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Jharkhand High Court · body

2007 DIGILAW 489 (JHR)

J. Kumar v. State Of Jharkhand

2007-06-21

D.G.R.PATNAIK

body2007
ORDER D.G.R. Patnaik, J. 1. Petitioners have prayed for quashing the entire criminal proceeding pending against them vide P.G. case No. 72 of 2004 pending in the Court of Smt. Kusum Kumari, Judicial Magistrate, Dhanbad, as also for quashing the order dated 15.3.2004, whereby the cognizance of the offences relating to violation of provisions of Section 7(3) of the Payment of Gratuity Act, 1972 for the breach of Rules 3(2) and 8(l)(i) of the Payment of Gratuity (Central) Rules, 1972 was taken against them. 2. The main grounds advanced by the learned Counsel for the petitioners in support of the prayer is that; 1. The learned Court below while passing the order of cognizance has acted mechanically without application of judicial mind and without passing any order of condonation of delay in filing the complaint. 2. that the complainant/opposite party No. 2 is not competent to file the complaint against the petitioners under Section 11 of the Payment of Gratuity Act and therefore, the order of cognizance as passed by the learned Court below on the basis of such complaint, is totally illegal. 3. that the petitioners have been cited as accused on behalf of the employer company as "nominated owner", though there is no concept of "nominated owner" under the payment of Gratuity Act and, therefore, no prosecution can be initiated for the alleged violation of the provisions of Act, against the present petitioners. 4. that neither of the petitioners come within the definition of the term employer’ as defined under Section 2(f)(iii) of the Act in respect of the mines, since neither of them are the managers of the concerned mines and, therefore, the petitioners cannot be prosecuted for the alleged offences. 5. that mere non release of the gratuity amount payable to the employee does not attract any penal consequences, since under Section 7(3A) of the Act, employer is at best liable to pay the amount of gratuity along with the interest accrued there on. 6. that the amount payable as gratuity to the employees has already been released, therefore the present criminal proceeding against the petitioners would be an abuse of the process of the Court. 3. For better appreciation of the grounds advanced, facts of the case may be stated in brief. 6. that the amount payable as gratuity to the employees has already been released, therefore the present criminal proceeding against the petitioners would be an abuse of the process of the Court. 3. For better appreciation of the grounds advanced, facts of the case may be stated in brief. The case was registered against the petitioners on 15.3.2004 on the basis of the complaint filed by the complainant/opposite party No. 2 in his capacity as Labour Enforcement Officer (Central), Dhanbad-I. A separate petition for condonation of delay in filing the complaint was simultaneously filed. A copy of the notification issued by the Ministry of Labour, Government of India authorizing the complainant to file the complaint was also filed on the same date. On the same date, the learned Court below had proceeded to take cognizance of the offences under Section 7(3) of the Payment of Gratuity Act, directing the petitioners to appear and face trial in the case. 4. It is alleged in the complaint petition that on 20.2.2003 the complainant in exercise of his powers as Inspector, conferred on him under Section 7A of the Act, had visited the establishment namely Ena Colliery of B.C.CL. Limited, Dhanbad and had found the following violations of the provisions of the Payment of Gratuity Act and The Rules thereunder: i. that the employer had failed to submit a notice in form - B about the changes in the name and address of the establishment to the controlling authority i.e. Assistant Labour Commissioner, Dhanbad which is a breach of Rule 3(2) of Payment of Gratuity (Central) Rules, ii. that the employer had failed to issue notice in form -L to the employee nominee or legal heirs and copy of such notice was not endorsed to the Controlling Authority under the provisions of the Act and this constitute a breach of Rule 8(l)(i) of the Payment of Gratuity (Central) Rules, iii. that the employer had failed to pay the amount of gratuity to the employees within 30 days from the date when it became payable and such fault constitutes breach of Section 7(3) of the Act. 5. Names of as many 13 employees have been mentioned in the complaint petition and the amount payable to each of them has been specified along with the date of retirement of the individual employee. 5. Names of as many 13 employees have been mentioned in the complaint petition and the amount payable to each of them has been specified along with the date of retirement of the individual employee. It is further alleged that an inspection report was prepared and sent to the present petitioners directing them to remove the defects and to pay the amount of gratuity within the time stipulated and also to file their respective show cause replies as to why appropriate action under the law should not be taken against them. On receiving unsatisfactory compliance report, and on the premise that the present petitioners being the persons responsible for the compliance of the provisions of the Act and Rules there under, and had failed to comply with the directions, the complaint was filed for putting the petitioners on trial for breach of the provisions of the Act and Rules there under, which is punishable under Section 9 of the Act. 6. Elaborating each of the grounds, Shri Anand Sen, learned Counsel for the petitioners, submits that the fact that the order of cognizance has been passed mechanically without application of judicial mind, would be evident from the order itself. Learned Counsel explains that the order has been passed on printed proforma by merely filling up the blanks in respect of the offences. The order indicates that the cognizance was taken for the offence under Section 7(3) of the Act and for breach of certain Rules under the Act, but Section 7(3) of the Act merely lays down the obligation upon the employer to pay the amount of gratuity within 30 days from the date when it becomes payable to the employee. Therefore, Section 7(3) of the Act does not, in itself, constitute any offence, nor does provisions of the said section prescribe any punishment. The penal provision under the Act is under Section 9(2) of the Act for which no cognizance was taken. Thus, the order of cognizance is bad as because, it does not relate to any penal offence. 7. Therefore, Section 7(3) of the Act does not, in itself, constitute any offence, nor does provisions of the said section prescribe any punishment. The penal provision under the Act is under Section 9(2) of the Act for which no cognizance was taken. Thus, the order of cognizance is bad as because, it does not relate to any penal offence. 7. As against this, learned Counsel for the opposite party No. 2 would explain that in the complaint petition filed by the opposite party No. 2, it has been specifically clarified that the accused persons had rendered themselves liable for punishment under Section 9 of the Art for breach of the provisions of Section 7(3) of the Act and also for breach of the specific Rules under the Act. The order of cognizance though recorded on printed proforma, does indicate that cognizance is for the offences made out for the breach of the provisions of Section 7(3) of the Act and also for the breach of Rule 3(2) and Rule 8(l)(i) of the Payment of Gratuity (Central) Rules, 1972 and, therefore, there is no infirmity in the order of cognizance. 8. From perusal of the impugned order of cognizance, it does appear that the same was recorded on printed proforma which mentions that a prima facie case is made out against the accused persons and cognizance of the offences under Section 7(3) of the Payment of Gratuity Act, 1972 for the breach of Rules 3(2) and 8(l)(i) of the Payment of Gratuity (Central) Rules, 1972 has been taken against the accused persons. As rightly pointed out by the learned Counsel for the petitioners, the offence for violation of the provisions of the Act and breach of Rules there under has been defined and made punishable under Section 9 of the Act and Section 7(3) of the Act, does not in itself, constitute any offence. It further appears that though a petition for condoning the delay in filing the complaint was filed along with the complaint petition, but the learned Court below has not adverted to the said petition at all, nor does it appear from the impugned order of cognizance that the Magistrate had considered the said petition and had applied his mind for the purpose of condoning the delay in filing of the complaint petition. These are certainly lapses which render the order susceptible to criticism suggesting lack of diligence on the part of the Magistrate. Nevertheless, the order confirms that cognizance was taken of the complaint and the allegations therein, where after the Magistrate proceeded to issue summons to the accused. Omission to mention the specific penal offence in the order is certainly an irregularity. It has however, to be seen as to whether any prejudice has been caused to the accused by such omission to specify the offence for which cognizance was taken. It appears from the record that in the summons, accompanied by the copy of the complaint, issued to the accused persons, it has been elaborately explained that cognizance has been taken for the offences in respect of breach of specific provision of the Act and specific Rules there under. The complaint petition categorically indicates that the prosecution is in respect of the offence punishable under Section 9 of the Act. The accused persons have thus being informed adequately of the substance of accusation as obtained against them and for which, they have been called upon to face trial. In this view of the matter, accused persons cannot claim to have suffered prejudice merely on account of non mentioning of specific penal offence in the order of cognizance. 9. As regards the ground that the order of cognizance is barred by limitation, learned Counsel for the petitioners argues that the date of offence is the date when the alleged lapses were detected and computing the period from this date, the cognizance ought to have been taken within one year as per the provisions of Section 498, Cr PC. It appears from the allegation appearing in the complaint petition and also explained in the counter affidavit of the opposite party No. 2, that the main allegation against the accused persons is that they had failed to pay the amount of gratuity to the employees not only within the stipulated statutory period, but had continuously failed to make payment even till the date of filing of the prosecution report of the complainant. 10. Under Section 7(3) of the Act, obligation is cast upon the employer to pay the amount, of gratuity payable to the employee within 30 days from the date when it becomes payable. 10. Under Section 7(3) of the Act, obligation is cast upon the employer to pay the amount, of gratuity payable to the employee within 30 days from the date when it becomes payable. Section 3A enjoins upon the defaulting employer’s liability to pay interest on the payable amount of gratuity calculated from the date when it becomes payable and till the date when it is paid. Thus, non - payment of the gratuity constitutes a breach of the provisions of Section 7 of the Act not only when the payment is not made within the statutory period of 30 days, but it amounts to a continuing offence as long as the payment is not actually made. In this view of the matter, limitation under Section 468, Cr PC cannot be attracted. The filing of a separate complaint petition by the complainant for condonation of delay, was therefore redundant and as such, non - advertence to such petition of the complainant by the Magistrate, is of no consequence. 11. As regards the ground of competency of the complainant to file the complaint, learned Counsel for the petitioners explains that under Section 11 of the Act, it is the Controlling Authority, defined under Section 2(b) of the Act, who is supposed to be authorized for filing the complaint against the employer. The complainant in the instant case, who has been appointed only as an Inspector by the notification of the Central Government under Section 7A of the Act, cannot be deemed to be the Controlling Authority and, therefore, no cognizance could be taken on the basis of the complaint filed by the present complainant. 12. The complainant in the instant case, who has been appointed only as an Inspector by the notification of the Central Government under Section 7A of the Act, cannot be deemed to be the Controlling Authority and, therefore, no cognizance could be taken on the basis of the complaint filed by the present complainant. 12. Per contra, learned Counsel for the opposite party No. 2 explains that the opposite party No. 1 was not only appointed as Inspector for the area covering the establishment of the accused persons under Section 7A of the Act by virtue of an specific notification dated 16.2.2004 issued by the Government of India, Ministry of Labour, complainant has been authorized under Sub-section (1) of Section 11 of the Act to file the complaint in the Court of competent jurisdiction against the accused persons named in the complaint petition for the offence under Section 9(2) of the Act, but he has also been appointed as Labour Enforcement Officer (Central), Dhanbad-I and by virtue of said position, he is the Controlling Authority for the area covering, jurisdiction over the establishment of the accused persons. Referring to annexure-4, which is copy of the aforementioned notification, whereby complainant was authorised in his capacity of being Labour Enforcement Officer, learned Counsel for the opposite party No. 2 explains further that the complainant is deemed to be the Controlling Authority by virtue of his appointment as Labour Enforcement Officer (Central) Dhanbad and as such, complainant was fully competent to file the complaint against the accused persons. There appears force in the argument of the learned Counsel for the opposite party No. 2. The complainant being the originally appointed as Labour Enforcement Officer, has been enlisted with the powers of the Controlling Authority and by the special notification (annexure-4 to the counter affidavit), complainant has been vested with authority under Section 11 of, the Act to file complaint against the accused persons. Therefore, the learned Magistrate was competent enough to take cognizance of the offences on the basis of the complaint filed by the opposite party No. 2. 13. Therefore, the learned Magistrate was competent enough to take cognizance of the offences on the basis of the complaint filed by the opposite party No. 2. 13. On the ground that the petitioners cannot be deemed to be employer, as defined under Section 2(f) of the Act, learned Counsel for the petitioners would argue that the petitioners are sought to be prosecuted on behalf of the B.C.C.L. as the nominated owner, although the concept of nominated owner is totally alien to the provisions of the Act and, therefore, the petitioners cannot be prosecuted for the alleged offences committed by the company namely, the B.C.C.L. Learned Counsel would argue further that under Section 2(f)(iii) of the Act, the Manager of the mines is deemed to be the employer and since the petitioners are not the managers of the mines under reference in the present case, their prosecution is totally illegal, arbitral and misuse of the authority of the complainant. As against this, learned Counsel for the opposite party No. 2 explains that the petitioner No. 1 in his capacity of being the Director of the Bharat Coking Coal Limited, has ultimate control over the affairs of the mines, project and establishment under the company and, therefore, petitioner No. 1 is made liable for the offences. Learned Counsel explains further that the petitioner No. 2 being the Chief General Manager, Kustore Area of B.C.C.L., mines under reference in the instant case falls within the direct jurisdiction and control of the petitioner No. 2 and, therefore, he too is made liable for the offences. 14. Section 2(f) of the Act defines the term "employer. Definition under Section 2(f)(iii) which relates to the mines, reads as follows. Employer means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop. The person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such persons. 15. The petitioner No. 1 is admittedly the director of the B.C.C.L, and is therefore, representative of the company having ultimate control over all the mines owned and possessed by the company. 15. The petitioner No. 1 is admittedly the director of the B.C.C.L, and is therefore, representative of the company having ultimate control over all the mines owned and possessed by the company. Likewise, petitioner No. 2 who is the manager of the colliery, has been vested with immediate authority over mines falling in his area including the mines under reference in the present case. Both the petitioners therefore, had apparently fall under the category of the term ’employer’ as defined under the Act. Even otherwise, in the light of the reference to the present petitioners by virtue of their respective office under the company, the controversy as to whether petitioners are the Representatives of the company or not, shall be determined by the concerned Court at the trial. This ground is, therefore, not acceptable. 16. The further argument of the learned Counsel for the petitioners that mere nonpayment of the amount of gratuity does not constitute an offence, since the penalty by way of a liability to pay interest on the payable amount of gratuity have already been envisaged under Section 7(3A) of the Act, petitioners cannot be prosecuted for the said lapses, is also not acceptable. Section 9 of the Act provides punishment for the contravention of default in complying with any of the provisions of the Act and of any Rule or Order made there under. The failure on the part of the employer to comply with the provisions of Section 7(3) of Act, constitute an offence punishable under Section j? of the Act. 17. Learned Counsel argues next that the total amount payable to the employees by way of gratuity has already been released and paid to them and, therefore, the prosecution is liable to be dropped. This argument also does not offer any assistance to the petitioners. From the allegations in the complaint petition, it appears that the accused persons had incurred liability for penal consequence not only at the expiry of the statutory period of 30 days from the date when the gratuity was payable, but were also liable for the offences by virtue of the fact that the payment was not made even till the date of filing of the complaint petition. Payments, if made subsequent to the initiation of the prosecution, may at best be a mitigating circumstance which may be considered for reducing the penalty, but it cannot be a ground for absolving the entire liability of the accused persons, if it is proved at the trial if they had incurred, such liability and are guilty for the offence. 18. In the light of the above discussions, I do not find any merit in this application. Accordingly, this application is dismissed at the stage of admission itself. The order of stay of the proceeding before the Court below, as passed by this Court on 5.10.2004, is hereby vacated.