INDIA CEMENTS LIMITED Vs. DIRECTOR GENERAL OF MINES SAFETY DIRECTORATE GENERAL OF MINES SAFETY MINISTRY OF LABOUR AND REHABILITATION GOVERNMENT OF INDIA DHANBAD

JUDGEMENT

(1.) THE petitioner has approached this Court for issue of a writ of mandamus directing the respondents to accept the nomination of the respective General Managers of the respective cement manufacturing units at Sankar Nagar and Sankaridurg of the petitioner company nominated by the Board of Directors as owners of the mines attached to the respective cement manufacturing units for the purpose of Sec.76 of the Mines Act, 1952. the brief facts leading to the writ petition may be summarized as follows.

(2.) THE petitioner namely THE India Cements Limited is a company incorporated under the provisions ofIndian Companies Act, 1913. THE main object of the company at the time of incorporation was to manufacture and sell cement. In the course of time, the company besides the cement manufacturing activity also engaged in the other business activities such as shipping, real estate and property development, manufacturing of calcium carbide, manufacturing of foundry products through its different units established for the said purposes. THE management of the company is being carried on through the Managing Director of the company who discharges his duties and responsibilities under the guidance and supervision of the Board of Directors of the company. THE General Managers are appointed to carry out the day-to-day operations and activities of each of the units and such General Managers are responsible for the affairs and management of each of the units. THE Board of Directors of the Company are persons of eminence having expertise and sound knowledge in their respective fields such as finance, technical, legal etc. In view of their eminence and expertise, these Directors are not only Directors of the petitioner company but also the Directors in other corporate bodies. THE office of the Managing Director who functions under the control and superintendence of the Board of Directors of the company is located in Madras. For manufacturing of cement, the company has three cement manufacturing units. Two units are located in the State of Tamil Nadu, one at Sankarnagar, Nellai Kattabomman District (presently known as Tirunelveli District) and the other at Sankaridurg, Salem District. THE third manufacturing unit is located at Chilamakur Village, Cuddapah District,Andhra Pradesh. All the three units are managed by the respective General Managers of the unit. THE principal raw material required for manufacturing of cement is limestone and for its requirements the company has its captive limestone mines attached to the respective cement manufacturing units of the company. THE limestone obtained from the mines are utilized in the respective units for manufacturing cement. Since the three manufacturing units are located in different places, it would not be possible for a single person to assume control and management of all the three units, General Managers have been appointed to manage the day-to-day affairs of each unit. THE General Managers so appointed are qualified engineers having sound technical knowledge and exercise effective administrative control to manage the affairs of the cement manufacturing units which included the mining activities in the mines attached to the units. THE General Managers so appointed were nominated as owners under the Proviso to Sec.76 of the Mines Act, 1952. THE Board of Directors of the Company resolved in their resolution on 20.12.1990 nominating one Mr.P.K.Subramanian as owner of the mine in respect of the mines attached to the Sankarnagar unit. In respect of the Sankaridurg cement manufacturing unit at Salem, District, after the retirement of the then General Manager Mr.G.Ramji, by a resolution of the Board of Directors dated 23.10.1992 one Mr.R.Arunachalam was appointed as the owner of the mines attached to the said manufacturing unit. Similarly, in respect of the Chilamakur cement manufacturing unit in Cuddapah District, Andhra Pradesh, after the demise of the then General Manager late Mr.N.Lokanathan, the Board of Directors in their resolution dated 27.5.1994 appointed one Mr.D.Sivagurunathan as the owner of the mines attached to the said factory. After the appointments of the above individuals as General Managers, the respondents were informed of their nominations as owners under Sec.76 of the Mines Act, 1952 (hereinafter referred to as "the Act" in respect of the Sankarnagar and Sankaridurg units by letter dated 24.12.1993. However, the said nominations were rejected by the respondents with further direction that if the company were to take advantage of Sec.76 of "the Act", only a Board of Director of the company should be nominated as owner. Several representations dated 11.4.1994, 8.6.1994, 25.7.1994 and explanations from the petitioner company did not yield any fruit with the respondents. Since the request of the petitioner nominating the General Managers as owners of the respective mines at Sankarnagar and Sankaridurg have not been accepted, the petitioner is constrained to file the present writ petition.

(3.) COMING to theMines Act, 1952, the object is more specific where it has been clearly stated that the Act was to amend the consolidated the law relating to the regulation of labour and safety in mines. The Mines Act is also a piece of social welfare legislation enacted primarily with the object of protecting the workmen employed in the mines against industrial and occupational hazards more particularly, keeping the safety of the workmen as paramount. Therefore, theMines Act provides for stringent provisions relating to the obligation of the owners with a view to protect the workers and to secure to them employment and condition conducive to their health and safety. With the above object in mind, some of the provisions of theMines Act, 1952 are to be considered. Sec.2(1)(h) of "the Act" while defining a person who is said to be employed in a mine included the manager also thereby indicating that the manager is construed to be a person said to be employed. Sec.17 of the Act relates to a condition that every mine shall be under a sole manager who shall have the prescribed qualification and the owner or agent of every mine. Therefore, there is a compulsion on the part of the company to appoint managers in respect of every mine. The company is also punishable with imprisonment for a term which may extend to three months or with fine which may extend to Rs.2,500 and with both when it fails to appoint such manager. The Proviso to Sec.17 also stipulates that even the owner or agent may be appointed as manager provided such owner or agent possesses the prescribed qualification. Sec.18 of the Act prescribes the duties and responsibilities of owners, agents and managers. Under Sub-sec.(2) of Sec.18, the responsibility in respect of matters provided for in the rules made Clauses (d), (e) and (p) of Sec.58 shall be exclusively carried out by the owner and agent of the mine and by such person other than the manager whom the owner or agent may appoint for securing compliance with the aforesaid provisions. Rules that can be made in Clauses (d), (e) and (p) of Sec.58 relate to maintenance of mines in regard to certain facilities wherein women are employed, and requiring the provision and maintenance of any mine specified by the Chief Inspector or Inspector where there are more than 250 persons re ordinarily employed, of a canteen or canteens for the use of such persons. In so far as the provisions of Clauses (d), (e) and (p) of Sec.58, the managers have no responsibilities as the duties and responsibilities of the managers are subject to the conditions enumerated under Sub-secs.(1), (2) and (3) of Sec.18. A reading of the above Secs.17 and 18 of the Act goes to show that managers have no ultimate control over the affairs of the mines in respect of all matters concerned in such mines. Therefore, managers cannot be made responsible for contravention of the provisions of the rules made under Clauses (d), (e) and (p) of Sec.58. In the light of the above discussion, the provisions of Sec.76 of the Act is to be considered. As pointed out by the learned Additional Advocate General, when theMines Act, 1952 was enacted, Sec.76 provided for prosecution and punishment where the owner of a mine is a public company anyone of the Directors of the company may be prosecuted and punished provided such public company was also empowered to nominate any of its Directors as owner for the purpose of Sec.76. The said Act was amended by amendmentAct 62 of 1959 where in the place of anyone of the Directors who could be considered as owner of the mine in the case of public company, all or any of the Directors of the company were treated as the owners of mine for the purpose of Sec.76. A company also was empowered to nominate anyone of the Directors as the owner of the company under proviso (C). However, a condition was imposed for such Director being appointed as owner wherein such Director shall be a resident in the place to which the Act extends and he is in charge of the management or holds the largest number of shares and shall also continue to be in charge and holds the largest number of shares. By subsequent amendmentAct 42 of 1983, for the first time the company is empowered to nominate any of its Directors or manager shall be in charge of the management or holds the largest number of shares in such company. Based upon the above amendments Mr.R. Muthukarumarasamy, learned Additional Advocate General submitted that in view of the inclusion of the manager in the amendment Act 42 of 1983 and by applying the dictum of the Supreme Court laid down in the judgment reported in Jugalkishore Saraf v. M/s.Raw Cotton Co. Ltd. Jugalkishore Saraf v. M/s.Raw Cotton Co. Ltd. Jugalkishore Saraf v. M/s.Raw Cotton Co. Ltd. (1955)1 MLJ. 220 (S.C.): (1955)1 S.C.R. 1369: 1955 S.C.J. 371: A.I.R. 1955 S.C. 376 and if the said provision is read literally in its ordinary, natural and grammatical meaning as used by the legislature, the managers, the General Managers as in this case could be nominated as owners of the company. His contention is that there cannot be a different interpretation to the said Section as contended by the learned counsel for the respondents by insisting the Directors alone could be appointed as Director when such Directors are appointed as manager. It is true that when any of the provisions of the statute is interpreted, the provision has to be read literally considering its ordinary, natural and grammatical meaning. However, while interrelating a statue, the object of the enactment has to be necessarily taken into consideration. As found, the object of theMines Act is to regulate the labour and safety in mines and the Act is social welfare legislation. Therefore, only stringent provision relating to the obligation of the owner and the manager have bene enacted. In" (1584)3 Co Rep 7a (V) it was established as one of the sound rule of construction of a Statute for the sure and true interpretation of all Statutes in general for discerned and consideration as follows. [Italics supplied] "The true reason of the remedy; and then the office of all the judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and "pro private commode" and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, " pro bono publico"". When the Statute is interpreted, the Court has duty to see that by such interpretation the very object of the Act should not be defeated. In this context, it is to be noted that since a company is a legal abstraction, it can act only through its agents who in fact control and determine the management and are the center of its personality. Such agents are generally called the Directors being the"directing mind and will" of the company. The legislature by enabling the companies to nominate its managers under Proviso to Sec.76 did not detract from the generality of the main provision of Sec.2(1)(l) and the main provision of Sec.76 of "the Act". Sec.2(1)(l) which defines the owner of the mines included the immediate proprietor or lessee or occupier of the mine also to be the owners but does not include a person who merely receives a royalty or rent from the mine or is merely the proprietor of the mine subject to any lease, grant or licence for the working thereof or is merely the owner of the soil and not interested in the minerals of the mine but included any contractor or sub-lessee for working of a mine. Therefore, the owner should be a person who has ultimate control over the mine and not merely a person who receives royalty or rent from the mine or a proprietor of a mine subject to any lease grant or licence for the working when such owner is made liable for prosecution and punishment under Sec.76. The legislature intended to make all or any of the Directors of a company as occupier when the owner of the mine is a company. However, when the company was empowered to nominate any of its Directors or managers as the owner, it shall necessarily mean that such nomination should be from among all or any of the Directors only. The inclusion of the manager would necessarily mean the manager appointed under the Proviso to Sec.17 which provided that the owner or agent may appoint himself as manager if he possesses the prescribed qualification. Sec.76 also provides that merely because a Director or a manager is nominated as the owner, it need not be accepted unless such Director or manager resides in any place to which the Act extends and who is in each case either in charge of the management or holds the largest number of shares in such company to assume the responsibility of the owner of the mine so long as such Director or manager continues to be in charge and holds the largest number of shares. In view of Sub-secs.(1) to (3) of Sec.18, the duties and responsibilities of the managers appointed under Sec.17 are limited and is not absolute. In such event, the word manager used in Sec.17 are limited and is not absolute. In such event, the word manager used in Sec.76 shall be only relatable to the managers appointed from among the Directors. There is a vast difference between a person having the ultimate control of the affairs of the mines and the one who has immediate or day-to-day control over the affairs of the mines. In the case of a company, the ultimate control of the mines, where the company is the owner of the mines, always vests in the company, through its Board of Directors. The manager or any other employee, of whatever status, can be nominated by the Board of Directors of the owner company to have immediate or day-to0day control of the affairs of the mines. Even in the affidavit filed in support of the writ petition, the petitioner has specifically stated in paragraph 3 as "the General Managers have been appointed to manage the day-to-day affairs of each units", which would mean that the General Managers do not have the ultimate control over the affairs of the company to assume the responsibility of owner of the mine. It is the further case of the petitioner that these General Managers were appointed by the resolution of the Board of Directors and therefore they can be nominated as owners. While interpreting Sec.2(n) of the Factories Act, the Supreme Court in the judgment reported in Abhiram Singh v. C.D.Connechen Abhiram Singh v. C.D.Connechen Abhiram Singh v. C.D.Connechen (1996)6 S.C.C. 665 has held that even where the resolution of the Board of Directors says that an officer or employee other than one of its Directors shall have the ultimate control over the affairs of the factory, it would only be a camouflage or an artful circumvention because the ultimate control cannot be transferred from that of the company, to one of its employees or its officers, except where there is a complete transfer of the control of the affairs of the factory. When such nominations are made to escape from the liability of prosecution and punishment, the Supreme Court termed such action of the company as one of escape route in the judgment reported in Pandiyan Roadways Corporation Limited v. M.A.Egappan Pandiyan Roadways Corporation Limited v. M.A.Egappan Pandiyan Roadways Corporation Limited v. M.A.Egappan A.I.R. 1987 S.C. 958. Such an escape route which had been carved out by the Directors of the company, which owns or runs the factory, was noticed by the Supreme Court and opined that if there was negligence in looking after safety requirements, even the Chairman and Managing Director besides the Board of Directors must be held responsible and liable. It is to be noted that the provisions of Sec.76 of "the Act" was amended only by an amendmentAct 42 of 1983. Similar provision under Factories Act was amended by amendmentAct 20 of 1987 defining the occupiers as anyone of the Directors of the company. Therefore, the proviso (C) to Sec.76 of "the Act" has to be read in terms of law laid down by the Supreme Court under theFactories Act as the object of both the Acts are similar and both the enactments are social legislations to regulate the factory or mines as the case may be and the safety of mines. By the above principles, it is abundantly clear that the power of the company to nominate a manager as owner of the company under proviso (c) to Sec.76 of "the Act" shall be referrable only to anyone of the Directors of the company. By letter dated 27.5.1985, the 1st respondent requested the petitioner to nominate the managing Director or anyone of the Directors of the company as owner under Sec.76 of the Mines Act, 1952. In furtherance to the said letter, the petitioner communicated its decision in nominating one Sri. G.Ramji as owner of the mine in Sankaridurg unit based upon the resolution dated 12.10.1987 in their letter dated 10.8.1987 followed by another letter dated 17.12.87. The said request was rejected by the 1st respondent in their letter date 30.5.1989 which reads as follows: "Please refer to your letter No.FSQ:G2:1519:87 dated 10.8.1987 on the above subject. In this connection I am to inform you that the General Manager of a mine is neither a Director or Manager of the company and thus he cannot have any say in the management of the affairs of the company. His nomination under Sec.76 of the Mines Act, 1952, as owner of the mines is therefore, not legally valid. The General Manager will come under the definition of Agent as defined under Sec.2(c) of the Mines Act, 1952. It is therefore, requested that if the advantage of nomination under Sec.76 of the Mines act, 1952, is proposed to be availed of by the Directors as provided under theMines Act, 1952, a Director of the Company may be nominated as" Owner "for the purpose of theMines Act, 1952." A similar request was rejected by the respondent in their letter dated 24.9.1993 in respect of the nomination of one PL. Subramanian as owner of the nine at Sankarnagar. The further communication of the petitioner in nominating one Mr.R.Arunachalam in the place of Mr.G.Ramji based upon the resolution dated 23.10.1990 was also rejected by the 1st respondent in their communication dated 24.12.1993 on the same reason. It is to be noted that the petitioner has not challenged the above orders of rejection made by the 1st respondent and allowed those orders to stand. However, the petitioner has approached this Court seeking for a direction in the nature of a writ of mandamus to direct the respondents to accept the nomination of the respective General Managers in the respective mine manufacturing units at Sankarnagar and Sankaridurg as owners for the purpose of Sec.76 of the Mines Act, 1952. In view of my above discussions that nomination of the managers as owners shall be from only among anyone of the Directors of the company, rejection of the request of the petitioner to nominate its General Managers as owners for the purpose of Sec.76 of the Act is well founded. For the said reason, I do not find any merit in the submission of the learned Additional Advocate General entitling the petitioner for a direction to the respondents to accept the nomination of the General Managers as owners of the mines at Sankarnagar and Sankaridurg for the purpose of Sec.76 of the Mines Act, 1952. In view of the said finding, the direction sought for by the petitioner cannot be granted. Accordingly, the writ petition has no merit and the same is dismissed. No costs. Consequently, connected W.M.P. is also dismissed.