- 1 - NC: 2025:KHC:9449 CRL.P No. 734 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 734 OF 2025 BETWEEN: VISHAL KUMAR S/O BANSI LAL AGED ABOUT 60 YEARS R/AT 24/64, ASHER NAGAR 60 FEET ROAD, GANDHI NAGAR POST TIRUPUR, TAMIL NADU-641 603. …PETITIONER (BY SRI. ASHWIN G. RAJ, ADVOCATE) AND: 1. STAT OF KARNATAKA BY R M C YARD POLICE REPRESENTED BY STATE PUBLIC PROSECUTOR HIGH COURT BANGALORE-560 001. 2. NAGARAJA B ENFORCEMENT OFFICER EMPLOYEES PROVIDENT FUND ORGANIZATION REGIONAL OFFICE, PEENYA NO 62, 3RD CROSS INDSUTRIAL SUBURB YASHWANTHPURA, 2ND STAGE BENGALURU-560 022. …RESPONDENTS (BY SRI. ANOP KUMAR M.V., HCGP FOR R-1; SMT. NANDITA HALDIPUR, ADVOCATE FOR R-2) THIS CRL.P IS FILED U/S 482 CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN CC.NO.39621/2024 Digitally signed by R HEMALATHA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:9449 CRL.P No. 734 of 2025 REGISTERED BY RMC YARD POLICE STATION, PENDING BEFORE THE 3RD ADDITIONAL CHIEF JUDICIAL MAGISTRATE (3RD A.C.J.M.), BENGALURU CITY, FOR THE OFFENCES P/U/S 409 OF IPC. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR ORAL ORDER The petitioner, who has been charge-sheeted as Accused No.2 for an offence punishable under Section 409 of the IPC, has approached this Court seeking relief. 2. The prosecution alleges that Accused No.1, after deducting amounts from employees towards their provident fund contributions, failed to deposit the contributions from 2017 to March 2018. Furthermore, the total sum of employees’ provident fund contributions, which was supposed to be maintained in the State Bank of India, was not deposited as mandated. The allegation against Accused No.2 is that he is the proprietor of a concern that is a sister concern of Accused No.1. 3. The learned counsel for the petitioner submitted that the competent authority, in the exercise of its powers under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for short, ‘the Act, 1952’), has directed Accused No.1 to pay the outstanding assessed amount of ₹19,21,710/-. Therefore, the petitioner is in no way connected to Accused No.1 and is not liable to pay the amount. In the absence of any material to substantiate that the - 3 - NC: 2025:KHC:9449 CRL.P No. 734 of 2025 petitioner is responsible for the dues of Accused No.1, the continuation of criminal proceedings would amount to an abuse of the process of law. 4. In response, the learned counsel for Respondent No.2 submitted that although the order was passed against Accused No.1 by the competent authority, the standing order clearly establishes that Accused No.2’s concern is a sister concern of Accused No.1. Therefore, Accused No.1 cannot absolve itself of its liability to pay the employees’ provident fund contributions. Hence, he sought the dismissal of the petition. 5. The arguments of the learned counsel for both parties have been duly considered. 6. A perusal of the order dated 17.06.2019, passed by the Assistant Provident Fund Commissioner, Employees’ Provident Fund Organization, Karnataka, Regional Office, exercising powers under Section 7A of the Act, 1952, indicates that Accused No.1 was held liable to pay an amount of ₹19,21,710/-. In the event of failure to pay, action would be taken under Sections 8B to 8G of the Act, 1952, besides initiating proceedings under Sections 14 and 14A of the Act, read with Paragraph 76 of the Employees’ Provident Funds Scheme, 1952. The order passed by the competent authority has attained finality. 7. In these circumstances, the petitioner has been arraigned as Accused No.2 on the grounds that he is the - 4 - NC: 2025:KHC:9449 CRL.P No. 734 of 2025 proprietor of International Trading Company, which, as per the standing order, is a sister concern of Accused No.1. However, the standing order does not indicate that a sister concern is also responsible for the liabilities of Accused No.1. Moreover, the employees’ contributions were not entrusted to Accused No.2, and therefore, the essential elements required to constitute an offence under Section 409 of the IPC are absent. In such a scenario, the continuation of criminal proceedings would amount to an abuse of the process of law. 8. Accordingly, the petition is allowed. The impugned proceedings in CC No.39621/2024, pending before the learned III Additional Chief Judicial Magistrate (3rd A.C.J.M.), Bengaluru City, insofar as they relate to the petitioner (Accused No.2), are hereby quashed. 9. The Trial Court shall proceed against the remaining accused in accordance with the law, uninfluenced by the observations made in this order. Any observations herein are solely for the purpose of this petition. Sd/- (HEMANT CHANDANGOUDAR) JUDGE BKM List No.: 1 Sl No.: 122