Delhi District Court
Cc No.696/2004 Pyare Lal vs . Neeraj Monga Page No.1 Of 33 on 20 July, 2016
IN THE COURT OF SHRI NARESH KUMAR LAKA
CHIEF METROPOLITAN MAGISTRATE, EAST DISTRICT,
KARKARDOOMA COURTS, DELHI
CC No.696/2004
Complaint under Section 29 of the Industrial Disputes Act
In the matter of:
Shri Pyare Lal
..........Complainant
Versus
Shri Neeraj Monga
...........Accused
Date of institution: 15.09.2004
Date of final arguments: 30.06.2016
Date of decision: 20.07.2016
J U D G M E N T
Brief Facts: On raising certain grievances by a group of workers (represented by a Union), an industrial dispute was referred to the Industrial Tribunal No. III, Delhi vide I.D No. 246/96 and an award was passed in favour of workmen on 11.12.1997. Thereafter, the said award was notified as per law and it became enforceable w.e.f 06.02.1998. Consequently a recovery certificate (RC) was issued by Labour Department for an amount of Rs. 31 Lacs plus on 02.09.1998. Against the said recovery certificate, the accused Neeraj Monga filed a CWP No. 441/03 before Hon'ble High Court of Delhi and vide order dated 13.08.2003, the said case was disposed of with the direction that the workers will not enforce recovery certificate in respect of personal assets of the Director/accused and the said order was CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.1 of 33 ultimately treated/construed as a show cause notice for initiation of proceedings for commission of offence under Section 29 read with Section 32 of the Industrial Disputes Act, 1947 (ID Act).
2. As per Section 34 of the ID Act, a complaint can be filed by the appropriate government only for initiating criminal prosecution under ID Act. Therefore, the Workers Union approached the appropriate government (i.e. Government of NCT of Delhi) and accordingly, vide order dated 08.09.2004 issued by the then Lieutenant Governor NCT of Delhi, Sh. Pyare Lal, President of the Workers Union was authorized to file present complaint against M/s. Wings Wear Private Ltd. and its Ex-director Sh. Neeraj Monga. Consequently, present complaint was filed before this Court on 15.09.2004.
3. After examination of the complainant on oath, summons were issued to the accused. After appearance of accused Neeraj Monga, he filed an application for dropping of the proceedings which was dismissed. Ultimately a notice under Section 251 Cr.P.C for the offence under Section 29 of the ID Act was served upon him to which he pleaded not guilty and claimed trial.
4. In order to prove its case, the complainant examined only one witness, namely, Pyare Lal as CW-1. The statement of the accused was also recorded under Section 313 Cr.P.C read with Section 281 Cr.P.C. Accused also examined himself as DW-1.
5. During the course of examination of complainant and accused, various documents were also exhibited/marked which are not being mentioned herein for the sake of brevity but they will be referred to in the subsequent paragraphs with their complete descriptions wherever felt necessary.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.2 of 33
6. I have heard arguments at length addressed by Shri H.K. Chaturvedi, learned counsel for the complainant and Shri R.C. Beri and S.K. Beri, learned counsels for accused. Written arguments were also filed by both sides. File perused.
REASONS FOR DECISION
7. Primarily the case of the prosecution/complainant is based on the premise that the accused was a Director of a company i.e. M/s Wings Wear Private Ltd. at the relevant point of time and he did not pay the amount as ordered in the award dated 11.12.1997 by the Industrial Disputes Tribunal. Consequently it is alleged that he had committed breach of said award and thus liable for punishment as per Section 29 of ID Act. For a better understanding, the said Section is reproduced as under:
Section 29 of the Industrial Disputes Act, 1947
29. Penalty for breach of settlement or award.- Any person who commits a breach of any term of any settlement or award, which is binding on him under this Act, shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both, and where the breach is a continuing one, with a further fine which may extend to two hundred rupees for every day during which the breach continues after the conviction for the first] and the Court trying the offence, if it fines the offender, may direct that the whole or any part of the fine realised from him shall be paid, by way of compensation, to any person who, in its opinion, has been injured by such breach.
8. On the other hand, the learned counsel for accused vehemently opposed the prosecution of the accused on the following points/grounds:
(i) The present complaint is barred by limitation.
(ii) The Director was not a party to the industrial proceedings in which award dated 11.12.1997 was passed and, as such, he cannot be prosecuted/punished.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.3 of 33
(iii) The present case is not maintainable without impleading the company i.e. M/s Wings Wear Private Ltd and secondly its Director alone can be prosecuted/punished.
(iv) There were various excuses and reasons for not making payment of the amount as ordered in the award dated 11.12.1997 and, as such, accused cannot be punished.
(v) There were various stay orders /status quo orders of various courts of law at the relevant time and the proceedings for winding up of the company were going on and even Official Liquidators were appointed and, as such, accused cannot be punished for non-compliance of award.
(i) The present complaint is barred by limitation
9. The learned counsel for the accused argued that the Section 29 of the ID Act provides punishment upto six months or with/without fine and, as such, the prosecution can be launched within a period of one year as per Section 468 of Cr.P.C. He also pointed out that in the instant case the award was passed on 11.12.1997 and it became enforceable w.e.f. 06.02.1998 and, as such, the prosecution, if any, has to be launched before 06.02.1999 whereas the present complaint had been filed on 15.09.04 i.e. after lapse of more than 5 years and 7 months.
10. On the other hand, learned counsel for the complainant argued that the present complaint was contemplated after passing of order dated 13.08.2003 by Hon'ble High Court of Delhi in CWP No.441/03 whereby the complainant was given an opportunity to file initiate criminal prosecution for commission of offence u/s 29 of the ID Act. He further argued that the violation of the conditions of award in question are continuing cause of action and, as such, the period of one year as provided u/S. 468 Cr.P.C. is not applicable to the present case.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.4 of 33
11. In support of his arguments, the learned counsel for accused relied on the case of Brahm Sarup & Ors vs. State of Haryana, reported in Chand. L. R. (Cri) 363 by Hon'ble Punjab High Court wherein it was held as under :
"The maximum punishment envisaged under section 29 is six months as envisaged in Section 468 (2) (b) of Cr.P.C. The complaint in such cases could be filed only within one year from the date of commission of the offence or when its commission came to the notice of the authority concerned."
12. Likewise, the learned counsel for the accused also relied on the case of State of Maharashtra Vs. Ajit Mankelal Choksey,. Reported in 1979 1 Lab. J.J. 423 wherein similar view was taken. He also referred to case of Harsh C. Desai Dharwad Vs. Basker Dharwad reported in 1984 Cr.. L. J. (NOC) 59. wherein it was held that condition of Sec.34 of the ID Act is not at par with taking of sanction u/s 197 Cr.P.C. Thus he argued that the time period consumed for taking permission from Lt. Governor of Delhi cannot be excluded. He also stressed that in the absence of any application for condonation of delay, this court cannot even condone the delay.
13. The crucial question herein is - whether the period of one year as provided in Section 468 Cr.P.C. will be applicable to the instant case or whether the alleged offence is a continuing one as defined in Section 472 Cr.P.C. The Section 29 of the ID Act provides punishment for violation of non-compliance of the terms of an award or settlement as passed under the ID Act. In my considered opinion, the particular terms and the conditions of the award or the settlement are the decisive factors which determine the period of limitation.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.5 of 33
14. As per Section 472 Cr.P.C. in case of a continuing offence, a fresh period of limitation begins to start from the moment of time during which the offence continues. The non-payment of the claim amount of Rs. 31 Lacs (plus) from the date of issuance of recovery certificate dated 02.09.1998 till it remained unpaid and the factum that both the parties were resorting to various courses available under law for claiming and opposing the award respectively, I hold that the present case is covered u/s 472 Cr.P.C. and the alleged offence is continuing one.
15. In this regard, I rely on the case of Cinema Workers' Union vs Gopal Naidu and Anr. (decided on 30 January, 1988), Karnataka High Court;(1994) III LLJ 193 Kant and I feel it apt to extract the entire conspectus of facts and the observations made therein as under:
"On behalf of the complainant it was contended that the offence in question was a continuing offence and it was not an offence committed once and for all. Therefore, Section 468, Criminal Procedure Code, did not apply to the facts of the case and it is only Section 472, Criminal Procedure Code that governs the case.
5. It is not in dispute that the said two workmen were working as gatekeepers in Sujatha Talkies. It is also not in dispute that their services were terminated by the Sujatha Theatre. It is also not in dispute that a reference was made by the Government in Reference No. 162 of 1976 to the Labour Court. It is also not in dispute that an award was passed by the Labour Court and the same was published in the Karnataka Gazette, dated 30th March, 1978.
Now, the main point for consideration in this case is: Whether the non-compliance of the award by the management of Sujatha Theatre amounts to a continuing offence or is just an offence committed once and for all ?
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.6 of 33
9. Section 19 of the Industrial Disputes Act (hereinafter referred to as "the Act") relates to the period of operation of settlements and awards. Section 19(3) relates to the period of operation of an award and it is this Section which is relevant for the purposes of this case. It reads:
"19. Period of operation of settlements and awards..... (3) An award shall, subject to the provisions of this section, remain in operation for a period of one year from the date on which the award becomes enforceable under Section 17-A:
Provided that the appropriate Government may reduce the said period and fix such period as it thinks tit:
Provided further that the appropriate Government may, before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit, so, however, that the total period of operation of any award does not exceed three years from the date on which it came into operation."
Section 19(3) makes a reference to Section 17-A. Section 17-A reads:
"(1) An award (including an arbitration award) shall become enforceable on the expiry of thirty days from the date of its publication under Section 17:
Provided that-......,"
Therefore, Section 17-A makes an award enforceable only on the expiry of thirty days from the date of its publication under Section
17. Section 17 requires that the award should be published in a Government Gazette. Therefore, if Sections 17 and 17-A are read together the award in question becomes enforceable only after the publication of the same in the Government Gazette and it becomes enforceable only on the expiry of 30 days from the date of its publication in the Government Gazette. If Section 17, Section 17-A and Section 19(3) are read together it follows that an award snail remain in force for a period of one year from the date on which an award is enforceable under Section 17-A i.e., the date of publication of the same in the Gazette (sic).
10. Learned counsel, Shri Krishnaiah, drew my attention to CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.7 of 33 Section 19(5) which reads:
"(5) Nothing contained in Sub-section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to any continuing obligation on the parties bound by the award."
Section 19(5) would come into play only if the enforceable award has been given effect to and if thereafter no continuing obligation is cast on the parties. Therefore, Section 19(5) clearly does not relate to the present case. Then he made a reference to Sections 22 and 23. They relate to prohibition of strikes and lock-outs. We are not concerned with any of those in this case. Then he drew my attention to Section 33-C of the Act. Section 33-C relates to recovery of money due from an employer.
11. The question whether a particular offence is a continuing offence or an offence committed once and for all necessarily depends on the language of the statute which governs the offence, the nature of the offence and above all the purpose which was intended to be achieved by constituting the particular act as an offence. The words "continuing offence' is not defined anywhere in the Code. The phrase, "continuing offence" has been left to the wisdom of the court for interpretation. The expression "continuing offence", though it appears to be a very vague expression, has acquired a well recognised meaning in law. If the act committed by accused constitutes an offence and if that continues from day to day and if that act covers a lapse on the part of the accused to comply with any statutory direction, a fresh offence is committed by the accused every day so long as the lapse continues. Normally and in the ordinary course, the offence is committed only once and for all. But, there are offences which continue to be committed day to day and such offences are continuing offences. In every case of a continuing offence, it might be an omission or a positive act on the part of the defaulter. Sri Krishnaiah referred me to State of Bihar v. Deokaran . In para 5 of the said judgment it has been observed as (at page 909):
"Continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.8 of 33 requirement is obeyed or complied with. On every occasion that such disobedience or non-compliance occurs and recurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues and, therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all."
Similar is the principle laid down in Bhagirath Kanorai v. State of Madhya Pradesh (1986) 68 FJR. 98. In Paras 12 to 14, the Supreme Court has laid down as (at pages 103 and 104):
"In Best v. Butler & Fitzgibbon 1932 2 KB 108, the English Trade Union Act, 1871, made it penal for an officer or a member of a trade union to wilfully withhold any money, books, etc., of the trade union. It was held in that case that the offence of withholding the money was a continuing offence, the basis of the decision evidently being that every day that the moneys were wilfully withheld, the offence was committed.
As already stated above, the offence would amount to a continuous offence, if non-compliance with the same amounts to a breach of that award every moment till that is complied with. In this case, the award is passed ordering reinstatement with back wages. So long as that award is not complied with, its non- compliance would amount to an offence every moment so long as it has not been given effect to. Therefore, in the ordinary course, non-complying with the order of reinstatement would amount to a continuous offence. It ceases to be an offence, once it is complied with. So long as it is not complied with, non-compliance thereof would amount to an offence being committed continuously. Therefore, I have no hesitation in mind to hold that the non- compliance with the award of reinstatement is a continuous offence and not an offence committed once and for all. It was sought to be argued by Shri Venkataramanaiah that once the award is complied with, there is no question of enforcing the same. Thus, according to him, it is an offence committed only once. The compliance of the award at a later stage would not wipe out the -original guilt. Hence, non-compliance with the award CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.9 of 33 within time can still be regarded as an offence, though it might have been complied with at a later stage.
15. But, we have got still a greater hurdle to get through in the present case. As stated above, even continuous offences if regulated by any enactment or statute, will have to be governed by the enactment or statute. Section 17 of the Act requires the publication of the award in a Government Gazette. Section 17-A of the Act says that an award shall become enforceable on the expiry of thirty days from the date of its publication under Section
17. Therefore, it makes clear that the award of reinstatement passed in this case becomes enforceable only on the expiry of 30 days from the date of publication under Section 17. It was published in the Karnataka Government Gazette on 30th March, 1978. Therefore, it becomes enforceable only from 30th April, 1978. Section 19(3) of the Act reads that an award shall subject to that provisions of this section remain in force for one year from the date on which the award becomes enforceable, which is thirty days from the date of publication under Section 17. Therefore, the enforceability of the award is restricted to one year by Section 19(3). If the award ceases to be enforceable after one year, non- compliance thereafter ceases to be an offence. If it ceases to be enforceable, it is not required to be complied with in law at all. The concept of enforceability and compliance thereof go hand in hand. If the law lays down that a particular award ceases to be enforceable after a particular period, no. party would have a right to enforce the same thereafter and no party can be accused of non-compliance after the expiry of that period. Therefore, even though the non-compliance of the award of reinstatement might amount to a continuous offence, still the statute contained in Section 19(3) places an embargo or restriction that it will be enforceable or it would remain enforceable only for one year. When the law itself restricts the operation of the award for one year, it would be wrong to urge that even after the expiry of one year, it would remain enforceable and non-compliance therewith even after the expiry of one year would be punishable under law. Therefore, the restriction of one year placed by Section 19(3) makes the present continuous offence in question, continuous only for one year and not thereafter. Any non-compliance during the period of enforceability for one year is made punishable every moment of the one year during which it remains in force. But, once the period of one year is over, it becomes no longer CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.10 of 33 enforceable in law and it cannot be made punishable. Therefore, though it was open to the complainant to prosecute the accused for non-compliance at any time during the period of one year, the right to prosecute is lost after the expiry of one year as laid down by Section 19(3). In this case, the award has been passed on 23rd February, 1978. It is published on 30th March, 1978, in the Karnataka Government Gazette. Therefore, it became enforceable from 30th April, 1978. The period of one year prescribed by Section 19(3) would be over by 30th April, 1979. The complainant, trade union, has approached the Labour Commissioner on 3rd August, 1979. They have thus approached the Labour Commissioner only after the expiry of the prescribed period of one year. The Labour Commissioner passed an order, dated 6th September, 1979, according sanction to prosecute. It was also after the expiry of the prescribed period of one year. By the grant of sanction, the period of limitation would not revive at all. If the matter is barred by limitation, the according of sanction would not revive the cause of action at all. The complaint has been filed on 19th September, 1980, i.e., after the expiry of one year from the date of order passed by the Labour Commissioner, according sanction. Section 29 of the Industrial Disputes Act has prescribed an imprisonment which may extend to six months or fine or both. Section 468(2)(b) prescribes a period of one year, if the imprisonment does not exceed a period of one year. In this case one year has already lapsed. Even if the date of offence is taken to be the date on which sanction was accorded by the Commissioner, still the complaint is barred by time because it was filed more than one year after the day when the Labour Commissioner had passed the order according sanction. Therefore, in the result, the Magistrate was right in holding that the complaint was barred by time. The said order needs no interference."
16. From the perusal of the aforesaid case, one thing is established that the offence under Section 29 of the ID Act is continuing one in respect of above cited case (as well as present case which is similar to that) but at the same time it was held in the above cited case that the said continuous period has to be governed by the provisions of law. The Hon'ble Judge also referred to Section 19(3) of the ID Act and held that in view of the specific CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.11 of 33 period prescribed therein, the limitation has to be counted as per the period given therein. If the latter part of the decision is relied then present case is beyond limitation but the said question becomes more interesting in view of provisions of Section 19 of the ID Act and following other precedents:
Section 19 of the ID Act is very crucial and accordingly the same is reproduced as under:
Section 19 Period of operation of settlement and award:
(3) An award shall, subject to the provisions of this section, remain in operation for a period of one year from the date on which the award becomes enforceable under Section 17-A:
Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit:
Provided further that the appropriate Government may before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit, so however, that the total period of operation of any award does not exceed three years from the date on which it came into operation. (4) Where the appropriate Government, whether of its own motion or on the application of any party bound by the award, considers that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National Tribunal for decision whether the period of operation should not, by reason of such change be shortened and the decision of Labour Court or the Tribunal, as the case may be, on such reference shall be final. (5) Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.12 of 33 on the parties bound by the award.
(6) Notwithstanding the expiry of the period of operation under sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award. (7) No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case may be".
17. Now after reading the Section 19, it is noticed that besides the clause (3), there is also a clause (6) which is very significant. The said clause (6) of Section 19 ID Act provides that notwithstanding the period of operation of sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed after giving a notice by the opposite party. The word "binding" is very crucial. No doubt the limitation period of operation of an award may expire after specified period of time as given in Sub-Section (3) of Section 19 ID Act, but the award still remains "binding" upon the parties until a specific notice has been given to terminate the award by the opposite party.
18. Moreover, the Section 29 of the ID Act refers to the aspect of "binding" nature of the award which is punishable. Thus, in my considered opinion, the law of limitation, with due respect to Hon'ble High Court of Karnataka, has to be interpreted in the light of Section 19(6) of ID Act and the award remains continuously binding upon the parties till it is terminated by a two months notice or till it is complied. In holding such decision, I also rely on the following case laws and especially the observations of Hon'ble Supreme Court in the below-cited case, speaking through our legend Hon'ble Mr. Justice V.R. Krishna Iyer in the following words:
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.13 of 33 "Again, so long as the award is binding on a party, breach of any of its terms will make the party liable to penalty under Sec. 29 of the Act, to imprisonment which may extend to six months or with fine or with both. After the period of its operation and also the period for which the award is binding have elapsed, Sec. 23 and 29 can have no operation."
The Life Insurance Corporation Of ... vs D. J. Bahadur & Ors on 10 November, 1980 [1980 AIR 2181, 1981 SCR (1)1083] Author: Hon'ble Judge VR Krishnaiyer.
We need not labour the point further because we are bound, presidentially speaking, by three decisions of this Court. Chacko's case, (2) in a clinching passage, settles the proposition and the Indian Oil Corporation case(3) adopts a reasoning compelling the same conclusion even like Mohd. Quasim Larry(4) has done. Das Gupta, J. speaking for a Bench of three judges studies the statutory scheme bearing on the triple periods after an award came into being and indicated, by purposive interpretation of the relevant provisions, the legal stages of the life of an award. After quoting s. 19(6) of the ID Act, the Court observed(5):
This makes it clear that after the period of operation of an award has expired, the award does not cease to be effective. For, it continues to be binding thereafter on the parties until notice has been given by one of the parties of the intention to terminate it and two months have elapsed from the date of such notice.
The effect of s. 4 of the Industrial Disputes (Banking Companies) Decision Act is that the award ceased to be in force after March 31, 1959. That however has nothing to do with question as to the period for which it will remain binding on the parties thereafter. The provision in s. 19(6) as regards the period for which the award shall continue to be binding on the parties is not in any way affected by s. 4 of the Industrial Disputes (Banking Companies) Decision Act, 1955. Quite apart from this, however, it appears to us that even if an award has ceased to be in operation or in force and has ceased to be binding on the parties under the provisions of s. 19(6) it will continue to have its effect as a contract between the parties that has been made by industrial adjudication in place of the old contract. So long as the award remains in operation CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.14 of 33 under s. 19(3), s. 23(c) stands in the way of any strike by the workmen and lock-out by the employer in respect of any matter covered by the award. Again, so long as the award is binding on a party, breach of any of its terms will make the party liable to penalty under s. 29 of the Act, to imprisonment which may extend to six months or with fine or with both. After the period of its operation and also the period for which the award is binding have elapsed s. 23 and s. 29 can have no operation. We can however see nothing in the scheme of Industrial Disputes Act to justify a conclusion that merely because these special provision as regards prohibition of strikes and lock-outs and of penalties for breach of award cease to be effective the new contract as embodied in the award should also cease to be effective. On the contrary, the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse- in respect of both of which special provisions have been made under ss. 23 and 29 respectively-the new contract would continue to govern the relations between the parties till it is displaced by another contract. The objection that no such benefit as claimed accrue to the respondent after March 31, 1959 must therefore be rejected. (emphasis added).
The power of reasoning, the purpose of industrial jurisprudence and the logic of the law presented with terse force in this pronouncement cannot be missed. The new contract which is created by an award continued to govern the relations between the parties "till it is displaced by another contract."
Another Bench of three judges, speaking through Chief Justice Gajendragadkar, in Md. Quasim Larrys case(1) has ratiocinated on similar lines:
When an award is made and it prescribes a new wage structure, in law the old contractual wage structure becomes inoperative and its place is taken by the wage structure prescribed by the award. In a sense, the latter wage structure must be deemed to be a contract between the parties because that, in substance, is the effect of industrial adjudication. The true legal position is that when industrial disputes are decided by industrial adjudication and CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.15 of 33 awards are made, the said awards supplant contractual terms in respect of matters covered by them and are substituted for them.... In this connection, we may incidentally refer to the decision of this Court in the South Indian Bank Ltd. v. A. R. Chacko(2) where it has been observed by this Court that the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse-in respect of both of which special provisions have been made under sections 23 and 29 respectively-the new contract would continue to govern the relations between the parties till it is replaced by another contract. This observation clearly and emphatically brings out that the terms prescribed by an award, in law, and in substance, constitute a fresh contract between the parties."
19. Reliance can also be placed on the case of All India Regional Rural Banks vs Union of India and Other (decided on 11 November, 1998) ILR 1999 KAR 1064, 2000 (3) Kar.L.J. 157 wherein it was held:
"Since no period of operation is fixed under the award of NIT, it must be taken that the maximum period of its operation is one year from 12-4-1996, the date on which it is ordered to be treated as an award passed under the Industrial Disputes Act, 1947 by the direction given by the Supreme Court. However, by virtue of the provisions in Section 19(6) even after the expiration of the period of operation of the award, which is one year in the present case, it must be taken that the award will continue to be in force till a notice is given to the first petitioner by the first respondent intimating its intention to terminate the award. Since, admittedly, no such notice has been issued by the first respondent or any of the parties to the award, intimating their intention to terminate the award passed by the NIT, the said award passed by the NIT, must be deemed to he in torce and is binding on all the parties and I agree with the said contention advanced by the learned Counsel for the writ petitioners. When it is found that the said award passed by the NIT, is still in force, the question of issuing a fresh sanction under the second proviso to Section 17 of RRB Act by the 2nd respondent for implementing the provisions contained in CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.16 of 33 6th Bipartite Agreement in respect of the employees and officers of RRBs does not arise and the earlier sanction given in terms of proviso (1) of Section 17 of RRB Act, 1976 for implementing the NIT Award and the recommendations of the Equation Committee referred in the communication dated 22-02-1991 sent by the 1st respondent-Union of India vide Annexure-A to the Chairman and Managing Director of All Sponsor Banks (except UPCB), holds good even for implementing the 6th Bipartite Agreement. I am, therefore, unable to accept the contention of the learned Counsel for respondents 1 and 2 that the award passed by the NIT, ceased to be in force and that it is open now for the Central Government to fix the salary and other allowances of the employees and officers of the RRBs, in exercise of the powers conferred under Section 17(1) of the RRB Act."
20. The learned counsel for the complainant also relied on the case of Trichur Urban Cooperative Bank Ltd. Vs. District Labour Officer (1987)II LLJ 38 Ker wherein various judgments of Apex Court were discussed and it was held that the breach of an award is a continuing offence. In the light of aforesaid facts and the case laws, I hold that the present complaint is within the period of limitation.
(ii) The Director was not a party to the industrial proceedings in which award dated 11.12.1997 was passed and, as such, he cannot be prosecuted/punished.
21. From the perusal of award dated 11.12.1997, it is clear that accused Neeraj Monga was not impleaded as one of the respondents in that case. However it is the admitted fact that accused Neeraj Monga was a director of the company i.e. M/s Wings Wear Private Ltd. The said award was passed against said company. A company is a juristic person/entity and as far as criminal liability of a director and company is concerned, the same is on different footing than civil liability. Section 32 of the Industrial Disputes CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.17 of 33 Act specifically provides that all the Directors/Managers and other Officers of the company who were concerned with the management of the company shall be deemed to be guilty of the offence, committed by the company. The said Section is reproduced as under:
32. Offence by companies, etc.- Where a person committing an offence under this Act is a company, or other body corporate, or an association of persons (whether incorporated or not), every director, manager, secretary, agent or other officer or person concerned with the management thereof shall, unless he proves that the offence was committed without his knowledge or consent, be deemed to be guilty of such offence.
22. From reading of said Section 32, it is evident that there in no mention that each Director of the company are required to be necessarily made as respondent in the industrial disputes. In my considered opinion, the word "company" is the genesis and its Officers/Directors are species. When the case is against a company, its Directors or Managers who were functioning on the date of accrual of cause of action are automatically relevant persons against whom liability can be fastened with the help of deeming provision.
23. The counsel for the accused vehemently argued that a Director cannot be made liable unless he has been shown to be concerned with the management of the company at the relevant time. He also argued that accused has already resigned from the company on 23.08.2002 and, thereafter, sent an intimation to the Registrar of the Companies by filling from No. 32 on 04.09.2002. The abovesaid argument is misconceived since the award was passed on 06.02.1998 and it is the admitted case that accused was the Director from 11.01.1995 till 23.08.2002. It is also evident that all the litigations between the Management and the Workmen were between accused Neeraj Monga and workers. There is no defence taken CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.18 of 33 by the accused that any other Director or any other person was responsible or concerned with the management of the said company during the abovesaid relevant period which indirectly proves (coupled with a legal presumption of guilty as per Section 32 NI Act) that there was no one else except accused Neeraj Monga who was concerned with the Management of the company at the relevant time.
24. The subsequent resignation of the accused from the company on 23.08.2002 will not absolve him from the actions, deeds or misdeeds taken/done by him during his tenure in the past.
25. Ld. Counsel for the accused also argued that the authorization given by the Lieutenant Governor of NCT of Delhi was without application of mind because no material was placed before him especially the status quo orders and position of winding up of the company. In this regard, ld. Counsel for the accused also referred various case laws.
26. It is clear that the requirement of Section 34 of the Industrial Disputes Act giving power to the Government to file a complaint and the requirement of obtaining a prosecution sancton under Section 197 Cr.P.C are different. Accordingly, I am of the opinion that the law on the point of application of mind which are applicable on the point of sanction are not applicable to the present case.
27. Even otherwise, in the instant case when it was alleged that the amount of award to the extent of Rs. 31 Lakhs plus was not paid by the company and its directors, this was a sufficient cause to give authorization for filing present complaint for criminal prosecution under Section 29 of the ID Act. Accordingly, I hold that the abovesaid arguments on behalf of accused are not tenable in law and thus rejected.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.19 of 33
(iii) The present case is not maintainable without impleading the company i.e. M/s Wings Wear Private Ltd and secondly its Director alone can not be prosecuted/punished.
28. It is vehemently argued by Ld. Counsel for the accused that the present case is not maintainable without impleading the company i.e. M/s Wings Wear Private Ltd. and the Director cannot alone be prosecuted/punished. The record reveals that there is no specific memo of parties attached along with the present complaint but from the complaint especially para no. 1, it is clear that complainant specifically named the company as well as its Director Neeraj Monga as the accused.
29. Ld. Counsel for accused again argued that in the authorization given by the Hon'ble L.G., the Director has been shown as ex-director but in the complaint the word "Ex" has been intentionally concealed. In my considered opinion, it hardly matters whether the director was referred to as "Director" on an "ex-Director". What is material is that he was the Director at the relevant time when the offence was allegedly committed. Admittedly, the Director/accused resigned on 23.08.2002 whereas the award dated 11.12.1997 became enforceable with effect from 06.02.1998 and, as such, there was sufficient cause to launch prosecution against the Director/accused.
30. It is further transpired from contents of complaint that name of the company as well as accused Neeraj Monga were mentioned in the first para of complaint but at the time of passing summoning order, a routine order was passed by my Ld. Predecessor for summoning of "accused" without referring the name of company. It might have happened on account of over- burdened of court and inadvertence. Due to the aforesaid bona fide CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.20 of 33 mistake, even notice was served under Section 251 Cr.P.C. to the accused Neeraj Monga only. Nevertheless, even if it is presumed that the company was not charged in the instant case, in that case also, I am of the considered opinion that the criminal prosecution is maintainable against an individual director alone without charging the company since the company acts through its director.
31. From the perusal of provisions of Industrial Disputes Act, it is clear that there is no clause or provision which mandates filing of a criminal complaint by including the specific company.
32. Ld. Counsel for the accused relies upon Section 446 of the Companies Act. But the said Section 446 of the Companies Act relates to civil liabilities/civil proceedings and accordingly I hold that the said Section is not applicable to the present criminal case. In this regard I also rely upon a case filed by learned counsel for the complainant as under:
Nagarjuna Finance Ltd., Hyd. vs Kanosika Laboratories Ltd.; 1998 (4) ALD 229, 1998 (4) ALT 563 wherein it was held:
6. A careful reading of the provision will show that no suit or other legal proceedings if pending by the date of winding up order shall be proceeded against the Company except with the leave of the Court. The Section deals with the suits and oilier legal proceeding.
The Marginal Note is regarding staying of suits on Winding Up Order. Therefore in the context of the object of framing the said Section it is clear that the word "other legal proceedings" is ejiisdem generis to the term 'suit'. The words "other legal proceedings" will not embrace proceeding like those under Section 138 of the Act. It appears that the purpose of the Section was to safeguard the assets and the property of the Company which has been wound up under the Court's Order. If any thing is to be realised from the assets or the property of the Liquidated Company, the same deserve to be done under the Court's permission only. Criminal proceedings particularly like Section 138 of the Act have no bearing whatsoever to the purpose for which CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.21 of 33 this Section has been enacted. The relief or provision incorporated in Section 446(1) of the Companies Act does not in my opinion cover criminal proceedings of the type under Section 138 of the Act. I think that the use of word "other legal proceedings" is not meant to embrace proceedings of every nature as such. It is true that the word "other legal proceedings'' if taken literally would mean that all and every proceeding of any nature will fall under Section 446 of the Companies Act. But having regard to the Marginal Note and the purpose of the Enactment, the expression "other legal proceedings" will have to be construed. The said word cannot be and ought not to be read out of its total context or in isolation. It lias to be considered, in my view, in the light of the penal provisions, otherwise the penal clauses under the various Acts would be ineffective by invoking Section 446 of the Companies Act. I think that the operation of this Section must be restricted to proceedings arising out of violations of the Companies Act and not to proceedings for violation of provisions of other Criminal Statutes. The learned Counsel on behalf of the Official Liquidator has stated that proceedings which are of criminal nature but arise out of the provisions under the Companies Act may perhaps fall under the term "other legal proceedings". I think that this contention is right and has to be accepted though it is not necessary for deciding the present application to deal with it in depth. Here I am concerned mainly with application of Section 446 of the Companies Act to prosecution under Section 138 of the Act. For the reasons given above and, if the Section 446 of the Companies Act is read in proper perspective and in the context in which it has been framed, I am of the view that it must be construed that the term "other legal proceedings" refers to civil proceedings as opposed to criminal proceedings under other Acts. Giving a wider meaning to "other legal proceedings" would make ineffective many of the benevolent and social legislations like (1) Employees State Insurance Act (Section 86-A); (2) Employees Provident Fund and Miscellaneous Provisions Act, 1952 (Section 14-A); (3) Employment of Manual Scavengers Act, 1993 (Section 15); (4) Industrial Disputes Act, 1947 (Section 32); (5) Minimum Wages Act (Section 22-C) and several such other Enactments, which are of piece of beneficial legislation to safeguard the public or the weaker sections of the Society. Under such beneficial Legislations prosecution of the Companies are permissible. If a simplistic view is to be taken of the application of Section 446(1) of the CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.22 of 33 Companies Act, all such prosecutions can become a sterile. I do not think that it was the purpose of enacting Section 446 of the Companies Act."
33. The Section 32 of the Industrial Disputes Act provides a presumption of law to the effect that where a person committing an offence under this Act is a company or association of persons, every director/manager/secretary, agent or any other person concerning with the management thereof shall be deemed to be guilty of such offence unless proves otherwise. From the language of said Section, it is clear that the said Section nowhere stipulates that it is essential that the company should be made an accused along with such Officers of a company. It is only a rule of evidence in the form of a presumption of law that whenever any offence is alleged against a company, its officer/director shall be deemed to be guilty.
34. Practically speaking, if an offence is committed by more than two persons and on account of negligence of the IO or on account of inadvertence of the Court or for any other reason, if any, one of the accused persons is let off or not proceeded further in a criminal case, the other accused who faced trial cannot take a plea that he is not liable to face criminal prosecution/punishment since the other accused has not been prosecuted. On the same analogy, I hold that even if the company has not been charged in the instant case, the accused alone can be prosecuted and punished. There is also no plea raised by the accused that he was not the in-charge of the management of the company or that some other person was the Director.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.23 of 33
35. The learned counsel for the accused vehemently relied on the case of State of Madras Vs. C.V. Parekh and others reported in AIR 1971 SC 447, wherein it was held by Hon'ble Supreme court "that conviction cannot be fastened on manager or director by applying section 10 of the Essential Commodities Act as liability can arise under that Section only when contravention is by company itself and in fact the company was not charged with the offence at all." The learned counsel for the accused also relied on the following cases on similar points:
(i) State of West Benal vs. United Rubber Works Ltd. & Ors. AIR 1959 Cal. 750
(ii) Krishan Bai VS. Arti Press, 1994 80 com case 750 (mad)
(iii) A.S. Dlela, Food Corporation of India Vs. State of Haryana, (1995) 82 com. Case 71.
(iv) State of Gujrat vS. Chandulal Jettalal, 1980 (1) Cr.L. R. 353.
36. I have gone through the aforesaid case laws. None of them applies to the provision of Section 29 of the ID Act. The first case i.e. State of West Bengal vs. United Rubber Works Ltd. (supra) only reiterates the provision of Section 32 of ID Act but there is no ratio decendi or finding that the prosecution of Director without company is not maintainable. The other cases pertain to NI Act or Essential Commodities Act which are distinguishable to the facts of present case.
37. Besides the aforesaid judgments relied by the defence counsel, there are also various other catena of judgments of the superior courts which took a different point of view to the effect that a Director or Manager of a company can also be punished without prosecuting the company. These are as under:
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.24 of 33 In Anil Hada vs Indian Acrylic Limited decided on 26 November, 1999 Appeal (crl.) 1258-63 of 1999, it was held by Hon'ble Supreme Court with reference to Section 138 and 141 of Negotiable Instruments Act as under:
Three categories of persons can be discerned from the said provision who are brought within the purview of the penal liability through the legal fiction envisaged in the section. They are: (I) The company which committed the offence, (2) Everyone who was in charge of and was responsible for the business of the company, (3) any other person who is a director or a manager or a secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence.
Normally an offence can be' committed by human beings who are natural persons. Such offence can be tried according to the procedure established by law. But there are offences which could be attributed to juristic person also. If the drawer of a cheque happens to be a juristic person like a body corporate it can be prosecuted for the offence under section 138 of the Act. Now there is no scope for doubt regarding that aspect in view of the clear language employed in section 141 of the Act. In the expanded ambit of the word "company" even firms or any other associations of persons are included and as a necessary adjunct thereof a partner of the firm is treated as director of that company. Thus when the drawer of the cheque who falls within the ambit of section 138 of the Act is a human being or a body corporate or even firm, prosecution proceedings can be initiated against such drawer. In this context the phrase "as well as" used in sub-section (1) of section 141 of the Act has some importance. The said phrase would embroil the persons mentioned in the first category within the tentacles of the offence on a par with the offending company. Similarly the words "shall also" in sub- section (2) are capable of bringing the third category persons additionally within the dragnet of the offence on an equal par. The effect of reading section 141 is that when the company is the drawer of the cheque such company is the principal offender under section 138 of the Act and the remaining persons are made offenders by virtue of the legal fiction created by the legislature as per the section. Hence the actual offence should have been committed by the company, and men alone the other two categories of persons can also become liable for the offence.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.25 of 33 If the offence was committed by a company it can be punished only if the company is prosecuted. But instead of prosecuting the company if a payee opts to prosecute only the persons falling within the second or third category the payee can succeed in the case only if he succeeds in showing that the offence was actually committed by the company. In such a prosecution the accused can show that the company has not committed the offence, though such company is not made an accused, and hence the prosecuted accused is not liable to be punished The provisions do not contain a condition that prosecution of the company is sine qua non for prosecution of the other persons who fall with in the second and the third categories mentioned above. No doubt a finding that the offence was committed by the company is sine qua non for convicting those other persons. But if a company is not prosecuted due to any legal snag or otherwise, the other prosecuted persons cannot, on that score alone, escape from the penal liability created through the legal fiction envisaged in section 141 of the Act The next contention is that under section 139 of the Act there is a legal presumption that the cheque was issued for discharging an antecedent liability and that presumption can be rebutted only by the person who drew the cheque. It was argued on that premise that if the drawer company is not made an accused the remaining accused would be under a handicap since the presumption would remain unrebutted. Section 139 of the Act reads thus:
38. The provision under the E.C. Act was considered by Hon'ble Supreme Court in Sheoratan Agarwal and another v. State of Madhya Pradesh, AIR (1984) SC I824 wherein it was observed as follows:
"Any one or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or an officer of the company may not be prosecuted unless he be ranged alongside the company itself. S.10 indicates the persons who may be prosecuted where me contravention is made by the company. It does not lay down any condition mat the person-in-charge or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.26 of 33 any of them any be separately prosecuted or along with the company."
39. The learned counsel for the complainant also relied on case decided by our own High Court of Delhi in the case of Rajeev Gupta vs. State & Ors. Decided on 01.10.2007 (http://indiankanoon.org/doc/1239941/) wherein it was held that a Director can be prosecuted and punished without impleading the company.
40. Thus in the light of aforesaid cases, I hold that the criminal prosecution of a director can be launched, tried and concluded.
41. Moreover, even if it is presumed that there were various contradictory judgments of superior courts as cited by both the learned counsel, in my opinion the verdict of a case-law has to be seen as on the date of accrual of cause of action i.e. on the date of filing of complaint of the present case. In the instant case, the cause of action arose on every breach of award in question and especially on the date of filing of present complaint on 15.09.2004 and the judgment of our own Hon'ble High Court of Delhi in the case of Rajeev Gupta vs. State & Ors. (supra) was decided on 01.10.2007 and at that time, the present case was maintainable. Accordingly I hold that the present case is maintainable against the Director alone in the light of above observations, latter case-laws and the peculiar circumstances of the present case.
(iv) There were various excuses and reasons for not making payment of the amount as ordered in the award dated 11.12.1997 and, as such, accused cannot be punished.
(v) There were various stay orders /status quo orders of various courts of law at the relevant time and the proceedings for winding up CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.27 of 33 of the company were going and even Official Liquidator was appointed and as such accused cannot be punished for non-compliance of award. (Both points discussed together).
42. The Section 29 of Industrial Disputes Act prosecution/punishment for breach of terms and conditions of award. However, ld. Counsel for the accused argued that if the accused had any reasonable excuse for non- compliance of the conditions of the award, he cannot be punished. He also argued that without there being any mens rea on the part of accused, he cannot be convicted. In this regard, he also relies on following case-laws:
In State of Orissa Vs. R. K. Prasad, reported in 1968 Lab. I.C. 1249, the Hon'ble High Court held that mens rea must be present to constitute an offence under Section 29 read with Section 32 of I.D. Act.
In 'State of Punjab Vs. B.D. Meattle AIR 1957 Punj, the Hon'ble Punjab High Court has observed as under:
"If there is no mens-rea, no offence is committed although the act may be proved detrimental to an individual or individuals. It is only voluntary acts which amount to offence. If a person is compelled by force of circumstances to perform an act forbidden by law he cannot be said to do it voluntarily and therefore he will not be held liable for the consequences of that act."
43. The learned counsel for the accused forcibly submitted that the company and the accused could not comply with the award in question as they were not in a position to implement it and it was impossible for them to make payment of the award to the workers for the following reasons:
(a) The factory of the Company at 10/59, Kirti Nagar, New Delhi was sealed by office of the Recovery Officer, Employees Provident Fund Organization, Nehru Place, New Delhi on 3 rd November, 1995 due to non-payment of employees share outstanding to Rs.11,82,448.30 and it was removed by the Provident Fund Department on 16.12.1995 on order of Hon'ble CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.28 of 33 High Court. Copy of sealing order dated 3.11.1995 is Ex. DW1/2.
(b) On 3rd June, 1996, the factory was sealed by Employee State Insurance Corporation, Rajinder Bhawan, Rajinder Place, New Delhi due to non-payment of their dues amounting to Rs.60,760.15. Copy of sealing order dated 03.06.1996 is Ex.
DW1/3.
(c) By order dated 13.08.1996 the Hon'ble Company Judge passed in C.P. No. 202/96 filed by workers of the Company directed the Respondent Company not to transfer, part with, sell or otherwise dispose of assets of the respondent company except in due course of law. Copy of order dated 13.08.1996 is Ex. DW1/6.
(d) When the aforesaid interim orders were passed by the Hon'ble Company Judge, the factory of the respondent Company at 10/59, Kirti Nagar, New Delhi was under lock and seal by the authorities of Provident Fund and ESIC.
(e) Again on 11th September, 1996, Recovery Officer of Employee Provident Fund Organization sealed the said factory due to non-payment of outstanding amounting to Rs. 7.72 lacs which was already sealed by ESI Department. Copy of sealing order dated 11.09.1996 is Ex.DW1/4.
(f) On 11.12.1997 (Ex. CW1/B) Sh. Dharam Paul Arora, the then Presiding Officer, Industrial Tribunal-III, Delhi passed award in question. The said award was ex-parte.
(g) On 07.04.1998, the management of the company filed an application for setting aside the ex-parte award dated 11.12.1997 before the Presiding Officer. However, the Presiding Officer had relinquished the charge and the Court was not functioning. The company was left with no other alternative but to file CWP No. 6120 of 1998 in Delhi High Court.
(h) On 09.12.1998 the Hon'ble High Court stayed the execution proceedings before the Tehsildar in the impugned Award until further orders. Copy of order dated 09.12.1988 is Ex. CW1/D2.
(i) The company paid the aforesaid dues of ESI and Provident CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.29 of 33 Funds in installments in 3 years and got the seals of both the Departments removed on 14.01.1999.
(j) On 11.03.1999, the said Writ Petition came up for hearing and the Hon'ble High Court directed the Industrial Tribunal to dispose of the said application of the Company for setting aside the ex-parte award by 30.04.1999 and it was ordered that till 30 th April, 1999 the award passed by the Industrial Tribunal shall not be given effect to and the writ petition was accordingly disposed of. Copy of order dated 11.03.1999 is Ex. CW1/D4.
(k) On 28.04.1999, the Presiding Officer dismissed the application holding that it had no power in the matter since the award had already been published and he had become functus officio.
(l) Accused who was not keeping good health for the past considerable time and as such was not in a position to control the day to day affairs of the company and resigned from the Directorship of the Company.
44. For a clear understanding of Section 29 of the Industrial Disputes Act, the same is reproduced again as under:
Section 29 of the Industrial Disputes Act, 1947 "29. Penalty for breach of settlement or award.- Any person who commits a breach of any term of any settlement or award, which is binding on him under this Act, shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both......"
45. From the plain reading of the aforesaid Section 29 of the ID Act, it is clear that there is no proviso or exception or explanation which provides any excuse for no-compliance of the terms of the award. The catching words are "bindingness of an award". M/s Wings Wear Private Ltd filed various applications as well as writ petitions to get set aside the award in question dated 11.12.1997 but despite various applications/writs, CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.30 of 33 the said company/accused did not succeed. Even during the course of arguments, it was concealed by the learned counsel for the accused that the said award dated 11.12.1997 attained finality since no further steps were taken by the accused company or by the Official Liquidator who was appointed subsequently to get set aside the award in question. Thus it is established that the award dated 11.12.1997 was binding on the company i.e. M/s Wings Wear Private Ltd as well as accused in terms of Section 32 of the ID Act as on the date of filing of present complaint and even till today.
46. In this regard, it is appropriate to reiterate the case of The Life Insurance Corporation Of ... vs D. J. Bahadur & Ors decided on 10 November, 1980 [1980 AIR 2181, 1981 SCR (1)1083] wherein it was held by Hon'ble Supreme Court as under:
"Again, so long as the award is binding on a party, breach of any of its terms will make the party liable to penalty under Sec. 29 of the Act, to imprisonment which may extend to six months or with fine or with both. After the period of its operation and also the period for which the award is binding have elapsed, Sec. 23 and 29 can have no operation."
47. As far as the closing of the company on account of sealing orders passed by EPFO and ESIC and other alleged excuses are concerned, it has already been held above that there is no excuse clause provided in Section 29 of the ID Act and accordingly the said excuses are not entertainable. As regards the judgments relied by the counsel for the accused, the same relate to the point where the terms of the award become impossible to be implemented e.g. if an award is passed for reinstatement of a worker, but if the worker dies or the company went into retrenchment, etc. In the instant case, the accused admitted in his cross-examination that the assets of the company were more than the value of the award in question.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.31 of 33
48. No doubt, various litigations/orders or status quo orders were pending during intermittent period but the said orders/litigations nowhere restricted the company or its Director to sell off some of the assets of the company to pay its liability to all the stake holders/creditors. Even the company had settled one of the cases with M/s. Everest Adventure and paid the settled amount of Rs.8 lacs.
49. The learned counsel for the complainant also pointed out that there was no stay from any quarter and stay order dated 13.08.1996 was passed on a civil petition of the complainant only but the said order restrained the company to create any third party interest in the assets of the company to protect the interest of workers only. I also find substance in the argument of the learned counsel for the complainant that the accused has never filed any application before the said court or any other forum or OL to seek permission to sell some of the assets of the company to pay off the amount of award in question. Accordingly, I am of the considered opinion that aforesaid excuses are not acceptable in law or on facts. The Section 32 of the ID Act specifically provides a presumption of law to the effect that all Director/Manager and other principal officers of the company shall be deemed to be guilty for breach of terms of the award and the accused failed to discharge such presumption. Thus the above arguments on behalf of accused are without any merit and thus rejected.
Conclusion
50. In the light of aforesaid findings, I hold that the complainant succeeded in proving the essential ingredients of the offence under Section 29 of the ID Act. The accused Neeraj Monga is accordingly convicted for the said offence. Copy of the judgment be given dasti free of cost to the accused or his counsel today itself.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.32 of 33
51. Put up for arguments on the point of sentence on 26.07.2016 at 2.00 pm. Announced in open court on 20.07.2016.
(Naresh Kumar Laka) Chief Metropolitan Magistrate (East) Karkardooma Courts: Delhi.
CC No.696/2004 Pyare Lal vs. Neeraj Monga Page No.33 of 33