In the High Court at Calcutta Circuit Bench at Jalpaiguri Criminal Revisional Jurisdiction Present: The Hon’ble Justice Rai Chattopadhyay CRR 623 of 2025 Gouri Prasad Goenka & Anr. versus The State of West Bengal & Anr. For the petitioners : Mr. Bikramaditya Ghosh : Mr. Ved Rai : Mr. Mayank Bhandari : Mr. Vivek Saha : Mr. Binayak Bandopadhyay : Mr. Hrisav Anirban Ghosh For the State : Mr. Avrojyoti Das, ld. APP Heard On : 09.07.2026 Judgment On : 09.07.2026 Rai Chattopadhyay, J. 1. A very short point is determinable in the instant criminal revision application that is, as to whether a criminal proceeding against the Directors of a company would be maintainable in the eye of law in case the company itself has not been made an accused person in the said proceeding. 2. Fact remains that, the Enforcement Officer, Employees’ Provident Fund Organization, Regional Office, Jalpaiguri, has initiated a criminal proceeding against the present petitioners in their capacity as the Directors of Duncan Industries Limited, a registered company, being CR case No. 34 of 2016 under Sections 14A, 14(1A) and 14(1B) of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 presently pending in the Court of learned Chief Judicial Magistrate, Darjeeling. The allegation against the petitioners is about withholding contribution of employees to the Employees’ Provident Fund, which is alleged to be an act in contravention of the provisions of law. However, admittedly, only the petitioners and not the company have been arrayed as the accused person in the proceeding. 3. Accordingly, a question has arisen as to whether the law existent as on date permits such proceeding to be continued against the present petitioners who are the non-executive Directors of the said company and has been arrayed as accused persons in their capacity as above without the company itself being impleaded as an accused person in the criminal proceeding. 4. The law is now well-defined in this regard pursuant to the judgments of the Constitutional Courts, some of which are relied on by the petitioners in the instant case. Those are as follows: - a) Employees’ State Insurance Corporation versus S.K. Aggarwal and Others reported at (1998) 6 SCC 288 b) Satish Kumar Jhunjhunwala versus The State of West Bengal and Others reported at 2008 SCC OnLine Cal 189 c) Rajiv Jajodia and Another versus The State of West Bengal and Another reported at 2017 SCC OnLine Cal 15563 d) Anil Kumar Nahata versus State of West Bengal and Another reported at 2021 SCC OnLine Cal 389 e) Sukumar Das versus State of West Bengal and Another reported at 2023 SCC OnLine Cal 2429 f) Mehboob Habib Chinoy versus State of West Bengal and Another [CRR 87 of 2021] (July 14, 2023) g) Mehboob Habib Chinoy versus State of West Bengal and Another [CRR 27 of 2022] (August 31, 2023) h) Govind Garg versus The State of West Bengal and Another [CRR 511 of 2024] (May 01, 2025) i) Amit Kumar Agarwal versus The State of West Bengal and Another [CRR 402 of 2024] (December 20, 2024) j) Amit Kumar Agarwal versus The State of West Bengal and Another [CRR 405 of 2024] (December 20, 2024) k) Surajit Baksi and Others versus The State of West Bengal and Another [CRR 406 of 2024] (December 23, 2024) 5. In the case of Employees’ State Insurance Corporation (supra) the Hon’ble Supreme Court has held that the definition of “principal employer” under the Employees' State Insurance Act, 1948 cannot automatically be applied through Explanation 2 to Section 405 of the Penal Code, 1860 to hold company directors liable. Where the company itself owns the factory and employs the staff at its Head Office, the company is the principal employer. In such circumstances, the directors do not fall within the statutory definition of “principal employer.” Consequently, they cannot be held liable on that basis alone under the relevant provisions. 6. In the case of Satish Kumar Jhunjhunwala (supra) the Hon’ble Supreme Court has held that although the definition of “employer” under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is pari materia with that under the Employees' State Insurance Act, 1948, it does not include company directors for the purposes of prosecution under Section 405 of the Penal Code, 1860. Relying on the Supreme Court's interpretation of Explanations 1 and 2 to Section 405 IPC, the Court observed that directors cannot be treated as “employers” merely by virtue of their position. Page 4 of 7 Accordingly, the prosecution initiated against the petitioners solely in their capacity as directors was held to be illegal and unsustainable in law. Also, in Rajiv Jajodia’s case (supra), the Hon’ble Supreme Court reaffirmed the settled legal position that Directors, senior Managers, or employees of a company cannot be held personally liable for the non-deposit of employees' provident fund contributions. The primary liability for such default rests with the company itself. The Court further held that a prosecution under Sections 406 or 409 of the Penal Code, 1860 is not maintainable unless the company is impleaded as an accused. Accordingly, proceedings against individuals alone are legally unsustainable. 7. In the case of Anil Kumar Nahata (supra), the Hon’ble Supreme Court held that a prosecution against a company director in his official capacity cannot be sustained under Sections 406 or 409 of the Penal Code, 1860 unless the company itself is arraigned as an accused. It observed that the alleged offence is attributable to the company, which bears the statutory obligation to deposit employees' provident fund contributions. The Court reiterated that vicarious criminal liability is not recognised unless expressly provided by statute. Since the Penal Code contains no such provision, the director cannot be held criminally liable solely by virtue of his official position without prosecuting the company. 8. In the case of Sukumar Das (supra), the Hon’ble Supreme Court has held that a Director cannot be regarded as an “employer” for the purposes of Section 405 of the Penal Code, 1860, in light of the Supreme Court’s categorical interpretation that the term “employer” does not include a director. Consequently, a director cannot be prosecuted under Sections 406 or 409 IPC for an alleged default committed by the company. The Court further held that where the company itself is not arraigned as an accused, criminal proceedings against the Director alone are not maintainable. Page 5 of 7 9. In the case of Mehboob Habib Chinoy versus State of West Bengal and Another in CRR 87 of 2021 dated July 14, 2023 the Supreme Court affirmed that a company director does not become the “principal employer” under Section 2(17) of the Employees’ State Insurance Act, 1948 merely by virtue of holding the office of director. Accordingly, a director is not personally liable for payment of the employer’s contribution under the Act. The statutory liability rests with the principal employer as defined by the Act, not with directors solely because of their designation. In the case of Mehboob Habib Chinoy versus State of West Bengal and Another in CRR 27 of 2022 dated August 31, 2023, the Supreme Court stated that it is a settled principle of law that criminal proceedings against a director cannot ordinarily continue unless the company itself is also arraigned as an accused. Since a company acts through its officers, the prosecution of a director alone is generally impermissible where the alleged offence is attributable to the company. 10. In the case of Govind Garg (supra), the Hon’ble Supreme Court held that a prosecution against a company director in his official capacity is not maintainable under Sections 406 or 409 of the Penal Code, 1860 unless the company itself is arraigned as an accused. It observed that the company, as the employer, bears the statutory obligation to deposit employees’ provident fund contributions. The Court reiterated that vicarious criminal liability is not recognised unless expressly created by statute. Since the Penal Code contains no such provision, a director cannot be held criminally liable for the company’s default in the absence of the company being prosecuted. 11. In the cases of Surajit Baksi (supra) and Amit Kumar Agarwal versus The State of West Bengal and Another in CRR 402 of 2024 and in CRR 405 of 2024 dated December 20, 2024, the Hon’ble Supreme Court has held that where an offence is alleged to have been committed by a company, both the company and the persons responsible for its affairs must ordinarily be prosecuted together. A director cannot be prosecuted in his official capacity under Sections 406 and 409 of the Indian Penal Code unless the company, being the principal employer, is also arraigned as an accused. As vicarious criminal liability is not recognised unless expressly provided by statute, a director cannot be held liable solely for the company's acts. Accordingly, continuing the prosecution against the director without impleading the company amounts to an abuse of the process of law and a miscarriage of justice. 12. Therefore, it is a well-settled proposition of law that the petitioner being the Director of the company, is not an “employer” under the statute as it is the company owning the tea estate, is the “employer” for the purpose of the said Act. In Indian Penal Code, 1860 (now repealed) there is no provision for prosecution of the directors by invoking the principle of vicarious liability. The petitioner being directors that too, non-executive directors not directly involved in the day to day policy matters of the company itself, cannot be prosecuted under Sections 406 and 409 of the Indian Penal Code, 1860 for non-deposit of provident fund contribution of the employees’ share and as such the complaint, FIR and charge-sheet as well as the said proceeding itself are illegal and bad in law. In due observance of the law settled as discussed above, the proceedings should, therefore, be set aside/quashed. 13. It is also pertinent to note a fact, though not directly connected with the decision making process of this Court but as a connected fact that, as regards the company, CIRP Procedure has been admittedly the NCLT Kolkata vide order dated March 05, 2020 and a “Resolution Plan” is now underway. The entire claim of the Provident Fund Authority on account of employee contribution from the company and not from the present petitioners, is under consideration through the “Resolution Plan”. 14. On the discussion as made above, the instant criminal revision is disposed of with the directions as follows: - i. The proceedings against the present petitioners in CR case No. 34 of 2016 pending in the Court of learned Chief Judicial Magistrate, Darjeeling is set aside and quashed. ii. Corresponding FIR/complaint, charge-sheet if any, shall stand set aside. 15. Urgent certified copy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (Rai Chattopadhyay, J.)