Offence Under Minimum Wages Act- Except In Case Of Direct Liability, Chairman Cannot Be Proceeded Against Without Impleading Company: Jharkhand HC

The Jharkhand High Court has held that as per Section 22-C of the Minimum Wages Act, 1948 if vicarious liability arises based on averments in the complaint, the Chairman of the Company cannot be proceeded against without impleading and taking cognizance against the Company. The Court while considering a petition filed for quashing criminal proceedings including an order taking cognizance under Section 22-A of the 1948 Act also held that the situation would be different in case there is direct or personal liability. 

A Single Bench of Justice Gautam Kumar Choudhary noted, “In the present case, there is no direct allegation against this petitioner that he was personally liable for not displaying the notice of the Act and Rule in Hindi and English at the work spot. This allegation is directed against Company and the petitioner has been proceeded against as he held the position of head of Eastern Region. Thus, this is a case where vicarious liability is sought to be imputed on the basis of averments made in the complaint petition. … Under the circumstance, the provision of Section 22-C of the Minimum Wages Act will be applicable and it was necessary for the Trial Court to have taken cognizance against the Company and without such cognizance, there is infirmity in the order of cognizance.”

Advocate Indrajit Sinha represented the petitioner while APP V.S. Sahay and Special PP Ravi Prakash represented the opposite parties.

Facts of the Case -

The complainant was the Labour Enforcement Officer (Central), Chaibasa and the case was lodged against Eureka Forbes Ltd. The case of the complainant was that the accused persons were executing the contract work of intensive coach cleaning work at coach cleaning complex of Tatanagar Railway Station of South Eastern Railway, Tatanagar, District Singhbhum (E), Jharkhand and on inspection of the said establishment, the irregularity was observed that the accused person failed to display the notice showing the extract of the Act and Rules in Hindi and English at the work place which was breach of Rule 22. On the basis of the prosecution report, the cognizance was taken which was under challenge in the instant petition.

The High Court in the above regard observed, “The criminal jurisprudence envisage both direct and vicarious liability for an act which is an offence under the penal provision. In case of direct liability of an accused, on the basis of facts as disclosed in a particular case, there may not be a requirement of impleading the Company as an accused along with the person who is sought to be proceeded. However, requirement of impleading the Company arises when the accused is vicariously held liable for the acts of the Company.”

The question that arose before the Court for consideration was whether the order taking cognizance only against this petitioner and one another Chairman of the said company without the cognizance being taken against the company, was sustainable in the eyes of law or not.

“In view of statutory provision as well as ratio laid down by the Hon’ble Supreme Court in Aneeta Hada Versus M/S Godfather Travels and Tours, (2012) 5 SCC 661, impleading the Company as an accused will be an imperative necessity in case of vicarious liability against the accused by virtue of him being holding a position of party of the said Company”, said the Court.

Accordingly, the High Court allowed the criminal miscellaneous petition and set aside the order.

Cause Title- Pinaki Das v. The State of Jharkhand & Anr.

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