DAYLE DE’SOUZA versus GOVERNMENT OF INDIA THROUGH DEPUTY CHIEF LABOUR COMMISSIONER (C) AND ANOTHER

Citation: [2021] 11 S.C.R. 511 · Decided: 29-10-2021 · Supreme Court of India · Bench: R. SUBHASH REDDY · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 13 · see the full citation network in Lexace

Judgment (excerpt)

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[2021] 11 S.C.R. 511
511
DAYLE DE’SOUZA
v.
GOVERNMENT OF INDIA THROUGH DEPUTY CHIEF
LABOUR COMMISSIONER (C) AND ANOTHER
(Criminal Appeal No. 1319 of 2021)
OCTOBER 29, 2021
[R. SUBHASH REDDY AND SANJIV KHANNA, JJ.]
Minimum Wages Act, 1948: s.22A, s.22C(1) and (2) – Appellant
is director of WS Company which had entered into an agreement
for servicing of ATMs with another company – The latter company
had entered into agreement with State Bank for maintenance and
upkeep of all their ATMs – A notice was issued to the appellant and
the head of WS company (accused no.2) by Labour Enforcement
Officer alleging non-compliance of provisions of 1948 Act – WS
company responded that they neither manage the ATMs nor work
at the ATMs – Criminal complaints filed against the appellant and
the head of WS company under s.22A – WS Company was not enlisted
as an accused in the complaint and was not summoned to stand
trial – Appellant-director filed s.482 CrPC petition which was
dismissed by High Court – On appeal, held: s.22A of the Act is a
‘General provision for punishment of other offences’ where “any
employer who contravenes any provision of this Act or of any rule
or order made thereunder shall, if no other penalty is provided for
such contravention by this Act, be punishable with fine...”– Sub-
section (1) to s.22C states that where an offence is committed by a
company, every person who at the time the offence was committed
was in-charge of and was responsible to the company for the conduct
of the business, as well as the company itself shall be deemed to be
guilty of the offence – By necessary implication, it follows that a
person who do not bear out the requirements is not vicariously liable
under s.22C(1) of the Act – The proviso, which is in the nature of
an exception, states that a person who is liable under sub-section
(1) shall not be punished if he proves that the offence was committed
without his knowledge or that he had exercised all due diligence to
prevent the commission of such offence – The onus to satisfy the
requirements to take benefit of the proviso is on the accused, but it
does not displace or extricate the initial onus and burden on the
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SUPREME COURT REPORTS
[2021] 11 S.C.R.
prosecution to first establish the requirements of sub-section (1) to
s.22C of the Act – Sub-section (2) states that notwithstanding
anything contained in sub-section (1), where any offence under the
Act has been committed by a company, and it is proved that such
offence has been committed with the consent or connivance of, or
is attributable to any neglect on the part of, any director, manager,
secretary or other officer of the company, then such director,
manager, secretary or other officer of the company shall also be
deemed to be guilty of that offence and shall be liable to be
proceeded against – The words ‘in-charge of the company’ and
‘responsible to the company’ are pivotal to sub-section (1) – This
requirement has to be satisfied for the deeming effect of sub-section
(1) to apply and for rendering the person liable to be proceeded
against and, on such position being proved, punished – The
necessities of sub-section (2) to s.22C of the Act are different from
sub-section (1) to s.22C of the Act – Vicarious liability under sub-
section (2) to s.22C can arise because of the director, manager,
secretary, or other officer’s personal conduct, functional or
transactional role, notwithstanding that the person was not in overall
control of the day to day business of the company when the offence
was committed – Vicarious liability is attracted when the offence is
committed with the consent, connivance, or is attributable to the
neglect on the part of a director, manager, secretary, or other officer
of the company – In the factual context of this case, it is crystal
clear that the complaint does not satisfy the mandate of sub-section
(1) to s.22C of the Act as there are no assertions or averments that
the appellant was in-charge of and responsible to WS company –
The proviso to sub-section (1) in the present case would not apply –
It is an exception that would be applicable and come into operation
only when the conditions of sub-section (1) to s.22C are satisfied –
In the absence of any specific averment, the prosecution in the
instant case does not and cannot rely on s.22C(2) of the Act – Thus,
proceedings initiated against the appellant and also against accused
no.2 are quashed.
Liability: Vicarious lia

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