Gujarat High CourtPraful Anubhai Shah vs State Of Gujarat on 14 September, 2023NEUTRAL CITATION\n\n\n\n\n   R/SCR.A/2392/2014                              ORDER DATED: 14/09/2023\n\n                                                                                   undefined\n\n\n\n\n          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD\n\n         R/SPECIAL CRIMINAL APPLICATION NO. 2392 of 2014\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 7037 of 2018\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 2393 of 2014\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 8321 of 2018\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 2396 of 2014\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 8318 of 2018\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 2397 of 2014\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 8316 of 2018\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 2398 of 2014\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 8322 of 2018\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 2395 of 2014\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 7025 of 2018\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 2394 of 2014\n                              With\n         R/SPECIAL CRIMINAL APPLICATION NO. 8319 of 2018\n\n==========================================================\n                          PRAFUL ANUBHAI SHAH\n                                 Versus\n                       STATE OF GUJARAT & 1 other(s)\n==========================================================\nAppearance:\nMR ISA HAKIM FOR GANDHI LAW ASSOCIATES(12275) for the\nApplicant(s) No. 1\nMR DHAWAN JAYSWAL, APP for the Respondent(s) No. 1\nRULE SERVED BY DS for the Respondent(s) No. 2\n==========================================================\n\n CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT\n\n                             Date : 14/09/2023\n\n                          COMMON ORAL ORDERPage 1 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n     R/SCR.A/2392/2014                                          ORDER DATED: 14/09/2023\n\n                                                                                                 undefined1.              Leave to amend is granted. Amendment to be\n\ncarried out forthwith.2.              All these petitions are filed under Articles 226/227\n\nof the Constitution of India read withSection 482of the\n\nCode of Criminal Procedure, 1973 (`the Code' for short) for\n\nquashing and setting aside the complaints being Criminal\n\nCase Nos.19316 of 2013, 19317 of 2018, 19320 of 2018, 19321\n\nof   2018, 19322           of   2018,      19319 of          2018,     19318       of     2018\n\nrespectively pending before the Labour Court, Ahmedabad for\n\nthe offences punishable underSection 9of the Payment of\n\nGratuity Act, 1972 (`the said Act' for short) for failure to\n\ncomply with Rule 7(3) and 7(4) of the said Act, along with\n\nthe consequential proceedings, if any.3.              As the common question of facts and law are\n\ninvolved in all these petitions, at the request of learned\n\nadvocates       for      the    parties,    they       are    heard        together        and\n\ndisposed of by this common oral order.4.              The       impugned         complaints          are      filed       by      the\n\ncomplainant-controlling authority under the said Act for not\n\ncomplying with the order passed in Gratuity Cases of the\n\nconcerned employees.Page 2 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n      R/SCR.A/2392/2014                                                ORDER DATED: 14/09/2023\n\n                                                                                                       undefined5.               Heard       learned      advocate            Mr.Isa        Hakim         for    the\n\npetitioners and learned APP Mr.Jayswal for respondent no.1-\n\nstate. Though served, none appears for respondent no.2.\n\n\n\n5.1              Learned advocate Mr.Hakim submits that during\n\nthe pendency of these petitions, the settlement is arrived at\n\nbetween the employer i.e. the present petitioners and                                            the\n\nemployees and the entire amount towards gratuity is now\n\npaid. He pointed out to the compromise deed arrived between\n\nthe parties and also the details of payment like receipt\n\nissued of such amount paid by the present petitioners and\n\nsubmitted that even otherwise the offences which are alleged\n\nin the complaint can be considered as technical breach and\n\nin    view      of      subsequent        development,               as   now       the      entire\n\npayment is made by the petitioners and nothing remains\n\noutstanding          towards       the    amount              of    gratuity,      no       fruitful\n\npurpose will be served to continue the present proceedings in\n\nview of the judgment in the case of Gian Singh V/s State of\n\nPunjab & Anr. Reported in (2012) 10 SCC 303, Nikhil\nMerchant          V/s      Central       Bureau          of        Investigation        &       Anr.\nReported in 2009(1) GLH 31 and                                     State of Haryana V/s\nBhajanlal        &        Ors.    Reported      in       AIR         1992     SC      604.       He,\n\ntherefore,       prays       to   allow     these        petitions          and     quash        the\n\nimpugned complaints.Page 3 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n      R/SCR.A/2392/2014                                                ORDER DATED: 14/09/2023\n\n                                                                                                      undefined6.               Learned          APP      Mr.Jayswal            for      respondent            no.1\n\nsubmits that prima facie the complaints are filed by the\n\ncontrolling         authority        which         disclose          necessary           material\n\nconstituting the offences under the said Act. As the said Act\n\nis a benevolent legislation, the commission of such breach by\n\nthe     petitioners         is    required        to      be    viewed         seriously         and\n\ntherefore        considering         the      willful          default      made         by      the\n\npetitioners in non-payment of such amount, these petitions\n\nare not required to be considered sympathetically.\n\n\n\n6.1              He, further submitted that all the ingredients ofSections 7(3),7(4)and9of the said Act are satisfied and\n\ntherefore this Court may not exercise powers of quashing the\n\nimpugned complaints, which are, otherwise, required to be\n\nexercised very sparingly. However, he is not in a position to\n\ndispute the factum, on specific query put by the Court, that\n\nsubsequently          the        payment     is    made         to     the workmen               and\n\nreceipts are also produced on the record. He, therefore, prays\n\nto pass appropriate order in the facts and circumstances of\n\nthe present case.7.               Though served, none appears for the respondent\n\nno.2.8.               I have considered the rival submissions made atPage 4 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n     R/SCR.A/2392/2014                                          ORDER DATED: 14/09/2023\n\n                                                                                                 undefined\n\n\n\n\nthe bar and I have also considered the provisions of the Act.9.Sections 7(3)and7(4)of the said Act read as\n\nunder:"(3) The employer shall arrange to pay the amount of\n       gratuity within thirty days from the date it becomes payable\n       to the person to whom the gratuity is payable.\n       (3A) If the amount of gratuity payable under sub-section (3)\n       is not paid by the employer within the period specified in\n       sub-section (3), the employer shall pay, from the date on\n       which the gratuity becomes payable to the date on which it\n       is paid, simple interest at such rate, not exceeding the rate\n       notified by the Central Government from time to time for\n       repayment of long-term deposits, as that Government may,\n       by notification specify:Provided that no such interest shall be payable if the delay\n       in the payment is due to the fault of the employee and the\n       employer          has    obtained     permission    in     writing       from      the\n       controlling        authority    for    the     delayed     payment          on     this\n       ground.]\n\n\n       (4)(a) If there is any dispute as to the amount of gratuity\n       payable       to    an    employee     under     this    Act    or     as    to    the\n       admissibility of any claim of, or in relation to, an employee\n       for payment of gratuity, or as to the person entitled to\n       receive the gratuity, the employer shall deposit with thePage 5 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\nR/SCR.A/2392/2014                                                 ORDER DATED: 14/09/2023\n\n                                                                                                  undefined\n\n\n\n\n  controlling       authority       such    amount          as      he      admits     to    be\n  payable by him as gratuity.[(b) Where there is a dispute with regard to any matter or\n  matters specified in clause (a), the employer or employee or\n  any      other     person       raising        the      dispute        may     make        an\n  application       to     the    controlling       authority         for    deciding       the\n  dispute.]\n\n\n  [(c) The controlling authority shall, after due inquiry and\n  after     giving       the     parties    to      the      dispute        a    reasonable\n  opportunity of being heard, determine the matter or matters\n  in dispute and if, as a result of such inquiry any amount is\n  found      to     be     payable     to    the       employee,         the     controlling\n  authority shall direct the employer to pay such amount or,\n  as the case may be, such amount as reduced by the amount\n  already deposited by the employer.]\n\n\n  [(d)]    The      controlling       authority           shall     pay      the      amount\n  deposited, including the excess amount, if any, deposited by\n  the employer, to the person entitled thereto.\n  [(e)] As soon as may be after a deposit is made under\n  clause (a), the controlling authority shall pay the amount of\n  the deposit--(i) to the applicant where he is the employee; or(ii)    where      the       applicant    is      not     the     employee,         to    the\n  [nominee or, as the case may be, the guardian of such\n  nominee or] heir of the employee if the controlling authorityPage 6 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\nR/SCR.A/2392/2014                                           ORDER DATED: 14/09/2023\n\n                                                                                            undefined\n\n\n\n\n  is satisfied that there is no dispute as to the right of the\n  applicant to receive the amount of gratuity.9. Penalties.--(1) Whoever, for the purpose of avoiding any\n  payment to be made by himself under this Act or of\n  enabling any other person to avoid such payment, knowingly\n  makes or causes to be made any false statement or false\n  representation shall be punishable with imprisonment for a\n  term which may extend to six months, or with fine which\n  may extend to 3 [ten thousand rupees], or with both.\n  (2) An employer            who contravenes,          or     makes default in\n  complying with, any of the provisions of this Act or any\n  rule or order made thereunder shall be punishable with\n  imprisonment for a term [which shall not be less than three\n  months but which may extend to one year, or with fine\n  which shall not be less than ten thousand rupees but which\n  may extend to twenty thousand rupees, or with both]:Provided that where the offence relates to non-payment of\n  any gratuity payable under this Act, the employer shall be\n  punishable with imprisonment for a term which shall not be\n  less than         [six months but which may extend to two years]\n  unless      the    court   trying   the       offence,    for    reasons       to    be\n  recorded by it in writing, is of opinion that a lesser term of\n  imprisonment or the imposition of a fine would meet the\n  ends of justice."Page 7 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n      R/SCR.A/2392/2014                                                    ORDER DATED: 14/09/2023\n\n                                                                                                           undefined10.Section 2(p)of the Industrial Disputes Act (ID Act\n\nfor short) reads as under:"settlement" means a settlement arrived at in the course of\n        conciliation proceeding and includes a written agreement\n        between the employer and workmen arrived at otherwise\n        than in the course of conciliation proceeding where such\n        agreement has been signed by the parties thereto in such\n        manner as may be prescribed and a copy thereof has been\n        sent     to       an   officer    authorised            in        this    behalf      by     the\n        appropriate Government and the concliation officer."11.              Pursuant        toSection         2(p)of     the     ID     Act,      the\n\nsettlement         is     arrived        at     between          the        management               and\n\nemployees and the               settlement is also produced on record. On\n\nperusal of the same, it transpires that it is signed by the\n\nrepresentatives of the employees and representatives of the\n\nemployer. Pursuant thereafter, the respective receipts were\n\nalso issued by the employees which are part of the record,\n\nwhereby it is mentioned that the amount is received on\n\n10.7.2014 by the employees.12.              In the case of Gian Singh (supra), the Hon'ble\n\nSupreme Court has observed in para 61 as under:"61. A three-Judge Bench of this Court in State ofPage 8 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\nR/SCR.A/2392/2014                                              ORDER DATED: 14/09/2023\n\n                                                                                               undefinedKarnataka v. M. Devendrappa and another[18] restated\n           what has been stated in earlier decisions that Section\n           482 does not confer any new powers on the High\n           Court, it only saves the inherent power which the\n           court possessed before the commencement of the Code.\n           The Court went on to explain the exercise of inherent\n           power by the High Court in paragraph 6(Pg.94) of the\n           Report as under :"6. .........It envisages three circumstances under which\n           the inherent jurisdiction may be exercised, namely,(i) to give effect to an order under the Code, (ii) to prevent\n  abuse of the process of court, and (iii) to otherwise secure\n  the ends of justice. It is neither possible nor desirable to\n  lay    down            any    inflexible    rule     which    would       govern       the\n  exercise of inherent jurisdiction. No legislative enactment\n  dealing with procedure can provide for all cases that may\n  possibly arise. Courts, therefore, have inherent powers apart\n  from express provisions of law which are necessary for\n  proper discharge of functions and duties imposed upon them\n  by law. That is the doctrine which finds expression in the\n  section      which           merely    recognizes      and    preserves        inherent\n  powers of the High Courts. All courts, whether civil or\n  criminal possess, in the absence of any express provision, as\n  inherent          in    their    constitution,       all   such    powers       as     are\n  necessary to do the right and to undo a wrong in course of\n  administration of justice on the principle quando lex aliquid\n  alicui concedit, concedere videtur et id sine quo res ipsaePage 9 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n      R/SCR.A/2392/2014                                                    ORDER DATED: 14/09/2023\n\n                                                                                                            undefined\n\n\n\n\n        esse non potest (when the law gives a person anything it\n        gives     him          that    without         which     it    cannot        exist).        While\n        exercising powers under the section, the court does not\n        function          as    a      court      of    appeal        or     revision.Inherent\n        jurisdiction           under     the      section      though        wide       has     to     be\n        exercised sparingly, carefully and with caution and only\n        when such exercise is justified by the tests specificallylaid\n        down inthe section itself. It is to be exercised exdebito\n        justitiae         to    do      real     and      substantial           justice       for     the\n        administration of which alone courts exist. Authority of the\n        court exists for advancement of justice and if any attempt is\n        made to abuse that authority so as to produce injustice, the\n        court has power to prevent abuse. It would be an abuse of\n        process of the court to allow any action which would result\n        in injustice and prevent promotion of justice. In exercise of\n        the powers court would be justified to quash any proceeding\n        if it finds that initiation/continuance of it amounts to abuse\n        of the process of court or quashing of these proceedings\n        would otherwise serve the ends of justice........"13.              In the case of Nikhil Merchant (supra), it is held\n\nin paragraphs 20 to 24 as under:"20. Having carefully considered the facts of the case and\n        the submissions of learned Counsel in regard thereto, we are\n        of the view that, although, technically there is force in the\n        submissions             made      by      the      learned         Additional         SolicitorPage 10 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\nR/SCR.A/2392/2014                                               ORDER DATED: 14/09/2023\n\n                                                                                               undefined\n\n\n\n\n  General, the facts of the case warrant interference in these\n  proceedings.21. The basic intention of the accused in this case appears\n  to have been to misrepresent the financial status of the\n  company,          M/s   Neemuch            Emballage         Limited,     Mumbai,         in\n  order to avail of credit facilities to an extent to which the\n  company           was   not        entitled.    In    other     words,        the    main\n  intention of the company and its officers was to cheat the\n  Bank and induce it to part with additional amounts of\n  credit to which the company was not otherwise entitled.22.      Despite the ingredients and the factual content of an\n  offence of cheating punishable underSection 420IPC, the\n  same has been made compoundable under Sub-section (2) ofSection 320Cr.P.C. with the leave of the Court. Of course,\n  forgery has not been included as one of the compoundable\n  offences,         but   it    is     in    such      cases     that     the     principle\n  enunciated in B.S.Joshi's case (supra) becomes relevant.23. In the instant case, the disputes between the Company\n  and the Bank have been set at rest on the basis of the\n  compromise arrived at by them whereunder the dues of the\n  Bank have been cleared and the Bank does not appear to\n  have      any       further        claim     against     the      Company.          What,\n  however, remains is the fact that certain documents were\n  alleged to have been created by the appellant herein inPage 11 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n      R/SCR.A/2392/2014                                           ORDER DATED: 14/09/2023\n\n                                                                                                  undefined\n\n\n\n\n        order to avail of credit facilities beyond the limit to which\n        the Company was entitled.                   The dispute involved herein has\n        overtones of a civil dispute with certain criminal facets. The\n        question which is required to be answered in this case is\n        whether the power which independently lies with this Court\n        to     quash        the     criminal        proceedings     pursuant          to     the\n        compromise arrived at, should at all be exercised?24.      On       an      overall    view      of   the   facts       as     indicated\n        hereinabove and keeping in mind the decision of this Court\n        in B. S. Joshi's case (supra) and the compromise arrived at\n        between the Company and the Bank as also clause 11 of\n        the consent terms filed in the suit filed by the Bank, we\n        are satisfied that this is a fit case where technicality should\n        not be allowed to stand in the way in the quashing of the\n        criminal proceedings, since, in our view, the continuance of\n        the same after the compromise arrived at between the\n        parties would be a futile exercise."14.              In the case of             Bhajanlal & Ors, it is observed by\nthe Hon'ble Supreme Court as under:"In     the       backdrop     of     the    interpretation      of    the     various\n        relevant provisions of the Code under Ch.XIV and of the\n        principles of law enunciated by this court in a series of\n        decisions relating to the exercise of the extraordinary power\n        underArt.226or the inherent powers under sec.482 of thePage 12 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\nR/SCR.A/2392/2014                                        ORDER DATED: 14/09/2023\n\n                                                                                          undefined\n\n\n\n\n  Code which we have extracted and reproduced above, we\n  give the following categories of cases by way of illustration\n  wherein such power could be exercised either to prevent\n  abuse of the process of any court or otherwise to secure the\n  ends of justice, though it may not be possible to lay down\n  any precise, clearly defined and sufficiently channelised and\n  inflexible        guidelines   or     rigid     formulae   and      to    give     an\n  exhaustive list of myriad kinds of cases wherein such power\n  should be exercised.(1) Where the allegations made in the first information\n  report or the complaint, even if they are taken at their face\n  value and accepted in their entirety do not prima facie\n  constitute any offence or make out a case against the\n  accused.(2) Where the allegations in the first information report and\n  other     materials,      if   any,    accompanying        the    FIR      do     not\n  disclose a cognizable offence, justifying an investigation by\n  police officers under sec.156(1) of the Code except under an\n  order of a Magistrate within the purview of sec.155(2) of the\n  Code.(3) Where the uncontroverted allegations made in the FIR or\n  complaint and the evidence collected in support of the same\n  do not disclose the commission of any offence and make out\n  a case against the accused.Page 13 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n      R/SCR.A/2392/2014                                                ORDER DATED: 14/09/2023\n\n                                                                                                       undefined\n\n\n\n\n        (4) Where, the allegations in the FIR do not constitute a\n        cognizable        offence   but       constitute         only        a    non-cognizable\n        offence, no investigation is permitted by a police officer\n        without an order of a Magistrate as contemplated under\n        sec.156(2) of the Code.(5) Where the allegations made in the FIR or complaint are\n        so absurd and inherently improbable on the basis of which\n        no prudent person can ever reach a just conclusion that\n        there is sufficient ground for proceeding against the accused.\n\n\n        (6) Where there is an express legal bar engrafted in any of\n        the provisions of the Code or the concerned Act (under\n        which a criminal proceeding is instituted) to the institution\n        and continuance of the proceedings and/or where there is a\n        specific     provision      in    the     Code          or     the       concerned      Act,\n        providing         efficacious    redress          for    the     grievance         of    the\n        aggrieved party.(7) Where a criminal proceeding is manifestly attended with\n        mala       fide    and/or       where     the       proceeding           is   maliciously\n        instituted with an ulterior motive for wreaking vengeance on\n        the accused and with a view to spite him due to private\n        and personal grudge."15.              Considering the aspect that now the dispute isPage 14 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023NEUTRAL CITATION\n\n\n\n\n      R/SCR.A/2392/2014                                ORDER DATED: 14/09/2023\n\n                                                                                       undefined\n\n\n\n\nsettled between the parties, the amount is already paid to\n\nthe employees and the employees have signed the receipts in\n\nreceipt of the same, and the settled legal position of law as\n\nlaid down by the Hon'ble Apex Court in the cases referred to\n\nhereinabove, I am of the considered opinion that no fruitful\n\npurpose will be served to continue the proceedings as even if\n\nthe petitioners are directed to face the trial, it will amount\n\nto futile exercise.16.              Resultantly,   all   these       petitions     are       allowed.\n\nCriminal Case Nos.19316 of 2013, 19317 of 2018, 19320 of\n\n2018, 19321 of 2018, 19322 of 2018, 19319 of 2018, 19318 of\n\n2018       respectively     pending      before      the      Labour         Court,\n\nAhmedabad and consequential proceedings, if any, are hereby\n\nquashed and set aside. Rule is made absolute. Direct service\n\nis permitted.(SANDEEP N. BHATT,J)\nSRILATHAPage 15 of 15Downloaded on : Mon Sep 18 20:38:57 IST 2023