(Prayer: Criminal Revision has been filed under Section 438 r/w. 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023, to call for the records of the order dated 19.09.2024 in Crl.M.P.No.2907 of 2022 in C.C.No.37 of 2017 passed by the learned Principal Special Judge for CBI Cases, VIII Additional City Civil Court, Chennai and set aside the same.)

Common Order

1. These Criminal Revision Cases have been filed as against the orders dated 19.09.2024 passed by the learned Principal Special Judge for CBI cases, VIII Additional City Civil Court, Chennai, in Crl.M.P.Nos.2907 of 2022, 181 of 2024, 4464, 9707, 4343 & 4344 of 2023, respectively in C.C.No.37 of 2017, thereby dismissed the petitions to discharge the petitioners viz., the accused 2 to 5 and 8 to 11, from the charges punishable under Sections 120-B r/w. 420, 468, 471 r/w. 511 of IPC and Section 13(2) r/w. 13(1)(d) of the Prevention of Corruption Act, 1988 (hereinafter referred to as “PC Act”).

2. All the Criminal Revision Cases are arising out of the same C.C. number on the file of the Trial Court and hence this Court passes the following common order.

3. On 08.12.2016, the respondent CBI registered three cases in RCs.Nos.33/A/2016, 34/A/2016& 37/A/2016, and proceeded with investigation. The case of the prosecution is that, during the year 2014 and 2015, the accused persons entered into a criminal conspiracy in order to cheat the Employees' Provident Fund Organisation (hereinafter referred to as the "EPFO"), thereby causing wrongful loss to the EPFO by dishonestly submitting bogus and fabricated provident fund returns with the intention to evade the payment of the employer's and employees' provident fund contributions, as well as other statutory dues and penalties payable by the accused companies.

4. It is further alleged that, after ascertaining the provident fund liabilities of the accused companies, the first accused contacted the second accused with a view to creating a second set of false and fabricated documents for production before the Employees' Provident Fund Organisation (EPFO), with the intention of reducing the provident fund liability of the accused companies. According to the prosecution, the first accused entered into a criminal conspiracy with the other accused persons on the assurance of illegal gratification. In pursuance of the said conspiracy, false and fabricated documents were allegedly prepared with the active assistance of the second accused, who is the own brother of the first accused. It is further alleged that the fabricated documents were thereafter submitted before the Enforcement Officer of the EPFO with the object of securing a reduced assessment of the provident fund dues payable by the accused companies.

5. It is further alleged that the illegal gratification was routed as consultancy charges and paid to M/s. Efficient Management Consultants HR Solutions (hereinafter referred to as “EMC HR Solutions”), a partnership firm in which Accused Nos. 1 to 3 are partners. It is also alleged that the third accused is the wife of the first accused. According to the prosecution, by adopting the aforesaid modus operandi, all the accused persons acted in concert and caused wrongful loss to the EPFO, while deriving corresponding wrongful gain for themselves. Upon completion of the investigation, the respondent filed a common final report for the offences punishable under Sections 120-B read with 420, 468, 471 r/w. 511 of the IPC and Section 13(2) read with Section 13(1)(d) of the PC Act. The Trial Court took cognizance of the said offences in C.C. No. 37 of 2017. There are totally 11 accused in the case. Except Accused Nos. 1, 6 and 7, all the remaining accused filed petitions seeking discharge from the charges and the same were dismissed by the Trial Court. Aggrieved by the orders of dismissal, the petitioners have preferred the present Criminal Revision Petitions.

6. The learned counsel appearing for the petitioner in Crl.R.C. No. 1822 of 2024 submitted that the petitioner has been arrayed as Accused No.2. He further submits that three separate FIRs had been registered in respect of three different private establishments situated at different locations, each relating to distinct transactions. However, the respondent proceeded to file a common charge sheet by including all the three cases. According to the learned counsel, it is contrary to the provisions of the ode of Criminal Procedure governing joinder of charges and joint trial. It was argued that the offences alleged in the three FIRs are separate and unconnected and therefore it cannot be clubbed together for the purpose of a common trial. Consequently, the common charge sheet is vitiated in law, and the petitioner is entitled to be discharged from the proceedings.

                     6.1. He further submitted that the second accused has been carrying on business as the sole proprietor of M/s. EMC HR Solutions since the year 2004 and it has been regularly filing its Income Tax returns and Service Tax returns. The second accused has been engaged in providing payroll management and other statutory compliance services to various establishments. It was further submitted that the services rendered by the second accused include the preparation and filing of PF returns, ESI returns, and other statutory returns. The learned counsel contended that all statements and returns prepared by the second accused were duly verified, signed, and sealed by the respective establishments concerned before being uploaded to the EPF Portal.

                     6.2. It was further submitted that the petitioner acted only as a professional consultant and had no role whatsoever in the commission of the offences alleged by the prosecution. According to the learned counsel, the mere fact that the first accused was serving in the EPFO and happened to be the brother of the second accused cannot, by itself, constitute a ground to implicate the second accused in the alleged offences. The learned counsel further contended that Accused Nos. 8 and 10, who are private establishments, were clients of the second accused. Pursuant to the consultancy agreements entered into with those establishments, the second accused had been rendering professional services and receiving consultancy charges through bank transactions from the year 2012 onwards. Therefore, the payments received by the second accused is a legitimate professional fees for the services rendered and it cannot be characterised as illegal gratification.

                     6.3. He also submitted that no complaint had been lodged by the EPFO in respect of the alleged occurrence and that the prosecution has failed to establish that any loss was caused to the EPFO on account of the alleged acts of the accused. According to the learned counsel, the allegations contained in the charge sheet are vague and not supported by any cogent material. The learned counsel further contended that, despite the allegation of fabrication of documents, the prosecution did not subject any of the disputed documents to examination by a handwriting or forensic expert to establish that the second accused had prepared or fabricated the same. According to the prosecution case the accused persons fabricated certain documents and submitted them before the EPF authorities with the intention of securing a reduction in the provident fund liability payable by the establishments concerned. However, in the absence of expert evidence connecting the second accused with the alleged fabrication, the prosecution has failed to make out a prima facie case against him. On the aforesaid grounds, the learned counsel prayed that the Criminal Revision Cases be allowed.

7. The learned counsel appearing for the petitioner in Crl.R.C. No.1656 of 2024 submitted that the petitioner has been arrayed as Accused No. 3 solely on the ground that she is the wife of the first accused. It was further submitted that the petitioner is only a joint holder of a bank account along with the first accused and that this circumstance alone has been relied upon by the prosecution to implicate her in the alleged offences. The learned counsel contended that, even according to the prosecution case, no role has been attributed to the petitioner in the commission of the alleged offences. None of the prosecution witnesses has spoken about any overt act committed by the petitioner so as to attract the offences alleged against her, nor is there any documentary evidence connecting her with the alleged conspiracy. The only circumstance relied upon by the prosecution is that she is a joint account holder with the first accused, which, by itself, is wholly insufficient to fasten criminal liability upon her.

                     7.1. The learned counsel further submitted that the petitioner is employed in the office of the Comptroller and Auditor General of India and has no connection whatsoever with the EPFO or the transactions forming the subject matter of the prosecution. It was also contended that no previous sanction for prosecution, as mandated under Section 19 of the PC Act or Section 197 of CrPC, had been obtained before initiating the proceedings against the petitioner. On the aforesaid grounds, it was prayed that the petitioner be discharged from the case.

8. The learned counsel appearing for the petitioners in Crl.R.C. Nos. 490 and 493 of 2025 submitted that the petitioners have been arrayed as Accused Nos. 4 and 5. It was contended that both the petitioners were employed in M/s. EMC HR Solutions, the proprietary concern owned by the second accused, and were receiving monthly salaries for the services rendered by them. The learned counsel further submitted that the duties of the petitioners were confined to the preparation of PF data in the prescribed format on the basis of the particulars furnished by the respective private establishment and thereafter forwarded the prepared statements to the respective establishments. The private establishments, upon verifying the correctness of the particulars contained therein, would sign and affix their official seal on the documents and subsequently upload the same to the Employees' Provident Fund (EPF) portal on their own. According to the learned counsel, the petitioners had no authority either to verify the correctness of the information furnished by the establishments or to upload the documents before the EPF authorities. Their role was purely clerical in nature, and they had no knowledge of or participation in the alleged offences and they have been arrayed as accused without any specific material connecting them with the alleged offences.

9. The learned counsel appearing for the petitioners in Crl.R.C. No. 2413 of 2024 submitted that the petitioners have been arrayed as Accused Nos. 8 and 9. It was contended that the eighth accused is a private establishment represented by its Managing Director, who has been arrayed as the ninth accused. The learned counsel further submitted that, according to the prosecution itself, an inspection was conducted on 07.09.2015 by the Enforcement Officer of the EPFO in the premises of the eighth accused establishment, and the inspection report was duly uploaded. As per the said report, the Enforcement Officer recorded that the provident fund contributions had been remitted up to date and that only certain records had not been produced during the course of inspection. Consequently, the Enforcement Officer called upon the eighth accused establishment to furnish the remaining records.

                     9.1. It was further contended that, only in response to the aforesaid requirement, Accused Nos. 8 and 9 approached the second accused for professional assistance in resolving the issues arising out of the inspection. According to the learned counsel, except for seeking such professional assistance, Accused Nos. 8 and 9 had no role whatsoever in the alleged offences, and there is no incriminating material connecting them with the alleged conspiracy. The learned counsel also drew the attention of this Court to the assessment report dated 05.01.2016 relating to the assessment years 2012–2013 and 2013–2014, wherein the Enforcement Officer provisionally assessed the provident fund dues at Rs. 1,90,74,546/-.

                     9.2. It was further contended that, if the Accused Nos. 8 and 9 entered into a criminal conspiracy with the other accused to reduce the provident fund liability, the Enforcement Officer would not have quantified the provisional dues in the said report. Pursuant to the inspection report, a show cause notice was issued to the eighth accused establishment, which was duly contested by the petitioners in accordance with law. Therefore, according to the learned counsel, there are absolutely no materials on record to prima facie establish the involvement of Accused Nos. 8 and 9 in the commission of the offences alleged by the prosecution, and they are entitled to be discharged.

10. The learned counsel appearing for the petitioners in Crl.R.C. No. 169 of 2025 submitted that the petitioners have been arrayed as Accused Nos. 10 and 11. It was contended that the tenth accused is a private establishment represented by its Managing Director, who has been arrayed as the eleventh accused. The learned counsel further submitted that, pursuant to the inspection conducted by the Enforcement Officer of EPFO, it was found that certain amounts were payable by the tenth accused establishment under the provisions of EPF & MP Act. In order to ensure compliance with the statutory requirements relating to EPF and ESI Act, the petitioners engaged M/s. EMC HR Solutions, the proprietary concern of the second accused, as a professional consultant on payment of a monthly consultancy fee of Rs.4,000/-.

                     10.1. It was further contended that there is no prohibition under the EPF & MP Act against engaging professional consultants for statutory compliance and even the proceedings under Section 7A of the EPF & MP Act are routinely attended by authorised consultants representing the establishments concerned. According to the learned counsel, there is absolutely no oral or documentary evidence connecting Accused Nos. 10 and 11 with the alleged offences, and the materials collected during the investigation do not disclose the essential ingredients of the offences alleged against them. Consequently, the petitioners are entitled to be discharged from the proceedings.

11. Heard the learned counsel appearing on either side and perused the materials placed before this Court.

12. On perusal of the counter affidavit filed by the respondent and on the submissions made by the learned counsels appearing on either side it is revealed that, there are totally 11 accused in the present case and the petitioners are arrayed as A2 to A5 and A8 to A11. The first accused was working as a Senior Social Security Assistant at the EPFO Regional Office, Chennai. The second accused is the brother of the first accused. The third accused is the wife of the first accused. The second accused is running a consultancy company in the name and style of M/s. EMC HR Solutions. The fourth and fifth accused are the employees of the EMC HR Solutions owned by the second accused. Accused Nos. 8 to 11 are private establishments which had engaged the proprietary concern of the second accused, namely M/s. EMC HR Solutions, for rendering professional consultancy services in relation to ESI AND EPF, payroll administration, and other statutory compliances concerning their employees.

13. The EPFO is the biggest social security organization in India, providing comprehensive social security for more than 40 million employees and their family members. Employees having a salary of less than Rs.15,000/- per month are to be compulsorily covered under the EPF & MP Act, 1952. Accordingly, every month, factories and other establishments have to deduct a contribution of 12% from the salary of eligible employees, and an equal share has to be borne by the employer along with administrative charges, and the same has to be paid as EPF under Section 6 of the EPF & MP Act. As per Section 13 of the EPF & MP Act, Inspectors are appointed by notification for the purpose of inquiring into the correctness of any information furnished in connection with the contribution of EPF. They can also conduct searches of any establishment and examine the employer from whom any amount is recoverable. On the basis of the inspection report, appropriate action will betaken as against the establishment.

14. On perusal of records placed before this Court, it is revealed that the accused persons, pursuant to the criminal conspiracy, dishonestly prepared and submitted false and fabricated attendance registers and salary registers pertaining to the employees of the respective establishments before the EPFO, with the intention of evading the statutory liability towards provident fund contributions payable by both the employer and the employees, together with the consequential dues and penalties. By adopting the said modus operandi, the accused caused wrongful loss to the EPFO and corresponding wrongful gain to themselves. The first accused, while serving as a public servant, abused his official position by establishing a proprietary concern in the name of the second accused, who is his own brother. Further, a current account was opened in the name of the said proprietary concern, for which the second accused was the authorised signatory. The first accused also started another business entity in the form of a partnership firm by executing a partnership deed with his mother-in-law. Thereafter, he started another partnership firm in the name of M/s. EMC HR Solutions along with his associates, executed a lease agreement in favour of the said partnership firm, and that the third accused was the lessee under the said agreement.

15. According to the inspection report submitted by the Enforcement Officer EPFO, the attendance registers, salary registers, and other employment records maintained by the private establishment were found to have been fabricated and subsequently uploaded before the EPFO with the intention of reducing the statutory provident fund liability of the establishment. Further, the particulars furnished by the establishment before various authorities were mutually inconsistent and did not tally with the records maintained by the establishment. The details relating to the employees furnished to the EPFO, the Income Tax Department, and the Insurance Company were allegedly at variance with one another, thereby indicating that the particulars uploaded before the EPFO were false and fabricated. Further, the Accused Nos. 4 and 5 prepared records on behalf of the sixth accused containing differing figures relating to the number of employees and labourers employed by the establishment, with the object of facilitating the evasion of provident fund contributions thereby causing wrongful loss to the EPFO.

16. It is further revealed during the course of investigation that, acting on the instructions of the first accused, Accused Nos. 4 and 5 allegedly prepared false and fabricated documents, which were subsequently verified and approved by the private establishments, namely Accused Nos. 8 to 11, and thereafter uploaded to the Employees' Provident Fund (EPF) portal with the object of reducing the statutory provident fund liability of the respective establishments. Further the eighth accused establishment maintained three different sets of salary statements in respect of its regular employees and that the gross salary figures reflected in the salary statements furnished to the proprietary concern of the second accused and to the Enforcement Officer did not tally with the corresponding figures disclosed in the balance sheet of the establishment.

17. Insofar as the third accused is concerned, she had received a sum of Rs.4,62,000/- in her bank account from the account of the proprietary concern, M/s. EMC HR Solutions, and that the said amount was utilised towards repayment of the equated monthly instalments (EMIs) of the housing loan availed by her. The third accused had opened a joint bank account along with the first accused and had availed three loans. Further during the period between September 2015 and March 2017, Accused Nos. 1 and 3 dishonestly received a sum of Rs.12,80,000/- by way of rental income in respect of their residential property. The third accused also made payments aggregating to Rs.6,84,774/- towards subscription to a chit fund from the account of the proprietary concern. Apart from the said transactions, several other transactions amounting to Rs.1,40,000/- are stated to have taken place through the account of the proprietary concern during the period from August 2015 to December 2015.

18. Insofar as the contention regarding sanction for prosecution is concerned, the respondent asserts that no previous sanction under Section 19 of the PC Act or Section 197 of CrPC was required for prosecuting the third accused, since the acts alleged against her were not committed in the discharge of her official duties. That apart the overt acts attributed to the third accused are spoken by L.Ws. 2, 3, 12, 21 to 23, 29, 31, 32, 34, 38, 46 and 47. Hence, the oral evidence of the said witnesses, coupled with the documentary materials collected during the investigation, prima facie establishes the involvement of the third accused in the alleged offences and is sufficient to frame the charges against her.

19. Further, the private establishments, namely Accused Nos. 8 to 11, were clients of the proprietary concern of the second accused. In pursuance of the instructions issued by the first accused, false and fabricated records were prepared for the said establishments with the object of producing them before the EPFO so as to secure a reduced assessment of the provident fund liability. By deliberately omitting the names of employees from the coverage of the EPF and by evading payment of the statutory provident fund contributions, the accused have dishonestly reduced the provident fund liability of the establishments, thereby causing wrongful loss to the EPFO and depriving the eligible employees of the social security benefits to which they were lawfully entitled under the Scheme.

20. Further, the second accused received amounts from the private establishments towards the alleged illegal arrangement and thereafter transferred a portion of the said amounts to the bank accounts of Accused Nos. 1 and 3. The said transfers constituted illegal gratification received in consideration of the official acts performed by the first accused, who facilitated the reduction of the provident fund liability of the private establishments. Acting on the instructions of the first accused, the second accused, in conspiracy with the other accused persons, prepared false and fabricated records for submission before the EPFO with the object of securing a reduced assessment of the provident fund liability of the respective establishments. Therefore, all the three cases arise out of the same modus operandi, involve a common conspiracy among the accused persons, and are founded upon a continuous course of transactions. Therefore, the filing of a common final report was legally justified, and the Trial Court rightly took cognizance of the offences on the basis of the said final report.

21. Further, the statements of the prosecution witnesses disclose the specific overt acts attributed to each of the accused persons. The oral evidence and the documentary materials collected during the course of investigation, prima facie establishes the existence of a criminal conspiracy and the involvement of the accused in the commission of the offences alleged. Therefore, the materials placed before the Trial Court are sufficient to frame charges for the offences punishable under Sections 120-B read with 420, 468, 471 r/w. 511 of IPC and Section 13(2) read with Section 13(1)(d) of the PC Act. Hence, this Court also finds no infirmity or illegality, in the order passed by the Trial Court. However, considering the facts and circumstances, the personal appearance of the petitioner in Crl.R.C.No.1656 of 2024 is dispensed with and she shall be represented by a counsel after filing appropriate application. She shall be present before the Court below at the time of furnishing of copies, framing charges, questioning under Section 313 Cr.P.C., and at the time of passing judgment.

22. Accordingly, all the Criminal Revision Cases stand dismissed. Consequently, connected miscellaneous petitions are also closed.