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: Criminal Appeal No. 5 of 1963

Decision Date: 07/04/1964

Coram: M. Hidayatullah, N. Rajagopala Ayyangar

In this case the Supreme Court examined an appeal by the State of Gujarat against Kansara Manilal Bhikhalal, who had been convicted under section 63 of the Factories Act, 1948. The factual background revealed that during an inspection three workmen were observed working in the factory before the commencement of their scheduled shift. The factory manager claimed that a letter had been sent to the Inspector of Factories a day before the inspection to inform him of a change in the working hours, but the letter did not reach the inspector until after the inspection had taken place. Consequently, the change in the hours of work had not been certified, displayed, or otherwise notified as required by section 61(1) of the Act. The respondent, as the occupier and manager of the factory, was therefore convicted under section 63. On appeal, the Sessions Judge acquitted the respondent, reasoning that the second part of section 61(10) applied only to a second or subsequent alteration in the system of work and that, because this was the first change, there was no statutory requirement to wait a week or to obtain prior sanction from the inspector as mandated by the later part of section 61(10). The Sessions Judge also held that section 117, which provides a protective clause, shielded the respondent because his action was undertaken in good faith. The State of Gujarat challenged this decision before the High Court, which affirmed the Sessions Judge’s interpretation of section 61(10) but declined to express any view on the applicability of section 117, and consequently dismissed the appeal. By special leave, the Supreme Court then considered the matter. The Court held that the respondent could not escape the operation of the peremptory provision of section 63 by relying on section 61(10); the sending of the letter to the inspector was therefore a mistaken basis for his defence. The Court explained that the phrase “change in the system of work in any factory which will necessitate a change in the notice” in section 61(10) refers not to a deviation from an existing notice for individual workers but to a systemic alteration that would require the notice itself to be redrafted. The notice, according to the Court, specifies the period during which adult workers may be required to work and describes the overall scheme of employment, not the specific timing for each worker, which is recorded in the register accompanying the notice. Sub‑section (1) therefore concerns a change to the notice and not to the register, indicating that the contemplated change must affect the whole group of workers rather than a single individual. The latter part of the sub‑section further implies that such changes should not be frequent and that a second change may not be introduced until at least one week has elapsed since the previous alteration. The Court also examined section 117 and concluded that its language is not confined to officers but extends to “any person.” The protection offered by this provision can be claimed only by a person who can show that he was required, under the Act, to do or omit to do something, or that he intended to comply with its provisions. It does not provide immunity for conduct that is contrary to the Act. Finally, the Court noted that occupiers and managers are exempt from liability only in the specific circumstances enumerated in section 101, and that a person charged with an offence under the Act retains the right to lodge a complaint against any other individual involved.

In this case the Court explained that the provision under consideration was intended to apply to a change that affected an entire group of workers rather than an individual employee. The latter portion of the same sub‑section reinforced this interpretation by indicating that such alterations should not be made frequently; specifically, if a second alteration is required, it may be effected only after a period of at least one week has elapsed since the previous change. The Court further observed that the language of section 117 of the Factories Act was not confined to officers alone; it was deliberately broadened to encompass “any person.” Consequently, the protection afforded by that section could be invoked only by a person who could demonstrate that he was either required to do something or to refrain from doing something under the Act, or that he intended to comply with any of its provisions. The protection could not be used to obtain immunity for conduct that was performed in contravention of the Act. The Court also noted that, under section 101, occupiers and managers were exempted from liability in certain enumerated situations. When an occupier or manager faced criminal charges, he was entitled to lodge a complaint against the actual offender; if the complaint was proved, the occupier or manager would be discharged from liability. This principle underscored the necessity of strict compliance with the mandatory provisions of the Act, and it made clear that unless the occupier or manager identified and reported the true offender, he would remain responsible. The Court emphasized that liability could arise even in the absence of a guilty mind; proof of mens rea was not a prerequisite for responsibility. The Court referred to several authorities to support these propositions, including Ranjit Singh v. Emperor, A.I.R. (1943) Oudh 308; Ranjit Singh v. Emperor, A.I.R. (1943) Oudh 311; Public Prosecutor v. Mangaldas Thakkar, A.I.R. [1958] Andh. Pra. 79; In re P. Lakshmaiah Naidu, I.L.R. [1958] Andh. Pra. 925; Public Prosecutor v. Vattem Venkatramayya, A.I.R. 1963 Andh. Pra. 106; Provincial Government C.P. and Berar v. Seth Chapsi Dhanji Oswal Bhate and Anr., I.L.R. [1940] Nag. 257; and Superintendent and Remembrancer of Legal Affairs, Bengal v. H. E. Watson, A.I.R. 1934 Cal. 730. The matter was set down as Criminal Appeal No. 5 of 1963, arising by special leave from the judgment dated 21 June 1962 of the Gujarat High Court in Criminal Appeal No. 383 of 1961. Counsel for the appellant and counsel for the respondent were appointed, and the judgment was delivered by Justice Hidayatullah. The factual background recorded that on 21 June 1960 at 5 a.m. 50 minutes the Inspector of Factories for Bhavnagar visited Saurashtra Metal and Mechanical Works in Wadhwan City, a factory defined by section 2(m)(1) of the Factories Act, 1948. The inspector observed workmen operating a machine, examined the notice specifying the period of work for adult workers and the accompanying register, and discovered that three workmen belonged to a group scheduled to commence work at 7 a.m. Accordingly, the inspector instituted proceedings under section 63 of the Factories Act, 1948 against the respondent, Mr Kansara Manilal Bhikhalal, in his capacity as occupier and manager of the factory.

In the proceedings the Inspector issued a notice to the respondent requiring him to show cause. The Inspector then sought an enhanced penalty under section 94 of the Factories Act, contending that Mr Kansara Manilal Bhikhalal had previously been convicted in three separate cases. Because three different workmen were involved, three distinct complaints were lodged before the Court of the Judicial Magistrate, First Class, Wadhwan City. The respondent defended himself by claiming that he was neither the occupier nor the manager of the factory. It was noted that the respondent and a certain Mr Dangi were partners who also owned another factory at Dharangadhra. The defence argued that Mr Bhikhalal acted as manager of the Dharangadhra factory while Mr Dangi managed the Wadhwan factory. A further defence asserted that a machine had broken down the day before and, after repair, work had been resumed slightly earlier on the following day in order to meet production requirements. The Inspector was said to have been informed of this change in working hours by a letter dated the 20th (Exhibit 11), although the letter did not reach him until the 22nd. The respondent admitted that the alteration in hours had not been formally notified or displayed as required by section 61(1). He argued that section 61(10) authorised a change in the system of work in a factory and that, because this provision had been complied with, no offence had been committed. The Judicial Magistrate rejected all of these defences. The Magistrate observed that the letter from Mr Dangi (Exhibit 15) demonstrated that the respondent was, in fact, the occupier and manager of the Wadhwan factory. Regarding the second defence, the Magistrate held that a change in hours of work could not be effected without the prior permission of the Inspector of Factories under sub‑section (10) of section 61. The respondent’s argument that, being the first change, a one‑week waiting period was not required, was also rejected; the Magistrate stated that the factory manager must always observe a one‑week interval before introducing any change. Consequently, the respondent was convicted under section 63 of the Factories Act for three separate offences, and an enhanced penalty under section 94 was imposed, ordering a fine of Rs 100 for each offence. On appeal, the Sessions Judge of Surendranagar set aside the conviction and acquitted the respondent. The Sessions Judge reasoned that the second part of section 61(10) applied only to a second or subsequent change, and because this was the first alteration, that part did not apply. He held that the change fell within the first part of the sub‑section and could not be said to breach it since the Inspector of Factories had been informed. The Judge also opined that section 117 of the Factories Act protected the respondent’s action because it was undertaken in good faith.

The conviction and sentence that had been imposed on the respondent were set aside by the lower court. The State of Gujarat then filed an appeal seeking to overturn the acquittal, but that appeal did not succeed. Subsequently, a Division Bench of the High Court heard the State’s appeal and agreed with the Sessions Judge’s interpretation of subsection (10) of section 61. The High Court did not express any view on the application of section 117 of the Factories Act. The present appeal was filed by way of special leave, and it again raised the two questions concerning the interpretation of subsection (10) of section 61 and the effect of section 117. In order to decide these questions, the Court examined the relevant scheme of the Factories Act, choosing to analyse the provisions in reverse order, beginning with the general penalty provisions and then moving to the specific requirements relating to hours of work and notice.

Section 92 of the Act is a general provision that authorises the imposition of penalties for any contravention of the Act, its rules, or any written order issued thereunder. Section 94 deals with the enhanced penalty that may be imposed after a previous conviction for the same offence. In the present case the alleged breach was said to be of section 63, which mandates that the hours of work for adult workers must correspond with the notice required under section 61 and with the entries recorded in the register prescribed by section 62. The text of section 63 reads: “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 governs the notice of periods of work for adults and contains ten subsections, of which subsections (1), (2) and (10) are relevant here. Subsection (1) requires that a notice showing clearly, for each day, the periods during which adult workers may be required to work be displayed and correctly maintained in every factory. Subsection (2) provides that the periods shown in that notice must be fixed beforehand in accordance with the provisions of the section and must not cause workers to work in violation of sections 51, 52, 54, 55, 56 and 58. Subsection (10) states that any proposed change in the system of work that will necessitate a change in the notice must be notified to the Inspector in duplicate before the change is made, and that, except with the prior sanction of the Inspector, no such change may be made until one week has elapsed since the last change. Section 62 then requires that a register of adult workers be kept, showing (a) the name of each adult worker in the factory; (b) the nature of his work; (c)

The register required by the statute must contain, in addition to the name and nature of work of each adult worker, the group to which the worker belongs, if any; the shift that the group follows; the specific relay to which the worker is assigned; and any other prescribed particulars. Section 51, as amended by the second sub‑section of section 61, already limits the total hours that may be worked in a week. Section 52 fixes a maximum of nine hours of work per day, mandates a rest interval, and prohibits work that exceeds five consecutive hours without a break. Section 56 generally requires that periods of work and rest be spread over a total of ten and a half hours, while section 58 expressly forbids any overlap of shifts.

The Sessions Judge and the High Court both agreed that the requirements of sub‑section (10) of section 61 had been fulfilled, and consequently they concluded that no offence under section 63 had been committed. They treated the situation as a change in the factory’s system of work that would require an amendment to the notice specified in sub‑section (1). Because the change had been communicated to the Inspector before it was implemented, the courts found no illegality in employing the three workers before the start of their shift. Moreover, the courts held that, being the first such alteration, there was no necessity to observe the one‑week waiting period or to obtain prior sanction from the Inspector as mandated for subsequent changes by the latter part of sub‑section (10).

With respect, the Court disagreed with the view that this case fell within the scope of sub‑section (10). That sub‑section refers to “a change in the system of work in any factory which will necessitate a change in the notice” and, according to the Court, those words indicate a modification of the overall system that would require the notice itself to be redrafted, not merely a deviation from an existing notice. The notice outlines the periods during which adult workers may be required to work and describes the overall employment scheme, but it does not specify the exact timing of employment for each individual worker. Such individual details are recorded only in the accompanying register. Sub‑section (1) mentions a change in the notice, not a change in the register, suggesting that the contemplated alteration must affect an entire group of workers rather than a single employee. The latter part of the sub‑section reinforces this interpretation by stating that changes should not be frequent and, if a second change is required, it must not occur until a week has passed since the previous change. This language could not be intended to cover a casual adjustment of an individual worker’s hours.

The counsel for the respondents attempted to justify the action by invoking section 59, which provides for the payment of additional wages for overtime. However, no request for overtime wages had been made earlier in these proceedings, and the reliance was placed solely on the provisions of sub‑section (10) of section 61 and section 117 of the Act. The Court noted that section 59 could not be used in isolation to validate the alleged violation.

Section 64 must be read together with the earlier provision; it confers on the State Government the authority to formulate exempting rules. Under those rules a departure from the requirements of sections 51, 52, 55 and 56 is permissible only if it is made in accordance with the specific rules that have been framed. For example, overtime work may be required of workers who are engaged in urgent repairs even though sections 51, 54, 55 and 56 would otherwise forbid it, but such overtime must be authorized by rule 91 and must be undertaken for an urgency that relates to the factory itself, not merely an urgency perceived by the individuals working in the factory. A deviation from the normal hours of work prescribed in section 61(2) is permissible only when the exempting provisions contained in the applicable rules expressly cover the situation. Consequently, the Court concluded that the offence in the present case consisted of employing workers in violation of the notice displayed under section 61(1) without any justification arising from an exempting provision. The respondent could not escape the operation of section 63, which is mandatory, by relying on anything contained in sub‑section (10), and therefore the decision to send a letter to the Inspector of Factories was misguided.

The State argued that the respondent was neither the occupier nor the manager of the factory and, even if he were, section 117 of the Act protected him because he was absent from the premises and acted in good faith. The Court noted that the magistrate had already found the respondent to be the occupier and manager, a finding supported by the letter of Mr Dangi (Exhibit 15). Accordingly, the issue raised under section 117 required a more detailed examination. Section 117 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 State, Mr M V Goswami, cited precedent in which the learned Chief Justice Thomas, in Ranjit Singh v. Emperor (1) and Ranjit Singh v. Emperor (2), held that the language of section 117 is not limited to inspecting officers but extends to occupiers, managers, foremen, workers and others. He also referred to two decisions of the Andhra Pradesh High Court, Public Prosecutor v. Mangaldas Thakker (3) and In re P Lakshmaiah Naidu (1), which expressed the same view. Counsel for the State of Gujarat, Mr D R Prem, relied upon the decision in The Public Prosecutor v. Vattem to support the argument.

In this matter the Court noted the authorities cited by counsel, namely the decisions reported as Venkatramayya (5) and Provincial Government, C.P. and Berar v. Seth Chapsi Dhanji Oswal Bhate and Anr (6), and also the case of Superintendent and Remembrancer of Legal Affairs, Bengal v. H. E. Watson (7). The Court observed that a detailed examination of the reasoning employed in those authorities was not required for the present purpose. It held that the protective provision of the Act is not confined to officers alone; the language of the clause expressly embraces “any person.” Accordingly, the protection extends not merely to an officer who does or intends to do something in pursuance of the Act but also to any other individual who fits within that description. However, the Court emphasized that the critical words are “any thing done or intended to be done” under the Act. Consequently, a person may invoke the protection only if he can demonstrate that he was compelled, by the provisions of the Act, either to act or to refrain from acting, or that he intended to comply with a specific requirement of the Act. The protection does not shield a person for conduct that is performed contrary to the Act. Even assuming, as the General Clauses Act permits, that an omission may be treated as an act, such an omission must also be one that the Act expressly commands. Merely asserting that the conduct was honest places it only within the notion of “good faith” and is insufficient. The complainant must further show that the matter complained of is something the Act mandates to be done or to be omitted. There must be evidence of actual or intended compliance with a statutory provision before the protective clause can be invoked. The provision cannot be used to cover a breach, or an intended breach, of the Act, regardless of how honest the conduct may appear. The Court also pointed out, referencing the earlier Nagpur case, that occupiers and managers enjoy exemption from liability in certain situations outlined in section 101. Where an occupier or manager is charged, the law—citing authorities such as A.I.R. (1943) Oudh 308, A.I.R. (1943) Oudh 311, A.I.R. (1958) Andh. Pra. 79, I.L.R. (1958) Andh. Pra. 925, A.I.R. (1963) Andh. Pra. 106, I.L.R. (1940) Nag. 257 (= A.I.R. (1938) Nag. 408), and A.I.R. (1934) Cal. 730—permits the occupier or manager, upon being charged, to lodge a complaint against the actual offender. If the offence by that person is proved, the occupier or manager is absolved of liability. This illustrates that strict compliance with the peremptory provisions of the Act is essential; unless the occupier or manager identifies and brings the true offender to justice, he remains responsible. Such a rule largely limits the operation of section 117 with respect to persons who have contravened the Act. The Court further remarked that it is not always necessary to establish mens rea, as some of the cited cases suggest, but the responsibility for compliance remains paramount.

In this case the Court observed that liability could arise even when the person concerned did not possess a guilty mind. The Court noted that an adequate safeguard was provided in section 101, as examined in the earlier part of the judgment, and that the occupier or manager could protect himself from liability if he was able to demonstrate that he was not the actual offender who committed the violation. The Court further recorded that no such defence was put forward by the respondent in the present proceedings. Because the respondent failed to raise the defence contemplated under section 101, the Court concluded that the respondent could not rely on the protection afforded by section 117. Accordingly, the Court set aside the acquittal that had previously been granted to the respondent and entered a conviction under section 63 read with section 94 of the Factories Act. The conviction was followed by a sentence that required the respondent to pay a fine of five hundred and one rupees for each offence with which he was charged. The Court also stipulated that, should the respondent fail to pay the prescribed fine, he would be required to undergo fifteen days of simple imprisonment. The appeal filed by the respondent was therefore allowed in the sense that the earlier acquittal was overturned and the conviction and sentence were imposed.