CRIMINAL MISCELLANEOUS No.11990 OF 2000 ---- In the matter of an application under Section 482 of the Code of Criminal Procedure,1973. ---- 1. M/S USHA INTERNATIONAL LTD., A PUBLIC LIMITED COMPANY REGISTERD UNDER INDIAN COMPANIES ACT, 1913 WITH ITS REGISTERED HEAD OFFICE AT 19, KASTURBA GANDHI MARG, NEW DELHI- 110001. 2. SHRI SIDHARTHA BHRIRAM, AGED ABOUT 35 YEARS, SON OF DR. CHARAT RAM, CHAIRMAN, USHA INTERNATIONAL LTD., 19 KASTURBA GANDHI MARG, NEW DELHI-1. 3. SUNIL WADHWA, SON OF DR. R.L. WADHWA, MANAGING DIRECTOR, USHA INTERNATIONAL LTD., 19 KASTURBA GANDHI MARG, NEW DELHI-1. 4. SHRI M.S. SOOD, SON OF MR. H.S. SOOD, DIVISIONAL MANAGER,, USHA INTERNATIONAL LTD., EXHIBITION ROAD, PATNA-1. ... ... PETITIONERS. Versus 1. THE STATE OF BIHAR 2. THE LABOUR SUPRINTENDENT MR. PARAMANAND KUMAR C/O DY. LABOUR COMMISSIONER, PATNA. ... ... OPPOSITE PARTIES. ---- For the Petitioners : M/S Rana Pratap Singh, Sr.Adv. Mukesh Kant, Adv. For the State : Mrs.Indu Bala Pandey, A.P.P. ---- P R E S E N T THE HON'BLE MR. JUSTICE RAKESH KUMAR ---- Rakesh Kumar,J. Four petitioners, while invoking inherent jurisdiction of this Court under Section 482 of the Code of Criminal Procedure, have prayed for quashing of an order dated 24.12.1999 passed by the Chief Judicial Magistrate, Patna in Complaint Case No.1834(M) of 1999. By the said order, on the official complaint, the learned Chief judicial Magistrate has taken cognizance 2 under Section 22(A) of the Minimum Wages Act and summoned all the accused persons. 2. Short fact of the case is that on 2.9.1999, an inspection was conducted in the premises of M/S Usha International, Showroom, Exhibition Road and it was found that one Sri Dinanath, who was working as employee, was not being paid wages as prescribed by the Minimum Wages Act. It was alleged that Sri Dinanath was being paid a meager amount. After inspection, sanction from the competent authority was obtained and thereafter, a complaint was filed in the court of Chief Judicial Magistrate by the Labour Superintendent and Inspector, Minimum Wages Act, Patna. Since it was an official complaint by order dated 24.12.1999, the learned Magistrate took cognizance of offence under Section 22(A) of the Minimum Wages Act and summoned the petitioners. 3. Aggrieved with the order of cognizance, the petitioners approached this Court by filing the present petition. At the time of argument, Shri Rana Pratap Singh, learned Senior Counsel, who was assisted by Shri Mukesh Kant, learned advocate, submitted 3 that the learned Magistrate had incorrectly taken cognizance of offences against all the accused persons. While referring to the complaint petition, it was argued that no averment was made in the complaint petition as to who was incharge at the relevant time where Sri Dinanath was alleged to be paid a meager amount. It was submitted that since the worker was functioning in the Company registered under the Companies Act, it was necessary for the complainant to indicate the role played by the specific persons. It was submitted that petitioner nos.2 and 3, who were Chairman and Managing Director respectively of Usha International Ltd. were directly or indirectly not associated in payment of meager amount to the worker as has been alleged in the complaint petition. Learned counsel for the petitioners, at the time of hearing of the present petition, has confined his argument to the case of petitioner nos.2 and 3 only. So far as petitioner nos.1 and 4 are concerned, it has not been disputed that order of cognizance in respect of them was incorrect. Shri Rana Pratap Singh, learned Senior Counsel has 4 specifically pointed out the provision contained in Section 22(C) of the Minimum Wages Act, which is as follows : “22C. Offences by companies.-(1) If the person committing any offence under this Act is a company, every person who at the time the offence was committed, was incharge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act 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. (2) Notwithstanding anything 5 contained in sub-section (1), where any 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 is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer of the company shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.” 4. Learned counsel has argued that the provision under Section 22(C) of the Minimum Wages Act is similar to the provisions contained in Sections 138 and 141 of the Negotiable Instrument Act. It was argued that similar issue was xamined by Hon’ble Supreme Court in a case reported in 2005(8) SCC 89 (S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and another). It was argued that in the case besides examining the provision of Sections 141 and 138 of the Negotiable Instrument Act, 6 the Hon’ble Supreme Court had also examined other provisions of similar nature in which a company was to be prosecuted and it was held that if a company is to be prosecuted in the complaint petition, there must be some specific assertion that who were responsible for committing the offence. Learned Senior Counsel has pointedly placed the decision of S.M.S. Pharmaceuticals Ltd. (Supra), at the time of hearing. In the said case, following questions were referred to the larger Bench, which are as No. (a) Whether for purposes of Section 141 of the Negotiable Instruments Act,1881, it is sufficient if the substance of the allegation read as a whole fulfil the requirements of the said section and it is not necessary to specifically state in the complaint that the person accused was in charge of, or responsible for, the conduct of the business of the company. (b) Whether a director of a company would be deemed to be in charge of, and responsible to, the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary. 7 (c) . . . . . . . . .” 5. This question was answered by the Hon’ble Supreme Court in paragraph-19 of its judgment, which is as follows : “ 19. in view of the above discussion, our answers to the questions posed in the reference are as under : (a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) The answer to the question posed in sub-para (b) has to be in the negative. Merely being a director of a company is not 8 sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c) . . . . . . . . . .” 6. In view of the law laid down by Hon’ble Supreme Court, it has been argued that the order of cognizance so far as petitioner nos.2 and 3 in the present case is liable to be set aside, since there were no specific averment relating to involvement of petitioner nos.2 and 3. 7. Smt. Indu Bala Pandey, learned Additional Public Prosecutor appearing on behalf of the State has vehemently opposed 9 the prayer of the petitioners. She has also referred to the averment made in the counter affidavit filed on behalf of the State. It was submitted that so far as petitioner no.4 is concerned, he was Divisional Manager of the Company and he was responsible for implementation and maintaining all the records under the Minimum Wages Act and its provisions. Learned counsel has referred paragraph-8 of the counter affidavit. It has further been submitted that in this case, order of prosecution sanction was also on record and as such the petition is liable to be rejected. 8. Besides hearing learned counsel for the parties, I have also perused the materials available on record. Prima facie, on the basis of the averment made in the complaint petition, the court is satisfied that there is no whisper regarding petitioner nos.3 and 2 for violating the provisions contained in the Minimum Wages Act. 9. In view of absence of any specific averment so far as petitioner nos.2 and 3 are concerned as well as in view of law laid down by Hon’ble Supreme Court in S.M.S. 10 Pharmaceuticals Ltd. (Supra), there is no option for this Court but to quash the order of cognizance so far as petitioner nos.2 and 3 are concerned. 10. Accordingly, order of cognizance in respect of petitioner nos.2 and 3 is hereby set aside and petition is allowed partly to the extent as indicated above. Since the petition in respect of petitioner nos.2 and 4 stands rejected, the interim order of stay dated 22.6.2001 so far as petitioner nos.1 and 4 is concerned, stands automatically vacated. 11. Let a copy of this judgment be sent to the court below forthwith. 12. The court below is directed to proceed in accordance with law so far petitioner nos.1 and 4 are concerned. 13. With above observation and direction, the petition is allowed partly. ( Rakesh Kumar,J.) PATNA HIGH COURT Dated 24.8.2010 N.A.F.R./N.H.