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The Commercial Ahmedabad Mills Co. Ltd. and ors. Vs. State of Gujarat and anr. - Court Judgment

LegalCrystal Citation
SubjectCriminal;Company
CourtGujarat High Court
Decided On
Judge
Reported in(1986)1GLR456
AppellantThe Commercial Ahmedabad Mills Co. Ltd. and ors.
RespondentState of Gujarat and anr.
Excerpt:
.....of employees who have been rendered..........have been filed by the original accused. in all these applications, the complainant as well as the petitioners-accused are common. most of the facts and the contentions raised are also common. hence, with the consent of the parties, all the three matters are being disposed of by common judgment.2. the petitioner no. 1 is a joint stock company, incorporated under the provisions of companies act. the petitioner no. 2 is the 'occupier' of the company and the petitioner no. 3 is the manager of the company. on may 19, 1984, as alleged in the complaint, the company has been closed down. therefore, a notice dated may 21, 1984 was issued by the government labour officer-opponent no. 2 herein-original complainant. the company was called upon to show cause as to why appropriate action under the.....
Judgment:

A.P. Ravani, J.

1. Quash the criminal proceedings to secure the ends of justice and/or to prevent the abuse of the process of the court. Such is the prayer made by the petitioners-original accused. 1 am afraid, if the prayer is granted, it would frustrate the ends of justice and that itself may amount to abuse of the process of court.

All these three applications under the provisions of Section 482 of the Criminal Procedure Code have been filed by the original accused. In all these applications, the complainant as well as the petitioners-accused are common. Most of the facts and the contentions raised are also common. Hence, with the consent of the parties, all the three matters are being disposed of by common judgment.

2. The petitioner No. 1 is a Joint Stock Company, incorporated under the provisions of Companies Act. The petitioner No. 2 is the 'occupier' of the Company and the petitioner No. 3 is the Manager of the Company. On May 19, 1984, as alleged in the complaint, the Company has been closed down. Therefore, a notice dated May 21, 1984 was issued by the Government Labour Officer-opponent No. 2 herein-original complainant. The Company was called upon to show cause as to why appropriate action under the relevant provisions of the Industrial Disputes Act, 1947 and the Rules, framed thereunder and under the relevant provisions of the Payment of Gratuity Act, 1972 and the Payment of Gratuity Gujarat Rules, 1973 should not be taken and why prosecution should not be launched. It appears that the reply was given by the Company on June 13, 1984. A copy of the notice as well as the copy of the reply have been shown to me by the learned Asstt. Public Prosecutor from the file of the labour Officer. Thereafter, on August 14, 1984, the Government declared the Company 'a relief undertaking' under the provisions of Bombay Relief Undertakings (Special Provisions) Act, 1958. After the issuance of the notification under the provisions of the Bombay Relief Undertakings Act, the Government passed an order granting sanction for prosecution as required under Section 34 of the Industrial Disputes Act. The order of sanction passed by the Government in respect of all the three cases has been shown to me by the learned Assistant Public Prosecutor appearing for the opponents.

3. After the Government granted sanction, complaint has been filed on September 5, 1984. Three cases have been filed. They are as follows:

(i) It is a legal that there is contravention of Section 25 FFA read with Section 30A of the Act. According to the complaint, the provisions of Section 25 FFA has been contravened because notice of 60 days before closure of the undertaking in the prescribed manner and as provided in the aforesaid section has not been given,

(ii) Another case has been filed for the alleged contravention of Section 25-FFF of the Act. As per the allegations of the complainant, whenever an undertaking is closed down for whatever reasons, the workmen who have been in continuous service for not less one year, are required to be paid compensation as provided in Section 25F of the Act as if workmen have been retrenched. As alleged in the complaint, such compensation has not been paid to any of the workmen and hence offence linear Section 25FFF read with Section 31(2) of the Act has been committed.

(iii) The third case has been filed on the allegation that the requisite notice of 60 days for payment of gratuity under the Payment of Gratuity (Gujarat) Rules, 1973 has not been given and therefore, there is contravention of the provisions of the aforesaid rule punishable under Section 9(2) of the Payment of Gratuity Act, 1972.

4. The complaint on the basis of aforesaid allegations has been filed on September 5, 1984. From record, it is not clear on which date the learned Magistrate has ordered to issue process. A certified or uncertified copy of order passed by the learned Magistrate directing to issue process has not been produced on record. But there appears no controversy on the point that the learned Magistrate ordered to issue process for offences alleged against the petitioners. From the memo of application, it appears that the petitioners have as a matter of fact, received summons from the Court of learned Metropolitan Magistrate, and thereafter, they have moved this Court. The petitioners have filed three separate applications as stated above and have prayed that this Court should exercise its power under Section 482 of the Criminal Procedure Code and quash the proceedings pending before the Court of Metropolitan Magistrate. Ahmedabad.

5. The number of criminal case mentioned in the application and in prayer clause does not tally with the copy of the complaint annexed with each of the application. Therefore, to avoid further confusion I have not referred to the criminal case number mentioned in the respective application.

6. It is contended that the petitioner No. 1-Mill Company was running into losses and the accumulated losses of the petitioner-company amounted to about Rs. 600 lakhs and it was incurring loss of about Rs. 20 lakhs every month. The petitioner-Company could not pay the electricity energy bills for the months of March and April 1984 and therefore, the Ahmedabad Electricity Company cut of the power supply and disconnected the electricity connection of the Company. It is stated at the bar by the counsel for the petitioners that the petitioner-Company had revived a notice from Ahmedabad Electricity Company ceiling upon the Company to pay electricity bill of March 1984. The Company has replied to the aforesaid notice on May 2, 1984 and had requested for instalments. In the aforesaid circumstances, it is submitted that the Company had to stop the working which has resulted into non-working of the Company since May 1984. Thereafter, the Company had started making efforts to re-start the working and as a matter of fact as submitted by the counsel for the petitioners, out of 2300 employees, more has 1000 employees have been given employment. In the aforesaid background it is submitted that having regard to the definition of 'closure' given in the Act there is no permanent closure. The definition of closure given in Section 2(cc) of the Act reads as follows:

'closure' means the permanent closing, down of a place of employment or part thereof.

It is submitted that there was no intention on the part of the Company to permanently close down the working of the Mill and hence the criminal proceedings initiated by the opponents be quashed.

7. The aforesaid contention cannot be accepted for the single reason that in an application under Section 482 of the Criminal Procedure Code, the Court is not required to examine the evidence which may be submitted by the petitioners-accused before the trial Court. The Court has to examine only the complaint. If the complaint on the face of it disposes the offence, it can ever be said that the trial Court has acted without jurisdiction in issuing the process and that there is abuse of the process of the Court. The provisions of Section 482 of the Criminal Procedure Code read as follows:

Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to, any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure ends of justice.

As far as the facts and circumstances of this case are concerned, it cannot be said that the powers of this High Court are required to be exercised for giving effect to any order under the Code. Then we are left with other two eventualities. Is it a case where process of the Court is abused or is it a case where the Court is required to exercise the powers to secure the ends of justice?

8. The aspect regarding the abuse of the process of Court may be examined after all why the provisions of Section 25FFA, 25FFF and 31(2) of the Act and the provisions of Section 9(2) of the Payment of Gratuity Act, 1972 and the relevant Rules have been enacted? Certainly with a view to protect the interests of the employees. Be it noted that in this country, till the enactment of Industrial Disputes Act and sometime thereafter also the relations between the employer and the employees were being governed and disputes between them were being resolved on the strength of collective barraging of the parties. With a view to see that the industrial peace is maintained and relations between the employers and employees remain harmonious and with a view to achieve the constitutional goal of securing the welfare of weaker sections of the society, the labour legislations have been enacted. The provisions of Section 25FFA have been inserted sometime in the year 1972. This provision puts restrictions on the fundamental right to carry on business or to put it differently, it regulates the fundamental right regarding carrying on business. In the background of the industrial relations and the history of the labour legislation in this country, the object behind inserting this provision in the statute book was to see that the weaker sections of the society i.e., employees, are not left at the mercy of the employer and the employer cannot be permitted to close down the business in such away that the employees are deprived of their livelihood at the sweet will of the employer. All the three provisions under which the offences alleged to have been committed aim at the protection of the workmen. In one provision notice is required to be given for a particular period before the undertaking is closed down. Another provision requires payment of compensation to the workmen as if they are retrenched as and when the undertaking is closed down similar provision is in the Payment of Gratuity Act and the Rules. All these provisions aim at two things: (i) maintenance of equilibrium or peace in the industrial relations, and (ii) the workmen should not be left helpless and be put in an awkward situation abruptly at the sweet will of the employer. If there is sufficient notice of closure of undertaking to the Government, then in that case, the Government also can step to and may salvage the situation or may take pleasure to help the work.

9. In the aforesaid background the fact situation in this case may be examined. Before filing the complaint, the Company was given notice by the Labour Officer to show cause as to why prosecution, should not be launched under the relevant provisions of law. Three different notices were given. Three different replies have been given, but the substance of the reply was the same. Be it noted that after the reply was given by the Company, the Government has given sanction to prosecute the petitioners-accused, under the relevant provisions of the Act. In para 2 of the reply, the Mill-Company has stated that it was facing serious difficulties and it could not make payment to the Ahmedabad Electricity Company towards its pending bills. Hence the Ahmedabad Electricity Company cut off its supply of power, as a result of, which the working of the Mill-Company was stopped from May 1984. It is, also stated that circumstances were beyond the control of the management which resulted in the non-working of the Mill-Company. In this way it was contended that there was no contravention of any of the provisions of the draw as alleged in the notice. This reply is dated Junel3, 1984, while the sanction to prosecute has been given, by the Government thereafter. In substance the petitioners-accused submitted that it was on account of the serious financial difficulties that the working of the Company had come to a stand-still.

10. The aforesaid reason advanced by the Company for closure of the Company may be examined in the context of the Explanation to Section 25FFF of the Act. The Explanation inter alia provides that an undertaking which is closed down by the reason merely of financial difficulties including financial loss or accumulation of undisposed stocks shall not be deemed to be closed down on account of the unavoidable circumstances beyond the control of the employer within the meaning of Proviso to Sub-section (1) of the Section 25FFF. If the case is covered by the aforesaid Proviso, the employer would be liable to pay compensation to the workmen which shall not exceed his average pay for three months. This Explanation gives an indication regarding the intention of the Legislature. This clearly provides that the closure on account of financial difficulties is no defence whatsoever.

11. Further it may be noted that at the initial stages, i. e., round about the time of filing of the complaint or sometime before the complaint is filed, the petitioners-accused had not told the Government or the complainant that the working of the undertaking was not closed down permanently. The case that the Company is not closed down permanently appears to have been put up for the first time in these applications preferred before the High Court under the provisions, of Section 482 of the Criminal Procedure Code. This obviously appears to be an after-thought. Even assuming for a moment that the petitioners-accused may, have a good case to show that the undertaking has not been permanently closed down and therefore, it cannot be said to be a closure which, would attract the provisions of the Act and the Rules which are alleged to have been contravened, the also, it could never be said that the complainant has abused the process., of Court. When the complaint was filed, no such case was placed before the complainant as stated above, this case has been placed for the first time before the High Court. As to whether this case is correct or not is yet to be examined by the trial Court. On the basis of this contention raised by the petitioners-accused which was never placed before the complainant or the Government and which is not decided by the trial Court, it can never be said that there is abuse of process of Court. On the contrary, in the facts and circumstances of the case, it appears that if the complainant had not launched prosecution against the Mill-Company, the complainant would have failed in his duty towards thousands of employees who have been rendered jobless. It may further be noted that the petitioner-company had received notice from the Ahmedabad Electricity Company before the power supply was actually cut off. Had the petitioner an intention to see that the working of the Company was not stopped on account of the non payment of the bills of the Ahmedabad Electricity Company, it would have surely taken some action to see that the power supply is not cutoff. At that stage it could have apprised the Government and also the labour leaders and could have told them that a difficult situation had arisen on account of the notice given by the Ahmedabad Electricity Company and that the Company was-facing serious financial problems. But nothing is pointed out to show that the labour leaders and the Government were taken into confidence or even informed about the impending dangers. On the contrary, it appears that the Government and the workers were kept in dark till the last moment. Even in the reply to the show cause notice given by the Labour Officer, the Company had not come forward with full facts. Even in these applications, all the aforesaid facts pertaining to the show cause notice given by the Government Labour Officer, reply given thereto and such other facts have not been placed on record by the Company. It was only during the course of arguments when the Court asked the questions, the details were disclosed and the correspondence which took place with the Government Labour Officer and with the Ahmedabad Electricity Company was shown to the Court. Even after going through all these materials, it cannot be said that when the complaint was filed, the complainant had no reason to believe that there was no contravention of the relevant provisions of the Act and the Rules. In the facts and circumstances of the case, it cannot be said that there is an abuse of the process of Court.

12. This brings us to the consideration of another aspect of the provisions of Section 482 of the Criminal Procedure Code, i.e., 'otherwise to secure the ends of justice'. One of the main functions of the judiciary is to see that the object of the law enacted by the validly elected representatives of the people is fulfilled. This is the very essence of democracy. In democracy all the organs of the State including the Judiciary, should see to it that the will of the people is reflected in the validly enacted legislations is fulfilled. In democracy the very existence of the judicial institution can be justified only if the institution of judiciary works in the direction of the fulfilment of the urges and aspirations of the people which get their expression in the legislative measures taken by the chosen representatives of the people. As stated above, in enacting the relevant provisions of the Act and the Rules, the mandate of the legislation is that animus employer should face prosecution; and if it is proved that he has not complied with the relevant provisions of the Act and the Rules he must be punished according to law. The underlying object behind the provisions of the legislation is that the weaker sections of the society or the have-nots be given protection against the mightily strength of organised corporate sector which has at its back and command tremendous financial power. The financial power is possessed by this sector on account of the assistance provided by the financial institutions and on account of the confidence reposed in them, by the numerous small investors who invest their money either in shares or in deposits. If the prosecution is quashed at this stage, it would amount to frustrating the will of the people and submit to the strength of the financial power as against the vioce of the weaker and unorganised sector of employees. In this view of the matter, it can never be said that the farther proceedings of the prosecution launched against the petitioners accused would not be for the purpose of securing the ends of justice. To do otherwise would be to frustrate the ends of justice rather then securing the same.

13. By way of clarification it may be noted that the aforesaid observations have been made only with a view to deal with the contentions raised in all these three applications. The observations have been made on the basis of the material made available to me at this stage and the arguments advanced. This is not the final expression of the opinion by the High Court. Therefore, I am sure that the trial court shall not in any way be influenced by the observations made hereinabove while disposing of the matters finally on merit.

In the result, all the three applications are rejected. Rule discharged. Interim relief granted earlier stands vacated.

14. The request for continuance of interim relief granted earlier is rejected. If and when the case is fixed for hearing before the trial Court, the petitioners-accused can make an application for adjournment of the case on the ground that they are desirous to approach the Supreme Court and challenge this order. I am sure, if and when such application is made, the trial court will consider the same in accordance with law and on merits.

15. As far as the presence of the petitioners-accused is concerned, it can be dispensed with by the trial court on the petitioner's making proper application. I am sure, if any such application is made before the trial court, the trial court will surely grant the same keeping in mind the principle that it is the right of the accused to see that the trial of the case takes place within his presence and hearing. This right of the accused cannot be turned into an obligation. The presence of the accused should not be insisted upon unless the same is absolutely necessary for the purposes of further proceeding of the case.


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