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2006 DIGILAW 722 (KER)

P. L. Johny v. Welfare Fund Inspector

2006-10-19

R.BASANT

body2006
Judgment :- This revision petition is directed against a concurrent verdict of guilty, conviction and sentence in a prosecution under the provisions of the Toddy Workers Welfare Fund Act. The verdict of guilty is concurrent, but the section of conviction and the sentence were altered by the appellate court. While the trial court held the petitioner/accused guilty of the offence punishable under Section 14B of the Act and sentenced him to undergo S.I. for a period of one year and to pay a fine of Rs.4,000/- and in default to undergo S.I. for a period of one month, the appellate court modified the sentence and altered the conviction to one under Section 14(2) of the Act and to suffer S.I. for a period of three months and to pay a fine of Rs.500/- and in default to undergo S.I. for a further period of 15 days. 2. The prosecution alleged that the petitioner is the employer in respect of toddy shops Nos. 1 to 3 and 4 to 30 of Kodungallur Excise Range for the period 1.8.1982 to 31.3.1983. It was alleged that inspite of Exts.P2 and P3 orders dt. 27.3.1985 and 4.6.1984, the petitioner, the licensee/employer in respect of those shops had failed to pay an amount of Rs.29,184.75 and Rs.3,28,732.75 respectively being the employer's and the employees' contributions with interest payable in respect of the said toddy shops. 3. This case has had a checkered career. It is unnecessary to advert to the history of the case. After remand by this court, when the matter came up for disposal afresh before the learned Magistrate, there was the evidence of PWs. 1 to 3 and Exts.P1 to P13 on the side of the complainant/Prosecutor and the evidence of DWs. 1 and 2 and Exts.D1 and D2 on the side of the accused. 4. PW1 is the Welfare Fund Inspector. PWs. 2 and 3 are the Excise Inspector and the Asst. Excise Commissioner respectively. Exts.P2 and P3 are the relevant orders passed under Section 8 of the Act, under which the liability to pay the amounts was identified and specific directions were issued. The accused did not dispute the fact that he is the licensee in respect of the shops. However, he advanced a contention that he was only a name lender licensee and the persons who were really conducting the business was a firm by name Five Star Company. The accused did not dispute the fact that he is the licensee in respect of the shops. However, he advanced a contention that he was only a name lender licensee and the persons who were really conducting the business was a firm by name Five Star Company. According to him, he was only a petty employee/Manager of the said company and notwithstanding the fact that he happens to be the licensee of the shops, he is not really liable to pay the contributions as demanded in Exts.P2 and P3 under Section 8 in his personal capacity. 5. He took up a further contention that for the period 10.12.1982 to 31.3.1983, on the basis of an agreement between his employer Five Star Company and the Trade Unions, the management of the toddy shops was entrusted to the workers themselves. The obvious contention is that he is not the employer in respect of the shops for that period as the said liability was taken over by the Trade Unions themselves. 6. The courts below came to the concurrent conclusion that the petitioner being the licensee is the employer and that he is liable to pay the amounts demanded under Exts.P2 and P3. They further came to the conclusion that Ext.D2 agreement or the evidence of DWs. 1 and 2 cannot absolve the petitioner of his liability to pay the amounts and to be prosecuted under Section 14 of the Act. Accordingly they proceeded to pass the impugned judgments. 7. I have heard the learned counsel for the rival contestants. The learned counsel for the complainant/respondent herein contends that the conviction must really have been entered not under Section 14(2), but under Section 14A of the Act. Admittedly the petitioner was not prosecuted under Section 14A. In these circumstances, at this third tier of litigation, I find no merit whatsoever in the prayer to reckon the conviction as one which could have been entered under Section 14A. The ingredients of the offence under Section 14A have to be proved specifically and the crucial ingredient is that contributions were deducted from the wages of the employees and retained by the employer. In the absence of a specific allegation to that effect, the prayer now to reckon the conviction as one under Section 14A is found to be without any merit. 8. In the absence of a specific allegation to that effect, the prayer now to reckon the conviction as one under Section 14A is found to be without any merit. 8. An attempt was made to contend before me that the petitioner is not the employer. The expression `employer' is defined under Section 2(c) of the Act in the following words: S.2(c) "employer" means any person who employs, whether directly or through another person, or whether on behalf of himself or any other person, one or more employees and includes any person who has a licence for the manufacture (distribution, storage or sale) of toddy under the Abkari Act for the time being in force." It is an explanatory and inclusive definition and the licensee under the Abkari Act must certainly be held to be the employer for the purpose of Section 2(c). The petitioner is admittedly the licensee for the relevant period. His contention that his employer - Five Star Company - is the real employer cannot at any rate help him to go out of the sweep of the definition of `employer' in Section 2(c). In these circumstances Ext.D1 letter which shows that certain letters addressed to the petitioner herein were addressed to him in the address of his employer, Five Star Company, cannot in any way help him to avoid liability under Section 14. It may, of course, be true that those who are directly involved in the conduct of the business could also have been brought within the sweep of the expression `employer' if satisfactory evidence were collected. But, at any rate, that mere possibility will not help the petitioner to claim absolution from liability, he being undisputedly the licensee for the relevant period and consequently the employer. 9. The next limb of the contention of the learned counsel for the petitioner is that in view of Ext.D2 also, he is not the employer. The union leaders/unions who were conducting the business actually from 10.12.82 to 31.3.83 are the real employers. Here again, the earlier view taken by me that whoever be actually conducting the business, the licensee will also continue to be the employer holds good. The union leaders/unions who were conducting the business actually from 10.12.82 to 31.3.83 are the real employers. Here again, the earlier view taken by me that whoever be actually conducting the business, the licensee will also continue to be the employer holds good. More over, this court had occasion to consider in John v. District Collector (1993 (2) KLT SN14 Case No.15) the very same question as to whether arrangements between the licensee and some others can help him to go out of the sweep of the expression `employer' in Section 2(c). It has clearly been held that any internal arrangement between the licensee and others cannot help the licensee to claim absolution from liability on that score. In these circumstances even assuming that the oral evidence of DWs. 1 and 2 and Ext.D2 can be accepted, as rightly contended by the learned counsel for the respondent/complainant, that cannot be an effective defence for the petitioner to the charge under Section 14(2) of the Act. 10. The learned counsel for the petitioner finally contends that the prosecution must be held to be barred by limitation in the light of the provisions of Chapter XXXVI of the Cr.P.C. It is fairly conceded that even then the prosecution on the basis of Ext.P2 may not be barred by limitation. The crux of the contention is that the offence under Section 14(2) of the Act is a non-continuing offence and therefore the prosecution having not been launched within a period of one year from the date of Ext.P3, the prosecution must be held to be partly barred by limitation. 11. I do not find any merit in this contention. In the light of the unambiguous and clear statement of the law in Bhagirath Kanoria & ors. v. State of M.P. (AIR 1984 SC 1688), this contention is no more available to the petitioner. How to distinguish between continuing and non-continuing offences was adverted to by the Supreme Court in State of Bihar v. Deokaran Nenshi (AIR 1973 SC 908). The applicability of those principles specifically to a case, where law mandates that payments must be made under labour legislation was considered in Bhagirath Kanoria (supra). In this case we are dealing with an exactly identical provision of the statute as was considered by the Supreme Court in Bhagirath Kanoria (supra). The applicability of those principles specifically to a case, where law mandates that payments must be made under labour legislation was considered in Bhagirath Kanoria (supra). In this case we are dealing with an exactly identical provision of the statute as was considered by the Supreme Court in Bhagirath Kanoria (supra). I may usefully extract paragraph 19, which reads as follows: “The question whether a particular offence is a continuing offence must necessarily depend upon the language of the statute which creates that offence, the nature of the offence and, above all, the purpose which is intended to be achieved by constituting the particular act as an offence. Turning to the matters before us, the offence of which the appellants are charged is the failure to pay the employer's contribution before the due date. Considering the object and purpose of this provision, which is to ensure the welfare of workers, we find it impossible to hold that the offence is not of a continuing nature. The appellants were unquestionably liable to pay their contribution to the Provident Fund before the due date and it was within their power to pay it, as soon after the due date had expired as they willed. The late payment could not have absolved them of their original guilt but it would have snapped the recurrence. Each day that they failed to comply with the obligation to pay their contribution to the Fund, they committed a fresh offence. It is putting an incredible premium on lack of concern for the welfare of workers to hold that the employer who has not paid his contribution or the contribution of the employees to the Provident Fund can successfully evade the penal consequences of his act by pleading the law of limitation. Such offence must be regarded as continuing offences, to which the law of limitation cannot apply." Going by the language of Section 14, purpose for which such an offence is created, the purpose which it is intended to serve and all other relevant inputs, I have no hesitation to agree that it has to be held that the offence under Section 14(2) is a continuing offence and will continue until the payment is made. The question before me is not whether separate prosecutions can be launched for the continuing offences separately - i.e. in respect of the breach on each following day. The question before me is not whether separate prosecutions can be launched for the continuing offences separately - i.e. in respect of the breach on each following day. To bring the case within the sweep of Section .... it is not essential that such separate prosecutions should be maintainable in respect of the continuing offence on each following date. 12. The learned counsel for the petitioner contends that, at any rate, the petitioner is not the licensee now and therefore he cannot be held to be guilty of the continuing offence. This contention cannot also obviously succeed. Under the scheme of the Abkari Act, licensees will be appointed from year to year and a licensee, who has committed default in making the payment of amounts under Section 14(2), cannot ever be heard to contend that he is not liable to face the prosecution after the elapse of period of licence on the short ground that he does not continue to be licensee. Such an interpretation would frustrate the purpose of the Act and stultify the objects which it has to achieve. Liability is on the person who is the licensee for the relevant period. His liability will continue to remain notwithstanding the fact that the period of licence has expired. In as much as claim is made in respect of a period during which he was the licensee, he cannot be heard to contend after the period of licence that he is not the licensee, who has to discharge the continuing liability. The challenge raised on this aspect cannot also succeed. 13. No other contentions are raised on merits. The learned counsel for the petitioner finally prays that a lenient view may be taken on the question of sentence. Under Section 14(2) the offence is punishable with imprisonment for a period which may extend to three months or with fine which may extend to Rs.500/- or with both. It will be incorrect and improper for this court to take an unduly lenient view on the question of sentence, if the indiscretion committed has not been reversed by making the payment. In a welfare State, the State attempts to enforce the labour friendly provisions of the Statutes under the threat of criminal prosecution. It will be incorrect and improper for this court to take an unduly lenient view on the question of sentence, if the indiscretion committed has not been reversed by making the payment. In a welfare State, the State attempts to enforce the labour friendly provisions of the Statutes under the threat of criminal prosecution. The anxiety of the law to take necessary steps for protection of the rights of the labour and to ameliorate their grievances is reflected in the State making such violations of criminal offences punishable under law. I am certainly of the opinion that if the indiscretion is not reversed it will be improper for the courts to take an unduly lenient view. In that view of the matter, I am satisfied that in the facts and circumstances of this case, where the liability continues to remain undischarged even now, the courts will not be justified in taking any undeservedly lenient view. However, I am satisfied that appropriate safeguards can be insisted to ensure that the petitioner does not have to undergo imprisonment if he makes amends and reverses the indiscretion committed by him. Modification of the sentence can be resorted to subject to this compulsion. 14. In the result: (a) This revision petition is allowed in part. (b) The impugned verdict of guilty and conviction under Section 14 (2) of the Toddy Workers Welfare Fund Act are upheld. (c) But the sentence imposed is modified and reduced. In supersession of the sentence imposed on the petitioner by the courts below, he is sentenced to undergo imprisonment till rising of court. He is further directed under Section 357(3) Cr.P.C. to pay the amount of Rs.3,57,917.25 (Rupees three lakhs fifty seven thousand nine hundred and seventeen and paise twenty five only) and in default to undergo S.I. for a period of three weeks. If the amount is realised, the same shall be released to the complainant. 15. The petitioner shall appear before the learned Magistrate on or before 31.12.2006 to serve the modified sentence hereby imposed. The sentence shall not be executed till that date. If the petitioner does not so appear, the learned Magistrate shall thereafter proceed to take necessary steps to execute the modified sentence hereby imposed.