Delhi District Court
India In M.C. Mehta vs Union Of India. But During Cross- on 2 February, 2019
IN THE COURT OF SH. PRANJAL ANEJA
METROPOLITAN MAGISTRATE-01, SHAHDRA DISTRICT,
KARKARDOOMA COURTS, DELHI
Factory Inspector
V.
Harish Ahuja
Complaint case no. 04/09
Comp. ID No. 5664/16
a. Serial No. of the case : 5664/2016
b. Date of commission of offence : Continuing offence
c. Date of institution of the case : 13.05.2008
d. Name of complainant : Factory Inspector
e. Name of accused : 1. Harish Ahuja
S/o Sh. M.F. Ahuja
R/o 22, Amrita Shergil Marg,
New Delhi-03.
2. J.D. Giri,
S/o Late Sh. D.B. Giri,
R/o Block No. 5, Flat no.112,
1st Floor, Eros Garden, Suraj
Kund Road, Haryana.
f. Offence complained of : Section 92 r/w Sections 6, 7, 9(d)
& 83 of the Factories Act, 1948
read with rules 11-A, 102, 88
of Delhi Factories Rules, 1950.
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g. Plea of accused persons : Pleaded not guilty
h. Arguments heard on : 01.09.2018
i. Final order : Convicted
j. Date of judgment : 02.02.2019
JUDGMENT
FACTS IN BRIEF:
1. The present complaint has been filed by the Inspector of Factories, Delhi seeking to prosecute the accused persons for the offence punishable U/s 92 r/w Sections 6, 7, 9(d) & 83 of the Factories Act, 1948 & Rules 11A, 102 & 88 of Delhi Factories Rules, 1950. It is stated in the complaint that the concern of the accused M/s Shahi Exports Pvt. Ltd. is a factory within the meaning of Section 2(m)(i) the Factories Act, 1948 and the same is not registered under the said Act and therefore, contravenes provision of Rules 11A of the Delhi Factory Rules, 1950 read with Section 6 & 7 of the said Act. It is also alleged that the accused Harish Ahuja is the occupier and Sh. Jalandhar. D. Giri is the Director of the said factory within the meaning of said Act.
2. Further, in the complaint it is stated that the above said factory was inspected on 14.02.2008 on the complaint of Labour Union and at the time of inspection 155 workers were found working in the premises who were engaged in the process CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 2 of 20 of manufacturing of Readymade Garments with the aid of power and the factory was running without licence. It is alleged that breach of various provisions of the said Act and said Rules were observed which are as under:-
(a) The said premises constituted a "factory" within the meaning of Section 2(m)(i) of Factories Act, 1948 read with aforementioned Rules.
(b) The required registration and license is not obtained from Chief Inspector of Factories, Delhi and factory is running without license amounting to contravention of the provisions of Rules 11-A of the Delhi Factory Rules, 1950 read with Section 6 & 7 of the Factories Act, 1948.
(c) The following registers had not been produced on demand at the time of inspection and again after written orders dt. 28.03.2008 amounting to contravention of Rule 102 of Delhi Factories Rules 1950 read with Section 9(d) of said Act:
1. Muster Roll in form no. 26.
2. Register of leave with wages in form no. 15 for year 2007 & 2008.
3. Register of Adult workers in form no. 12.
4. Register of Accident & Dangerous occurrence in Form no. 27.
5. Inspection Book (f) overtime Muster Roll in form no.10.
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6. Register of line working & painting in Form no. 7.
(d) Leave books in form no. 16 had not been provided to the workers Ashok Giri, Rajinder Pandey, Md. Salim, Md. Nazim, Sandeep Nautiyal, Ram Ratan, Ms. Suman, Nirmala, Rajbala, Anita, Vivek, Satish, Satpal, Dinesh, Vikas, Vinod Kr. & Others amounting to contravention of Section 83 of the Factories Act read with Rule 88 of said Rules.
3. It is alleged that on the basis of aforesaid contraventions, accused persons are liable and punishable under Section 92 of the said Act read with aforesaid Rules.
4. Cognizance was taken & accused were summoned.
Notice was framed against both accused on 19.08.2008 for the offence punishable for the aforesaid offence. Accused persons pleaded not guilty and claimed trial.
5. In order to prove its case the complainant examined Sh. J.N. Jain, Inspector of Factories as PW-1 who exhibited the following documents in his testimony i.e. Complaint dt. 08.02.2008 of Labour Union received in the office of Chief Inspector of Factories as Ex .PW1/A, detailed inspection form alongwith list of worker investigation as Ex. PW1/B, list of registers as Ex. PW1/C, signatures of workers as an CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 4 of 20 acknowledge of not issue of leave books as Ex. PW1/D, Complaint filed before court for contravention of section 6,7,9(d), 83 read with said rules as Ex. PW1/E, show cause issued to management as Ex. PW1/F, application for grant of license and renewal and license cannot be granted as per direction of High Power Committee as Ex. PW1/G & Ex. PW1/H and Sh. R.N. Dahiya, Deputy Chief Inspector of Factories as CW-2. Both the witnesses in their examination-in-chief have deposed supporting the complaint and they were also cross-examined on behalf of the accused.
6. CE was closed on 18.12.2013 and statement of accused persons u/s 313 r/w Section 281 Cr.P.C was recorded on 15.04.2014 wherein they opted to lead DE and got examined Sh. Deepak Kumar Thadani as DW-1 and thereafter, DE was closed on 21.07.2018.
7. I have heard the arguments of both sides. I have also gone through the evidence on record.
REASONS FOR DECISION :
8. Before determining whether breach of the provisions of the Factories Act, as alleged, have occurred or not, it is CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 5 of 20 necessary to firstly decide upon the averments in the complaint that the premises constituted 'factory' within the meaning of the Act. Section 2(m) of the Factories Act, 1948 defines the word "factory", the relevant portion of which is reproduced as under:
Section 2(m) : " "factory" means any premises including the precints thereof-
(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or
(ii) ............"
9. Thus, where a manufacturing process is being carried on with the aid of power in a premises where ten or more workers are working on any day of the preceding 12 months, the premises would mean factory as per the Act.
10. Inspection in this case was carried out on 14.02.2008 vide inspection memo Ex. PW1/C. Alongwith inspection memo, annexed there is a list of employees/workers present in the premises at the time of inspection and the same is Ex. PW1/D showing 155 employees/workers. There is no contest on this aspect that 155 employees/workers were present and working in the premises. Furthermore, there is also no contest that manufacturing process was being carried on with the aid of power. As a matter of fact, even the accused also applied for a CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 6 of 20 license under the Factories Act. Therefore in view of the same, the concern i.e. M/s Shahi Export Pvt. Ltd. constituted a "Factory" as per Section 2(m)(i) of the Factories Act, 1948.
11. Broadly, the accused persons have challenged the prosecution on the ground that their factory is not running in a non-confirming area and also that it falls in category 'G' which is not shortlisted by Hon'ble Supreme Court of India for closure/shifting.
12. A challenge, inconsistent to the above, has also been raised that a licence for factory under the Factories Act was applied which was deemed to be granted which was renewed time to time.
13. Other contentions, such as the trade union complaint being illegal and accused no. 1 being not the occupier have also been raised which shall be dealt with while appreciating the evidence on record.
14. From the side of complainant, the inspector who inspected the factory was examined as CW-1. The accompanying personnel i.e. Dy. Chief Inspector of Factories was examined as CW-2. From the side of accused, their senior HR Manager appeared and was examined as DW-1.
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15. In appreciating the testimonies of these witnesses while dealing with the challenge raised by the accused, it is noted that in cross-examination of CW-1 & CW-2 the ld. Counsel for the accused while claiming that their factory falls in 'G' category and not in B to F raised questions regarding the report of High Power Committee and the decision of the Hon'ble Supreme Court of India in M.C. Mehta Vs Union of India. But during cross- examination of CW-2 when it was asked about the present case, CW-2 deposed as under:
"The case against the accused company is of running the factory without the factory licence and not of, having not obtain the requisite permission from the High Power Committee"
16. There is no contrary suggestion put to CW1 after this deposition although a suggestion as to deemed licence is put which shall be dealt later separately. The inspection memo Dt. 14.02.2008 (Ex. PW1/C) and the present complaint dt. 13.05.2008 (Ex. PW1/E) do not mention about any directions of Hon'ble Supreme Court or its High Power Committee rather the inspection memo and the complaint records that the factory is running without licence in contravention of Rule 11A of Delhi Factory Rules, 1950 read with Section 6 & 7 of the Act. Other violations as to non-production of records are also mentioned. Therefore the prosecution of accused persons has been initiated CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 8 of 20 not on the ground of any directions passed by High Power Committee or Hon'ble Supreme Court but on the ground of the factory running without licence in a non-confirming area. Thus, the documentary evidence corroborates the aforementioned testimony of CW-1. Therefore, the contentions & challenge of the accused as to the factory categorization becomes irrelevant since the primary ground for prosecution is that the factory of accused was running in a non-confirming area without licence thereby contravening Rule 11A of the Delhi Factories Rules read with Section 6 & 7 of the Act. Moreover, claims and suggestions on behalf of accused that its company does not falls under category B to F or in any hazardous or polluting industries has been clearly denied by CW-1 who also denied that factory falls under category 'G'. There is no report of High Power Committee on record filed by either parties, however, there is unexhibited copy on judicial file of order dt. 29.04.2005 passed by Hon'ble Supreme Court in Writ Petition (Civil) No. 4677 of 1985 in its IA no. 22. This order directs closure of industrial units in residential/non-confirming areas in Delhi on or after 01.08.1990 as per schedule mentioning various categories from A to F. The onus of proving it defence as to categorization of factory was thus upon the accused. Accused filed and relied upon the document Ex. CW1/H (exhibited on 09.08.2018) stating to be it "Classification of Industries - Green Category Group - G1", claiming its factory to be covered under entry 69 (Readymade garments) of this list. But it is seen that CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 9 of 20 there is nothing on record to interpret and ascertain the scope and meaning of this entry of "Readymade garments" so as to give any benefit to the accused. Admittedly, accused's factory is engaged in the process of manufacturing readymade garments which may include several processes including weaving, dying, process of various kinds such as chemical process, stitching, packaging etc. Accused has brought nothing on record to disclose the process(es) employed in his factory for manufacturing of readymade garments. Even CW-1 also claims in his testimony that accused carried out more activity than stitching. It was for the accused to have brought specific and substantive piece of material/evidence in order to show that its factory falls within the aforeclaimed green category - G1. There is no report of High Power Committee on record to give any benefit to the accused. Furthermore, there is no document on record to sustain the claim of accused that its factory falls within green category- G1 and is exempted from obtaining any licence under the Factories Act or is not liable for running its operations in non- confirming area. Thus, accused has failed to discharge his onus to prove its defence as to the categorization. Even otherwise as already observed, this categorization defence has been found to be irrelevant in this case since the prosecution case is based upon the ground that factory of accused was running in non- confirming area without licence. Here, the admissions made by defence witness DW-1 in his testimony assume importance and CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 10 of 20 are reproduced hereunder for convenience:-
"It is correct that at the time of inspection on 26.02.1997, as shown in Ex. DW1/A, the factory was running without license."
"Q. Is it correct that this document Mark B, which is license for running factory issued by MCD, mentions the name M/s Shahi Export House with partner Sh. Harish Ahuja for non-confirming area (aswikrit kshetra)?
Ans. Yes. In those days MCD used to issue factory license for non-confirming area also."
"It is correct that the company Shahi Export Pvt. Ltd., at Ranjeet Nagar was denied license by the department/chief inspector of factories from the very beginning for the reason for the said factory situated in non-confirming area but despite the same the said factory was kept running till August, 2012. Vol. The objection of the department/Chief Inspector of Factories was received in 1998 but we had applied for factory license under the Factories Act in the year 1997 and thereafter we requested to carry on our factory till newly allotted relocation site. It is correct that the same was not allotted and it was only applied for."
17. Reading of the above testimony leave no room for any doubt that accused has admitted that their factory was situated in a non-confirming area. Although there is a clear cut admission by DW, that licence was denied by the department CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 11 of 20 from very beginning and that licence was not allotted and it was only applied for thereby clearly making it a case of the factory running without licence, yet this aspect requires some further observation to be made as the accused also raised the contention as to a deemed grant of licence and therefore this contention shall be dealt hereitself. Accused in this regard relied upon a testimony of CW-2 whereby this witness admitted to a suggestion that after having applied for factory licence on 20.04.97 the factory licence was deemed to have been granted on 20.07.97. Here it becomes necessary to advert to the law with respect to deemed licence. The same is contained in Rule 11A of the Delhi Factory Rules, 1950 which is reproduced as under for convenience:
Rule 11A - Prohibiting running of a factory without a valid licence.
An occupier shall not use any
premises as a factory or carry on any
manufacturing process in a factory unless a licence has been issued in respect of such premises and is in force for the time being:
Provided that if a valid application for grant of licence has been submitted and the required fee has been paid, the premises shall be deemed to be fully licensed until such date as the Chief Inspector of Factories or as the case may be, any CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 12 of 20 other officer appointed under sub-section (2-A) of section 8 of the Factories Act, and specially empowered in this behalf by the State Government, grants or renews the licence or refuses in writing with reasons to grant or renew licence:
Provided further that if the Chief Inspector of Factories or as the case may be, any other officer appointed under sub-section (2-A) of section 8 of the Act and specially empowered in this behalf, by the State Government fails to grant or renew the licence or fails to refuse to do so, for reasons to be communicated in writing to the applicant, within 60 days from the date of the application, the licence shall be deemed to have been granted or renewed.
18. As per the above Rule, for availing the benefit of deemed licence, as stipulated in 2nd proviso, a valid application as mentioned in the 1st proviso has to be submitted. In the present case, the accused applied for registration but the application contained discrepancies which were pointed out by the department in reply. The communication/reply is Ex. CW1/D1. CW-1 deposed that accused had been intimated abut the discrepancies in their application and the fact that the application CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 13 of 20 was incomplete and company was directed not to run its operation without obtaining effective licence and the case was closed. The following question put to defence witness DW1 and its reply is also important to be reproduced here as under:
"Q. Is it correct that the we had written two letters to you in the year 2000 and 2002 (Ex. PW1/G and Ex. PW1/H) in which your application for grant of licence was rejected and renewal also denied?
Ans. Yes."
19. Thus, the factual position is that the application for grant of licence was rejected and the renewal also denied. As a matter of fact there could have been no renewal in the absence of a licence. Even otherwise the application was fraught with discrepancies which were never removed and therefore such application can never be said to be 'valid' as required under 1 st proviso to the aforesaid Rule 11A. Accordingly, the claim of the accused as to having a deemed licence fails. The admitted suggestion of CW2 as to deemed licence is thus contrary to law in the given facts & circumstances of the case and therefore cannot operate as estoppel upon the department and therefore said suggestion of CW2 is of no help to the accused.
20. In totality, the complainant has thus proved the allegation in the complaint that M/s Shahi Exports Pvt. Ltd. is a 'factory' within the meaning of the Act and was running in a non-
CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 14 of 20 confirming area without licence required under the Factories Act thus contravening the provision of Rule 11A of the Delhi Factory Rules, 1950 read with Section 6 & 7 of the Act.
21. Now coming towards other allegations in the complaint pertaining to non-production of record such as Muster Roll, Leave Register with wages, Register of adult workers, Register of accident and dangerous occurrence, inspection book, overtime muster roll, register of lime washing and painting, leave books etc. thereby contravening the provisions of Rule 88 & 102 of the Delhi Factory Rules read with Section 9(d) & 83 of the Act. After the inspection accused was served with a show cause notice dated 28.03.2008 Ex. PW1/F directing to produce the aforesaid record within a week and stipulating legal action in case of failure. In response, accused sent a reply dt. 07.04.2008 Ex PW1/G in which he objects that in the show cause notice the name of occupier is wrongly mentioned as that of accused no. 1 and accused no. 2 is the occupier. It is noted that no compliance as to the production of requisite records is made vide this reply, rather a protest is raised as to the name of the occupier and the notice is returned. It would be apt hereitself to record a finding as to who was the occupier at the time of inspection so as to find whether the accused by raising this protest in its reply and not producing the records, defeated the purpose of show cause notice and defied the lawful directions contained in it. In this CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 15 of 20 regard it is seen that accused no. 1 in his statement U/s 313 Cr.P.C. stated that he is not the occupier. Here, it would be relevant to refer the deposition of defence witness DW1. It is pertinent to note that in his entire examination-in-chief DW1 did not depose that accused no. 1 was not the occupier on the date of inspection. He simply deposed that the inspection slip given at that time was in the name of J.D. Giri i.e. accused no. 2 showing the said person as occupier. It is noted that DW1 did not produce that inspection slip on record. Even otherwise, he simply states the contents of a document without producing it and abstains from making any substantive deposition in his examination-in- chief as to who was the occupier as on the date of inspection. Finally, the cross-examination of DW1 reveals the truth. Relevant portion thereof is reproduced for convenience as under:
"Q. Is it correct that as per this document Mark A i.e. Form no. 2 your company had shown Mr. Harish Ahuja as occupier as Column no. 8?
A. Yes.
It is correct that the said document mark A at its page 2 bears the signature of Harish Ahuja at point A."
22. Mark A is the initial application dt. 11.04.97 for grant of licence. Although, as observed earlier, no application for grant of licence was accepted, what is to be noted that the company considers accused no. 1 as the occupier for the purpose of Factories Act. It is important to note that the MCD licence also CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 16 of 20 records the name of accused no. 1 as the occupier.
23. Further testimony of DW1 is also relevant to be reproduced:
"Q. Why there is no signature of occupier on this document Mark H on the form no. 2 despite your application for grant of factory license proposing the occupier as J.D. Giri?
Ans. At that time Mr. J.D. Giri was not in India and Mr. Amod Dalela was the manager in the company and therefore said Mr. Amod Dalela signed on the last page of form no. 2 at point A."
24. This testimony reveals that the application even does not bear the signature of accused no. 2 i.e. the proposed occupier.
25. By filing application for grant/renewal of licence alongwith payment of fee every year the accused malafidely assumed a grant/renewal of licence thereby knowing very well that it never removed the discrepancies raised by the department and therefore the applications being invalid, there could be no licence or deemed licence available to the factory. In such scenario, proposing or assuming J.D.Giri i.e. accused no. 2 to be the occupier would be again a fallacy on the part of accused. It would be here pertinent to note that the name of occupier was CC No.04/09 (Comp. ID5664/16) FI v. Harish Ahuja (02.02.2019) Page No. 17 of 20 never got changed in the MCD licence.
26. From the above analysis and the admissions of DW1, it can thus safely be concluded that accused no. 1 was the occupier of the factory at the time of inspection. Otherwise also, as defined U/s 2(n) of the Act, accused no. 1 having the ultimate control over the affairs of the factory is considered as the occupier. Accordingly, being the occupier accused no. 1 i.e. Harish Ahuja is liable for the contraventions already proved thus attracting the offence punishable U/s 92 of the Factories Act.
27. As regards accused no. 2 J.D. Giri, he himself in his statement U/s 313 Cr.P.C. admits that he is responsible for carrying out the day to day affairs of the company. This implies that he manages the day-to-day affairs i.e. acts as manager in the factory. Otherwise also as per Section 7(5) of the Factories Act where no person has been designated as manager of a factory, any person found acting as manager shall be deemed to be the manager of the factory for the purpose of the Act. Section 92 stipulates liability upon occupier as well as manager and each of them shall have to be guilty for the offence. Accordingly, accused no. 2 is also jointly and severally liable for the offence punishable U/s 92 of the Act for the contravention proved on record, as already discussed.
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28. As a preliminary challenge, accused cross-examined CW1 suggesting that the inspection by him alongwith CW2 was illegal and without any valid complaint from any valid union having its membership in that company. It was also suggested that in absence of some material documents CW1 could not have formed any prima facie opinion that the accused company had committed the alleged violations or that such raid/investigation on hearsay complaints are not valid. CW1 clearly denied these suggestions. He filed original complaint dt. 08.02.2008 Ex. PW1/A made by the trade union to the Chief Inspector of Factories against the company M/s Shahi Export Pvt. Ltd. The trade union also bears a registration number. Nothing could be brought on record by the accused to prove that the inspection was illegal. Though the inspection at the factory of accused was triggered by this trade union complaint, the inspection at the factory was duly made as per law by the Factory Inspector accompanied by the Dy. Chief Inspector of Factories. They found 155 workers employed at that time in the manufacturing process carried on with the aid of power and the factory was running without licence under the Factories Act. As observed in the foregoing paras, the allegations made in the present case have been found to be proved. Therefore, this challenge of the accused regarding trade union complaint has no substance and accordingly does not sustain.
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29. In light of the above analysis and findings, it is concluded that accused no. 1 &2 are liable with respect to the contraventions as alleged in the complaint and duly proved and both of them are accordingly held guilty and convicted for the offence punishable U/s 92 of the Factories Act, 1948 read with various provisions of the Delhi Factory Rules, 1950 as discussed.
30. Be heard on the point of sentence.
Digitally signed SH by SH PRANJAL
Directly Dictated on the PRANJAL ANEJA
Date: 2019.02.04
Computer System and
Announced in the open
ANEJA
(PRANJAL ANEJA)
17:13:27 +0530
Court on 02.02.2019 Metropolitan Magistrate-01
Shahadara District,
Karkardooma Courts, Delhi
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