Karnataka High Court
Vikram Kirloskar vs State Of Karnataka By Ulsoorgate Police on 25 May, 2010
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS 25'?" THE DAY OF MAY 2010
BEFORE
THE HON'BLE MR. JUSTICE K.N.KESHAVANARAYARTA A.
Cr}. P. NO. 2577/2005 _
C/W Crl. P. No. 21'-84'61'05
BE'I'\/VEISIN:
SR1. VIKRAM KIRLOSKAR,
MAJOR,
NO.8. Sm FLOOR,
EMBASSY STAR,
VASANTHNAGAR, ~ . ; ..
BANGALORE. V 2 RE;m"i.ONER
{BY SR1. S.N. ]v1uR'1_RY, ESERIOR 'Ai)5i2jOOA"1j£«:'FOR
S. MAHESH g3z'--.CO1'§f1'PAI~EY',.A£)VOC}xTE)
AND:
STATEOF _ ~
BY ULSOOR GATE.fR.QL.1cE._ ~ '
(DELETED) ' '
1. SR1. V. S. "HUBER,
MAJOR, " V
"RXO..fN()~. .66. 5?H"NlAI{N ROAD,
. ' - ,S~1~LMiPANGiRAMNAGAR,
V ._BARGALORE'~_-- 560027.
é; O14"'i5:ciAL LIQUIDATOR.
'Arm FLOOR, KENDRIYASADAN,
BANGALORE _34. RESPONDENTS
O UMPLEADED AS PER
" -COURT ORDER DATED 1.12.2005}
VT EEBY SR1. N. G. PHADKE, ADVOCATE FOR R1.)
( BY SR1 V. JAYARAM , ADVOCATE FOR R2)
f'§<./'/
x,/
E " D_¥3AN'€xAL.OR_E*.334.
IN Crl. P. No. 2846/2005
BETWEEN:
1. SRI. SHYAM KIRLOSKAR.
MAJOR. ----
C/O THE KIRLOSKAR OIL ENGINE LTD, H _
KRIKI, MUMBAI ROAD, .. *
PUNE, I
MAHARASHTRA STATE.
2. s. PADMANABHAN,
MAJOR,
YANTRAPURA. _
HAR1HARA--577502.. '
DAVANAGERE DISTFJCT. PETIDGMERS
[BY SR1. S.N. MURTHY, SENIOR 'ADVOCA'£'iZi,FC)R
s. MAHESH &_CQM--PAN";_Y, ADVOCATE.) ' '
AND:
1. SRILV. S, KU.EER~,, -. '
MAJOR, '-
R/OQNO'. 66. 51E..MAIN__ROAD,
SAMPAPJGIRAJWNA53 .
EA\IOALORE 560027";
'E V' -. 2. "EvTi9iE"EOF'F1CLAE LEQUIDATOR.
' v .. 4w_,FL.OOR,,KENDR1YAsADAN.
V A . RESPONDENTS
._ * .;;MPL.EADED'As PER
A ,_COU1RT(3_R"DER DATED 16.12.2005}
( BY N'. G. PHADKE, ADVOCATE FOR R1.)
" 1 BY SRE V. JAYARAM , ADVOCATE FOR R2}
THIS CRIMINAL PETIT101\E IS FILED UNDER SECTEON
V. _..:182 CR.P.C. PRAYING TO QUASH THE ENTIRE CRIMINAL
PROCEEDINGS AGAINST THE PIEITITEONER IN' C.C.1\§O'.
///../A
1097/2004 {PCR NO. 105/2004] ON THE FILE OF THE C.J.
{JR.DN.} ON THE FILE OF THE C.J. {JR.DN.} & JMFC,
THIS CRIMINAL PETITION NO. 2846/200.5'Is..';IaII§E.35- _
U/53.482 CR.P.C. PRAYING TO QUASH THEVIAENTIRE'
PROCEEDINGS IN C.C.NO. I097/2004 {PCR~v1~IQ;'v.10'5V/2004;}
ON THE FILE OF THE C.J. [JR.DN.:}'&' JMFC',
THESE CRIMINAL P£3'1'I'I'ION§'.VI«1:2'%AI\Ef1i\IGEE"§I'1'3I£'1\I _ _
AND RESERVED FOR ORDERS c:oMIN0r--~.0N FOR I
PRONOUCEMENT THIS DAY. _CoURIf_ pI§oNotJCI:=:D"THE
FOLLOVVING:
In these ::vuIId::eI9.I'V_*Eection 482 of
Cr.P.C. (forw 'petitioners who have
been ' '.:'aCCIIsed persons in
of the Civil Judge
[Jr.Dn.')'; in Davangere District, have
sot;-i:gh't for t1ua.shi:ngV'l:he Criminal prosecution launched
0 against t.E:efn_in the said Case.
which have led to filing of these petitions
in brief are as under:
V' , Respondent No.1 herein namely V.S.Kuber was an
employee of M/ s Mysore Kiriesker Limited, Unit 111
s'?
Sattur, later shifted to Yantrapur, Harihar. By 'order
dated 30.9.1986, the Management of Mysore rerijeapker
Limited dismissed him from service. '
his dismissal from service by the"Manag4emVent.
and contrary to law, respondent
under Section 10 [4--A) of ti1e""induVs'tria1...ijisputess'Act,dd'
1947 (for short 'theirs yALaiaeu1- court by
award dated 8.7.2o02fiae-it Apaaideeiithr_e iei+§.e:%:.passed by the
Ma3:1agernent~' from service
and directed the service with fuil
back to be published, as
required ID Act, by the Government
on 'anddthe award came into effect from
1 provided by Section 17--A of the ID Act. As
did not reinstate him as per the award
of dither-Labour Court, respondent No.1 approached the
Labour" Commissioner to authorise him as required by
Sectiori 34 (1) of the ID Act, to file a complaint against
"the Management for offence punishable under Section
29 of the ID Act, for breach of the terms of the award
passed by the Labour Court. To the show causenotice
issued by the Labour Commissioner, the .
filed its objections inter alia C-VI.that4_'_}th'6 nu
company is not working frorn
4 company has been declaredflhas sick. the"
Board for Industrial ~ Reconstruction (for
short 'BIFR') and it 'A 0.2002, has
recommended company and the
said 'Court as such, the
to implement the
award," Commissioner by order
dated authorised respondent No.1 to file
the Management for offence
A :iu1ri'der Section 29 of the 1}) Act. Pursuant to
s1ieh..__authorisat1on, respondent No.1 filed complaint
r.under~'Section 34 of the ID Act r/w Section 200 of the
°.Code against the petitioners herein. The petitioners 1
"and 2 in Cr1.P.No.2846/2005 have been arraigned as
accused 1 and 3 while petitioner in Crl.P.No.2577/2005
has been arraigned as accused No.2. In the complaint
Accused 1 to 3 are described as the Managing".
I:'3x--Managir1g Director and the Company=...VS=.ecretar3*_¢
respectively of Mysore ;
complainant inter alia contended " that t}f}!f';'lEt{'(3:L1.SEC;l are',
liable to implement the awardbf the Court and
in spite of the same ;tfi1ayfe.l'.fa_illed'~tto implement the
award as such the3r~-dhavepp the offence
punishablfi. Act. The learned
Magistratell the complaint was presented,
took cognizance' :_ti1e""offence alleged, recorded the
sworn staternentvllof the complainant and by forming an
opiniounfé about existence of a prima facie case against
._th},=_;_placc'i;ts_edi;"persons, directed registration of the case
and issue "of summons to accused 1 to 3. After coming
"to»,l<noW of the same. the petitioners presented these
'Z'-petitions seeking to quash the criminal prosecution
V it "launched against them.
3. Upon service of notice of these petitions,
respondent No.1 has appeared through his Vcouiizsei.
Subsequently, the official liquidator attached' _
Court came to be impleaded asppppresporide-n:t'_»V= it
upon service of notice, he has appeared'
counsel. _' V V V' S
4. I have heard Sri.Sv;Si'J..ih3.\/I1,1Vprth'y',~. counsel
appearing for the counsel
appearing for.v_responde.fit "";Sri.V.Jayaram,
counsel V'
the following contentions
in s1,tppoi't--. of petitions:
As the" 'award of the Labour Court came into
pursuant to its publication on
required by Section 17 of the ID Act, the
same' was in operation for a period of one year as per
subésection (3) of Section 19 of the ID Act, from
____.i2.5.2003, as such the complaint ought to have been
./2'
<§:« '"
filed on or before 11.5.2004, therefore, the cornplaint
filed on 23.9.2004 was barred by time under
468 of the Code and under these 1'
learned Magistrate could not havetaken
(ii) Even prior to the "date of the the
Labour Court i.e., been
declared as a sick .1V2.10.2oo1 and
directions as éick Industrial
Companies" 1985 (for short
.SICA.}c..1'iad::beerfii:tissued."directing the company not to
except with the consent of
the _Board"'«an'dV:£3§l*'A'i7,{_»' 31.10.2002 recommended for
' _ wind~in_g.:upzof the"-company, therefore, in the light of the
by BIFR under Section 22-151 of SICA, it
be and unfair to prosecute the Directors of
the contpany as such initiation of prosecution against
thefcpetitioners is not legal.
W
(iii) As per the recommendations of the BIFR, the
company was ordered to be wound up by order dated
1.4.2004. Thus even as on the date of the fi1injgw.do£d_:the
complaint, the company ceased to exist, '
account of these subsequeljt" v4.'_}th'e.
petitioners are not in a position to_irLa_plernent'the
as such there is no commission'-iof crirninal jtjffence'. '
(iv) Sri.Vikrain"-- petitioner in
Cri.P.No.25'774_/O5__ ceas'e(i- the company
with effect was within the
knowiedge __No.1 as is evident from the
descriptioniiof parties the cause title of the complaint
wheiregin S_ri.Vi1{rarn««KirIosker has been described as Exe
ijirector of the company, therefore the
prosectrtioti'Fiaunched against Sri.Vikrarn Kirlosker, the
petitioner in Cr1.P.No.2577/O5 is liable to be quashed.
(V) The procedure adopted by the learned
Magistrate in recording the sworn statement of the
W.
10
complainant by permitting the Advocate to'___ put
questions and eliciting answers, is contrary to
settled principles of law and since list of wit'r;esses:"'was-r '
not annexed to the complaint as""required_,.b"y5.'law,._}the
learned Magistrate ought_n0t_to
(vi) After winding up, ipvcompany
have been sold by' in public
auction and vthe r__proc'eed--s:'; therefore the
only to approach the
ofiicm
5} ..Per ccntrarl:_Sri;'l'I'fG.Phadke, would submit as
under:
-ézection of the ID Act speaks of breach of
and not an award in operation as per
Se"ction.1§'(3) of the ID Act and since the award passed
"by..Labour Court directing reinstatement with back
iii'-yrages is a binding award against the Management, and
it n0n--implementation of such binding award is a
iv
11
continuous offence, the provisions of Section 468 of the
Code has no application and in View of S€CtiOi'i..VVf§r7:2.V_Of
the Code, the complaint filed even after
of one year of its operation as pro.\.Iided "'
of the II) Act is not barred by ti'me1'as~'Csnfch"'the
Magistrate is justified of'; the-C'
offence.
[b] The direction. of the SICA
issued by_ operative only
during the recording of the
opinion by 'Winding up of the company
under su]§..section;_ of Section 20 and up to
CQi1'imencernen't«...of,the proceedings relating to the
L' xyiiadiiag :before the High Court and since in the case
proceedings relating to the winding up of
the company was received by the Company Court on
.6:>_".1":g_2003, the restraint order issued by BIFR ceased to
' v'__T*oe operative with effect from 6.1.2003, therefore, the
12
prosecution launched for offence under Section 29 of
the ID Act on the basis of the complaint
23.9.2004 and the cognizance taken theifeoii..'_'V:-gee.
accordance with law. I _
(c) Merely because the company.
ordered to be wound up,""'i'*;t"has no"'effec't;: the
prosecution for the offe'nce under Section 29
ofthe II) Act. if
(d) Kirlosker that he
ceased'. "the company with effect
from 29,V_1'2,%200_0 doubtful in the light of the
statern.enturnade'in thefpetition before this Court that he
resigned some time in 2002 and in any case it is a
such, on the basis of such disputed
fact, c.rin1i:na1 prosecution cannot be quashed and the
if resaid disputed fact is required to be decided during the
of the case.
13
(e) If the averments made in the complaint are
read as a whole, it would prima facie indicate that all
the 3 accused persons have failed to irnplerneni;:'_"it,_l1e
binding award as such, the learned .
justified in taking cognizance ofmthe offencehivtherefere "'
exercise of the power under Sect,ior;"'4£$2 'of 'the Coideisi
not warranted.
[i] There is no jrecordinlg the sworn
statement of the of witnesses
has been sefiaratelgr a-nnex'ed'"to:V 'th'e..eompla,int as such
there is no 'procedure adopted by the
learned M.agistrate;A,_ " V7:I:'.l'1erefore, the learned counsel
V. A_ sorrggghti for udisn91iss..a.1.of the petitions.
" ~ 'Ine._s"up_port of the respective contentions, the
learned counsels placed reliance on several decisions.
it respect to the first contention urged by
it "~:lf"Siri,S«.',N.Murthy that the complaint was barred by time,
,b.
14
it is relevant to note few undisputed dates, which have
bearing on this aspect of the matter.
{1} The award of the Labour Court was passed
8.7.2002. 'S S' S
[2] The award was published irimthe 3"
11.4.2003. A p _ _ p p
[3} The award came into force effec_tA.A'frorn
12.5.2003. 'S 'f p S S S'
[4] Sanction for prosecution _11in;d.er'V»Section_ of
the ID Act was _corI1_.p1ainarit on
30.12.2003, Sp
(5) Sanction, the Labour
(6) Complaint'-Viras'filedon 23.0.2004.
(7) cogxzigance 24.9.2004.
p itis th'e""'contenti0n of Sri.S.N.Murthy that as
of the ID Act, the award would remain
for a period of one year from the date on
xwhichit became enforceable under Section 17--A of the
therefore the complaint ought to have been filed
= . Qvithin the period of one year i.e., on or before 1 1.5.2004
15
and since the complaint came to be filed only on
23.9.2004, it is barred by time as per Section the
Code. In support of this contention, he sought' _
reliance on decision of Single Bench of~..
Court in the case of M/s.Swarnt;~;jit ,c.tn.c'l"ot'i1§a:fs
State and other [1986 L'AB,I.cf-1i23],t"smg1_¢_VBeficiif
decision of Bombay High Co1ii*t..:in..the 'ca-seV._of vvi:1!'he State
of Maharashtra Vs. [1979 LAB.I.C.
559] and aiso on th¢.V«d€Cision w~.Q f" Bench of this
Court in __AI1i¢;rs!2afA' Vibesai, Dharwad Vs.
Baskg;irt,W1)hati1;Jctti':ei.§t'VV'[1 cRi';i;;;19. N00 591.
9. 'H_'o'*.xzve\VV/'e_1"'4'tr'.) 'C.9t'ifitCr this argument, Sri.Phadke
placed i*e1iance'---o1ii__§tSingle Bench decision of this Court
' thev_Vcase°of_ Management of Naga Theatre v. R.Raja
' 119999 'i4}1'-'I;L3J'i151.
9' mi. Section 19 of the ID Act deals with period of
9' opetation of settlement and awards. Subsection (1) and
K!'
5%/9
16
(2) deals with settlement while sub--sections (3)__to (6).
relate to awards.
11. Subsections (3) to (6) which'.a.re_:':reIeifani.4
the case on hand read as under:_
"19. Period of V"operatioi'i .
settlements and V d 'V
1) xx X
2) xx X . V p p _ 2 V
3] An awa1'd::"pshaii,._' it to the
provisi;fj:ns;1ic~t»e:.thisd remain in
operation vddorieiyear {from the
dais, --. ti': :fI.3-whioh'- ' 'award becomes
:enforceahie' 1 7--A].
it .- the appropriate
Goverrxrnent rnvaydzreduce the said period and
it such periodvas it thinks fit:
:V"'7I'3:roVided further that the appropriate
may, before the expiry of the
s-aids period,' extend the period of operation
p any period not exceeding one year at a
time as it thinks fit, so, however, that the
total period of operation of any award does
M.
17
not exceed three years from the date on
which it came into operation.
4} Where the appropriate is
whether of its own motion or""'on'_'v,th.e'*.V
application of any party bo'und.4b§s* the4.awa1"d,.e__"V A , y
considers that sincepethe award was.".lyrnade,':'.
there has been a material ch..ange_',in'=, the
circumstances on " it i was . based , , the
appropriate Gov=er"n_1n'ent:;_rnayplrefer the award
or a part of -.a if the
award;~'Wa:s:pI"that c,-f or to a
Tribunéd, that of a Tribunal
o'fv.,_V'af*-I 'rr1puha1] for decision
1'-yvhetheii=" Vperiod __ of {operation should not.
by_reason_"c}iange, be shortened and
_thet'"'~de'cisiont'=_ of" [Labour Court or the
'I_'ribnnal;"'«a_s....the case may be], on such
refererice shall be final.
--. Slllhlothing contained in sub--section (3)
a':ha;'£l"' apply to any award which by its
nature, terms or other circumstances does
H not imposed, after it has been given effect to,
any continuing obligation on the parties
1%/.
bound by the award.
£8
6) Notwithstanding the expiry of the
period of operation under sub--section [3)_,_'
the award shall continue to be binding_p.oV_ir1.t?.y_
the parties until a period of two it
elapsed from the date on which i
given by any party bound"'by--.the awaiii to-[L A
the other party or parti:es1'_'iI1'tiInatir:gp
intention to terminate the award.
Thus as per subsection {3)"'of"Section._l9.of Act, it
an award shall rexnainain _operatioVn"-for alperiod of one
year from the date on becomes
enforeeahle"Sectiton_ of the ED Act. Under
Section' _1'?sA," « "becomes enforceable on the
expiry of from the date of its publication under
" Thus the combined reading of Sections
7+3; the ID Act, it is clear that in the normal
cotirse-._'the"'award will be in operation for a period of one
it 30 days from the date of its publication.
-
19
As per sub--section (5) of Section 19 of the Act. the operative period of the award as prescribed--i:.i}n'der Section 19(3) shali apply to any award nature, terms or other circunzstanees does impose, after it has been given effect_ "to, any 'continuing obligation on the parties As per sub--secti_on :{'t3')', of the period of Iirnitation vtheii award, the award contintiets:V1"to unless and until a given by either of the parties to "terminate such award.
of this Court in the case of M_ai;a_g_émenti "of..._I.\i'_aga Theatre 1:. R.Raja referred to ' .eupmv,._Vconsidering the provisions of Section 19 of the If) A¢t;' that in the fight of provisions of sub-- ' secutions-_ (3), (5) and (6) of Section 19 it is clear that [T operation of the award mainiy depends upon the nature, /3 20 terms and circumstances and the continuing obligation if any, on the parties to the award.
13. Under Section 29 of the ID Act VVhaf':iS,._i11_:2id€ punishable is, breach of any terms of Thus, it is the binding nature of the avviard. no-tithe period of operation, which is relevaintii foriaunching"t,he_ prosecution.
14. In Management .of"N'aga"*1'heatré" 1), R.Raja's case referred to supra, "refer_ring to several decisions of other High Courts and also decision of of this Court in N.K.Shah Vs. M,/.<spg. Engineering} General Workers Union, Bangalore
- 11955} if-3} has been observed thus in paras hi ' :""'i12. Thus on going through the various A " pronouncements referred to above of the A Apex Court as weli as the High Court of Madras, Rajasthan, Calcutta and also the latest pronouncement of this Court in the M 21 case of N. K. Shah, {supra} and the undisputed fact in the case on hand that though by the award reinstatement ordered and as long as the reinstate.rne_nt__' award was not complied implemented, it would continuing offence. Merely :_'-'because thgf-.___ period of operation has expired, it doeslnot . mean that the characteprrof offence, as continuous offence i""doe:s "riot cease/4 to operate". As stated ,ezi§rl.iei*-,:':it.p'l is binding nature of the awa--::d_ and ri.orl¥impiernentation of the puiiishable 'time; Section 29 Voft'theV.;liD doesnot depend on the periods loft'-»..,4operation' of one year as conternplated.lpund*er' Section 19(3) if the said provision is reladlvwith sub--sections (5) and " (6). of Section"'i9 of the ID Act.
" View of the aforesaid finding, I V amloftiie clear View and opinion that in View it ,.ofa:the fact that the offence under Section 29 d " Act is a continuing offence, the embargo placed under Section 468 Cr. PC of limitation is not applicable to the case of &/ 22 present nature. Even otherwise in the case of social beneficiai legislation and of offen.ce._"~.._ arising under the same, the Court should take note of provisions of Section C Cr. PC which empowers t}fie"iC0uAI"t'..«to:.eXtend-[3 the period of limitationifl ~in circumstances. This vprovisiono. unde1f'v:S<%;ctiion 473 C1'. PC is based on'=pCrin_cip1es_ of *f1atura1 I am in respectfui the aforesaid opinion of Single Bench of the Calcuittaiiiigh Singh's case and Single' High Court in The State of Maharashtra' Vs. Ajitfiifaneklal Choksfs case referred to supira have that complaint filed for the offence 29 of the II) Act after the expiry of one year' .. date of enforceability of the award, is bari"ed"Vby.iiInitation under Section 468(2)(b) of the Code. However, both these decisions do not refer to the Cdeciisions of the Supreme Court, which are referred to in Management of Maya Theatre 1:. R.Rcy'a's case. In these @ 24 the Management was directed to pay certain sums of money in installments by prescribing the date-s;"p*'.tliis Court held that failure to pay installment continuing offence. However, ir1"th'e« .ca'se _on'hjand.,]~the award directed reinstatement full back wages and it the' Management. As of the II) Act directs that of period of operation of' continues to be binding duntii a notice of two the parties showing intention: award. Under Section 29 of the the 'breach of binding award is made Therefore, the decision in Harsha C. Des-cti's' applicable to the facts of the case on hand. light of the law laid down in Management d ef,iVa_r;'a Theatre 1:. R.Raja's case with which I am in 'agreement, I find no substance in the first contention of it wthe learned Senior Counsel for the petitioners with 25 regard to the complaint being time barred. Therefore, I hold that the complaint filed after the expiry of from the date on which it became enforceabieds barred by time under Section 468"of
16. There appears tohe no "seriousadis_pu_te piasyito the fact that the Mysore yvasfi deciared as a sick industiyi' the Board, recomInended_efo_r icompariy under Section 2Q(i'1}rofAii§I;CA;_hy'its opijnioriudated 31.10.2002.
directs that Where an enquiry is pending or any scheme referred to.' under Section 17 is under preparation or «consideration or a sanctioned scheme is under or where an appeal under Section 25 reuiatingt an industrial company is pending, no 'eperoceedsings for winding up of the industrial company or :7-iorhdexecution, distress or the iike against any of the it "properties of the industrial company or for the &Z/, 26 appointment of a receiver thereof and no suit for the recovery of money or for enforcement of any security against the industrial company or any guarant_ee_:""in respect of any loans or advance industrial company shall lie for "be further, except with the consent appellate authority as the cas:e"1nay A Under Section"= H the board is empowered to"issue;"Cii1'ectiofl§*1._toy'. sick industrial company not a1'iyfvo'f ivtsnlassets except with the consent. during the period of preparation cr.3ns§{1eration of the scheme under luor~..._d_nring the period beginning with ' opinion by the Board for winding up of .Cornpany'e:'I.V_1ri1der Section 20(1) of SICA and up to comrnencement of the proceedings relating to winding 'before the concerned High Court.
27
17. A Division Bench of this Court in the case of Indian Plywood Mfg. Co. Ltd. and Commis$ioliier"".,9f Labour 8:, others {1999 (1) LLJ 4: :1 held that of the ID Act cannot be controlled»-or ltothave been curtailed by incorporation"«Vof.--'.ASectionA.22 and the provisions of canvnotsl over"
ride the admitted a.nd settled. of tl'1e*'yvork1nan under the ID Act. it it 'V V 'M £8. The Apex Coiirt:intlti1_e._clas.e'Kusum Ingots 8:. Alloys Ltd. Peterson :Securities Ltd. and others (iourt Cases 745} has ruled that Selctionv " does not create any legal impediment for._____instituting and proceeding with a ' ;cI"imina;i. on the allegations of the offence under Slecltioln the NI Act against a company or its Directors.' Learned Senior Counsel appearing for the A "it." Apetitioner fairly submitted that the embargo imposed thunder Section 22 of SICA would not come in the Way of launching of the criminal prosecution for the offence 28 punishable under Section 29 of the ID Act for non» implementation of the award. However, accordingto the learned Senior Counsel, in the light of SICA, prosecution could not be launched: rm. implementation of the award.
19. In Kusum Ingots. _& filings Apex Court has considere>d:"lthe xlzlrlhetherff Section 22--A of SICA:'affects"'a'Vf case for offence under Section 138 of Haiiingeregard to facts of that case " for the offence punishable 138 of NI Act was launched betweenfthe v.per_1'_.od._V fdulring which the direction under v 22-A \i:fas.._operatiVe, the Apex Court held thus in 'S p X X X X In a case in which BIFR has .. subtnitted its report declaring a company as 'sick' and has also issued a direction under S.22A restraining the company or its directors not to dispose of any of it assets except with consent of the Board then the %/ 29 contention raised on behalf of the appellants. that a criminal case for the alleged offe_nc_le-._y'_l'~w. under Section 138 N1 Act cann_of"«'.be.._i instituted during the period in restraint order passed 1.ferrIa_inS,f} ' operative cannot be rejected 17f Whether the contentionpcan'-be accteiptedpr not will depend ony' the 2 circumstances . ofthe easel for instance, before the datefilon' ..cheque was drawn ,_before' " I 2 ' statutory perioc} iof days It a restrain orders'. of 'the. tinder fsection 22-A was ;p'aésedf7'.agai;jst:"the ccfihpahy then it cannot be 'evoffence under Section 138 N1 'Act was In such a case it may fliasonably' be 'said that the dishonouring of t cheqneybylthe bank and failure to make of the amount by the Company its Directors is for reasons beyond the 'control of the accused. It may also be "contended that the amount claimed by the complainant is not recoverable from the assets of the Company in View of the ban order passed by BIFR. In such 5Za/ 30 circumstances it would be unjust and unfair and against the intent and purpose of the statue to hold that the Directors should compelled to face trial in a criminal case.'_'x _ Whereas in the case on hand, as no'ticed.V:eariiér, the report of BIFR holding Myso're"Kir1osker 2 sick industry was dated recommendation of BIFR for'vi«i2i}indiIig't1_1l§)"o_f" V.th'eqclolr.tipanyll was dated 31.10.200':2~.~..&_ As«"co_u1d_ble'~seen frorii the order passed by this Court in'7 on 1.4.2004. the summary' of along with the comiriuriicatioifidated sent by the Registry of the BVoiard».wVas ilrecefired by the Registry of this Court O1fi4';5.E1__f.:20_03.hFI'Q1Tl<thiS, it is clear that the restraint .ordeTr"v..}§asse:d---_under Section 22--A of SICA ceased to .opleratel.'.l'vliivfith effect from 6.1.2003. Admittedly. comp1ai:nt was filed on 23.9.2004 much after the restraint order issued under Section 22--A of SICA M ceased to operate. The learned Magistrate took 31 cognizance of the offence on 24.9.2004. Therefore. as on the date the complaint came to be filed and was taken thereon, there was no restraint o'rd'erjpassed'_4'i "
as per section 22--A of SICA in :5p'éra:io::, circumstances, it cannot be said that._criminal "case; for the alleged offence punishableiittndet Sectionthe II) Act could not have thetdate when the complaint was Iodge_d.:" of the Supreme Ltd. '5 case is not V. 'tithe case. on hand.
Under _I not find any substance in the second Sri.S.N.i\/Iurthy.
No do'ubt_,____pursuant to the recommendations ofVVBIF§.?.,,_ 'the:"co_mpany was ordered to be wound up by this"'ConrtV-"cjasd1'per order dated 1.4.2004. Under these ',circun1.stances, the question to be considered is, A fwthettter on account of this subsequent development, pifosecution for the offence under Section 29 of the ID &/ 32 Act could not have been initiated and proceeded with. In my considered opinion. merely because the company has been ordered to be Wound up, it cannot V. to hold that no criminai prosecution K it against the functionaries of a cornpanéyygas Thientionedhin Section 32 of the ID Actefogr theoffence7'-pnnishable'V"g under Section 29 of the such company long before "winding up order. As noticed above. the ax'.-*ea.~_d~. came into force with 'u':1'}'ie Management of the conipanyi.5;VasV;n'r1d:e1f_'an obiigation to implement the said award'. _The_. 'offe'nc'e being a continuing offence.
- -_ 9 t/« even ' prior to the 'Windingfi)\order came to be passed. the V " offen ce'.cornp1ete.
21't'tA_s..t:'per Section 32 of ID Act every Director, Manager, Secretary, Agent or any other officer or person concerned with the Management of a company are Wctieemed to be guilty of such offence where the person Tfi 33 committing an offence under the Act is a company. Thus by a legal fiction, the Directors and functionaries of the company are deemed to---be 1 V' the offence committed by the company. casedffiori-.' hand, since the award was bvinding__o'n._dpthe ._ non implementation of such is punis_'hab--3_e'V'iinder V Section 29 of the other functionaries of the be guilty of the offence corn'rn,itted:=A._bythe 'i.'hus even prior to the date. the company, the functionaries deemed to be guilty of said 'in respect of such offence, a complaint fitted' yiagainst the functionaries of the company ,"h'?._1d tommbfe not rnaintainable on the ground while the company has been ordered to be W0°1ind' up.
he A Single Bench of this Court in the case of .' Cee Electronics Limited, Mysore and others Vs. W 34 Judicial Magistrate First class (11 Court), Mysore and others [(2000) 1 LLJ 843] rejecting the argume4nt_ft_4ha_t once a winding up order is passed, .
committed by the company muststarid Qh1ite1;étted,V'1_i.asV_V H"
stated thus in para 4, "4. It was lastlyVicogntended.by_Coun;s'ei~ appearing for the petition:eifs=.that.since company had beefinotir op-:de're'd'tco be wound up, the prosecution"p1joe'eVedings not go on. T he;-.. was that once is "passed, any offence . company must s_:tan_d_A..Vsee no substance in that my opinion, there is no '°3'.uristic_ A'~.,pi'i.i'icipIe supporting the wigsudbmission.___no.r was any cited by Mr. Counsel appearing for the The winding up order may be it revieyafitl for purposes of liquidating the 0 ~liabi1ities of the company and disposal of the it aiiajlable assets for purposes of paying all those, who have a claim to make, but it is difficult to see how an offence already 3'3 35 committed could be said to get obliterated just because a winding up order has been made. The fact that the company is no longer able to meet the demand the--':.n'on'--'.i'gj--- payment of which constitutes the_--basi:s.. « the offence alleged against pith,' ;:s,;_ opinion. besides the P0int.V4Wh€_ther.'QTt"not it the supervening circnn1.sta.nces, .wh.ici1:
resulted in the ;liquidat.io:1j,__of.._gthe'l cornpany should weigh _Athe;_l\;/uIagist'I'ate in the matter of pimposing:l' a_ is something grtihat do pronounce upon'. "be to the company iiicludinrg p'e.ti'ti.'oneI"'s~-- herein to cite all s'ach4'reaso:nsp:Vand-circurnstances to call for a lenient xriexxr ..theii4'rnatter, but leniency in \t1'1.¢ punishment must be it understood 't0"'be distinctly different from the it 3 _r'n.4aintain-ability of such proceedings."
in din respectful agreement with the said opinions; In the light of the above, I find no substance in ttie--.t3rd contention urged by Sri.S.N.1Viurthy. &.
36
24. As noticed earlier, Section 32 of the ID Act creates a legal fiction whereby every Director, Manager. Secretary, Agent or other Officer or person with the Management of a company....,which:'* committed the offence under the be guilty of such offence un]_ess such that offence was committed withoéutgvfhigs knowledgeg or his consent. Thus evenV\7vh:en 'the-» .person, committing the offence is a company, ail'-itsiefunctionaries' are deemed to be guilty of. prove that the offence " their knowledge or consent." the the award of the Labour Court was passed against the Management of Mysore jvfiiraited ffff H directing reinstatement of the full back wages.
25. As per section 29 of the ID Act non- H'-'_Aim_pIementation of the award is an offence. Thus _gv_a§ccording to the complainant, the offence punishable under Section 29 of the II) Act was committed by the company and it is for the said offence compiaint be filed against the petitioners herein . accused No.1 is the Managing Director, a':ccu'se-fir 2' EX-Managing Director and accu2sed=A.'_No.300"is" Secretary. The fact that as date~the"offe:nce 2' 2 was committed by t14ei'99mI3fih&;2;.:1}3§C'~}Sed2No.1-hvas the Managing Director and the Company Secretary of not in serious dispute. himself in the cause title 2 udvdescribed accused No.2- Vikrarn" :""'t'.:._:i">:<"-';T'.'via1'1aging Director. It is the conteivitionéof-.VVVii<rani Kirlosker that he ceased to be the '*the company with efiect from 29.12.2000 as date of the commission of the alleged offence'; 'lie'; was not a functionary of the company as descritied under Section 32 of the ID Act, therefore, he be prosecuted for the offence committed by the it "company. Along with the petition, he has aiiso produced &/..
Jki/ 38 a copy of particulars furnished in from No.32 in respect of appointment of Directors, Manager and among them submitted by the Company . Mysore Kirlosker Limited dated: Kl certified by the Registrar of Corfipariies As per the contents of this doctimerit.Vikrarn";Kirl»osker * 0' resigned as Director, viIith"--.effect from 29.12.2000. I Of Cjourse of the argument, t}'.""1e<':«.E['g(:§3.I'I']_%d complainant sought Vikrain Kirlosker appea:rsHto'_' frornwthe post of the Managing Director,_h'eVcontiriued the Chairman of the Board Of }3i'rectors alsodvthe company and he was also offer for re--appointment. To support he sought to place reliance on the copy oflhthe.-__'5.9*"i"Annua1 Report of the company for the year "19;99--l2000. According to the learned counsel, the fact "Ayrhether Vikram Kirlosker ceased to he a Director of the 0 "company as on the date of the commission of the b.
39 offence is a disputed question of fact and therefore the same will have to be adjudicated and decided during-..t'he trial of the case. Merely because the . disputed the said fact that, by itself if if to reject the contention raised.l':'oni..A_"beha1f Kirlosker, if the undisputed dociimenti__p1*nVdnce~d"by 'him " it indicates that he ceasedxtto be"'a'.lD4ifl€"C§0I 16'r1'g~ before the date of commission of certificate issued by in Karnataka which has clearly indicates that Vikrarn' the Director of the compariy__With' :l'2L9.12.2000. It is pertinent to not§_ that 4.i11.V_ the title of the complaint after deyscribiiig' 'gaccused No.2--Vikram Kirlosker as Ex- I§ir'ector of Mysore Kirlosker Limited, the cofiiplainant in the body of the complaint has not stated "any thing about Vikram Kirlosker. In paragraph 2 of lfftheffcomplaint it is stated as under: 40
"The Accused/Respondents, namely ._ Shri Shyam Kirloskar is the Managing'e.._pifi.V Direcotr of M / s Mysore Kiroloskar 1tc1., 0. ~ S. Padmanabhan is the Company Sedfijetargri of M/s Mysore Kirloskarv.-E;td.(4.p these Accused/Respondent? to 2 implement the said .award V(:it_. The complainant wasttvfeady report to the duti~e_s in; to the award and the by the complainant to they by his 1¢tt§1~é#;>zi,t~ ,13-Q5f2Q'(33,'707,07.2003 and 15.053, my aim. 15.09.2003 has by the 18* received the same on ~ A 1osi0'9'.200s'.tt" However, the pi' Aeeused/VRe'spontients faiied to Comply with it the said ewardt Dt. 08.07.2002. Thereby, the _ Aepeiise:d--/'Respondents have committed an of ' punishable under section 29 of the lhdu'strial Disputes Act, 1947.
it Again in paragraph 4 of the complaint, it is stated 42 is further clear that the complainant was awa1'_e.__ that accused No.2--Vikrarn Kirlosker is an Director of the company and as on the~'i.':eiatei:VV:olf offence alleged, he was neither" the nor Director of the company :4's_o;".that prosecuted for the offence Withi.thehaidV_of seéjséfi S32 of if the ID Act. It is foriihat ujth.e cornvplayiynant has not; made any No.2 in the body of the /it of the considered opinion before the learned accused No.2 was guilty of the of Section 32 of the ID Act asgésluch the taking cognizance of the offence and ,0 issuing.f's.LfH1mons to accused No.2 is illegal and the passed without appiication of judicious mind."---VThe'.materia1s available on record is sufficient to f'ir1d_icat'e that accused No.2--Vikram Kirlosker ceased to Ufa Director of the company with effect from 2 "H29. 12.2000 itself and as on the date of the commission /'.
c:
_ /,0...
. ix"44
Therefore the said contention is not available to the petitioners. The other technical ground urged .that sworn statement of the complainant has with the assistance of the coui1s'ei~«forfcompiainant as though it was eXaininationV--in--chief;-_ 'How'e_ver., I 'no substance in this contention--vais,o for that the' perusal of the certified "statement produced would indicate .'/learned Magistrate has recorded"'the of the complainant for the complainant has put questions to the complainant his statement. Therefore, I find' no or irregularity committed by the , 'iearnehdtMagistrate in recording the sworn statement of H the_ co'm"p»1.a1'nant.
" . :'2,'g7.''in View of the above discussions, exercise of xpowerflh under Section 482 of the Code to quash the 'prosecution launched against the petitioners in >@