Prashant Jain vs State Of Maharashtra & Anr.

(PER : NANDESH S. DESHPANDE, J.)

Heard. Admit. Heard finally with the consent of learned Counsel for both the parties.

This is an application under Section 482 of the Criminal Procedure Code for quashing of the charge-sheet, registered as Summary Criminal Case No. 97/2021 for an offence punishable under Sections 188, 269 of the Indian Penal Code, Section 51 (b) and 58 of the Disaster Management Act, 2005, and Section 2, 3 and 4 of the Epidemic Diseases Act, 1897, read with Maharashtra Covid-19 Resolution, 2020.

It is the case of the applicant and as can be seen from the application, the Directors of M/s Mohota Industries Limited, Hinganghat, were facing financial crisis and unable to cover their liabilities with their income and therefore in the year 2019, the creditors of the said industry filed a company petition bearing Company Petition No. 4500/2009, under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘IBC’) for initiating Corporate Insolvency Resolution Process against the said industry. It is further submitted in the application that the applicant herein was appointed as an Insolvency Resolution Professional (hereinafter referred to as ‘IRP’) vide order dated 23.01.2020. However, on 20.02.2020, he received an application from the operational creditor of said Industry under Resolution 30 (A) of the Insolvency and Bankruptcy Board of India for withdrawal of Corporate Insolvency Resolution Process (hereinafter referred to as ‘CIRP’), and the applicant therefore filed an application in the National Company Law Tribunal, (hereinafter referred to as ‘NCLT’) Mumbai, on 21/02/2020. It was thus clear that even though the applicant was working as IRP, it was clear that his role was at an end, and the reins of the company would go back to the hands of the directors of the said company. The applicant took all efforts to fulfill his obligations and to pay wages to the workers, which were pending since considerable time.

In such a situation, on 24.03.2020 the nation went in a state of strict lockdown due to Covid-19 pandemic situation and the Government of India passed an order of 29.03.2020 for the benefit of the factory workers stipulating that during the period of lockdown, even if factory workers were not doing any actual work, the factory owners were prohibited from retrenching them and they were further directed to continue to pay the salary/wages of such workers. However, since Mohota Industries was unable to pay the wages as directed by the Government of India, several complaints were made with the Labour Union and the Government authorities seeking directions to compel the payment of wages. Thus, even if, the applicant had no personal stakes in the company, since he was only working as an IRP as per the orders of the NCLT. In this background, the non-applicant No. 2 passed an order dated 22.04.2020 directing the non-applicant No. 1 to file the First Information Report against the applicant. Thus, the subject First Information Report was filed, and an investigation the charge-sheet was filed before the Court as stated above. It is this charge-sheet and the consequent criminal proceedings which are challenged in the present application filed under Section 482 of the Criminal Procedure Code.

We have heard Shri G.D. Dani, learned Counsel for the applicant, as also, Ms S.S. Dhote, learned Additional Public Prosecutor for non-applicant No.1/State.

Shri G.D. Dani, learned Counsel for the applicant, submits that a bare perusal of the charge-sheet would show that no offence as alleged in the First Information Report and the charge-sheet is made out, and the entire criminal prosecution is nothing but an abuse of the process of the Court. He further submits that the authority, more particularly, the non-applicant No. 2, has failed to appreciate that the applicant was only working as IRP and therefore was protected by virtue of Section 233 of the IBC. He further submits that in the present facts, the applicant had no stake in preserving the funds of the company and by preserving such funds no funds would have gone in the pocket of applicant. Thus, in his submission, the applicant is in no way concerned with the alleged breach of orders of the State Government or the Central Government, and no offence is made out.

Per contra, the learned Additional Public Prosecutor, while opposing the contentions advanced by the learned Counsel for the applicant, submits that there is enough material on record to proceed against the applicant. She submits that, even though the Board of Directors was dissolved and the applicant was appointed as an IRP, he was liable to pay the wages of the laborers during the period of lockdown, and since it is an admitted position that the said wages were not paid, the offence was committed. She therefore prays for rejection of the application.

In the backdrop of these facts, we have perused the First Information Report and the charge-sheet in question. The offences complained of are punishable under Sections 188 and 269 of the Indian Penal Code. Section 188 speaks about disobedience of an order duly promulgated by a public servant. However, Section 195 of the Criminal Procedure Code expressly bars the code from taking cognizance of an offence punishable under Section 188, except when the complaint is made in writing by the public servant concerned or of some other public servant to whom he is administratively subordinate. In the present case, the complaint has been lodged by the Tahasildar, who is allegedly authorized by the non-applicant No. 2/Sub Divisional Officer. However, there is nothing on record to show that either the Sub Divisional Officer or the Tahasildar has been authorized by the State to lodge such a prosecution. Thus, there is an express bar to take cognizance of the offence punishable under Section 188 of the Indian Penal Code. As far as offence under Section 269 is concerned, it speaks about a negligent act likely to spread infection of a disease dangerous to life. Even a meaningful reading of the First Information Report would reveal that this is not even the informant's case that the applicant has unlawfully or negligently did any act which he knows or has reason to believe to be likely to spread the infection of any disease dangerous to life. Thus, the ingredients of said offence are also not made out.

As far as offence under Section 51(b) of the Disaster Management Act, 2005, is concerned, it speaks about punishment for obstruction without reasonable cause to comply with any direction given by or on behalf of the Central Government or the State Government under the Act. However, Section 59 of the said Act provides that no prosecution for an offence punishable under Section 55 shall be instituted except the previous sanction of the Central Government or the State Government, or any officer authorized in that behalf. There is nothing on record to show such an authorization by the Central Government or the State Government. In that view of the matter, it is clear that Section 51(b)of the Act is also not made out. Furthermore, as far as offences under Sections 2 and 3 of the Epidemic Diseases Act, 1897 are concerned, the ingredients of the said offences are also not made out since the said sections speak about power of the Central Government to take special measures and prescribe regulations as to dangerous epidemic diseases. Furthermore, Section 3 of the said Act contemplates that if offence under Section 2 is committed, it shall be deemed that the said person has committed an offence punishable under Section 188 of the Indian Penal Code. However, as discussed above, cognizance of the offence punishable under Section 188 is expressly barred in view of the provisions of Section 195 of the Criminal Procedure Code. Furthermore, there is no question of invoking Section 4 of the Epidemic Diseases Act, since it speaks about protection to persons acting in good faith. Likewise, there is no ingredient to attract breach of Regulation 11 of the Maharashtra Covid-19 Regulations.

As rightly pointed out by the learned Counsel for the applicant, in the judgment reported in 2020 SCC OnLine Bom 794, in the matter of Premier Employees Union Vs. State of Maharashtra and others, Coordinate Bench of this Court dealt with the issue and held that where the management and the workman are engaged in an industrial adjudication relating to non-payment of salary/wages and suspension of work much prior to closure of the establishment, then in that situation the workers/union is not entitled to the benefit of Central Government order dated 29.03.2020, and the Maharashtra Government Resolution 31.03.2020. The facts in the present matter are somewhat identical in the said reported judgment. As can be seen from the record, the company had gone into insolvency, and the proceedings in accordance with the insolvency Code were already pending. No role can be attributed to the applicant, as admittedly, he was only an IRP appointed by the NCLT. No mens rea can be attributed to him in view of the fact that he was discharging a statutory duty as provided under the Code.

Furthermore, as stated supra there is express bar in taking cognizance for offences punishable under Section 188 of the Indian Code and Section 2 and 3 of the Epidemic Diseases Act, as also, Section 51(b) of the Disaster Management Act. In that view of the matter, the situation would squarely fall within the well laid down parameters in the case of State of Haryana and others Vs. Bhajanlal and others, 1992 Supp (1) SCC 335, and more particularly Clause 1, 3, and 7 thereof :

Therefore, we proceed to pass the following order:

Application is allowed and disposed of in above terms.