Kerala High Court
T.P.Mohanlal vs Unknown on 4 January, 2013
Author: N.K. Balakrishnan
Bench: N.K.Balakrishnan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE N.K.BALAKRISHNAN
FRIDAY, THE 4TH DAY OF JANUARY 2013/14TH POUSHA 1934
Crl.MC.No. 1725 of 2007 ( )
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AGAINST THE ORDER IN ST.74/2007 of C.J.M.,THODUPUZHA
PETITIONER(S)/ACCUSED:
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1. T.P.MOHANLAL, MANAGING DIRECTOR,
KERALA WATER AUTHORITY, JALA BHAVAN
THIRUVANANTHARPURAM.
2. M.C.JOHN, SUPERINTENDING ENGINEER,
KERALA WATER AUTHORITY, P.H.CIRCLE, MUVATTUPUZHA.
ADV. SRI.P.VIJAYA BHANU (SR.)
BY ADVS.SMT.AMBIKA DEVI, SC, KWA
ADV. SRI.JOSEPH JOHN,
COMPLAINANT(S)/STATE & CPMPLAINANT::
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1.THE
STATE OF KERALA, REPRESENTED BY
PUBLIC PROSECUTOR, HIGH COURT OF KERALA
ERNAKULAM.
2.GRADE
INSPECTOR OF FACTORIES & BOILERS,
II, THODUPUZHA.
ADV. SRI. ROY THOMAS , PUBLIC PROSECUTOR
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
04-01-2013, ALONG WITH
CRMC. 2454/2008 AND CRMC.CRMC. 1721/2007, CRMC. 1722/2007,
461/2009, THE COURT ON THE SAME
DAY PASSED THE FOLLOWING:
N.K. Balakrishnan, J.
* * * * * * * * * * * * * * * * * *
Crl.M.C. 1725/2007, 1722/2007,
461/2009, 1721/2007 and 2454/2008
* * * * * * * * * * * * * * * * * *
Dated : 4-01-2013
ORDER
All these Crl.M.Cs are filed by the Managing Director, Kerala Water Authority and the Superintending Engineer, Kerala Water Authority, P.H. Circle, Moovattupuzha. The second respondent, Inspector of Factories & Boilers filed the complaints against the petitioners mentioned above alleging violation of the provisions of the Factories Act and the Kerala Factories Rules.
(i) Whether Kerala Water Authority is a factory as defined under Section 2(m) of the Factories Act?
(ii) Whether Kerala Water Authority is a 'Local Authority' within the meaning of Section 7A of the Factories Act, or, whether Kerala Water Authority is to be treated only as a company, in Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:2:- which case, can A1- being the Managing Director escape from the criminal liability?
(iii) Whether the Managing Director of Kerala Water Authority is the 'occupier' of the Factory within the meaning of Section 2(n) of the Factories Act?
These are the pertinent questions that fall for consideration in these petitions.
2. Kerala Water Authority is a statutory autonomous body constituted under the Kerala Water Supply and Sewerages Act for the distribution and supply of water and removal of waste materials and matters connected therewith. Five complaints were filed by the 2nd respondent contending that the first petitioner who is the Managing Director of Kerala Water Authority is the "occupier" and the 2nd petitioner Superintending Engineer is the Manager of Water Treatment Plant, Thodupuzha and as such they are liable to be punished for the violations mentioned in the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:3:- complaint.
3. In Crl.M.C. 1725/2007 it is alleged that the petitioners violated Sec. 7 (a) of Factories Act and Rule 81
(b) of Kerala Factories Rules. The allegation is that the petitioners failed to ensure the health and safety of the workers by providing adequate instructions, necessary training and supervision and as a result of the same an accident occurred resulting in chlorine leakage. It was stated that there was a bursting of P.V.C. pipe which connected the tonner and chlorinator at about 2.15 p.m. on 7-11-2006 at the Water Treatment Plant, Thodupuzha, which according to the complainant is in the ultimate control of the Managing Director, the first accused.
4. It is alleged that the 2nd respondent along with the Joint Inspector of Factories visited the premises of the water treatment plant on 9-11-2006 and conducted inspection. The 2nd accused, the Superintending Engineer Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:4:- was also there at the premises. It was alleged that the 2nd petitioner, the Superintending Engineer threatened the 2nd respondent/complainant. Violations of the Act and Rules are mentioned in the different complaints filed by the 2nd respondent as S.T. 72/2007, 73/2007 and 74/2007. The complaints were filed before the Chief Judicial Magistrate's Court, Thodupuzha.
5. It is submitted by the learned Sr. Counsel appearing for the petitioners that the first petitioner Managing Director of Kerala Water Authority is not the occupier and the 2nd respondent/Superintending Engineer is not the manager and as such the cognizance taken against these petitioners are liable to be quashed invoking the power under Sec. 482 of Cr.P.C.
6. To understand the rival contentions advanced by the learned Sr. counsel appearing for the petitioners and the learned Public Prosecutor, the relevant provisions of the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:5:- Factories Act, Factories Rules and the Kerala Water Supply and Sewerages Act have to be gone into. Section 2 (m) of the Factories Act defines "factory": as:
"Factory" means any premises including the precincts 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) whereon twenty 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 without the aid of power,or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952), or a mobile unit belonging to the armed forces of the Union, railway running shed or a hotel restaurant or eating place".
Manufacturing process is defined in Section 2 (k) of the Act as :
"Manufacturing process" means any process for -
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:6:-
ii) pumping oil, water, sewage or any other substance;
(clause (iii) and (iv) and other subclauses are omitted as unnecessary).
7. That there are more than ten workers working in Kerala Water Authority is not disputed. Since pumping water and sewage etc. are included in the definition "manufacturing process" occurring in Sec. 2 (k) of the Act, it is not disputed by the learned Sr. counsel for the petitioners also that since such sewage plants etc. are installed by the Kerala Water Authority (KWA) in the water treatment plants etc, Kerala Water Authority would come within the definition of 'manufacturing process'. Since such a manufacturing process is being carried on with the aid of power it would certainly come within the definition of "factory" as defined under Sec. 2 (m) of the Factories Act, 1948.
8. The next point to be considered is whether the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:7:- Managing Director /first petitioner is the occupier of the factory. Sec. 2 (n) defines "occupier" of a factory to mean the person who has ultimate control over the affairs of the factory. Clause 3 of the Proviso assumes much importance, here the learned Sr. Counsel submits. Section 3(3) of the Kerala Water Supply and Sewerage Act describes that the Water Authority shall, for purposes be, deemed to be a local authority and so in view of the fiction so created by the Statute it has to be seen who was actually the person or officer enjoined by the Statute to act as the occupier and so it is only such officer who can be mulcted with the criminal liability for the various violations made mention of in the complaints.
9. According to the learned Sr. Counsel, the Managing Director and Superintending Engineer are not persons appointed to manage the affairs of the Water Authority. But the learned Public Prosecutor Sri.Roy Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:8:- Thomas would submit that the Managing Director is the person who has ultimate control over the affairs of the Kerala Water Authority, which is a "factory" and as such he cannot wriggle out of the criminal liability for violation of the provisions mentioned in the different complaints filed against him.
10. Section 7 A deals with the general duties of the occupier which enjoins upon the occupier to ensure so far as is reasonably practicable, the health, safety and welfare of all workers while they are at work in the factory. It is further made clear by Sub Sec. 2 that such duties would include the provision and maintenance of plant and systems of work in the factory that are safe and without risk to health and the arrangements in the factory for ensuring safety and absence of risk to health in connection with the use, handling, storage and transport of articles and substances. Since these are the general duties of the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:9:- occupier, the crucial question for consideration is whether the first petitioner is the occupier as defined under Sec. 2
(n) of the Factories Act referred to above.
11. Rule 3 of Kerala Factories Rules, 1957 deals with the approval of site, construction or extension of a factory . It says that no site shall be used for the location of a factory nor shall any building be constructed, reconstructed or extended for use as a factory, nor shall any manufacturing process be carried on in any building, constructed, reconstructed or extended unless the previous permission in writing is obtained from the State Government or the Chief Inspector or the Deputy Chief Inspector. It is pointed out that an application for such permission shall be made in the prescribed form, Form No.
1. According to the complainant, such application is to be submitted by the occupier who is the Managing Director of the Kerala Water Authority . That is clear from Rule 4 Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:10:- which says that the occupier of every factory shall submit to Chief Inspector or the Deputy Chief Inspector an application for registration and grant of licence and notice of occupation, specified in Sections 6 and 7 in form No. 2 in triplicate. Rule 5 (2) says that the Chief Inspector or the Deputy Chief Inspector may refuse to register a factory and grant of licence for reasons mentioned therein. Therefore, according to the learned Public Prosecutor it is the duty of the occupier of every factory to submit the application for registration and obtain the licence as specified in the Rules.
12. The learned Sr. Counsel appearing for the petitioners rely upon certain provisions in the Kerala Water Supply and Sewerage Act, (hereinafter referred to as "Kerala Act") and submits that the Kerala Water Authority, shall for all purposes, be deemed to be a local authority. According to the learned Sr. Counsel, Sec. 3 (3) was so Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:11:- worded bearing in mind the provisions of the Factories Act; in particular, Section 2(n)(iii) of the Factories Act which says that the "occupier", in the case of a factory, owned by any local authority, shall be the person or persons appointed to manage the affairs of the factory by the local authority. Therefore, the argument is that it is the person appointed by the Kerala Water Authority to manage the affairs of the Kerala Water Authority who is to be construed or reckoned as the occupier within the meaning of Sec. 2 (n) of the Factories Act.
13. Section 4 of the Kerala Act deals with the Constitution of the Water Authority which states that the Authority (Kerala Water Authority) shall consist of the following members namely, a Chairman appointed by the Government, a Managing Director who possesses experience in management or administration or who is a qualified Engineer not below the rank of a Chief Engineer Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:12:- having sufficient experience in management and administration in water supply and sewerage works, appointed by the Government. In this connection, the learned Sr. counsel has also relied upon Section 9 of that Act which says that subject to the Superintendence of the Authority, the Managing Director shall be the Chief Executive and shall have the general control or direction over all the employees of the authority. The learned Sr. counsel would also refer to Kerala Water Authority (Duties of Employees) Regulations, 1999 as per which the word "duty" has been defined in Rule 2 (iii) as .
"Duty means what an employee is bound to do or cause to be done or what an employee is responsible for, either solely or jointly with such of his subordinate officers in the discharge of his official obligation, attached to the post in which he is an incumbent".
14. It is submitted by the learned Sr. counsel that duties and responsibilities of Superintending Engineers, Executive Engineers and other Engineers and Staffs have Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:13:- been separately dealt with under these Rules. It is pointed out that Appendix A deals with the duties and responsibilities of Superintending Engineers which says that a Superintending Engineer in-charge of a Circle has to exercise administrative and technical control over the various divisions under his jurisdiction in order to ensure efficient functioning of the departmental activities in that circle. As per clause 6, periodical inspection of all important works/schemes and also works which require his guidance in the matter of maintenance and execution, has to be done by him. Inspection is part of the duty assigned to the Superintending Engineer. Besides Clause 12 (b) enjoins upon the Superintending Engineer the duty to ensure prompt action on all important and urgent matters and which are necessary and to bring such cases personally to the notice of the Managing Director/Chief Engineer. Therefore, even as per the duties and Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:14:- responsibilities of Superintending Engineers mentioned in appendix A the second petitioner is to be made liable for the violations of some of the Rules, the learned Public Prosecutor rightly submits.
15. Clause 2 of Appendix A deals with the duties and responsibilities of Executive Engineers. The Executive Engineer is also responsible for the proper maintenance and upkeep of all installations and structures under the maintenance charge of the divisions. In particular, he should see that the installations and structures are systematically and carefully inspected by himself and through his subordinates particularly vulnerable portions thereof like pump houses , reservoirs , treatment plants, pipe lines etc. It is also his duty that regular maintenance works are carried out in appropriate time. Sub clause (10) makes it further clear that Executive Engineer shall be responsible for the monitoring and ensuring the quality of Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:15:- water, controlled usage of chemicals and other consumables used for water purification. Therefore, the Executive Engineer also may be liable for the violations, act or omissions complained of.
16. Chapter IV deals with the duties and responsibilities of Assistant Executive Engineers. In particular, he is made responsible for the controlled use of chemicals and other consumables for water purifications etc. and it should be ensured by periodical inspections. It is further stated as per sub clause (3) that the Asst. Executive Engineer shall also be responsible for the proper maintenance of installations and structures under his charge and this shall include periodical inspection of the Water Authority installations, structures particularly the vulnerable parts like intake and treatment plants, reservoir, pump house etc. in accordance with the general or special instructions issued in that regard. It also says Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:16:- that initiation of timely action for repairs where there are needed so as to keep the system and structures intact is also on the Asst. Executive Engineer. Chapter VIII deals with the duties of Mechanical Superintendent/Chief Mechanical Foreman. He is responsible to see that the mechanical and electrical installations under his control are functioning properly and that he should arrange for the timely repair. Ultimately Chapter XIV deals with the duties and responsibilities of the Operators/Head Operators. Clause 3 therein states that the Operator/Head Operators shall check the defects, if any, in any of the machineries such as abnormal sound vibration etc. and shall bring to the notice of the Supervisors then and there.
17. The learned Public Prosecutor Sri. Roy Thomas would submit that what have been mentioned in the Rules mentioned above have no application so far as the violation of the provisions of the Factories Act and Rules are Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:17:- concerned. The duties and responsibilities mentioned in the Regulations, 1999 are only in the nature of inter se management or delegation of duties to the Subordinates, but that does not absolve the duty of the occupier of the factory within the meaning of Sec. 2 (n) of the Act, to comply with the duties as are enjoined under the Factories Act and Rules. The learned Public Prosecutor further submits that any arrangement made to circumvent the provisions of the Factories Act and Rules can have no legal sanctity nor can the Managing Director of the Authority who is the occupier under Sec. 2 (n) of the Factories Act get himself absolved of the criminal liability.
18. The main stay of the argument advanced by Sri. Roy Thomas, the learned Public Prosecutor is that so far as the Water Authority is concerned the Managing Director is the ultimate authority and as such he cannot squirm out of the criminal liability. It is further submitted that as the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:18:- Managing Director, he had submitted applications to the Factories Inspector of other divisions or units in respect of the installations of pump sets or installations installed at other different places and as such the petitioners cannot wriggle out of the criminal liability in respect of the Moovattupuzha Sub Division of the Kerala Water Authority made mention of in the complaint. In this connection, the learned Public Prosecutor submits that Sec. 101 of the Act is so clear that if the first petitioner was of the view that he was not the occupier and some other person was the person in-charge of the particular unit or division it was the duty of the occupier or the Manager of the factory to prove to satisfaction of the Court that it was another officer whether it is Asst. Executive Engineer or Asst. Engineer or the Foreman as the case may be, who was responsible for the violations made mention of in the complaints. It is also argued that the second proviso to Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:19:- Sec. 101 of the Act would make it further clear that if the person charged as the actual offender by the occupier or manager cannot be brought before the court at the time appointed for hearing the charge, the court shall adjourn the hearing from time to time for the period not exceeding three months and if by the end of the said period the person charged as actual offender cannot still be brought before the Court, the Court shall proceed to hear the charge against the occupier or the Manager and shall if the offence be proved, convict the occupier or Manager. Hence, Sri. Roy Thomas, the learned Public Prosecutor submits that the Occupier is the person having ultimate control as defined in Sec. 2 (n) of the Act and if the Occupier does not bring the person who according to him was in-charge of the affairs of the particular unit, then the occupier himself has to face the trial for the offence complained of in the various complaints. It is further Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:20:- submitted that Sec. 104 A deals with the presumption . It reads:
"104 A. Onus of proving limits of what is practicable, etc.-In any proceeding for an offence for the contravention of any provision of this Act or rules made thereunder consisting of a failure to comply with a duty or requirement to do something, it shall be fore the person who is alleged to have failed to comply with such duty or requirement, to prove that it was not reasonably practicable or, as the case may be, all practicable measures were taken to satisfy the duty or requirement".
Therefore, the learned Public Prosecutor vehemently argues that the burden is on the occupier to prove that it was not reasonably practicable or, as the case may be, that he had taken precaution or measures to satisfy the duty or requirement,. Therefore, according to the learned Prosecutor, it is the duty of the first petitioner, the Managing Director to adduce such evidence to show that he had taken reasonable precaution or measures and that the failure, if any, was of another officer subordinate to him who as per the Kerala Act and Rules are responsible Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:21:- for the day-to-day affairs of the authority. But that is only a matter to be proved in evidence, which would arise only in the course of the trial and not at this stage, argues the learned Public Prosecutor. Therefore, relying on the presumption available under Sec. 104 A also, the learned Public Prosecutor submits that the petitioners cannot wriggle out of the criminal liability in view of the various provisions of the Factories Act and Rules.
19. The learned Public Prosecutor submits that the word or expression "local authority" is not defined under the Factories Act. Hence, the definition of "local Authority"
in Sec. 3 (31) of General Clauses Act, 1897 is to be made applicable, the prosecution contends. In General Clauses Act 1897, 'local authority' is defined in Section 3(31) as:
""local authority" shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund;"
Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:22:- The characteristic features and the distinctive attributes of "local authorities" are that they like Municipal Committees and District Boards must have a separate legal existence as Corporate Body and must not be mere Governmental agencies. It is argued that the local authorities should be treated and reckoned as legally independent entities functioning in a defined area, enjoying a certain degree of autonomy with freedom to decide for themselves questions of policy affecting the area administered by them.
20. Under Sec. 3 (3) of the Kerala Water Supply and Sewerages Act it is stated that the Water Authority shall for all purposes be deemed to be a local authority. According to the learned Public Prosecutor it can only be treated as a local authority just like Panchayath, Municipality or Corporation. It has separate legal assistance and is functioning independently in a defined area. Such local authorities are entrusted by statute with such governmental Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:23:- functions and duties as are usually entrusted to Municipal bodies. But the learned Sr. Counsel for the petitioner would submit that by the deeming provision contained in Sec. 3 (3) of the Act it can be certainly held that it is not a body corporate or a Government Company as defined under Section 617 of the Companies Act. The learned Sr. Counsel appearing for the petitioners has relied upon the decision of the Division Bench of this Court in Muraleedharan v. Principal -1989 (1) KLT 526 where it was held that under Sec. 3 of the Kerala Water Supply and Sewerages Act, 1986 , the Government have constituted "an autonomous authority to be called the Kerala Water Authority". The Authority is a body corporate having perpetual succession and a common seal. It was held in the aforesaid decision that the Kerala Water Authority for all purposes shall be deemed to be a local authority. Though the facts dealt with there in are entirely Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:24:- different, the learned Sr. counsel submits that while interpreting Sec. 3 (3) of the Act, it was held that the Water Authority for all purposes is deemed to be a local authority and as such the argument to the contrary advanced by the learned Public Prosecutor cannot be sustained.
21. The decision of the Apex Court in State of Gujrat v. Kansara Manilal Bhikhalal - AIR 1964 SC 1983 also been relied upon in this connection. In that case it was stated that the Inspector of Factories Bhavnagar, had visited Saurashtra Metal and Mechanical Works, Wadhwan City, which was a factory within the meaning of S. 2 (m)(i) of the Factories Act, 1948. The Inspector found seven workmen working on a machine and on examining the notice of period of work for adult workers and the register of workers he found that three of the workmen belonged to a group which was expected to begin work from 7.a.m. Proceedings were initiated under Sec. 63 of the Factories Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:25:- Act, against the respondent as the Occupier or Manager of the Factory. Defence taken by the accused was that he was not the Occupier or Manager of the factory. It was held that the Occupier and Manager are exempted from liability in certain cases mentioned in Sec. 101. Where an occupier or Manager is charged with an offence he is entitled to make a complaint in his own turn against any person who was the actual offender and on the actual offender and on proof of the commission of the offence by such person the occupier or the manager is absolved from liability. This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility. Such a provision largely excludes the operation of S. 117 in respect of persons guilty of a breach of the provisions of the Act. It was held that the responsibility exists without a guilty mind. An adequate Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:26:- safeguard exists in Sec. 101 by resorting to which the "occupier" and "manager" can save themselves if they prove that they are not the real offenders but informing who, in fact is responsible . In that case no such defence was taken and so the accused persons were convicted by the Supreme Court reversing the verdict of acquittal .
22. The learned Public Prosecutor would submit that the first petitioner who is the Managing Director having ultimate control of the affairs of the Company cannot escape from the liability simply by stating that some other person or officer of the Water Authority was the actual offender because only on proof of commission of offence by such person, the Managing Director or the Manager can get themselves absolved from the liability as occupier or Manager. The argument proceeds further that in the cases on hand the petitioners have not chosen to make use of that provision and so they cannot simply get themselves Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:27:- absolved of the liability stating that they are not responsible for the violations of the provisions or Rules mentioned earlier.
23. The learned Public Prosecutor submits that According to Black's Law Dictionary the word "ultimate" means at last , finally or at the end. According to Collin's Dictionary of the English Language the word "ultimate "
has been defined as last; final; elemental; fundamental;
basic or essential, highest, farthest or greatest thing . The Oxford Advanced Learner's Dictionary of Current English, Encyclopaedic Edn. (1992) defines the word "ultimate "
means beyond which no other exists or is possible; last or final from which everything is derived; basic or fundamental; that cannot be surpassed or improved upon; greatest etc.
24. The learned Public Prosecutor has relied upon the decision of the Apex Court in J.K. Industries Lt. v. Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:28:- Chief Inspector of Factories and Boilers - (1996) 6 SCC 665 . In paragraph 21 it was held by the Apex Court that there is a vast difference between a person having the ultimate control of the affairs of a factory and the one who has immediate or day-to-day control over the affairs of the factory. In the case of a company, the ultimate control of the factory, where the company is the owner of the factory, always vests in the company, through its Board of Directors. The Manager or any other employee, of whatever status, can be nominated by the Board of Directors of the owner company to have immediate or day- to-day or even supervisory control over the affairs of the factory. The learned Public Prosecutor submits that even if Board of Directors have resolved that a particular officer or employee other than one of the Directors have the ultimate control over the affairs of the factory it can only be treated as a camouflage or an artful circumvention as Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:29:- held by the Apex Court in the aforesaid decision because the ultimate control cannot be transferred from that of the Company to one of its employees or officers except where there is a complete transfer of the control of the affairs of the factory. It was held by the Apex Court in the aforesaid decision as :
"There is a vast difference between a person having the ultimate control of the affairs of a factory and the one who has immediate or day-to-day control over the affairs of the factory. In the case of a company, the ultimate control of the factory, where the company is the owner of the factory, always vests in the company, through its Board of Directors. The Manager or any other employee, of whatever status, can be nominated by the Board of Directors of the owner company to have immediate or day-to-day or even supervisory control over the affairs of the factory. Even where the resolution of the Board of Directors says that an officer or employee, other than one of the directors, shall have the 'ultimate' control over the affairs of the factory, it would only be a camouflage or an artful circumvention because the ultimate control cannot be transferred from that of the company to one of its employees or officers, except where there is a complete transfer of the control of the affairs of the factory. Mechanical recitation of the words of Section 2(n), as a mantra, in a resolution nominating an employee or an officer as the occupier by stating that he shall have "ultimate control over the affairs of the factory", cannot be permitted to defeat the object of the amendment. The provisions of the Act have to be construed in a manner which would promote its object, prevent its subtle Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:30:- evasion and foil its artful circumvention to suppress the mischief. Though, the expression ultimate control was used in Section 2(n) even prior to the 1987 Amendment also but read with the proviso to Section 100(2), it gave an opportunity to the companies owning the factory to dilute the rigour of the provision by not notifying one of its directors to be the occupier and instead nominating some employee or the other to be the 'occupier' for purposes of punishment and penalty. The ultimate control which vests in an owner and in the case of a company in the Board of Directors cannot be vested in anyone else without completely transferring the control over the factory to that other person. The law does not countenance duality of ultimate control. If the transfer of the control to another person is not complete, meaning thereby that the transferor retains its control over the affairs of the factory, the transferee, whosoever he may be, (except a director of the company, or a partner in a partnership firm) cannot be considered to be the person having ultimate control over the affairs of the factory notwithstanding what the resolution of the Board states. The litmus test, therefore, is who has the 'ultimate' control over the affairs of the factory".
Therefore, according to the learned Public Prosecutor, the crucial test is as to who has the ultimate control over the affairs of the factory. Simply by deputing or relegating the duty to a Foreman or a Mechanic or Assistant Engineer, the Managing Director who is actually the occupier, having ultimate control over the Authority cannot escape from the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:31:- penal liability in the light of the decision rendered by the Apex Court in J.K. Industries Case, argues the learned Public Prosecutor.
25. Following the decision in John Donald Mackenzie v. Chief Inspector of Police - AIR 1962 SC 1351 , it was held that the ultimate control of the factory must necessarily be with an owner unless the owner has completely transferred the control to another person. It was further held by the Apex Court in J.K. Industries that where a company has completely transferred that control to another person that other person would have the ultimate control over the affairs of the factory to the exclusion of the transfer- company and in such a case that other person would be its occupier. Therefore, the learned Public Prosecutor submits that unless there is a complete transfer of the ultimate control, the Managing Director, first petitioner herein, cannot escape from the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:32:- liability. The learned Public Prosecutor re-iterates his submission that sufficient safeguard is provided under Sec. 101 of the Act , and so it was the bounden duty of the Managing Director/first petitioner upon complaint duly made by him and on giving to the Prosecutor not less than three clear days' notice in writing of his intention to do so to have any other person whom he charges as the actual offender to be brought before Court at the time appointed for hearing the charge. Since the first petitioner has not availed of that right conferred under Sec. 101 of the Act it is too late in the day for the first petitioner to contend that he should be absolved of the liability on the promise that he is not having the ultimate control over the affairs of the factory so far as it relates to each and every unit functioning in different parts of the State of Kerla.
26. After taking note of the subsequent amendment that came into force with effect from 1-12-1987 as per Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:33:- which Sec. 100 was deleted from the Statute it was held by the Apex Court in J.K. Industries (Supra) that after the amendment the true import of proviso (ii) to Section 2 (n) would be that in the case of a company, which owns the factory, the company cannot nominate any one of its employees or officers, except a director of the company, as the occupier of the factory. In other words, an occupier of the factory in the case of a company must necessarily be any one of its directors who shall be so notified for the purposes of the Factories Act. Such an occupier cannot be any other employee of the company or the factory. But the learned Sr. Counsel would submit that what was held by the Apex court in J.K. Industries was in relation to a Company under and not regarding Kerala Water Authority which by deeming provision contained in Sec. 3 (3) of the State Act is only a local authority. The learned Sr. Counsel further submits that since the Statute itself says Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:34:- as to who are the persons to be made responsible for each and every acts or omissions which would attract the penal provisions contained in the Factories Act it is not necessary to have a further intimation or nomination of any one of such persons so as to make such persons liable for the acts or omissions made punishable under the provisions of the Factories Act or Rules.
27. The proviso (iii) to Sec. 2 (n) was highlighted by the learned Sr. Counsel for the petitioner . Before 1987 Amendment, Section 2 (n) was required to be read along with Sec. 100 of the Act . Section 100 prior to the Amendment which came into effect on 1-12-1987 read as follows:-
"Section 100 as it stood prior to the Amendment of 1987 "100. Determination of occupier in certain cases- (1) Where the occupier of a factory is a firm or other association of individuals, any one of the individual partners or members thereof may be prosecuted and punished under this Chapter for any offence for which the occupier of the factory is punishable :
Provided that the firm or association may give notice to the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:35:- Inspector that it has nominated one of its members, residing within India to be the occupier of the factory for the purposes of this Chapter, and such individual shall, so long as he is so resident, be deemed to be the occupier of the factory for the purposes of this Chapter, until further notice cancelling his nomination is received by the Inspector or until he ceases to be a partner or member of the firm or association.
(2) Where the occupier of a factory is a company, any one the directors thereof may be prosecuted and punished under this Chapter for any offence for which the occupier of the factory is punishable :
Provided that the Company may give notice to the Inspector that it has nominated a director, who is resident within India, to be the occupier of the factory for the purposes of this Chapter and such director shall, so long as he is so resident, be deemed to be the occupier of the factory for the purposes of this Chapter,until further notice cancelling his nomination is received by the Inspector or until he ceases to be a director Provided further that in the case of a factory belonging to the Central Government or any State Government or any local authority the person or persons appointed to manage the affairs of the factory shall be deemed to be the occupier of that factory for the purposes of this Chapter.
(3) Where the owner of any premises or building referred to in Section 93 is not an individual, the provisions of this section shall apply to such owner as they apply to occupiers of factories who are not individuals".
28. The learned Public Prosecutor has also relied upon the decision of the Apex court in Indian Oil Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:36:- Corporation Ltd. v. Chief Inspector of Factories - (1995) SCC 738. It was held by the Apex Court that while amending Sec. 2 (n), a significant change was made by the legislature in 1987 by deleting Sec. 100 and instead introducing a stricter provision in Sec. 2 (n) itself. The learned Sr. counsel would submit that in paragraph 16 and 17 the Hon'ble Apex Court has held that the position of the government and the Local Authorities are quite different from a firm or association or a company not only with respect to the person who can be said to be in ultimate control but also with respect to the object for which the factory is set up. It was held:
"Moreover, it is the Government which looks after the successful implementation of the provisions of the Factories Act and, therefore, it is not likely to evade implementation of the beneficial provisions of the Factories Act. That appears to be the reason why the legislature thought it fit to make a separate provision for the Government and the local authorities. Ordinarily, for running the factories owned or controlled by the Central Government or any State Government, or any local authority, a person or persons would be appointed by it to manage the affairs of the factory.
Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:37:- Therefore, the legislature appears to have provided that in case of a factory owned or controlled by the Central Government, the State Government or the local authority the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be, shall be deemed to be the occupier. ?Therefore, if it is a case of a factory in fact or in reality owned or controlled by the Central government or the State Government or any local authority, then in case of such a factory, the person or persons appointed to manage the affairs of the factory shall have to be deemed to be the occupier, even though for better management of such a factory or factories, a corporate form is adopted by the Government.
29. It was further observed by the Apex Court that before 1987 when Sec.100 was the governing provision, any one of the individual partners of a firm or any one of the members of the association of individuals could be punished under sub-section (1) thereof for any offence for which the occupier of the factory was punishable. The firm or association was given an option to nominate one of its members as the occupier of the factory and if such an option was exercised by giving a notice to the Inspector, then he alone was to be deemed to be occupier of the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:38:- factory for the said purpose. Similar option was available to the Company as in the case of a firm or an association of individuals. In the case of a company the provision was made for deciding who should be deemed to the occupier of a factory. In case it belonged to Central Government, State Government or a Local Authority, a similar option is made available to the Company as in the case of a firm and an association of individuals. It was held:
"It is significant to note that it was by way of a proviso to sub-section (2) which dealt with the case of a company that the provision was made for deciding who should be deemed to be the occupier of a factory in case it belonged to the Central Government or any State Government or any local authority and a similar option is made available to them. The said proviso though enacted as an exception to the main part of sub-section (2), is truly by way of a separate provision made in the case of a factory belonging to the Central Government or any State Government or any local authority. While making the amendment in 1987 in Section 2(n) and deleting Section 100 at the same time, the legislature made the proviso to sub- section (2) of Section 100, an independent proviso to Section 2
(n). That also clearly indicates the intention of the legislature that it wanted to make a separate provision for deeming who should be the occupier of a government factory".
(underlined by me to lay emphasis) Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:39:-
30. In the aforesaid case it was held that as the factories run by the appellant Corporation were effectively and really owned and controlled by the Central Government, they fall within the purview of clause (iii) and not clause (ii) of the first proviso to Section 2 (n). Therefore, according to the learned Senior Counsel, the very same principle applies to the case on hand also since clause (iii) to the first proviso to Section 2 (n) applies here since Water Authority by virtue of Section 3(3) of the Kerala Act shall be deemed to be a Local Authority and that the said provision was introduced by the State Legislature, bearing in mind the fact that it is practically owned by the State Government.
31. It is to obviate the difficulty that may arise the State Legislature has in its wisdom though it proper to treat the Kerala Water Authority as a local authority and in the Rule/Regulation - Kerala Water Authority /Water Authority(Duties of Employees) Regulation, 1999, different Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:40:- categories of officers were assigned the different duties and responsibilities. Since the contours are well defined as per the Regulation mentioned above, there could be no difficulty to fix the liability on account of the act or omission of those officers pertaining to the violations made mention of in the Factories Act and Rules made thereunder. The complainant can very well file the complaints taking note of those provisions on whom the liability or responsibility was cast as per the Regulation which has all the force of a Statute. It is not just like a Company deciding by itself that the penal liability as per the provisions of the Factories Act and Rules is to be had only on an employee of a factory. But it is a case where the State Legislature itself in its wisdom thought it fit as to who should be fastened with the criminal liability.
32. The learned Public Prosecutor would submit that Section 3(2) of the Kerala Act has to be read harmoniously Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:41:- with Section 3(3) of the Act. Section 3 (2) of the Kerala Act says that the authority shall be body corporate by the name aforesaid having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to contract and shall by the said name sue and be sued. Though the authority shall be deemed to be a local authority, Section 3(2) cannot be totally ignored which makes it clear that the Authority shall be a body corporate known by the name Kerala Water Authority having perpetual succession and a common seal and it cannot be treated as the body Corporate owned by the State Government but having a separate legal entity.
33. The learned Sr. counsel would submit that in view of the deeming provision contained under Sec.3(3) of the Kerala Act, if the Water Authority is deemed to be a local authority in view of clause (iii) to Section 2 (n) of the Act which was introduced as per Amendment Act of 1987 which Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:42:- came into force from 1-4-1987; in the case of factory owned by any local authority; to mean the Water Authority; the person appointed to manage the affairs of the factory by the local authority shall be deemed to be the occupier. Therefore, the contention that is vehemently advanced by the learned counsel for the petitioners is that since the Legislature has as per the Kerala Act mentioned above has defined the different duties and responsibilities of the Superintending Engineer, Executive Engineer, Asst. Executive Engineer etc. it cannot be said that the Managing Director is the occupier of the factory. It is not the second part of the proviso that applies to the facts of the case but only the third part of the proviso to section 2(n). Therefore, the person or persons who are appointed to manage the affairs of the factory the local authority, namely; the Water Authority should be deemed to be the occupier and if that be so, according to the learned counsel for the petitioners Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:43:- the prosecution as against the first petitioner cannot be sustained. Though it is argued that the 2nd petitioner who was shown as the Manager also cannot be mulcted with the criminal liability in view of the various provisions of the Kerala Water Supply and Sewerage Act, Rules and the Scheme mentioned earlier that argument is found unacceptable. As per Rule 2(1) of the Kerala Factories Rule Manager means the person responsible to the occupier for the working of the factory for the purposes of the Act. The duties and responsibilities of the Superintending Engineer are specifically mentioned and specific allegation are also made against him. As such the request made by him to quash the proceedings against him cannot be sustained.
34. The learned Public Prosecutor would submit that these are only petitions filed under Sec.482 Cr.P.C. to invoke the inherent jurisdiction. Since what have been stated earlier are matters to be gone into at the time of Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:44:- trial, for which evidence has to be let in by the party, the inherent power under Sec.482 cannot be invoked to stifle a legitimate prosecution. In support of that submission the learned counsel has relied upon the decisions of the Apex Court in Dr. Nalla Thampy Thera v. Union of India and others - 1992 (4) SCC 307 and State of Madhya Pradesh v. Awadh Kishore Gupta and others - AIR 2004 SC 517.
35. In S.T. No. 73/2007, which is the subject matter of Crl. M.C. No. 1721/2007, it is alleged that the accused failed to maintain a record of the accident in the Register of Accident and the dangerous occurrences in the Form prescribed and thereby violated Rule 131 of the Kerala Factories Rule, 1957 prescribed under section 112 of the Factories Act, 1948. The other allegation is that the accused willfully obstructed the Inspector in exercising the power conferred on him under Section 9 (a) of Factories Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:45:- Act, 1948 and it is thereby punishable under Section 95 of Factories Act, 1948. It is further alleged that the accused failed to maintain a bound inspection book containing Form Nos.7, 33 and 35 and thereby violated Rule 132 of Kerala Factories Rule, 1957 prescribed under section 112 of the Factories Act, 1948.
36. In S.T. No. 72/2007, which is the subject matter of Crl.M.C. No.1722/2007, it is alleged that the accused failed to obtain previous permission in writing from the Director of Factories & Boilers, Thiruvananthapuram, for construction of the building for use as a factory and thereby violated Rule 3 of the Kerala Factories Rules, 1957 and also failed to apply for registration and grant of license for the factory from the Director of Factories & Boilers, Thiruvananthapuram and thereby violated Rule 4 of the Kerala Factories Rule, 1957. The other contravention mentioned is that the accused failed to report the accident Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:46:- occurred in the factory on 7.11.2006 in form No.18 to the Director of Factories & Boilers, the Joint Director of Factories & Boilers and the Inspector of Factories & Boilers, Thodupuzha and thereby violated Rule 123 (1) and Rule 123 (3) of the Kerala Factories Rules, 1957, the violations of which are punishable under section 92 of the Factories Act, 1948.
37. In S.T. No. 74/2007, which is the subject matter of Crl.M.C. No.1725/2007, it is alleged that when the complainant inspected Kerala water Authority, Water Treatment Plant, Thodupuzha on 9.11.2006 along with Additional Inspector of Factories, Thodupuzha, water purification was being carried on, employing 13 workers with the aid of 35 H.P., without a valid factory license under the Factories Act, 1948. It is further alleged that the 2nd accused M.C. John, Superintending Officer, willfully obstructed the Inspector from taking evidence about the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:47:- accident (gas leakage) which occurred in the factory on 7.11.2006. In the complaint it is alleged that the accused persons failed to ensure the health and safety of the worker in the factory by providing adequate instructions, necessary training and supervision, which resulted in accident and thereby the accused violated Section 7A of the Factories Act, 1948. The other violation complained of is that the accused failed to maintain the chlorinator plant in the factory in a safe manner and without risk of bodily injury, resulting in chlorine leakage and thereby violated Rule 81 B of the Kerala Factories Rules, 1957 r/w section 41 of the Factories Act, 1948, which is made punishable under section 92 of the Factories Act, 1948.
38. In C.C. No.345/2007, which is the subject matter of Crl.M.C. No.2454/2008, it is alleged that the accused failed to report the fatal accident which occurred in the factory on 06.03.2007 resulting in the death of Sri. Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:48:- P.M.Shaji and thereby violated Rule 123(1) and Rule 123(3) of Kerala Factories Rules, 1957. The other allegation is that the accused failed to carry out the process or work in the factory in such a manner as not to cause risk of bodily injury which resulted in the accident and death of of Sri.P.M. Shaji and thereby violated Rule 81 C of the Kerala Factories Rules 1957. The other contravention alleged is that the accused failed to provide such information, instruction, training or supervision necessary to ensure the health and safety of workers and thus violated Section 7A(2)(c) of Factories Act, 1948 which is made punishable under section 92 of the Factories Act, 1948.
39. In S.T. No. 744/2008, which is the subject matter of Crl.M.C. 461/2009, the violations complained of are that the accused failed to provide such information, instruction, training, supervision as are necessary to ensure the health and safety of the workers and thereby violated section 7A Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:49:- (2) (c) of the Factories Act, 1948, and that the accused failed to report the dangerous occurrence (chlorine leakage) on 18.02.2008 and thereby violated Rule 123(1) and Rule 123(3) of the Kerala Factories Rules, 1957, which also is made punishable under section 92 of the Factories Act.
40. In view of the fact that the 2nd accused, being the Superintendent Engineer, having been duty bound to perform the duties and responsibilities as enjoined on him as per Kerala Water Authority (Duties of Employees) Regulations, 1999 referred to earlier he is also to be treated as the occupier of the factory in regard to the various violations complained of in the five cases lodged against him and as such the request made by him to quash the proceedings is unsustainable. Clause 6, Clause 12 (b) etc. of Appendix A of the Regulations, as noted in paragraph 14 of this order, would make it indubitably clear as to the Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:50:- duties and responsibilities of A2 as the Superintending Engineer and the penal liabilities he has to incur for the violations complained of, if proved. It is so cast on him as per the Statute - the State Act mentioned earlier. But such duties are not cast on A1 the Managing Director as per the Regulations. Since it is not an inter se arrangement made, as in the case of a company but defined and assigned by the Kearala Statute itself A1 cannot be fastened with the criminal liability. In the light of the findings entered earlier, since the 1st accused cannot be teated as the occupier within the meaning of the provisions of the Factories Act referred to earlier, the proceedings as against A1 has to be quashed.
In the result these Criminal M.Cs. are allowed in part. The cognizance taken and the proceedings Crl.M.C. 1725/2007, 1722/2007, 461/2009 1721/2007 and 2454/2008 -:51:- initiated against the 1st petitioner alone will stand quashed but the request to quash the proceedings against the 2nd accused is rejected.
Dated this the 4th day of January, 2013.
Sd/-N.K. Balakrishnan, Judge ani /true copy/ P.S. to Judge