Dismissed

Anupam B Vyas the Then G. M (R) Food Corporation of India Dehradun v. Union of India through Secretary

Uttarakhand HC6 Dec 2021C482/1537/2021

Case brief

AI extract

What is this about?

Criminal Misc. Application challenging cognizance under Section 29 of the Industrial Disputes Act for alleged breach of a Labour Court award. The High Court dismissed the petition, ruling the offence is continuing as long as the award remains binding, thus barring limitation defences and affirming the lowr court's order.

What did the court decide?

The criminal miscellaneous application was dismissed in limine with no interference warranted in the proceedings under Section 482 CrPC.

Anupam B Vyas the Then G. M (R) Food Corporation… — Service and Employment | Uttarakhand HC (2021)

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HIGH COURT OF UTTARAKHAND AT NAINITAL

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Criminal Misc. Application No. 1537 of 2021

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Anupam B Vyas ......Petitioner Versus Union of India and others ….Respondents

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Present:

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Mr. Avtar Singh Rawat, Senior Advocate, assisted by Mr. Bhuwnesh Joshi, Advocate for the petitioner. Mr. Pratiroop Pandey, A.G.A. for the State.

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Hon’ble Ravindra Maithani, J.(Oral)

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Challenge in this petition is made to the

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following:-

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(i) Order dated 08.08.2017, passed in the Complaint Case No. 8067 of 2017, Labour Enforcement Officer Vs. General Manager, by the court of the Chief Judicial Magistrate, Haridwar (for short, “the case”). By the impugned order, cognizance under Section 29 of the Industrial Disputes Act, 1947 (for short, “the Act”) has been taken against the petitioner and he has been summoned to answer the accusations. (ii) The judgment and order dated 01.10.2021, passed in Criminal Revision

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No. 94 of 2020, Anupam B Vyas Vs. State and another, by the court of 3^rd Additional District Judge, Haridwar (“the revision”). By it the order taking cognizance dated 08.08.2017, passed in the case has been upheld.

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Facts necessary to appreciate the controversy, briefly stated, are as follows:-

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The following reference was made to the Central Government Industrial Tribunal-Cum-Labour Court (CGIT), New Delhi, by the Ministry of Labour. The reference was registered as ID No. 192 of 2011, which was answered by the award dated 29.02.2016. In para 45 of the award, directions have been issued, which are as hereunder:-

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“Whether the demand of Food Corporation of India Shramik Sangh Uttaranchal is just and legal to declare that the workers Shri Rajbir Singh, S/o Shri Hodil Singh and 199 others were employed at Food Corporation of India Depot, Jwalapur since 1996-97 continuously and were also engaged by the management of FCI Jwalapur under Direct Payment System during the period 10.07.2003 to 28.10.2004 and thereafter their discontinuance/termination from service by the management of FCI in violation of section 25 (O) of the ID Act, 1947 is illegal and unjustified? If so, to what relief the concerned workman are entitled to?”

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The reference was answered by the award dated 29.02.2016. In para 45 of the award, directions have been issued as hereunder:-

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“45. As a sequel to my discussion made hereinabove, it is held that the workmen herein Shri Rajbir Singh and 199 others were employed by Food Corporation of India Depot at Jwalapur and they have not received their salary/wages for the period from 10.07.2003 to 28.10.2004 under direct payment system and thereafter their discontinuation/termination from service is also held to be illegal and unjustified as the same is in violation of provisions of Section 25(o) of the ID Act. Since the Depot at Jwalapur is stated to be closed since 2004, as such, FCI would be at liberty to engage the workmen herein willing to work at a nearby place like Rourkee, Shrinagar, Haridwar etc. as the management thinks fit. An award is accordingly passed. Let this award be sent to the appropriate Government, as required under Section 17 of the Industrial Disputes Act 1947, for publication.”

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The petition has yet not been admitted. At the stage of admission, the matter has been heard.

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Learned senior counsel for the petitioner would submit that the petitioner never made any breach of award. The petitioner challenged the award dated 29.02.2016, but then finally, SLP was dismissed on 03.04.2017. The petitioner, in order to implement the award, informed the workmen in the month of April, 2017 itself, to furnish information in a prescribed

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proforma. But, it is argued that the information was never furnished by the workmen. Not only this, it is argued that in the month of December, 2017, a public notice was also published by the petitioner, inviting the workmen to submit information in the prescribed proforma. It is argued that even thereafter, the information has not been furnished. Learned senior counsel also raised the following points in his

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submission:-

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(i) The Food Corporation of India (“the FCI”) constituted a Committee to scrutinise the cases of the workmen and the scrutiny report was prepared by the officers of the FCI, which shows that, in fact, some of the workmen were ten years of age in the year 1996, when allegedly, they were employed by the FCI. In order to ensure that the money goes at the right hand, information was sought from the workmen. After all, it is a matter of use of public money. Hence, the FCI has been careful in implementing the award and has been seeking information.

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(ii) Operation of the award had expired sometime in the month of March, 2017, as per Section 19 (3) of the Act. A complaint under Section 29 of the Act, could have been filed during the period, when the award was in operation.

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(iii) The award is still binding between the parties as per Section 19 (6) of the Act. That is how the FCI intends to collect the information and implement the award.

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(iv) The FCI has never committed any breach of the award. The FCI intends to comply with the award, after the award ceases to be in operation, as per Section 19 (3) of the Act. If cognizance is taken, the delay is required to be explained, in view of Section 473 of the Code of Criminal Procedure, 1973 (for short, “the Code”). But, in the impugned order, the delay has not been explained.

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(v) The impugned order is bad in the eyes of law, because it does not record any finding, with regard to delay as well as any breach that has been made by the

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FCI. The impugned order is also bad in the eyes of law, because it has been passed without conducting any inquiry under Sections 200 and 202 of the Code.

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In support of his contention, learned senior counsel placed reliance, on the principles of law, as laid down in the case of State of Himachal Pradesh Vs. Tara Dutt and another, AIR 2000 SC 297 and Mysore Structurals Ltd. and others Vs. State of Karnataka and another, (2002) 1 SCC 477.

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In the case of Tara Dutt (supra), the accused was though not charged under Sections 417 and 465 IPC, but was convicted under Section 417 & 465 IPC. In the appeal, the High Court held that the cognizance for the offences under Sections 417 and 465 IPC was beyond limitation and the delay in taking cognizance had never been explained. In that background, in para 7 of the judgment the Hon’ble Supreme Court held that “ Section 473 confers power on the court taking cognizance after the expiry of the period of limitation, if it is satisfied on the facts and in the circumstances of the case that the delay has been properly explained and that it is necessary so to do in the interest of justice .”

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In the case of Mysore Structurals Ltd. (supra), when a complaint under Section 29 of the Act was filed, it was challenged in the High Court on the ground that the company had already been closed and the factory license was surrendered. Learned senior counsel would submit that this judgment reflects that the facts could be seen in such proceedings. In the case of Mysore Structurals Ltd. (supra), in fact, the High Court did not interfere with the summoning order. The Hon’ble Supreme Court also did not intervene in the summoning order and observed that “the award passed by the Labour Court has become final and the remedy available to the workmen is under Section 29 of the Act. As for the appellants, it is open to them to raise all these contentions in their defence in the proceedings launched against them as a consequence of grant of sanction under Section 34 of the Act.”

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During the course of the hearing, Mr. M.C. Pant, Advocate intervened and addressed the Court on behalf of the FCI Shramik Sangh. He would submit that at this stage, no interference is warranted. According to him, all the details are with the FCI. The proforma on which the FCI has been trying to seek the information is in itself misleading. He would raise the following points:-

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(i) The workmen have already by communication dated 08.07.2019

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furnished all the information available with them.

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(ii) Even the workmen were medically examined.

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(iii) The award records a categorical finding that the workmen did work with the FCI. Reference has been made to para 32 of the award.

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(iv) The order taking cognizance and the order passed in revision are in accordance with law. No interference is warranted.

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(v) The award has yet not been complied with.

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(vi) The petitioner is giving explanation as to why it has not been complied with. The reasons for non compliance cannot be adjudged in these proceedings under Section 482 of the Code. These may be defences available to the petitioner. Therefore, no interference is warranted.

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Learned State counsel would submit that the award is binding on the petitioner. The argument raised on behalf of the petitioner that FCI is still willing and ready to comply with the award, may be adjudged in the trial.

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The facts are not in dispute. The award was passed on 29.02.2016. The complaint under Section 29 of the Act was filed on 08.08.2017. It is undoubtedly beyond the period of one year. It is also admitted that the award has yet not been complied with. According to the complaint, the FCI had made breach of it. According to the petitioner, the FCI is still in the process of complying with the terms of the award and the FCI is seeking information from the workmen for that purpose.

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Arguments have been raised with regard to the operation and binding nature of the award. Reference has been made to Section 17A and Section 19 of the Act. In fact, Section 17A makes provision with regard to the enforceability of the award. It reads as hereunder:-

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“ 17A. Commencement of the award:- (1) An award (including an arbitration award) shall become enforceable on the expiry of thirty days from the date of its publication under Section 17:

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Provided that-

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(a) if the appropriate Government is of opinion, in any case where the award has been given by a Labour Court or Tribunal

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in relation to an industrial dispute to which it is a party; or

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(b) if the Central Government is of opinion, in any case where the award has been given by a National Tribunal,

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that it will be inexpedient on public grounds affecting national economy or social justice to give effect to the whole or any part of the award, the appropriate Government, or as the case may be, the Central Government may, by notification in the Official Gazette, declare that the award shall not become enforceable on the expiry of the said period of thirty days.

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(2) Where any declaration has been made in relation to an award under the proviso to sub-section (1), the appropriate Government or the Central Government may, within ninety days from the date of publication of the award under Section 17, make an order rejecting or modifying the award, and shall, on the first available opportunity, lay the award together with a copy of the order before the Legislature of the State, if the order has been made by a State Government, or before Parliament, if the order has been made by the Central Government.

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(3) Where any award as rejected or modified by an order made under subsection (2) is laid before the Legislature of a State or before Parliament, such award shall become enforceable on the expiry of fifteen days from the date on which it is so laid; and where no order under sub-section (2) is made in pursuance of a declaration under the proviso to sub-section (1), the award shall become enforceable on the expiry of the period of ninety days referred to in subsection (2).

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(4) Subject to the provisions of sub-section (1) and sub-section (3) regarding the enforceability of an award, the award shall come into operation with effect from such date as may be specified therein, but where no date is so specified, it shall come into operation on

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the date when the award becomes enforceable under sub-section (1) or sub-section (3), as the case may be.”

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Section 19 deals with the period of operation of settlements and awards. According to Section 19, sub Section (3) of the Act, an award remains in operation for a period of one year from the date on which the award becomes enforceable under Section 17A of the Act. In fact, there are other sub-Sections in Section 19 of the Act, which deals with the period of operation of the Act and the duration till the award may have its effect of binding in nature. Especially, Sub Section (6) of Section 19 is quite important on this aspect. Section 19 as such is as hereunder:-

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“19. Period of operation of settlements and awards .- (1) A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute.

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(2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement.

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(3) An award shall, subject to the provisions of this section, remain in operation for a period of one

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year from the date on which the award becomes enforceable under Section 17A:

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Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit:

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Provided further that the appropriate Government may, before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit, so, however, that the total period of operation of any award does not exceed three years from the date on which it came into operation.

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(4) Where the appropriate Government, whether of its own motion or on the application of any party bound by the award, considers that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National Tribunal for decision whether the period of operation should not, by reason of such change, be shortened and the decision of Labour Court or the Tribunal, as the case may be, on such reference shall be final.

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(5) Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award.

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(6) Notwithstanding the expiry of the period of operation under sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.

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(7) No notice given under sub-section (2) or subsection (6) shall have effect, unless it is given by a

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party representing the majority of persons bound by the settlement or award, as the case may be.”

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The questions of delay and breach have been

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argued on behalf of the petitioner. It is argued that delay has not been explained in the impugned order and factum of breach has not been recorded. First and foremost, the Court would examine the aspect of delay to ascertain as to whether the order taking cognizance is barred by limitation. The complaint in the instant case has been filed under Section 29 of the Act, which provides for penalty for breach of an award. It reads as hereunder:-

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“29. Penalty for breach of settlement or

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award.- Any person who commits a breach of any term of any settlement or award, which is binding on him under this Act, shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both and where the breach is a continuing one, with a further fine which may extend to two hundred rupees for every day during which the breach continues after the conviction for the first and the Court trying the offence, if it fines the offender, may direct that the whole or any part of the fine realised from him shall be paid by way of compensation, to any person who, in its opinion, has been injured by such breach.”

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On behalf of the petitioner, it is argued that, in fact, penalty under Section 29 is for six months and in view of the provision, as contained under Section 468 of

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the Code, the period of limitation for taking cognizance, in such matters, is one year.

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On the question of delay in taking cognizance, learned counsel for the FCI Shramik Sangh would submit that it is a continuing offence. Learned counsel for the FCI Shramik Sangh has placed reliance on the principles of law, as laid down in the case of Management of M/s. Naga Theatre Vs. R. Raja, ILR 1999 KAR 2481, Trichur Urban Co-Op Bank Ltd. Vs. District Labour Officer, (1987) IILLJ 38 Kerala and Bhagirath Kanoria and others Vs. State of M.P., AIR 1984 SC 1688.

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In the case of R. Raja (supra), the Hon’ble Karnataka High Court has interpreted the provision of Section 29 qua limitation. A reference has been made to Section 19 of the Act. While following the law, as laid down by the Hon’ble Supreme Court, in the case of South Indian Bank Ltd. Vs. A.R. Chacko, AIR 1964 SC 1522 and various other judgments, it was held that the offence under Section 29 of the Act is a continuing offence and the embargo as placed under Section 468 of the Code is not applicable in a matter under Section 29 of the Act.

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In the case of Trichur Urban Co-Op. Bank Ltd (supra) also, the Hon’ble Kerala High Court concluded

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that the offence under Section 29 of the Act is a continuing offence.

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In the case of Bhagirath Kanoria (supra), the Hon’ble Supreme Court, inter alia, held that “For these reasons, we are of the opinion that the offence of which the appellants are charged, namely, nonpayment of the employer's contribution to the Provident Fund before the due date, is a continuing offence and, therefore, the period of limitation prescribed by Section 468 of the Code cannot have any application. The offence which is alleged against the appellants will be governed by Section 472 of the Code, according to which, a fresh period of limitation begins to run at every moment of the time during which the offence continues.”

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A bare reading of sub Section (3) of Section 19 of the Act, makes it explicitly clear that an award remains in operation for one year with effect from its enforceability.

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Sub-Section (6) of Section 19 of the Act, adds to what has been stated in sub Section (3) of Section 19. According to it, even after expiry of the operation of the award under Section 19 (3) of the Act, it shall continue to be binding on the parties until a period of two months

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has elapsed from the date on which notice is given by either of the parties to the other party intimating its intention to terminate the award. In sub-Section (3) to Section 19 the word used is “operation”. In sub-Section (6) of Section 19 the word used is “binding nature of the award” . The award remains binding, even after its operation. These two words have been interpreted by the Hon’ble Supreme Court in the case of South Indian Bank Ltd. (supra) and in para 8 of it, the Hon’ble Supreme Court observed as hereunder:-

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“8 . Quite apart from this, however, it appears to us that even if an award has ceased to be in operation or in force and has ceased to be binding on the parties under the provisions of Section 19(6) it will continue to have its effect as a contract between the parties that has been made by industrial adjudication in place of the old contract. So long as the award remains in operation under Section 19(3), Section 23( c ) stands in the way of any strike by the workmen and lockout by the employer in respect of any matter covered by the award. Again, so long as the award is binding on a party, breach of any of its terms will make the party liable to penalty under Section 29 of the Act, to imprisonment which may extend to six months or with fine or with both. After the period of its operation and also period for which the award is binding have elapsed Section 23 and Section 29 can have no operation. We can however see nothing in the scheme of the Industrial Disputes Act to justify a conclusion that merely because these special provisions as regards prohibition of strikes and lockouts and of penalties for breach of award cease to be effective the new contract as embodied in the award should also

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cease for be effective. On the contrary, the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse — in respect of both of which special provisions have been made under Sections 23 and 29 respectively — may expire, the new contract would continue to govern the relations between the parties till it is displaced by another contract. The objection that no such benefit as claimed could accrue to the respondent after March 31, 1959 must therefore be rejected.”

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(emphasis supplied)

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The principles, as laid down in the case of South Indian Bank Ltd. (supra) has further been followed by the Hon’ble Supreme Court in the case of Life Insurance Corporation of India Vs. D.J. Bahadur and others, (1981) 1 SCC 315. In para 78 of it, the Hon’ble Supreme Court observed as hereunder:-

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“78. The position seems comparable with what happens in the case of an award. Section 19(3) and Section 19(6) contain similar provisions. In the case of an award this Court has laid down in South Indian Bank Limited v. A.R. Chacko [ Sathya Studios v. Labour Court , (1978) 1 LLJ 227 (Mad HC)] that after the period of operation of an award has expired, the award does not cease to be effective. It continues to be binding on the parties, by virtue of Section 19(6), until notice has been given by one of the parties of the intention to terminate it and two months have elapsed from the date of such notice. Thereafter,—

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“it will continue to have its effect as a contract between the parties that has been made by industrial adjudication in place of the old contract ... the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it

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reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse — in respect of both of which special provisions have been made under Sections 23 and 29 respectively — may expire, the new contract would continue to govern the relations between the parties till it is displaced by another contract”.

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Later in Md. Qasim Larry, Factory Manager, Sasamusa Sugar Works v. Muhammad Samsuddin [ Indian Oil Corpn Ltd v. Workmen , (1976) 1 SCC 63 : 1975 SCC (L&S) 453 : (1976) 1 SCR 110] the court held that when an award was made and it prescribed a new wage structure, in law the old contractual wage structure became inoperative and its place was taken by the wage structure prescribed by the award. The court said:

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“In a sense, the latter wage structure must be deemed to be a contract between the parties, because that, in substance, is the effect of industrial adjudication. The true legal position is that when industrial disputes are decided by industrial adjudication and awards are made, the said awards supplant contractual terms in respect of matters covered by them and are substituted for them.”

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In the case of South Indian Bank (supra), the Hon’ble Supreme Court has categorically recorded that so long as the award is binding on the party, breach of its term will make the party liable to penalty under Section 29 of the Act. This period is definitely beyond the period of operation of the award, as stipulated under subSection (3) of Section 19 of the Act. This has also been discussed by the Hon’ble Supreme Court in the same paragraph 8 of the judgment. It makes it a continuing offence.

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In fact, this controversy was set at rest long back by the Hon’ble Supreme Court, in the case of State of Madras Vs. C.P. Sarathy and another, AIR 1953 SC 53.

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In that case, an award was given by the Industrial Tribunal, Madras on 15.12.1947, under the Act. The complaint under Section 29 of the Act was filed on 24.04.1950. An argument was raised that the complaint has been filed after expiry of the award. This argument was not accepted by the Hon’ble Supreme Court. In para 11, it was held as hereunder:-

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“11. Before dealing with the main contentions of the parties, we may dispose of a minor point raised by Mr Krishnaswami Aiyangar, for the first time before us, namely, that the prosecution of the first respondent for the alleged breach of some of the terms of the Tribunal's award is unsustainable inasmuch as it was instituted after the expiry of the award. In support of this argument learned counsel invoked the analogy of the cases where it has been held that a prosecution for an offence under a temporary statute could not be commenced, or having been commenced when the statute was in force, could not be continued after its expiry. Those decisions have no application here. The first respondent is prosecuted for an offence made punishable under Section 29 of the Act which is a permanent statute and when he committed the alleged breach of some of the terms of the award, which was in force at the time, he incurred the liability to be prosecuted under the Act. The fact that the award subsequently expired cannot affect that liability.” (emphasis supplied)

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In the instant case also, admittedly, none of the parties have given any notice under Section 19 (6) of the Act of their intention to terminate the award. The award is still binding. The parties are under obligation to

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comply with the award. Though, the operation of the award had expired under Section 19 (3) of the Act. Its binding nature makes it explicitly clear that it is a continuing offence. Each moment the offence is being committed. There is no question of delay in taking cognizance. There is no question of any explanation to it.

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An argument has been raised that without an inquiry under Section 200 of the Code, summoning order has been passed. This argument also does not merit any acceptance for the simple reason that the complaint, which has been filed by the petitioner, as Annexure 9, itself records that the complainant is the public servant. In the impugned order also, it has been recorded so. Section 200 of the Code makes exceptions for inquiry with regard to the complaint filed by a public servant. According to the provision to Section 200 of the Code, when a complaint is made in writing, the Magistrate need not examine the complainant and the witnesses, if a public servant acting or purporting to act in the discharge of his official duties or a court has made a complaint. In the instant case also, the complaint has been filed by a public servant in discharge of his official duties. Therefore, the Magistrate was not under any obligation to conduct any inquiry under Section 200 and

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202 of the Code. Based on the averment as made in the complaint, the cognizance could have been taken.

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It is true that in the impugned order dated 08.08.2017 categorical finding has not been recorded with regard to the breach. It is true that before the Court it has been argued that the petitioner is still willing and trying to implement the award. But, the fact remains that today the award has not been fully complied with, whatever the reasons may be.

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It is true that taking cognizance is not a mechanical and a routine act. At that stage, the Magistrate has to apply its judicial mind to ascertain as to whether any offence is made out or not. The Magistrate is not required to pass any detailed order at that stage. The commission of an offence and the grave suspicion of the involvement of the accused, in that offence is enough to take cognizance. That is what prima facie case means. The complaint, in the instant case, categorically records that despite lapse of huge period, the award has not been complied with by the petitioner. It was considered and the court took cognizance by a detailed order. It is not required that the court should collect any evidence and record some finding at that stage. Whatever arguments have been raised on behalf of the petitioner for

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implementing the award that may be valid defences to be taken at trial. But such arguments do not make any ground to make interference in the proceeding under Section 482 of the Code.

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In view of the above, this Court is of the view that no interference is warranted in this petition and the petition deserves to be dismissed.

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The petition is dismissed in limine .

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Jitendra

Anupam B Vyas the Then G. M (R) Food Corporation of India Dehradun v. Union of India through Secretary

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Anupam B Vyas the Then G. M (R) Food Corporation of India Dehradun v. Union of India through Secretary

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