IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD. Dated this the 31 st day of May Before THE HONBLE MR.JUSTICE C.R.

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1 :1: IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD Dated this the 31 st day of May 2012 Before THE HONBLE MR.JUSTICE C.R.KUMARASWAMY Criminal Petition No.7277/2011 C/w. Criminal Petition No.7278/2011 BETWEEN: RakeshTandon Managing Director, Indian Railway Catering & Tourism Corporation Limited, B.O.B. Building, 1 6th Parliament Street, New Delhi-hO D. Sathyaseelan Area Manager, Indian Railway Catering & Tourism Corporation Limited Near Cell kitchen, Hubli Railway Station, Hubli.... Petitioners (Common) (By Sri. C.V Sudhindra, Sri. S Yogananda & Sri. M.D Anuradha Urs., Sri. A Ramesh Gowda, Sri. Vinay T.R, Advocates)

2 Labour Enforcement Officer (Central) Hubli58O (Common).. Respondent No.362/A, 362/B, Kusughal Road, Government of India, Ministry of Labour, State Rep. by AND: Court, Hubli. C.C.No.725/2009 as per Annexure-A on the file of JMFC-ll Hon ble Court may be pleased to quash the proceedings in Cr.P.C, by the Advocate for the petitioner praying that this 1. Crl.P.No.7277/2011 is filed under Section 482 of COMMON ORDER the Court made the following: These petitions coming on for dictating orders this day, file JMFC-ll Court, Hubli. proceedings in C.C No.718/2009 as per Annexure-A on the 482 of Code of Criminal Procedure seeking to quash the Criminal Petition No.7278/2011 is filed under Section file JMFC-ll Court, Hubli. proceedings in C.C No.725/2009 as per Annexure-A on the 482 of Code of Criminal Procedure seeking to quash the Criminal Petition No.7277/2011 is filed under Section (By Sri. S.C Bhema Reddy, CGSC).2.

3 :3: 2. Cr1 PNo 7278/2011 is filed under Section 482 of the Cr.PC. by the advocate for the petitioner praying that this Hon ble Court may be pleased to quash the proceedings in CCNo.718/2009 as per Annexure-A on the file of JMFC-II, Hubli. 3. I have heard learned counsel for the petitioner and the learned Central Government Standing Counsel appearing for the Union of India in both these cases. 4. The Labour Enforcement Officer (Central), Government of India, Ministry of Labour, has presented two complaints for contravention of the Section 23 of the Contract Labour (Regulation and Abolition) Act, 1970, (for short the Act ) before the Court of JMFC, II Court, Hubli The said complaints was registered as C.C No. 725/2009 and 718/ The common averment made in these two complaints reads as under:

4 a Principal Employer within the meaning of Section 2 (1) (g) establishment of South Western Railway Station Hubli, He is labours for catering services through the contractors in the The accused principal employer is engaged in contract il/ which was not found satisfactory. letter No.IRCTC/Labour Enforce/UBL/09 dated accused received the same. The accused sent reply vide He sent the said report to the accused. The Inspection Report bearing No.35/ /L-H is dated 6. He inspected the premises on The New Delhi of the Government of India, Ministry of Labour, of Section 28 of the said Act vide SO NO.3452 dated He has been appointed as an Inspector under sub-section (1) complainant is Labour Enforcement Officer (Central), Hubli. provisions of the Act and Rules made thereunder. The (iv) of the said Act. He is responsible for complying with the.4:

5 Officer under Section 7 of the Act. The date of offence is The registration certificate is not obtained from the Registering produced the registration certificate at the time of inspection. Case No.718/2009. The averment made in this complaint is in Magistrate, I Class. The said complaint was registered in Cr1. against the same accused before the Court of Judicial 8. Similarly, the complainant presented another complaint the Act. knowledge of the Inspector as prescribed under Section 27 of months from on which the offences came to the in 0.0 No.725/2009 not filed within the time limit of three imprisonment for three months or with both. The complaint is which provides a penalty extending to one thousand rupees or mentioned above is punishable under Section 23 of the Act Western Railway Station Hubli. Each of the offences Services through Contractors in the Establishment of South Principal Employer engaged in Contract Labours for Catering and the place of offence is establishment of the 7. It is alleged in the complaint that the accused has not

6 :6: the same line as that of the previous complaint in so far as the occupation of the accused and also date of offence and also date of inspection of the premises in question. The averment made in the complaint discloses that the accused did not maintain the register in Form No.Xll (Register of contractor not mentioned under Section 29 (1) Rule 74 and that the principal employer did not display notice showing rates of wages, hours of work, wage period, date of payment, name and address of the Inspector and date of payment of unpaid wages in English, Hindi and Kannada. There is also contravention of Rule 81(1) (I) of the Act. The complaint is not within the time limit of three months from in which the offences came to the knowledge of the Inspector as prescribed under Section 27 of the Act. 9. The learned Magistrate after perusing the complaint in both the cases has taken cognizance of the offence against accused for contravention of the Act. Feeling aggrieved by the same, accused Nos.1 and 2 have preferred these two criminal petitions to quash the criminal case.

7 Railways, that they are on deputation to Indian Railway submits as under: The petitioners are the employees of the Indian 10. Sri.C.V.Sudhindra, learned counsel for the petitioners Tourism Corporation sets apart three to six places to be given the size of the station, M/s. Indian Railway Catering and and licensee. In fact, at every railway station depending on as licensee and therefore it is a simple relationship of licensor given on license to run a catering services to a private person premises that was said to be inspected by the respondent was Catering and Tourism Corporation, that the particular by the Corporation as per the norms of Indian Railway and comfort to the travelling passengers and was put to use Catering and Tourism Corporation to provide better services Public), that the premises is set apart for M/s. Indian Railway to the travelling passengers of the Indian Railways (General the creation of Ministry of Railways to provide better services that the Indian Railway Catering and Tourism Corporation is Catering and Tourism Corporation Limited on tenure basis,.7.

8 :8: to licensees to run catering. The premises set apart for catering services was awarded on Annual License Fee to the Licensee while the Licensor remains the Indian Railway Catering and Tourism Corporation. Under this commercial contract, the licensee is allotted space within the railway premises wherein the licensee would undertake catering for a fixed period on his own by engaging his own workers, making his own investment, bearing all costs and expenses but as per the strict standards set by the licensor. The licensor has no role in its day to day administration, its profit and loss. The only concern of the licensor (M/s, Indian Railway Catering and Tourism Corporation) is to ensure adherence of standards and qualitative supply of eatables. Therefore, neither the petitioners nor the employees of Indian Railway Catering and Tourism Corporation have anything to do either legally or factually in running the affair of catering or their internal matters. The respondents have initiated the prosecution in haste. Petitioner No.2 had sought time to file reply vide requisition dated Learned counsel for the

9 relating to alleged acts of omission by each of the accused. complaint is vague and that there is no specific averment is the abuse of process of law. The averment made in the petitioners submitted that the prosecution of these petitioners following rulings: 11. Learned counsel for the petitioners has relied on the party is bad in law. servants. The prosecution not making the Company as a prosecution is of vindictive attitude. The petitioners are public relax/extend the period of limitation which is barred. The law of limitation. There is no enabling provision to is bad since it is hit by Section 27 of the Act. It is barred by petitioner No.2 in reality is factually incorrect. The prosecution perfunctory manner. The name of occupant shown as no further. The report purported to have been prepared is in occupant and the petitioners is of a licensor and licensee and any of its activities. The relationship that governs between the obligation on the part of the petitioners to run the catering or The prosecution is illegal. There is no legal or contractual :9:

10 BIHAR AND OTHERS (1998 (3) BLJR 2266) - ii) SIN TRA LIMITED AND OTHERS VS. STATE OF SC 1609), SILK EXPORTERS, BANGAL ORE, (AIR 1999 I) M/S.SIL IMPORT, USA VS. M/S.EXIM AIDES 1963) Section 5 wherein it has been held As Whether the delay in filing a and Limitation Act (Central Act NO.36 of (Central Act No26 of 1881) Sections 138 to KAR 2143) wherein it has been held iv) C.KALEGOUDA VS. KSADASHIVAPPA (ILR held that delay of one day cannot be condoned, (2006 (3) KCCR 1793) wherein this Court has iii) N.GOVARDHAN VS. JAVOB ABHRA HAM knowledge of the Inspector, alleged commission of the offence came to the made within three months from the date on which punishable under the Act, unless a complaint is Court shall take cognizance of any offence per Section 77 no 10:

11 11: complaint under Section 138 of the Negotiable Instruments Act can be condoned under Section 5 of the Limitation Act, HELD be condoned. No delay cannot v) JU.PRABHU VS. STATE OF KARNATAKA - (1985 LAWS (KAR) 921) wherein it has been held that the prosecution has been launched beyond three months and therefore learned Magistrate has no competence to take cognizance of the offence and issue summons to the petitioner. vi) Unreported judgment in the case of PKGOEL AND ANOTHER VS. LABOUR ENFORCEMENT OFFICER (CENTRAL) - I (CRLP.NO3439/2OO8 DISPOSED OF ON ), wherein it has been held as under The private complaint filed by the respondent against the petitioners for breach of Rule 6 (a) of the Rules while working as Managing Director

12 complaint and ordering process against the cognizance of the offence in such private IRCTC as accused is bad in law and taking and Chief Regional Manager without making Contract Labour Regulation Act has no application as the 12. Learned counsel for the petitioners submits that the 2004 SC 4274). VS. STATE OF GUJARATH AND OTHERS (AIR viii) MOHABEN KETANBHAI SHAH AND ANOTHER about the role played by each of the Directors. should be specific averment in the complaint SCC 330) wherein it has been held that there SINGH PAINTAL AND ANOTHER (2010 (3) CORPORATION LIMITED VS. HARMEET vii) NATIONAL SMALL INDUSTRIES against the petitioners will not serve any purpose. law and continuation of such criminal proceedings petitioners would amount to abuse of process of 12:

13 ANOTHER (2001 CRL.L.J. 4163), I) P.R.CATERING VS. STATE OF BIHAR AND relationship is that of licensor and licensee. In support of this contention, he relies on the following decisions: GUJARAT AND ANOTHER (AIR 2000 SC 3346) vii) KK.PA TEL AND ANOTHER VS. STATE OF AND OTHERS (AIR 1994 SC 1262), vi) S TA TE OF HA R YA NA VS. HA RI RAM YA DA V (1976 SCC (CR1) 507), SHIVALINGAPPA KONJALGI AND OTHERS v) SMT.NAGAWWA VS. VEERANNA 2004 KAR 164), THE LABOUR ENFORCEMENT OFFICER (ILR iv) M/S.JYOTHI GAS LTD AND ANOTHER VS. 2414), iii) SJ?AM MOHAN VS. THE STATE (1995 CRL.L.J OTHERS (1999 (2) KU 259), AND OTHERS VS. UNION OF INDIA AND ii) M/S.ASIA PRIVATE LIMITED, BANGALORE 13:

14 sanction, the complaint is irretrievably barred under the said provision. complaint was filed after delay and without in support of the contention that where., z Enforcement Officer decided to file a complaint against the satisfy with the explanation offered by the accused, the Labour authorities. He further submits since the authority did not they have sought for extension of time to convince the accused has not availed the opportunity. On the other hand, contention before the Labour Enforcement Officer, the Though opportunity was given to the accused to putforth the further submits that the complaint is within the time limit. produce the register certificate as required under the Act. He The accused has not maintained the register and did not six months of the offence alleged to have been committed. Section permits the complainant to present complaint within of this Court to Section 27 of the Act. The proviso to this 13. Learned counsel for the respondent invited the attention 14;

15 14. Learned counsel for the petitioner submits that the by the Deputy Labour Commissioner (Central) on accused. He further submits that the sanction was received - V business premises of the petitioner belong to the within the purview of the establishment and the trains for supply of foods to the passengers come was being used by the petitioner in the running According to O.P.No,2 the pantry car which has observed at Para 9 as under: AND ANOTHER (2001 CRL.L.J.4163), the Patna High Court 15. In the case of P.R.CATERING VS. STATE OF BIHAR situated at the railway station. food or to supply in the railway coaches or at the premises obligation. The Indian Railway Catering and Tourism further submits that the relationship is not a contractual the railway is the relationship of licensor and the licensee He relationship between the Indian Railway Catering and Tourism Corporation Limited and the persons who supplies eatables in Corporation Ltd. does not employ any workers to prepare the 15:

16 16: Railways. In this respect the terms of contract and agreement are to be scrutinized to find out whether the petitioner comes within the purview of the definition of Contractor and establishment thereof as per Section 2 of the Act. 10. xxxxx That Contractor shall pay in advance in cash or cheque a license fee of Rs. 45/- (Rupees Forty five only) per month for each of the cars used as Dining/Pantry cars to the Station Superintendent/Gu wahati. Northeast Frontier Railway. Such license fee shall be paid on the 5 day of every calendar month during the continuance of this agreement. The Contractor shall not be entitled to any refund of the licence fee in whole or in part under any circumstances. Thus, the pantry car allowed to be used by the petitioner was on the basis of license fee and if all the clauses of the agreement are read as a whole the form of agreement would come in the form of licensee only. In the running trains belonging to the Railway establishment the petitioner had been allowed to supply prepared foods and drinks to the passengers of the train and for safety of health of the passengers being taken into

17 17: consideration some restrictions are put on supply of foods and drinks to its customers (Railway passengers). So, the petitioner was to supply foods to its customers and restrictions regarding the price and hygenic health conditions some clauses have been put to restrict the petitioner such as asking of exorbitant prices and not to supply stale foods etc. From Clause 16 of the agreement no where it shows that the Pantry cars in the running trains are being used by the petitioner permanently during the course of agreement. Such sort of establishment in the pantry cars are varying from train to train in the running condition. After the train is halted at the destined Stations the Contractor/petitioner vacates the same and as per the agreement he would occupy another pantry car in another running train. Thus, there is no establishment under the Railways for carrying out the contract and hence use of Pantry cars on payment of license fees would definitely not come within the scope of establishment as per Clause 2 of the agreement to cover the definition of the Contractor as per Section 2(c) of the Act.

18 18: 16. In the case of KERALA CIVIL AVIATION GENERAL WORKERS CO-OP. SOCIETY AND UNION OF INDIA (1984 II LU 314), the High Court of Kerala observed as under: The question here is whether porters doing porterage work in an airport, forming themselves into a co-operative society, will come under the definition of contract labour and whether, with reference to them, the civil aviation department would be the Principal employer. Held: The civil aviation department which sells the privilege to do porterage in its premises cannot be considered to be the Principal employer within the meaning of the Act, for the work done by the contract labour is not part of the work of the establishment. The members of the union were the employees of the society and the society was the contractor on whom the licence or the previlege to enter the premises of the airport and do porterage service for the air travel passengers was conferred for a period of two years from 6th December, The rights, if any of the contract labour were only against their employer, viz., the society. If, on the other hand, the society is to be understood as consisting of its

19 19: members, as contended by the petitioner s counsel, the members of the society do not even fall within the definition of contract labour. They were only persons doing sen/ice on behalf of the society of which they are members. 17. The High Court of Calcutta, in the case of CARLSBAD MINERAL WATER MFG CO. LTD., V. P.K. SARKAR AND OTHERS (AIR (30) 1952 CAL 6 (C.N.2) has held as under: Industrial Disputes Act (1947), S.2 (a)(i) Industry carried on by or under authority of Government-Meaning of-company entering into contract with Central Government for selling certain articles on railway property-company if carries on industry under or by authority of Government. What is referred to in S. 2 (a) (I) is any industry owned by Government which is being carried on by Government itself either through a department or by some authority created by Government to carry on that industry. An industry carried on by or under the authority of Government is a Government industry. No

20 20: business owned and carried on by a private person or a limited company can be a business carried on by or under the authority of Government. Where a company who manufactured aerated waters entered into a contract with Central Government by which it acquired a right to sell its aerated waters on the stations of a certain Railway and on the trains running on that railway and under the contract the Government had a right to fix maximum prices and to control to some extent the work of the Company: Held, that (1) the company was not conducting an industry under or by authority of Government. It was conducting its own business of manufacturing and selling aerated waters for its own benefit. It was a licensee of Government under a Contract and was carrying on its own business and not that of Government or of the railway. (2) Though the contract required considerable control by the Government it would not make the business carried on by the company a business of LV

21 21: Government carried on by authority of Government 18. In the instant case, the Indian Railway Catering and Tourism Corporation Ltd., was created by the Ministry of Railways to provide better service to the passengers travelling in the train. The object of the Indian Railway Catering and Tourism Corporation Limited is to supply eatables to the passengers who are travelling in the railways or in the station and also to promote tourism. The Indian Railway Catering and Tourism Corporation Ltd., grants permission to the licensee to supply eatables in the railway coaches and also in the premises situated at the railway station. In the instant case even the licensee has not been arrayed as accused, though he is a person mainly dealing with the supply of eatables. It is well settled that the licensor will be empowered to regulate the business of the licensee for supply of good food to the passengers. Licensor collect the prescribed fee from the licensee to carry on the business of supplying the eatables to the passengers at the railway station as well as at the railway

22 22; coaches. The word contractor means a person who undertakes a contract to provide materials or labour for a job. In this case, the petitioner i.e Indian Railway Catering and Tourism Corporation Ltd. does not provide any material or engage labour for supplying the eatables. The relationship between the licensee and the licensor is not the relationship between Principal Employer and the worker or the employee. Even the co-ordinate bench of this Court in Crl.P No.3439/2008 has quashed the private complaint lodged by the Labour Enforcement Officer. 19. Normally, an agreement will be entered between the licensee and the licensor on payment of the prescribed license fee to supply eatables at the railway station and also at the compartments. Supply of the eatables is licensor. The agreement is also produced. regulated by the In that there was agreement for sale of fresh fruit juice within the railway premises by the licensee ie., S.M.Saquib. In other words, the premises viz., railway coaches and shops premises will be allowed to the licensee to sell the eatables. Therefore in my

23 23: view, the Indian Railway Catering and Tourism Corporation Ltd., does not engage any contractor to carry or supply the food items. All that it does is to regulate with regard to the supply of the eatables to the passengers. 20. One of the contentions raised by the learned counsel for the petitioners is that there is delay in lodging the complaint. Therefore, the complaint is barred under section 27 of the Act. There is a force in the submission of learned counsel for the petitioners. Even the complainant has admitted that there is delay in lodging the complaint. 21. As stated earlier, this Court has observed that the relationship between the agreement of sale of fresh fruit juice in the railway premises is between the licensor and licensee. Therefore, the complaint filed by the complainant lacks jurisdiction and it is bad in law. This is one of the rare case where this Court can exercise its inherent power to quash the criminal cases filed by the Labour Enforcement Officer. Therefore, these Criminal petitions deserve to be allowed.

24 2. CC. No.718/2009 and CC. No.725/2009 pending 1 Both these Criminal Petitions are allowed. ORDER 22. In the result I pass the following, J m/jtr/ JLTDG Sd/ on the file of learned JMFC-lI, Hubli are hereby quashed. 24