These are Criminal Miscellaneous Cases filed under Section 482 of the Code of Criminal Procedure, seeking to quash S.T. Nos.20 of 2019 and 14 of 2019 respectively, pending before the Judicial First Class Magistrate’s Court, Kunnamangalam. Since parties are same and contentions are common, both these matters were heard together and are disposed of by this common order.

2. In S.T. 20 of 2019 subject matter is a complaint preferred by the 2nd respondent alleging offence under Section 24 of the Contract Labour (Regulation and Abolition) Act, 1970, hereinafter referred to as the Act, where the following allegations are raised against the petitioners who are the Director and the General Manager respectively of Sarovar Hotel Pvt. Ltd. which is employed in hospitality industry:

i. Register of persons employed has not been maintained and not kept at the site office or at any other place within a radius of 3 kms from the workplace in breach of Rule 75 of the Central Rules;

ii. Muster Roll in Form-XVI, Register of Wages in Form-XVII, Register of deduction for damage and loss in Form-XX, Register of fine in Form-XXI, Register of Advance in Form-XXII, Register of Overtime in Form-XXIII have not been maintained in breach of Rule 78 of the Central Rules;

iii. An abstract of the Act and Rules in the form approved by the Chief Labour Commissioner (Central), New Delhi has not been displayed at the work site in English, Hindi and in the language spoken by the majority of workers in breach of Rule 79 of the Central Rules;

iv. Notice showing rate of wages, hours of work, date of payment of wages, wage period, name and address of the Inspectors having jurisdiction and date of payment of unpaid wages have not been displayed at the work site in English, Hindi and in the local language understood by the majority of workers in breach of Rule 81(1)(i) of the Central Rules and

v. Copy each of the notices to be displayed have not been sent to the Inspector in breach of Rule 81(2) of the Central Rules.

3. Similarly, there are two counts of offences alleged in S.T. 14 of 2019, which is the subject matter of Crl.M.C.2794 of 2019 where the offence alleged are under Section 23 of the Act. Those two counts are as shown below:

I. Petitioners executed contract work through contract labour numbering more than 20 with effect from 01.12.2013 without obtaining licence in breach of Section 12(1) of the Act, and

II. Intimation about the commencement/completion of the contract work has not been submitted to the Inspector in Form-VIA and thus the petitioners breached Rule 25(2)(viii) of the Central Rules.

4. According to the petitioners, the 1st petitioner was the successful bidder in an e-tender floated by the Indian Institute of Management, Kozhikode, hereinafter referred to as the IIM, inviting suitable vendor for rendering hospitality services such as restaurant and pantry services, housekeeping services, front office services, security services, laundry services, etc. at its management development centre. After obtaining bid in favour of the petitioners, on 03.12.2013 a detailed terms of agreement was executed between the management of the IIM and the petitioner company for a period of three years which was later extended under Annexures 2 and 2(a) documents produced by the petitioners. The said agreement was for providing “hospitality services, such as restaurant and pantry services, housekeeping services, 24 hours front office services, 24 hours security services, 24 hours laundry services and other miscellaneous tasks”. According to the petitioners the said agreement does not provide contract labour but for providing services only. Moreover, the rates agreed therein were monthly lump sum amount for provision of services rather than per workman cost. According to the petitioners, they had been carrying out the services through its own employees including workmen, supervisory and managerial staff who are working on full-time basis under fixed term contract and they are not contact labourers as defined in Section 2(b) of the Act. It is also stated that the Act and Rules are not applicable as the petitioners have already registered themselves under the Kerala Contract Labour Rules, 1974 before the District Labour Officer, Enforcement, Kozhikode on 19.03.2018 bearing given licence numbers. The IIM also wrote letters to the 2nd respondent stating that the petitioner is registered under the Kerala Shops and Commercial Establishments Act, 1960 and therefore they are bound to pay minimum wages only under the Kerala Rules. However, they were issued show cause notice after an inspection conducted by the 2nd respondent on 23.11.2017, which was duly replied by the petitioners, despite the same the 2nd respondent has, without any authority instituted two complaints against the petitioners, which are totally arbitrary and illegal and therefore entire proceedings are sought to be quashed invoking jurisdiction under Section 482 of the Cr.P.C.

5. I heard the learned counsel for the petitioners, the learned Additional Director General of Prosecution for the 1st respondent and also the learned Assistant Solicitor General for the 2nd respondent.

6. According to the learned counsel for the petitioners, they are being prosecuted by the 2nd respondent without any basis. As contractor, even though under the agreement executed between the 1st petitioner and the IIM the petitioner is expected to do services, it is not a labour supply agreement. He is not supplying any contract labour; contract labour and workman are different. The learned counsel invited my attention to the definition of a workman and contractor under Section 2 of the Act. According to him, appropriate Government is the Government of Kerala, even though there is a stipulation in Annexure-2 memorandum of agreement that it will be the responsibility of the contractor to obtain necessary licence from the licensing authority under the Act and the Central Rules framed thereunder. The agreement further provides that the contractor will have to comply with the minimum wages applicable to the State of Kerala. According to the learned counsel, the 1st petitioner has obtained licence from the District Labour Officer, Kozhikode under the Kerala Shops and Commercial Establishments Act and they are bound to pay minimum wages only under the Kerala Act, and the Central Act is not applicable in the present case. Moreover, he has not engaged contract labourers and all the labourers are employees appointed by the petitioners on fixed tenure and they do not fall under the definition of contract labour. Their employment has no connection whatsoever with the particular work or any establishment. They were not hired in or in connection with the work of a particular establishment. Petitioner has activities in various centres in Kerala and therefore he retains flexibility for re-assignment of its employees to other centres of Kerala. He has hospitality business in Thiruvananthapuram, Cherthala, Thekkady etc. apart from the contract obtained in the IIM. Therefore, he is retaining flexibility and none of the employees are contract labourers and therefore the provisions of the Act and Rules are not applicable to the petitioner. The learned counsel also submitted that the allegations against the petitioners are without any basis, the alleged roles played by them in the commission of the crime are not stated. Moreover, the complaints are badly barred by limitation, that there is no provision for extending the period of limitation and therefore both the complaints are liable to be quashed invoking jurisdiction under Section 482 of the Cr.P.C.

7. The learned counsel for the petitioners also relied on the decisions reported in Basanta Kumar Mohanty v. State of Orissa [(1992) II LLJ 190], Sushil Sethi and another v. State of Arunachal Pradesh and others [AIR 2020 SC 765] and Sarath v. Ramachandran [2020 (1) KLT 653], in support of his arguments.

8. As stated earlier,identical questions are involved in both these Crl.M.Cs. The petitioners in both the Crl.M.Cs are one and the same; they are the accused in respective Summary Trial proceedings before the Judicial First Class Magistrate's Court, Kunnamangalam, where they face allegations under Sections 24 and 23 of the Act. In both the Crl.M.Cs, Annexures A1 to A7 documents have been relied on by the petitioners. The contentions are also common in both the cases.

9. It is the undisputed position that the 1st petitioner is the Director of Sarovar Hotels Pvt.Ltd. which is a Hyderabad based company where the 2nd petitioner is the General Manager. They have numerous other units in different parts of Kerala; in Thiruvananthapuram, Cherthala, Thekkady and in Kozhikode, where they have bid in auction, floated by the IIM for rendering various services. They bid the auction and executed Annexure-2 memorandum of agreement, on the basis of which they have obtained rights to render services such as restaurant and pantry services, housekeeping services, front office services, security services, laundry services, etc. Even though the Annexure-2 was executed in 2013, it stands extended and during the period, on 23.11.2017 the 2nd respondent visited the premises of the company where the petitioners have taken up the contract and noted various irregularities and statutory violations for which show cause notices were issued and after getting replies, as the explanations were not satisfactory, criminal prosecutions were launched, as mentioned earlier.

10. The learned counsel for the petitioners has raised manifold contentions to buttress the position that the prosecutions are bad. According to him, the IIM being an educational institution under the Government, not an establishment falling under Section 2(e) of the Act. Under Section 2(e), an establishment means any office or department of the Government or a local authority or any place where any industry trade, business manufacture or occupation is carried on. The IIM does not fall in any of the above categories. Secondly, the petitioners have not employed contract labourers, their employees are not falling under the definition of contract labourer, that contract labourer and workman are different. They have no contract labourers, they have their own employees who are liable to be transferred from one unit to another and that such flexibility is maintained. The employees recruited by the petitioners are not meant for a particular unit. Therefore he is not a contractor falling within the definition of Section 2(c) of the Act and his workers are not workmen falling under Section 2(b) of the Act. According to the petitioners, they do not fall within the ambit of the Act. The appropriate Government is the State Government. At the direction of the principal employer, the IIM, they have registered under the Kerala Shops and Commercial Establishments Act and therefore they are not bound to pay minimum wages as stipulated by the Central Government. On the other hand, minimum wages provided under the Shops and Commercial Establishments Act are being paid so that none of the offences alleged against the petitioners will lie. Moreover, according to them, all the statutory formalities are being followed by them, that the 2nd respondent has no authority or competency to inspect the premises and call in question any of the acts of the petitioners. Moreover, it is stated that the complaints are barred by limitation and there is no provision under the Act for condoning the delay.

11. As noticed earlier, it is not disputed that the petitioners are running hospitality business and on the basis of the tender floated by the IIM they bid the right and started undertaking various services in the IIM from 2013 onwards and still they are rendering the said services on the basis of the extended terms of the agreement. Now the point is, whether they have employed any person falling under the definition of ‘contract labourer’. Going by Section 2(b) of the Act, a workman shall be deemed to be employed as 'contract labour' in or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer. In other words, in order to attract the scope of Section 2(b) of the Act, the following conditions have to be satisfied:

i. The services of workers were hired;

ii. It was hired in connection with such work or through a contractor;

iii. In connection with the work of an establishment.

It seems that IIM does not fall within the scope of ‘establishment’ defined under Section 2(e) of the Act. Whatever it may be, there is substance in the contention of the learned counsel that the workers employed in the IIM were not hired for the purpose of employment in IIM alone. On the other hand, it is the specific case of the petitioners that they are employees of the petitioners who are liable to transferred to the other units of M/s Sarovar Hotels, that they were not recruited for the purpose of the IIM alone.

12. Even though Annexure-2 is the Memorandum of Agreement executed between the petitioners and the IIM, it is doubtful that the 1st petitioner company would fall within the definition of ‘contractor’ in Section 2(c) of the Act. A 'contractor' in relation to an establishment means a person who undertakes to produce a given result for the establishment, other than mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor. Here, the learned counsel has asserted that he is not a contractor for the supply of labour, but he is rendering services on numerous fields like running restaurants and pantry services, housekeeping, front office services, security services, laundry services, etc. In other words, he does not fall within the definition of ‘contractor’ in the Act.

13. There is also considerable force in the argument of the petitioners that both the complaints do not contain the alleged roles played by the petitioners in the commission of the crime. The 1st petitioner is the Director of the company whereas the 2nd petitioner is the General Manager. It is not known whether they are expected to manage day-to-day activities of the company. Anyhow, such allegations are not made in the complaints and their roles in running of the contract business with the IIM cannot be inferred from the complaints.

14. The most formidable contention of the learned counsel is the argument regarding limitation. The date of offence shown in both the complaints is 23.11.2017, the date on which the 2nd respondent had made inspection in the premises of the IIM, where the 1st petitioner company was rendering services. However, the complaints were laid on 16.05.2018. Along with the complaints they have preferred prayer for condoning delay of 82 days in preferring the complaints. According to the 2nd respondent, before laying complaints they have to make several correspondences with higher authorities regarding the inspection. By the time he completed all these formalities, the time limit to file these complaints expired, which was not intentional. But relying on Section 27 of the Act, the learned counsel pointed out that the period of limitation is three months, beyond which no court shall take cognizance of the offence unless the complaint thereof is made within three months from the date on which the alleged commission of the offence came to the knowledge of the Inspector. In the proviso, it is stated that where the offence consists of disobeying a written order made by the Inspector, complaint thereof may be made within six months of the date on which the offence is alleged to have been committed.

15. I have reasons to think that the complaints filed on 16.05.2018 do not satisfy the requirements under Section 27 of the Act. It is not laid within three months. Normally such complaints should have been laid within three months from the date of commission of offence, i.e. on 23.11.2017. That has not been done. Of course, from the office seal it has come out that the complaints were received by the Court on 16.05.2018. But the complainant does not have a case that he had given some order in writing. As rightly pointed out by the learned counsel for the petitioners, the Annexure-1 is not an order in writing but it is a show cause notice and therefore it does not seem that the proviso of Section 27 is applicable to the facts of the case. In fact the 2nd respondent has no such case also.

16. I have also come across the decision reported in P.P. Unnikrishnan and another v. Puttiyottil Alikutty and another [AIR 2000 SC 2952]. Firstly, as in the case of Section 473 of the Cr.P.C., there is no provision in the Act enabling the petitioner to extend the period of limitation provided in the Act. Secondly, it is held by the Supreme Court that the provisions under Section 473 of the Cr.P.C. are not applicable to a case other than cannot be operated in respect of any period of limitation prescribed under any other enactment. In other words, in the absence of provisions in the Act, extension of period availa

ble to a person facing allegations under the IPC is not applicable to the complaints in question. That means, the complaints preferred after three months is bad and therefore are barred by limitation. 17. Moreover, it is true that in Annexure-2 it has been specifically stated in paragraph 34 that it will be the responsibility of the contractor to obtain necessary licence from the licensing authority under the Contract Labour (Regulation and Abolishment) Act and the Central Rules framed thereunder and produce the same to the Institute. At the same time, in paragraph-39 it is stated that the contractor will have to comply with the minimum wages as applicable to the State of Kerala. That means, both parties had agreed and the IIM, the principal employer, also agreed with the contractor that the minimum wages that are applicable to the State of Kerala will be paid by the contractor. It is also evident from the records produced by the petitioners that they have made separate registration before the District Labour Officer, Kozhikode under the Kerala Shops and Commercial Establishments Act, 1960. It seems to be a commercial establishment as defined under Section 2(4) of the Kerala Shops and Commercial Establishments Act, which is evident from Annexure-7 communication issued by the IIM also. 18. On a collocation of all these considerations, it appears that the petitioners are not bound to follow the provisions of the Contract Labour (Regulation and Abolition) Act, 1970, and it is futile on the part of the 2nd respondent to initiate proceedings against them under the provisions of the Act and Rules. Moreover, both the complaints are barred by limitation, which goes to the very root of the matter. On these considerations, proceedings against the petitioners through the complaints are liable to be quashed. In the result, both the Crl.M.Cs are allowed and the petitioners shall stand exonerated.