Container Corporation Of India ... vs Lt. Governor, Delhi And Ors.
2002 Latest Caselaw 726 Del

JUDGMENT

K.S. Gupta, J.

1. In this petition under Articles 226 and 227 of the Constitution of India, petitioner seeks quashment of the complaint filed on 29th October 1997 by the State (through Inspector of Factories), respondent No. 2 and the summons dated 18th November 1997 issued by a Metropolitan Magistrate, respondent No. 4.

2. Complaint (copy at pages 69 to 70 on the file) was filed by respondent No. 2 against N.K. Chaubey alleging that Container Corporation of India Ltd is a factory under section 2 of the Factories Act, 1948 (for short 'the Act') and N.K. Chaubey, accused being proprietor/ partner/director thereof is an occupier within the meaning of section 2(n) of the Act. Factory situated at Inland Container Depot, Tughlakabad, New Delhi was inspected by the Inspector of Factories on 29th September 1997 at 12 noon and breaches as detailed in para 4 of the complaint were noticed. Accused was, thus, guilty of contravening Rule 11-A of Delhi Factories Rules, 1950 read with Sections 6 and 7 of the Act and Rules 3, 4, 5 and 12 of the said Rules which are punishable under Section 92 of the Act. It was prayed that accused be summoned and published According to law.

3. I have heard Sh. M.B. Datta for petitioner and Sh. Sunil K. Kapoor for respondents 1 & 2.

4. The complaint and summons dated 18th November 1997 are sought to be quashed mainly on the grounds that - (i) Workshop of petitioner at Tughlakabad is not a factory within the meaning of Section 2(m) and (ii) N.K. Chaubey, accused was not an occupier within the meaning of Section 2(n) of the Act. It was pointed out that the the petitioner is managed by its Board of Directors and N.K. Chaubey was only an employee of the petitioner. I propose to take up the later ground first for discussion. In J.K. Industries Ltd and Ors. v. Chief Inspector of factories and Boilers and Ors., the Question which fell for consideration before the Supreme Court was whether in the case of a company which owned or run a factory, was it only a director of the company who could be notified as the occupier of the factory within the meaning of proviso (ii) to section 2(n) of the Act, or whether the company could nominate any other employee to be the occupier by passing a resolution to the effect that nominated employee would have ultimate control over the affairs of factory and if the answer to this question was that only a director could be notified as an occupier, another question for consideration was about the constitutional validity of proviso (ii) to Section 2(n) of the Act as introduced by the Amending Act of 1987. It was held:-

(1) In the case of a company, which owns a factory, it is only one of the directors of the company who can be notified as the occupier of the factory for the purposes of the Act and the company cannot nominate any other employee to be the occupier of the factory.

(2) Where the company fails to nominate one of its directors as the occupier of the factory, the Inspector of Factories shall be at liberty to proceed against any one of the directors of the company, treating him as the deemed occupier of the factory, for prosecution and punishment in case of any breach or contravention of the provisions of the Act or for offences committed under the Act.

(3) Proviso (ii) to Section 2(n) of the Act is intra vires the substantive provision of section 2(n) of the Act.

(4) Proviso (ii) to section 2(n) is constitutionally valid and is not ultra vires Articles 14, 19(1)(g) and 21 of the Constitution of India.

(5) The law laid down by the High Courts of Bombay, Orissa, Karnataka, Calcutta, Guwahati and Madras is not the correct law and the contrary view expressed by the High Courts of Allahabad, Madhya Pradesh, Rajasthan and Patna is the correct enunciation of law in regard to the ambit and scope of proviso (ii) to Section 2(n) of the Act."

5. In yet another decision in Indian Oil Corporation Ltd v. Chief Inspector of Factories and Ors. 1998 V AD (SC) 223 which notices the judgment in J.K. Industries Ltd (supra), short question for determination was to who is to deemed occupier of a factory of a Government company incorporated under the Companies Act. It was held that 'if a factory in reality is owned or controlled by the Central Government or the State Government or any local authority, then in case of such a factory the person or persons appointed to manage the affairs of factory shall be deemed to be the occupier, even though for better management of such a factory or factories a corporate form is adopted by the Government.' Along with petition the copies of certificate of incorporation dated 10th March 1988 and Memorandum and Articles of association have been filed. Certificate of Incorporation indicates that the petitioner is a Government of India undertaking incorporated under the Companies Act, 1956. In definition clause (d) of said Articles of Association word 'Directors' has been defined to mean the directors for the time being of the company and includes persons occupying the position of directors by whatever name called. Along with affidavit dated 21st February 2002 of M.L. Shanmukh, a copy of Order No. 17 of 1995 dated 8th March 1996 has been filed which notices that N.K. Chaubey, accused was transferred and posted as Executive Director, Northern Region, Tughlakabad. Directors are not the employees or servants of the company and they manage, control and direct the business of company as owners vide Section 291 of the Companies Act. In this backdrop and the ratio in Indian Oil Corporation Ltd's case (supra), N.K. Chaubey was, prima facie, the occupier of workshop at Tughlakabad within the meaning of Said Section 2(n) of the Act.

6. Coming to aforesaid ground (i), in C.W.P. No. 142/97 - Container Corporation of India Ltd (Concor) Empolyees Union and Ors. v. Union of India and Ors., an affidavit of M.L. Shanmukh was filed on behalf of present petitioner and in Para 3 thereof it was averred that in Tughlakabad workshop the repairs and other manufacturing activities are carried on and workshop is a factory as defined in Section 2(m) of the Act. In view of this admission, the workshop at Tughlakabad is, prima facie, a factory within the meaning of Section 2(m) Thus, on none of the said two grounds the petitioner can Seek quashment of the complaint dated 29th October 1997 and summons dated 18th November 1997 and the petition deserves to be dismissed being without any substance.

7. Consequently, the petition is dismissed being without any merit.