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PETITIONER:

SRIKANTA DATTA NARASIMHARAJA WODIYAR

Vs.

RESPONDENT:

ENFORCEMENT OFFICER, MYSORE

DATE OF JUDGMENT04/05/1993

BENCH:

RAMASWAMY, K.

BENCH:

RAMASWAMY, K.

SAHAI, R.M. (J)

CITATION:

1993 AIR 1656 1993 SCR (3) 508

1993 SCC (3) 217 JT 1993 (3) 230

1993 SCALE (2)783

ACT:

%

Employees Provident Funds and Miscellaneous Provisions Act

1952:

Sections 2 (e), (k), 14A.

Employees Provident Funds Scheme 1952: Para 76.

Employees Family Pension Scheme 1971.

Employees Deposit Linked Insurance Scheme 1976.

Director of private company-Neither occupier nor manager-

Whether liable for prosecution under Section 14A of 1952 Act

for violation of Provident Fund Scheme.

HEADNOTE:

The appellant was one of the Directors of a Company

registered under the Companies Act This company was also

registered under the Factories Act and its object was to

manufacture Motorcycles and its accessories. It had a

Managing Director, Joint Managing Director and Directors

including the appellant for managing the establishment.

The respondent- an Enforcement Officer, Regional Provident

Fund Commissioner's Office laid 18 complaints against six

accused including the appellant (A-6) and the Company-

employer, for the failure to deposit the contribution for

the period October to December 1990 to the Provident Fund

Account under the Employees Provident Fund and Miscellaneous

Provisions Act, 1952, Employees Provident Fund Scheme 1952,

Employees Family Pension Scheme, 1971 and Employees Deposit

Linked Insurance Scheme 1976, offences punishable under

Section 14A of the 1952 Act read with para 76 of the 1952

Scheme.

On the Magistrate taking cognizance of the complaint, the

appellant filed Criminal Miscellaneous Petitions in the High

Court for quashing the complaint as they did not contain the

relevant averments constituting offences against the

appellant. It was contended that the appellant was a mere

Director of the Company, that he was neither incharge of the

company nor was

509

responsible to comply with the provisions of the aforesaid

Act and the Schemes thereunder. Reliance was placed on the

definition of 'employer' in Section 2 (e) of the Act and the

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liability that had been fastened on the Managing Director or

the Manager or occupier of the establishment to abide by the

Act and the Schemes. The High Court dismissed the

applications.

The appellant appealed to this Court and contended that the

reading the definition of 'employer' in section 2(e) of the

Act with Sections 30,14(1a) and para 31 of the Scheme,

demonstrate that the employer in relation to the

establishment means the owner or occupier of the factory

which includes the Agent or the Manager of the factory under

the Factories Act, that there was an occupier and Manager

recorded for the instant company, and that they were

Incharge of and were solely responsible to comply with the

Act and the Schemes thereunder and that no specific

averments have been made in the complaint making the

appellant responsible for the management of the factory or

the liability to comply with the Act and the Schemes. The

complaint laid against the appellant was therefore illegal

and the cognizance taken by the Magistrate was vitiated by

manifest error of law.

On the question: whether a Director of a Private Company,

who is neither an occupier nor a manager can be prosecuted

under Section 14(A) of the Employees' Provident Fund and

Miscellaneous Provisions Act, 1952 for violation of the

Provident Fund Scheme.

Dismissing the appeals, this Court,

HELD: (By the Court K. Ramaswamy & R.M. Sahai, JJ.)

1. The Employees' Provident Fund and Miscellaneous

Provisions Act 1952 by Section 2(e) defines 'employer'. It

is an inclusive definition and consists of two clauses which

are vide in their sweep. In Clause (i) are included not

only owner or occupier but even the agent or manager. When

it comes to establishments other than factory it is not

confined to owner or occupier but to all these who have

central or are responsible for the affairs of the company.

It includes even director. Therefore, every such person who

has the ultimate control of the affairs of the company

becomes employer Section 2(k) defines `occupier' which means

the person who has the ultimate control of the factory, and

where the said affairs are entrusted to a Managing Agent,

such agent shall be deemed to be the occupier of the

factory. Therefore, by its extended definition its sweep is

enlarged bringing within its scope the person who is

incharge of or responsible for,the management or 1

510

ultimate control over the affairs of the factory or

establishment. In the event of entrustment to a Managing

Agent, such Managing Agent shall also be deemed 'to be the

occupier of the factory'. (514-GH,)

2. In the instant case, the appellant having been declared

himself as one of the person Incharge of and was responsible

for conduct of the business of the establishment or the

factory in Form 5A the complaint and non-compliance thereof

having been enumerated in para 3 of the complaint, it was

validly made against the appellant along with other accused

for the alleged Contravention. Necessary allegations

bringing out the ingredient of offence have been made out in

the complaint. Therefore, the Magistrate has rightly taken

cognizance of the offence alleged against the appellant.

(518-A-B)

(Per K. Ramaswamy, J.)

1. The Act and the Schemes are self-contained code for

deduction from the salary of the employees and the

responsibility to contribute in equiproportion of the

employer's share and deposit thereof in the account within

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the specified time under the Act and the Schemes into the

account It is a welfare legislation to provide benefits to

the employees as per the schemes. They need mandatory

compliance and violation thereof visits with penal action.

(514-E)

2. Section 6 fastens the obligation on the employer. It

postulates that the contribution to the fund shall be made

by the employer. (515-A)

3. Under para 30 of the Employees' Provident Fund Scheme,

1952 and the other Schemes, the employer shall deposit the

contribution to the Fund. (515-B)

4. The employer shall, in the first instance, pay both the

contributions payable by himself(in the Scheme referred to

as employer's contribution) and also on behalf of the

members employed by him directly or through a Contractor,

the contribution payable by such member (in the Scheme re-

ferred to as member's contribution). (515-G)

5. Para 38 provides that the employer shall send to the

Commissioner within 15 days of the close of every month, pay

the same to the Fund by separate Bank Drafts or cheques and

the administrative charges within 25 days of close of the

month, the employer shall submit a monthly consolidated

511

statement as per form 5 with particulars mentioned therein.

(515-H, 516-A)

6. Para 76 also fastens criminal offence for non-

compliance of the provisions of the schemes on the persons

incharge of and responsible for the management or control of

the establishment.

7. Every person, who at the time the offence was

committed, was Incharge of and was responsible to the

establishment for conduct of its business as well as the

company shall be liable to be proceeded against and punished

accordingly. (517-C)

8. Form 5-A read with para 36A give an option to the

employer to furnish particulars of ownership and the

branches of the department, owners, occupiers, directors,

partners, manager or other person or persons who have

ultimate control over the affairs of such factory or

establishment incharge of and responsible for the conduct of

the business of the company and compliance of the statutory

obligation fastened under the Act and the relevant schemes.

It is made mandatory to the employer to abide by the same

and noncompliance thereof is liable for prosecution under

Section 14A of the Act (517-D)

Municipal Corpn. of Delhi v. Ram Kishan Rohtagi & Ors.;

[1983] 1 SCC 1 and Employees'State Insurance Corpn. v.

Gurdial Singh & Ors. [1991] Supp. 1 SCC 204, referred to.

Employees' State Insurance Corporation v. Gurdial Singh &

Ors. (1991 Supp. 1 SCC 204, and Municipal Corporation of

Delhi v. Ram Kishan Rohtagi & Ors., [1983] 1 SCC 1,-

distinguished.

(Per R.M. Sahai, J.)

1. The Act is a welfare legislation enacted for the

benefit of he employees engaged in the factories and

establishments and is directed towards achieving this

objective by enacting provisions requiring the employer to

contribute towards Provident Fund, Family Pension and

Insurance and keep the Commissioner informed of it by riling

regular returns and submitting details in forms prescribed

for that purpose. (518-G)

512

2. Paragraph 36A of the Provident Fund Scheme framed by

Central Government under Section 5 of the Act requires the

employer in relation to a factory or other establishment to

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furnish Form 5A mentioning details of its branches and

departments, owners, occupiers, directors, partners,

managers or any other person or persons who have ultimate

control over the affairs of the factory or establishment.

The purpose of giving details of the owners, occupiers and

directors etc, is not an empty formality but a deliberate

intent to widen the net of responsibility on any and every

one for any act or omission. It is necessary as well as in

absence of such responsibility the entire benevolent scheme

may stand frustrated. (519-A-B)

3. The anxiety of the Legislature to ensure that the

employees are not put to any hardship in respect of

Provident Fund is manifest from sections 10 and 11 of the

Act. The farmer grants immunity to provident fund from

being attached for any debt outstanding against the

employee. And the latter provides for priority of provident

fund contribution over other debts if the employer is

adjudged insolvent or the company is winded up. Such being

the nature of provident fund any violation or breach in this

regard has to be construed strictly and against the

employer. (519-C)

4. Sections 14 and 14A provides for penalties. The one

applies to whosoever is guilty of avoiding payment of

provident fund and to employer if he commits breach of

provisions mentioned in its various clauses where as Section

14A fastens liability on certain person if the persons

committing the offence is company. The scope of the two

sections is same. Latter is wider in its sweep and reach.

The former applies to anyone who is an employer or owner or

is himself responsible for making payment whereas latter

fastens the liability on all those who are responsible or

are in charge of the company for the offence committed by

it. (519-D-E)

5. Sub-sections (1) and (2) of Section 14A extend the

liability for any offence by any person including a partner

by virtue of explanation if he was incharge or was

responsible to the company at the time of committing the

offence. The expression,'was in charge of and was

responsible to the company for the conduct of the business'

are very wide in their import. It could not, therefore, be

confined to employer only. (520-D)

6. To say therefore that since paragraph 36A requires an

employer to do certain acts the responsibility for any

violation of the provision should be confined to such

employer or owner would be ignoring the purpose and

513

objective of the Act and the extended meaning of 'employer'

in relation to establishments other than the factory. The

declaration therefore in Form 5A in the instant case

including appellant as one of the persons in charge and

responsible for affairs of the company was in accordance

with law, therefore, his prosecution for violation of the

scheme does not suffer from any error of jurisdiction or

law. (521-B-C)

JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 402 to

419 of 1993.

From the Judgment and Order dated 3.3.1992 of the Karnataka

High Court in Crl. Petitions Nos. 1574 to 1584 of 1991 and

1588 to 1594 of 1991.

M.S. Nesargi, R.C. Mishra and Dr. (Mrs.) Meera Aggarwal (For

Aggarwal & Mishra & Co.,) for the Appellant.

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V.Gauri Shankar, Anil Srivastava and Mrs. Anil Katiyar (NP)

for the Respondent.

The Judgments of the Court were delivered by

K. RAMASWAMY.J. Special Leave granted.

Since common question of law arises in these 18 appeals for

decision, they are disposed of by a common judgment. The

appellant is one of the Directors of M/s Ideal Jawa (India)

Ltd. Yadavagiri, Mysore, a Private Ltd. Company estab-

lished under the Companies Act. It was also registered

under the Factories Act, 1948. Its object is to manufacture

Motor-Cycles and its accessories. It has its Managing

Director, Joint Managing Director and Directors including

the appellant to manage the establishment. The respondent

laid 18 complaints against six accused including the

appellant(A-6) and the Company,employer,for their failure to

deposit the contribution for the periods of October to

December, 1990 to the Provident Fund Account No. NK 2260

under the Employees'Provident Funds and Miscellaneous

Provisions Act, 1952, for short 'the Act', Employees'

Provident Funds Scheme, 1952,Employees' Family Pension

Scheme, 1971 and Employees' Deposit- Linked Insurance

Scheme, 1976, for short 'the Schemes' punishable under S.

14A of the Act read with para 76 of 1952 scheme. On the

Magistrate's taking cognizance thereof, the appellant laid

Crl. M.Ps. in the High Court to quash the complaints as

they do not contain the relevant averments constituting the

offences against the appellant. It is his case that he is a

mere Director of the

514

Company. He was neither Incharge of the Company, nor is

responsible to comply with the provisions of the Act and the

Scheme,. In support thereof he placed reliance on the

definition 'employer' and the liability has been fastened on

the Managing Director or the Manager or occupier of the

establishment to abide by the Act and the Schemes. The High

Court by its order dated March 3,1992, dismissed the

applications. Thus these appeals.

Sri Nesargi, learned Sr. counsel for the appellant contended

that a reading of the definition 'employer' in s.2(e) read

with ss. 30, 14 (1-A) and paras 30 and 38 of the Schemes

demonstrates that the employer in relation to an

establishment means the owner or occupier of the factory

which includes the Agent or the Manager of the Factory under

the Factories Act. One Sri N.K. Khudamurad was recorded as

occupier and one Sri D.K. Darashawas recorded as the

Manager. They are Incharge of and were responsible to

comply with the Act and the Schemes. No specific averments

were made in the complaint making the appellant responsible

for the management of the factory or the liability to comply

with the Act and the Schemes. The complaint, therefore,

laid against him is illegal and the cognizance taken by the

Magistrate is vitiated by manifest error of law. In support

thereof he placed reliance on the decisions of this court in

Municipal.Corpn. of Delhi v. Ram Kishan Rohtagi & Ors.

[1983] 1 SCC 1 and Employees'State Insurance Corpn.v.Gurdial

Singh & Ors. [1991] Supp. 1 SCC 204.

The Act and the Schemes are self-contained code for

deduction from the salary of the employees and the

responsibility to contribute in equi-proportion the

employer's share and deposit thereof in the account within

the specific time under Act and the Schemes into the

account. It is a welfare legislation to provide benefits to

the employees as per the schemes. They need mandatory

compliance and violation thereof visits with penal action.

Section 2(e) of the Act defines 1 employer' which means in

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relation to an establishment which is a factory, the owner

or occupier of the factory, including the Agent of such

owner or occupier, the legal representative of deceased

owner or occupier and, where a person has been named as a

Manager of the factory under clause (f) of sub-s. (1) of s.7

of the Factories Act, 1948, the person so

named................

The definition is an inclusive definition bringing within

its ambit the owner or occupier as well:" its Manager.

Section 2(k) defines 'occupier' which means the person who

has ultimate control over the affairs of the factory, and,

where the said affairs are entrusted to a Managing Agent

such Agent shall be deemed to be the occupier of the

factory. Therefore, by its extended definition its sweep is

enlarged bringing within its scope the person who is

incharge or responsible for in management or ultimate

control over the affairs of the factory or establishment.

515

In the event of entrustment to a Managing Agent, such

Managing Agent shall also be deemed 'to be the occupier of

the factory'. Section 6 fastens the obligation on the

employer in this behalf. It postulates that the

contribution shall be made by the employer to the Fund and

shall be 8-1/3% of the basic wages, dearness allowances and

retaining allowances, if any, for the payment being payable

to each of the employees, whether employed by him directly

or through a Contractor. The employee's contribution shall

be equal to the contribution payable by the employer in

respect of him, etc. in its application to any establishment

or class of establishments. Other provisions are not

relevant, hence they are omitted. Under para 30 of the

Employees' Provident Fund Scheme, 1952 and the other

Schemes, the employer shall deposit the contribution to the

Fund.

Under para 36A of the Scheme the employer is enjoined to

furnish particulars of the ownership of the factory which

provides thus:

"36-A Employer to furnish particulars of ownership:- Every

employer in relation to a factory or other establishment to

which the Act applies on the date of coming into force of

the Employees' Provident Funds Scheme, 1961, or is applied

after that date, shall furnish in duplicate to the Regional

Commissioner in Form No. 5A annexed hereto particulars of

all the branches and departments, owners, occupiers,

directors, partners, manager or any other person or persons

who have the ultimate control over the affairs of such

factory or establishment and also sent intimation of any

change in such particulars, within fifteen days of such

change, to the Regional Commissioner by registered post and

in such other manner as may be specified by the Regional

Commissioner.

Provided that in the case of any employer of a factory or

other establishment to which the Act and the Family Pension

Scheme, 197 1, shall apply the aforesaid Form may be deemed

to satisfy the requirements of the Employees' Family Pension

Scheme, 197 1, for the purpose specified above."

The employer shall, in the first instance, pay both the

contributions payable by himself (in the Scheme referred to

as employer's contribution) and also on behalf of the

members employed by him directly or through a Contractor,

the contribution payable by such member (in the Scheme

referred to as member's contribution). Para 38 provides

that the employer shall send to the Commissioner within 15

days of the close of every month, pay the same to the Fund

by separate Bank Drafts or cheques and the administrative

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charges. Within 25 days of close

516

of the month, the employer shall submit a monthly

consolidated statement as per form 5 with particulars

mentioned therein.

Form 5-A envisages to give particulars in Columns 1 to 7

thereof, i.e. particulars of owner, etc. The appellant's

establishment stated the name of the establishment as Ideal

Jawa (India) Ltd., Code No. of the establishment, its

address, nature of business, period of its commencement and

manufacturing status, have been given. In Column 8 the

establishment is to furnish the names of the owner-company,

Directors. It was mentioned therein as Mr. N.K. Irani as

Managing Director; the appellant as one of the Directors and

others. In column 10 the names of occupier and Manager as

registered under the Factories Act were given. In Column 11

which specifies particulars thus: 'particulars of the

persons mentioned above, who are Incharge of, and

responsible for the conduct of the business of the

establishment'. Therein it was stated that "as per the

details mentioned in item 8". As stated earlier in column 8

the names of the Managing Director, the Joint Managing

Director and two Directors including the appellant have been

mentioned.

Section 14A which is penal states thus:

"14A. Offences by Companies:-

(1)If the person committing an Offence under this Act, the

Scheme or the Family Pension Scheme or the Insurance Scheme

in a company, every person who at the time the offence was

committed was Incharge of and was responsible to the company

for the conduct of the business of the company, as well as

the company shall be deemed to be guilty of the offences and

shall be liable to be proceeded against and punished

accordingly.

Provided that nothing contained in this sub-section shall

render any such person liable to any punishment, if he

proves that the offence was committed without his knowledge

or that he exercised all due diligence to prevent the

commission of such offence.

(2)Notwithstanding anything contained in sub-s. (1), where

an offence under this Act, the scheme or the Family Pension

Scheme or the Insurance Scheme has been committed by a

company and it is proved that the offence has been committed

with the consent or connivance of, or is attributable to,

any neglect on the part of any

517

director or manager, secretary or other officer shall be

deemed to be guilty of that offence and shall be liable to

be proceeded against and punished accordingly.

Explanation:For the purposes of this Section-

(a) "Company" means any body corporate and includes a firm

and other association of individuals; and

(b) "director" in relation to a firm means a partner in the

firm."

Para 76 also fastens criminal offence for non-compliance of

the provisions of the schemes on the persons incharge of and

responsible for the management or control of the

establishment. It could thus be seen that every person, who

at the time of the offence was committed, was Incharge of

and was responsible to the establishment for conduct of its

business as well as the company shall be liable to be

proceeded against and punished accordingly. It is seen that

Form 5-A read with para 36A give an option to the employer

to furnish particulars of ownership and the branches of the

department, owners, occupiers, directors, partners, manager

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or other person or persons who have ultimate control over

the affairs of such factory or establishment incharge of and

responsible for the conduct of the business of the company

and compliance of the statutory obligation fastened under

the Act and the relevant schemes. Particulars in column 8

as regards owners and column 10 relates to Manager or

occupier and their names, addresses etc. and column 11

refers to the persons Incharge of, and are responsible to

the management of the establishment or factory are

specified. In form 5-A, as seen earlier in columns 8 and 1

1, it was specifically stated that the Managing Director,

Joint Managing Director and Directors including the

appellant as not only owners of the factory, but are

Incharge of and responsible for the management of the

factory and the establishment. In paragraph 3 of the

complaint, It was specifically stated, "that accused 2 to 6

(appellant) are the persons Incharge of the said

establishment and are responsible for conduct of its

business. They are thus required to comply with all the

provisions of the Act and the Schemes in respect of the said

establishment". It is made mandatory to the employer to

abide by the same and non-compliance thereof is liable for

prosecution under s. 14A of the Act. Section 14(1-A) relied

on by Sri Nesargi relates to only liability for punishment

for contravention or making default to comply with s. 6 or

s. 17 (3-A) in so far as it relates to the payment of

inspection charges and para 38 of the Scheme in so far as it

relates to payment of administrative charges. That has no

application as regards the offence covered under s. 14A by

the companies are concerned. Accordingly, we hold that the

518

appellant having been declared himself as one of the person

Incharge of and responsible for conduct of the business of

the establishment or the factory, the complaint and non-

compliance thereof having been enumerated in subsequent

paras of the complaint, it was validly made against the

appellant along with other accused for the alleged

contravention. Necessary allegations bringing out the

ingredient of offence have been made out in the complaint.

Therefore, the learned Magistrate has rightly been taken

cognizance of the offence alleged against the appellant.

Employees' State Insurance Corporation v. Gurdial Singh &

Ors. [1991] Supp. 1 SCC 204 is the case relating to an

admission made by the prosecution that the Directors were

not Incharge nor are responsible for compliance of the

provisions of the Employees' State Insurance Act, 1948,

"Admittedly the company had a factory and it is not in

dispute that the occupier of the factory had been duly

named. It is also not in dispute that it has a Manager

too". In view of this admission the Directors were held not

responsible for non-compliance with the provisions of the

Employees' State Insurance Act, 1948. The ratio therein,

therefore, does not assist the appellant. Equally in

Municipal Corporation of Delhi v. Ram Kishan Rohtagi & Ors.

[1983] 1 SCC 1 for an offence under Prevention of Food

Adulteration Act specific provision of Food Adulteration

Rules provide to nominate occupier or Manager responsible

for the production or manufacture of articles of food, etc.

by the company and were nominated. Under those circum-

stances, this court upheld the quashing of the proceedings

against the Directors as the complaint did not contain

necessary allegations constituting the offence against the

Directors. The appeals are thus dismissed.

R.M. SAHAI, J. Can a director of a private company, who is

neither an occupier nor a manager be prosecuted under

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Section 14(A) of the Employees' Provident Fund and

Miscellaneous Provisions Act, 1952 (in brief 'the Act') for

violation of the Provident Fund Scheme.

That depends, obviously, on the scheme of the Act the

liability it fastens on the director of the Company and

applicability of the penal provisions to the statutory

violation or breach of the scheme framed under it. But

before doing so it may not be out of place to mention that

the Act is a welfare legislation enacted for the benefit of

the employees engaged in the factories and establishments.

The entire Act is directed towards achieving this objective

by enacting provisions requiring the employer to contribute

towards Provident Fund, Family Pension and Insurance and

keep the Commissioner informed of it by filing regular

returns and submitting details in forms prescribed for that

purpose. Paragraph 36A of the

519

Provident Fund Scheme framed by Central Government under

Section 5 of the Act requires the employer in relation to a

factory or other establishment to furnish Form 5A mentioning

details of its branches and departments, owners, occupiers,

directors, partners, managers or any other person or persons

who have ultimate control over the affairs of the factory or

establishment. The purpose of giving details of the owners,

occupiers and directors etc. is not ail empty formality but

a deliberate intent to widen the net of responsibility on

any and every one for any act or omission. It is necessary

as well as in absence of such responsibility the entire

benevolent scheme may stand frustrated. The anxiety of the

Legislature to ensure that the employees are not put to any

hardship in respect of Provident Fund is manifest from

Sections 10 and 11 of the Act. The former grants immunity

to provident fund from being attached for any debt

outstanding against the employee. And the latter provides

for priority of provident fund contribution over other debts

if the employer is adjudged insolvent or the company is

winded up. Such being the nature of provident fund any

violation or breach in this regard as to be construed

strictly and against the employer.

Reverting to the statutory provision Sections 14 and 14A

provide for penalities. The one applies to whosoever is

guilty of avoiding payment of Provident fund and to employer

if he commits breach of provisions mentioned in its various

clauses where as Section 14A fastens liability on certain

persons if the person committing the offence is a company.

The scope of the two sections is same. Latter is wider in

its sweep and reach. The former applies to anyone who is an

employer or owner or is himself responsible for making

payment whereas latter fastens the liability on all those

who are responsible or are in charge of the company for the

offence committed by it. Section 14A reads as under:

"14-A. Offences by companies-(1) If the person committing

an offence under this Act, the Scheme or the

Family Pension Scheme or the Insurance Scheme

is a company, every person, who at the time

the offence was committed was in charge of,

and was responsible to, the company for the

conduct of the business of the company, as

well as the company, shall be deemed to be

guilty of the offence and shall be liable to

be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall

render any such person liable to any punishment, if he

proves that the offence was committed without his knowledge

or that he exercised all due diligence to prevent the

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commission of such offence.

520

(2) Notwithstanding anything contained in sub-section (1),

where an offence under this Act, the Scheme or

the Family Pension Scheme or the Insurance

Scheme has been committed by a company and it

is proved that the offence has been committed

with the consent or connivance of, or is

attributable to, any neglect on the part of,

any director or manager, secretary or other

officer of the company, such director,

manager, secretary or other officer shall be

deemed to be guilty of that offence and shall

be liable to be proceeded against and punished

accordingly.

Explanation- For the purposes of this section,-

(i) "company" means any body corporate and includes a firm

and other association of individuals; and

(ii) "director", in relation to a firm means a partner in

the firm."

Sub-sections (1) and (2) extend the liability for any

offence by any person including a partner by virtue of

explanation if he was incharge or was responsible to the

company at the time of committing the offence. The

expression, 'was in charge of and was responsible to the

company for the conduct of the business' are very wide in

their import. It could not, therefore, be confined to

employer only. The employer is defined by Section 2(e) to

mean,

"2 (e).-'employer' means-

(i)in relation to an establishment which is a factory, the

owner or occupier of the factory, including the agent of

such owner or occupier, the legal representative of a

deceased owner or occupier and, where a person has been

named as a manager of the factory under clause (f) of sub-

section (1) of Section 7 of the Factories Act,

1948, the person so named; and

(ii)in relation to any other establishment, the person who,

or the authority which, has the ultimate control over the

affairs of the establishment, and where the said affairs are

entrusted to a manager, managing director or managing agent,

such manager, managing director or managing agent;"

Both clauses (i) and (ii) again are wide in their sweep. In

clause (i) are

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included not only owner or occupier but even the agent or

manager. When it comes to establishments other than factory

it is not confined to owner or occupier but to all those who

have control or are responsible for the affairs of the

company. It includes even director. Therefore, every such

person who has the ultimate control over the affairs of

company becomes employer. To say therefore that since

paragraph 36 A requires an employer to do certain acts the

responsibility for any violation of the provision should be

confined to such employer or owner would be ignoring the

purpose and objective of the Act and the extended meaning of

employer in relation to establishments other than the

factory. The declaration therefore in Form 5A including

appellant as one of the persons in charge and responsible

for affairs of the company was in accordance with law

therefore his prosecution for violation of the scheme does

not suffer from any error of jurisdiction or law.

ORDER

For reasons given by us in our concurring but separate

orders the appeals fail and are dismissed.

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NVK. Appeals dismissed.

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