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PATNA HIGH COURT
S.Sarwar Ali and Nagendra Prasad Singh JJ.
B.Samanta
Versus
Government Of India
Criminal Writ Jurisdiction Case No. 93 of 1975 ; 102 of 1975 ; 103 of 1975 ; 104 of 1975 ; 105 of 1975 ; 106 of 1975 ;
Decided On : SEPTEMBER 25, 1975
PAYMENT OF BONUS ACT, 1965 - SECTION 10, 11, 32 (VII) (B), 34 (3) - PAYMENT OF BONUS RULES, 1965 - RULE 4 (A), 4 (B), 4 (C) - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 19 (2) - Settlement between employer and employees for payment of bonus at fixed rate - Applicability of Payment of Bonus Act - Maintenance of registers in Forms A and B - Production of Profit and Loss Account and Balance Sheet - Contravention of provisions of the Act and Rules.
Fact of the Case:
Petitioners, owners of mica mines, were prosecuted for alleged contravention of certain provisions of the Payment of Bonus Act, 1965 (the Act) and the Payment of Bonus Rules, 1965 (the Rules). The Labour Enforcement Officer (LEO) inspected the mines and noticed three irregularities: (i) Register in Form A showing computation of allocable surplus was not maintained, (ii) Register in Form B showing set-on and set-off was not maintained, and (iii) Profit and Loss Account and Balance Sheet for the year in question was not produced. Petitioners showed cause, asserting that there had been no contravention as they were paying bonus at a fixed rate as per agreement with the workers' union and that the registers were not required to be filled up. The LEO filed petitions of complaint against the petitioners alleging the irregularities. Petitioners filed writ applications under Articles 226 and 227 of the Constitution of India for quashing the criminal proceedings.
Finding of the Court:
The Court held that the prosecution of the petitioners amounted to an abuse of the process of the Court as there was no contravention of any of the provisions of the Act and the Rules. The Court found that the petitioners had entered into a settlement with their employees in 1966, which was in force during the relevant period, and that the bonus was to be paid according to the rate agreed upon by the parties. The Court held that, in view of Section 32 (vii) (b) of the Act, nothing in the Act was applicable to the employees of the petitioners and, as such, the employers had not to prepare and maintain registers in Forms A and B. The Court also held that there was no contravention of Section 27 (4) of the Act, which requires the production of accounts, books, registers, and other documents, as the petitioners had explained that the Profit and Loss Account and Balance Sheet were not kept at the works spot due to the fixed rate of bonus payment.
Issues: 1. Whether the petitioners were required to maintain registers in Forms A and B and produce the Profit and Loss Account and Balance Sheet, considering the settlement with their employees for payment of bonus at a fixed rate? 2. Whether the prosecution of the petitioners for alleged contraventions of the Act and Rules amounted to an abuse of the process of the Court?
Ratio Decidendi: 1. The Court held that the petitioners were not required to maintain registers in Forms A and B or produce the Profit and Loss Account and Balance Sheet at the works spot, as they were paying bonus at a fixed rate as per the settlement with their employees. The Court relied on Section 32 (vii) (b) of the Act, which excludes from the applicability of the Act employees who have entered into an agreement or settlement with their employers for payment of annual bonus in lieu of the bonus payable under the Act. 2. The Court held that the prosecution of the petitioners amounted to an abuse of the process of the Court, as there was no contravention of any of the provisions of the Act and the Rules. The Court found that the petitioners had explained their reasons for not maintaining the registers and producing the Profit and Loss Account and Balance Sheet, and that the LEO had not given them an opportunity to produce the documents at a different location.
Final Decision: The Court allowed the writ applications and quashed the prosecutions launched against the petitioners.
NAGENDRA PRASAD SINGH, J.
1. These writ applications have been filed by the petitioners under Articles 226 and 227 of the Constitution of India for quashing criminal proceedings launched against them for alleged contravention of certain provisions of the Payment of Bonus Act, 1965 (hereinafter referred to as the Act) and of the Payment of Bonus Rules, 1965 (hereinafter referred to as the Rules).
2. The Labour Enforcement Officer (Central), Kodarma (hereinafter referred to as the Enforcement Officer) inspected different mines belonging to petitioner No. 1 in Cr. W. J. C. Nos. 105 and 106 of 1975 and Petitioner No. 2 in Cr. W. J. C. Nos. 93, 102, 103 and 104 of 1975, on different dates between the 18th January, 1972 and the 4th February, 1972, and noticed three irregularities in the mines concerned, namely:
(i) Register in Form A showing computation of allocable surplus for the particular year in question was not at all maintained, which amounted to breach of Rule 4 (a) of the Rules.
(ii) Register in Form B showing set-on and set-off for the accounting year in question was not at all maintained, which amounted to breach of Rule 4 (b) of the Rules.
(iii) Profit and Loss Account and Balance Sheet for the year in question was not produced, which amounted to breach of Section 27 (4) of the Act.
3. Cr. W. J. C. Nos. 93 and 102 relate to Bhuti Mica Mines for the accounting years ending on the 30th June, 1969 and 30th June, 1970. Cr. W. J. C No. 103 relates to Kari No. 2 Mica Mines, Pit No. 2, for the accounting year ending on 30th June, 1970. Cr. W. J. C. No. 104 relates to No. 8 Mica Mines for the accounting year ending on the 30th June, 1970. Cr. W. J. C. Nos. 105 and 106 relate to Kamla Mica Mines and the relevant accounting years are years ending, respectively, on the 31st December, 1969 and the 31st December, 1970.
4. The Enforcement Officer, after his inspection, issued notices to the petitioners pointing out the aforesaid irregularities noticed by him during the course of his inspection of the different mines and asked the petitioners to show cause within ten days directly to the Regional Labour Commissioner (Central), Dhanbad (hereinafter referred to as the Regional Labour Commissioner), endorsing a copy to him, as to why legal action should not be taken against them for the contraventions noted therein. A copy of such notice is Annexure 1 to Cr. W. J. C. No. 93 and Annexure 2 to Cr. W. J. C. Nos. 102 to 106.
5. In response to the said notices cause was shown on behalf of the petitioners refuting the allegations and asserting that there had been no contravention. In the said show cause it was pointed out that the owners of the mines were maintaining registers in Forms A and B, but some of the columns had not been filled in, as the bonus under the Act was being paid at a fixed rate as per agreement with the workers" union and, in view of the said agreement, it was not necessary to fill up all the columns of the registers. About the profit and loss account and balance sheet, it was said that it was not kept at the works spot as the payment was being made at fixed rate as per agreement with the workers union Copies of the show cause, dated the 21st. February, 1972, are Annexure 2 in Cr. W J. C. No. 93 and Annexure 3 in Cr. W. J. C. Nos. 102 and 104; that dated the 11th February, 1972 is Annexure 3 in Cr. W J. C. No. 103; and those dated the 19th. February, 1972 are Annexure 3 in Cr. W. J. C. Nos. 105 and 106. Acccording to the petitioners, they did not receive any communication from the respondents as to whether or not they were satisfied from the show cause filed on behalf of the petitioners. Suddenly, in March, 1974, the petitioners learnt that prosecutions under Section 28 of the Act had been launched against them. From inspection of the records of the learned Subdivisional Magistrate, it appeared that the respondent Enforcement Officer had filed petitions of complaint before him against the petitioners alleging therei
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