SHRENIKRAJ Vs. LABOUR OFFICER RAICHUR

JUDGEMENT

(1.) ON a complaint made by the Labour Officer, Raichur Sub -Divisions, Raichur, alleging contravention of rules 4(a), 4(b) and 4(c) of the Payment of Bonus Rules, 1975, and consequent to the commission of an offence punishable under section 28 of the Payment of Bonus Act, 1965, the JMFC., Raichur, having issued process against the petitioners, the petitioners appearing before the magistrate, made an application on February 17, 1981, to dismiss the complaint on the ground that the firm had not been made a party. The magistrate having dismissed that application, they approached the Sessions Judge in Cr. R.P. No. 30 of 1981 and the Sessions Judge having dismissed the revision by his order dated September 14, 1984, they have approached this court invoking the inherent powers under section 482 of the Code of Criminal Procedure.

(2.) MR . Raikote, learned counsel for the accused -petitioners, argued that the firm being the employer under the provisions of the Payment of Bonus Act, 1965, not only the prosecution against the partners alone was not maintainable, but on such complaints, in the form in which it has been made to the Magistrate, the Magistrate was not justified in taking cognizance of the offence and the proceedings as initiated being wholly illegal are bad in law and deserved to be quashed.

(3.) /8/2014 Page 2 of 2 situated in Hyderabad Road, Raichur, on a particular day and petitioner No. 1, who was present in the office, was unable to produce the registers when called upon to do so. The firm, which is the employer, had committed the offence. The firm had not been arrayed as an accused, but the fact that the firm has not been arrayed as an accused by itself is not sufficient to hold that no such prosecution could be brought against the partners of the firm, without impleading the firm as an accused. That position of law is now well settled by the decision in the case of Sheoratan Agarwal and Another Vs. State of Madhya Pradesh, AIR 1984 SC 1824 . Their Lordships of the Supreme Court, considering similar provisions in section 10 of the Essential Commodities, Act, 1955, have observed that there is no statutory compulsion that the person in charge or an officer in charge of the company cannot be prosecuted unless he be ranged alongside the company itself; the company alone may be prosecuted; the person in charge only may be prosecuted : or one or all may be prosecuted. Therefore, the Magistrate, it appears, was justified in dismissing the application; but if that was all, then naturally the petition had to be dismissed. Unfortunately, here, in this case, not only the firm has not been prosecuted, but the allegations made in the complaint do not disclose that any of the petitioners arrayed as accused in the complaint was in charge of or was responsible to the firm in the conduct of the business of the firm. All that has been stated in the complaint is that petitioner No. 1, Sri Shrenikraj, was present when the inspector visited the office of the firm and called upon him to produce the registers required to be maintained. That has a very important bearing on the propriety of the Magistrate taking cognizance of an offence on that complaint; because section 29 of the Act provides that if a person committing an offence under the Act is a company (which as explained under the section also means any body corporate and includes a firm or other association of individuals), 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. It, therefore, follows that merely arraying the partners of the firm is not sufficient. The complaint must also state that one or the other of the partners of the firm arrayed as accused in the complaint was in charge of and was responsible to the firm for the conduct of the business of the firm at the time the offence was committed. Similar question arose for decision in the case of R. D. Shukla v. State of Bihar before their Lordships of the High Court of Patna. There, as in the case on hand, where partners were only named in the complaint without arraying them as parties or making any specific allegation that any of the partners so named was entrusted with the business of the firm and was responsible for the conduct of the business of the firm, it was held that the complaint must show that certain partner or the managing partner or manager was entrusted with the business of the firm and if that description is missing, then all the partners cannot be proceeded against for violation of any rules. The Magistrate, in the absence of these material allegations necessary, was not justified in taking cognizance of the offence against the petitioners, inasmuch as the complaint did not disclose that any of the accused -petitioners was responsible for contravention of the rules, constituting an offence punishable under the Act. Therefore, taking of cognizance against the petitioners by the Magistrate on such bald allegations, without there any allegation that they being entrusted with the business of the firm were responsible to the firm for the conduct of the business, being bad in law, the proceedings are vitiated and are liable to be quashed. 4. In the result and for the reasons stated above, the petition is allowed. The process issued against the petitioners is set aside and the proceedings are quashed.