Allowed¶41

M/S Texcel Engineers Pvt. Ltd. v. State of Chhattisgarh and Ors.

Chhattisgarh HC18 Nov 2024WPL/3011/2010

Case brief

AI extract

What is this about?

Chhattisgarh High Court, Bilaspur; W.P(L) No.3011 of 2010; decided 19.11.2024 by Justice Deepak Kumar Tiwari. Keywords: appropriate government; Contract Labour (Regulation and Abolition) Act, 1970; Section 2(1)(a); Section 12 licence; Section 24 prosecution; Section 25 offences by companies; Industrial Disputes Act 1947 Section 39; notification dated 05.05.2008; Labour Court Korba; NTPC; complaint against Managing Director without arraying company; writ allowed; prosecution closed.

What did the court decide?

Petition allowed; criminal prosecution pending against the Managing Director of the petitioner-company, MP Sudhakaran, in Case No.90/CL Act/09 before the Labour Court, Korba stands closed. ¶41

M/S Texcel Engineers Pvt. Ltd. Vs State of… — Writ and Judicial Review | Chhattisgarh HC (2024)

What the court decided

AI extract

Outcome

Petition allowed; criminal prosecution pending against the Managing Director of the petitioner-company, MP Sudhakaran, in Case No.90/CL Act/09 before the Labour Court, Korba stands closed.

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Issue for consideration

Whether the proceedings in Case No.90/CL Act/2009 before the Labour Court, Korba are without jurisdiction or in excess of jurisdiction, i.e., whether the appropriate government in respect of the petitioner's establishment is the Central Government following the notification dated 05.05.2008. +1 more

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Court's answer

Where a dispute subsists between the Union and the State as to the appropriate government under Section 2(1)(a) of the Act of 1970 and a licence has been granted by any of the governments, prosecution on that score is not justifiable.

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Ratio / Principle

When an offence under the Act of 1970 is alleged to have been committed by a Company, a complaint filed against the Managing Director alone, without impleading the Company as an accused, is not maintainable.

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Detailed headnote1 paragraphs

M/s Texcel Engineers Pvt. Ltd. filed a writ petition under Articles 226/227 of the Constitution of India seeking quashing of proceedings in Case No.90/CL Act/2009 before the Labour Court, Korba and the summons dated 06.05.2010 issued therein to its Managing Director, MP Sudhakaran, under Section 24 of the Contract Labour (Regulation and Abolition) Act, 1970. The complaint had been filed against the Managing Director alone without arraying the Company, although a valid licence had been issued to the petitioner by the Central Government after its notification dated 05.05.2008 rescinded the earlier notification dated 03.07.1998 issued under Section 39 of the Industrial Disputes Act, 1947. Held: (i) where a dispute existed between the Union and the State as to the appropriate government under Section 2(1)(a) of the Act of 1970 and a licence had been granted by any of the governments, prosecution on such score is not justifiable; and (ii) where an offence is alleged to have been committed by a Company under the Act of 1970, a complaint against the Managing Director alone, without impleading the Company, is not maintainable. Petition allowed; prosecution closed.

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2024:CGHC:44966

NAFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

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W.P(L) No.3011 of 2010

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M/s Texcel Engineers Pvt. Ltd. Through Its Managing Director, G-59, 12^th Street, Near Chintamani Anna Nagar, East, Chennai-600102

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... Petitioner

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versus

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1 - State Of Chhattisgarh through The Secretary, Labour Department, Government of Chhattisgarh, DKS Bhawan, Raipur, Distt. Raipur (CG) 2 -The Inspector, Contract Labour Act, 1970 Office of Labour Officer, Labour Department, Government of Chhattisgarh, Korba, District Korba (CG)

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3 - National Thermal Power Corporation, through its General Manager, Korba, Super Thermal Power Station, PO Vikas Bhawan, Jamnipali, Korba, District Korba (CG)

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4 - Labour Court, through the Labour Judge, Korba, District Korba (CG)

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Digitally signed by SISTLA NEELIMA VISHNU PRIYA Date: 2024.11.20 10:56:50 +0530

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... Respondents

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For Petitioner : Shri Ritesh Giri along with Ms. Dyna Bajray on behalf of Shri Vinod Deshmukh, Advocates. For : Shri Lav Sharma, PL. Respondent/State For : Shri Anuroop Panda, Advocate. Respondent/NTPC

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Hon'ble Shri Justice Deepak Kumar Tiwari

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Order on Board

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19.11.2024

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This Petition has been filed under Articles 226/227 of the Constitution of India for the following reliefs:-

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“i) Call for the entire record of Case No.90/CL ACT/2009 pending before Labour Court, Korba pertaining to the issuance of the impugned summons dated 06.05.2010 (Annexure P/1) by the Presiding Officer, Labour Court, Korba.

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ii) To quash the proceedings of Case No.90/CL Act/2009 initiated by the Presiding Officer, Labour Court, Korba holding it to be without jurisdiction or in excess of jurisdiction.

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iii) This court may further be pleased to hold that the appropriate government in respect of petitioner’s establishment would be the Central Government.

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iv) Any other relief as deemed fit and proper by this Hon’ble Court.”

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Necessary facts for adjudication of the case are that the Petitioner/Establishment/Company is an industry engaged in the work of executing contracts for different major Companies and the PetitionerEstablishment has been awarded a contract by Respondent No.3/NTPC, who has taken license under the Contract Labour (Regulation and Abolition) Act, 1970 (for short ‘the Act of 1970’) from the Government of Chhattisgarh as the appropriate Government in terms of Section 2(1)(a) of the said Act, at the relevant time, was State Government. The Petitioner-Establishment has also obtained license from the State of Chhattisgarh under the said Act. Subsequently, the

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Central Government has issued the notification dated 05.05.2008 whereby, the earlier notification dated 03.07.1998 issued by the Ministry of Labour in exercise of powers conferred under Section 39 of the Industrial Disputes Act, 1947 notifying NTPC New Delhi at Sl. No.96 as a Central Public Sector undertaking governed by the State Government, was withdrawn. After such notification of NTPC, the appropriate Government was the Central Government and another circular has also been issued on 15.07.2009 (Annexure P-10) to the Labour Commissioner of the State of Chhattisgarh. Although the Petitioner/Company was having a valid license from the Central Government, a complaint was filed against its Managing Director namely MP Sudhakaran without arraying the Company and summons have been issued to him in person by the Labour Court, Korba under Section 24 of the Act of 1970 (Annexure P-1), therefore, the complaint as also the notice have been challenged in this Petition.

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Shri Giri submits that after the issuance of notification dated 05.05.2008, when the Petitioner-Establishment/Company was having valid license issued by the authority under the Central Government, the requirement under Section 12 of the Act of 1970 was complied with, therefore, prosecution under Section 24 of the said Act is bad in law. He further submits that the complaint was not properly filed as only Managing Director in person was arrayed as an accused though the offence has been committed by the Petitioner-Establishment/Company for which, a procedure has been stipulated under Section 25 of the said Act, which reads as follows:-

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“ 25. Offences by companies .—(1) If the person committing an offence under this Act is a company, the company as well as every person in charge of, and responsible to, the company for the conduct of its business at the time of the commission of the offence shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

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Provided that nothing contained in this subsection shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

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(2) Notwithstanding anything contained in subsection (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 that the commission of the offence is attributable to any neglect on the part of any director, manager, managing agent or any other officer of the company, such director, manager, managing agent or such other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.”

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He, therefore, submits that in view of above, the Petition may be allowed and the proceedings initiated against the Managing Director i.e. MP Sudhakaran by the competent authority before the Labour Court, Korba may be closed.

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Shri Sharma, learned Counsel for the State fairly admits that no prosecution has been lodged in terms of Section 25 of the Act of 1970 and only a complaint has been filed against the Managing Director of the Company i.e. MP Sudhakaran in person. He does not dispute the fact that at the relevant time, the Petitioner/Company was having license issued by the Central Government under the Act of 1970 and submits that there is only a dispute with regard to competent authority

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¶35

i.e. the appropriate Government in terms of Section 2(1)(a) of the Act of 1970. When a query was put, he fairly submits that the sanction of license which has been accorded to the Petitioner/Company under the said Act has not been challenged by the State as per the information available in the record with regard to the competency of the Union. He further does not dispute the fact that subsequent notification issued by the Ministry of Labour and Employment on 05.05.2008 whereby, the Central Government rescinded the earlier notification issued on 03.07.1998.

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Shri Panda, learned Counsel for NTPC adopts the submissions of Shri Giri, learned Counsel for the Petitioner/Company.

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Heard learned Counsel for the parties and gone through the relevant annexures carefully.

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Having considered the submissions made and having gone through Section 12 of the Act of 1970, it is explicit that a valid license was issued by the Central Government in favour of the Petitioner/Company though there is a dispute between the competency of the Union of the State in terms of Section 2(1)(a) of the said Act whereby, the appropriate Government is defined and further considering the subsequent notification which has been issued by Ministry of Labour and Employment on 05.05.2008 whereby, earlier notification has been rescinded, this Court is of the considered opinion that when such a dispute was existing and when license has been granted by any of the Governments, prosecution on such score is not justifiable and further,

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¶40

when an offence was committed under the Act of 1970 by a Company, without impleading it as an accused, a complaint filed against the Managing Director of the said Company is not maintainable.

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In view of the foregoing discussion, this Petition is allowed and the criminal prosecution pending against the Managing Director of the Petitioner/Company i.e. MP. Sudhakaran in Case No.90/CL Act/09 before the Labour Court, Korba stands closed.

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Sd/-

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(Deepak Kumar Tiwari)

¶44

Priya

M/S Texcel Engineers Pvt. Ltd. v. State of Chhattisgarh and Ors.

Case brief

What is this about?

What did the court decide?

M/S Texcel Engineers Pvt. Ltd. v. State of Chhattisgarh and Ors.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

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