Bombay High Court
ASHUTOSH SATCHIDANAND PANDEYversusTHE STATE OF MAHARASHTRA AND ANR
- Decided
- Disposal
- Disposed Off
Holding
The Court held that no prima facie case exists against the petitioner and therefore quashed the FIR, charge sheet and related proceedings.
Summary
The petitioner, former director and CEO of Kailasa Analytics, was charged under IPC Sections 406 and 409 for the company's failure to deposit statutory Employees' Provident Fund (EPF) contributions for October and November 2017. The company later paid the arrears with interest, but the prosecution continued. The petitioner argued that he was not the director at the time, had no knowledge of the delay, and that the case was covered by the precedent in Rolta India Ltd. The court examined the elements of criminal breach of trust and found that the FIR did not allege any dishonest use or misappropriation of the EPF amounts, nor did it identify the petitioner as an employer liable under Section 405. Concluding that there was no prima facie case, the court quashed the FIR, the charge sheet, and the discharge order, while directing the petitioner to pay a modest cost to a charitable trust.
Issues considered
- Whether the FIR and criminal proceedings under IPC Sections 406 and 409 for non‑payment of EPF contributions can be quashed under CrPC Section 482 and BNSS Sections 528/529.
- Whether a CEO, who was not a director at the relevant time, can be held liable for criminal breach of trust for the company's statutory default.
- Whether subsequent payment of the EPF dues defeats criminal liability.
- Whether the absence of specific allegations of dishonest use of the EPF amounts defeats the ingredients of Sections 406 and 409 IPC.
Legislation cited
- Bharatiya Nagarik Suraksha Sanhita, 2023 — s. 528, 529
- Code of Criminal Procedure, 1973 — s. 482
- Indian Penal Code, 1860 — s. 405, 406, 409
Subjects
- EPF default
- criminal breach of trust
- IPC 406
- IPC 409
- quash of FIR
- corporate liability
- CEO liability
- Section 482 CrPC
- BNSS
Judgment
CRI WP-2661-26.doc
Amberkar
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO. 2661 OF 2026
Ashutosh Satchidanand Pandey .. Petitioner
Versus
The State of Maharashtra & Anr. .. Respondents
....................
Mr. Shyam Dewani a/w Mr. Sachet Makhija & Ms. Asmita Maurya,
Advocates for Petitioner
Mr. Sukanta Karmakar, APP for State
Ms. Shraddha Talkar, Advocate for Respondent No. 2
Mr. Satyajit V. Virnodkar (Goregaon Police Station) Pairavi Officer
...................
CORAM : MILIND N. JADHAV, J.
DATE : SEPTEMBER 17, 2026
P. C.:
1. Heard Mr. Dewani, learned Advocate for Petitioner; Mr.
Karmakar, learned APP for State and Ms. Talkar, learned Advocate for
Respondent No. 2.
2. Present Petition is filed under Sections 528 and 529 of Bharatiya
Nagarik Suraksha Sanhita, 2023 to seek quashing of proceedings in
Criminal Case No. 3745/PW/2019 pending before Judicial Magistrate
at Borivali, Mumbai arising out of Crime No. 387 of 2018 registered
with Goregaon Police Station and all consequent actions in pursuance
thereof and for setting aside the order dated 20.02.2026 passed by the
learned Judicial Magistrate First Class, 67th Court, Borivali, Mumbai
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rejecting the Petitioner's Discharge Application (Exh. 3) in CC No.
3745/PW/2019.
3. Petition is an ex-director and CEO of the Company called M/s.
Kailasa Analytics and Services Pvt. Ltd. He was the founder director of
the said company. By order dated 07.09.2017 passed by the Registrar
of Companies, Mumbai, he stood disqualified as director.
The said Company defaulted in payment of Employees' Provident Fund
(EPF) amount, which is the statutory amount, to the EPF Authority for
the period of October and November 2017.
4. Respondent No. 2 - Provident Fund Implementation Officer at
Central Government Employees Provident Fund Organisation Office in
Mumbai filed a complaint and registered an FIR on 04.07.2018 under
Section 406 & 409 of the IPC against the Petitioner.
Reading of the FIR, prima facie, shows that it has been filed against
the Petitioner because he is the director of the Company.
5. The record itself shows that immediately after the FIR was filed,
the said company immediately paid the EPF contribution amount for
the said unpaid period along with interest. The prosecution, however,
has continued. The reasons for non-payment of the said amount
towards EPF contribution was on account of the Company having
faced financial constraints during the months of October and
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November 2017. Record also shows that during the said months
rather during the said period, the Petitioner who was working as the
CEO of the Company and was no longer the director, also did not draw
his salary. Most importantly, the Petitioner was completely unaware
about the fact that there was a delay in deposit of the EPFC
contribution amount. It is seen that on 29.11.2018, the entire amount
towards EPF contribution which was in arrears was duly deposited.
6. Case of the prosecution against the Petitioner is for non-
remittance of EPF contribution amount of Rs. 42,453/- and Rs.
38,845/- for the months of October 2017 and November 2017. The
petitioner has approached this Court for quashing.
7. Mr. Dewani would subit that the amount was deposited and
delay in depositing the amount could not be attributed to the
Petitioner who was not even the director of the Company at the then
time. He would submit that since the amount is deposited, the case of
the Petitioner is fully covered by the decision of this Court in the case
of Rolta India Ltd & Anr. v. State of Maharashtra & Anr. 1. He has
placed the said decision before this Court for consideration and for
quashing.
8. Per contra, Ms. Talkar, learned Advocate for Respondent No. 2 -
Complainant has placed on record written submissions dated
1 Order dated 01.08.2024 in Criminal Writ Petition No. 3078 of 2018
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28.08.2026. She would submit that the FIR, investigation papers and
chargesheet prima facie discloses the essential ingredients of the
offenses of breach of trust and cheating. She would submit that the
prosecution is initiated bona fide on the basis of statutory records
maintained by Respondent No. 2's office and therefore, no case is
made out for exercising extraordinary jurisdiction of this Court for
quashing the FIR, since the Petitioner is prima facie guilty. She would
submit that Petition is misconceived since the FIR and chargeseeht
would disclose prima facie offence based upon statutory records and
material collected during investigation. She would submit that failure
to remit the deducted EPF contribution amount within the prescribed
period attracts criminal liability and even if it is true that subsequent
payment has been made, that does not absolve the Petitioner from
criminal liability. She would submit that subsequent full compliance of
payment of the amount renders continuation of the proceedings
oppressive since it is confirmed that the Petitioner has committed the
said offense. She would submit that the plea of subsequent
compliance is a matter for consideration during trial and does not
constitute a ground for quashing the proceedings. Next she would
submit that non-impleadment of the Company does not render the
prosecution unsustainable and it merely raises a disputed question of
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facts to be decided during trial. Hence, she would submit that the
Petition be dismissed and the prosecution be continued.
9. I have considered the submissions advanced by both the learned
Advocates appearing for the parties and perused the record of the
case.
10. According to the Complaint, an offense is committed under
Sections 406 and 409 of the Indian Penal Code, 1860 (for short "IPC")
by the Petitioner who was admittedly the CEO of the Company which
defaulted in payment of the statutory EPF contribution for two months
in October and November 2017.
11. Section 405 of the IPC is the offense of criminal breach of trust
whereas Section 406 is the punishment for criminal breach of trust.
Section 409 pertains to criminal breach of trust by public servant or
banker or merchant or agent.
12. In the present case, the Company has defaulted in payment of
the amount whereas the Petitioner before the Court is the CEO of the
Company. Prima facie, the Petitioner being the CEO cannot be
regarded as an employer because if Explanation 1 to Section 405 is
considered, then the definition of 'criminal breach of trust' under
Section 405 can only implicate the employer who can be held
responsible for the default in making the payment of contribution.
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Further, no prima facie case is made out against the Petitioner in the
FIR itself as the ingredients of the offense under Sections 406 and 409
of IPC have not been made out by the Complainant.
13. The Complainant has not stated in what manner the Petitioner
has used the said property for his own use or dishonestly has used the
said property or disposed of the said property, which is a prime
requirement under Section 405 of the IPC to constitute criminal
breach of trust. All that the Complaint merely states is that the said
amounts have not been deposited towards EPF contribution.The
Complaint nowhere states as to in what manner the said amounts have
been used by the Petitioner dishonestly for his own use. Therefore
having failed to make out the ingredients of Section 406 and 409 of
the IPC, allegations made by the Complainant are not at all
sustainable.
14. I am of the opinion that even if the allegations in the FIR are
taken at their face value and accepted in their entirety, it still does not
constitute the alleged offenses. The fact remains that had it been the
intention of the Petitioner to commit criminal breach of trust, he acting
as the CEO of the Company, would not have deposited the amount in
the EPF account subsequently. Therefore, the conduct of the Petitioner
does not reflect dishonesty in any manner. There was no criminal
intention for committing the said offense. In this view of the matter,
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the continuation of criminal proceedings in furtherance to the FIR and
the charge sheet against the Petitioner would be, in my opinion unfair,
unjust and against the interest of justice. It would rather only amount
to an abuse of the due process of law and a sheer waste of judicial
time. I am of the opinion that there is nothing likely to be achieved by
continuation of such proceedings. The case of the Petitioner before me
is fully covered by the decision of this Court in the case of Rolta India
Ltd. & Anr. (supra) relied upon by the learned Advocate for the
Petitioner.
15. Considering the aforesaid facts and circumstances, the
prosecution is not likely to succeed if the proceedings are continued
and taken to its logical end. There is no prima facie case warranting
continuation of prosecution. Therefore, to secure the ends of justice,
the FIR and the consequential proceedings are required to be quashed
and set aside in exercise of the powers conferred under Section 482 of
the Cr.P.C. However, since admittedly the Petitioner was the CEO of
the Company and in charge of its operations, he has given reasons
about financial constraints faced by the Company during the said
period. Though it is true that the amounts are deposited subsequent
to the filing of the FIR, non-deposit of the said amounts which were
statutory amounts was contrary to law and would therefore attract
penal consequences.
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16. I am, therefore, of the opinion that the Petitioner, being the CEO
of the Company was responsbile and should had be vigilent about the
effect of non-payment of statuory dues and its consequnces and ought
to have ensured that the said deposit was made. For not having made
the said deposit on time, I am inclined to direct the Petitioner to pay
costs for his such actions as condition for allowing the present Petition
for quashing on merits of the matter. Hence, on exercising powers
conferred under Section 482 of the Cr.P.C. read with Section 528 of the
BNSS, I am inclined to allow the present Petition subject to Petitioner
paying costs of Rs. 5,000/- towards charity. Petitioner is directed to
pay this costs amounts to the Corpus of A.K. Munshi Yojana a trust
which runs medical centres, vocational training centres and which also
runs a Special School called J.T. Sheth Mandbuddhi Vikas Kendra,
imparting education and training to the needs of 150 special children
in the field of Education (Classes for 6 to 18 years), early intervention
(upto 6 years) and vocational training (18 years above) having its
school address and building at A.K. Munshi Yojana Chowk, 3 rd
Panjarapole Lane, C.P. Tank, Mumbai – 400 004 [Contact Nos.
22425513 / 22423654] registered under the Society Registration Act,
XXI of 1980 under No. : 387/81 GBBSD and the Public Trust Act, XXIX
of 1950 under No. F-6809. RCI Reg. No. 0163.
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17. Petitioner is present in Court and through his Advocates agrees
to pay the aforesaid costs amount to charity within a period of two
weeks from the date of uploading of this order.
18. In view of the above, the present Petition is allowed in terms of
prayer clauses (a) and (b) which read thus:-
“(a) Quash and set aside First Information Report bearing Crime No.
387 of 2018 as well as the Chargesheet filed in respect thereof
vide Criminal Case No. PW/3745/2019 which is pending before
Hon'ble Judicial Magistrate, Borivali and all the consequential
actions in pursuance thereto, as far as they are pertaining to the
Petitioner herein;
(b) Quash and set aside the order dated 20.02.2026 passed by the Ld.
Judicial Magistrate First Class, 67th Court, Borivali, Mumbai, on
the Discharge Application (Exh-3) filed by the Petitioner in
Criminal Case No. 3745/PW/2019 and consequently allow the
said discharge application and discharge the Petitioner form the
said proceedings."
19. List the Petition for compliance of the order on 8th October,
2026.
20. Advocate for Petitioner shall remain present and show
compliance on that date. If he does not remain present and there is
non-compliance of this order, Court will pass appropriate order for
recall of this order, which shall be noted by the Petitioner.
21. Writ Petition is allowed and disposed.
Amberkar [ MILIND N. JADHAV, J. ]
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Digitally signed
RAVINDRA by RAVINDRA
MOHAN
MOHAN AMBERKAR
AMBERKAR Date: 2026.09.17
11:41:52 +0530
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