Himachal Pradesh High Court
Reserved On: 27.05.2025 vs State Of H.P. & Others on 18 June, 2025
2025:HHC:18542
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. MMO No. 211 of 2025
Reserved on: 27.05.2025
Date of Decision: 18.06.2025.
Vinod Kumar
….Petitioner
Versus
State of H.P. & others
….Respondents
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting? Yes
For the petitioner : Mr. Raju Ram Rahi,
Advocate.
For respondents/State. : Mr. Lokender Kutlehria,
Additional Advocate
General
Rakesh Kainthla, Judge
The petitioner has filed the present petition under
Section 528 of the Bhartiya Nagarik Suraksha Sanhita (BNSS), 2023,
for quashing of F.I.R. No. 40 of 2018, dated 10.03.2018, registered at
Police Station Dharamshala, District Kangra, H.P. for the
commission of an offence punishable under Section 406 of Indian
____________
Whether reporters of the local papers may be allowed to see the judgment? Yes
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Penal Code (IPC) and the consequential proceedings arising out of
the said F.I.R.
2. Briefly stated, the facts giving rise to the present
petition are that the informant made a complaint to the police
stating that M/S Sidhbari Cooperative Tea Factory is an
establishment covered under the Employees Provident Fund and
Miscellaneous Provisions Act, 1952. The employer of the
establishment is under a statutory obligation to deduct the
employee’s share of the Provident Fund contribution from their
wages. The deducted amount is like a trust fund with the employer.
It was found that M/S Sidhbari Cooperative Tea Factory had
deducted the employee’s share of contribution from their wages
w.e.f. March 2016 to July 2017, but failed to deposit the contribution
into the statutory fund. Therefore, offences punishable under
Sections 406 and 409 of the IPC were committed by the employer.
The police registered the F.I.R. and conducted the investigation.
3. Being aggrieved by the registration of the F.I.R. and the
investigation conducted by the police. The petitioner has filed the
present petition for quashing the F.I.R. It has been asserted that the
petitioner had no concern with the processing, producing,
transporting and marketing of tea. M/S Sidhbari Cooperative Tea
3
Factory invited quotations as per the resolution dated 07.10.2014 for
leasing out the Tea factory from 01.01.2015 till 31.12.2019. The
petitioner quoted the highest amount of ₹ 71,14,914/-, and the lease
was awarded in favour of the petitioner. The petitioner was facing
difficulty in running the factory. The factory failed to produce 2 lakh
KG per annum as mentioned in the tender. The petitioner had to
clear the past liability of ₹ 5 lakhs. He suffered losses. He requested
a reduction in the lease money. This request was accepted, and the
lease money was reduced to ₹ 15 lakh per annum for the first five
years and ₹ 16,50,000/- for the next five years. The society was
superseded on 16.05.2017, and notice of termination of the lease
deed was received by the petitioner on 01.09.2017. The petitioner is
not registered under the Employees’ Provident Fund and
Miscellaneous Provisions Act, 1952 and the contributions are to be
paid by the principal employer. The workers were not employed by
the petitioner, but they were engaged by M/S Sidhbari Cooperative
Society. The responsibility of the employees was not delegated to
the petitioner. The F.I.R. does not disclose any cognizable offence.
The matter involves a civil dispute. The continuation of the
proceedings would amount to an abuse of the process of the Court.
Therefore, it was prayed that the present petition be allowed and the
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F.I.R. and the consequential proceedings arising out of the said F.I.R.
be quashed.
4. I have heard Mr. Raju Ram Rahi, learned counsel for the
petitioner and Mr. Lokender Kuthelria, Additional Advocate General,
for respondents No.1 and 2/State.
5. Mr. Raju Ram Rahi, learned counsel for the petitioner,
submitted that a false F.I.R. was registered against the petitioner.
The petitioner is not the Principal employer and is not liable to
deposit the EPF contribution. The allegations in the F.I.R. do not
constitute the commission of any cognizable offence; rather, it is a
civil dispute. Therefore, he prayed that the present petition be
allowed and the F.I.R. and consequential proceedings arising out of
the same F.I.R. be quashed. He relied upon Horticulture Experiment
Station, Gonikoppal, Coorg vs Regional Provident Fund Organisation
2022 (4) 516 in support of his submission.
6. Mr. Lokender Kutlehria, Additional Advocate General for
the respondents Nos 1 and 2/State, submitted that the petitioner
falls within the definition of the employer. He had deducted
contributions from the employees. Therefore, he was duty-bound to
deposit them into the statutory funds; however, he failed to do so,
5
which amounts to a breach of trust. Therefore, he prayed that the
present petition be dismissed.
7. I have given considerable thought to the submissions
made at the bar and have gone through the records carefully.
8. The law relating to quashing of criminal cases was
explained by the Hon’ble Supreme Court in B.N. John v. State of
U.P., 2025 SCC OnLine SC 7 as under: –
“7. As far as the quashing of criminal cases is concerned, it
is now more or less well settled as regards the principles to
be applied by the court. In this regard, one may refer to the
decision of this Court in State of Haryana v. Ch. Bhajan
Lal, 1992 Supp (1) SCC 335, wherein this Court has
summarised some of the principles under which
FIR/complaints/criminal cases could be quashed in the
following words:
“102. In the backdrop of the interpretation of the
various relevant provisions of the Code under Chapter
XIV and of the principles of law enunciated by this Court
in a series of decisions relating to the exercise of the
extraordinary power under Article 226 or the inherent
powers under Section 482 of the Code which we have
extracted and reproduced above, we give the following
categories of cases by way of illustration wherein such
power could be exercised either to prevent abuse of the
process of any court or otherwise to secure the ends of
justice, though it may not be possible to lay down any
precise, clearly defined and sufficiently channelised and
inflexible guidelines or rigid formulae and to give an
exhaustive list of myriad kinds of cases wherein such
power should be exercised.
6
(1) Where the allegations made in the first
information report or the complaint, even if they are
taken at their face value and accepted in their
entirety, do not prima facie constitute any offence or
make out a case against the accused.
(2) Where the allegations in the first information
report and other materials, if any, accompanying
the FIR do not disclose a cognizable offence,
justifying an investigation by police officers
under Section 156(1) of the Code except under an
order of a Magistrate within the purview of
Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in
the FIR or complaint and the evidence collected in
support of the same do not disclose the
commission of any offence and make out a case
against the accused.
(4) Where the allegations in the FIR do not constitute
a cognizable offence but constitute only a non-
cognizable offence, no investigation is permitted by a
police officer without an order of a Magistrate as
contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or
complaint are so absurd and inherently
improbable on the basis of which no prudent
person can ever reach a just conclusion that there
is sufficient ground for proceeding against the
accused.
(6) Where there is an express legal bar engrafted in
any of the provisions of the Code or the concerned Act
(under which a criminal proceeding is instituted) to
the institution and continuance of the proceedings
and/or where there is a specific provision in the Code
or the concerned Act, providing efficacious redress for
the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly
attended with mala fide and/or where the
7
proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the
accused and with a view to spite him due to a
private and personal grudge.” (emphasis added)
8. Of the aforesaid criteria, clause no. (1), (4) and (6) would
be of relevance to us in this case.
In clause (1) it has been mentioned that where the
allegations made in the first information report or the
complaint, even if they are taken at their face value and
accepted in their entirety do not prima facie constitute any
offence or make out a case against the accused, then the
FIR or the complaint can be quashed.
As per clause (4), where the allegations in the FIR do not
constitute a cognizable offence but constitute only a non-
cognizable offence, no investigation is permitted by a
police officer without an order dated by the Magistrate as
contemplated under Section 155 (2) of the CrPC, and in
such a situation, the FIR can be quashed.
Similarly, as provided under clause (6), if there is an
express legal bar engrafted in any of the provisions of
the CrPC or the concerned Act under which the criminal
proceedings are instituted, such proceedings can be
quashed.”
9. This position was reiterated in Ajay Malik v. State of
Uttarakhand, 2025 SCC OnLine SC 185, wherein it was observed:
“8. It is well established that a High Court, in exercising its
extraordinary powers under Section 482 of the CrPC, may
issue orders to prevent the abuse of court processes or to
secure the ends of justice. These inherent powers are
neither controlled nor limited by any other statutory
provision. However, given the broad and profound
nature of this authority, the High Court must exercise it
sparingly. The conditions for invoking such powers are
embedded within Section 482 of the CrPC itself, allowing
the High Court to act only in cases of clear abuse of process
8or where intervention is essential to uphold the
ends of justice.
9. It is in this backdrop that this Court, over the
course of several decades, has laid down the principles and
guidelines that High Courts must follow before quashing
criminal proceedings at the threshold, thereby pre-
empting the Prosecution from building its case before the
Trial Court. The grounds for quashing, inter alia,
contemplate the following situations : (i) the criminal
complaint has been filed with mala fides; (ii) the FIR
represents an abuse of the legal process; (iii) no prima facie
offence is made out; (iv) the dispute is civil in nature; (v.)
the complaint contains vague and omnibus allegations;
and (vi) the parties are willing to settle and compound the
dispute amicably (State of Haryana v. Bhajan Lal, 1992 Supp
(1) SCC 335).
10. It was held in State of Karnataka v. L.
Muniswamy (1977) 2 SCC 699: 1977 SCC (Cri) 404 that the High
Court can quash the criminal proceedings if they amount to an
abuse of the process of the Court. It was observed on page 703:
“7. … In the exercise of this wholesome power, the High
Court is entitled to quash a proceeding if it concludes that
allowing the proceeding to continue would be an abuse of
the process of the Court or that the ends of justice require
that the proceeding ought to be quashed. The saving of the
High Court’s inherent powers, both in civil and criminal
matters, is designed to achieve a salutary public purpose,
which is that a court proceeding ought not to be permitted
to degenerate into a weapon of harassment or persecution.
In a criminal case, the veiled object behind a lame
prosecution, the very nature of the material on which the
structure of the prosecution rests, and the like would
justify the High Court in quashing the proceeding in the
interest of justice. The ends of justice are higher than the
9ends of mere law, though justice has got to be administered
according to laws made by the legislature. The compelling
necessity for making these observations is that without a
proper realisation of the object and purpose of the
provision which seeks to save the inherent powers of the
High Court to do justice, between the State and its subjects,
it would be impossible to appreciate the width and contours
of that salient jurisdiction.”
11. The term abuse of the process was explained in
Chandran Ratnaswami v. K.C. Palanisamy, (2013) 6 SCC 740: (2014)
1 SCC (Cri) 447: 2013 SCC OnLine SC 450 at page 761:
33. The doctrine of abuse of process of court and the
remedy of refusal to allow the trial to proceed is a well-
established and recognised doctrine both by the English
courts and courts in India. There are some established
principles of law which bar the trial when there appears to
be an abuse of the process of the court.
34. Lord Morris in Connelly v. Director of Public Prosecutions
[1964 AC 1254 : (1964) 2 WLR 1145 : (1964) 2 All ER 401 (HL)],
observed: (AC pp. 1301-02)
“There can be no doubt that a court which is endowed
with a particular jurisdiction has powers which are
necessary to enable it to act effectively within such
jurisdiction. … A court must enjoy such powers in order
to enforce its rules of practice and to suppress any
abuses of its process and to defeat any attempted
thwarting of its process.
***
The power (which is inherent in a court’s jurisdiction) to
prevent abuses of its process and to control its
procedure must in a criminal court include a power to
safeguard an accused person from oppression or
prejudice.”
10
In his separate pronouncement, Lord Delvin in the same
case observed that where particular criminal proceedings
constitute an abuse of process, the court is empowered to
refuse to allow the indictment to proceed to trial.
35. In Hui Chi-ming v. R. [(1992) 1 AC 34 : (1991) 3 WLR 495 :
(1991) 3 All ER 897 (PC)], the Privy Council defined the word
“abuse of process” as something so unfair and wrong with
the prosecution that the court should not allow a
prosecutor to proceed with what is, in all other respects, a
perfectly supportable case.
36. In the leading case of R. v. Horseferry Road Magistrates’
Court, ex p Bennett [(1994) 1 AC 42 : (1993) 3 WLR 90 : (1993)
3 All ER 138 (HL)], on the application of the abuse of
process, the court confirms that an abuse of process
justifying the stay of prosecution could arise in the
following circumstances:
(i) where it would be impossible to give the accused a
fair trial; or
(ii) where it would amount to misuse/manipulation of
the process because it offends the court’s sense of
justice and propriety to be asked to try the accused in
the circumstances of the particular case.
37. In R. v. Derby Crown Court, ex p Brooks [(1984) 80 Cr App
R 164 (DC)], Lord Chief Justice Ormrod stated:
“It may be an abuse of process if either (a) the
prosecution has manipulated or misused the process of
the court to deprive the defendant of a protection
provided by law or to take unfair advantage of a
technicality, or (b) on the balance of probability the
defendant has been, or will be, prejudiced in the
preparation of conduct of his defence by delay on the
part of the prosecution which is unjustifiable.”
38. Neill, L.J. in R. v. Beckford (Anthony) [(1996) 1 Cr App R
94: 1995 RTR 251 (CA)], observed that:
“The jurisdiction to stay can be exercised in many
different circumstances. Nevertheless, two main strands
11can be detected in the authorities: (a) cases where the
court concludes that the defendant cannot receive a fair
trial; (b) cases where the court concludes that it would
be unfair for the defendant to be tried.”
What is unfair and wrong will be for the court to determine
on the individual facts of each case.
12. It was held in Mahmood Ali v. State of U.P., (2023) 15
SCC 488: 2023 SCC OnLine SC 950 that where the proceedings are
frivolous or vexatious, the Court owes a duty to quash them.
However, the Court cannot appreciate the material while
exercising jurisdiction under Section 482 of the CrPC. It was
observed at page 498:
13. In frivolous or vexatious proceedings, the Court owes a
duty to look into many other attending circumstances
emerging from the record of the case over and above the
averments and, if need be, with due care and
circumspection, try to read between the lines. The Court,
while exercising its jurisdiction under Section 482CrPC or
Article 226 of the Constitution, need not restrict itself only
to the stage of a case but is empowered to take into account
the overall circumstances leading to the
initiation/registration of the case as well as the materials
collected in the course of investigation. Take, for instance,
the case at hand. Multiple FIRs have been registered over a
period of time. It is in the background of such
circumstances that the registration of multiple FIRs
assumes importance, thereby attracting the issue of
wreaking vengeance out of private or personal grudge, as
alleged.
14. State of A.P. v. Golconda Linga Swamy [State of
A.P. v. Golconda Linga Swamy, (2004) 6 SCC 522: 2004 SCC
(Cri) 1805], a two-judge Bench of this Court elaborated on
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the types of materials the High Court can assess to quash
an FIR. The Court drew a fine distinction between
consideration of materials that were tendered as evidence
and appreciation of such evidence. Only such material that
manifestly fails to prove the accusation in the FIR can be
considered for quashing an FIR. The Court held : (Golconda
Linga Swamy case [State of A.P. v. Golconda Linga Swamy,
(2004) 6 SCC 522: 2004 SCC (Cri) 1805], SCC p. 527, paras 5-
7)
“5. … Authority of the court exists for the advancement
of justice, and if any attempt is made to abuse that
authority so as to produce injustice, the court has power
to prevent such abuse. It would be an abuse of the
process of the court to allow any action which would
result in injustice and prevent the promotion of justice.
In the exercise of its powers court would be justified in
quashing any proceeding if it finds that initiation or
continuance of it amounts to abuse of the process of the
court or quashing of these proceedings would otherwise
serve the ends of justice. When no offence is disclosed by
the complaint, the court may examine the question of
fact. When a complaint is sought to be quashed, it is
permissible to look into the materials to assess what the
complainant has alleged and whether any offence is made
out, even if the allegations are accepted in toto.
6. In R.P. Kapur v. State of Punjab [R.P. Kapur v. State of
Punjab, 1960 SCC OnLine SC 21: AIR 1960 SC 866], this
Court summarised some categories of cases where
inherent power can and should be exercised to quash the
proceedings : (SCC OnLine SC para 6)
(i) where it manifestly appears that there is a legal
bar against the institution or continuance, e.g. want
of sanction;
(ii) where the allegations in the first information
report or complaint taken at their face value and
accepted in their entirety do not constitute the
offence alleged;
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(iii) where the allegations constitute an offence, but
there is no legal evidence adduced or the evidence
adduced clearly or manifestly fails to prove the charge.
7. In dealing with the last category, it is important to bear in
mind the distinction between a case where there is no legal
evidence or where there is evidence which is clearly
inconsistent with the accusations made, and a case where
there is legal evidence which, on appreciation, may or may
not support the accusations. When exercising jurisdiction
under Section 482 of the Code, the High Court would not
ordinarily embark upon an enquiry whether the evidence in
question is reliable or not or whether, on a reasonable
appreciation of it, the accusation would not be sustained.
That is the function of the trial Judge. The judicial process,
no doubt, should not be an instrument of oppression or
needless harassment. The court should be circumspect
and judicious in exercising discretion and should take all
relevant facts and circumstances into consideration
before issuing the process, lest it would be an
instrument in the hands of a private complainant to
unleash vendetta to harass any person needlessly. At the
same time, the section is not an instrument handed over
to an accused to short-circuit a prosecution and bring
about its sudden death.” (emphasis supplied)
13. The present petition is to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
14. It is undisputed that the petitioner was running a
factory at the time of inspection. It was specifically mentioned in
the present petition that the petitioner had taken the factory on
lease from M/s Sidhbari Cooperative Tea Factory. Section 2(e) of
the EPF Act defines the employer as the owner or occupier of the
14
factory, including the agent of such owner or occupier. The term
occupier of the factory is defined in Section 2(k) of the EPF Act as
the person who has ultimate control over the affairs of the
factory, and where the affairs are entrusted to a managing agent,
such agent shall be deemed to be the occupier of the factory.
15. In the present case, the averments made in the present
petition show that management of the factory was entrusted to
the petitioner by way of lease. It was laid down by the Madras
High Court in Basha Khan, In re, 1965 SCC OnLine Mad 288: AIR
1966 Mad 343 that a lessee of a factory will fall within the
definition of the occupier. It was observed at page 344:
“3… It is an undisputed fact that the petitioner is the owner
of the rice mills, but he has leased the mills under Ex. D-1
and was receiving the rent every month, the lessees would
no doubt be occupiers within the meaning of Section 2(n)
of the Act, as they have ultimate control over the affairs of
the mills. If they fail to comply with the provisions of
Section 7 of the Factories Act, they could be proceeded
against for such default. If, however, they complied with
the provisions of Section 7 of the Factories Act and gave the
name of the manager, that person could be proceeded
against for violation of R. 100(2) of the Rules framed under
the Act.”
16. A similar view was taken in South India Corporation
(Travancore) Ltd. v. Chief Inspector of Factories, 1956 SCC OnLine
Ker 143, wherein it was observed:
15
12. The above provisions of the Act and rules make it
perfectly clear that the owner of a factory has, by virtue of
such status alone, no right to make an application for and
get either the registration and licensing of a factory or the
transfer or renewal of the licence once granted. If the
owner came in at all, it was only for incurring liability in
the stead of the occupier in particular circumstances. It
was the “occupier” and he alone who took the paramount
place. Such an “occupier” may be an owner or lessee, or a
mere licensee. But the point was that he must have the
right to occupy a property and dictate how it had to be
managed. He might not actually occupy the building, but
he must have control of its operation.
17. Therefore, the petitioner will fall within the definition
of the occupier, and he, being an occupier, was bound to deduct
the contribution and deposit the same into the statutory funds.
Hence, the submission that the petitioner is not liable to deposit
the contribution and the proceedings were wrongly initiated
against him cannot be accepted.
18. The judgment in Horticulture Experiment Station
(supra) deals with the recovery proceedings initiated under
Section 14 B of the EPF Act, and the same is not relevant in the
present case.
19. It was submitted that the registration of the F.I.R. is
not proper because the remedy of recovery of the amount by way
of civil proceedings was available to the Inspector, and instead of
16
resorting to such a recovery, the Inspector had filed a complaint,
which is impermissible. This submission cannot be accepted.
Explanation to Section 406 of the IPC specifically provides that
failure to deposit the contribution will be an offence punishable
under Section 406 of the IPC. Therefore, the Inspector was
justified in taking recourse to Section 406 of the IPC, and his
action cannot be faulted.
20. It was laid down by the Hon’ble Supreme Court in
Trisuns Chemical Industry v. Rajesh Agarwal, (1999) 8 SCC 686:
2000 SCC (Cri) 47 that the availability of the remedy of arbitration
is no ground to quash the criminal proceedings. It was observed
at page 690:
“9. We are unable to appreciate the reasoning that the
provision incorporated in the agreement for referring the
disputes to arbitration is an effective substitute for a
criminal prosecution when the disputed act is an offence.
Arbitration is a remedy for affording relief to the party
affected by a breach of the agreement, but the arbitrator
cannot conduct a trial of any act which amounted to an
offence, albeit the same act may be connected with the
discharge of any function under the agreement. Hence,
those are not good reasons for the High Court to axe down
the complaint at the threshold itself. The investigating
agency should have had the freedom to go into the whole
gamut of the allegations and to reach a conclusion of its
own. Pre-emption of such investigation would be justified
only in very extreme cases as indicated in State of
17Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992
Supp (1) SCC 335: 1992 SCC (Cri) 426].”
21. Hence, the availability of the alternative remedy will
not help the petitioner.
22. The allegations in the F.I.R. show that the petitioner
had failed to deposit the EPF contribution despite its deduction.
These allegations, prima facie, satisfy the requirement of Section
406 of the IPC, and the F.I.R. cannot be quashed in the present
case.
23. No other point was urged.
24. In view of the above, the present petition fails, and the
same stands dismissed.
25. The observations made herein before shall remain
confined to the disposal of the petition and will have no bearing,
whatsoever, on the merits of the case.
(Rakesh Kainthla)
Judge
18th June, 2025.
(ravinder)