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2023 DIGILAW 640 (JHR)

Md. Fassihuddin v. State of Bihar (Now Jharkhand)

2023-05-08

SANJAY KUMAR DWIVEDI

body2023
JUDGMENT : Heard Mr. Ajay Kumar Sah, learned counsel appearing for the petitioner, Mr. V.K. Sinha, learned A.P.P. for the State and Mr. Shiv Kumar Sharma, learned C.G.C. for the O.P. No. 2. 2. This petition has been filed for quashing of the entire criminal proceeding including the order taking cognizance dated 05.04.1997, whereby the learned court has taken the cognizance under Sections 23/24 of the Contract Labour Act against the petitioner, in connection with C-7 45/97, pending in the court of learned Chief Judicial Magistrate, Chaibasa. 3. The prosecution story in brief is that by his letter No. 34/28/96- KTG/CHB dated 17.03.1997 the office of the Labour Enforcement Officer (Central), Chaibasa annexed a complaint petition before the Chief Judicial Magistrate, Chaibasa against two officers of M/s Tata Iron and Steel Company Ltd. one being Md. Fassihuddin, General Manager (the present petitioner) and another Mr. J.P. Mishra, Agent and Manager. It was alleged in the aforesaid complaint petition that the aforenamed accused person were executing the work of Iron Mining at Noamundi Iron Mine of M/S TISCO Ltd. and are responsible for the maintenance of registers/records and observance of various other provisions of the Contract Labour (Regulation & Abolition Act, 1970) and rules made thereunder for their establishment. The establishment of the accused persons were inspected by the Assistant Labour Commissioner (Central)/Labour Enforcement Officer (Central) Chaibasa/Dhanbad/Koderma on 25.2.1996 at 03:30 P.M. when 48 persons were found working in the establishment and during the course of his inspection he observed the following illegalities :- (a) In contravention of Rule 18 (4) the accused persons failed to maintain certificates of registration up-to-date in relation to the particulars as specified in the Certificate of Registration. (b) In contravention of Rule 73 the accused person failed to record a certificate at the end of the entries in the register of wages maintained by the contractors. (c) In contravention of Rule 74 the accused persons failed to maintain a register of contractors in Form XII. (d) In contravention of Rule 79 the accused persons failed to display abstract from the Act and Rules under the Contract Labour (R&A) Act, 1970. (c) In contravention of Rule 74 the accused persons failed to maintain a register of contractors in Form XII. (d) In contravention of Rule 79 the accused persons failed to display abstract from the Act and Rules under the Contract Labour (R&A) Act, 1970. (e) In contravention of Rule 81 (1) (i) the accused persons failed to display the notices showing the rates of wage, hours of work, wage periods date of payment of wages, name and address of the Inspectors having jurisdiction, and the date of payment of unpaid wages in English and Hindi at the Establishment. (f) In contravention of Rule 81 (3) the accused persons failed to submit a return in Form VI-B to the Inspector appointed under section 28 of the Act. The aforesaid contraventions as observed by the Assistant Labour Commissioner (Central)/Labour Enforcement Officer (Central), Chaibasa/Dhanbad/Koderma, during the course of his inspection was incorporated in his Inspection report -cum- show cause notice No. 34 (28)/96- KTG/CHB dated 31.12.1996 and the same was served to the accused persons by registered post with A/D as well as personally. 4. Mr. Sah, learned counsel for the petitioner submits that accused no.2 in the aforesaid complaint petition namely Mr. Jay Prakash Mishra, the then Senior Divisional Manager (Mines) of Noamundi Iron Ore Mines of TISCO has passed away on 28.01.2006 at Greater Noida. He further submits that the petitioner was General Manager of the said company and the company has not been made accused in the present case. He also submits that in absence of company, liability cannot be fastened upon the petitioner. He refers Section 25 of the Act, 1970 and submits that there is no averment that the petitioner was looking to day-to-day affairs of the company. On these grounds, he submits that the entire criminal proceeding is bad in law. 5. On the other hand, Mr. Sharma, learned counsel for opposite party no.2 submits that several illegalities were found and that is why the complaint case was rightly filed. He further submits that the petitioner was In-charge of the company at that time. He also submits that there is averment in the complaint petition that the petitioner was looking to dayto- day affairs of the company. 6. Mr. Sinha, learned counsel for the State submits that the learned court has taken cognizance looking into the complaint. 7. He further submits that the petitioner was In-charge of the company at that time. He also submits that there is averment in the complaint petition that the petitioner was looking to dayto- day affairs of the company. 6. Mr. Sinha, learned counsel for the State submits that the learned court has taken cognizance looking into the complaint. 7. In view of the above submissions of the learned counsel for the parties, the Court has gone through the materials on record including the contents of the complaint case and finds that there is no averment that the petitioner was looking to day-to-day affairs of the company, which is one of the requirement to make out the case under the Act, 1970. Section 25 of the Act, 1970 speaks as under:- "25. Offences by companies.-(1) If the person committing an offence under this Act is a company, the company as well as every person in charge of, and responsible to, the company for the conduct of its business at the time of the commission of the offence shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in subsection (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or that the commission of the offence is attributable to any neglect on the part of any director, manager, managing agent or any other officer of the company, such director, manager, managing agent or such other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly." 8. It appears that in the complaint case, the company has not been accused and in absence of the company, the case has been lodged which is against the mandate of law as has been held by the Hon'ble Supreme Court in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and another; [ (2005) 8 SCC 89 ]. Paragraphs 4 and 9 of the said judgment are quoted herein below:- “4. Paragraphs 4 and 9 of the said judgment are quoted herein below:- “4. In the present case, we are concerned with criminal liability on account of dishonour of a cheque. It primarily falls on the drawer company and is extended to officers of the company. The normal rule in the cases 20 involving criminal liability is against vicarious liability, that is, no one is to be held criminally liable for an act of another. This normal rule is, however, subject to exception on account of specific provision being made in the statutes extending liability to others. Section 141 of the Act is an instance of specific provision which in case an offence under Section 138 is committed by a company, extends criminal liability for dishonour of a cheque to officers of the company. Section 141 contains conditions which have to be satisfied before the liability can be extended to officers of a company. Since the provision creates criminal liability, the conditions have to be strictly complied with. The conditions are intended to ensure that a person who is sought to be made vicariously liable for an offence of which the principal accused is the company, had a role to play in relation to the incriminating act and further that such a person should know what is attributed to him to make him liable. In other words, persons who had nothing to do with the matter need not be roped in. A company being a juristic person, all its deeds and functions are the result of acts of others. Therefore, officers of a company who are responsible for acts done in the name of the company are sought to be made personally liable for acts which result in criminal action being taken against the company. It makes every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of business of the company, as well as the company, liable for the offence. The proviso to the sub-section contains an escape route for persons who are able to prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence. 9. The position of a managing director or a joint managing director in a company may be different. The proviso to the sub-section contains an escape route for persons who are able to prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence. 9. The position of a managing director or a joint managing director in a company may be different. These persons, as the designation of their office suggests, are in charge of a company and are responsible for the conduct of the business of the company. In order to escape liability such persons may have to bring their case within the proviso to Section 141(1), that is, they will have to prove that when the offence was committed they had no knowledge of the offence or that they exercised all due diligence to prevent the commission of the offence.” 9. So far as the contention of the learned counsel for opposite party no.2 is concerned, it is well settled that only bald allegation against the accused that he is looking day-to-day affairs of the company, is not sufficient. What are the roles being played for such business, is required to be disclosed in the complaint petition, 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.” 10. In view of the above facts, reasons and analysis, the entire criminal proceeding including the order taking cognizance dated 05.04.1997, whereby the learned court has taken the cognizance under Sections 23/24 of the Contract Labour Act against the petitioner, in connection with C-7 45/97, pending in the court of learned Chief Judicial Magistrate, Chaibasa, are hereby, quashed. 11. Accordingly, this petition is allowed and disposed of. 12. Interim order, granted earlier, stands vacated.