AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • S. 10 read with Ss. 19, 26 and 27(4) of the Payment of Bonus Act, 1965, read with rules 4(a), 4(b), and 4(c) of the rules
  • provisions of Sub-sec. (1) of S. 30 of the Payment of Bonus Act, 1965 (21 of 1965),
  • EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT
  • provisions of S. 30 of the Payment of Bonus Act
  • Indian Penal Code in the Payment of Bonus Act
  • S. 28 of the Payment of Bonus Act.
  • Tamilnadu Chit Funds Act, 1951,
  • PAYMENT OF BONUS ACT 1965
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • S. 10 read with Ss. 19, 26 and 27(4) of the Payment of Bonus Act, 1965, read with rules 4(a), 4(b), and 4(c) of the rules
  • provisions of Sub-sec. (1) of S. 30 of the Payment of Bonus Act, 1965 (21 of 1965),
  • EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT
  • provisions of S. 30 of the Payment of Bonus Act
  • Indian Penal Code in the Payment of Bonus Act
  • S. 28 of the Payment of Bonus Act.
  • Tamilnadu Chit Funds Act, 1951,
  • PAYMENT OF BONUS ACT 1965
Smart Summary

Factual and Procedural Background

This petition challenges the order issuing process for an offence under the Payment of Bonus Act, 1965, and the rules framed thereunder. The complaint was filed on 15 July 1986 by a Government Labour Officer and Inspector alleging breaches of the Act by the petitioners, who are directors of Avanti Development Company, Ltd. The complaint arose from a visit conducted on 1 April 1986, during which several breaches punishable under Section 28 of the Act were noticed. The petitioners contest the jurisdiction of the trial Magistrate to take cognizance of the complaint on grounds of limitation and the authority of the complainant to file the complaint under Section 30 of the Act.

Legal Issues Presented

  1. Whether the learned trial Magistrate took cognizance without jurisdiction because the complaint was barred by limitation.
  2. Whether the complaint, lodged by the Government Labour Officer and Inspector under the Payment of Bonus Act, was instituted by an authority contemplated under Section 30 of the Act.
  3. Whether the trial Magistrate was justified in taking cognizance of the offence contained in the complaint.

Arguments of the Parties

Appellant's Arguments

  • The offences alleged are punishable with imprisonment up to six months or fine up to Rs. 4000 or both, and thus the limitation period for filing the complaint under Section 468(2)(b) of the Code of Criminal Procedure (CrPC) is one year.
  • The complaint filed on 15 July 1986 relates to an offence allegedly committed in 1982, making it barred by limitation.
  • The complainant, being a Government Labour Officer and Inspector, cannot be considered a "person aggrieved" under Section 469(1)(b) of the CrPC to start the limitation period from his knowledge of the offence in 1986.
  • Reliance was placed on the Madras High Court decision in Sulochana v. State Registrar of Chits, which restricts "person aggrieved" to those personally and directly affected by the offence, excluding officers enforcing regulatory statutes.
  • The complaint was not maintainable under Section 30 of the Payment of Bonus Act as it was not filed by or under the authority of the appropriate Government or an officer not below the rank of Labour Commissioner specially authorized.
  • The petitioners, as directors, cannot be held liable merely based on their directorship without allegations showing they were in charge of and responsible for the company's business conduct, relying on precedents under the Employees' Provident Funds and Miscellaneous Provisions Act and related case law.

Respondent's Arguments

  • The complainant, appointed under Section 27 of the Payment of Bonus Act, has statutory authority and powers to ensure compliance with the Act and thus qualifies as a "person aggrieved" for the purpose of limitation under Section 469(1)(b) of the CrPC.
  • The complaint filed within three months of the complainant's knowledge of the offence in April 1986 is within the limitation period.
  • The State Government issued a special authorization under Section 30 of the Act empowering the Commissioner of Labour to act as the authority for filing complaints and to authorize officers such as the complainant to file complaints, validating the maintainability of the complaint.
  • Although the complaint lacks specific averments about the petitioners’ control over the company’s affairs, this deficiency does not warrant quashing the process at this stage; evidence can be led at trial to establish liability.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sulochana v. State Registrar of Chits, Madras (1978 C.L.J 116) Definition of "person aggrieved" under Section 469(1)(b) of CrPC as limited to those personally and directly affected by the offence, excluding officers enforcing regulatory statutes. Initially considered by the court but rejected in favor of a broader interpretation of "person aggrieved" under the Payment of Bonus Act due to the statutory role of the complainant.
Mahalderam Tea Estate (Private), Ltd. v. D.N Prodhan (1978—II L.L.N 107) Liability of directors under the Employees' Provident Funds and Miscellaneous Provisions Act requires proof that they were in charge and responsible for the company's conduct. Referenced to argue that mere directorship without further material is insufficient to hold petitioners liable; however, the court declined to quash the process at this stage.
M. Anamharamaiah Woollen Factory v. State (1981-1 L.L.N 170) Only persons with ultimate control over the establishment are liable in prosecutions under similar statutory schemes. Used to support the argument that only those in control can be held liable; court deferred decision on this issue to trial.
Navinchandra Gandhi v. Dr. Pushpasen Kapadia (87 B.L.R 557) Reaffirmed the restricted meaning of "person aggrieved" under Section 469(1)(b) of CrPC, limiting it to those personally and directly affected by the offence. Subsequently applied by the court to hold that the complainant is not a "person aggrieved" and thus the complaint is barred by limitation.
R. C Trivedi v. A. H Paranjape (1982 Mah. L.J 82) Period of limitation under Section 469(1)(a) of CrPC applies where complainant is not a "person aggrieved" under Section 469(1)(b), starting limitation from date of offence. Applied by the court to conclude that the complaint filed beyond the limitation period is barred and the trial Magistrate lacked jurisdiction.

Court's Reasoning and Analysis

The court initially considered the petitioner's contention that the complaint was barred by limitation, relying on Section 468(2)(b) of the CrPC and the definition of "person aggrieved" under Section 469(1)(b). It noted that the complainant was a Government Labour Officer and Inspector under the Payment of Bonus Act, appointed under Section 27, with statutory duties to ensure compliance.

The court rejected the narrow interpretation of "person aggrieved" as excluding such a complainant, reasoning that this would nullify the complainant's statutory role and render enforcement ineffective. It held that the complaint was maintainable and within limitation, as the complainant's knowledge of the offence during the 1 April 1986 visit triggered the limitation period under Section 469(1)(b).

Regarding maintainability under Section 30 of the Act, the court examined the authorization issued by the State Government, which empowered the Commissioner of Labour and authorized the complainant to file the complaint. Thus, the complaint was validly instituted by an authority contemplated under the Act.

On the issue of the petitioners' liability as directors, the court observed that the complaint lacked averments that they were in charge of and responsible for the company's conduct. However, it declined to quash the process at this stage, leaving it to the complainant to lead evidence on this point during trial.

After the initial judgment, the petitioner's counsel cited a binding decision of this Court in Navinchandra Gandhi v. Dr. Pushpasen Kapadia, which approved the restricted interpretation of "person aggrieved" as limited to those personally and directly affected. The court acknowledged the binding precedent and held that the complainant was not a "person aggrieved" for limitation purposes.

Consequently, the court concluded that the complaint was barred by limitation under Section 469(1)(a), starting from the date of the offence in 1982. The trial Magistrate's cognizance was therefore without jurisdiction, leading to quashing the impugned process and dismissing the complaint.

Holding and Implications

The petition succeeds. The impugned process issued by the trial Magistrate is quashed and the complaint dismissed on the ground of being barred by limitation.

The direct effect is the dismissal of the complaint against the petitioners. The court adhered to binding precedent on the interpretation of "person aggrieved" under the CrPC, thereby reinforcing the limitation framework for statutory offences. No new precedent was set beyond applying existing case law to the facts.

    Avanti Development Company, Ltd., Bombay, And Others v. State Of Maharashtra And Others

    1. This petition seeks to challenge the order of issue of process for an offence under the Payment of Bonus Act, 1965, read with the rules framed thereunder. It raises a couple of questions of law for my decision, viz., whether the cognizance taken by the learned trial Magistrate was without jurisdiction on account of the complaint being barred by limitation and whether the said complaint which is lodged by the Government Labour Officer and the Inspector under the Payment of Bonus Act has been instituted by an authority contemplated under s. 30 of that act and consequently whether the trial Magistrate was justified in taking cognizance of the offence contained in that complaint.

    2. The complaint in question was filed on 15 July, 1986, alleging offences under S. 10 read with Ss. 19, 26 and 27(4) of the Payment of Bonus Act, 1965, read with rules 4(a), 4(b), and 4(c) of the rules framed thereunder. It is alleged that the petitioners are the directors of Avanti Development Company, Ltd., and the Payment of Bonus Act is applicable to the said industry. During the course of the visit of the complaint on 1 April, 1986, several breaches under the Act were noticed which were punishable under S. 28 of the Payment of Bonus Act. A copy of the Government order regarding authorisation of the complainant for filing the complaint was enclosed with the complaint and it was averred that the evidence both oral and documentary shall be produced at the time of hearing and this complaint was lodged by the complainant who is the Government Labour Officer and Inspector under the Payment of Bonus Act.

    3. Sri Naphade, the learned advocate appearing in support of the petition, contended that the offences in question were punishable with imprisonment for a term which may extend to six months or with tine which may extend to Rs 4000 or with both and consequently the period of limitation for filing such a complaint as provided in S. 468(2)(b) of the Code of Criminal Procedure was one year. He pointed out by placing reliance upon breach 1 contained in the complaint, viz., full payment of bonus for 1982 was not paid, the offence alleged had been committed in the year 1982 and hence the present complaint tiled on 15 July, 1986 was hopelessly barred by limitation and the trial Magistrate was not empowered to take cognizance of the said complaint. In regard to the averment made in the complaint:

    “During the course of my visit on 1 April, 1986 under the Payment of Bonus Act, 1965, the following breaches were detected …”,

    he submitted that it could not be held that the complaint was within limitation by virtue of S. 469(1)(b) on account of the knowledge of the offence of the complainant on his visit on 1 April, 1986. According to him the complainant could not be termed as a person aggrieved so as to claim the benefit of S. 469(1)(b) for the starting point of the period of limitation from the date of the knowledge of the said offence by the complainant. According to him the only person that would be aggrieved would be the employees of the petitioners and not the complainant. In order to appreciate the aforesaid contentions of Sri Naphade, it will be convenient to reproduce the provisions of S. 469 of the Code of Criminal Procedure:

    “469. Commencement of the period of limitation.—(I) The period of limitation, in relation to an offence, shall commence,—

    (a) on the date of the offence; or

    (b) where the commission of the offence was not known to the person aggrieved by the offence or to any police officer, the first day on which such offence comes to the knowledge of such person or to any police officer, whichever is earlier; or

    (c) where it is not known by whom the offence was committed, the first day on which the identity of the offender is known to the person aggrieved by the offence or to the police officer making investigation into the offence, whichever is earlier.

    (2) In computing the said period, the day from which such period is to be computed shall be excluded”.

    Sri Naphade, the learned advocate placing reliance on the aforesaid section, submitted that the present case would be governed by S. 469(1)(a) and the period of limitation would commence from the date of the offence which in the present case according to the complainant had been committed in 1932, and the provisions of S. 469(1)(b) would not be attracted as the complainant who is a Government Labour Officer and Inspector under the Payment of Bonus Act could not be said to be a person aggrieved by the offence nor was he a police officer and consequently, the provisions of Sub-sec. (b) would not enure to the benefit of the complainant for availing of the new starting point of period of limitation on the strength of his knowledge of the commission of that offence. Reliance was placed on the case of Sulochana v. State Registrar of Chits, Madras, [1978 C.L.J 116|, wherein it has been held that the words “person aggrieved by the offence” occurring in S. 469(1)(b) and 469(1)(c) should be given a limited or restricted coverage, viz., one who is personally and directly affected by an offence, and not to any member of the public or even an officer who is charged with the duty of enforcing the prohibitory regulations under a statute. A Single Judge of the Madras High Court, while dealing with a prosecution under the Tamilnadu Chit Funds Act, 1951, observed that the Registrar had come forward with the complaint in performance of his official duty and not on account of any grievance felt or sustained by him personally in the contraventions committed by the petitioner therein. Complaints preferred in discharge of one's official duty are vastly different in character and nature from complaints preferred by person aggrieved by commission of the offence. They distinctly fall in two different categories and the former is not to be confused with the latter. In Para. 5 of the said judgment, while considering the question whether the Registrar under the Tamilnadu Chit Funds Act can be termed a “person aggrieved” by the offences alleged to have been committed by the petitioner therein, reference was made to offences contained in Chap XX of the Indian Penal Code, i.e, offences relating to marriage and cognizance of the said offences was barred under S. 197 of the Code of Criminal Procedure, except upon a complaint made by the husband or wife as the case may be or the guardian of the victim of the offences. A similar reference was made to offences under Chap. XXI, i. e., defamation and cognizance of the said offence was barred under S. 199 of the Code of Criminal Procedure, except by a person defamed. It was thus held that it was logical to hold that the words “person aggrieved by the offence” occurring in Ss. 469(1)(b) and 469(1)(c) should also be given a limited or restricted coverage, viz, one who is personally and directly affected by an offence, and not to any member of the public or even an officer who is charged with the duty of enforcing the prohibitory regulations under a statute.

    4. I am afraid, I have not been able to persuade myself to concur with the views expressed in the aforesaid decision. The complainant who is the Inspector under the Payment of Bonus Act has been appointed by virtue of s. 27 of that act and has been empowered with various powers and functions for ensuring the due compliance of its provisions. If such a complainant who is enjoined with the duty of ensuring the due compliance of the various provisions of this Act comes to know of the offences having been committed under the Act, to say that he is not a person aggrieved so as to be entitled to file a complaint under the Act would, in my view, render his functions nugatory. I see no justification to give a narrow construction to the phrase “person aggrieved” so as to restrict the filing of the complaint only by the employees who alone can be said to be the persons aggrieved, as such a complaint would be barred in view of the provisions of S. 30 of the Payment of Bonus Act which provision bars the Court from taking cognizance of any offence punishable under the Act save on a complaint made by or under the authority of the appropriate Government or an officer of that Government not below the rank of a Regional Labour Commissioner… specially authorised in this behalf by that Government. I am not prepared to import the provisions of Ss. 198 and 199 of the Code of Criminal Procedure which bar the taking of cognizance except on complaints made by the persons who are directly affected by the offences contemplated in Chaps. XX and XXI of the Indian Penal Code in the Payment of Bonus Act which is undoubtedly a social legislation meant for the benefit of the employees of industries, I find no provision in the Act or the rules justifying such construction. Giving such a narrow construction as pointed out hereinabove would render any complaint not maintainable in view of the aforesaid S. 30 of the Act. In this view of the matter, it must be held that the present complaint filed by the Inspector under the Payment of Bonus Act is maintainable and is within limitation in view of the provisions cl S. 469(1)(b) in as much as the complainant during his visit on 1 April, 1986, had detected the various breaches complained of in the complaint and consequently the complaint filed on 15 July, 1986, is a complaint filed well within the period of limitation. So this contention of Sri Naohade regarding the complaint being barred by limitation must be negatived.

    5. On the next question Sri Naphade, the learned advocate appearing for the petitioners, on placing reliance upon S. 30 of the Act, submitted that the present complaint filed by the present complainant who was an Inspector under the Act was not maintainable and the trial Magistrate had erred in taking cognizance on the strength of this complaint. In order to appreciate the said contention, it may be convenient to reproduce the provisions of S. 30(1):

    “30(1) No Court shall take cognizance of any offence punishable under this Act, save on complaint made by or under the authority of the appropriate Government or an officer of that Government not below the rank of a Regional Labour Commissioner in the case of an officer of the Central Government, and not below the rank of a Labour Commissioner in the case of an officer of the State Government specially authorised in this behalf by that Government”.

    According to Sri Naphade the present complaint not having been filed either by the appropriate Government or under its authority by an officer of the Government not below the rank of a Labour Commissioner specially authorised in this behalf, the complaint was not maintainable, in my judgment, there is no merit in the aforesaid contention Inasmuch as the said provision for its proper construction can be split up as follows:

    “No Court shall take cognizance of any offence save on complaint made by the Government or under its authority, and

    No Court shall take cognizance of any offence save on a complaint made by an officer not below the rank of a Labour Commissioner or by or under his authority”.

    Smt. Keluskar, the learned Assistant Public Prosecutor, has produced for my perusal the special authorisation issued by the State Government authorising the Commissioner of Labour to be the authority for the purpose of S. 30 of the said Act. The said authorisation has been duly published in the Maharashtra Government Gazette and it provides—

    “In pursuance of the provisions of Sub-sec. (1) of S. 30 of the Payment of Bonus Act, 1965 (21 of 1965), the Government of Manarasntra, being the appropriate Government, hereby specially authorises the Commissioner of Labour, Bombay, Maharashtra State to be the authority for the purposes of the said section.

    By order and in the name of the Governor of Maharashtra”.

    The said authorisation would indicate that the Labour Commissioner is not merely authorised to file complaints but has been appointed as the authority contemplated in S. 30 and not only would he be empowered himself to file complaints but would also be entitled to authorise third parties such as the complainant in the present case to file the present complaint. The copy of the order of the Labour Commissioner authorising the complainant to file the instant complaint is enclosed as exhibit A to the complaint and I see no fault in the authority derived by the present complainant to file the instant complaint. In this view of the matter, the second contention of Sri Naphade must be negatived.

    6. Sri Naphade lastly contended that the petitioners had been implicated in the present complaint on account of they being the Directors of the Company, Avanti Development Company, Ltd. According to him the involvement of the petitioners merely by virtue of they being the directors would not be justified by virtue of S 39 of the Act. According to him the petitioners could be held liable only if they were shown to be in charge of and were responsible to the company for the conduct of the business of the company and such averments were conspicuously absent in the present complaint. Consequently the process issued against them was without application of mind and was liable to be quashed. Reliance was placed on the case of Mahalderam Tea Estate (Private), Ltd. v. D.N Prodhan, [1978—II L.L.N 107], wherein in a prosecution under the Employees' Provident Funds and Miscellaneous Provisions Act, apart from a statement that the accused were directors of the company and hence responsible for the conduct of its business and management, there was no further material from which the Magistrate could satisfy that the accused took some part in the running of the business of company or its tea gardens, the process issued for the said offences came to be quashed, Reliance was also placed on the case of M. Anamharamaiah Woollen Factory v. State, [1981-1 L.L.N 170], wherein in a similar prosecution it was held that ordinarily not all the partners of the firm to which a: establishment belongs are liable to be punished but only the persons who have the ultimate control over the affairs of the establishment or the manager, managing director or managing agent to whom the ultimate control over the affairs of the establishment are entrusted, is liable to be prosecuted. The process in the said case also came to be quashed on account of the absence of necessary allegation of facts attracting the liability of the accused on account of their being the partners of the firm.

    7. It is true that in the present case all that has been averred is that the accused petitioners are the directors of the company, viz., Avanti Development Company, Ltd., and the further averments that the petitioners are in charge of and were responsible to the company for the conduct of the business of the company are conspicuously absent. However, I am not inclined, at this stage, on account of the said averments being wanting, to quash the process in the exercise of my inherent jurisdiction under S. 482 of the Code of Criminal Procedure. It would be for the complainant to lead evidence on this point at the trial.

    8. In the result, I find no merit in this petition and the same is liable to be dismissed

    9. After the afore said judgment of mine was pronounced but before the writ was despatched from this Court, Sri Naphade, the learned advocate appearing on behalf of the petitioners, pointed out a decision of this Court in the case of Navinchandra Gandhi v. Dr. Pushpasen Kapadia, [87 B.L.R 557], wherein this Court has concurred with the view expressed in Sulochana v. State Registrar of Chits, Madras, [1978 Cri. L.J 116] (vide supra), of the Madras High Court with which 1 have deferred hereinabove. According to Sri Naphade in view of the said decision of this Court it would not be open to me to take a contrary view. 1 may at best be justified in referring this matter to a larger Bench. In my judgment, there is considerable force in the contention of Sri Naphade. Having heard him further in the matter and having perused the judgment in the case of Navinchandra (vide supra), decided by this Court, though left to myself, I was inclined to take a contrary view, I must in view of the decision of this Court, having regard to the binding effect of precedents which I must respect, follow the same It has been held that the expression “person aggrieved by the offence” occurring in CI. (b) of S. 469(1) of the Criminal Procedure Code is limited or restricted only to those persons who are personally and directly affected by an offence. The words “person aggrieved” include a person who has a genuine grievance. When a complainant cannot be said to have been prejudicially affected by the activities of the offence-doer and cannot be said to be directly affected by the alleged offence, the complainant cannot be held to be an aggrieved person within the meaning of Cl. (b) of S. 469(1), Criminal Procedure Code, and thus when Cl. (b) is not attracted, the period of limitation has to be counted under Cl. (b) of S. 469(1). In this decision the decision of the Madras High Court in the case of Sulochana (vide supra), has been approved. In this view of the matter it must be held in the facts of the present case that the respondent 1 the original complainant is not an aggrieved party but the aggrieved parties are the employees of the petitioner 1-Avanti Development Company, Ltd. of which the petitioners are directors. That being the case, the provisions of S 469(1)(b) cannot be attracted and the case would be governed by S. 469(1)(a) and the period of limitation will commence from 1982 and consequently as held in the case of R. C Trivedi v. A. H Paranjape, [1982 Mah. L.J 82], the complaint being beyond the period of limitation the cognizance taken by the learned trial Magistrate is without jurisdiction. In this view of the matter, the petition succeeds. The impugned process is quashed and the complaint is dismissed. Rule made absolute.

    Use AI to get other relevant cases.

    Comments

    Avanti Development Company, Ltd., Bombay, And Others v. State Of Maharashtra And Others
    (Aug 20, 1987)