Law:

Section:

Companies Ordinance (XLVII of 1984)-------Ss. 227 & 229---Failure to comply with the provisions of S.227 of Companies Ordinance, 1984---Company, under provisions of S.227 of the Companies Ordinance, 1984 was required to transfer all money or securities, deposited by its employees in pursuance of their contracts of service with that company, within fifteen days from the date of such deposit in a special account to be opened in a Scheduled Bank and no portion of such amount, could be utilized by that company, except in the case of breach of employment contract on the part of employees as provided in that contract, after notice to the employees concerned---Company had kept separate bank account for Provident Fund, but the payments were made through company's Bank account which was used for normal operation---Company, in circumstances, had mixed its normal operations with the Provident Fund Account--- Spirit and purpose of the Companies Ordinance, 1984, in respect of keeping a separate Bank Account of the Provident Fund, was to safeguard the money deposited by the employees in that respect and to foster the transparency and traceability of the payments/deposits so made in the Provident Fund account---Company by depositing cash in the Provident Fund, had violated the essence of the provisions of S.227 of the Companies Ordinance, 1984 and the purpose of maintaining separate Bank Account of the Provident Fund, had failed---Bank Statement of the Provident Fund for relevant period showed that there had been certain withdrawals of huge amounts, which did not appear to be withdrawals as a result of termination of the employment contracts---Company had contravened the provisions of S.227 of the Companies Ordinance, 1984 by using/withdrawing amount from the Provident Fund account in the normal course of operations, for which penal action provided under S.229 of Companies Ordinance, 1984 could be taken---Company and its Directors had failed to perform their duties with due care and prudence---Securities and Exchange Commission, under S.229 of the Companies Ordinance, 1984, taking lenient view, condoned the company, as the act of transfer of the adjusted contribution…

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