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Madhya Pradesh High Court · body

2019 DIGILAW 681 (MP)

Pfizer Limited v. State of M. P.

2019-09-20

ROHIT ARYA

body2019
ORDER Arya, J.--1. The Labour Commissioner, Madhya Pradesh, Indore in purported exercise of power under section 34 of the Industrial Disputes Act, 1947 (for short, 'the ID Act') has sanctioned filing criminal complaint against the petitioners for the alleged breach of award dated 7.8.2009 passed in case No. 8/98 I.D.Act Reference (Annexure 'C') by the Labour Court, Khandwa punishable under section 29 of the ID Act on an application filed by the respondent No. 2/workman (for short, 'the workman'). In this writ petition under Article 226 of the Constitution of India, the petitioners; Pfizer Limited and its Managing Director (for short, the petitioner-company) seek to challenge the legality, validity and propriety of the order impugned dated 19.4.2018 (Annexure 'A'). 2. Before adverting to the contentions of both the parties, it is expedient to refer to relevant facts as adumbrated in the pleadings of the parties. 3. Petitioner No. 1 is a company registered under the Companies Act with registered office as mentioned in the cause title and engaged in the business of manufacturing, producing, preparing and distributing and dealing in pharmaceutical, medical, healthcare and allied fields. Petitioner No. 2 is Managing Director of the company. 4. The workman an employee of Wyeth Limited had raised an industrial dispute after termination of employment. Upon failure of conciliation, the appropriate government had referred the dispute to the Labour Court, Khandwa registered as case No. 8/98 I.D.Act Reference for adjudication. Vide award dated 7.8.2009, the labour Court ordered for reinstatement of the workman without backwages. Wyeth Limited challenged the aforesaid award in W.P. No. 11770/2009 at Principal Seat, Jabalpur on 10.11.2009 (Annexure 'D'). Thereafter, Company Scheme Petition No. 520 of 2014 was filed before the High Court of Judicature at Bombay under Scheme of Amalgamation for merger of Wyeth Limited (transferor company) with the petitioner No. 1 - company (transferee company). The merger was sanctioned by the Court on 31.10.2014 (Annexure 'E'). W.P. No. 11770/2009 filed by Wyeth Limited (for short, 'the erstwhile company') was dismissed for want of prosecution vide order dated 17.7.2015 (Annexure 'F'). Petitioner-company was not aware of pendency of the aforesaid writ petition at Principal Seat, Jabalpur. It is submitted that the employees who were in charge of the present case and working with the legal department of erstwhile company had left the service of the petitioner-company. Petitioner-company was not aware of pendency of the aforesaid writ petition at Principal Seat, Jabalpur. It is submitted that the employees who were in charge of the present case and working with the legal department of erstwhile company had left the service of the petitioner-company. After shifting of the registered office, the petitioner-company came to know about the aforesaid writ petition while reviewing the litigations pending by and against the erstwhile company. Thereafter, immediately took steps and filed M.C.C. No. 1862 of 2016 seeking restoration of aforesaid writ petition (supra) on 25.7.2016 (Annexure 'G'). The notice was issued to the workman vide order dated 24.10.2016 (Annexure 'H') and he was served with the notice on 5.12.2016 and the server report of acknowledgment was received on 12.12.2016. Thereafter, through an advocate reply to the said application was filed by the workman on 23.3.2017 (Annexure 'I'). During pendency of restoration proceedings, the workman was paid wages in compliance of section 17B of the ID Act and the details of payments made from August, 2012 to March, 2016 are placed on record (Annexure 'J'). The petitioner-company in the process of change in the functioning of the company has introduced accounts software called SAP system for accounting process and mechanism which also includes payments more efficient. One of the requirements of the SAP system was creation of vendor code to enable payments to third parties. Since, earlier the workman was being paid wages under section 17B of the ID Act through demand drafts, the petitioner-company did not have relevant details to prepare vendor code of the workman to make payment through SAP system. Under the circumstances, a letter was written to the workman on 9.11.2017 with a request to provide details contained thereunder for preparing a vendor code (Annexure 'K'). The workman provided the details through email dated 3.1.2018 (Annexure 'L'). Neither in the said communication nor any time prior thereto, the workman made a complaint of non-payment of last wages drawn as indicated in the impugned order, i.e., August, 2009 to July, 2012. Moreover, the petitioner-company was not in existence during the relevant period, therefore, not aware of details of payments made by erstwhile company. Neither in the said communication nor any time prior thereto, the workman made a complaint of non-payment of last wages drawn as indicated in the impugned order, i.e., August, 2009 to July, 2012. Moreover, the petitioner-company was not in existence during the relevant period, therefore, not aware of details of payments made by erstwhile company. After receipt of relevant information, vendor code of the workman was prepared and payments have been made in compliance of section 17B of the ID Act tot he workman from April, 2016 including advance payment upto the year 2018 (Annexure 'M'). To the surprise of the petitioner-company on 4.1.2018, the workman filed an application before the respondent No. 1 seeking prosecution of the petitioners alleging breach of the award dated 7.8.2009 (supra) whereupon the order impugned is passed (Annexure 'N'). A show cause notice dated 11.1.2018 was issued to the petitioners by the respondent No. 1 (Annexure 'O') and reply thereto was filed (Annexure 'P') with the submission that the workman was an employee of the erstwhile company with effect from 9.8.1989. He was dismissed from service on 20.9.1995. The erstwhile company was merged with the petitioner-company on 1.12.1994. The petitioner-company was not in existence during the relevant period, i.e., August, 2009 to July, 2012 in the context whereof complaint has been made by the workman that he has not been paid the last drawn wages. It is submitted that during pendency of W.P. No. 11770/2009, affidavit of compliance of section 17B of the ID Act was filed in the High Court. It is submitted that during pendency of W.P. No. 11770/2009, affidavit of compliance of section 17B of the ID Act was filed in the High Court. Petitioner-company has also pointed out that in his application dated 4.1.2018, the workman has suppressed the following facts : (a) during pendency of MCC No. 1862/2016 filed on 25.7.2016, the workman was issued with the notice by the Court on 24.10.2016 and the same was received by him on 5.12.2016 and the acknowledgment thereof was received on 12.12.2016 and the reply to the said application through an advocate was filed on 23.3.2017 [Annexures 'G, 'H' and 'I']; (b) the letter issued by the petitionercompany calling upon the workman on 9.11.2017 to furnish the details required for updating vendor code under SAP system and to make payments to him and the reply of the workman was received through email on 3.1.2018 [Annexure 'K' and 'L'] (c) payment of last wages drawn received by the workman from August, 2012 to March, 2016 and from April, 2016 to December, 2018 [Annexure 'J' and 'M']. As such, in the application dated 4.1.2018 addressed to the respondent No. 1, the workman has consciously suppressed the material facts and reiterated selective facts convenient to him and prejudicial to the petitioner-company i.e., award dated 7.8.2009 passed by the labour Court, dismissal of W.P. No. 11770/2009 (in default) on 17.7.2009. Therefore, the alleged breach of the award seeking sanction for prosecution is bad in law. 5. Shri Piyush Mathur, learned senior counsel for the petitionercompany at the first instance has offered payment of the arrears of was wages in compliance of section 17B of the ID Act; based on last wages drawn by the workman for the period from August, 2009 to December 2009, Years 2010, 2011 and January, 2012 to July, 2012; total to the tune of Rs. 94,500/- (Rupees Ninety-Four Thousand Five Hundred Only) by way of demand draft No. 634436 dated 11.9.2019 issued by HDFC Bank,Mumbai. However, learned counsel for the workman insisted for seeking the order on merits. Faced with the aforesaid situation, learned senior counsel for the petitioner-company addressed the Court on merits and submits that the impugned order is a glaring example of colourable exercise of power by the Labour Commissioner and tantamounting to abuse of authority. However, learned counsel for the workman insisted for seeking the order on merits. Faced with the aforesaid situation, learned senior counsel for the petitioner-company addressed the Court on merits and submits that the impugned order is a glaring example of colourable exercise of power by the Labour Commissioner and tantamounting to abuse of authority. Such casual approach to order for prosecution by a senior official of State Government is wholly unwarranted and deserves to be deprecated. Learned senior counsel further elaborating submissions contends that the jurisdiction of the authority of the respondent No. 1 for taking cognizance of offence under section 34 of the ID Act is required to be exercised with care, caution and circumspection regard being had to the penal consequences flowing therefrom. To reach the conclusion that there is breach of the award under section 29 of the ID Act, the prescribed authority is required to apply its mind to complete facts placed on record. That has not been done. Learned senior counsel submits that to constitute the commission of criminal offence, existence of an element of mens rea is sine qua non. The respondent No. 1 did not consider that MCC No. 1862/2016 filed on 25.7.2016 for restoration of W.P. No. 11770/2009 was pending consideration on the date of passing order impugned. The respondent No. 1 ignored that the petitioner-company was not an employer of the workman during the period August, 2009 to July, 2012. The petitioner-company came into existence only after merger of erstwhile company by force of the sanction order by the High Court of Judicature at Bombay on 31.10.2014 (Annexure 'E') with effect from 1.12.1994. Suppression of facts detailed above from (a) to (c) by the workman though pointed out by the petitioner-company, the same were not taken note of by the respondent No. 1. The factum of payment made in compliance of section 17B of the ID Act from August, 2012 to March, 2016 and from April, 2016 to December, 2018 [Annexure 'J' and 'M'] has also not been taken into consideration. Under such circumstances, the respondent No. 1 in fact and in effect has acted in a surreptitious manner and with biased mind has passed the order impugned. Therefore, the same cannot be sustained in the eyes of law. 6. Under such circumstances, the respondent No. 1 in fact and in effect has acted in a surreptitious manner and with biased mind has passed the order impugned. Therefore, the same cannot be sustained in the eyes of law. 6. Per contra, learned counsel for the workman opposes the writ petition and supports the order impugned with the submission that non-payment of last wages drawn for the period August, 2009 to July, 2012 by the petitioner-company tantamounting to breach of the award within the meaning of section 29 of the ID Act. Moreso, W.P. No. 11770/2009 was dismissed on 17.7.2009. Therefore, no illegality is committed by the respondent No. 1 while passing the order impugned. However, there is no explanation as to why the aforesaid relevant facts referred above were not mentioned in the application before the respondent No. 1. 7. Heard. 8. Before adverting to the aforesaid contentions advanced by learned counsel for the parties, this Court considers it apposite to address upon the issue as to when cognizance can be taken by the Court or the authority under section 34 of the ID Act for an act punishable under section 29 of the ID Act? 9. The word "offence" means "an act or instance of offending"; "commit an illegal act" and "illegal means","contrary to or forbidden by law". "Offence" has to be read and understood in the context as it has been prescribed under the provisions of sections 40, 41 and 42 IPC which cover the offences punishable under IPC or under special or local law or as defined under section 2(n) CrPC or section 3(38) of the General Clauses Act, 1897; thus the view expressed by Hon'ble Supreme Court in the case of S.Khushboo v. Kanniammal and another, (2010) 5 SCC 600 . 10. Upon hearing learned counsel for the parties and perusal of the documents placed on record and in the backdrop of the law quoted above; in the considered opinion of this Court, the respondent No. 1 has not exercised the jurisdiction under section 34 of the Industrial Disputes Act, 1947 in right earnest and appears to have acted fast and loose with its authority. The pleadings and the material placed before the authority were not at all looked into and in a ship shod manner, the impugned order appears to have been passed. The pleadings and the material placed before the authority were not at all looked into and in a ship shod manner, the impugned order appears to have been passed. There is substantial force in the submission of learned senior counsel for the petitioner-company that the jurisdiction under section 34 of the ID Act is to be exercised with due care and caution. That has not been done. In fact, the order for prosecution under section 34 of the I.D.Act is serious decision involving invasion of the personal liberty of an individual. Hence, the satisfaction of the authority upon fulfillment of ingredients of the offence together with an element of mens rea are pre-requisites before subjecting a person to criminal prosecution. That apart, the authority is also required to ascertain and record its satisfaction as regards the acts of commission and omission on the part of the individual pointed alleged breach of the award by the person accused of the offence before initiating the process for prosecution. The criminal liability is personal strict in nature. The petitioner-company had filed MCC No. 1862/2016 on 25.7.2016 for restoration of W.P. No. 11770/2009 to which the workman had filed reply on 23.3.2017. All along, the petitioner-company has made payments of last wages drawn to the workman for the period from August, 2012 to March, 2016 and from April, 2016 to December, 2018. The workman has accepted the payment. The workman has consciously suppressed the relevant facts (a) to (c) referred above in paragraph 4 of the order. In fact, W.P. No. 11770/2009 was restored to its original number on 25.1.2019. Without addressing on relevant facts, the respondent No. 1 has jumped to the conclusion of breach of award and initiation of criminal proceedings. Hence, in the obtaining facts and circumstances, the impugned order dated 19.4.2018 (Annexure 'A') is patently bad in law and cannot be sustained. Accordingly, set aside. 11. However, to meet ends of justice, the petitioner-company is directed to pay last wages drawn by the workman in compliance of section 17B of the ID Act [for the period August, 2009 to December 2009, January, 2010 to December, 2010, January, 2011 to December, 2011 and January, 2012 to July, 2012 = total 36 months] and send the prepared bank draft No. 634436 dated 11.9.2019 for Rs. 94,500/- (Ninety four thousand five hundred only) of HDFC Bank, Mumbai drawn in the name of the respondent No. 2/workman at his last given address alongwith the 'acknowledgment receipt' by registered post acknowledgment due within a week from today. Upon receipt of the same and In turn, the respondent No. 2/workman is directed to send back the 'acknowledgment receipt' duly signed and dated by him through a registered post to the registered office of the petitioner-company. 12. Writ Petition stands allowed and disposed of.