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2019 DIGILAW 887 (JHR)

Life Insurance Corporation of India v. State of Jharkhand

2019-04-16

RAJESH SHANKAR

body2019
ORDER : The present petition has been filed for quashing the entire criminal proceeding arising out of Case No. C-III-313/2009 including the order dated 22.06.2009 passed by the Chief Judicial Magistrate, Ranchi whereby the cognizance of the offence under Section 10 of the Equal Remuneration Act, 1976 (in short “the Act, 1976”) has been taken against the petitioner. 2. A complaint case being C-III-313/09 was lodged by the opposite party no.2- Labour Enforcement Officer (Central) Dhanbad camp Ranchi alleging that while inspecting the establishment of the Life Insurance Corporation of India (hereinafter to be referred as “the corporation”), Ranchi Branch-2 on 30.06.2008, found that the Branch Manager failed to maintain the register in Form ‘D’ at the place work and thus violated the provisions of rule 6 of the Equal Remuneration Rules, 1976 (in short “the Rules, 1976”) and Section 8 of the Act, 1976. The Chief Judicial Magistrate, Ranchi vide order dated 22.06.2009 took cognizance of the offence under section 10 of the Act, 1976 against the Branch Manager- Sri Naresh Prasad Srivastava. 3. The learned counsel for the petitioner submits that at the time of the alleged incident, Shri Naresh Prasad Srivastava was working as Branch Manager in Ranchi Branch-2 of the corporation and was not an employer as alleged in the complaint. Though Sri Naresh Prasad Srivastava was posted as Branch Manager in the Ranchi Branch-2, however the O.S. Department of the corporation was responsible to maintain all the registers etc. in the said branch office under the relevant law. Form “D” under the Act, 1976 was also being maintained by the O.S. Department and it was not the duty of the Branch Manager to maintain any such register as required under the Act, 1976 for which separate arrangement has been made by the corporation. It is further submitted that the instant complaint was filed after about one year from the date of alleged inspection i.e. 30.06.2008 and as such the complaint was also barred by limitation in view of the provision of Section 468 of the Criminal Procedure Code. It is further submitted that all the documents as required including Form “D” were subsequently produced before the opposite party no. 2 and there was no occasion for him to file complaint against the Branch Manager. As such, the instant proceeding being an abuse of the process of law, is fit to be quashed. 4. It is further submitted that all the documents as required including Form “D” were subsequently produced before the opposite party no. 2 and there was no occasion for him to file complaint against the Branch Manager. As such, the instant proceeding being an abuse of the process of law, is fit to be quashed. 4. The learned counsel for the opposite parties while referring to the counter affidavit filed on behalf of the opposite party no. 2 submits that the Branch Manager of the corporation was responsible for the supervision, control and day to day affairs of the Branch Office being the employer under Section 2(c) of the Act, 1976. It is further submitted that Branch Manager is the employer in respect of the said branch on which he has ultimate control, power of supervision and is responsible for day-to- day affairs. 5. Heard the learned counsel for the parties and perused the materials available on record. The learned counsel for the petitioner has primarily contended that under Section 10 of the Act, 1976, it is the “employer” who could be prosecuted for the omission or failure in maintaining any register or document in relation to the workers employed by him and since the Branch Manager of Ranchi Branch-2 of the said corporation was not responsible for supervision and control of the employees, the impugned order suffers from error of law. In support of his contention, learned counsel for the petitioner puts reliance on a judgment of Patna High Court rendered in the case of P. K Bahal Vs. State of Bihar and another reported in 2001 Cri.L.J 1085 wherein cognizance of the offence under section 10 of the Act, 1976 taken against the Senior Divisional Manager of LIC has been quashed. 6. Section 2(c) of the Act, 1976 defines the term “employer” which reads as follows:- “(c) “employer” has the meaning assigned to it in clause (f) of section 2 of the Payment of Gratuity Act, 1972 (39 of 1972)” 7. 6. Section 2(c) of the Act, 1976 defines the term “employer” which reads as follows:- “(c) “employer” has the meaning assigned to it in clause (f) of section 2 of the Payment of Gratuity Act, 1972 (39 of 1972)” 7. Further section 2(f) of the Payment of Gratuity Act, 1972 provides the definition of “employer” as follows:- “(f) “Employer” means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop:- (i) belonging to, or under the control of, the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned, (ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive officer of the local authority. (iii) in any other case, 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, or managing director or by any other name, such person.” 8. In the case of Life Insurance Corporation of India, Divisional Office, Mysore Vs. State of Karnataka reported in (2005) 5 Kar L J 564, a Bench of Karnataka High Court has held as under:- “8. Life Insurance Corporation of India is established under the Life Insurance Corporation Act , 1956. A conjoint reading of Sections 3, 4, 5, 6 and 17 coupled with the power of the Central Government, to make Rules under Section 48 and promulgate the service conditions of employees under Section 49 of the LIC Act, it is beyond cavil of doubt that the Central Government has all pervasive control over the Life Insurance Corporation. If that is so, it goes without saying that the petitioner is an establishment under the Central Government. If that is so, it goes without saying that the petitioner is an establishment under the Central Government. In the circumstances the judgment of the Apex Court in C.V. Raman v. Management of Bank of India, 1988 II LLJ 423 is apposite: "If the 'Criteria' laid down above is applied to the facts of the instant cases it is obvious that even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and its employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks". 9. In Life Insurance Corporation's case, supra, what essentially fell for consideration was whether the Corporation is a creature of the statute. The High Court of Kerala, having considered the various provisions of the LIC Act , and the control exercised by the Central Government, following the principles laid down by the Apex Court in C.V. Raman's case, held that the petitioner Corporation falls within the purview of the expression "under the Central Government". Applying the same to the exclusion provision under Section 3(1)(c) of the Kerala Shops and Commercial Establishments Act, 1960, it was further held that the said Act has no application to the petitioner establishment.” 9. In the case of P.K Bahal (supra.), the Patna High Court has held that the definition of employer given under section 2(f)(i) of the Act, 1972 would be applicable in the case of LIC and the employer will be an authority appointed by the Central Government for the supervision and control of the employees or where no person or authority has been so appointed, the head of the Ministry or the department concerned. The impugned order of cognizance has thus been quashed by observing that the State failed to show that a Senior Divisional Manager working in a Division is an authority appointed by the Central Government for the supervision and control of the employees. 10. Para 14 of the judgment rendered in the case of P.K Bahal (Supra.) is reproduced here-in-below:- “14. It may be mentioned that as per Schedule II of the Regulation the Divisional Managers and Senior Divisional Managers both are placed in the category of Class I officers. 10. Para 14 of the judgment rendered in the case of P.K Bahal (Supra.) is reproduced here-in-below:- “14. It may be mentioned that as per Schedule II of the Regulation the Divisional Managers and Senior Divisional Managers both are placed in the category of Class I officers. This being so, a senior Zonal Manager will not appear to be an authority who supervises, and has control over all the employees working in a Regional Office. Neither it has been shown to this Court in course of arguments nor it has been mentioned in the complaint petition, an annexure to this petition, that a Senior Divisional Manager is employer and an authority appointed by the Central Government for supervision and control of all the employees even in a Regional office, not to say of the Corporation as whole. Since only an employer under S. 10 of the 1956 Act can be punished for violation of any of its provisions, it was imperative that the complaint petition should have shown that a Senior Divisional Manager was an employer within the meaning of S. 2(f) of the Payment of Gratuity Act, 1972. Now even a statement to that effect has been made in the complaint petition except mentioning that the provision of 1976 Act and Rules made there under are applicable to the accused as well to the Establishment. An Officer of the Corporation may be bound to observe the provisions of 1976 Act but when the question of making him criminally liable for any breach arises, it has to be shown that the accused is the employer.“ 11. In the present case also, Sri Naresh Prasad Srivastava was the Branch Manager of the said branch at the relevant time. It has not been pleaded by the opposite party no. 2 in the complaint that the Branch Manager was appointed by the Central Government for the supervision and control of the employees. Though it has been stated in the complaint that the Branch Manager of Ranchi Branch-2 of the said corporation was responsible for the maintenance of records etc. of the workers employed by him in the said Branch, yet the said fact is not sufficient to initiate prosecution against him alleging violation of the provisions of the Act, 1976 and the Rule, 1976. 12. of the workers employed by him in the said Branch, yet the said fact is not sufficient to initiate prosecution against him alleging violation of the provisions of the Act, 1976 and the Rule, 1976. 12. Under the aforesaid factual and legal position, the criminal proceeding initiated against the Branch Manager-Shri Naresh Prasad Srivastava including the order of cognizance dated 22.06.2009 passed by the Judicial Magistrate, Ranchi in connection with Case No. C-III-313/2009 is hereby quashed. 13. The writ petition is accordingly allowed.