Rajesh Adani vs Assistant Labour Commissioner on 13 April, 2010

[Cites 11, Cited by 8]

Karnataka High Court

Rajesh Adani vs Assistant Labour Commissioner on 13 April, 2010

Bench: Ashok B.Hinchigeri

 

IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT DHARWAD
DATED THIS THE 13"' DAY OF APRIL, 2010  "

BEFORE   ._

THE HON'Bi_E MR. }USTICE ASHOK  i'5:'.1:'!\i~IC 'HI'CC%.E'I9-A1,'.  

CRIMINAL PETITION Nb}-'QV65 EOIO. ,   

BEYWEEN:

1. SR1 RAJESE-é ADANI,

MANAGING DIRECIOR,   «

M/S ADANI ENTERPRISES LFD, _  '

ADANI ROUSE, SH R1rviAL3'- .SOc:;IET§r,_f,: ,  
MIIHAKALI SIX ROAD,  , .   V ,'  " 
NAVRANORURA,  "   .    .
AHMEDASAD 3800_09i,_ 

GUJRARM" STATE'.  

. SRI MAHENDRA AIA..Y'A:<','»-_,'"= "

_BELIKERI;j58:,321.  .. V' V"

MANAGER ADMEI":IS§'RATQN A'N_b' R,
M/SADANI EN'I?ERPRISES'L.:D,,'*--5sRANCI~I OFFICE,
BELIKERI PORE,  ' ' ~ 

 PETIYEONERS

(B,YS»RI' RAv.z,'IsgAIA::'I<.._EOR SRI MURTHY D NAIK, ADVOCATE)

T' 

-1':A_ V I TA TvVL'  U  COMMISSIONER,
 'AO'IVI.A§cAIA_D DIVISION, HGBLI,
«SU3_AT%~£A"_COMPLEX,

_O~PP';.G LASS HOUSE,

 ..._I~fI'LJBLI.



2. THE STATE OF KARNATAKA,
BOTH REPRESENTED BY
ADDL. STATE PLSBLIC PROSECUTOR,
CIRCUIT BENCH,
DHARWAD.

(BY SRI A.R.PA"§"EL, ADDLSPP)   ~

.. REvS»Rojiii.,o'EAiT.S  "

THIS CRL.P is FILED L}/S482 cR.P,c"'iSv Aii;,i,{ocAT.E
"§"HE PETITIONER PRAYING THAT TH,tS_ HON'--8LE COLJRTI MAY 'BE

RLEASEO TO CALL FOR RECORDS' ._AN.O Q'oAsH_ 'TVHEi._i'**E.i\i.T«IRE
PROCEEDIGNS PENDING AGAINST QTTHE R'ETITIONE'RS IN
C.C.¥\iO.884/2088 ON THE FILE OF THE___3MFC-I1 COURTVVHUESLE AND
PASS ANY OTHER ORDERS AS TH"IS_ HON*BLE...C;Ot§i2.T OEEMS FIT.

THIS CRL.P. COMING ONTFQR";3»..[5'i\<i'IS$I'tiiVi\:...'T-ijiIS DAY, THE
COURT MAOE THE FOLLOWENG:  ' ..  V

The  Tquashing of entire;
proceedings  iiie of J.M.F.C II Court,
Hubii. The factS.__o'fthe-._ea--i;AeEiéﬁ-tﬁrief are that Adani Enterprises

Ltd. is a ;Pri\gate.V §Sirrii't'ed'V'Company, registered under the

provisionsvlvofithe C:io~:i&ipanie'émAct, I956. The petitioner No.1 is its

 Managi'i--nVg'«.T'_ petitioner No.2 is its Manager -

T'vv__i3§El'r="iinistra't.ion,__'~'anti"~"Human Relations. The Assistant Labour

'"C1e"r§'itti'i»ssione'i.iOharwao Division, Hubii (A.L.C for short) filed a

 the Magistrate against the petitioners for the

 oif.F'enc.es; punishable unoer Section 18 of Minimum Wages Act,

ﬁﬁiﬁ



1948 and 29-h, 29(5) of Karnataka Minimum Wages Rules,
1958. The sum and substance of the complaint is that the

attendance, overtime and wage registers are not produced at__the

time of investigation. The annual reports for the yearsj"2,CJ_O_4,,V'-

2005 and 2006 are not displayed. Despite the 

on the petitioners, they did not comply with the  nu

law. The Magistrate, by his order, dated  

cognizance of the offence against tl'le_T:-e_titiohners and  the

summons. This order was challengeAd..,.t{y._wa.y of 'rev.i,syion§ before
the I Addl. Sessions Judge, i9iu'ih,i-i.inCrf.fi';'i?'}_!Xiho;».18/2009. The
Sessions Judge, by hi4s:"o_rder"'d'a'ted V.'i'S,V.:'vi3._2..'V2'.{).'.i9"'dismissed the

said petition. 
2. Sri RaviVV"l'vé.aiii<., the 4Viea"m:_ed Senior Counsei appearing for
Sri_,.Murthy_~  for 't'h€....P§3titioners submits that the complaint

filedyvitghfthge ..fj/i'ag'ist"ra._te is in respect of the Company's Branch

:--"'v,,Qffice  However, the complaint is filed with the

7M,ag:--strate"s cour"t"'in Hubli. He submits, with reference to the

,:SectiuohAAJ,'t'}'-7, of Cr.P.C., that every offence shall ordinarily be

hi"-4'e.nquh.i.--rec, into and tried by a Court within whose local jurisdiction

 wahshvcommitted. As the offence was allegedly committed in



Ankota Thaiuk, the complaint ought not to have been filed in

Hubsi, so contends Sri Naik.

3. The learned Senior Counsei has aiso reiieid 

Court's decision in the case of N.R.NA"fI=i"l\'YA!§A 

KANNADA RAKSHANA VAKEELARA VEv'li3*.II:(E, reported an"

2007 KAR 3589. The relevant para"grVa'ph in the 'S-aid ftidﬂcjrnent

is extracted hereinbetow:

"I0. Accordingfto Sectionf:  ??_"'s._g§\i'[/"i5 every
offence shall_Vordir;;ia'rii'yVVoe 1e_nouire.d"in'to-~Vand tried by

a Court v£'ithi:n"_.. wh'ose"C'i'.loca--l.':ir~jii*riswdicti'on it was

committed: it'T57:;idrriitteolIy,v___ the alleged incident
occurreolat'-_Infos_ys Mysore. The II-Addl.
Chief _Metro';3oiitan-._Ma_giistrate at Bangalore had no
 territ.ori'ai~ jurisciictilon 'to try the alleged offence.
 a) of Cr.P. C. if a complaint is
  Ma_::;;vi's,trate who is not competent to take
cog»n'i;aan~¢§§V--"ci'of' the offence, he should return the

A -V coinplaint  presentation to the proper Court with
cendorsement to that effect. But, in the instant
the learned Magistrate, without application of

t  niind to the facts and circumstances of the case, has

 '"tal<en cognizance following the decisions applicable

€315!



to defamation cases. On that score alone, the 

proceedings initiated against the petitioner 

P.C.R.lVo. 771 O/2007(C.C.l\io.12359/200,7) are liatzlej  " 

to be quashed. "

4. The learned Senior Counsel br}{;gs:_-A-tho? noticehft_he:;_ié

Apex Court's judgment in the-..__ casV'e.V_'"of 

RAMACHANDRA KAVALEKAR v. stinfé OF lVI'A_t{i:A:RA$HTRA
AND ANOTHER, reported i'ﬁ...'_"'2oo'e ,'.*.i"R--.._'SC~mi 1379. The
relevant paragraph of tE'1e',....s:'a'E--d 'is extracted

here-inbelow:   ..   

"13.   j'u'r.i:sdict'ion of a Court with
regard tohctiminaiaoftence'fiiould be decided on the
basis of_place" occurrence of the incident and not

-'*.on of uiiiere.«the complaint was filed and
i'Aact:ti7.at FIR was registered in a particular
  criterion to decide that no cause

of a{:tion hahstiarisen even partly within the territorial

 Tlimits ofju«ri'sdicti'on of another Court. The venue of

it ':enc;u':'ry or trial is primarily to be determined by the
 _awei'm.ents contained in the complaint or charge

 Section 177 of Criminal Procedure Code

ﬁﬁt-£



6

provides that every offence shall ordinarily be
inquired into and tried by a Court within whose focal
jurisdiction it was committed. Reference can be
made to the observations made by this Court in Asit
Bhattacharjee v. Hanuman Prasad Ojha and Ors. 
(2007) 5 SCC E786 ......... 

5. Sri Ravi Naik cornpiains of the violation  "

contained in Section 202 of the Code oircriminaidirocetiure. 

Under Section 202 of Cr.P.C., it is 

Magistrate to postpone the issue ofhiprocess agaihstit-he"'..ac'Cused

and either inquire into the case.himseif----o.t'--dii'--ect an"'imi.es»tigation

to be made by"the.hviifoihihclei*§Dffice.r"::oritby'~s--a"ch other person as he
thinks fit for the  whether or not there is no
sufficient groundidixB[oVVce_eVd'i_rigi=5} if the accused is residing at a
piace.«_vQverfvv'hi_ciw _the""Ma.gi_i.strate has no jurisdiction. In the

instant'-:.ase.,j ~n_o~isuch.._enquiry has preceded the issuance of

:1""pArVocess ishthe  of the petitioners. The iearned Senior

__$C=.ou'n'sel song.hVtr...to4 draw the support from the Apex Court's

 j.L_Jdvg:na:enAAt'iiii.iAthVe case of K.T.JOSEPH v. STATE or-' KERALA

'"7i;xn_o«i«;:x:§'ig.', reported in (2009) 15 sec 199.
i   ﬁ8i~i

6



6. He relies upon the i-ion'b!e_Supreme Court'sjudgn1eint_:in

the case of MAKSUD SAIYED v. STATE OF Gusgéhitiiii'_::i--i~aje-.c1C_

omens, reported in (2008) 5 sec 558 for.--ac;vi":é:jjr_~..<§i'nTg -iiie._]'  

contention that summoning of accused in a_--~crin1iinai,.'cas'efis a

serious matter. In the said case,v'iVit«,i_s hie':-dithat 
cannot be set into motion as a  Magistrate
has to carefuiiy scrutinise .:.br.c_)'ti'ghtpp on record and
may even himseif put.questiensj:~t§3\/Vtiig§ and his
witnesses to    otitrt'i.i'é».rt}<pthfu|ness of the
ailegations or    any offence is prima
facie committed--. the accused. What is thus
emphasised is""th_ge  mind on the part of the
Ma.g.istrate«.§g it  V V i V

V""i'".irieV'"p"e»tition"ers also have the grievance over not

V713arraigning""the:'.Cornpany as an accused party alongside the

.1-.pTe'ti"tiiQne~i*sg_. Their further grievance is over the complaint not

V.'ta.'*..con.tairi--in'g"any averments that the petitioners are in charge of

 th"e:VCo'n1pany or responsibie to the Company for its day~t0--day
 ; gait.



affairs. In this regard, the Eearned Senior Counse! brings to my
notice the provisions contained in Section 22--C of the Minimum

Wages Act, 1948, which read as follows:

"22-C.Offences by companies - (1) If the person.VV_ﬂ.._'hi~.

committing any offence under this Act is a comparm  

every person who at the time the offence"«y:vas"rr.: 
committed, was in charge of, and wasrr»reSponsio_ie"'tto, 
the company for the conduct of the,
company as well as the compa,.ny_ shaii hie" deernre-of. to it

be guilty of the offence and Si'~?aii, bet./iabieto  '

proceeded against and punished --according/y.' --

Provided 'tha*t_V:no'th:ing-- con&ta'in'ed" in '':this sub--section
shall render  liable to any
punishment_providedin  if he proves that the
offence. _was4"'co_n1mitte'o' Vvvithout his knowledge or
 e:§<eijci'sed"aii....due diligence to prevent the

X corrrmgission 'such offence.

( .i\)'otwith"s'ta.i:'7ding anything contained in sub--

_ --sectio'i=. ).,"vi/here an offence under this Act has
t5eeng_co.n'iinitted by a company and it is proved that
   offence has been committed with the consent or
'"~-____"'i'.'connivance of, or is attributable to any neglect on

"-('that part of, any director, manager, secretary or



H)

registers according to the Shops and Establishments 

Act, 1963 and the Rules thereunder those registers_W. 

would suffice for the requirements of the Mi'nimu.rn 

Wages Act and Rules and, therefore, they WOUl'(':f..'.n0{7--.V:

be liable for prosecution under the_;i¥/linirnurriiiiwaigiesi" 4'

Act or its Rules; for the Act cannoticovntem/jia-te'=Vj-,__: 

(maintenance of) separate registers"--in"spitetoiftrie"
fact that a set of registers underﬁangother~Act....oi*o\}'ide' 
the same information as reojuired uno"'e--r,_ the
Minimum Wages Act  _ti:tirdiy,t'" 't.h_'a._tVthe notice
issued on the petitioners i~he'vAA.'groS'ecution
does not conforni--:;to:- .the§;'reoui.temen'ts of R26-B sub~
r.(2) and as-Vproceevdingiimagainst the

petitioners ca-.nnot;fgo on.«'.' ..

9. To buttress Ahis"/s::t§"mitss3on that, simpty because a

person is a"E~':anagVer»_or"Mar;ager in a Company, he does not

 beEEorn'e.g_._|iabIe iiii "tor the offence committed by the

   on the Apex Court's judgment in the

"£533 of S«TA'E_'_E'  HARYANA V. 39.13 LAL MITTAL AND

"'"oitH£"Rs,gre;}o.-.?t'ed in (1998) 5 scc 343.

=;»

3,



10. Sri A.R.Pai:ii, the teamed Addi. S.P.P submits that,_the

petitioners were given adequate opportunities to subrrii't.,:":.i«h'e~.,'

particulars and the documents to the A.L.C. Only on  *

to furnish the same, the A.i_.C was constréainediitvtort.--'I,'f%ie" .t_he

compiaint with the Magistrate. As the ;"offit%_eir~"haiis.juri',s<iieEi'o.{i*7[

over four districts, it is open to t'hCe_V:v,"o.fficer'"ton fil_e'ita;riy
Court within his (the A.i_.C.'s)  A.itei'na,tivteiy, he
submits that as the officer  districts, if
the compiaints are iiicfd in different
piaces, attending.  {to   administrative
incoriveniencei,H,e_'sti,i5'in'i-its "u'i.:adc,e,:Vfrom where the notice
is issued derria.,ndi-.n'g ofthe documents, aiso gives

the A.L.C. the causetiof action:  the compiaint.
11. He' also submits' that not arraigning the Company or

noit-,_mentiVo'ninEgRf responsibilities of the petitioners in the

 compia--int~..are  curabie defects. They can be cured at

 stage:-.._ In"s.u,i,r3tiort of his submissions, he reiies on the

"de.c'i"s.iVo'n,o,f thev...i4igh Court of 3udicature, Madras, in the Case of

'"=.'j'-»_'S;i(;!§iAi3H#'VAN, BANK OF THANJAVUR LTD. v. STATE REP.

9.814



av ms LABOUR ENFORCEMENT OFFICER (CENTRAL),

reported in 1989 I L.!_.3. 149. The relevant paragraph_4»oi_'V"~t_:he_

said judgment is extracted heretnbelow:

"10. The final contention that th:emt5'a'ni:t_V also 

necessary party to the prosecution}cannot'   

brushed aside. However,  '«.p[eserit 'jIJ!'OS€'1C'tJtfi(Z'£?_VV 
need not fail merely because tr:'e_'»i'Bani<V"als'o"is not
prosecuted along with th"e~..petiti'onerQ 1'  not 'denied
that the petitioner islkthe  Chief
Executive Officer: of the  fherefore,
responsible for affa;irs€:o'f; the.::'E}ank...:A The bank
also is a5"    the criminal

II

prosecution..~..,.:.".; it

12. Sri 'Paatiiv 's"u't)"rri'it.g;':fthéat under Rule 29-5 of the
!~<a.rnatai<a,.§/itrsicsﬁdurn W~a_oes Act, 1958, the petitioners are obiiged

toA'p_r_oldt:'c.e:V th_VeVire--gistVers and records as demanded by the A.L.C.

'.'g_durin_ci'  oxfivnspection of the establishment. Despite

Vfthe-issoanéce anidteceipt of the notice, the petitioners have not

.1~corr€e,toiwéardlto produce the registers and records. It is their

V.'iv."~..coortin'uin'g"Aldefault, which has entaiied in the filing of the

 '  cornp'la'ilnt by the Assistant Labour Commissioner.

83%



13. In the course of rejoinder, Sri Murthy Naik, the learned

counsel for the petitioners submits that the place where--___an

offence has been committed plays an important role; 

presupposes that all offences are local. Section  "

determines the jurisdiction of a Court try'i'ng«the¢   

Court ordinariiy will have jurisdiction oo!yA:'whie_re theo'fi*eVn.;e" 

been committed. in support of hVis~v..:su13missians,,oAhe the

Apex Court judgment inv:-the of M/S"--..I~£v£\RMAN

ELECTRONICS (P) LTD. é{.a_'ANs§; NATIONAL

PANASONIC INDIA,  reirziporitleid i.r§f2oo9" A1}: scw 419.

14. Nextly""Suri i\'lu"i'th'\,it l*la'i'§-: 'brings to my notice the Apex
Court judgthent in th'é~ea§e of R.I(ALYANI v. JANAK C.MEHTA

&"0_'Vl'H;ER$,  in 2009 AIR SCW 1836, wherein it is

'.*,_held th;=it'.evevr't'unde§r"special statute when the vicarious Eiabiiity

V'7,i_s fastened .o"nA.a"'.Vperson on the presumption that he was in

.1 --c'ha'!59e'u'i't--t_heVVaffairs of the Company and responsible to it, ali the

if'V-4"_~.iVng.red'ientsAlaid down under the statute must be fuifiiied. He has

 "relied on the said judghggent for another proposition too --



Company must be made an accused. The relevant paragraph of

the said judgment is extracted hereinbelow:

".27. If a person, thus, has to be proceeded  

being variously liable for the acts of the comp:an;-Q': 

the company must be made an a__(?C!.JS_E.'d.  '

event, it would be a fair thing to7__vdo-..so}, 

fiction is raised both against the Cornpany as 

the person responsible for theVac:ts~..of the  

15. The following questionsfail.fer;rn'yVt:Cogh5,ideration:

0

For an oﬁ'ei'?ce"alle=ged   place within the

te;rritoriaitV5»v_jur}sdictio:n ofmwthe Ankola Magistrate,

whether' the'.lA:_ljVcori?_piain't can be filed with the

_Magistrate 's .Cour't, i;-mil?
"V's-..<Wh'en"l--the abcasea persons are residing beyond the
'te:ri'it;oriaV!.:j_;.1ri'sdiction of the Magistrate, Hubli, is it

l...44Vopen--:ti:VVthe Hubli Magistrate to issue the process

withiout holding the enquiry as to whether or not

rthere is sufficient ground for proceeding: against

petitioners ?

ﬁght.



iii) Whether the complaint as against the Directors___ or

Officers of the Company can be entertained 

Company itseif is not made the accused? 

iv ) Whether the complaint has to:cen.t'ain'at9e'rn*iefiits 

regarding the role and responsibiiiitj/it of*it_s 

and/or Officials of the y?A."

16. In Re-Question  tgtiebmissiontihtitged on
behaif of the respondent that Aasv'i'._i's spread over

four districts, the cora5:pht'tieiti%t can be~nie'd Court in any of the four Districts \i=ii_'thV.thVe'Co'ti:t~t..&:Wi-t'hift Whose jurisdiction his office is situated,'-d'oes""i'it);t»i:tcnj'i'n§'i'id' itseif to me. Section 177 of Cr.P.C. unequivocaily .stat.es'.'that;'every offence shali be inquired intoand triedty by a c'o'uvrt_w3thin whose Iocal jurisdiction it was con91'nnitt;ed»t__ In'«tr'ie°'i.n_stant case, the aileged vioiations of the I-'ﬁgarvovisions Wages Act, 1948 have taken piece at _VV'7B_eIii<--eri in '.i\n.i<'o.i«Va"i;.a|uE<. The aiiied submission urged on behaif .1-of:f:h'et».,resip-Qndvent that since the notice is issued from the A.L.C the compiaint can be filed in Htibii is equaiiy .'u"»v.tJnt'enVaVb'Ie. in the case of M/s i-farman Electronics (P) Ltd. 334% If:

(supra), the l-ion'bIe Supreme Court has this to say in para of its judgment:

"25. We cannot, as things stand today, be Ob/Hit/}"ou,§'\,,_' ll".

of the fact that a banking institutionholding"setterai-1 '- cheques signed by the same horroweijcan'not'_o~nly.,V...' present the cheque for its vencashnient at-i_,foui*. if K different places but also may notices fronj different places so as to enable: it tolfile'. fotir complaint cases at fouri_differehnt_ This only causes grave harassment ;_to 'they' it is, therefore, necess._:~:'i*';if_ in at"cas'e'::of"th:is_natureto strike a balance bet_ir~i:eer}?therigiit uof the vconiplainant and the right of an a_;fc;.ised {iis..z>he".provisi'ons of the Code of?,Criininai..'Proc'e%dure';If_ _ '

17. The i~Vio--nh'b'EeV' Sulpvrherhle Court in Rejendrais case (stipra) na »s Etiaken th'e«....co.nsiderecl view that the territorial jurisdi,c'ti,on' with reference to the criminal offence :3'v§io»uld he ti'ecidedV-Vltieri' the basis of place of occurrence of the _ _jin..c.étIen_t and' nohhtaon the basis of where the complaint was filed. 93%

18. As the aiieged offence has taken piace in Anifzoia Thaiuk, the proceedings before the Hubii Court are wtitr.-oiut jurisdiction. The very fiiing of the compiaint by the . the Hubli Magistrate is bad in iaw. t_i_ence answered in the negative hoiding that the co'rrrpia'int"~has'ttj=.._be:;_:

filed oniy with the Court, which has__'t--e}'ritorivai juris'di'cvt.i'o..nmosrer Beiikeri in Ankoia Thaiuk.

19. In Re-Quesétimfi Ne_t'j4'_';':.-'§he Magistrate "shaii, in a case v\{.h---efriea a place beyond the area in postpone the issue of process-. and hoid the enquiry or direct the investigatioindfoiritttiieiiipiurpose of deciding whether or no4t..o.there,.«.igsitsufficieV'nt~.i_.VgVrouhd for proceeding, is inserted by (An'ien_dnnenA:t'),Act, 2005 (Act 25 of 2005). It has come 7'*,_into tortgéfwittikatreitit"Jfrom 23.6.2006 vide notification dated Vi'7'i31.6i2OG6E."This Iegisiative provision came to be made as false .1c.o'rn'ps%ai"i1§;e.i{irerVe being fiied against the persons residing in far off to harass them. This provision makes it hid'~._Vob'i-igatoiry for the Magistrate to hoid the enquiry or direct the investigation for satisfying himseif that there is sufficient ground for proceeding against the accused, who resides beyond the Magistrates jurisdiction.

20. In the instant case, the territorial jurisdicit-ionv Magistrate, with whom the compiaint is fi'led,"i's ,_co,nfi;ned'»«o_niy"rto Hubli, but the accused are residing in AnkoiaThaluk,:_jT'h'ereiore,itS' the Magistrate's order issuing the ;ji"o@iess withouit, the mandatory enquiry or d"ii'e,ctin.g"W "theVj"-investigation, is unacceptabie. Thus question No.2'isai'iswe_.re'd.A/acbcordingly.

21. In Re~Questi'o'ri:No.3; To.v*':ansirJe1r-question N03 and 4 it is desirabieiifo 'referV"tLfjs.oi:iié*.;{f""th'e'decisions delivered by the Courts whiie con's_i_d"erinxg. tri'e"c:a'ses under Section 141 of the Negotiable.«iinstrurrierits--.,Ac_t,_ 1881 (PH Act for short). The proivisions-»con,t_aine.d'iin_ Section 22--C of the Minimum Wages Act, '.'g_1948 a'r'e:'.a~!<initivtoiftiheinrovisi0ns found in Section 141 of the NJ V'7'A'ct. --

'u_j22.'iiT-he i;ion'bIe Supreme Court in the case of N.l(.WAHI sisitémi HASINGH AND omens, reported in AIR 209'? sc '.,jv..14E*;'.<-iﬂhas held in para 7 of its judgment as foliows:

851%.

I9 "This provision clearly shows that so far as the Companies are concerned if any offence is committed by it, then every person who is a Director or employee of the Company is not liable. Only persons would be held liable if at any time offence is committed, he was incharge ¢_a'ln't:"l*-- "

responsible to the Company for the business of the Company as well a1sl.__thexCornplah}, ' Merely being a Director ofV'thLe"~._%Com'pany.yin absence of above factors' will not__make.._himliable. " V}

23. In the case of Court has taken the View that{'thé;jy.t.CQn'f;i;an:y""xmu's.tVhe-miade an accused.

The Caicutta Chandra (supra) heid that the has the Firm was not made a Damn The .i8aEd'b4c"35_:€: fell consideration under the Minimum '2'2.4:Lcase, for the reasons best known to the the.44__Compab'n.ylis not made a party. On this ground too, ' "t3hiVe'~c_omAplaint Esﬁiabie to be quashed.

25. In Re-Question No.4: I am now engaged with____the last question. In the case of N.K.Wahi (supra) it is heid iaunch the prosecution against a Director, there specific: aliegation in the comptaint as to the part in the transaction. As held by the Ape>:€gCo'_:urtiv S.M.S.PHARl\/EACEUTICALS i.'rp.,"y_;~-...;\tEe1'Agg 5'i1':itg'L/rt{A_,_s.;.\:§te ANOTHER, reported in AIR 2905 ctieari-riﬂasgeiihas to be spelt out in the complaint '«petr:g.t§V:n.g:.VSought to be made liable. It is aiso 4pnr'o.fE'tattie'to Supreme Court's decision PATTA v.

STATE reported in AIR 2oo7 sc 915:, wheteihifttfirstg'he&ii§i"'-ethait oniy those persons who can be connectedwithg the .'co.n1rn'i.tssion of offence at the retevant timecan be§subj~ectedV.'t'e.. prosecution. eithveu.f'Vc.a'se of \l.G.SREERAM & ETC. v. i"vV3s'MT_.IN9AU«MAn CHANDACHAL AND omens, reported in i":zo'o:ig"tcr:V,gL.j'-3e09, the Supreme Court has heicf that if the bereft of the detaiis of specific roles assigned to ﬁg!-£ each of the Directors of the Company, then the complaint as against them is iiabie to be dismissed.

27. On the perusai of the aforesaid decisions, trite that the making of the averment to satisfy the if of Section 141 of N.I.Act is imperative for"'a'ttrac.ting."

provisions of constructive/vicarious IiabiIity}_ if

28. However the position is dpi_f_f:é'rent._y_in the.f_c_ase_f? of the Director of the Company. Iri'---.i;i'ie 'i--.ca:s'e. :N.._RANGACHARI v. BHARAT SANCHAR. Vnzemviv..LzM1r»gp;}}reported in 2007 Cr|.L.J., 2448, the that the Qirectors of a company are prirna_Vifa,cie .ih'ithe.:p'osition of managing the affairs of _.--th_e Co»ni'1.pa_riy.V "i".h"e--i.co__rnpIaint as against the Director of a C'on'ip:a'nyywiVti1ou_t"'making specific averments regarding his '-'ﬁroytes and"-Fresp'o:ns'iIbViIities is therefore stili maintainabie. 'However, the'".sarne cannot be said of the Officers o.f the If the Officers of the Company are to be made the A'~"_accu«s'ed"§persons, then the com iaint has to disciose their 3"} rotes and responsibilities in the Company and particularly in Committing the offences.

29. It is worthwhiie to refer to the Hon'bIe sememtee Court's judgment in the case of K.K.AHUJA v.

ANR., reported in 111 (2009) BC 676v.(S€--). that to be vicariousty liable under Sectioh'--.:411Ai.'{t1'jV ott*"i:h Ae~.¥:\V1.{V. a person shouid fuifii the iegal requirenrent of oein_g»~-a in law responsible to the compamf for:rtheo_e.o'h»d'ncttof'vb:Js~ihess of the company and the 'factual vhpierng a person in charge of the a person [game unde,-tip 'mechanical repetition of requirements un'de_r"Seetton.'._1"«4i_(~1) wiii be of no consequence. The.._retevaniltuptaragreph.s__o_fthe said judgment are extracted herei_nbei'o--w; M "i~1;'7._rhe Iiabiiity for the offence by a Comfiesan}/.__"z.mVder Section 138, is fastened vicariously the"p_e~rsons referred to in Subsection (1) of V' 141 by virtue of a legai fiction. Pena! .'_jQ'_.sfatLites are to be construed tstricﬂy. Pena! statutes ' ﬁﬁfi t .1 '\.¢J providing constructive vicarious liability should be construed much more strictly. When conditions are prescribed for extending such constructive cri'rninai"_;~.'__' liability to others, Courts will insist upon strict if co ia . er ' ue i .i_ relate 4' mlnce Th eisno sto of nfe=til_ irnplied compliance. Therefore, a specifiicfi'av'arn.'ient"'V"-s complying with the requirements of'Section 14.1': is' imperative. As pointed out ii)~..iii§';"S»rikanth. North East Securities Ltd, viiyig,éjao7;x_.gsLr' 334;:iir (2007) on (Crl.) 73t2«..th'iisc)'_¢.-=rv_ac 375 (SC)m-III(2007) CCR 254(sc,1Vi=;?'oo'7 788, the mere fact thatjsat scirneh an officer of a company .ri.adhAltplayed.sorne--.:'role' financial affairs of sufficient to attract _l'iab_ility Section 141 of the Act. Vh Q .

12.Sub---.section,_:(2}'fofA"Secti'on 141 provides that a * ..Qirect§3r,:,_Manager] 'S--e.cretary 'or other officer, though cha;':g'eL"c3f__the conduct of the business of the cornp_,3jjy.4:"'ivill liable if the offence had been cornnjiitted. with his consent or connivance or if the ".Qff€f7C&~~ vvasva result of any negligence on his part. kxffheihiiability of persons mentioned in Subsection (2) i._is_n'ot7on account of any legal fiction but on account _o_f5the specific part played -- consent and connivance or negligence. ff a person is to be made liable under__ Subsection (2) of Section 141, then it is necessary._u"'r._V to aver consent and connivance, or negligence ~ part. "

30. The preponderance of judiciai':.yie'wr~iis aiso ref|:ect'etd"T1&in the decision of Aiiahabad High in the DEVI v. snrre or= U.P. 83ANr§.y,...ii€eg;osa:§ed"in.ﬁt_(V,éoo9) BC 543, wherein it is held thaVt"'the.,ceiji'1p'i'ai'h'tVc:a.o«ainst the Managing Director is maintainabie ﬁbirectors where specific avermentsia're:i_aci-:4i':;;g'€.i' paragraph of the said jL:dgment__.is_ "I5. Azhlohok at would reveal that the compiainiant has -not "assigned any role to accused . to 9 nharnely Shri Madan Mohan Gulathi, Shri V p;?en§ iitéuiatnpi, Shtl""Dinesh Gulathi, Shri Chitranjan Géulaethgii.,and~_Si:'it.Brahma Devi. Oniy this much is ivisibley complaint that they were the V the Company at the time when the ..chequ'e---Lwas issued. Merely because they were the 'Qi_re.:tors in the Company, they cannot be deemed to be guilty under the N.I.Act and proceeded against "unless it is averred in the compiaint that at the ﬁe:-L relevant time they, were incharge of and were responsible to the company for the conduct of its business and because there is no such avement the complaint about this fact against these accosedj persons, hence, they cannot be deemed to be and cannot be proceeded againstr»..'Myth.yieyir-'I,is'.V"

fortified by l<.p.G.Nair V. Jindai Menthoi (supra) and State of Haryana .y. Mittaiy. 2 (1998) SLT 795 9 II (1998) cc'R:246 (sc*,2_'::»»cr[: 9V9ej' i 5 scc 343. " y

31. Simpiy because a pVe'rs.ony isa{.DVi.r'e--ct'o.r'Of a company, it does not necessarily 'm_ean:.~'ti':ia--tf' 'Jiiabie to be prosecuted. !:onyei'r*~sieiy, izzeinomav Director, a person can be incharge ofVant£ canyyibe'Vre'eoo»ns'ible to the company for the conduct of its.,busén'es_s. ' ii'32}_.fE*Vhe:}3.§n'4Vb%eV"_E3uprerne Court reiterating the position in vmiikavngachari in the subsequent case in NATIONAL iémjtri. xnousrexes comm. LTD. v. HARMEET SING}-I AK.«t'E5A'Ii§iTiAe!,,teported in (2010) 3 sec 330 has held that for 'pua'ssing__5the criminal liabiiity there is no presumption that every £333.

26 Director knows about the transaction. Vicarious liability on..the part of the person must be pleaded and proved and not There shouid be necessary averment in the complainrjasvto"h'ow..""--i "

and in what manner the accused was .r*uil.t of coinsenti' V vs vs is _ ..

connivance or negiigence and therefore, 7.'re'spoin'si:bl--e Section 141(2) of the NI. Act. l-iVo,vyfev_er, if Vt2he_VVAaVccuse'd~~~is a Managing Director or a Joint,Managiingf"g'Dir'ec.torithen it} is not necessary to make specific c'oi'rI_plaint and by virtue of their position they are'Vl'i'a'bi'e against.

33. In the i:ai~siyiii)cno~ v. Sk.S ALI, reportecVi__in_ Caicutta High Court while exarnining .' under the Minimum Wages Act, 1948 held thatgthe wrongiy taken and quashed the_.p.roceediingvs'~as thVe'r'eV:iiii_a'sA:no whisper in the corripiaint as to hovﬁthe:'«partners'i.iN~ere responsible to the company for the ﬁconduct Vi5uAVs'i'»n.e's;;s"Vor in what way they were responsible to Vite'; the failure totgdo so is fatai to prosecution. It is not averred in that the petitioner No.2 has anything to cieai with ii"ii.'p.ers--ojna"I~l~y'in:the discharge of his either statutory or official duty. paramount duties of higher judiciary is to see that a 993%! person who is apparently innocent is not subjected to the ordeal of trial on the basis of an untenabie complaint.

34. Viewed in the background of the case--law _ references are made hereinabove, the complaint a'sx-e.rrifien'ts are it to be scrutinised. There are no averments w.h_avts'oe'ver---against;i the petitioners regarding their roies.»an_ci responsibilit'i'e'sVV.i 13' petitioner is the Managing Direction, he iacie in charge of the affairs of the Tihe.re,i'oire the compiaint as against him cannot be quashed there being no specific averrnentsgvag}3ii'n,st_hirn._ Ho4we\}'er,'"the petitioner N02 is only a Managieir." i\io'i.V?.'Vcannot be prosecuted, merely on holoingthelYl.ainijaigerfs"'»post in the Company. In the absence of any averrnvent,'-th'e complaint is not entertainable as against. the--..€pe.tti~tio'in.er In the result, I answer question . No.4"pai'tly'"inftshe-ill'affirmative and partly in the negative by V7.!ho'iiding thatVicom.p:ia_s.1Vt is entertainabie as against the petitioner he i's.,ttse Managing Director of the Company but not if.44entertaiirsa_bl:e' as against the petitioner No.2, as he is the 333% Manager of the Company and as there are no specific averment in respect of him.

35. In the resuit, 1 allow this petition and' eiiitéire proceedings in C.C.No.884/2008. it opinion is expressed on the merits is confined to the four specific,questionqivjfé-rinii'Eate'd"'hieireinabove and answered thereto. Liberty-It '~t_Q the A.L.C (Assistant Labour Corrin1.§_ssion'e'r")' constituted compiaint with V it it

36. oftiaccordingiy. No order as t0 COStS.

Safe TCFDGE nr2ri:x--=--. A. i

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