The main legal point established in the judgment is that non-payment of gratuity constitutes an offence under Section 7(3) of the Payment of Gratuity Act, and the release of the gratuity amount does not absolve the employer from liability.

D.G.R. Patnaik, J.

1. Petitioners have prayed for quashing the entire criminal proceeding pending against them vide P.G. case No. 72 of 2004 pending in the Court of Smt. Kusum Kumari, Judicial Magistrate, Dhanbad, as also for quashing the order dated 15.3.2004, whereby the cognizance of the offences relating to violation of provisions of Section 7(3) of the Payment of Gratuity Act, 1972 for the breach of Rules 3(2) and 8(l)(i) of the Payment of Gratuity (Central) Rules, 1972 was taken against them.

2. The main grounds advanced by the learned Counsel for the petitioners in support of the prayer is that;

1. The learned Court below while passing the order of cognizance has acted mechanically without application of judicial mind and without passing any order of condonation of delay in filing the complaint.

2. that the complainant/opposite party No. 2 is not competent to file the complaint against the petitioners under Section 11 of the Payment of Gratuity Act and therefore, the order of cognizance as passed by the learned Court below on the basis of such complaint, is totally illegal.

3. that the petitioners have been cited as accused on behalf of the employer company as "nominated owner", though there is no concept of "nominated owner" under the payment of Gratuity Act and, therefore, no prosecution can be initiated for the alleged violation of the provisions of Act, against the present petitioners.

4. that neither of the petitioners come within the definition of the term employer’ as defined under Section 2(f)(iii) of the Act in respect of the mines, since neither of them are the managers of the concerned mines and, therefore, the petitioners cannot be prosecuted for the alleged offences.

5. that mere non release of the gratuity amount payable to the employee does not attract any penal consequences, since under Section 7(3A) of the Act, employer is at best liable to pay the amount of gratuity along with the interest accrued there on.

6. that the amount payable as gratuity to the employees has already been released, therefore the present criminal proceeding against the petitioners would be an abuse of the process of the Court.

3. For better appreciation of the grounds advanced, facts of the case may be stated in brief. The case was registered against the petitioners on 15.3.2004 on the basis of the complaint filed by the complainant/opposite party No. 2 in his capacity as Labour Enforcement Officer (Central), Dhanbad-I. A separate petition for condonation of delay in filing the complaint was simultaneously filed. A copy of the notification issued by the Ministry of Labour, Government of India authorizing the complainant to file the complaint was also filed on the same date. On the same date, the learned Court below had proceeded to take cognizance of the offences under Section 7(3) of the Payment of Gratuity Act, directing the

petitioners to appear and face trial in the case.

4. It is alleged in the complaint petition that on 20.2.2003 the complainant in exercise of his powers as Inspector, conferred on him under Section 7A of the Act, had visited the establishment namely Ena Colliery of B.C.CL. Limited, Dhanbad and had found the following violations of the provisions of the Payment of Gratuity Act and The Rules thereunder:

i. that the employer had failed to submit a notice in form - B about the changes in the name and address of the establishment to the controlling authority i.e. Assistant Labour Commissioner, Dhanbad which is a breach of Rule 3(2) of Payment of Gratuity (Central) Rules,

ii. that the employer had failed to issue notice in form -L to the employee nominee or legal heirs and copy of such notice was not endorsed to the Controlling Authority under the provisions of the Act and this constitute a breach of Rule 8(l)(i) of the Payment of Gratuity (Central) Rules,

iii. that the employer had failed to pay the amount of gratuity to the employees within 30 days from the date when it became payable and such fault constitutes breach