At Late-Night Hearing, Calcutta High Court Takes Up Issue Of Non-Payment Of Provident Fund Dues To Jute Mill Workers, Directs ED To Investigate

The Calcutta High Court has held a late-night hearing on the issue of non-payment of provident fund (PF) dues to a bunch of jute mill workers by various jute companies such as Delta Mills, etc.

A single bench of Justice Abhijit Gangopadhyay took up the matter.

It was submitted by the petitioners' advocate that the dues were to the tune of an average of Rs 2.5 lakhs each for 10 workers, amounting to a total of approximately Rs 25 lakhs.

Earlier in the day, the single bench had called for the directors of the companies and directed them to be questioned by the Serious Fraud Investigation Unit (SFIO).

Upon hearing the counsel for the SFIO, the Bench was told that the directors were actually sham directors, who were laborers in the company who were asked to take up a directorial role in exchange for some amount of money.

Court called for DSG Dhiraj Trivedi for the Enforcement Directorate and asked why the ED could not take up an investigation into the matter.

It was submitted that the ED could only investigate scheduled offenses, and that criterion would only be met if the ingredients for Section 447 of the Companies Act, 2013, had been established and if an FIR had been lodged. 

Upon hearing these submissions and analyzing the ingredients of S.447 of the Companies Act, the Court remarked:

"The ingredients of s447 of the Companies Act are writ large in this case. I am directing the SFIO to lodge an FIR at the local police station in order to enable the ED to begin their investigation."

While the counsel for the SFIO contented that it could not lodge an FIR of its own volition, the Court said that under Section 212 of the Companies Act, the Court itself was directing the SFIO to lodge the FIR in the larger public interest.

Court noted that ingredients of fraud had clearly been established in this case due to the installation of sham directors, and abuse of position committed by connivance.

Accordingly, it directed for the FIR to be lodged by the SFIO before 3 pm tomorrow, and for the details of the same to be intimated to the ED, so they could immediately begin their investigation.

The Court also directed for the five directors who were being questioned to be released, and for their mobile phones to be returned.

Matter has been listed at 3 pm tomorrow.

Case: SANATAN NASKAR v THE REGIONAL PROVIDENT FUND COMMISSIONER AND ORS.

Case No: WPA/19510/2023