Chairman Not Vicariously Liable U/S 22-C Minimum Wages Act Without Implicating Company: Jharkhand High Court

The Jharkhand High Court has held that as per Section 22-C of the Minimum Wages Act, 1948, when vicarious liability arises based on the averments in a complaint, the Chairman of the Company cannot be proceeded against without impleading and taking cognizance against the Company itself.Justice Gautam Kumar Choudhary observed, “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,” Justice Choudhary added.The above ruling came in a petition filed for quashing the entire criminal proceeding including the order taking cognizance under Section 22-A of the Minimum Wages Act in connection with a complaint filed by Labour Enforcement Officer (Central) against Eureka Forbes, represented by Sapoor P. Mistry (Chairman), and Sri Pinaki Das, Regional Head (ER), the petitioner.The case of the complainant was that the accused persons were executing the contract work of intensive coach cleaning work and on inspection of the 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 workplace 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 fundamental question before the Court was whether it is legally justifiable to issue an order of cognizance solely against the petitioner and the Chairman of the Company, without extending the cognizance to the Company itself.The Court 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."Referring to the Supreme Court's ruling in Aneeta Hada Versus M/S Godfather Travels and Tours (2012) 5 SCC 661, the Court highlighted the mandatory requirement of including the Company as an accused when an individual is vicariously liable due to their position in the said Company. Given these considerations, the Court concluded that the order to take cognizance of the case was not sustainable and subsequently set it aside. As a result, the Court allowed the Criminal Miscellaneous Petition.Counsel/s For the Petitioner : Mr. Indrajit Sinha, Advocate Mr. Ajay Kumar Sah, Advocate Counsel/s For the State : Mr. V.S. Sahay, A.P.P. Counsel/s For the O.P. No.2 : Mr. Ravi Prakash, Special P.P.LL Citation: 2023 Livelaw (Jha) 56Case Title: Pinaki Das vs The State of Jharkhand Case No.: Cr.M.P. No. 1069 of 2018Click Here To Read/Download Judgment

Chairman Not Vicariously Liable U/S 22-C Minimum Wages Act Without Implicating Company: Jharkhand High Court

Bhavya Singh

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