Chief Administrative Officer and Principal Employer, Indian Institute of Management Kozhikode (IIM-K) v. State of Kerala and Labour Enforcement (Central), Cochin

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** ## **THE HONOURABLE MR. JUSTICE K.HARIPAL** **MONDAY, THE 31[ST] DAY OF JANUARY 2022 / 11TH MAGHA, 1943** **CRL.MC NO. 2722 OF 2019** **[ST 145/2019 OF COURT OF JUDICIAL MAGISTRATE OF FIRST CLASS** ## **KUNNAMANGALAM]** ## **PETITIONER/ACCUSED:** CHIEF ADMINISTRATIVE OFFICER AND PRINCIPAL EMPLOYER REPRESENTED BY LT.COL.M. JULIUS GEORGE(RETD)INDIAN INSTITUTE OF MANAGEMENT, KOZHIKODE(IIM-K) IIM KOZHIKODE CAMPUS P.O, KOZHIKODE 673570, KERALA. BY ADVS. E.K.NANDAKUMAR (SR.) SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.JAI MOHAN ## **RESPONDENTS/STATE & COMPLAINANT:** 1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. 2 LABOUR ENFORCEMENT (CENTRAL), COCHIN , OFFICER OF THE DEPUTY LABOUR COMMISSIONER(CENTRAL), KENDRIYASHRAMSADAN,OLIMUGAL, KAKKANAD, COCHIN-682030. BY ADVS. SHRI.P.VIJAYAKUMAR, ASG OF INDIA MANU S., ASG OF INDIA ## **OTHER PRESENT:** ADGP - SRI. GRACIOUS KURIAKOSE THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 01.12.2021, THE COURT ON 31.01.2022 PASSED THE FOLLOWING: Crl.M.C.No.2722 of 2019 :-2-: **==> picture [71 x 9] intentionally omitted <==** This is a case filed under Section 482 of the Code of Criminal Procedure seeking to quash Annexure-A complaint and all further proceedings initiated pursuant to registration of S.T.No.145/2019 on the file of Judicial First Class Magistrate, Kunnamangalam preferred by the second respondent-the Labour Enforcement Officer (Central) Cochin against the petitioner as the accused. Documents produced by the petitioner indicate that on 10.8.2018, the second respondent had visited the premises of the Indian Institute of Management ('IIM' for short), Kozhikode on 10.8.2018 and found certain irregularities in its establishment. Thus a note was prepared by the second respondent, copy of the same was forwarded to the petitioner for rectification. Even though the petitioner had given a reply on 19.9.2018, not satisfied with the same and alleging offence punishable under Section 21(4) of the Contract Labour (Regulation and Abolition) Act,1970 (hereinafter Crl.M.C.No.2722 of 2019 :-3-: referred to as 'the Act') and the Rules made thereunder, the complaint was preferred before court, which was taken on file as S.T.No.145 of 2019 and the petitioner was summoned. Aggrieved by the same, the petitioner has moved this Court under Section 482 of Cr.P.C. challenging the very maintainability of the complaint. 2. Going by Annexure A complaint, the following are the offences alleged against the petitioner: 1. Under Section 21(4) of the Act, the petitioner/accused as the principal employer failed to make payment of wages of the unpaid balance due to the contract labourers of M/s.Sarovar Hotel Pvt. Ltd., as the contractor made less amount than the statutory minimum wages to workers; 2. Breach of Rule 81(3): Failed to intimate the date of commencement/ completion in respect of each contractor engaged within 15 days of the commencement/completion of the contract work in Form VII annexed to the Rationalisation of Forms and Reports under the Contract Labour Laws to the Crl.M.C.No.2722 of 2019 :-4-: Inspector; 3. Breach of Rule 72: The principal employer failed to ensure the presence of his authorised representative at the place and time of disbursement of wages to workmen by the contractor; 4. Breach of Rule 73: The authorised representative of the principal employer has not recorded a Certificate under his signature at the end of the entries in the Register of Wages of the Contractor; 5. Breach of Rule 74 Register of Contractors in Form XII has not been maintained correctly. 3. The petitioner contends that the above allegations are baseless. When he received Annexure C notice from the second respondent, Annexure D reply was given but ignoring the same, he is being prosecuted without any basis, which is liable to be quashed. According to the learned counsel for the petitioner, minimum wages allegedly payable under Section 21(4) of the Act has no application as the contractor, M/s.Sarovar Hotels is a registered institution Crl.M.C.No.2722 of 2019 :-5-: under the Kerala Shops and Commercial Establishments Act and a licencee under the Contract Labour (Regulation and Abolition) Act from the State Government. This being the case, the wages payable by M/s.Sarovar Hotels to its employees would be that notified by the State Government in respect of employees engagement in shops and commercial establishments within the State of Kerala and therefore notice alleging violation of Section 21(4) of the Act cannot be sustained. Moreover, he claims that since the employees were being paid through bank, the presence of his authorised agent or representative or physical disbursement of wages cannot be insisted. He also claims that all the necessary periodical returns have been submitted and therefore, the notice was preposterous and he is not liable to be prosecuted. 4. I heard Sri.E.K.Nandakumar, Senior Counsel instructed by Smt.Pooja Menon for the petitioner and the learned Central Government Standing Counsel for the respondent. The learned Senior Central Government Counsel also filed a statement of the Crl.M.C.No.2722 of 2019 :-6-: Assistant Solicitor General supporting the prosecution initiated against the petitioner. 5. Learned Senior Counsel for the petitioner submitted that apart from the contentions and grounds urged in support of the petition, there are` inherent infirmities in the complaint. He said that even though it is stated that the complaint was supported by an application for condoning the delay in filing the complaint, no such application has been filed and the complaint was filed ignoring paragraph 6 of the complaint regarding the period of limitation. The period of limitation is three months, but the complaint was preferred beyond the period of limitation which is not liable to be extended and provisions under Section 473 of the Cr.P.C. are not applicable in the present case. Secondly, he said that the IIM, Kozhikode is a body corporate and the said body corporate is not made an accused. Petitioner has been shown as the accused as the Chief Administrative Officer and Principal Employer and it is not stated in what capacity he has been made a party in the complaint, Crl.M.C.No.2722 of 2019 :-7-: the respective roles played by him in the alleged commission of the crime. Therefore, for two reasons, the very complaint is liable to be dismissed as not maintainable. 6. I have considered the rival contentions of the parties. As evident from the records produced by the petitioner, Annexure A complaint was preferred by the second respondent alleging the offences under Section 21(4) of the Act and under Rules 72,73,74 and 81(3) of the Contract Labour (Regulation and Abolition) Central Rules,1971. Thus, the second respondent alleged that he is liable to be prosecuted. It has also come out that the criminal proceedings were initiated against the petitioner after conducting an inspection by the second respondent on 10.8.2018 and notice was issued to the petitioner; however Annexure-D reply was given incorporating their versions in the matter. According to the second respondent, the explanations offered by the accused were not satisfactory and that made him to prefer the complaint. 7. It is evident that IIM had engaged the services of Crl.M.C.No.2722 of 2019 :-8-: M/s. Sarovar Hotels after conducting a public auction for the purpose of doing various services in the premises. Thus, they entered into an agreement and on that basis, the said Sarovar Hotels was engaged. Learned counsel submitted that in terms of clause 37 of Annexure B agreement, M/s.Sarovar is required to strictly comply with the existing labour legislations and at all times indemnify and keep indemnified the IIM against all claims of any workman employed by M/s.Sarovar in carrying out the work. Similarly there are provisions clarifying that M/s.Sarovar alone is responsible for complying with the various statutory obligations. 8. Various arguments raised by the learned counsel on the merits of the complaint need not be looked into by this Court. In my opinion, the arguments raised by the learned Senior counsel regarding the maintainability of the complaint are really formidable and they are sufficient to quash the proceedings. Firstly as pointed out by the learned counsel, from the complaint itself, it is evident that the complaint should have been preferred within a period of Crl.M.C.No.2722 of 2019 :-9-: three months from 10.8.2018, the date on which the offences had come to the knowledge of the second respondent. In other words, the period of limitation started running from 10.8.2018 and in that case, the complaint ought to have been instituted within a period of three months from the date of getting knowledge of the commission of offences. That has not been done. Complaint has been instituted only on 29.1.2019. Again, it is stated in paragraph 6 of the complaint that the application for condonation of delay in filing the complaint has been filed. Learned counsel has pointed out that such an application has not been filed at all. Even otherwise, it has to be considered whether such an application for condonation of delay is entertainable in a statutory complaint. In this connection, it is important to note that the second respondent has no case that the complaint falls under the proviso to Section 27 of the Act. Therefore, the complaint ought to have been instituted within a period of three months itself and failure to adhere to the statutory mandate and preferring the complaint beyond time goes to the very Crl.M.C.No.2722 of 2019 :-10-: root of the matter. 9. During the course of argument, the question as to whether an application under Section 473 of the Cr.P.C. is entertainable in a given case had come up for discussion. Referring **P.P.Unnikrishnan and another** v. to the decision reported in **Puttiyottil Alikutty and another** [AIR 2000 SC 2952], the learned counsel pointed out that such an application is not maintainable in a complaint filed under a statute. In the said decision, the Supreme Court held that the provisions of Section 473 Cr.P.C. cannot be applied to circumvent bar of limitation applied in a statute. In other words, extension of the period contemplated in Section 473 Cr.P.C cannot operate in respect of any period of limitation prescribed under any other enactment. That means, in the absence of a special provision in the Contract Labour Act, with the aid of S.473 Cr.P.C, the period of limitation under Section 27 of the Act cannot be stretched. In other words, the very complaint preferred beyond the period of limitation is bad in law. Crl.M.C.No.2722 of 2019 :-11-: 10. The argument touching the non-impleadment of the body corporate also is equally fatal to the prosecution. As rightly pointed out by the learned Senior Counsel, the petitioner has been arrayed as an accused in his capacity as the Chief Administrative Officer and Principal Employer of the Indian Institute of Management. No doubt, IIM is a large institution, it is a body corporate. But the said body corporate is not made an accused. In this connection, the dictum in the decisions reported in **Sushil Sethi and another** v. **State of Arunachal Pradesh and others** [AIR 2020 SC 765] and **Sarath** v. **Ramachandran** [2020 (1) KLT 653] are also favourable to the petitioner. In the decision in Susheel Shetty (supra), the Supreme Court held that even though the Managing Director and Directors are arrayed as the accused, there are no allegations to constitute vicarious liability. Such vicarious liability will arise only if there is any provision existing in the statute, but there is no such provision existing in the Act. Therefore, non-incorporation of the body corporate is also fatal to the Crl.M.C.No.2722 of 2019 :-12-: prosecution. Secondly, the prosecution has no case that the petitioner as the Principal Employer is expected to manage the dayto-day affairs of the IIM and therefore, in the absence of appropriate pleadings alleging the involvement of the petitioner in the alleged statutory violations, prosecution cannot lie against him. 11. On these considerations, I am convinced that the allegations against the petitioner cannot sustain. In this connection, it is appropriate to refer to the oft quoted decision in **State of Haryana and others** v. **Ch.Bhajan Lal and others** [AIR 1992 SC 604] where the Supreme Court has enumerated various circumstances in which a complaint can be quashed at the threshold itself, if the allegations in the complaint do not make out a prima facie case against the accused. Borrowing the dictum in Bhajanlal (supra) also, the proceedings are liable to be quashed. In the above circumstances, entire proceedings in S.T.No.145 of 2019 on the file of the Judicial First Class Magistrate Court,Kunnamangalam are quashed and the petitioner shall stand Crl.M.C.No.2722 of 2019 :-13-: exonerated. Crl.M.C. is allowed as above. **sd/K.HARIPAL, Judge** MBS/ Crl.M.C.No.2722 of 2019 ## :-14-: ## **APPENDIX OF CRL.MC 2722/2019** PETITIONER ANNEXURES ANNEXURE A CERTIFIED COPY OF THE COMPLAINT DATED 29.01.2019 FILED BY THE 2ND RESPONDENT BEFORE THE JUDICIAL FIRST CLASS MAGISTRATE COURT, KUNNAMANGALAM. ANNEXURE B TRUE COPY OF THE AGREEMENT DATED 3.12.2013 ENTERED INTO BETWEEN HMK AND SAROVAR HOTELS PVT LTD, ANNEXURE C TRUE COPY OF THE LETTER DATED 10.08.2018 ISSUED BY THE 2ND RESPONDENT TO HMK ALONG WITH THE INSPECTION REPORT-CUM-SHOW CAUSE NOTICE. ANNEXURE D TRUE COPY OF THE LETTER DATED 19.09.2018 ISSUED BY HMK TO THE 2ND RESPONDENT.