State Of Gujarat vs Kansara Manilal Bhikhalal

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 7 April, 1962

Coram: M. Hidayatullah, N. Rajagopala Ayyangar

The case was heard before a bench consisting of M. Hidayatullah and N. Rajagopala Ayyangar. On the morning of 21 June 1960, at approximately five fifty A.M., the Inspector of Factories for Bhavnagar entered the premises of Saurashtra Metal and Mechanical Works located in Wadhwan City. The premises qualified as a factory under section 2(m)(i) of the Factories Act, 1948. During the inspection the Inspector observed seven workmen operating a machine. On further examination of the notice indicating the period of work prescribed for adult workers and of the register of workers, the Inspector discovered that three of the workmen belonged to a shift that was scheduled to commence work at seven A.M. Consequently, the Inspector initiated proceedings against Mr. Kansara Manilal Bhikhalal, identifying him as the occupier and manager of the factory, in violation of section 63 of the Factories Act, 1948. Prior to commencing the prosecution, a notice requiring the respondent to show cause was issued to him. The Inspector also sought an enhanced penalty under section 94 of the Act, emphasizing that Mr. Bhikhalal had previously been convicted in three separate cases. Because the alleged breach involved three different workmen, three distinct complaints were lodged before the Court of the Judicial Magistrate, First Class, at Wadhwan City.

The respondent put forward several defences. He asserted that he was neither the occupier nor the manager of the Wadhwan factory. It was explained that Mr. Dangi and the respondent were partners who operated another factory at Dharangadhra, and that the respondent functioned as manager of the Dharangadhra establishment while Mr. Dangi managed the Wadhwan unit. A second defence concerned a mechanical breakdown that had occurred on the preceding day; after the machine was repaired, work resumed slightly earlier on the following day because production had been delayed and goods were required. The Inspector was reportedly informed of this alteration in timing by a letter dated 20 April (Exhibit 11), although the letter did not reach the Inspector until 22 April. The respondent admitted that the change in working hours had not been notified or displayed as mandated by section 61(1). He further argued that section 61(10) allowed a change in the work system provided the statutory requirements were satisfied, and therefore no offence was committed. The Judicial Magistrate rejected these contentions. The Magistrate held that the letter from Mr. Dangi (Exhibit 15) demonstrated that the respondent was indeed the occupier and manager of the Wadhwan factory. Regarding the second defence, the Magistrate ruled that any change in hours of work required prior permission from the Inspector of Factories under sub‑section (10) of section 61, and that the factory manager must wait a full week before introducing any alteration. The respondent’s argument that this was the first change and therefore a waiting period was unnecessary was not accepted. Accordingly, the respondent was convicted under section 63 of the Factories Act for three separate offences, and the conviction was upheld.

In the lower court the accused was found guilty of three offences under the Factories Act and, pursuant to section 94, the court imposed an enhanced punishment by directing the payment of a fine of one hundred rupees for each offence. The respondent appealed the conviction, and the Sessions Judge of Surendranagar set aside the conviction and ordered an acquittal. The learned Sessions Judge explained that the second part of subsection (10) of section 61 applied only to a second or subsequent alteration of the work system; because the change in question was the first one, it fell within the first part of that subsection. Accordingly, the judge held that the change could not be said to breach the provision, since the Inspector of Factories had been informed of the change. The judge further opined that section 117 of the Factories Act protected the respondent’s action because it was undertaken in good faith. Consequently, the conviction and sentence were annulled. The State of Gujarat appealed the acquittal, but the appeal was dismissed. A Division Bench of the High Court, hearing the appeal, agreed with the Sessions Judge’s interpretation of section 61(10) and did not express any view on the applicability of section 117. The present appeal, filed by special leave, again raises those two questions for the Supreme Court’s consideration.

The statutory framework relevant to the present dispute can be examined beginning with the penalty provisions. Section 92 of the Factories Act provides a general regime for penalties, while section 94 prescribes an enhanced penalty where a prior conviction exists. These sections empower a court to impose a fine for any violation of the Act, its rules, or any written order made thereunder. In the instant case the alleged breach was of section 63, which requires that the hours of work in a factory correspond with the notice required to be displayed under section 61 and with the entries made in the register maintained under section 62. Section 63 reads: “Hours of work to correspond with notice under section 61 and register under section 62. – No adult worker shall be required or allowed to work in any factory otherwise than in accordance with the notice of periods of work for adults displayed in the factory and the entries made beforehand against his name in the register of adult workers of the factory.” Section 61 deals with the notice of periods of work for adults and contains ten sub‑sections, of which sub‑sections (1), (2) and (10) are pertinent here. Sub‑section (1) provides that a notice of periods of work for adults must be displayed and correctly maintained in every factory in accordance with the provisions of sub‑section (2) of section 108, showing clearly for each day the periods during which adult workers may be required to work. Sub‑section (2) states that the periods shown in the notice shall be fixed beforehand in accordance with the provisions of this section and shall be such that workers working for those periods would not be working in contravention of any of the provisions of sections 51, 52, 54, 55, 56 and 58. Sub‑section (10) requires that any proposed change in the system of work which would necessitate an alteration of the notice referred to in sub‑section (1) must be notified to the Inspector in duplicate before the change is made, and, except with the prior sanction of the Inspector, no such change may be effected until one week has elapsed since the last change.

In this case the Court explained that sub‑section (1) of section 61 requires the periods of work for adult workers to be fixed in advance and that those periods must not cause the workers to violate any of the provisions contained in sections 51, 52, 54, 55, 56 or 58. Sub‑section (10) of the same section further provides that any proposed alteration in the system of work in a factory which would require a corresponding amendment to the notice mentioned in sub‑section (1) must be communicated to the Inspector in duplicate before the alteration is effected; and, except with prior sanction of the Inspector, no such alteration may be made until a period of one week has passed since the last alteration. Section 62 subsequently mandates that a register of adult workers be kept, showing the name of each adult worker, the nature of his work, the group to which he belongs, the relay to which he is allotted where the group works on shifts, and any other particulars that may be prescribed. The Court also recalled that section 51 prescribes a forty‑eight hour work week, section 52 deals with weekly holidays, section 54 generally limits daily work to nine hours, section 55 fixes the interval for rest and states that work may not exceed five hours at a stretch, section 56 requires that periods of work and rest be spread over ten and one‑half hours, and section 58 prohibits the overlapping of shifts. The Sessions Judge and the High Court had agreed that the requirements of sub‑section (10) had been satisfied and therefore concluded that no offence under section 63 had been committed. They treated the incident as a change in the system of work that necessitated a change in the notice under sub‑section (1); because the change had been notified to the Inspector before it was made, they held there was nothing unlawful in employing the three workers before the commencement of their shift. Moreover, they held that because this was the first such change, there was no obligation to wait for a week or to obtain prior sanction from the Inspector as required by the latter part of sub‑section (10). With due respect to the High Court, the present Court does not accept that this type of situation falls within the scope of sub‑section (10). The language of that sub‑section speaks of a “change in the system of work in any factory which will necessitate a change in the notice,” and these words refer not to a mere departure from an existing notice but to a change in the overall system that would require the notice to be redrafted. The notice records “the periods during which adult workers may be required to work”; those words describe the general scheme of employment in the factory and are not intended to specify the exact time of employment for each individual worker, which can be ascertained only by referring to the accompanying register. Sub‑section (1) mentions a change in the notice and makes no reference to a change in the register, indicating that the contemplated alteration is an overall change affecting an entire group of workers rather than an individual employee. The latter part of sub‑section (10) further supports this interpretation because it implies that such changes should not be frequent and, if a second change is required, it may not be made until one week has elapsed since the previous change; this limitation cannot reasonably apply to casual adjustments in the working hours of a single worker.

In this case the Court observed that the notice referred to in the statute is intended to indicate the periods during which adult workers may be required to work and is not meant to specify the time of employment for each individual worker; such detail can only be obtained from the register that accompanies the notice. Sub‑section (1) therefore mentions a change in the notice rather than a change in the register, and it therefore points to a change that affects an entire group of workers, not a single employee. The latter part of the sub‑section reinforces this interpretation because it requires that such changes not be made frequently and, if a second change is contemplated, it may not be effected until at least one week has passed since the previous change. This language cannot be read as permitting casual alterations in the working hours of an individual labourer.

The counsel attempted to justify the action by relying on section 59, which provides that overtime wages must be paid. No claim based on that provision had been raised earlier in the proceedings, and the defence was instead drawn from sub‑section (10) of section 61 and from section 117 of the Act. The Court held that section 59 cannot be considered in isolation; it must be read together with section 64, which empowers the State Government to make exempting rules. Under those rules a departure from the provisions of sections 51, 52 and 56 is permissible only in accordance with the rules that have been framed. For example, overtime work may be allowed for workers engaged in urgent repairs despite the provisions of sections 51, 54, 55 and 56, but such overtime must be authorized by rule 91 and the urgency must relate to the factory itself, not merely to the personal circumstances of the workers. Consequently, a departure from the hours of work prescribed in section 61(2) is lawful only when the exempting provisions contained in the applicable rules expressly cover the situation.

Accordingly, the Court concluded that the offence in the present matter was the employment of workers in contravention of the notice displayed under section 61(1) without any justification under an exempting provision. The respondent could not invoke the peremptory effect of section 63 by relying on sub‑section (10), and the letter sent to the Inspector of Factories was therefore misconceived. It was also contended that the respondent was not the occupier or manager of the factory and that, even if he were, section 117 of the Act protected him because he was not physically present and acted in good faith. The Court noted that the Magistrate had found him to be the occupier and manager, a finding supported by the letter of Mr Dangi (Exhibit 15). Thus the argument based on section 117 required a more detailed examination, which the Court indicated would follow.

The Court quoted Section 117, which reads: “Protection to persons acting under this Act – No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act.” Counsel for the respondent, Mr M V Goswami, relied on several authorities to argue that this provision shields a person from prosecution for any act performed in good faith under the Act. He cited two judgments of Chief Justice Thomas, namely Ranjit Singh v Emperor, A.I.R. (1943) Oudh 308 and Ranjit Singh v Emperor, A.I.R. (1943) Oudh 311, where the learned Chief Justice observed that the language of Section 117 is not confined to inspecting officers but extends to occupiers, managers, foremen, workers and others. He further referred to two decisions of the Andhra Pradesh High Court, Public Prosecutor v Mangaldas Thakkar, A.I.R. (1958) Andh. Pra. 79 and In re P Lakshmaiah Naidu, I.L.R. (1958) Andh. Pra. 925, which endorsed the same view. Counsel for the State of Gujarat, Mr D R Prem, placed reliance on The Public Prosecutor v Vattem Venkatramayya, Provincial Government, C.P. and Berar v Seth Chapsi Dhanji Oswal Bhate and Anr, I.L.R. (1940) Nag. 257 = A.I.R. (1938) Nag. 408, and also mentioned Superintendent and Remembrancer of Legal Affairs, Bengal v H E Watson. The Court found it unnecessary to repeat the detailed reasoning of those authorities. It emphasized that the protective clause is not limited to officers but expressly covers “any person,” and that the essential words are “anything done or intended to be done” under the Act. Accordingly, protection may be claimed only by a person who can show that the act or omission was required by, or intended to comply with, a provision of the Act. The provision does not grant immunity for conduct that is contrary to the Act, even if performed honestly. An omission, if covered by the General Clauses Act, must also be one imposed by the Act. Good‑faith alone is insufficient; the conduct must be one that the Act obliges a person to perform or to refrain from performing. Only when there is compliance, or intended compliance, with a specific statutory requirement can the protection of Section 117 be invoked. The section does not protect a breach or an intended breach of the Act, regardless of the honesty of the conduct.

In this connection, it was necessary to point out, as had been done in the Nagpur case referred to earlier, that the occupier and the manager are exempted from liability in the situations enumerated in section 101 of the Act. When an occupier or a manager is charged with an offence, the statute permits him to lodge a complaint against any other person who was in fact the actual offender. If the prosecution is able to prove that the other person committed the offence, the occupier or the manager is thereby absolved of liability. This provision demonstrates that compliance with the mandatory provisions of the Act is essential; unless the occupier or manager identifies and brings the real offender to justice, he must bear the responsibility for the breach. Consequently, section 117 cannot be invoked to shield a person who is guilty of violating any provision of the Act. The Court observed that it is not indispensable to establish a guilty mind in every case, as some earlier judgments have suggested. Liability may arise even in the absence of mens rea. Nevertheless, section 101 provides an adequate safeguard, allowing the occupier or manager to escape liability if he can prove that he was not the actual offender and can disclose the true perpetrator. In the present matter, no such defence was advanced by the respondent.

For these reasons, the Court was of the opinion that the respondent could not rely on section 117 for protection. Accordingly, the Court set aside the acquittal and convicted the respondent under section 63 read with section 94 of the Factories Act. The Court imposed a fine of fifty rupees for each offence and ordered that, in default of payment of the fine, the respondent would undergo fifteen days of simple imprisonment. Finally, the appeal was allowed, thereby affirming the conviction and the prescribed sentence.