Kerala High Court
Thomas John Muthoot vs State Of Kerala on 22 October, 2024
Author: K. Babu
Bench: K. Babu
2024:KER:78655
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE K. BABU
TUESDAY, THE 22ND DAY OF OCTOBER 2024 / 30TH ASWINA, 1946
CRL.MC NO. 6113 OF 2024
(STC NO.157/2021 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-
II, THALIPARAMBA)
PETITIONER/ACCUSED:
THOMAS JOHN MUTHOOT, AGED 61 YEARS
MUTHOOT FINCORP LIMITED FIRST FLOOR,
GLASS EMPORIUM BUILDING TALIPARAMBA,
KANNUR, PIN - 670141.
BY ADVS.SRI.AJITH S.
MAYURI A. NAIR
MUHAMMED OWAIS
RESPONDENTS/STATE.COMPLAINANT:
1 STATE OF KERALA
REPRESENTED BY PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, PIN - 682031.
2 ASSISTANT LABOUR OFFICER
TALIPARAMBA, KANNUR, PIN - 670141.
BY PP SMT.NIMA JACOB
THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION
ON 22.10.2024, THE COURT ON THE SAME DAY PASSED THE
FOLLOWING:
2024:KER:78655
Crl.M.C.No.6113 of 2024 2
"C.R"
ORDER
The petitioner, the Managing Director of Muthoot Fincorp Limited seeks to quash all further proceedings in STC.No.157/2021 on the file of the Judicial First Class Magistrate Court-II, Thaliparamba. The petitioner is alleged to have committed offence punishable under Section 22A of the Minimum Wages Act, 1948 r/w Rule 21A(1) of the Kerala Minimum Wages Rules, 1958. The petitioner's company is a private financial institution as provided in the schedule to the Minimum Wages Act, 1948.
2. The Assistant Labour Officer, Thaliparamba (respondent No.2), the Inspector appointed under the Minimum Wages Act, 1948 (hereinafter referred to as 'the Act') inspected the establishment run by the petitioner on 22.9.2020 at 10.30 a.m. and found that five workers were employed there, but the petitioner failed to submit electronically or upload an IT enabled 'Register of Employment and Wages' in Form XIV as provided under Rule 21A(1) of the Kerala Minimum Wages Rules 2024:KER:78655 Crl.M.C.No.6113 of 2024 3 (hereinafter referred to as 'the Rules'). Respondent No.2 filed a complaint under Section 22A of the Act alleging violation of Rule 21A(1) of the Rules against the petitioner. The learned Magistrate took cognizance of the offence under Section 22B of the Act.
3. I have heard the learned counsel for the petitioner and the learned Public Prosecutor.
4. The learned counsel for the petitioner submitted that the complaint does not constitute the offence as alleged. The complaint is silent as to whether the rule, violation of which is alleged, is applicable to the establishment, the employer of which is described as the petitioner. It is submitted that Rule 21A of the Rules is applicable only to the employments enumerated in the Appendix to the Rules. It is further submitted that the prosecution is barred as the company has not been made as an accused in terms of the mandate in Section 22C of the Act. The learned counsel for the petitioner relied on Dayle D'Souza v. Government of India through Deputy Chief Labour Commissioner (AIR 2021 SC 5626) in support of his contentions.
5. The learned Public Prosecutor, in support of the prosecution, submitted that as the establishment run by the petitioner 2024:KER:78655 Crl.M.C.No.6113 of 2024 4 has been registered under the Kerala Shops and Commercial Establishments Act, 1960, it comes under the definition of "commercial establishment" as provided in the Kerala Shops and Commercial Establishments Act, 1960. The learned Public Prosecutor further submitted that as per Section 17 of the Kerala Shops and Commercial Establishments Act, the entire provisions of the Act shall be made applicable to whole or any class of employees in the establishment in which the Act applies.
6. In answer to the contentions of the learned Public Prosecutor, the learned counsel for the petitioner submitted that in the Minimum Wages Act, 1948, under which the Rules have been framed, the Legislature, has separately identified 'employment in shops and establishments' and 'employment in private financial institutions'. It is submitted that while enacting the Rules, the Legislature has specifically excluded the employments other than referred to in the Appendix to the Rules. On the application of Section 17 of the Kerala Shops and Commercial Establishments Act, the learned counsel for the petitioner submitted that Section 17 refers to Payment of Wages Act, 1936 whereas, the petitioner is proceeded against with the aid of the 2024:KER:78655 Crl.M.C.No.6113 of 2024 5 Minimum Wages Act, 1948, and the Rules framed thereunder. The learned counsel for the petitioner added that the complaint does not contain specific pleading as to whether the establishment comes under the definition of 'employment' under the Kerala Shops and Commercial Establishments Act, 1960.
7. The employments that come under the Minimum Wages Act, 1948 are enumerated in the schedule appended to the Act. As per Section 30 of the Act, the Government may make rules for carrying out the purposes of the Act. The Kerala Minimum Wages Rules, 1958 has been enacted in exercise of the powers conferred by Section 30 of the Minimum Wages Act, 1948. Rule 21A of the Rules reads thus:-
"21A. Payment of wages through I.T. enabled wages payment system.- (1) Notwithstanding anything contained in these rules, employers of the scheduled employment as specified in the Appendix shall submit electronically or upload an I.T. enabled 'Register of Employment and Wages' in Form XIV through Labour Commissionerate Automation System.
(2) Employers of the scheduled employments specified under sub-section (1) shall pay and disburse the wages to the employees only through individual bank accounts."
8. As per Rule 21A, the employers of the scheduled employment as specified in the Appendix shall submit electronically or 2024:KER:78655 Crl.M.C.No.6113 of 2024 6 upload an IT enabled 'Register of Employment and Wages' in the specified form through Labour Commissionerate Automation System.
9. The employments specified in the Appendix to the Rules are the following:-
(I) Employment in Shops and Establishments.
(ii) Employment in Private Hospitals, Dispensaries, Pharmacies, Clinical Labs, Scanning Centres, X-ray Units and Other allied institutions,
(iii) Employment in Star Hotels,
(iv)Employment in Security Services,
(v) Employment in Computer Software.
(vi) Employment in Private Educational Institutions (Non-teaching).
10. It is the case of the petitioner that the establishment of the petitioner has been excluded from the schedule appended to the Rules. The case of the prosecution is that the establishment of the petitioner comes under "Employment in Shops and Establishments". The learned counsel for the petitioner submitted that in the Minimum Wages Act, 1948 the Legislature has consciously treated employments in shops and establishments different from the employment in private financial institutions. The learned counsel relied on the schedule 2024:KER:78655 Crl.M.C.No.6113 of 2024 7 appended to the Act to support his contention.
11. The relevant portion of the schedule appended to the Minimum Wages Act is extracted below:
"THE SCHEDULE (PART I) xx xx xx
21. Employment in Shops and Establishments (including hotels and restaurants) xx xx xx
85. Employment in private financial institutions."
12. Sl.No.21 in the schedule is employment in shops and establishments (including hotels and restaurants) and Sl.No.85 is employment in private financial institutions.
13. In the Appendix to the Rules, the employment in private financial institutions is excluded. Violation of Rule 21A of the Rules is applicable only to the employers of the scheduled employment as specified in the Appendix to the Rules. The petitioner's company/establishment does not come under the scheduled employment as specified in the Aappendix to the Rules. The prosecution shall fail on this ground alone.
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14. Coming to the submission of the learned Public Prosecutor that as per Section 17 of the Kerala Shops and Commercial Establishments Act, 1960, the provisions of the Payment of Wages Act, 1936 shall be made applicable to any class of employees in the establishments in which the Act applies. The learned Public Prosecutor submitted that the petitioner's establishment had been registered under the provisions of the Kerala Shops and Commercial Establishments Act, 1960. It is an Act to consolidate and amend the law relating to the regulation of conditions of work and employment in the shops and commercial establishments in the State of Kerala. Section 17 of the Kerala Shops and Commercial Establishments Act, 1960 refers to the Payment of Wages Act, 1936. The Payment of Wages Act, 1936 has been enacted to regulate the payment of wages of certain classes of employed persons. The prosecution in the present case has been initiated against the petitioner under the Minimum Wages Act,1948 and the Rules thereunder. The Act has been enacted to provide for fixing minimum rates of wages in certain employments. Therefore, Section 17 of the Kerala Shops and Commercial Establishments Act, 1960 has no application in the present facts.
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15. The petitioner has a contention that in the complaint there is no specific pleading as to whether the establishment concerned comes under the definition of 'employment' under the Kerala Shops and Commercial Establishments Act, 1960. I have gone through the complaint. The submission of the petitioner has force.
16. The learned counsel for the petitioner has projected another fatal defect in the prosecution as the Company has not been made as an accused or even summoned to be tried for the offence. The learned counsel for the petitioner submitted that as per Section 22C of the Minimum Wages Act, 1948, the liability of the persons in charge of the company only arises when the contravention is by the company itself. Section 22C of the Act reads thus:-
"22C. Offences by companies.--(1) If the person committing any offence under this Act is a company, every person who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was 2024:KER:78655 Crl.M.C.No.6113 of 2024 10 committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer of the company, shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section,--
(a) "company" means any body corporate and includes a firm or other association of individuals, and
(b) "director" in relation to a firm means a partner in the firm."
17. In State of Madras v. C.V.Parekh [(1970) 3 SCC 491], while dealing with Section 10 of the Essential Commodities Act, 1955, the Supreme Court held that the liability of the persons in charge of the Company only arises when the contravention is by the Company itself. In Aneeta Hada v. Godfather Travels & Tours (P) Ltd. [(2012) 5 SCC 661] in the context of Section 141 of the Negotiable Instruments Act the Supreme Court held that for maintaining the prosecution, arraigning of a company as an accused is imperative.
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18. Dayle De'Souza v. Government of India Through Deputy Chief Labour Commissioner (AIR 2021 SC 5626), the Supreme Court, following the law declared in C.V.Parekh and Aneeta Hada (supra), in the context of Section 22C of the Act, held that there is difficulty for the prosecution to proceed if the company has not been made an accused or even summoned to be tried for the offence. The Supreme Court held that prosecution of the company is mandatory.
19. The averments in the complaint do not reveal any offence. The continuation of the prosecution is an abuse of the process of the Court. Annexure A complaint and all further proceedings in STC.No.157/2021 on the file of the Judicial First Class Magistrate Court- II, Thaliparamba, therefore stand, quashed.
The Crl.M.C. is allowed.
Sd/-
K.BABU Judge TKS 2024:KER:78655 Crl.M.C.No.6113 of 2024 12 APPENDIX OF CRL.MC 6113/2024 PETITIONER'S ANNEXURES Annexure A series CERTIFIED COPY OF THE COMPLAINT IN STC NO: 157/2021 AND THE DOCUMENTS PRODUCED ALONG WITH THE COMPLAINT.
TKS