Research › Search › Judgment

Jharkhand High Court · body

2005 DIGILAW 105 (JHR)

Kanhaiyalal Bansal v. State of Jharkhand

2005-02-08

HARI SHANKAR PRASAD

body2005
Order These three applications are being disposed of by this common order as common question of fact and law are involved in the matter. 2. These applications have been filed for quashing the cognizance order dated 24.2.2001 passed by learned CJM, Dhanbad in Factories Act Case Nos. 2521 2001 251/2001 and 250/2001 respectively under Section 22A of the Minimum Wages Act, 1948, under Section 20 of the Payment of Wages Act and under Section 92 of the Factories Act, 1948 and all subsequent proceedings thereto. 3. Facts leading to the filing of these applications are that the petitioner has been prosecuted for offences under Section 22A of the Minimum Wages Act, 1948, under Section 20 of the Payment of Wages Act and under Section 92 of the Factories Act, 1948. It has been alleged in the complaint petition that M/s Om Sri Durga Hard Coke Manufacturing Company Private Ltd., situated. at village Amjhore, P.O. Baliapur, district Dhanbad is a registered factory under the Factories Act, 1948 and names of Smt. Vimla Bansal and Sri K.L. Bansal have been recorded as occupier of the factory and in the memorandum of articles of association submitted in past in the office of the opposite party. no. 2, the names of persons have figured in the list of Board of Directors. Vivek Bansal, for the first time in the year 1977, has signed in the application for renewal of the licence of the factory in the capacity of occupier of the factory but no document was available in the office of the opposite party no. 2 to show that Vivek Bansal was the Director of M/s Sri Durga Hard Coke Manufacturing Company Private Ltd. whereas S.C. Roy, a low paid employee functioning as Munshi, has signed as an occupier of the factory in the renewal application. M.P. Bansal has ultimate control over the affair of the factory for the purpose of the Factories Act, 1948 but has been left out from the list of Board of Directors. Smt. Bimla Bansal is the wife of M.P. Bansal and petitioner is the younger brother of M.P. Bansal. Director No.4 is the daughter of M.P. Bansal. M.P. Bansal has ultimate control over the affair of the factory for the purpose of the Factories Act, 1948 but has been left out from the list of Board of Directors. Smt. Bimla Bansal is the wife of M.P. Bansal and petitioner is the younger brother of M.P. Bansal. Director No.4 is the daughter of M.P. Bansal. Vivek Bansal is the son of M.P. Bansal and S.C. Roy is virtually a Munshi and in any case M.P. Bansal is to be treated as the Manager of the factory as provided under the provisions of Section 7(5) of the Factories Act, 1948 read with Rule 2(M) of the Bihar Factories Rules, 1950. It is alleged that complainant in course of inspection found that the licence of the factory either in original or its attested copy was not displayed in the factory. Sri P.N. Verma stated that the licence of the factory for the year 2000 has been signed by the Deputy Chief Inspector of Factories, Bokaro, who was not competent to renew the licence of the factory in absence of any valid order/notification issued by the Government. Licence for the year 2001 was also submitted to the Deputy Inspector of Factories, Bokaro for renewal. Since the licence of renewal was not submitted to the opposite party no. 2 as directed by him in time, as such it will be deemed that the factory is running without a licence. 4. There were also contravention of the provisions of Rules 4, 7 and 11 of the Bihar Factories Rules, 1950. The rate of Minimum Wages duly fixed by the State Government for Hard Coke Industries was not found displayed in the factory. This was contravention of Minimum Wages Act, 1948 read with Rule 22 of the Bihar Minimum Wages Rules, 1951. There was difference between the amount shown in the payment of wages register and the amount actually paid to the workmen. The workers were also being paid piece rate but in the register they were shown as daily wages. None of the workers were allowed weekly off. The workers were not paid any extra amount for the work done beyond their normal working hours i.e. for over time which is in contravention of the provision of Section 59 of the Factories Act, 1948. Workers were not supplied with O.T. slips. None of the workers were allowed weekly off. The workers were not paid any extra amount for the work done beyond their normal working hours i.e. for over time which is in contravention of the provision of Section 59 of the Factories Act, 1948. Workers were not supplied with O.T. slips. This was in contravention of Rule 103A of the Bihar Factories Rules, 1950. Workers were not given identity card. This was in contravention of Rule 80A of the Bihar Factories Rule, 1950. The date of payment of wages was not found displayed which is contravention of Section 5 of the Payment of Wages Act. It has been alleged that a spot report was prepared in the factory and duly received by an employee for compliance and report asking production of relevant registers and documents but there has been violation of sections 9 and 95 of the Factories Act, 1948 read with Rules 13(i) and 13(j) of the Bihar Factories Rules, 1950. It has been further alleged that by letter no. OSD/2000/01 dated 9.1.2001 the occupiers of factory were asked to comply with the reported contraventions but no response was received. 5. Learned counsel for the petitioner submitted that petitioner resigned from the Directorship of the company with effect from 1.7.90, which will be evident from Form No. 32 issued by the Assistant Registrar of the Companies, West Bengal on 9.10.2001 and the petitioner is not even a shareholder of the company. It is submitted that as per clause 17 of the Articles of Association of the company only shareholder can remain a Director of the Company and whole power and duties to run the company rests with the Directors as per clause 20 and 21 of the Articles of Association of the Company (Annexure 3). Since the petitioner resigned from the Director of the Company from 1.7.90 and, therefore, he is not a Director from any corner and, therefore, he has not committed any offence. Since he resigned in 1990 he cannot be deemed to be an occupier. It was further pointed out that opposite party no. Since the petitioner resigned from the Director of the Company from 1.7.90 and, therefore, he is not a Director from any corner and, therefore, he has not committed any offence. Since he resigned in 1990 he cannot be deemed to be an occupier. It was further pointed out that opposite party no. 2 has failed to bring any material to show that the petitioner was an occupier of the company at any point of time and particularly at the relevant period when the offence is said to have been committed and further that petitioner has violated any provisions of law under the Factories Act, 1948, Bihar Factories Rules 1950, Minimum Wages Act, 1948 or Payment of Wages Act. It is also submitted that company has not been made accused in the present case and petitioner is not responsible for any omission or commission of the company. Further in the allegation petition no such allegation of specific nature has been brought against the petitioner. In this connection reliance has been placed upon 1998(3) SCC 345, wherein Hon'ble Supreme Court has held and laid down a law that vicarious liability of a person prosecuted for an offence committed under the Act by a company arises if at the material time he was Incharge and was also responsible to the company for the conduct of its business and simply because a person is a Director of a company, it does not unnecessarily mean that he fulfils both the above requirements so as to make him liable. Here in the instant case the petitioner has already resigned from the Directorship in 1990. It was also submitted that an enquiry should have been made as to the fact whether petitioner had any role to play in the management and mere mechanical reproduction of the words of statutes and naming of an accused also in a mechanical manner without making some enquiry, the petitioner cannot be prosecuted and in this connection reliance has been placed upon 1996(1) PLJR 856 . It is further submitted that from perusal of complaint petition no case is made out against the petitioner. 6. It is further submitted that from perusal of complaint petition no case is made out against the petitioner. 6. Since, from annexure 3, it appears that petitioner has resigned in 1990 and he was not a Director or even he was not a shareholder and as per provisions of the Act, a shareholder can only be a Director and as such he is not a Director or occupier of the company and, therefore, he cannot be held liable for the lapses or omission or commission on the part of the authorities of the company. 7. Perusing the records and going through the case law cited above, these applications are allowed and cognizance taken against the petitioner in all the three cases is hereby quashed.