No criminal complaint under Contract Labour (Regulation and Abolition) Act 1970 possible if the person is not a Director on the Date: Madras High Court

In the case of  Parag M Munot, Managing Director, M/s. Property Solutions, India Private Limited,  Vs.  The State Represented by The Labour Enforcement Officer (Central) Government of India, Ministry of Labour and Employment, and  2. Rajanikant Head of Operation, M/s. Property Solutions India Private Limited, Citation: Madras HC CRL.O.P.No.30836 of 2019 dated March 6, 2020 the Bench consisting of : G.K.ILANTHIRAIYAN, J. held as follows:-

Introduction

This Petition was filed to quash the proceedings in the file of the II Metropolitan Magistrate Court, Egmore, thereby taken cognizance for the offences under Section 24 of the Contract Labour (Regulation and Abolition) Act 1970, for breach of Rules 81(1)(i), 75 r/w. Rules 80(1), 78(1)(a)(i), 78(1)(a)(iii), 78(1)(b) of the Contract Labour (Regulation and Abolition) Act 1970  and Section 79 of IPC, as against the petitioner.

Facts of the Case

A Labour inspector observed on certain deficiencies at the establishment ( M/s Property Solutions India Pvt Ltd) in terms of the Contract Labour (Regulation and Abolition) Act 1970  as:-

1. Failed to display notices containing rates of wages, hours of work, date of payment, wage period & Name and addresses of the Inspectors having jurisdiction, date of payment of unpaid wages in English/Hindi/local language at the workspot
2. Failed to maintain Employee Register in Form A
3. Failed to maintain register of Wages in Form-B.
4. Failed to upload Annual Return for the year ending 2018 in form XIV before 1^st February on Sharam Suvidha Web Portal.
5. Failed to maintain Register of Attendance in Form-D.
6. Failed to maintain Register of Loan/Recoveries in Form – C
7. Failed to issue wage slips in Form XIX to the workmen at least a day prior to the disbursement of wages although wage period is more than a week..
8. Failed to display the abstract of the Act & Rules in English/Hindi and in the local language at the establishment

Thereafter, the show cause notice was issued. As per the investigation report, the accused persons were requested to rectify the irregularities mentioned in the Inspection Report and also issued a show-cause notice. On receipt of the same, their Contractor did not submit any reply. Therefore, the first respondent initiated the proceeding by way of complaint.

The learned trial Court has taken cognizance of the offences under Section 24 of the Contract Labour (Regulation and Abolition) Act 1970 for breach of its Rules 81(1)(i), 75 r/w. Rules 80(1), 78(1)(a)(i), 78(1)(a)(iii), 78(1)(b) and Section 79 of IPC, as against the petitioner.

According to the petitioner, he was inducted as Director in M/s. Property Solutions India Private Limited and thereafter he was not associated with the company with effect from 12.01.2010 due to resignation. It was duly registered with the Registrar of Company under Form-32. On the date of inspection, the petitioner was not a Director of the company and he did not participate in the day to day affairs of the company.

Madras High Court Judgement

On the date of show cause notice also the petitioner is not a Director of the company. Further on perusal of complaint, there is absolutely no participation of the above-said in the affairs of  the company. Therefore, it was held that the entire complaint is nothing but clear abuse of the process of law and it cannot be sustained as against the petitioner.

This was a case of harassment using powers granted to an inspector. The Court did not comment on what actions should be taken against the official for his misconduct and wasting the time of the Court.