| Headnote |
Minimum Wages Act, 1948: s.22A, s.22C(1) and (2) – Appellant is director of WS Company which had entered into an agreement for servicing of ATMs with another company – The latter company had entered into agreement with State Bank for maintenance and upkeep of all their ATMs – A notice was issued to the appellant and the head of WS company (accused no.2) by Labour Enforcement Officer alleging non-compliance of provisions of 1948 Act – WS company responded that they neither manage the ATMs nor work at the ATMs – Criminal complaints filed against the appellant and the head of WS company under s.22A – WS Company was not enlisted as an accused in the complaint and was not summoned to stand trial – Appellant-director filed s.482 CrPC petition which was dismissed by High Court – On appeal, held: s. 22A of the Act is a ‘General provision for punishment of other offences’ where “any employer who contravenes any provision of this Act or of any rule or order made thereunder shall, if no other penalty is provided for such contravention by this Act, be punishable with fine...”– Sub- section (1) to s.22C states that where an offence is committed by a company, every person who at the time the offence was committed was in-charge of and was responsible to the company for the conduct of the business, as well as the company itself shall be deemed to be guilty of the offence – By necessary implication, it follows that a person who do not bear out the requirements is not vicariously liable under s. 22C(1) of the Act – The proviso, which is in the nature of an exception, states that a person who is liable under sub-section (1) shall not be punished if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence – The onus to satisfy the requirements to take benefit of the proviso is on the accused, but it does not displace or extricate the initial onus and burden on the prosecution to first establish the requirements of sub-section (1) to s. 22C of the Act – Sub-section (2) states that notwithstanding anything contained in sub-section (1), where any offence under the Act has been committed by a company, and it is proved that such 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, then 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 – The words ‘in-charge of the company’ and ‘responsible to the company’ are pivotal to sub-section (1) – This requirement has to be satisfied for the deeming effect of sub-section (1) to apply and for rendering the person liable to be proceeded against and, on such position being proved, punished – The necessities of sub-section (2) to s. 22C of the Act are different from sub-section (1) to s. 22C of the Act – Vicarious liability under sub- section (2) to s. 22C can arise because of the director, manager, secretary, or other officer’s personal conduct, functional or transactional role, notwithstanding that the person was not in overall control of the day to day business of the company when the offence was committed – Vicarious liability is attracted when the offence is committed with the consent, connivance, or is attributable to the neglect on the part of a director, manager, secretary, or other officer of the company – In the factual context of this case, it is crystal clear that the complaint does not satisfy the mandate of sub-section (1) to s. 22C of the Act as there are no assertions or averments that the appellant was in-charge of and responsible to WS company – The proviso to sub-section (1) in the present case would not apply – It is an exception that would be applicable and come into operation only when the conditions of sub-section (1) to s. 22C are satisfied – In the absence of any specific averment, the prosecution in the instant case does not and cannot rely on s. 22C(2) of the Act – Thus, proceedings initiated against the appellant and also against accused no.2 are quashed. Liability: Vicarious liability – A company being a juristic person cannot be imprisoned, but it can be subjected to a fine, which in itself is a punishment – Every punishment has adverse consequences, and therefore, prosecution of the company is mandatory – Minimum Wages Act, 1948. |
