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1976 DIGILAW 34 (ALL)

S. Gupta v. State

1976-01-14

K.B.ASTHANA, SATISH CHANDRA

body1976
JUDGMENT Satish Chandra, J. 1. (FOR self and FOR K. B. Asthana, C. J.) :- The question of law that requires consideration in these references is whether under Section 100 of the Factories Act, 1948, can only, one or more than one of the Directors of a Company be prosecuted FOR an offence FOR which the occupier of a factory is punishable under that Act. 2. IN R. C. Sharma v. State of U. P., AIR 1956 All. 4 a learned Single Judge held that all the partners are liable to be prosecuted. On the other hand in Hari Krishna v. State, AIR 1959 All. 794 another learned Single Judge held that only one of the partners could be prosecuted even though the Company had not nominated any Director or partner as the occupier of the factory. Faced with this conflict of opinion a learned Single Judge has referred these cases to a Division Bench. That is how these references have been laid before this Bench. 3. CHAPTER X of the Factories Act deals with Penalties and Procedure. Section 92 provides that for any contravention of any provision of this Act or of any rule made thereunder or of any order in writing given thereunder, the occupier and manager of the factory shall each be guilty of an offence and punishable. Section 100 provides for a case where the occupier of a factory is a firm or a company. Sub-Section (1) deals with a firm or other association of individuals, while sub-Section (2) refers to a company. The provisions are identical. The present is a case of a company, so sub-Section (2) is material. It provides- "100 (1)............ (2) where the ocoupier of a factory is a company, any one of the directors thereof, or in the case of a private company, any one of the shareholders, thereof, may be prosecuted and punished under this CHAPTER for any offence for which the occupier of the factory is punishable. It provides- "100 (1)............ (2) where the ocoupier of a factory is a company, any one of the directors thereof, or in the case of a private company, any one of the shareholders, thereof, may be prosecuted and punished under this CHAPTER for any offence for which the occupier of the factory is punishable. Provided that the company may give notice to the Inspector that it has nominated a director, or in the case of a private company, a shareholder, who is resident in either case within India, to be the occupier of the factory for the purposes of this CHAPTER and such director or shareholder as the case may be, shall so long as he is so resident, be deemed to be the occupier of the factory for the purposes of this CHAPTER until further notice cancelling his nomination is received by the Inspector or until he ceases to be a director or shareholder." 4. SUB-Section (2) clearly and specifically provides that any one of the directors of the company may be prosecuted and punished. There is no room for any doubt that it precludes prosecution of more than one director. If a director has been nominated under the Proviso, that director alone is liable to prosecution as the occupier of the factory. In such case the prosecuting agency has no choice to proceed against other directors. But if the company has not made the nomination under the Proviso, the main provision comes into play, under which the prosecuting agency has a choice to proceed against any one of the directors of the company. SUB-Section (2) clearly precludes more than one Director from being roped in. Hari Krishna's case was of a firm covered by sub-section (1) of Section 100, but since the provisions are identical the decision is helpful in respect of a company as well. It was held that under Section 100 "any one" of the partners could be prosecuted and punished that is, either one or the other could be prosecuted and punished, but not both. "Anyone" means any single individual ; the expression does not include more than one individual. It was held that under Section 100 "any one" of the partners could be prosecuted and punished that is, either one or the other could be prosecuted and punished, but not both. "Anyone" means any single individual ; the expression does not include more than one individual. It was also observed that if the Legislature had intended that more than one partner could be prosecuted and punished, it would have used the words "any one or more" instead of the words "any one." When the Legislature used the word "one", it was not necessary to use the word "only"; the word cannot mean any thing but "only one". The word "any" was used along with "one" to show that the prosecution had the choice of selecting one of the partners to be prosecuted and punished. The Legislature having intended that one of the partners was to be prosecuted and punished, the question arose "which one", and the reply given by the Legislature was "any one" meaning thereby that the prosecutor had the right of selecting any one of the partners for prosecution. The prosecution of both the partners of the firm was, therefore, illegal. 5. WE are, in agreement with these observations and they apply equally to the case of a company and its directors. Under Section 100 only one of the Directors can be prosecuted and punished the choice of selecting one of the directors resting on the prosecution. If the company has made a nomination under the Proviso, the choice of the prosecution disappears and only the nominated director can be proceeded against. 6. IN R. C. Sharma's case it was observed that if a firm does not nominate a person to be the occupier under the Proviso, all the partners would be individually liable. The matter was not discussed. No reasons have been given. We are satisfied that this decision does not lay down the correct Jaw. 6. IN R. C. Sharma's case it was observed that if a firm does not nominate a person to be the occupier under the Proviso, all the partners would be individually liable. The matter was not discussed. No reasons have been given. We are satisfied that this decision does not lay down the correct Jaw. In Superintendent and Remembrancer of Legal Affairs West Bengal v. Madhablal Mehta, 78 Calcutta Weekly Notes 518 it was held that the use of the words "any one" in Section 100, sub-Section (2) read with the words "occupier" and "each" in Section 92 of the Factories Act, 1948, rule out the plural and clearly establish that any one of the Directors of the Company, if there be no specific nomination of a particular specified director, and not all of them may be prosecuted and punished under Section 92 of the Act. The Calcutta High Court approved the decision in Hari Krishna of this Court. 7. IT appears that the Inspector of Factories filed three complaints under Section 92 of the Factories Act, 1948, for breach of various provisions of the Act and the rules. The seven directors of the Company, namely M/s. Agra Electric Supply Co. as well as the Manager thereof, were mentioned as accused persons. The various directors raised a preliminary objection that they were not all liable to be prosecuted and punished. The learned City Magistrate, Agra rejected the objection. Aggrieved, the Directors went up in revision. The Additional Civil and Sessions Judge, Agra, upheld the objection and made a reference to this Court, recommending that only one of the directors may be prosecuted. He also observed that since the Manager, who is accused, no. 8, is already being prosecuted, all the other directors may be acquitted. 8. FOR reasons mentioned above, we agree that only one of the directors can be prosecuted and punished. The prosecution will have a choice in this matter because the company had not made any nomination under the Proviso to Section 100(2). Section 92 of the Factories Act specifically provides that the occupier and manager of the factory shall each be guilty. The view that since the Manager is being prosecuted none of the directors be proceeded against is incorrect. Section 92 of the Factories Act specifically provides that the occupier and manager of the factory shall each be guilty. The view that since the Manager is being prosecuted none of the directors be proceeded against is incorrect. In the case of a company, the directors become the occupier, and in that capacity he is liable to be prosecuted along with the Manager of the factory. 9. THE three references are accepted in part. It is directed that the prosecution will choose one of the directors only for being proceeded against along with the Manager. The rest of the directors will be acquitted. References accepted.