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of <h1>Conviction upheld for failure to deposit employee cash security in scheduled bank</h1> <h3>Rameswar Tantia Versus Mahabir Prosad Sureka</h3> The court upheld the conviction of two petitioners under section 282B of the Indian Companies Act for failing to keep an employee's cash security in a ... Employees’ Securities to be deposited in Post office Saving Banks or scheduled Bank Issues:Conviction under section 282B of the Indian Companies Act for failure to keep employee's cash security in a special account of a scheduled bank.Allegation of contravention of section 282B(1) by the petitioners.Failure to inform the accused of their right to examine themselves as witnesses.Failure to question the petitioners regarding their knowledge of the contravention.Analysis:The judgment involved the conviction of two petitioners under section 282B of the Indian Companies Act for failing to keep an employee's cash security in a special account of a scheduled bank. The complainant, an employee of the society, deposited Rs. 500 as cash security without receiving a receipt. The defense argued that the money was a loan and not a deposit. However, the court found that the money was treated as a security deposit by the society, as evidenced by a letter from the society's attorney. Therefore, the deposit was held to be made by the complainant as cash security in accordance with the agreement.Another contention raised was whether the deposited amount was a loan or a security deposit since it carried interest. The court held that the presence of interest did not negate the deposit being a security deposit. The terms of the appointment letter indicated that any loss to the society caused by the employee would be recouped from the deposit, establishing it as a security deposit. The court emphasized that the intent was to prevent indiscriminate use of such deposits by companies, regardless of whether they carried interest.The petitioners argued that they were not directors of the society and did not knowingly contravene section 282B(1). However, the court found that as ex-officio directors, they were part of the executive committee that decided to keep security deposits within the society instead of a bank, contravening the Act. The court held that the petitioners, being aware of the society's practices, knowingly contravened the Act, leading to their conviction.Regarding the failure to inform the accused of their right to examine themselves, the court noted that there was no obligation under the relevant section to explain this right. Additionally, the court found that the failure to question the petitioners about their knowledge of the contravention did not prejudice their case, as their involvement in the executive committee's decisions was sufficient to establish their awareness of the contravention. Consequently, the petitioners were rightfully convicted, and the judgment was upheld with the dismissal of the petition.
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