1. These are appeals preferred by the State against the acquittals of the respondent in two related cases, in which the facts are identical, but the periods of time concerned are different. In both these cases, the Inspector of Provident Funds, Coimbatore, prosecuted Kaleeswarar Mills, Ltd., Coimbatore (accused 1), and the present respondent, the general manager of the mills, the accused 2, for an alleged offence under Section 14(2) of the Employees' Provident Funds Act 19 of 1952, read with Para. 76 of the Employees' Provident Fund Scheme, 1952. What has subsequently happened is that the prosecution was withdrawn as against the accused 1 (Kaleeswarar Mills, Ltd)., and it survived only as against the respondent. After proceeding into the facts in great detail, the learned Additional First Class Magistrate of Coimbatore held that the respondent was saved by virtue of the proviso to Section 14A of the Act, which is in the following terms:
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.
The State pleads that the respondent did not satisfy the terms of this proviso, and that, hence, upon the admitted facts of the record, he ought to have been convicted. The learned Public Prosecutor urges that the admitted facts are that Kaleeswarar Mills, Ltd., did make deductions from the wage bills of its employees during the relevant periods, and thus it withheld a large sum representing the contribution of the employees to the provident fund. Under the Act, the mill was bound to make a similar contribution itself, and the failure to do this is an offence under Rule 76(a) of the Employees' Provident Fund Scheme, 1952. It is strenuously contended that this really amounts to a kind of breach of trust, by which both the mills and the general manager (respondent) are liable, within the terminology of Section 14A(1). On this ground, the acquittal is impugned as wrongful and opposed to law.
2. Sri V.T. Rangaswami Ayyangar for the respondent raises a plea that the mills having been exonerated in these proceedings, or the prosecution of the mills withdrawn, the liability of a person like the respondent (general manager) does not separately survive, since the mills or the concern is the party mainly liable under Section 14A. There is something to be said for this view, for a reading of Section 14A makes it clear that the company or organization is made liable for the offence as a jurisdic person. But it is not really necessary for me to furnish an interpretation of this section, in this context. The real question is whether it is now expedient or essential in the interests of justice, that the acquittal of the respondent should be interfered with.
3. I find from a perusal of the judgment of the learned Magistrate, that he has made an exhaustive analysis of the facts with reference to the proviso relied on by the respondent. The learned Magistrate seems to believe that the respondent strained every nerve to save the mills as a going concern, including running hazards himself in order to provide credit, and that the situation deteriorated to such an extent that the respondent was quite unable to make any provision for the provident fund contribution of the employer. Other and more urgent demands had to be met, and it was the collapse of the company, financially speaking, which led to the inability. It seems to me that the facts do justify the inference that the respondent has tried very hard to save the company. Even if I were inclined to take a somewhat different view of the facts, it will still entirely be a question of fact whether the test laid down by the proviso has been fulfilled in an Individual case.
4. I am therefore very clear that there is no substantial or compelling reason for Interfering with the order of acquittal, nor do the facts involve any question of law in reality. The question whether this proviso is fulfilled on the facts, is an issue of fact like any other, to be determined on the individual merits. The learned Magistrate seems to be perfectly conscious of this, as well as of the obvious position that, since he relies upon a proviso, it is for the accused to show that he exercised 'all due diligence.'
5. I hence dismiss these appeals. Before parting with them, I desire to observe that this does not mean that the liability of the employer or of a person situated as a general manager under an employer concerned, to deal fairly with the workers in respect of their provident fund contributions, and in respect of the employer's own liability under Act 19 of 1952, is not a very real one, or is one that can be lightly evaded. On the contrary, the legislature has thought it fit to enforce this liability by means of a penal provision, really because it does amount to a kind of trust, and the unwarranted infringement of it, to a breach of trust. With these observations, the appeals are dismissed.