Govinda Menon, J.@mdashThis is an appeal filed by the Provident Fund Inspector, Kozhikode against the order passed by the Industrial Tribunal-First Class Magistrate of Kozhikode acquitting the accused who was prosecuted for offence under paragraph 76 of the Employees'' Provident Funds Scheme, 1952-hereinafter referred to as the Scheme. The case against the accused was that he failed to pay the employer''s and the employees'' share of contributions together with the administrative charges for the month of March 1962 in the manner specified under paragraph 38 (1) of the Scheme; (2) Failure to send to the Regional Provident Fund Commissioner, returns in Form 5 together with a declaration in Form 2 and returns in Form 10 for the month of March, 1962 in the manner specified under paragraph 36 (2) (a) and (b) of the Scheme; and (3) Failure to send to the Commissioner the monthly consolidated statement showing recoveries made from the wages of each employee and the amount contributed by the employer in respect of each such employee in Form 12 for the month of March, 1962 in the manner specified under paragraph 38 (2) of the Scheme.
2. When the case came up for hearing, the accused stated that he had already paid the amount and sent the returns before the filing of the complaint and as such he is not guilty of the offence charged. The learned Magistrate agreeing with the contention held that the complaint was not maintainable and acquitted the accused. It is the legality of this order that is challenged in this appeal. In view of the importance of the question involved regarding the interpretation of the Employees" Provident Funds Act, 1952-hereinafter referred to as the Act-and Scheme framed thereunder, the case was referred to this Bench for decision,
3. Learned counsel for the respondent does not dispute the proposition that it is not open to the Magistrate to refuse to examine the complainant and the witnesses produced by him and the acquittal of the accused u/s 245 without recording any evidence is clearly illegal. In fact the Code makes no provision for the acquittal of the accused persons without examining witnesses. But it is contended that no useful purpose would be served by ordering a retrial as the complaint itself is not maintainable.
It is, therefore, necessary to look into the relevant provisions of the Act. The Act came into force in March 1952. Section 1 (3) of the Act extended the operation of the Act in the first instance to all factories engaged in any industry specified in schedule 1. Later by the amending Act 46 of 1960 it was made to apply to other establishments employing 20 or more persons which the Central Government may by notification in the official gazette specify in this behalf. That the motor transport industry has been brought within the scope of Section 1 (3) of the Act is not disputed.
Under Section 5 of the Act the Central Government may by notification in the official gazette frame a Scheme for the establishment of provident funds under this Act for employees or of any class of employees and specify the establishment or class of establishments to which the said Scheme shall apply and there shall be established, as soon as may be after the framing of the Scheme, a fund in accordance with the provisions of this Act and the Scheme. In exercise of the powers conferred by Section 5, the Central Government has framed the Employees'' Provident Funds Scheme, 1952 and it was duly notified by publication in the official gazette on 2nd September, 1952 as required under law.
4. In paragraph 29 of the Scheme, contributions payable by the employer shall be at the rate of 61/4 per cent of the basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance if any payable to each employee to whom the Scheme applies. The contribution payable by the employee under the Scheme shall be equal to the contribution payable by the employer in respect of such employee.
Under paragraph 38 (1) the employer shall before paying the member his wages in respect of any period or part of period for which contributions are payable, deduct the employee''s contribution from his wages together with his own contribution as well as an administrative charge of such percentage of the total employer''s and employee''s contributions as may be fixed by the Central Government. He shall within fifteen days of the close of every month, pay to the Fund by separate Bank drafts or cheques on account of contributions and administrative charge.
Under paragraph 38 (2) it is stated that the employer shall forward to the Commissioner, within fifteen days of the close of the month, a monthly consolidated statement, in such forms as the Commissioner may specify, showing recoveries made from the wages of each employee and the amount contributed by the employer in respect of each such employee.
5. Under Paragraph 36,
(1) Every employer shall send to the Commissioner within fifteen days of the commencement of this Scheme, a consolidated return in such form as the Commissioner may specify, in duplicate of the employees required or entitled to become members of the Funds showing the basic wage, retaining allowance (if any) and dearness allowance including the cash value of any food concession paid to catch of such employees.
(2) Every employer shall send to the Commissioner within fifteen days of the close of each month a return:
(a) in duplicate in Form 5 of the employees qualifying to become members of the Fund for the first time during'' the preceding month together with the declaration in Form 2 furnished by such qualifying employees and with a statement showing the basic wages, retaining allowance (if any) and dearness allowance including the cash value of any food concession of each such employee, and
(b) in duplicate, in such form as the Commissioner may specify, of the employees leaving service of the employer during the preceding month.
(3) Every employer shall send to the Commissioner within fifteen days of the commencement of every half year, beginning from 1st April and 1st October, a consolidated return in duplicate to replace the one furnished under sub-para (1) above.
It is admitted in this case that the employer''s share of the contribution to the provident Fund was not paid within time and that the consolidated statement under paragraph 38 (2) and the returns under para 36 (2) were not sent within time.
6. Paragraph 76 of the Scheme deals with the punishment. Paragraph 76 reads:
If any person -
(a) fails to pay any contribution which he is liable to pay under this Scheme, or
(b) deducts or attempts to deduct from the wages or other remuneration of a member the whole or any part of the employer''s contribution, or
(c) fails or refuses to submit any return, statement or other document required by this Scheme or submits a false return, statement or other document, or makes a false declaration, or
(d) obstructs any inspector or other official appointed under the Act of this Scheme in the discharge of his duties or fails to produce any record for inspection by such inspector or other official, or
(e) is guilty of contravention of or non-compliance with any other requirements of this Scheme,
he shall be punishable with imprisonment which may extend to six months or with fine which may extend to one thousand rupees, or with both.
7. Paragraph 76 gives some of the acts and omissions which are punishable and in general provides punishment for contravention or non-compliance with any other requirements of the Scheme. This provision of the Scheme has been laid down in accordance with the provisions of Section 14 which lays down that the Scheme framed under the Act may provide that any person who contravenes, or makes default in complying with, any of the provisions thereof shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
8. What is now argued by the learned counsel for the respondent is that under clause (a) of paragraph 76 what is made punishable is only failure to pay contribution which he is liable to pay under the Scheme and not failure to deposit the contribution within the time allowed under paragraph 38. Similarly it is contended that paragraph 76 (c) makes punishable failure to submit returns and not failure to submit returns in time and that the accused having already paid the contribution and sent the returns prior to the date of the filing of the complaint, the complaint could not have been instituted. In other words, the gist of the contention appears to be that even though under the Scheme a duty is imposed on the employer to pay the contribution to the Fund within the stipulated time and to submit returns within the period mentioned in the Scheme, the Scheme does not provide for its enforcement. This argument cannot be accepted. The payment of the contribution within the time allowed is mandatory under the Scheme and no exception has been provided for the avoidance of this payment within the time prescribed. This is a mandate of the statute which has to be complied with. Where there is an unqualified mandatory direction for the doing of an act calculated to cater for the welfare of the persons for whom the statute is enacted the disobedience of the mandate must be visited with a penalty and if that is not so the entire Scheme would be rendered nugatory. In our opinion the offence is complete when there has been a default of the duty imposed on the employer. If there is nothing in the statute either expressly or impliedly to the contrary, a breach of the statute becomes an offence.
9. It is instructive to compare the provisions of Section 14. Sub-section(1) provides penalty for knowingly making any false statement for avoiding any payment. Sub-section (2) says that the Scheme framed under the Act may provide that any person who contravenes or makes default in complying with any provisions of the Scheme is liable to be punished. So the intention of the legislature is clear that the default committed by the party in complying with the requirements of the Scheme is an offence. It seems to us that the whole object of the Act and the Scheme would be defeated if the interpretation adopted by the learned counsel were to be accepted. The result of such interpretation would be to leave the evil rampant to remove which was the manifest intention of the Act.
To carry out effectually the object of a statute, it must be so construed as to defeat all attempts to do or avoid in an indirect or circuitous manner that which it has prohibited or enjoined................ and a statute is understood as extending to all such circumvention and rendering them unavailing.
This is a cardinal principle of interpretation.
10. It must be presumed that the legislature enacts laws for the purpose of their being obeyed and in the case of disobedience, to enforce obedience. For every law there must be a sanction. In this case the Scheme imposes certain duties on the employer and we must presume that it was intended that the said duties should be performed by those individuals. In the absence of voluntary performance, there must be power to punish disobedience; otherwise it would be a misnomer to call such a piece of legislation as a law. We cannot accede to the contention of the learned counsel for the respondent that the will of the framers of the Act and the Scheme was that the provisions regarding the time fixed for payment of contribution and submission of returns was only an expression of a pious wish and disobedience was never meant to be visited with any penalty. Even if there is any ambiguity or doubt the principles of construction in such cases is as stated in Maxwell''s Interpretation of Statutes that where alternative constructions are equally open, that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating and that alternative is to be rejected which will introduce uncertainty, friction or confusion into the working of the system. A careful reading of clauses (a) and (c) of paragraph 76 would show that what is made punishable is failure to pay ''any'' contribution ''which he is liable to pay under the Scheme''. What he is made liable to pay under paragraph 38 (1) is the employer''s contribution for every month within fifteen days of the close of every month, not, be it noted, the consolidated contribution for more months than one. So when after fifteen days of the close of the month the employer fails to pay to the Fund his share of the contribution for the previous month, it is a failure to pay within the meaning of clause (a) of paragraph 76 and he is liable to be proceeded against, no matter whether he pays the amount later. Similarly clause (c) refers to the failure to submit any returns required by the Scheme. Paragraph 36 requires that the returns should be sent within a particular time and if he fails to do so there is a failure to send the returns as required by the Scheme. We are, therefore, of opinion that the default will be punishable under clauses (a) and (c) of paragraph 76. But whatever that may be, there can be no doubt that this violation to remit the contribution in time or to submit the returns in time will undoubtedly be an offence under clause (e) of paragraph 76 which makes contravention of or non-compliance with any requirements of the Scheme an offence.
The order of the First Class Magistrate acquitting the accused is, therefore, illegal and unsustainable in law and has to be set aside. We do so and order a retrial of the case.
