Allowed

Shrikant Madhav Vaidya v. the State of Jharkhand

Jharkhand HC13 Sept 2023Cr.M.P./942/2023

Case brief

AI extract

What is this about?

The Court quashed the order taking cognizance of offences under the Factories Act against the petitioner, holding that no manufacturing process was underway, thus the unit was not a factory, and the petitioner lacked personal involvement.

What did the court decide?

The order dated 06.04.2022 passed by the learned Chief Judicial Magistrate, Dhanbad in Complaint Case No. 3166 of 2022 taking cognizance inter alia against the petitioner is quashed and set aside qua

Shrikant Madhav Vaidya Vs the State of Jharkhand — Criminal Trial and Appeal | Jharkhand HC (2023)

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1 Cr.M.P. No.942 of 2023

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IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 942 of 2023

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Shrikant Madhav Vaidya, s/o Madhav Damodar Vaidya, aged about 59 years, currently posted as the Chairman of Indian Oil Corporation Limited having his office at 3079/3, J B Tito Marg, Sadiq Nagar, P.O. Andrewsganj, P.S. Defence Colony, New Delhi 110049

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.... Petitioner

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Versus

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The State of Jharkhand

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Factory Inspector, Dhanbad Circle-2, having its office at Sanyukt Shram Bhavan Bartand, P.O. & P.S. Dhanbad, Dist. Dhanbad

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…. Opp. Party

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P R E S E N T

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HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY

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For the Petitioner : Mr. B.M. Tripathi, Sr. Advocate : Mr. Rahul Lamba, Advocate For the State : Mr. Pankaj Kumar, P.P.

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By the Court:-

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Heard the parties.

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This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 482 Cr.P.C. with a prayer for quashing the order dated 06.04.2022 passed by the learned Chief Judicial Magistrate, Dhanbad in Complaint Case No. 3166 of 2022 by which the learned Chief Judicial Magistrate has taken cognizance of the offences punishable under Sections 92 and 96A of the Factories Act, 1948 inter alia against the petitioner, who is the Chairman-cum-non-Executive Director of Hindustan Uvarak

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Cr.M.P. No.942 of 2023

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Rasayan Limited (HURL), Jharia- cum- Jharpokhar- cum- Sindri which is a public sector undertaking of Government of India.

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The brief facts of the case is that the petitioner being the director

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of the said company; in an unsafe manner, without personal protective equipment was getting the works done in the said Hindustan Uvarak Rasayan Limited (HURL), Sindri, Dhanbad due to which on 10.01.2022; while conducting the stability test of the Transformer, because of flash over in the main substation panel, during the work, two workers respectively Shri Ashish Kumar Mandal and Shri Mathavan V, got scorched. It is further alleged that the work was executed in an unsafe manner without personal protective equipment in violation of Section 7A of the Factories Act, 1948 read with Rule 55A of the Jharkhand Factories Rules, 1950 and the information about the accident has not been duly given by the factory management in Form No. 17A. It is also alleged that the failure to report the accident in Form No. 17A is in violation of Section 88 of the Factories Act, 1948 read with Rule 96 of the Jharkhand Factories Rules, 1950 even though Hindustan Uvarak Rasayan Limited (HURL) is a factory as defined in Section 2 (m) (1) of the Factories Act, 1948. There is also allegation that various to were found processes relating production operationalized in the factory and required fees were not deposited and the unit is a hazardous factory as per Section 2 (c)(b) of the Factories Act, 1948 and the petitioner has not got the factory plan approved; in violation of Section 3 of the Jharkhand Factories Rules and the factory was operated without registration

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Cr.M.P. No.942 of 2023

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in violation of Section 6 of the Factories Act, 1948 read with Rule 4, 5 and 10 of the Jharkhand Factories Rules, 1950. There is also allegation that in the occupational health center located in the factory, no physicians was appointed as per the required provision of law and only one physician was employed on contractual basis who is not qualified as per Rule 62-OH(2) of the Jharkhand Factories Rules, 1950 and non-appointment of required number of physicians with due qualification in hazardous factory as per the laid down provision is in violation of Rule 62-OH 1 (C) and 62-OH (2) of the Jharkhand Factories Rules, 1950. There is further allegation that pre-employment medical examination was not being done in the factory which is in violation of Rule 62 NH(1) & (2) of Jharkhand Factories Rule, 1950.

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Mr. B.M. Tripathi, learned Senior Advocate appearing for the petitioner by drawing attention of this Court to page no. 55 of the brief submits that it has been mentioned therein that “urea was to be produced” in the Hindustan Uvarak Rasayan Limited (HURL) which indicates that on the alleged date of occurrence, no manufacturing process was carried out within the premises of Hindustan Uvarak Rasayan Limited (HURL). Drawing attention of this Court to the definition of factory, Section 2 (m) of Factories Act, 1948 which reads as under:-

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“Section 2(m) of Factories Act 1948

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(m) “factory” means any premises including the precincts thereof—

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(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or

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Cr.M.P. No.942 of 2023

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(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,—

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but does not include a mine subject to the operation of [the Mines Act, 1952 (35 of 1952)], or [a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place];

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[Explanation [I].—For computing the number of workers for the purposes of this clause all the workers in different groups and relays] in a day shall be taken into account;]

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[Explanation II.—For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof;].” (Emphasis supplied)

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It is submitted by the learned Senior Advocate appearing for the petitioner that for an organization to come under the ambit of ‘factory’ carrying on of manufacturing process is a sine qua non. Relying upon the judgment of Hon’ble Supreme Court of India in the case of Lanco Anpara Power Limited vs. State of Uttar Pradesh & Ors. reported in (2016) 10 SCC 329 , paragraph no.38 of which reads as under:-

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“38. It is not in dispute that construction of the projects of the appellants is covered by the definition of “building or other construction work” as it satisfies first two elements of the definition pointed out above. In order to see whether exclusion clause applies, we need to interpret the words “but does not include any building or other construction work to which the provisions of the Factories Act … apply” (emphasis supplied). The question is as to whether the provisions of the Factories Act apply to the construction of building/project of the appellants. We are of the firm opinion that they do not apply. The provisions of the Factories Act would

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Cr.M.P. No.942 of 2023

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“apply” only when the manufacturing process starts for which the building/project is being constructed and not to the activity of construction of the project. That is how the exclusion clause is to be interpreted and that would be the plain meaning of the said clause. This meaning to the exclusion clause ascribed by us is in tune with the approach adopted by this Court in Organo Chemical Industries v. Union of India [Organo Chemical Industries v. Union of India, (1979) 4 SCC 573 : 1980 SCC (L&S) 92] . Two separate, but concurring, opinions were given by Justice V.R. Krishna Iyer and Justice A.P. Sen, and we reproduce here below some excerpts from both opinions:” (emphasis supplied)

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It is submitted by the learned Senior Advocate appearing for the petitioner that the works related to production process of a factory cannot itself be treated as manufacturing process in the factory.

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It is then submitted by the learned Senior Advocate appearing for the petitioner that as admittedly, no manufacturing process was carried on in the premises of Hindustan Uvarak Rasayan Limited (HURL) as mentioned in the complaint itself by the complainant hence, the Hindustan Uvarak Rasayan Limited (HURL) on the date of occurrence was not a factory, therefore, the penal provision of Section 92 or 96A of the Factories Act is not applicable and the learned Magistrate ignoring the same has taken cognizance of the offence punishable under Section 92 and 96A of the Factories Act. It is then submitted by the learned Senior Advocate appearing for the petitioner that co-accused- Dipten Roy is the occupier of the premises and in this respect, learned Senior Advocate appearing for the petitioner relied upon the Annexure-2 of the brief at page no. 57 as well as Annexure-5 at page no.78 of the brief which shows that Dipten Roy, is the head

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Cr.M.P. No.942 of 2023

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of Sindri Project of Hindustan Uvarak Rasayan Limited (HURL) and is the occupier of Sindri Unit where the occurrence allegedly took place and hence, the petitioner cannot be held liable for the alleged acts. It is next submitted by the learned Senior Advocate appearing for the petitioner that the petitioner has been arraigned as “co-occupier” and the term “co-occupier” is indisputably not recognized by the Factories Act and in this respect, learned Senior Advocate relied upon the judgment of Hon’ble Supreme Court of India in the case of Indian Oil Corporation Limited vs. Chief Inspector of Factories & Ors. reported in (1998) 5 SCC 738 , paragraph no. 16 of which reads as under :-

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“16. Xxxxx xxxxx xxxxx xxxxx Therefore, if it is a case of a factory in fact or in reality owned or controlled by the Central Government or the State Government or any local authority, then in case of such a factory, the person or persons appointed to manage the affairs of the factory shall have to be deemed to be the occupier, even though for better management of such a factory or factories, a corporate form is adopted by the Government.”

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It is then submitted by the learned Senior Advocate appearing for the petitioner that as has been held by the Hon’ble Supreme Court of India in the case of Castrol (India) Ltd. vs. State of Karnataka reported in (2018) 17 SCC 275 , wherein it has been observed that clear and categorical statement in the complaint is required for fastening vicarious liability for offence committed by the company or a director who is responsible or in-charge of conduct of business of the company but as no such averment has been made in the complaint, hence, on this score also the complaint is liable to be set aside. It is next submitted by the learned Senior Advocate

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appearing for the petitioner that indisputably the petitioner is currently the Chairman of Indian Oil Corporation Limited and he is only a non-executive director of the alleged offending company in an ex-officio capacity and as there is no allegation that the petitioner had personal involvement or knowledge so, no way cognizance could have been taken against him. Relying upon the judgment of Hon’ble Supreme Court of India in the case of Sunil Bharti Mittal vs. CBI reported in (2015) 4 SCC 609 , learned Senior Advocate appearing for the petitioner submits that directors of the accused company may only be roped in if (a) there is sufficient incriminating evidence against them coupled with criminal intent or (b) the statutory regime attracts the doctrine of vicarious liability and the Factories Act, 1948 do not attract any vicarious liability and for that purpose the provision of occupier has been made with the definition as mentioned in Section 2 (n) of the Factories Act, 1948. Hence, it is submitted that the order dated 06.04.2022 passed by the learned Chief Judicial Magistrate, Dhanbad in Complaint Case No. 3166 of 2022 be quashed and set aside.

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Learned Public Prosecutor on the other hand opposes the prayer for quashing the order dated 06.04.2022 passed by the learned Chief Judicial Magistrate, Dhanbad in Complaint Case No. 3166 of 2022. It is submitted by learned Public Prosecutor that since the learned Magistrate has rightly taken cognizance against the petitioner, hence, this criminal miscellaneous petition being without any merit be dismissed.

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Cr.M.P. No.942 of 2023

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Having heard the submissions made at the Bar and after going through the materials in the record, since it is an admitted case of the complainant-opposite party no.2, as mentioned in the complaint itself, that “production of urea was to start” in Hindustan Uvarak Rasayan Limited (HURL) which clearly indicates that on the date of occurrence; production of urea did not start. There is no material in the record to suggest that any manufacturing activity was going on in the establishment where production has admittedly not started on 10.01.2022.

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Under such circumstances, in the absence of any material in the record regarding any manufacturing process being carried out in the premises of Hindustan Uvarak Rasayan Limited (HURL) but on the other hand, it is the admitted case of the complainant to the contrary, as already indicated above, certainly, the said Hindustan Uvarak Rasayan Limited (HURL), Sindri cannot be considered to be a factory; as defined under Section 2 (m) of the Factories Act, 1948. Further, though the petitioner is admittedly a director as mentioned in the complaint itself but there is no material in the record to suggest that he has any personal involvement or knowledge about the acts alleged. In the absence of such specific allegation and in the absence of provision of vicarious liability, except the occupier, arraigning the petitioner as an accused in this case is also not in accordance with law and as there is a specific person as a occupier, in the absence of any specific allegation against the petitioner merely because he is a director of the company certainly, he cannot be arraigned as an accused in this

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9 Cr.M.P. No.942 of 2023

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case. Thus this Court has no hesitation in holding that the order dated 06.04.2022 passed by the learned Chief Judicial Magistrate, Dhanbad in Complaint Case No. 3166 of 2022 taking cognizance of the offence inter alia against the petitioner; being not sustainable in law, will amount to abuse of process of law.

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Accordingly, the order dated 06.04.2022 passed by the learned Chief Judicial Magistrate, Dhanbad in Complaint Case No. 3166 of 2022 passed by the learned Chief Judicial Magistrate, Dhanbad is quashed and set aside qua the petitioner only.

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In the result, this criminal miscellaneous petition is allowed.

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(Anil Kumar Choudhary, J.)

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High Court of Jharkhand, Ranchi Dated the 13^th September, 2023 AFR/Sonu-Gunjan/-

Shrikant Madhav Vaidya v. the State of Jharkhand

Case brief

What is this about?

What did the court decide?

Shrikant Madhav Vaidya v. the State of Jharkhand

Case brief

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