Gujarat High Court

Praful Anubhai Shah vs State Of Gujarat on 14 September, 2023

Bench: Sandeep N. Bhatt

                                                                                  NEUTRAL CITATION




   R/SCR.A/2392/2014                              ORDER DATED: 14/09/2023

                                                                                   undefined




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

         R/SPECIAL CRIMINAL APPLICATION NO. 2392 of 2014
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 7037 of 2018
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 2393 of 2014
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 8321 of 2018
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 2396 of 2014
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 8318 of 2018
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 2397 of 2014
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 8316 of 2018
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 2398 of 2014
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 8322 of 2018
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 2395 of 2014
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 7025 of 2018
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 2394 of 2014
                              With
         R/SPECIAL CRIMINAL APPLICATION NO. 8319 of 2018

==========================================================
                          PRAFUL ANUBHAI SHAH
                                 Versus
                       STATE OF GUJARAT & 1 other(s)
==========================================================
Appearance:
MR ISA HAKIM FOR GANDHI LAW ASSOCIATES(12275) for the
Applicant(s) No. 1
MR DHAWAN JAYSWAL, APP for the Respondent(s) No. 1
RULE SERVED BY DS for the Respondent(s) No. 2
==========================================================

 CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT

                             Date : 14/09/2023

                          COMMON ORAL ORDER

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

1. Leave to amend is granted. Amendment to be

carried out forthwith.

2. All these petitions are filed under Articles 226/227

of the Constitution of India read with Section 482 of the

Code of Criminal Procedure, 1973 (`the Code' for short) for

quashing and setting aside the complaints being Criminal

Case Nos.19316 of 2013, 19317 of 2018, 19320 of 2018, 19321

of 2018, 19322 of 2018, 19319 of 2018, 19318 of 2018

respectively pending before the Labour Court, Ahmedabad for

the offences punishable under Section 9 of the Payment of

Gratuity Act, 1972 (`the said Act' for short) for failure to

comply with Rule 7(3) and 7(4) of the said Act, along with

the consequential proceedings, if any.

3. As the common question of facts and law are

involved in all these petitions, at the request of learned

advocates for the parties, they are heard together and

disposed of by this common oral order.

4. The impugned complaints are filed by the

complainant-controlling authority under the said Act for not

complying with the order passed in Gratuity Cases of the

concerned employees.

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

5. Heard learned advocate Mr.Isa Hakim for the

petitioners and learned APP Mr.Jayswal for respondent no.1-

state. Though served, none appears for respondent no.2.

5.1 Learned advocate Mr.Hakim submits that during

the pendency of these petitions, the settlement is arrived at

between the employer i.e. the present petitioners and the

employees and the entire amount towards gratuity is now

paid. He pointed out to the compromise deed arrived between

the parties and also the details of payment like receipt

issued of such amount paid by the present petitioners and

submitted that even otherwise the offences which are alleged

in the complaint can be considered as technical breach and

in view of subsequent development, as now the entire

payment is made by the petitioners and nothing remains

outstanding towards the amount of gratuity, no fruitful

purpose will be served to continue the present proceedings in

view of the judgment in the case of Gian Singh V/s State of

Punjab & Anr. Reported in (2012) 10 SCC 303, Nikhil Merchant V/s Central Bureau of Investigation & Anr. Reported in 2009(1) GLH 31 and State of Haryana V/s Bhajanlal & Ors. Reported in AIR 1992 SC 604. He,

therefore, prays to allow these petitions and quash the

impugned complaints.

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

6. Learned APP Mr.Jayswal for respondent no.1

submits that prima facie the complaints are filed by the

controlling authority which disclose necessary material

constituting the offences under the said Act. As the said Act

is a benevolent legislation, the commission of such breach by

the petitioners is required to be viewed seriously and

therefore considering the willful default made by the

petitioners in non-payment of such amount, these petitions

are not required to be considered sympathetically.

6.1 He, further submitted that all the ingredients of

Sections 7(3), 7(4) and 9 of the said Act are satisfied and

therefore this Court may not exercise powers of quashing the

impugned complaints, which are, otherwise, required to be

exercised very sparingly. However, he is not in a position to

dispute the factum, on specific query put by the Court, that

subsequently the payment is made to the workmen and

receipts are also produced on the record. He, therefore, prays

to pass appropriate order in the facts and circumstances of

the present case.

7. Though served, none appears for the respondent

no.2.

8. I have considered the rival submissions made at

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

the bar and I have also considered the provisions of the Act.

9. Sections 7(3) and 7(4) of the said Act read as

under:

"(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. (3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.]

(4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

controlling authority such amount as he admits to be payable by him as gratuity.

[(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the employer or employee or any other person raising the dispute may make an application to the controlling authority for deciding the dispute.]

[(c) The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer.]

[(d)] The controlling authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto. [(e)] As soon as may be after a deposit is made under clause (a), the controlling authority shall pay the amount of the deposit--

(i) to the applicant where he is the employee; or

(ii) where the applicant is not the employee, to the [nominee or, as the case may be, the guardian of such nominee or] heir of the employee if the controlling authority

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity.

9. Penalties.--(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to 3 [ten thousand rupees], or with both. (2) An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or order made thereunder shall be punishable with imprisonment for a term [which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both]:

Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall be punishable with imprisonment for a term which shall not be less than [six months but which may extend to two years] unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice."

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

10. Section 2(p) of the Industrial Disputes Act (ID Act

for short) reads as under:

"settlement" means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and the concliation officer."

11. Pursuant to Section 2(p) of the ID Act, the

settlement is arrived at between the management and

employees and the settlement is also produced on record. On

perusal of the same, it transpires that it is signed by the

representatives of the employees and representatives of the

employer. Pursuant thereafter, the respective receipts were

also issued by the employees which are part of the record,

whereby it is mentioned that the amount is received on

10.7.2014 by the employees.

12. In the case of Gian Singh (supra), the Hon'ble

Supreme Court has observed in para 61 as under:

"61. A three-Judge Bench of this Court in State of

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

Karnataka v. M. Devendrappa and another[18] restated what has been stated in earlier decisions that Section 482 does not confer any new powers on the High Court, it only saves the inherent power which the court possessed before the commencement of the Code. The Court went on to explain the exercise of inherent power by the High Court in paragraph 6(Pg.94) of the Report as under :

"6. .........It envisages three circumstances under which the inherent jurisdiction may be exercised, namely,

(i) to give effect to an order under the Code, (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. It is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction. No legislative enactment dealing with procedure can provide for all cases that may possibly arise. Courts, therefore, have inherent powers apart from express provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. That is the doctrine which finds expression in the section which merely recognizes and preserves inherent powers of the High Courts. All courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

esse non potest (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the section, the court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised exdebito justitiae to do real and substantial justice for the administration of which alone courts exist. Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice........"

13. In the case of Nikhil Merchant (supra), it is held

in paragraphs 20 to 24 as under:

"20. Having carefully considered the facts of the case and the submissions of learned Counsel in regard thereto, we are of the view that, although, technically there is force in the submissions made by the learned Additional Solicitor

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

General, the facts of the case warrant interference in these proceedings.

21. The basic intention of the accused in this case appears to have been to misrepresent the financial status of the company, M/s Neemuch Emballage Limited, Mumbai, in order to avail of credit facilities to an extent to which the company was not entitled. In other words, the main intention of the company and its officers was to cheat the Bank and induce it to part with additional amounts of credit to which the company was not otherwise entitled.

22. Despite the ingredients and the factual content of an offence of cheating punishable under Section 420 IPC, the same has been made compoundable under Sub-section (2) of Section 320 Cr.P.C. with the leave of the Court. Of course, forgery has not been included as one of the compoundable offences, but it is in such cases that the principle enunciated in B.S.Joshi's case (supra) becomes relevant.

23. In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

order to avail of credit facilities beyond the limit to which the Company was entitled. The dispute involved herein has overtones of a civil dispute with certain criminal facets. The question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal proceedings pursuant to the compromise arrived at, should at all be exercised?

24. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B. S. Joshi's case (supra) and the compromise arrived at between the Company and the Bank as also clause 11 of the consent terms filed in the suit filed by the Bank, we are satisfied that this is a fit case where technicality should not be allowed to stand in the way in the quashing of the criminal proceedings, since, in our view, the continuance of the same after the compromise arrived at between the parties would be a futile exercise."

14. In the case of Bhajanlal & Ors, it is observed by the Hon'ble Supreme Court as under:

"In the backdrop of the interpretation of the various relevant provisions of the Code under Ch.XIV and of the principles of law enunciated by this court in a series of decisions relating to the exercise of the extraordinary power under Art.226 or the inherent powers under sec.482 of the

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under sec.156(1) of the Code except under an order of a Magistrate within the purview of sec.155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under sec.156(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

15. Considering the aspect that now the dispute is

NEUTRAL CITATION

R/SCR.A/2392/2014 ORDER DATED: 14/09/2023

undefined

settled between the parties, the amount is already paid to

the employees and the employees have signed the receipts in

receipt of the same, and the settled legal position of law as

laid down by the Hon'ble Apex Court in the cases referred to

hereinabove, I am of the considered opinion that no fruitful

purpose will be served to continue the proceedings as even if

the petitioners are directed to face the trial, it will amount

to futile exercise.