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2023 DIGILAW 493 (JHR)

Subuir Ghosh v. State of Jharkhand

2023-04-10

SANJAY KUMAR DWIVEDI

body2023
JUDGMENT : Heard Mr. Indrajit Sinha along with Mr. Rishav Kumar, learned counsel for the petitioner, Mr. Jitendra Pandey, learned counsel for the State and Mr. Laxman Kumar, learned counsel for opposite party no.2. 2. This petition has been filed for quashing of entire criminal proceeding in connection with C.L. (R&A) Act Prosecution Case No.170 of 2012 including the order taking cognizance dated 21.11.2012, pending in the court of the learned Judicial Magistrate, Dhanbad. 3. The complaint was filed by the Labour Enforcement Officer (Central), who has been appointed as an Inspector under Contract Labour (Regulation and Abolition) Act, 1970, wherein, it has been alleged that the accused person are responsible for the affairs of the company and is the principal employer and carrying out the contract work of removal of overburden, extraction and transportation of coal from XV seam hired HEMM patch of Bhowra (South) Colliery, Eastern Jharia Area, Bharat Coking Coal Limited by employing contract labour. The complainant being an Inspector had inspected the establishment of the accused person on 22.08.2012 and observed the offence that any contravention of Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970, the employer have engaged 15 contract labours through M/s SAR Parivahan Pvt. Ltd., contractor for executing the contract work of earth cutting, removal of overburden and extraction of coal at Bhowra (South) Colliery, Eastern Jharia, Bharat Coking Coal Limited, which is prohibited by Government vide notification dated 21.06.1988. The petitioner was arrayed as accused at Serial No.1 to the complaint petition and he had submitted his show-cause, which was found unsatisfactory and accordingly the present case was registered. 4. Learned counsel for the petitioner submits that the learned court has taken cognizance vide order dated 21.11.2012 under Sections 23 and 24 of the said Act. He further submits that the work of hiring of HEMM for removal of OB extraction and transportation of coal with fire fighting from XV seam hired HEMM patch of Bhowra (S) Colliery of EJ Area. He also submits that the work of hiring of above mentioned was awarded in favour of M/s SAR Parivahan Pvt. Ltd. with certain terms and conditions. He submits that there is allegation that there was contravention of Section 10(1) of the said Act. He also submits that the work of hiring of above mentioned was awarded in favour of M/s SAR Parivahan Pvt. Ltd. with certain terms and conditions. He submits that there is allegation that there was contravention of Section 10(1) of the said Act. He further submits that on the date of inspection no contract labour was appointed by the authorities of M/s. Bharat Coking Coal Ltd. for execution of any operation/work in any establishment and there is no violation of Section 10(1) of the said Act. He also submits that the cognizance has been taken under the said Act and the Company is not made party. He draws attention of the Court to Section 25 of the said Act and submits that there is no averment in the complaint petition that the petitioners were looking for day-to-day affairs of the company. He submits that identical was the situation in Cr.M.P. No.326 of 2015 and batch cases, which was decided vide order dated 07.03.2022 in which the entire criminal proceeding was quashed by this Court. 5. On the other hand, Mr. Laxman Kumar, learned counsel for opposite party no.2 submits that there is violation of the said Act and that is why the case has been filed. Not making M/s BCCL as one of the accused, is not fatal for the prosecution and at this stage, the entire criminal proceeding may not be quashed. 6. Mr. Jitendra Pandey, learned counsel for the State submits that the learned court has rightly taken cognizance on the complaint petition. 7. In view of the above submissions of the learned counsel for the parties, the Court has gone through the materials on the record. It is an admitted fact that the petitioner is General Manager of Eastern Jharia Area of M/s BCCL and M/s BCCL is not made accused and in absence of the company, this petitioner has been made accused. Section 25 of the Act stipulates that the persons who are responsible for day to day affairs of the company, are liable to be prosecuted. In the case in hand, nothing has been specifically disclosed that how this petitioner was looking for day-to-day affairs of the company. Section 25 of the Act stipulates that the persons who are responsible for day to day affairs of the company, are liable to be prosecuted. In the case in hand, nothing has been specifically disclosed that how this petitioner was looking for day-to-day affairs of the company. However, the company is not made accused and in absence of making the company as accused, the petitioner is not responsible, as has been held by the Hon'ble Supreme Court in S.K. Alagh v. State of Uttar Pradesh & others; [ (2008) 5 SCC 662 ]. Paragraph 19 of the said judgment is quoted herein below: “19. As, admittedly, drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Indian Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offense committed by the Company itself.” 8. Further, the Court has gone through the order taking cognizance and finds that the word 'cognizance' and transfer to another court is handwritten and filled up in blank space, which suggests that there is non-application of judicial mind. A reference may be made to the judgment passed by the Hon'ble Supreme Court in Sunil Bharti Mittal v. C.B.I.; [ (2015) 4 SCC 609 . Paragraph 48 of the said judgment is quoted herein below: “48. Sine qua non for taking cognizance of the offence is the application of mind by the Magistrate and his satisfaction that the allegations, if proved, would constitute an offence. It is, therefore, imperative that on a complaint or on a police report, the Magistrate is bound to consider the question as to whether the same discloses commission of an offence and is required to form such an opinion in this respect. When he does so and decides to issue process, he shall be said to have taken cognizance. At the stage of taking cognizance, the only consideration before the court remains to consider judiciously whether the material on which the prosecution proposes to prosecute the accused brings out a prima facie case or not.” 9. When he does so and decides to issue process, he shall be said to have taken cognizance. At the stage of taking cognizance, the only consideration before the court remains to consider judiciously whether the material on which the prosecution proposes to prosecute the accused brings out a prima facie case or not.” 9. Identical was the situation in the recent judgment passed by the Hon'ble Supreme Court in Dayle De'souza v.Government Of India, through Deputy Chief Labour Commissioner (c) And Another; (2021 SCC OnLine SC 1012) . Paragraph 30 of the said judgment is quoted herein below: “30. This position was again clarified and reiterated by this Court in Himanshu v. B. Shivamurthy and Another. (2019) 3 SCC 797 . The relevant portion of the judgment reads thus: “6. The judgment of the High Court has been questioned on two grounds. The learned counsel appearing on behalf of the appellant submits that firstly, the appellant could not be prosecuted without the company being named as an accused. The cheque was issued by the company and was signed by the appellant as its Director. Secondly, it was urged that the observation of the High Court that the company can now be proceeded against in the complaint is misconceived. The learned counsel submitted that the offence under Section 138 is complete only upon the issuance of a notice of demand and the failure of payment within the prescribed period. In absence of compliance with the requirements of Section 138, it is asserted, the direction of the High Court that the company could be impleaded/arraigned at this stage is erroneous. 7. The first submission on behalf of the appellant is no longer res integra. A decision of a three-Judge Bench of this Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd. governs the area of dispute. The issue which fell for consideration was whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without the company being arraigned as an accused. The three-Judge Bench held thus: (SCC p. 688, para 58) “58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. The three-Judge Bench held thus: (SCC p. 688, para 58) “58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words “as well as the company” appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted.” In similar terms, the Court further held: (SCC p. 688, para 59) “59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is 14 imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself.” xxx 12. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished. 13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused.” 10. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused.” 10. In view of the above facts, reasons and analysis and considering that the company is not made an accused, which is mandatory in view of Section 25 of the Act, however it is not stated in the complaint petition that the petitioner was looking for day-to-day affairs of the company and also considering that the order taking cognizance is non-application of judicial mind. In that view of the matter, the entire criminal proceeding in connection with C.L. (R&A) Act Prosecution Case No.170 of 2012 including the order taking cognizance dated 21.11.2012, pending in the court of the learned Judicial Magistrate, Dhanbad is, quashed. 11. Accordingly, this petition is allowed and disposed of. 12. Interim order, if any granted by this Court, stands vacated.