Case: Ashok Kumar Jain and Others Vs. State of Bihar and Others

RAY, G.N. AND HANSARIA B.L. (J. J.) 1. The appellants in these criminal appeals arc Chairman, Managing Director and other senior officials in the management of the Rohtas Industries Limited a company registered under the Indian Companies Act and engaged in the manufacture and sale of variety of products namely cement, vanaspati, paper asbestos, cement products etc. The factories owned by the company were situated at Dalmianagar in the district of Rohtas, Bihar, wherein about 15000 workers were engaged. The Company had a contract with Bihar State Electricity Board for the supply of 25000 KVA of electricity and the Company was to pay 75% of the electricity charges irrespective of the fact whether such supply for running its factories and establishments were made. The case of the Company is that due to chronic shortage of power supply ever since 1981 varying between 11.5 to 7.3 MW. of electricity per diem, the productive activities of the Company suffered immensely. The. Electricity: Board made demand for payment of Bill including enhanced fuel surcharge for the period 1977-80 and 1980-81 which stood at Rs. 72, 61, 010, 70.00. The Company moved writ petitions in Patna High Court for quashing supplementary Bills but such wr it petitions were dismissed. The Companys attempt to clear dues of the Electricity Board by instalments also failed. The Board disconnected electric connection to the Companys factories and establishments for which the Company suffered a serious set back. The Company resorted to lay off of its workers without obtaining prior permission of the concerned authority. For such action of lay off, complaints were filed by the Superintendent of Labour, Dalmianagar before the Chief Judicial Magistrate Sasaram who took cognizance of the offence under Section 25-M read with Section 25-O of the Industrial Disputes Act. The appellants moved the Patna High Court for quashing the complaint by challenging the maintain ability of the said criminal cases by contending that Section 25-M in so far as it required permission to lay off was ultra vires the Constitution of India. The appellants also contended that lay off was necessitated because of power failure on account of insufficient and irregular supply of power by the Electricity Board and some other reasons beyond the control of the Company or the appellants. It was also contended that the appellants could not be held an employer for the purpose of prosecution for the offence under Section 25-M read with Section 25-Q of the Industrial Disputes Act. The High Court of Patna held inter alia that the Section 25-M was ultra vires the Constitution and the complaint prima facie disclosed offence under the said provisions. Hence, taking of cognizance by the Chief Judicial Magistrate could not be held illegal or invalid warranting quashing of the complaint. The High Court, however, held that it was only just and proper in the f acts and circumstances of the case, that the Magistrate would hold enquiry under Section 202 of the Code of Criminal Procedure for the purpose of ascertaining as to whether the appellants or any one of them could be held to be employer so that they could be summoned to stand trial for the aforesaid offence. The High Court therefore allowed the said applications for quashing the criminal proceedings only to the extent indicated above. 2. Against the aforesaid decisions of the High Court special leave petitions were moved before this Court which have been admitted giving rise to these appeals. Further proceedings and prosecution of the criminal cases have been stayed by this Court on 22.2.1985. Mr. Jain, learned Senior Advocate appearing for the appellants has contended that the vires of Section 25-M(2) cannot be upheld for the reasons indicated by this Court in Excel Wears case. He has submitted that Madras High Court has held the said provision as constitutionally invalid and the appeal from such decision is pending disposal before this Court. That apart, lay off became inevitable on account of power failure occasioned by short supply and irregular supply of power seriously affecting productive activities. In the facts of the case it is more than evident that the lay off was not motivated or unjustified but such lay off had to be resorted for compulsive circumstances beyond the control of the company and its management including the appellants. He has submitted that the Company became sick beyond revival and all attempts to revive have failed. The Company is no longer in the management of the factories and productive units. Even if the vires of Section 25-M is upheld, in the facts of the case, there is no difficulty in finding that there was no lack of bonafide on the part of the Company and its management in resorting to lay off. Such action had to be taken to save the Company from being permanently sick. The situation was so grave that the management felt the need of immediate lay off without waiting for permission as contemplated under Section 25-M. That apart, Section 25-O was declared ultra vires by this Court in Excel Wears case and constitutional validity of Section 25-M for the reasons indicated in Excel Wears case was seriously doubted. In the aforesaid circumstances, the lay off without taking prior permission cannot be held to be per se illegal and unjustified and mala fide. The liability of the appellants for being prosecuted under Section 25-M read with Section 25-Q, in any event, are doubtful. AS a matter of fact, the High Court has directed the Chief Judicial Magistrate to first ascertain the liability of the appellants before proceeding further with the criminal cases. In view of order of stay granted by this Court, such enquiry has not yet been held. After such a long lapse of time, resumption of enquiry and the criminal proceedings will not serve any practical purpose but the appellants are bound to suffer irreparable loss and prejudice because of the changed circumstances and long lapse of time. Mr. Jain has submitted that the criminal cases should be quashed to secure ends of justice. He has submitted that such power has been exercised by this Court when the ends of justice demanded such quashing although the criminal case was validly instituted and was otherwise maintainable. 3. As the question of vires of Section 25-M of Industrial Disputes Act was involved in these appeals and also a Civil Appeal No. 807 of 1982 (arising out of the decision of Madras High Court), all these matters were heard analogously. We have upheld the vires of Section 25-M in the decision rendered in Civil Appeal No. 807 of 1982. Hence, the contention that Section 25-M being ultra vires, no prosecution on account of violation of the provisions of Section 25-M is maintainable, cannot be accepted. 4. It however appears to us that there is enough force in the contention of Mr. Jain that in the special facts of the case and in the altered scenario, the enquiry as directed by the High Court need not be made and the criminal case s instituted against the appellants need not be pursued any further. Such course of action in our view is not only within the scope and ambit of Section 482 of the Code of Criminal Procedure but in the special facts of the case will also secure the ends of justice. 5.

Decision reasoning: 1[ds]In the facts of the case it is more than evident that the lay off was not motivated or unjustified but such lay off had to be resorted for compulsive circumstances beyond the control of the company and its management including the appellants. He has submitted that the Company became sick beyond revival and all attempts to revive have failed. The Company is no longer in the management of the factories and productive units. Even if the vires of Section 25-M is upheld, in the facts of the case, there is no difficulty in finding that there was no lack of bonafide on the part of the Company and its management in resorting to lay off. Such action had to be taken to save the Company from being permanently sick. The situation was so grave that the management felt the need of immediate lay off without waiting for permission as contemplated under Section 25-M. That apart, Section 25-O was declared ultra vires by this Court in Excel Wears case and constitutional validity of Section 25-M for the reasons indicated in Excel Wears case was seriously doubted. In the aforesaid circumstances, the lay off without taking prior permission cannot be held to be per se illegal and unjustified and mala fide. The liability of the appellants for being prosecuted under Section 25-M read with Section 25-Q, in any event, are doubtful. AS a matter of fact, the High Court has directed the Chief Judicial Magistrate to first ascertain the liability of the appellants before proceeding further with the criminal cases. In view of order of stay granted by this Court, such enquiry has not yet been held. After such a long lapse of time, resumption of enquiry and the criminal proceedings will not serve any practical purpose but the appellants are bound to suffer irreparable loss and prejudice because of the changed circumstances and long lapse of time. Mr. Jain has submitted that the criminal cases should be quashed to secure ends of justice. He has submitted that such power has been exercised by this Court when the ends of justice demanded such quashing although the criminal case was validly instituted and was otherwise maintainable3. As the question of vires of Section 25-M of Industrial Disputes Act was involved in these appeals and also a Civil Appeal No. 807 of 1982 (arising out of the decision of Madras High Court), all these matters were heard analogously. We have upheld the vires of Section 25-M in the decision rendered in Civil Appeal No. 807 of 1982. Hence, the contention that Section 25-M being ultra vires, no prosecution on account of violation of the provisions of Section 25-M is maintainable, cannot be accepted4. It however appears to us that there is enough force in the contention of Mr. Jain that in the special facts of the case and in the altered scenario, the enquiry as directed by the High Court need not be made and the criminal case s instituted against the appellants need not be pursued any further. Such course of action in our view is not only within the scope and ambit of Section 482 of the Code of Criminal Procedure but in the special facts of the case will also secure the ends of justice.