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REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.442 OF 2016

(Arising from SLP(Criminal) No. 6410/2015) Hemant Madhusudan Nerurkar ..Appellant

versus State of Jharkhand and another ..Respondents

WITH CRIMINAL APPEAL NO. 443  OF 2016

(Arising from SLP(Criminal) No. 6406/2015) J U D G M E N T

JAGDISH SINGH KHEHAR, J. Leave granted in both the special leave petitions. The controversy arising for adjudication emerges from the  

provisions of the Factories Act, 1948 (hereinafter referred to as '  the Act'), and the Bihar Factories Rules, 1950 (as applicable to  the  State  of  Jharkhand).   Insofar  as  the  alleged  violations  committed by the appellants are concerned, a summary of the same  stands recorded in paragraph 3 of the impugned judgment, which is  extracted hereunder:

“3. It appears that an inspection carried out in  the  Growth  Shop  of  M/s  Tata  Steel  Limited  on  14.09.2013  and  in  course  of  inspection,  it  was  found  that  in  Fabrication  Yard  No.1  about  100  numbers of contract labourers engaged.  However, on  inquiry, it came to the notice of the Inspecting  Team  that  though  the  Management  took  overtime  service from them, but in terms of Factories Rules,  1950 (Form-10A) overtime slip not provided to them,  which is violative of Rule 103A of the Factories  Rules,  1950.   The  Inspecting  Team  further  found  that the contract labourers were not provided  with  leave book in Form-15 of the Factories Rules, which  is  violative  of  Rule  88  of  Jharkhand  Factories

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Rules,  1950.   It  is  further  alleged  that  on  inspection of canteen, the following shortcomings  defected:

(a) There is no partition for the female  workers in the dining hall and service counter. (b) Doors and windows of the canteen are  not fly proof. (c) Menu  Chart,  rate  and  the  names  of  members  Canteen  Managing  Committee  has  not  disclosed on the board. (d) for washing of utensils no arrangement  of hot water has been made.”

Based  on  the  above  allegations,  cognizance  was  taken  against the occupier – Hemant Madhusudan Nerurkar (the appellant in  Criminal Appeal No. 442 of 2016 - arising out of SLP(Criminal) No.  6410 of 2015), and the manager – Rupam Bhaduri ( the appellant in  Criminal Appeal No. 443 of 2016 - arising out of SLP(Criminal) No.  6406 of 2015).

Keeping in mind the apparently trivial issues, on which  proceedings were taken out against the appellants, this Court on  the  first  date  of  hearing,  i.e.,  on  14.08.2015,  recorded  the  following order:

“Heard  Mr.  K.V.  Vishwanathan,  learned  senior  counsel  for  the  petitioner  and  Mr.  Tapesh  Kumar  Singh, learned Standing Counsel for the State of  Jharkhand.   

Having  heard  learned  counsel  for  the  parties,  it  is  directed  that  the  concerned  Inspector  shall  verify  the  factory  premises  and  find out whether the defects pointed out by him  have been rectified or not.

List  the  matter  in  the  first  week  of  September, 2015.

The Registry is directed to reflect the name  of Mr. Tapesh Kumar Singh in the Cause List on the

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next date of hearing.”

A perusal of the above order reveals, that the entire purpose of  passing  the  same,  was  to  ensure  that  violations  if  any  are  rectified.   It seems, that the aforesaid course of action was  taken on the basis of the decision rendered by this Court in the  Delhi Cloth and General Mils Co. Ltd. vs. The Chief Commissioner,  Delhi and others, reported in (1970) 2 SCC 172, for the reason,  that the appellants asserted that they needed to have been afforded  an opportunity to cure the defects and irregularities found during  the course of inspection, and only if they had failed to abide by  the provisions of the Factories Act, 1948 and the Rules, it would  be open to the authorities to proceed against the appellants.   

After 14.08.2015, the matter came up for consideration on  30.11.2015, on which date the motion Bench passed the following  order:

“It  is  submitted  by  learned  counsel  for  the  petitioner that the petitioner has removed all the  defects  pertaining  to  infrastructure  but  two  defects pertaining to contract labour are not yet  been  removed  because  the  burden  lies  on  the  contractor under the law.   Mr. Sinha, learned senior counsel along with Mr.  Tapesh Kumar Singh, learned counsel for the State  shall obtain instructions in this regard. Let  the  mater  be  listed  in  the  third  week  of  January, 2016.”

A perusal of the above order reveals, that two defects pertaining  to contract labour had not been removed. Insofar as the instant  aspect of the matter is concerned, it has been the submission of  the learned counsel for the appellants, that these two allegations

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leveled  against  the  appellants,  were  the  responsibility  of  the  contractor who had provided the contract labour.  And, not of the  appellants.

Lastly,  the  matter  came  up  for  consideration  on  27.4.2016, when this Court ordered as under:

“Learned counsel for the petitioner(s) states, that  the  violation  with  reference  to  the  contract  labourers, depicted in paragraph 3 of the impugned  judgment, will be rectified within four days from  today, and that the matter may be taken up for  hearing again on 4.5.2016. List again on 4.5.2016.”

In compliance with the directions issued by the motion  Bench order dated 27.4.2016, an affidavit has been filed on behalf  of both the appellants, affirming that the two defects pertaining  to the contract labour have also been rectified.

Given the aforesaid factual position, the question which  arose for consideration is, whether the appellants could still be  punished under Section 92 of the Act, which provides as under:  

“92. General penalty for offences – Save as is  otherwise  expressly  provided  in  this  Act  and  subject to the provisions of Section 93, if in, or  in  respect  of,  any  factory  there  is  any  contravention of any of the provisions of this Act  or of any rules made thereunder or of any order in  writing given thereunder, the occupier and manager  of the factory shall each be guilty of an offence  and punishable with imprisonment for a term which  may extend to two years or with fine which may  extend to one lakh rupees or with both, and if the  contravention is continued after conviction, with a  further  fine  which  may  extend  to  one  thousand  rupees for each day on which the contravention is  so continued:  Provided  that  where  contravention  of  any  of  the  provisions  of  Chapter  IV  or  any  rule  made  thereunder or under section 87 has resulted in an

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accident causing death or serious bodily injury,  the  fine  shall  not  be  less  than  twenty  five  thousand rupees in the case of an accident causing  death, and five thousand rupees in the case of an  accident causing serious bodily injury. Explanation – In this section and in section 94  “serious  bodily  injury”  means  an  injury  which  involves, or in all probability will involve, the  permanent loss of the use of, or permanent injury  to, any limb or the permanent loss of, or injury  to, sight or hearing, or the fracture of any bone,  but  shall  not  include,  the  fracture  of  bone  or  joint (not being fracture of more than one bone or  joint) of any phalanges of the hand or foot.”

Insofar as the seriousness of the issues is concerned,  learned counsel for the State of Jharkhand, Mr. Tapesh Kumar Singh,  vehemently contends, that the violations committed at the hands of  the appellants should not be termed as trivial. It was submitted,  that the enactment under reference has a laudable role, inasmuch  as, the same extends to ensure due facilities to the labour engaged  in  factories,  and  provides  measures  to  regulate  emoluments  of  factory  employees.   In  this  behalf,  learned  counsel  for  the  respondents  has  placed  reliance  on  a  decision  of  this  Court  rendered in J.K. Industries Limited and others vs. Chief Inspector  of Factories and Boilers and others, reported in (1996) 6 SCC 665,  and  placed  reliance  on  the  following  observations  recorded  thereunder:

“40. In keeping with the aim and object of the  Act which is essentially to safeguard  the  interests  of  workers, stop their exploitation,  and take  care of their safety, hygiene and welfare  at their  place of  work, numerous restrictions  have been  enacted in  public interest in the Act.  Providing restrictions in  a Statute  would be a  meaningless  formality  unless  the  statute  also  contains a provision for penalty for the breach  of  the   same.  No   restriction  can   be   effective

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unless  there   is  some  sanction  compelling  its  observance  and  a  provision   for  imposition   of  penalty  for breach  of the obligations under  the  Act or the rules made thereunder is a concomitant  and necessary incidence  of  the  restrictions.  Such a provision is  contained in  Section 92 of  the Act, which  contains  a  general  provision   for  penalties  for offences under the Act  for  which   no  express  provision  has  been  made  elsewhere and  seeks to  lay down uniform penalty  for all  or any of the offences committed under  the Act. The offences under the Act  consist  of contravention of (1) any provision of  the Act; (2) any rules framed thereunder; and (3) any order  in writing made thereunder. It comprises both acts  of omission  and   commission.   The  persons  punishable under the  Section are occupiers  and  managers, irrespective of the question as  to who  the  actual  offender  is.  The provision, is  in  consonance  with the scheme  of  the  Act  to  reach  out  to those  who have  the ultimate control over  the affairs of  the factory  to see  that the  requirements  for safety and  welfare of the  employees  are  fully  and  properly  carried  out  besides carrying   out various  duties  and  obligations  under   the  Act.   Section  92  contemplates  a  joint  liability  of   the  occupier  and  the   manager  for  any  offence  committed  irrespective,  of the  fact  as   to  who  is  directly responsible   for   the   offence.  The   fact   that  the  notified/identified  director  is   ignorant  about the 'management'  of the factory  which has  been  entrusted  to  a  manager  or   some  other   employee  and   is  himself not responsible for  the  contravention  cannot  absolve  him  of  his  liability.   The  identified /notified  director  is held  vicariously liable  for the  contravention of the  provisions of the Act,  the   rules  made  thereunder or of any order made in writing  under  it  for the offender company, which is the occupier  of the factory. 41. Mr. Jain, Mr.  Nariman   and  Mr.  Tripathi,  appearing for the  appellants,  however,  argued  that  since  Section  92 imposes a  liability for  imprisonment  and/or   fine,  both  on  the  occupier  (the  notified  director)  and  the  manager  of  the  factory,  jointly  and  severally,  for  the  contravention of any of the provisions  of  the  Act or any rule made thereunder or of any order  in  writing given  thereunder,  irrespective  of  the  fact   whether  the   occupier  (the   notified

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director)   or  manager,  had   any  mens-rea   in  respect  of  that  contravention  or  that  the  contravention  was not  committed by him or was  committed by  any other  person in  the factory   without his knowledge, consent  or connivance,  it  is  an unreasonable restriction.  Learned  counsel  argued  that in  criminal law, the doctrine  of  vicarious   liability  is   unknown  and   if   a  director is to be punished for some thing of which  he is not actually guilty,  it would  violate his  fundamental right as enshrined in  Article 21  of  the  Constitution. It was urged that on  account  of  advancement in  science and technology, most of  the companies, appoint professionally qualified men  to run the factories  and nominate  such a person  to be the 'occupier' of  the factory  and  make  him  responsible  for proper implementation  of the  provisions of  the Act and it would, therefore,  be  harsh  and unreasonable  to  hold  any  director  of  the company, who may be wholly innocent, liable  for the  contraventions committed under the Act  etc. when he may be totally ignorant of what was  going on in the factory, having vested  the control  of the affairs of the factory to such an  officer  or  employee, by  ignoring the liability of that  officer  or employee.  The argument  is  emotional   and attractive but not sound. 42. The offences  under the  Act are  not a part  of general penal law  but arise from the breach of  a  duty  provided  in  a  special  beneficial  social  defence  legislation,  which  creates  absolute  or  strict liability without proof of any mens rea. The  offences are  strict  statutory offences   for  which  establishment  of   mens  rea   is  not   an  essential ingredient. The omission or commission of  the statutory breach is itself the offence. Similar  type of offences based on the principle of strict  liability, which means liability without fault or  mens rea, exist in  many  statutes  relating  to  economic  crimes  as   well    as   in    laws  concerning    the   industry,  food  adulteration,  prevention  of pollution etc.   In   India   and  abroad.  'Absolute  offences'  are  not  criminal  offences in any real sense  but acts which are  prohibited  in  the  interest  of  welfare  of   the  public and the  prohibition   is   backed   by  sanction of  penalty. Such  offences are  generally  knows as public welfare offences. A  seven Judge  Bench of this Court in R.S. Joshi Vs.  Ajit Mills  (AIR 1977 (SC), 2279, at page 2287: SCC p. 110,  para 19):

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"Even here we may reject the notion that  a  penalty  or  a  punishment cannot be cast  in  the form  of an absolute or  no-fault liability  but  must  be   proceeded  by  mens  rea.  The  classical view  that '  no mens rea no crime'  has long ago been eroded and  several   laws  in  India  and abroad, especially  regarding  economic   crimes   and   departmental  penalties,   have  created  severe  punishments even where the offences have been  defined to  exclude mens rea. Therefore, the  contention that Section  37(1)   fastens  a  heavy liability regardless  or fault  has no  force......"

43. What  is made  punishable   under  the  Act  is the 'blameworthy' conduct  of the occupier which  resulted  in  the  commission  of   the  statutory  offence and  not his  criminal intent to  commit  that  offence.  The  rule  of  strict  liability  is  attracted to the offences committed under the Act  and the occupier is  held vicariously  liable along  with  the Manager and the actual offender, as the  case may be. Penalty follows actus reus, mens-rea  being irrelevant.”

In view of the above declaration by this Court, we are of the view,  that it is not possible for us to interfere with the impugned order  passed by the High Court, wherein the prayer made by the appellants  for quashing the proceedings initiated against them, was declined.  We therefore hereby confirm the same.    

Despite  our  above  conclusion,  learned  counsel  for  the  appellants  points  out,  that  the  factual  position  is  clear,  and  that, rather than requiring the appellants to face a protracted  trial, this Court may consider the appropriateness of imposing a  reasonable punishment on the appellants, by accepting the aforesaid  violations , summarised in paragraph 3 of the impugned order.

Learned counsel for the respondents – State of Jharkhand,  states that he has no objections to the suggestion made by the

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learned counsel for the appellants. Having  given  our  thoughtful  consideration  to  the  

allegations levelled against the appellants, we are satisfied, that  in terms of the mandate of section 92 of the Act, ends of justice  would be met, if a penalty of Rs.50,000/- each is imposed on the  appellants.  Ordered accordingly.  The aforesaid amount of penalty  shall be deposited by the appellants before the trial Court, within  four weeks from today.   

The  instant  order  shall  also  dispose  of  the  criminal  proceedings against the appellants in G.O. Case No. 252 of 2013,  pending before the Judicial Magistrate, First Class, Seraikella,  after the penalty amount is deposited by the appellants before the  trial Court.

Disposed of in the aforesaid terms.

…......................J. [JAGDISH SINGH KHEHAR]

NEW DELHI; …......................J. MAY 04, 2016. [C. NAGAPPAN]

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ITEM NO.3               COURT NO.3               SECTION IIA                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS PETITION(S) FOR SPECIAL LEAVE TO APPEAL (CRIMINAL) NO.6410/2015 (from the judgment and order dated 9.3.2015 in Crl.MP No. 1987/2014  of the HIGH COURT OF JHARKHAND AT RANCHI) HEMANT MADHUSUDAN NERURKAR                         Appellant(s)                                 VERSUS STATE OF JHARKHAND & ANR.                          Respondent(s) (with  appln(s)  for  exemption  from  filing  c/c  of  the  impugned  judgment  and  exemption  from  filing  OT  and  permission  to  bring  additional facts and documents on record and interim relief and  office report) WITH SLP(CRIMINAL) NO. 6406 OF 2015  (With (With (With appln.(s) for permission to bring additional  facts and documents on record and appln.(s) for c/delay in refiling  SLP and appln.(s) for exemption from filing O.T. and Interim Relief  and Office Report) Date : 04/05/2016 These petitions were called on for hearing today. CORAM :           HON'BLE MR. JUSTICE JAGDISH SINGH KHEHAR          HON'BLE MR. JUSTICE C. NAGAPPAN For Petitioner(s) Mr. K.V. Vishwanathan, Sr. Adv.

Mr. Abhijeet Sinha, Adv. Mr. Arijit Mazumdar, Adv. Mr. Abhinav Mukerji,Adv.

                  Mr. Shambo Nandy, Adv.   For Respondent(s) Mr. Tapesh Kumar Singh,Adv.                    Mr. Mohd. Waquas, Adv.             UPON hearing the counsel the Court made the following                              O R D E R

Leave granted. The appeals are disposed of in terms of the Reportable  

Judgment, which is placed on the file. As  a  sequel  to  the  above,  pending  miscellaneous  

applications, if any, also stand disposed of. (Renuka Sadana) (Parveen Kumar)  Court Master    AR-cum-PS