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2023 DIGILAW 580 (CHH)

Sumit Binani S/o Shri Sushil Kumar Binani v. State Of Chhattisgarh Through Factory Inspector

2023-10-31

RAKESH MOHAN PANDEY

body2023
ORDER : 1. The petitioner has challenged the cognizance taken by the Labour Court Janjgir, District Janjgir-Champa on four complaints lodged by the Factory Inspector for alleged violation of Sections 6, 7, 7A(2)(c) and 7A(2)(d) of the Factories Act, 1948 (for short ‘the Act, 1948’) read with Rules 3A(1) and 3A(3) of the Chhattisgarh Factories Rules, 1962 (for short ‘the Rules, 1962’) on various dates from the year 2020 to 2023. 2. The facts of the present case are that the petitioner/Sumit Binani is a registered Insolvency Professional registered with the Insolvency and Bankruptcy Board of India and he was appointed as the Resolution Professional by the National Company Law Tribunal, Hyderabad Bench vide order dated 16.06.2020 for company namely KSK Mahanadi Power Company Limited. 3. CRMP No. 1436 of 2023 arising out of Case No. 270/F.A./2021: The facts are that in July 2019, one of the Financial Creditors of the KSK Mahanadi Power Company Limited moved an application before NCLT under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Proceedings against the Company. The proceedings were initiated and vide order dated 16.06.2020 the petitioner was appointed as Resolution Professional by the National Company Law Tribunal, Hyderabad Bench. The factory KSK Mahanadi Power Company Limited is situated at Nariyara, District Janjgir-Champa whereas; the Head office of the Company is in Hyderabad. The petitioner was discharging the functions of a Resolution Professional (RP) from Hyderabad. On 04.03.2021 at about 9:45 pm, one Shiva Yadav who was working as the House Keeper in the Company got injured on account of his rash driving near the factory premises. He was taken to the hospital and information in this regard was given to the company thereafter, on 07.03.2021 the injured Shiva Yadav died during the course of treatment. The Factory Inspector inspected the factory and a report was prepared on 08.03.2021 and a show-cause notice was sent to the petitioner to the effect that the petitioner has violated the provisions of the Factories Act particularly, Sections 7A(2)(c) and 7A(2)(d) of the Act, 1948 and Rule 73 of the Rules, 1962. The petitioner filed a reply to the show-cause notice and thereafter, the company paid a lump-sum amount of Rs.3,57,417/- to the family of the deceased and the company is also paying a monthly pension of Rs.16,571/- to the dependents. The petitioner filed a reply to the show-cause notice and thereafter, the company paid a lump-sum amount of Rs.3,57,417/- to the family of the deceased and the company is also paying a monthly pension of Rs.16,571/- to the dependents. Thereafter, the Labour Inspector filed a complaint case on 29.10.2020 before the learned Judicial Magistrate First Class, Labour Court, Janjgir-Champa and the Court took cognizance and a summons was issued to the petitioner. 4. CRMP No. 1463 of 2023 arising out of Case No. 98/F.A./202: The facts of the present case are that on 13.10.2020 at about 5:40 pm, one Anand Kishore Sahu, who was working as a Labourer in the Company, got injured while returning home from the factory near cooling tower-3 from a JCB vehicle. The factory was inspected; a show-cause notice was issued to the petitioner; the same was replied to and the injured is still working with the company. A complaint case was filed by the Labour Inspector on 29.10.2020. The Court took cognizance and a summons was issued by the concerned Court. 5. CRMP No. 1477 of 2023 arising out of Case No. 13/F.A./2022: The allegation in this case is with regard to violation of Sections 6 and 7 of the Factories Act, 1948 read with Rules 3A(1) and 3A(3) of the Chhattisgarh Factories Rules, 1962. On 03.06.2022 for non-compliance with certain provisions, a show-cause notice was issued to the petitioner and the same was replied to, thereafter, a complaint case was filed by the Labour Inspector on 11.07.2022. 6. CRMP No. 1580 of 2023 arising out of Case No. 1/F.A./2023: A complaint case was filed for alleged violation of Sections 7A (2) (c) and 7A(2)(a) of the Factories Act. The allegations are that on 02.09.2022 at about 6:40 am, while the workers were unloading the coal from the Wagon, one of the workers Rahul Kant sustained certain injuries on his left hand and thereafter, he was taken to the hospital. The Labour Inspector inspected the factory, a show-cause notice was issued and a reply was filed by the petitioner thereafter, the Labour Inspector filed a complaint case on 19.09.2022. 7. Learned counsels appearing for the petitioner would submit that the petitioner/Sumit Binani was appointed as a Resolution Professional by the National Company Law Tribunal, Hyderabad Bench vide order dated 16.06.2020 and he was discharging his functions/duties as such. 7. Learned counsels appearing for the petitioner would submit that the petitioner/Sumit Binani was appointed as a Resolution Professional by the National Company Law Tribunal, Hyderabad Bench vide order dated 16.06.2020 and he was discharging his functions/duties as such. He would further submit that the petitioner is still working as an ex-officio occupier of the Company and performing all duties strictly in accordance with law. He would also submit that no accident took place within the factory premises and the accident took place on account of rashness and carelessness of the workers and for such act, the petitioner cannot be held liable. He would further contend that the petitioner was appointed as a Resolution Professional according to the provisions of Section 16 of the Insolvency and Bankruptcy Code, 2016 (for short ‘the IBC Code, 2016’) and according to provisions of Section 233 of the IBC Code, 2016 the actions of the Resolution Professional are protected. He would also contend that the provisions of the Code, 2016 shall have an overriding effect over any other enactment. In support thereof, he has placed reliance on the judgment passed by the Hon’ble Supreme Court in the matter of Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Limited and Others, reported in 2023 SCC OnLine SC 842. He has also placed reliance on the judgment passed by the High Court of Jharkhand in the matter of Sanjay Kumar Agarwal vs. Central Bureau of Investigation reported in 2023 SCC OnLine Jhar 394 and the judgment passed by the High Court of Madras in the matter of Deepak Upadhyaya vs. Raman Ramakrishnan reported in 2023 SCC OnLine Mad 2567 and would submit that the Resolution Professional cannot be prosecuted for bonafide discharge of his functions. 8. On the other hand, learned counsel for the State would oppose. He would submit that there is an efficacious alternative remedy to prefer an appeal before the Industrial Tribunal according to provisions of Section 64 of the Chhattisgarh Industrial Relations Act, 1960. 8. On the other hand, learned counsel for the State would oppose. He would submit that there is an efficacious alternative remedy to prefer an appeal before the Industrial Tribunal according to provisions of Section 64 of the Chhattisgarh Industrial Relations Act, 1960. He would further submit that the petitioner/Sumit Binani was appointed as a Resolution Professional and in the letter dated 07.07.2020 the petitioner himself has admitted the fact that he has been appointed as occupier of KSK Mahanadi Power Company Limited therefore, he would be liable for the injuries sustained by the workers within the factory premises and for any other act committed by the workers during working hours. He submits that the petitions deserve to be dismissed 9. I have heard learned counsel appearing for the parties, considered their rival submissions made herein above and perused the documents placed on record with utmost circumspection. 10. From a perusal of the documents, it appears that vide order dated 16.06.2020 the petitioner was appointed as a Resolution Professional by the National Company Law Tribunal, Hyderabad Bench in relation to KSK Mahanadi Power Company Limited, which is situated in Village Nariyara, District Janjgir-Champa. The head office of the company is situated in Hyderabad and the petitioner is discharging his functions as a Resolution Professional from Hyderabad. Some untoward incidents took place within the factory premises between the year 2020 and 2023 and some of the workers sustained injuries and one of the workers succumbed to injuries. From the pleadings, it is evident that the dependents of the deceased were paid a compensation of Rs.3,57,417/- and a monthly pension of Rs.16,571/- is being paid to the dependents of the deceased. One of the allegations against the petitioner is that he has not followed certain provisions of the Factories Act whereas; in two cases there are allegations that the two workers sustained injuries. 11. Section 7A of the Act, 1948 states the duties of the occupier and according to this section; every occupier shall ensure the health, safety and welfare of all workers while they are at work. In the present case, one of the workers sustained injuries while he was going to his house. 11. Section 7A of the Act, 1948 states the duties of the occupier and according to this section; every occupier shall ensure the health, safety and welfare of all workers while they are at work. In the present case, one of the workers sustained injuries while he was going to his house. In one of the cases, there is an allegation that the petitioner has not complied with the provisions of Sections 6 & 7 of the Factories Act and Rules 3A (1) & 3A(3) of the Chhattisgarh Factories Rules, 1962 12. Section 233 of the IBC Code, 2016 deals with the protection of action taken in good faith. It says that no suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government, the Chairperson, Member, officer or other employee of the Board or an insolvency professional or liquidator for anything which is in done or intended to be done in good faith. 13. From a perusal of the contents of the complaint case filed against the petitioner, it appears that the petitioner has not committed any misconduct, irregularity or infirmity in the discharge of his functions. During the course of the work at the factory, some of the workers sustained injuries and as a result, it cannot be held that the petitioner is liable for any allegations made against him in the complaint cases. 14. In the matter of Paschimanchal Vidyut Vitran Nigam Ltd. (supra), the Hon’ble Supreme Court in paragraphs 54 & 55 held that the provisions of IBC would prevail over the customs act or any other enactments. 15. In the matter of Sanjay Kumar Agrawal (supra) it was observed thus:- “28. Section 233 gives protection to a resolution professional from criminal prosecution for acts in good faith, and not where he has been apprehended red-handed with the bribe amount. Insolvency and bankruptcy code is self-contained code but only with respect to the matter provided therein. It does not cover the matters like the present, where a Resolution Professional takes bribes in order to favour a party for which P.C. Act is squarely applicable. Section 232 does not exclude operation of P.C. Act. Therefore, the plea the petitioner was not a public servant and was immune from criminal prosecution under PC Act is not tenable. 29. It does not cover the matters like the present, where a Resolution Professional takes bribes in order to favour a party for which P.C. Act is squarely applicable. Section 232 does not exclude operation of P.C. Act. Therefore, the plea the petitioner was not a public servant and was immune from criminal prosecution under PC Act is not tenable. 29. From the aforesaid discussion it is manifest that the appointment of resolution professional is made by the National Company Law Tribunal, which is the Adjudicating Authority for the insolvency resolution process of the companies under the I & B Code, 2016. Resolution Professional has a key role to play in the insolvency resolution process and to protect the assets of the corporate debtors. From his nature of assignment and duty to be performed his office entails performance of functions which are in the nature of public duty and therefore will come within the meaning of public servant both under sections 2 (c) (v) & (viii) of the PC Act.” 16. In light of the judgment passed by the Hon’ble Supreme Court in the matters of Paschimanchal Vidyut Vitran Nigam Ltd. (supra) and Sanjay Kumar Agrawal (supra), it is quite vivid that the provisions of the IBC Code, 2016 would override other enactments including the Factories Act, therefore, the contention of learned counsel for the respondent that there is an alternative remedy, is not sustainable. 17. Further, the petitioner has the right to approach the High Court against the order of cognizance taken by the Magistrate in the proceedings under the Factories Act and thus, the petition is maintainable. 18. Now coming to the facts of the present case in light of the judgments cited above, it is quite vivid that the petitioner was appointed as a Resolution Professional by the National Company Law Tribunal, Hyderabad Bench vide order dated 16.06.2020 and in pursuance of that order, he discharged the functions of Resolution Professional. Unfortunately, during that period, some incidents took place and the workers got injured and for that act, the petitioner cannot be held liable. 19. Taking into consideration the provisions of Sections 233 and 238 of the IBC Code and the law laid down by the Hon’ble Supreme Court, I am inclined to allow these petitions. Consequently, these petitions are allowed and the orders taking cognizance in case Nos. 19. Taking into consideration the provisions of Sections 233 and 238 of the IBC Code and the law laid down by the Hon’ble Supreme Court, I am inclined to allow these petitions. Consequently, these petitions are allowed and the orders taking cognizance in case Nos. 270/F.A./2021, 98/F.A./2020, 13/F.A./2022 & 1/F.A./2023 passed by the learned Judicial Magistrate First Class Janjgir, District Janjgir-Champa are hereby quashed/set-aside.