Karnataka High Court
Mr Shachindra Kumar vs State Of Karnataka on 22 February, 2013
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 22ND DAY OF FEBRUARY 2013
BEFORE
THE HON'BLE MR.JUSTICE K.N.KESHAVANARAYANA
CRIMINAL PETITION NO.6400 OF 2012
BETWEEN:
1. Mr.Shachindra Kumar,
Factory Manager,
M/s.Hindustan Unilever Ltd.,
Sultan Battery Road, Boloor,
Mangalore - 575 003.
2. Mr.Thanmaya Banerji,
Unit H.R.Head,
M/s. Hindustan Unilever Ltd.,
Sultan Battery Road, Boloor,
Mangalore - 575 003.
...Petitioners
(By Sri.K.Kasturi, Senior Counsel for Smt.Rukmini
Menon, Advocate)
AND:
1. State of Karnataka,
Department of Labour,
Asst. Labour Commissioner,
Mangalore Division,
Mangalore - 575 002.
2. Labour Commissioner,
(under Payment of Bonus Act),
Karnataka Bhavana,
Bannerghatta Road,
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Bangalore - 560 029.
...Respondents
(By Sri.P.Karunakar, HCGP)
This Criminal Petition is filed under Section 482
Cr.P.C. by the Advocate for the petitioners praying that
this Hon'ble Court may be pleased to quash the entire
criminal proceedings initiated by the respondents for
the alleged violation of Section 11 of the Payment of
Bonus Act, 1965 for an offence p/u/s 28 of the said Act,
culminating in the order dated 18.06.2012 at Annexure-
A passed by the JMFC (II Court), Mangalore in
C.C.No.1675/2012.
This Criminal Petition coming on for admission, on
this day, the Court made the following: -
ORDER
In this petition filed under Section 482 of Cr.P.C., the petitioners have sought for quashing the prosecution launched against them in C.C.No.1675/2012 on the file of JMFC., Mangalore for the offence under Section 11 of the Payment of Bonus Act which is punishable under Section 28 of the said Act.
2. The briefs facts leading to the presentation of this petition are:
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The 1st petitioner is the Factory Manager of M/s.Hindustan Unilever Limited, Mangalore while the 2nd petitioner is the Unit H.R. Head of the said company. The officials of the Labour Department conducted inspection of the records of the aforesaid company in Mangalore and found that the company is not paying bonus to the contract labourers on par with regular employees. Therefore, notice was issued to the petitioners for making payment of bonus to the contract labourers. Petitioners sent a reply saying that the contract labourers are not the employees as defined under the Payment of Bonus Act, therefore, they are not entitled for bonus from the employer on par with their regular employees. The authorities having not satisfied with the reply, lodged a complaint before JMFC., Mangalore alleging that the petitioners have committed violation of provisions of Payment of Bonus Act and they are guilty of the offence punishable under Section 28 of the said Act. The learned Magistrate before whom the complaint came to be presented, took cognizance of the offence. Since the complainant is a public servant, :4: recording of sworn statement was dispensed with and thereafter ordered issue of summons to the petitioners.
On coming to know of the same, petitioners have presented this petition.
3. The contention urged in this petition is that the learned Magistrate without applying his judious mind even to the averments made in the complaint wherein the definition of an employee as defined in Payment of Bonus Act is extracted which clearly indicates that it does not include the contract labourers, has taken cognizance of the offence alleged, therefore, the cognizance taken for violation of Section 11 punishable under Section 28 of the said Act is bad in law and without jurisdiction.
4. I have heard Sri.K.Kasturi, learned Senior Counsel appearing for the petitioners and the Government Pleader appearing for the respondents. :5:
5. Section 11 of Payment of Bonus Act, 1965 makes it obligatory on the part of the employer to pay minimum bonus to its employees. The Section reads as under:-
"11. Payment of maximum bonus -
(1) Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.
(2) In computing the allocable surplus under this section, the amount set on or the amount set off under the provisions of section 15 shall be taken into account in accordance with the provisions of that section."
6. Section 28 is the penal Section. According to the said section if any person contravenes any of the provisions of this Act or any rule made thereunder or to :6: whom a direction is given or a requisition is made under this Act fails to comply with the direction or requisition, he shall be punishable with imprisonment for a term which may extent to six months, or with fine which may extend to one thousand rupees, or with both.
7. This Act is applicable to all the factories and other establishments in which twenty or more persons are employed on any day during an accounting year.
8. Section 2(13) of the Payment of Bonus Act defines 'employee' as under:-
"2(13) "employee" means any person (other than an apprentice) employed on a salary or wage not exceeding [ten thousand rupees] per mensem in any industry to do any skilled or unskilled manual supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied."
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9. If a person claims any benefit under the Payment of Bonus Act, he should fit into the definition of an employee found in Section 2(13) of the Act. Reading of this definition extracted above would indicate that it does not include a contract labourer. On comparison, if we look into the definition of an employee both in Employees' State Insurance Act, 1948 or Employees' Provident Funds and Miscellaneous Provisions Act, 1952, specifically includes a contract labourer also. Conspicuously, the definition of an employee under the Payment of Bonus Act does not either expressly or impliedly include a contract labourer.
10. In the complaint lodged before the Magistrate, the complainant has extracted the definition of employee found in Section 2(13) of the Act. The learned Magistrate seems to have not even read the definition of 'employee' as extracted in the complaint itself before proceeding to take cognizance. It is well settled law by catena of decisions that at the time of :8: taking cognizance, Magistrate is required to apply his judicious mind to the averments made in the complaint and documents if any produced along with the complaint. If the jurisdictional Magistrate had applied his mind to this definition, in my considered opinion, he would not have proceeded to take cognizance for the aforesaid offence since the contract labourers are not included in the definition of the employee under Section 2(13) of the Act.
11. The Kerala High Court in the case of COMINCO BINANI ZINC LTD., VS. PAPPACHAN reported in 1989 (1) L.L.J. 452 has considered the question as to whether the persons employed in a canteen run by independent contractors or by co-operative societies of the workmen are the employees of the management. After considering the provisions of the Factories Act, Payment of Wages Act, etc., it has been held that when the responsibility of running the canteen is entrusted to a contractor or a society, the workmen employed and paid by such contractor or society cannot be treated as :9: workmen of the management and there is no employer- employee relationship between the management and such workmen.
12. The Apex Court in the case of THE WORKMEN OF THE FOOD CORPORATION OF INDIA VS. M/S.FOOD CORPORATION OF INDIA reported in 1985 (II) LLJ 4 has considered the relationship of the contract labourer with the statutory Corporation. It has been observed at Para 12 thus:
"12. Briefly stated, when Corporation engaged a contractor for handling foodgrains at Siliguri Depot, the Corporation had nothing to do with the manner of handling work done by the contractor, the labour force employed by him, payments made by him etc. In such a fact situation, there was no privity of contract of employer and workmen between the Corporation and the workmen. 'Workmen' has been defined (omitting the words not necessary) in the Industrial Disputes Act to mean 'any person (including an apprentice) employed in any industry to do ....'). The expression 'employed has at least two known connotations but as used in the definition, the : 10 : context would indicate that it is used in the sense of a relationship brought about by express or implied contract of service in which the employee renders service for which he is engaged by the employer and the latter agrees to pay him in cash or kind as agreed between them or statutorily prescribed. It discloses a relationship of command and obedience. The essential condition of a person being a workman within the terms of the definition is that he should be employed to do the work in that industry and that there should be, in other words, an employment of his by the employer and that there should be a relationship between the employer and him as between employer and employee or master and servant. Unless a person is thus employed there can be no question of his being a 'workman' within the definition of the term as contained in the Act. Dharangadhara Chemical Works Ltd. v. State of Saurashtra [1957-I LLJ 477]. Now where a contractor employs a workman to do the work which he contracted with a third person to accomplish on the definition as it stands, the workman of the contractor would not without something more become the workman of that third person. Therefore, when the contract system : 11 : was in vogue, the workmen employed by the contractor were certainly not the workmen of the Corporation and no claim to that effect has been made by the Union."
13. In the light of above principles and having regard to the definition of employee found in Section 2(13) of the Act, the claim of the Labour Department that the contract labourer are also entitled for payment of bonus on par with the regular employees, as contended in the complaint has no legal basis and it does not amount to violation of Section 11 of the Act attracting punishment under Section 28 of the said Act. Even according to the allegation made in the complaint, the petitioners have paid minimum bonus at 8.33% to the contract labourers also. The claim is only for higher rate of bonus on par with the regular employees of the management.
14. From the discussion made above, it is clear that the contract labourer cannot be treated on par with the regular employees for the purpose of Payment of : 12 : Bonus. The reliance sought to be placed by the Government Pleader on the notification issued by the Government of Karnataka, Department of Labour dated 22.04.2010 is of no assistance for the reason that under the said notification, the Government has laid down certain conditions wherein they have specified certain requirements to be complied by the employer even in respect of contract labourers. The said notification is issued in exercise of the power under Contract Labour (Regulation and Abolition) Act, 1970. Certain conditions have been laid down directing the employers to issue employment card, specifying working hours, rest intervals, providing weekly holiday, national festival holidays, leave with wages, etc., even in respect of contract labourers.
15. Conspicuously, while mentioning the wage rate at Sl.No.11 of the said notification, payment of bonus on par with the regular employees of the management is not specified. This is also another circumstance which indicate that the contract labourers : 13 : cannot be treated as 'employees' as defined under Section 2(13) of Payment of Bonus Act.
16. In this view of matter, taking cognizance of the offence by the learned Magistrate in the facts of this case is without jurisdiction as no case is made out against the petitioners for the offence alleged. When the contract labourers are not 'employees' as defined under Payment of Bonus Act, there is no obligation on the part of the employer to pay bonus on par with regular employees, therefore, it does not constitute violation as contemplated by Section 11 punishable under Section 28 of Payment of Bonus Act. Therefore, the prosecution launched is without authority of law. Therefore, continuance of the prosecution would result in abuse of process of Court and the same results in unnecessary hardship to the petitioners. In this view of matter, the prosecution launched against the petitioners is liable to be quashed.
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17. In the result, petition is allowed. The prosecution launched against these petitioners in C.C.No.1675/2012 on the file of J.M.F.C. (Court-II), Mangalore is hereby quashed.
SD/-
JUDGE Prs*