Not Arraigning Company As Accused Would Not Vitiate Proceedings Initiated Against Occupier Under Factories Act: Karnataka High Court

Justice M. Nagaprasanna in its order dated December 6, 2021 observed,

"Section 2(n) of the Factories Act and its proviso makes it clear that one of the Directors of the company would be responsible for proper implementation of the provisions of the Act. This ensures that more care is taken for the maintenance of the factory and various safety measures prescribed under the Act, so that the health, welfare and safety of the workers are not neglected. It is the occupier who would become responsible for all such acts of a factory."

It opined that the Factories Act is a complete Code in itself and no provision thereunder provides that the Company has to be made an accused in case of any default.

Case Background:

A complaint was registered against the petitioner (occupier) by the Respondent under Section 200 of the Cr.P.C., without passing any order on the reply given to the show cause notice issued pursuant to an accident in the factory.

Thus the petitioner approached the court calling in question the proceedings pending on the file of the Principal Civil Judge and JMFC, Ramanagara initiated under the provisions of the Factories Act, 1948.

Petitioners Submissions:

Senior Advocate S.N.Murthy argued that the complaint is registered against the occupier of the factory and not the Company and the complaint itself would not be maintainable in the form that it is presented in the absence of the Company being arrayed as an accused.

Further, he submitted that having issued a show cause notice and the reply having been submitted by the petitioner, an order ought to have been passed by the respondent against which an appeal is provided under the Factories Act in terms of Section 107 of the Factories Act. By registration of criminal complaint even without passing an order the petitioner has lost the right of appeal as provided under the statute.

The counsel relied on several judgments of the Supreme Court including the judgement rendered in the case of Aneeta Hada & Others V. Godfather Travels And Tours Private Limited.

Respondents argued:

Additional Government Advocate Namitha Mahesh B.G, refuted the submissions and contend that there is no statutory obligation for the respondent to pass an order under the Factories Act. The show cause notice is issued only to bring it to the notice of the occupier that proceedings under the Factories Act would be initiated. The offence alleged against the petitioner is in violation of Section 7A(2)(c) of the Factories Act. The said provision does not require passing of an order prior to registration of a criminal case against the occupier.

Further, all the judgments relied on by the learned Senior Counsel were interpreting the provisions of different enactments and not the Factories Act. The Factories Act does not mandate that the Company should be made a party in the proceedings instituted under the Factories Act. She relied on the judgement of the Apex Court in the case of J.K. Industries Limited And Others V. Chief Inspector Of Factories And Boilers & Others.

Court findings:

The bench went through the judgement cited by the petitioners counsel and considered the Apex court judgement in the case of J.K Industries Limited and Others and said, "The judgments rendered by the Coordinate Benches of this Court (supra) or the case of Aneeta Hada would not be applicable to the facts of the case at hand or even the statute that has fallen for consideration in the case at hand. The Factories Act as held by the Apex Court in the case of J.K. Industries Limited is a complete code by itself."

It added, "Therefore, the interpretation rendered by the Apex Court in the case of J.K. Industries Limited interpreting the Factories Act would be applicable to the case at hand and not the ones that are relied on by the learned Senior Counsel."

As regards the other contention of the petitioner that right to appeal is lost as no order was passed by the Deputy Director of Factories on the show cause notice issued by him. The court said, "The allegation against the petitioner, as stated hereinabove, is violation of Section 7A(2)(c) of the Factories Act which does not require an order to be passed in writing or the same to be communicated to the occupier."

The court noted that Sections 15, 38, 39 and 40 of the Factories Act speak of an order to be passed in writing by the Inspector and to be served upon the occupier of the factory. The bench then observed, "Therefore, if an order is not obligatory to be passed under the statute, no appeal would lie against the offence alleged under Section 7A(2)(c) of the Factories Act as is alleged in the case at hand."

It added, "It is trite law that remedy of appeal is a creature of the statute. The Factories Act restricts an order to be passed only in certain circumstances as narrated (supra) and only against an order that is to be passed an appeal remedy is available."

Following which it dismissed the petition.

Case Title: Yashihirao Horinouchi v. The Deputy Director Of Factories

Case No: Writ Petition No.11451 OF 2018

Date of Order: December 6, 2021.

Citation: 2022 LiveLaw (Kar) 20

Appearance: Senior Advocate S.N.Murthy, a/w Advocate Somashekar for petitioner; Aga Namitha Mahesh B.G for respondent.

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