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2013 Supreme(Mad) 2756
High Court of Judicature at Madras
S. NAGAMUTHU, J.
S. Balasubramanian Director Addison Paints & Chemicals Limited Chennai & Others
Versus
The State of Tamil Nadu rep. by the Labour Welfare Officer Chennai & Others
Crl.R.C. Nos. 8 & 9 of 2009 & Crl.O.P. No. 8025 of 2008
Decided on : 01-08-2013
For the Appearing Parties:A. Ramesh Senior Counsel for K.R. Hariharan, S. Shanmuga Velayutham, Public Prosecutor Assisted by Mrs. M.F. Shabana, Government Advocate, (Criminal Side) K.M. Ramesh, Advocates.
The main legal point established in the judgment is that the prosecution of directors without arraying the company as an accused under the Industrial Disputes Act is not maintainable. The judgment emphasized the necessity of arraigning the company as an accused before recording a finding of guilt against it and highlighted the importance of fair trial and the principles of natural justice in criminal cases involving artificial juristic persons like companies.
Headnote:
Industrial Disputes Act - Prosecution of Directors without arraying the Company as an accused - Section 29 of the Industrial Disputes Act - Section 32 of the Industrial Disputes Act - Summary of Acts and Sections: The court discussed the provisions of Section 32 of the Industrial Disputes Act, which creates vicarious liability on the persons responsible for the day-to-day affairs of a company for offences committed by the company. The court also referenced the judgment in Aneeta Hada vs. Godfather Travels & Tours (P) Limited, which emphasized the necessity of arraigning the company as an accused before recording a finding of guilt against it. The judgment highlighted the importance of fair trial and the principles of natural justice in criminal cases, particularly in relation to artificial juristic persons like companies. The court concluded that the prosecution of the accused directors without arraying the company as an accused was not maintainable, and acquitted all the accused.
Fact of the Case:
The case involved the prosecution of the petitioners, who were accused of committing an offence under Section 29 of the Industrial Disputes Act. The prosecution alleged that the company,
Finding of the Court:
The court found that the prosecution of the accused directors without arraying the company as an accused was not maintainable. It emphasized the necessity of arraigning the company as an accused before recording a finding of guilt against it. The court held that fair trial and the principles of natural justice required the company to be given an opportunity to defend itself before being punished for any offence committed under the Industrial Disputes Act. Therefore, the court set aside the conviction and sentence of all the accused and acquitted them.
Issues: The main issue was whether the prosecution of the accused directors without arraying the company as an accused was maintainable under the Industrial Disputes Act.
Ratio Decidendi: The court's decision was based on the interpretation of Section 32 of the Industrial Disputes Act and the principles of fair trial and natural justice. It emphasized the necessity of arraigning the company as an accused before recording a finding of guilt against it, as well as the importance of giving the company an opportunity to defend itself before being punished for any offence committed under the Industrial Disputes Act.
Final Decision: The court allowed the Criminal Revision cases, set aside the conviction and sentence imposed by the trial court, and acquitted all the accused. It also dismissed the Criminal Original Petition challenging the order of enhancement of sentence of fine.
1. The petitioners in Crl.R.C.Nos. 8 and 9 of 2009 are the accused Nos. 1 and 4 in C.C.No.10403 of 1995 on the file of the II Metropolitan Magistrate, Egmore. The respondents 2 and 3 in both revision cases are the Prosecution Witnesses 2 and 4 in the said case before the lower Court. The said case was instituted by way of a private complaint by the first respondent/Labour Welfare Officer alleging that the petitioners herein and the other accused had committed an offence punishable under Section 29 of the "Industrial Disputes Act". The first petitioner/accused No.1 was the Director of a Company known as, "Addison Paints & Chemicals Limited", which is a Company governed by the Companies Act. The second petitioner/accused No.4 is the then Vice-President of the said Company. One Mr. Arjunan, yet another Director of the Company, was the second accused; one Mr. Sundaram, the then President of the Company, was the third accused; and one Mr. Suresh, the Chief Manager of the Company, was the fifth accused. Thus, altogether, there were five accused including the petitioners herein in these revision cases.
2. According to the case of the prosecution, in I.D.No.83 of 1984 on the file of the Industrial Tribunal, Chennai, the Tribunal had passed an award directing the "Addison Paints & Chemicals Limited" to pay Dearness Allowance and House Rent Allowance to the workmen and also to implement Settlements under Section 12(3) of the Industrial Disputes Act, dated 24.04.1985 and 21.06.1990. The said award dated 31.12.1992 was notified. Still, the Company did not comply with the said award. With the said allegation, the Association of Addison Paints & Chemicals Limited made a representation to the Government on 05.10.1994 requesting the Government to launch prosecution against the Company and others. Based on the said representation and the report of the Deputy Commissioner of Labour-I and the Commissioner of Labour, the Government issued G.O.(D) No.1320 Labour and Employment Department, dated 07.11.1995, authorizing the Inspector of Labour, IIIrd Circle, Chennai, to file a private complaint against all the accused. In the said Government Order, there was no authorisation to prefer a private complaint against the Company. The said Government Order was issued by the Government in exercise of its power under Section 34(1) of the Industrial Disputes Act. The offence said to have been committed by the petitioners, according to the Government Order, is punishable under Section 29 of the Industrial Disputes Act. In pursuance of the said authorisation, the Inspector of Labour, IIIrd Circle, Chennai, filed a private complaint before the II Metropolitan Magistrate, Egmore, upon which the learned Magistrate took cognizance in C.C.No.10403 of 1995 for the offence under Section 29 of the Industrial Disputes Act. On service of summons, all the accused appeared before the learned Magistrate and contested the case.
3. During the course of trial, on the side of the prosecution as many as four witnesses were examined and they were all cross-examined by the accused. When the accused were questioned under Section 313 Cr.P.C., they disputed the incriminating materials. On their side, they examined two witnesses. During the course of trial, the second accused viz., Arjunan, died. Finally, the trial Court, by judgment dated 18.08.2003, found all the accused, except Mr. Arjunan, guilty of the offence under Section 29 of the Industrial Disputes Act and accordingly, imposed a punishment of fine of Rs.1,000/- each, in default to undergo one week simple imprisonment each. Challenging the said conviction and sentence, the petitioners/ accused Nos. 1 and 4 filed an appeal in Crl.A.No.289 of 2003 on the file of the learned Additional District and Sessions Judge, Fast Track Court-I, Chennai. Seeking enhancement of punishment, the respondents 2 and 3 herein filed a revision case in Crl.R.C.No.1442 of 2003 before this Court. Since, this Court felt that the said revision
