Bombay High Court gives relief to builder Niranjan Hiranandani in Provident Fund case

Mumbai: In a major reprieve to Niranjan Hiranandani, managing director of the real-estate giant Hiranandani Group, the Bombay High Court on Wednesday quashed a chargesheet filed against him. The HC even junked a First Information Report (FIR) registered against the billionaire for allegedly misappropriating funds by fudging the number of employees.

A division bench of Acting Chief Justice Vijaya Tahilramani and Justice Makarand Karnik allowed Hiranandani’s petition seeking quashing of the FIR and also the charge-sheet filed against him in September 2010. Hiranandani had challenged the registration of the FIR against him for alleged non-payment of Provident Fund (PF) dues of his employees. The Central Bureau of Investigation (CBI) which had conducted a ‘surprise’ raid in Hiranandani’s office in 2004, claimed the real estate giant had failed to pay the dues of employees. The central agency claimed the due were to the tune of ` 9 crores.

Having considered the facts of the case, Justice Tahilramani said, “The allegations as levelled can only be determined by initiating an inquiry against the petitioner (Hiranandani) under the provisions of the Employees’ Provident Fund (EPF) Act..” “The action of the enforcement agencies in initiating criminal prosecution on the basis of the enforcement agencies themselves coming to a conclusion that the employer/contractor has made default and not paid the dues to the employees is impermissible.

The action of the enforcement agencies therefore in initiating the criminal proceedings is premature. The criminal prosecution lodged against the petitioners on the basis of the conclusion arrived at by the enforcement agency regarding non-payment of provident fund dues and manipulation of the record is not tenable in the teeth of the provisions of the said Act,” ACJ Tahilramani observed in her detailed order.

While quashing the proceedings, ACJ Tahilramani said, “Registration of this FIR against the petitioner amounts to an abuse of process of Court which cannot be countenanced and in order to secure the ends of justice, such an FIR and the proceedings relating thereto have to be quashed.”