Cri. Appln. No. 438 of 1999,Cri. Appln. No. 439 of 1999

16th December, 2000

Petitioner Counsel: Shri. A. P. WACHASUNDER, Shri. S. V. MANOHAR

Cases Cited:
J. K. Industries Vs. Chief Inspector of Factories & Boilers, 1997(1) L.L.J. 772 [Para 5]
Chief Inspector of Mines Vs. Karam Chand Thapar, AIR 1961 SC 838 [Para 9]

JUDGMENT

JUDGMENT :- Rule. Heard forthwith by consent of the learned counsel for the applicant and the learned A.P.P. for the respondent.

2. These are two applications filed by the sole surviving Director of M/s. Azide Chemicals & Pharmaceuticals Pvt. Ltd. challenging his prosecution for having committed offence under Rule 4(1)(a)(b)(c) of the Maharashtra Factories Rules, 1963 and for offences under Section 7A(2)(3) of the Factories Act, 1948.

3. The applicant came to be prosecuted by the respondent State through its Assistant Director, Industrial Safety and Health, Nagpur for the reason that in an enquiry into the leakage of toxic gas which resulted into the death of Shri Rajesh Gupta, Managing Director, who was also noticed as the "Occupier" under the Factories Act and Shri Harpal Singh Thakur and Shri Ramkrishna Raut, the company was found guilty. On 13-10-1995 at 7.30 A.M. it was found that the factory was engaged in manufacturing activity of making sodium azide and that the company did not get its plans approved in respect of site building used for the purpose of manufacturing process and in respect of the layout of plant and machinery, raw material, intermediate by-products from the office of the Jt. Director, Industrial Safety and Health and therefore, they contravened the provisions of Rules 4(1) (a)(b)(c) of the Maharashtra Factories Rules, 1963. Similarly, it was found that the toxic gas was released because of faulty storage and wrong handling of the same at the relevant time because of which large amount of toxic gas came out through the gap in between the Reactor Cover and Agitator Shaft. On such release of the toxic gas, Shri Raut, who was working on the platform collapsed on the platform. Similarly, Shri Rajesh Gupta also became its victim and one Harpal Singh Thakur, who was working as Supervisor outside the shade, also succumbed to the toxic gas. They were moved to the Govt. Medical hospital but were declared dead by the attending Doctors, whereas the other co-workers namely Pardhi and Yadav who were also affected were fortunately saved.

4. It is contended by Mr. Manohar, the learned Counsel appearing for the applicant, that in view of the definition of "Occupier" given in Section 2 (a) of the Factories Act, the person who could be prosecuted for this act or omission was Mr. Rajesh Gupta, who was nominated as the "Occupier" and was the Managing Director of the Company at the relevant time, whereas the applicant was only a Director and his participation in the Company was that of an investor i.e. by way of putting in finance.

5. It is submitted that as the "Occupier" himself was the victim of the release of toxic gas, the liability cannot be fastened on the applicant. It is, therefore, submitted that the prosecution initiated by the Respondent State against the applicant deserves to be quashed and set aside.

Mr. Manohar, the learned Counsel for applicant, has placed reliance on the case of "J. K. Industries and others Vs. Chief Inspector of Factories & Boilers" 1997 (1) L.L.J. 722, in which the Apex Court observed in Para 26 of the reported judgment as under-

"Thus, we find that after the 1987 Amendment, the true import of proviso (ii) to Section 2(n) would be that in the case of a company, which owns the factory, the company cannot nominate any one of its employees or officers, except a Director of the Company, as the occupier of the factory in the case of a company must necessarily be any one of its Directors who shall be so notified for the purposes of the Factories Act. Such an occupier cannot be any other employee of the company or the factory. This interpretation of an occupier would apply to all provisions of the Act, wherever the expression occupier is used and not merely for the purposes of Sections 7 or 7-A of the Act."

6. Then learned A.P.P. submitted that the applicant is the Sole surviving Director of the Company and has been rightly prosecuted in his capacity as "occupier" of the Factory for breach of the Rules under the Maharashtra Factories Rules 1963 and under the Factories Act, 1948. The learned A.P.P. drew attention of this Court to Section 92 of the Factories Act, 1948 and submitted that it is the "occupier" and Manager of the Factory, who could be held guilty of offence for contravention of the provisions of the Factories Act and the Rules made thereunder.

7. It is submitted that the Company had no manager appointed in the Factory and though Mr. Rajesh Gupta, Managing Director, was notified as "deemed occupier" under Section 7 of the Factories Act, on his death in the accident, the respondent State is justified in prosecuting the applicant as "Occupier" of the Factory, as he is one of the Directors. It is submitted that merely because the person notified as "occupier" under Section 7 of the Factories Act, dies, it would not exonerate the Company from the offence committed by it under the Maharashtra Factories Rules, 1963 and so also under the Factories Act, 1948. Therefore, the prosecution of the applicant is justified and does not deserve to be quashed and set aside.

8. There is no dispute as to the fact that an accident did occur in the factory because of release of toxic gas causing death of its Managing Director as well as 2 workers. The complaint, prima-facie, shows that it was due to the negligence on the part of the Company in handling the chemicals i.e. right from storage till its use or release. In the complaint it is very specifically alleged by the complainant that the plaint and its layout, was not got approved from the Jt. Director, Industrial Safety and Health, Nagpur.

9. In the case of "Chief Inspector of Mines & another Vs. Karam Chand Thapar and others" reported in AIR 1961 SC 838 the Bench of 5 Judges of the Apex Court, had an occasion to interpret the expression "any one of the Directors" in reference to the Mines Act, particularly, occurring in Section 76 of the Act and it was held -

"The expression "any one of the directors" is ambiguous; in some contexts, it means "only one of the directors, does not matter which one: but in other contexts, it is capable of meaning "every one of the directors". Which of these two meanings was intended by the legislature in any particular statutory phrase has to be decided by the courts on a consideration of the context in which the words appear and in particular, the scheme and object of the legislation.

The plain object of S.76 of the Mines Act is to ensure that no lacuna remains in the application of the provisions in the Act to owners of mines, in the cases, where the mine is owned not by an individual, but by a firm or other association of individuals or a public company or a private company. There can be no question that where a mine is owned by one individual the one and complete owner - he would be liable to all penalties which ownership entails. When the legislature thought it desirable to make special provision where the mine is owned by a firm, or an association of individuals, or a company, it does not stand to reason that it would ordinarily permit all the partners except one, all the members of the association except one, all the shareholders of the private company except one and all the directors of the public company except one to escape the penalties. The purpose of the Act is to secure safety and proper conditions of work for labour to enforce the provisions of the Act and the rules, regulations and bye-laws under it, designed to achieve this purpose, the legislature makes in S.18, the manager, the agent and the owner, responsible for their proper observance. Contravention is made punishable by fine or imprisonment. In this scheme of things, it is reasonable to expect that the legislature, would take particular care to see that everybody performing the function which an individual owner is expected to perform would be treated in the same way as an individual owner.

The rule of strict interpretation of penal statutes in favour of the accused is not of universal application and must be considered along with other well-established rules of interpretation. The scheme and object of the statute makes it reasonable to think that the legislature intended to subject all the directors of a company owning coal mines to prosecution and penalties, and not only one of the directors. In the face of these considerations there is no scope for the application of the rule for strict interpretation of penal statutes in favour of the accused.

Hence the words "any one of the directors" in S.76 of the Mines Act, 1952, must be interpreted to mean "every one of the directors."

10. The contention of the learned counsel for the applicant is that the respondent State had chosen not to prosecute the Company but one of its Directors, who at the relevant time was not "occupier" and therefore, he deserves to be discharged and that the company would stand exonerated as its Director who was notified as "occupier" having died in the accident. Well, this cannot be accepted as the offence has been committed by the Company and the prosecution is launched against its sole surviving Director, who would definitely come within the purview of definition of "occupier" and is liable for prosecution under Section 92 of the Factories Act and therefore, this Court finds that the applicant has no case.

11. Mr. Manohar, the learned counsel, for the applicant has submitted that the "occupier" Mr. Rajesh Gupta, who was the Managing Director, was a technical person and incharge of the factory and, therefore merely because the applicant happened to be the sole surviving director, he should not be punished for the acts of Mr. Rajesh Gupta. It is submitted that as said Rajesh Gupta has already suffered the punishment in the accident, which took his life, and, therefore, on this count also the prosecution of the applicant is not justified. It may be so, but the Company does not stand exonerated in the given facts and circumstances being a legal person distinct from the human corporators who constitute its frame work, it can be so prosecuted only through the applicant. Though the applicant may not be directly concerned with the accident but by virtue of his being one of the directors and the sole surviving director, he will have to face the prosecution and of course will be entitled to raise all such pleas in the defence of the Company which are available to him under the law. It will also be open for the applicant, if at the conclusion of the trial, the company is found guilty and the trial court decides to sentence the applicant, to, take up a plea that the act or default was of the managing Director (Deceased Rajesh Gupta) or to bring on record such mitigating circumstances, for leniency, in so far as substantive sentence of imprisonment is concerned.

12. With these observations, the application stands rejected. Rule is discharge.

Application dismissed.