State of Gujarat v. Jayantilal Keshavji Mehta — 1969 DIGILAW 61 (GUJ)

JUDGMENT : N.G. Shelat, J. The facts giving rise to these three appeals broadly stated are that Mr. C. J. Patel, the complainant, an Inspector appointed by the Government of Gujarat under S. 80 of the Payment of Bonus Act, 1965, hereinafter referred to as 'the Act,' filed a complaint No. 777 of 1968 against the Sihor Electricity Works Ltd., Sihor and two others in the Court of the Judicial Magistrate First Class, Sihor. The two other are accused No. 2, the Chairman, of the Board of Directors of Sihor Electricity Works Ltd., and accused No. 8, a Manager and Engineer there, of. They are referred to along with accused No. 1 the Company as employers in respect of the said company, which has in its employment more than 20 persons, as defined in S. 2 (14) (ii) of the Act. While the complainant visited the establishment on 20-5-1967 he found that the accused had not paid bonus to its employees for the years 1964-65, 1965-66 and 1966-67, which they were liable to pay under the Act, on 30th November of each of these years and thereby they had contravened the provisions of S. 19 (b) read with Sections 10 and 11 of the Act. They are thus said to have committed offences punishable under S. 28 of the Act. Three separate complaints bearing Nos. 776, 777 and 778 of 1968 were filed on 27-9-68 by the Electrical Inspector after obtaining necessary sanction, in the Court, which after registering the same issued summons to the accused in respect thereof. On the date fixed for appearance, the accused No. 2 Jayantilal Keshavji Mehta presented an application in each of the three cases inter alia saying that he was wrongly joined in the complaint in as much as not only he was not managing the affairs of the company, but even he was not the Managing Director or Managing Agent of the Company, and that way not an employer so as to come within the ambit of S. 2 (14) (ii) of the Act. He, therefore, requested to discharge him. The complainant filed a reply thereto and pointed out that he was the person or authority with whom lay the ultimate control with regard to the affairs of the establishment and since he was that way an employer as defined under 8. He, therefore, requested to discharge him. The complainant filed a reply thereto and pointed out that he was the person or authority with whom lay the ultimate control with regard to the affairs of the establishment and since he was that way an employer as defined under 8. 2 (14) of the Act, and was thus responsible for the payment of bonus due to the employees of the Company. He, therefore, requested the Court not be decide it on such a preliminary point but decide the same after allowing parties to lead evidence. The learned Magistrate did not consider it necessary to allow complainant to lead evidence and decided that the Chairman of the Directors of any Buoh company was not covered within the definition of an employer given under S. 2 (14) (ii) of the Act, and, therefore, he by reason of his being only a Chairman, cannot be held responsible for payment of bonus, and consequently there was no justification for prosecuting accused No. 2 in the case. He, therefore, acquitted him of the offence under S. 28 of the Act, under S. 245 (l) of Criminal P. C. in all the three cases. Feeling dissatisfied with that order passed on 28-8-1969 by Mr. D. N. Medh, Judicial Magistrate First Class, Bihor, the State has come in appeal in all the three cases. They are Criminal Appeals Nos. 379, 880 and 878 of 1969 respectively. Since they raise a common question, they are heard together and a common judgment is recorded. 2. The point made out by Mr. Chhaya, learned Assistant Government Pleader for the appellant is that the learned Magistrate has not properly considered the effect of the definition of the term "Employer," and for ascertaining a3 to whether accused No. 2 was an employer, it was necessary for the Court to record the evidence that was to be adduced by the complainant in the case. Now S. 2(14) of the Act defines the term "Employer." Clause (1) thereof relates to an establishment which is a factory and Clause (2) relates to any other establishment. In this case, we are concerned with clause (2) in as much the Electricity Works is-not covered by clause (1)-it being not a factory. Thus the employer of any such establishment covered by Clause (ii) of Section 2 (14) of the Act has to be considered. In this case, we are concerned with clause (2) in as much the Electricity Works is-not covered by clause (1)-it being not a factory. Thus the employer of any such establishment covered by Clause (ii) of Section 2 (14) of the Act has to be considered. It includes, "any person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent". Now the learned Magistrate found that the prosecution had not shown by any evidence whatever that accused No. 2 was entrusted or has the ultimate control over the affairs of Sihor Electricity Works so as to be a Manager, Managing director or managing agent, and since he is merely shown as a Chairman of the Board of Directors of the company accused No. 1 he is not so covered by that definition. Now taking the second part first it is true that accused No. 2 is not so styled. He is styled as Chairman of the Directors of the Company. But while referring to Manager, Managing Director or managing agent in that part of second clause, it cannot be said that any other person differently styled or recognised cannot be considered at all as an employer under the Act. It recognises any person or authority'-as an employer, which has the ultimate control over the affairs of the Establishment. That i3 the main and the most important part of the definition. The second part - includes-any such manager etc.- where he has been so entrusted with the affairs of the company. He need not thus be a manager etc. as referred to therein, and if any such person-like accused No. 2 is shown to have ultimate control over the affairs of the establishment, he becomes an employer within this definition under S. 2 (14) (ii) of the Act. The learned Magistrate has ignored the importance of the first part-and since he is not described as a Manager etc.,-he did not hold him to be an employer of the Company. It was urged by Mr. Shah, the learned Advocate for the respondent that the com. plaint makes no reference about this accused having the ultimate control over the affairs of the Company as such. It was urged by Mr. Shah, the learned Advocate for the respondent that the com. plaint makes no reference about this accused having the ultimate control over the affairs of the Company as such. Nor is there any reference about bis having been entrusted with any such affairs of the Company and, therefore, the learned Magistrate was right in holding that the complaint did not disclose any liability of any such person as accused No. 2 in the case. It is clear that the complaint does make a reference about the accused being an employer within the definition of the term "employer" given in S. 2 (14) (ii) of the Act. This description of accused No. 2 as an employer of the Company-is enough to attract the consideration of his falling within the definition given in S. 2 (14) (ii) of the Act, and when that expression about him is used, it would be then a matter of evidence, as to how he was an 'employer' falling within that definition. Apart from that position the complainant had filed a statement in response to an application given by accused No. 1 and therein he has clearly stated that he was a person or authority with whom lay the ultimate control with regard to the affairs of the establishment, and that he was an employer responsible for payment of bonus to the employees of the Company. In those circumstances the evidence should have been allowed to be led by the parties instead of deciding any such question at a preliminary stage. There was no justification whatever to be summarily decide it as a preliminary point arising in the case. The complaint need not set out the evidence to be adduced in the case. It is essential to emphasise that a preliminary point can only be decided when on the face of the complaint as it stands, it was not maintainable in law on grounds such as for want of jurisdiction or its being time-barred. or for want of necessary sanction required by law, or where-on the facts stated in the complaint-no offence is disclosed. But in all such or other case3, where a preliminary point is required to be decided - it should be clear-that no evidence is required to be led by the parties-on facts contained in the complaint. or for want of necessary sanction required by law, or where-on the facts stated in the complaint-no offence is disclosed. But in all such or other case3, where a preliminary point is required to be decided - it should be clear-that no evidence is required to be led by the parties-on facts contained in the complaint. The learned Magistrate was, therefore, wrong in not allowing evidence to be led and deciding this question whether the accused No. 2 was an employer within the definition of the said term given under Section 2 (L4) (ii) of the Act, and acquitting the accused as done in all these thre8 cases. The orders of acquittal passed by the learned Magistrate in all the three eases are liable to be set aside and they shall go back to the Trial Court for proceeding further in accordance with law. 3. All the three appeals are allowed and the orders of acquittal passed in all the three cases by the learned Magistrate are set aside. The cases shall be sent back to the Trial Court for proceeding further in accordance with law. Appeals allowed.