judgement:
Appeal No. 613/ 1963.
Appeal by special leave from the judgment dated December 12, 1960, of the Punjab High Court in Income tax Reference No. 2 of 1958.
section K. Kapur, K. K. Jain, Bishambar Lal Khanna and section Murthy, for the appellant.
C.K. Daphtary, Attorney General, R. Ganapathy Iyer and R.N. Sachthey, for the respondent.
627 April 2, 1964.
The Judgment of the Court was delivered by SIKRI, J.
The appellant is a Joint Stock Company, here inafter referred to as the assessee, having its registered office in Delhi.
It held 11950 'B ' Preference shares in another company, called Rohtas Industries Ltd., in the previous year (calendar year ending December 31, 1953).
The latter company paid a sum of Rs. 50,787/ as dividend on the said Preference Shares to the assessee, and for the assessment year 1954 55 this sum was taxed in the hands of the assessee as dividend, within section 2(6A) of the Indian Income Tax Act, 1922, by the Income Tax Officer.
The Appellate Assistant Commissioner, on appeal by the assessee, held it not to be taxable.
The Income Tax Appellate Tribunal, on an appeal by the Department, however, agreed with the Income Tax Officer and allowed the appeal.
On the application of the assessee, the Appellate Tribunal stated a case for the opinion of the Punjab High Court.
The High Court upheld the contention of the Department and answered the question referred to it against the assessee.
The assessee, after failing to get a certificate under section 66A(2) of the Income Tax Act, obtained special leave from this Court and now the appeal is before us for disposal.
The question referred to the High Court is as follows: "Whether on the facts and in the circumstances of the case, the receipt of Rs. 50,787/ was a receipt of dividend and is taxable under the Indian Income Tax Act.
" The facts and circumstances referred to in the question are as follows.
Rohtas Industries Ltd., hereinafter referred to, as the declaring company, had in the year 1946 issued shares at a premium and the share premiums so received by it were kept separate under the head 'Capital Reserve '.
The declaring company declared a dividend in the previous year of the assessee out of the above capital reserve.
The learned counsel for the assessee contends before us that the sum received by the assessee is not dividend within the definition of the word in section 2(6A) of the Income Tax Act.
He says that the share premiums were not profits capable of being distributed as profits within Regulation 97 of Table A Of Companies Act of 1913 which lays down that "no dividend shall be paid otherwise than out of the profits of the year or any other undistributed profits.
" He argues further that it was a capital gain in the hands of the declaring company and capital gains are expressly excluded from the definition of 'dividend ' by the explanation to section 2(6A) which provides that 'the 628 expression "accumulated profits" wherever it occurs in this clause shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day of March, 1948 '.
Lastly, he urges that in any event, section 78 of the , has placed this sum beyond the reach of the Revenue.
Before adverting to the arguments addressed to us, it is necessary to reproduce the relevant statutory provisions.
Section 2(6A) of the Income Tax Act defines 'dividend ' as follows: (6A) 'dividend ' includes (a) any distribution by a company of accumulated profits, whether capitalised or not, if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company; (b). . . (c). . .
Provided that (d). . .
Provided that Provided further that the expression "accumulated profits", wherever it occurs in this clause, shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day of March, 1948.
" Section 78, of the , reads: "78.
(1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called "the share premium account"; and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.
(2) The share premium account may, notwithstanding anything in sub section (1), be applied by the company (a) in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares; (b) in writing off the preliminary expenses of the company; 629 (c) in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; or (d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company (3) Where a company has, before the commencement of this Act, issued any shares at a premium, this section shall apply as if the shares had been issued after the commencement of this Act: Provided that any part of the premiums which has been so applied that it does not at the commencement of this Act from an identifiable part of the company 's reserves within the meaning of Schedule VI, shall be disregarded in determining the sum to be included in the share premium account.
" It is evident from the definition of the word 'dividend ' that if a distribution of accumulated profits, whether capitalised or not, entails the release by the company to its shareholder of all or any part of its assets, it is dividend.
It is not disputed that the distribution of Rs. 50,787/ entails the release of the assets of the declaring company.
But it is contended that there was no distribution of accumulated profits, because by virtue of Regulation 97, Table A of the Companies Act, 1913, no dividend could be paid otherwise than out of the profits of the year or any other undistributed profits.
It is said that the premiums received by the declaring company were not profits within Regulation 97.
We are unable to accede to this contention.
Previous to the enactment of section 78 of the Companies Act of 1956, and the corresponding section in the English Companies Act, it was recognised that a company ,could distribute premiums received on the issue of shares as dividends (vide Palmer 's Company Law, Twentieth Edition).
At page 637, it is stated: legally permissible for the company to distribute dividend out of assets which do not represent profits made as the result of its trading or business.
The connotation of divisible profits, or profits in the legal sense, is much wider than that of profits in the business sense: the former term includes, e.g., reserves accumulated from past profits, from realised capital profits indeed, before the requirement of a share premium account by the 1947 48 legislation, from premiums obtained on issue of 630 new shares, whereas none of these items is regarded and rightly so by the businessman or accountant as trading profits." Palmer relies on two cases: Re Hoare & Co. Ltd.,(1) and Drown vs Caumin British Picture Corporation(2).
In Re Hoare 's (1) case the company had created a reserve fund con sisting partly of premiums received on the issue of preference: shares.
It having incurred a loss arising from the depreciation in the value of the public houses below the amount stated in the company 's balance sheet, applied for sanction of the Court to a scheme for reduction of capital whereby the company, while retaining a small portion of the reserve, attributed to, the reserve more than its rateable proportion and to capital account less than that of its rateable proportion Buckley J. apparently held that these premiums were not 'profits ' in the strict sense; and, on appeal, the counsel for the company contended before the Court of Appeal that this was wrong.
Romer, L.J., disposed of this contention in the following words"; "The surplus which was carried to the reserve fund represented that which might have been properly applied at the time, if the company had so thought fit, in paying further dividends to shareholders and no person could have complained if they had done so" Thus, Romer, L.J., thought that there was nothing objec tionable in utilising premiums received on the issue of shares for the purpose of declaring dividend.
in Drown 's case(2), a company proposed to pay a dividend on its preference shares and utilise in part premiums received by the company on the issue of shares, which had in fact been invested in the assets of the company.
The plaintiff asked for an injunction to restrain the company from paying the dividend.
Clauson, J., held that part of a reserve fund consisting of moneys paid by way of premiums on shares, unless set aside in some particular fund which has been wholly spent, is available for dividend purposes.
We are not concerned with other points that arose in the case and we have only set out the facts and findings relevant to the question before us.
We may here set out Article 129 of the Gauniont British Picture Corporation Ltd. Article 129 reads thus: "The Directors may, with the sanction of a general meeting, from time to time declare dividends or bonuses, but no such dividend shall (except as by (2)[1937] Ch.
631 the statutes expressly authorised) be payable otherwise than out of the profits of the company. . . " .
Mr. Kapur, learned counsel for the appellant, had contended that the English Law was different inasmuch as what was prohibited in English Law was payment of dividends out of capital and that it did not enjoin directors to pay dividends out of profits.
This case refutes Mr. Kapur 's contention.
In re Duff 's Settlements, National Provincial Bank Ltd., vs Gregson,(1) which is strongly relied on behalf of the appellant, and which we will advert to in detail later, Jenkins, L.J., says at p. 926: "The share premiums would have been profits available for distribution (see Drown vs Gamnont British Picture Corporation) " (2).
It was thus well established before the Act of 1956 and the corresponding English Act that premiums received on the issue of shares were profits available for distribution.
We are of the opinion that the same connotation should be attached to the word 'Profits ' in Regulation 97 of Table A.
In this view of the matter, it is not necessary to pronounce on the question whether even if these premiums were not profits within Regulation 97, would this necessarily exclude them from coming with the words 'accumulated profits ' within section 2(6A)(a).
This takes up to the next point raised before us: Are the premiums received on the issue of shares capital gains within the explanation to section 2(6A)? This point was not urged before the High Court or the Appellate Tribunal and we did not allow it to be developed.
The last point may now be dealt with.
In this connection it is necessary to appreciate the scheme of section 78 of the Com panies Act, 1956.
Sub section (1) enjoins a company, when it issues shares at a premium, to transfer the premiums to an account called 'the Share Premium Account ' and it then applies the provisions of the Act relating to the reduction of the share capital of a company as if the share premium account were paid up capital of the company.
Sub section (2) then provides how the share premium account may be applied.
It is said that it impliedly provides that it cannot be used for the purpose of paying dividends.
Sub section (3) then deals with the issue of shares at a premium before the commencement of this Act.
It deems them to have been issued after the commencement of the Act and applies the provisions of section 78.
The effect of this would be that company which has issued shares at a premium before the commencement of the Act would by (1) (2) 632 virtue of section 78, have to open a share premium account and transfer to it the premium so received.
What is to happen if before the commencement of the Act the company has already dealt with the premiums in such a way that they had ceased to remain as an identifiable part of the company 's reserves? The sub section says that in that event the premiums so dealt with shall be disregarded in determining the sum to be included in the share premium account.
If such premiums are to be disregarded for the creation of the share premium account, it means that they fall outside the purview of section 78.
It has no application to them.
If this is so, it is difficult to appreciate bow the appellant can utilise this section for the purpose of showing that the premiums which have already been distributed became invested with the character of capital in the bands of the distributing company.
We do not say that for the purpose of income tax any future application of the share premium ac count in one of the ways mentioned in sub section (2) will be treated as distribution of capital.
No such question arises for our determination in this case.
But we do hold that section 78 of the Companies Act does not in any way change the taxability of dividends declared out of premiums on shares received by a Company before the Act of 1956 came into force.
If it was taxable, apart from section 78; it remains so taxable.
The case of Duff 's Settlements(1) referred to above, on which the learned counsel strongly relied, might or might not help him if the declaration of dividend had taken place after the Act of 1956.
We are of the opinion that what was decided in this case has no relevance to the facts of this appeal.
Before concluding, we may refer to the decision of the House of Lords in Land Revenue Commissioners vs Reids Trustees(2), relied on by the learned counsel for the respondents.
This case would be relevant if we were considering generally whether the receipt of Rs. 50,787/ was income or capital in the hands of the assessee.
The question, however, referred to the High Court is limited, and that is whether the receipt of Rs. 50,787/ was a receipt of dividend and taxable.
It is, therefore, unnecessary to say more about this case.
In the result, we agree with the High Court that the answer to question referred to it is in the affirmative.
The appeal fails and is dismissed with cost.
Appeal dismissed.
(1)[1951] 1 Ch.

summary:
The Rohtas Industries Ltd. issued in 1945 shares at a pre mium and the share premiums so received were, kept separate under the head Capital Reserve.
In the calendar year ending December 31, 1953, the company paid a sum of Rs. 50,787/ as dividend to the appellant company.
For the year 1954 55, this sum was taxed in the hands of appellant as dividend by the Income tax Officer.
The Appellate Assistant Commissioner set aside the order of the Income tax Officer, but the same was restored by the Income tax Appellate Tribunal.
The Tribunal referred to the Punjab High Court the question whether on "he facts and in the circumstances of the case, the receipt of Rs. 50,787/ was a receipt of dividend and was taxable under the Indian Income tax Act.
The High Court answered the question against the appellant and the latter appealed this Court with special leave.
Dismissing the appeal.
Held: The receipt of Rs. 50,787/ was a receipt of dividend :and was taxable under the Indian Income tax Act, 1922.
It was well established before the , that premiums received on the issue of shares were profits available for distribution and the word "profits" in Regulation 97 of Table A of Companies Act 1913 should be understood to include share premiums also.
section 78 of the Companies Act does not in any way change the taxability of dividends declared out of premiums on shares received by a Company before the Act of 1956 came into force.
If it was taxable, apart from section 78, it remains so taxable.
Re Hoare & Co. Ltd., ; Drown vs Gaumint British Picture Corporation, ; re Duff 's Settlements.
National Provincial Bank Ltd., vs Gregson, ; Land Revenue Commissioners vs Reids Trustees, , referred to.


judgement:
iminal Appeal No. 5 of 1963.
Appeal by special leave from the judgment and order dated June 21, 1962 of the Gujarat High Court in Criminal Appeal No. 383 of 1961.
D. R. Prem and B. R. G. K. Achar, for the appellant.
M. V. Goswami, for the respondent.
April 7, 1962.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
On June 21, 1960 at 5 50 A.M. the Hi Inspector of Factories, Bhavnagar, visited Saurashtra Metal and Mechanical Works, Wadhwan City, which is a factory within the meaning of section 2(m)(1) of the .
He found even workmen working on a machine and on examining the notice of period of work for adult workers and the register of workers he found that three of the workmen belonged to a group which was expected to begin work from 7 A.M. He commenced proceedings under section 63 of the against the respondent Mr. Kansara Manilal Bhikhalal as the occupier/manager of the factory, after issuing notice to him to show cause.
He asked for enhanced penalty under section 94 of the because the said Mr. Manilal Bhikhalal was convicted on a previous occasion in three cases.
As three workmen were concerned three separate complaints were filed in the Court of the Judicial Magistrate, First Class, Wadhwan City.
The defence of the respondent was that he was not the occupier and manager of the factory.
It may be pointed out that one Mr. Dangi and the respondent are partners.
They have another factory at Dharangadhra and the defence was that Mr. Bhikhalal was manager at the Dharangadhra factory 658 and Mr. Dangi was manager at Wadhwan.
Another defence.
was that a machine had gone out of order the previous day and after it was repaired work was started a little earlier the: next day, because production had suffered and goods were required.
The Inspector, it was stated, was informed by a letter (Ext.11) written on the 20th about the change of timing though the letter, unfortunately, did not reach the Inspector till the 22nd.
It was admitted that this change in the hours of work was not notified and displayed as required by section 61(1).
It was urged that section 61(10) permitted a change to be made in the system of work in a factory and as this provision was fully complied with, there was no offence.
The Judicial Magistrate did not accept these defences.
According to him, Mr. Dangi 's letter (Ext. 15) showed that the respondent was the occupier and the manager of the factory at Wadhwan.
On the second defence the Magistrate was of the opinion that the hours of work could not be changed without the permission of the Inspector of Factories under sub section
(10) of section 61.
The contention on behalf of the respondent that this being the first change it was not necessary to wait for one week before making another change, was not accepted because it was held that the factory manager must always wait for one week before introducing a change.
The respondent was, therefore, convicted under section 63 of the in respect of three offences and under section 94, enhanced punishment was imposed upon him by ordering him to pay a fine of Rs. 100 in respect of each offence.
On appeal the Sessions Judge of Surendranagar ordered the acquittal of the respondent.
The learned Sessions Judge held that the second part of section 61(10) applied to a case of second or subsequent change and this being the first change it did not fall within the second part.
According to the Sessions Judge, it fell in the first part of the sub section and the change could not be said to have been effected in breach of that part since the Inspector of Factories was informed about the change.
The learned Sessions Judge was also of the opinion that section 117 of the protected the action because it was bonafide.
The conviction and sentence were accordingly set aside.
The State of Gujarat appealed against the acquittal but was unsuccessful.
A Division Bench of the High Court which heard the appeal agreed with the Sessions Judge in his interpretation of section 61 (10) and did not express any opinion on section 117 of the Act.
In this appeal filed by special leave of this Court these two points have again arisen for our consideration.
The scheme of the bearing upon the present matter may now be examined.
It is convenient to do so 659 in the reverse order.
Section 92 is a section providing generally for penalties and section 94 provides for enhanced penalty after previous conviction.
These sections prescribe penalties for contravention of any of the provisions of the Act or of any rule made or of any order in writing given thereunder.
The breach here is stated to be of section 63 of the Act which lays down that the hours of work must correspond with notice required to be displayed under section 61 and the register directed to be maintained under section 62.
It provides: "section 63.
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.
It is divided into 10 sub sections of which sub sections
(1), (2) and (10) alone are relevant here.
They are as fol lows: "61.
Notice of periods of work for adults. (1) There shall be displayed and correctly maintained in every factory in accordance with the provisions of sub section (2) of section 108, a notice of periods of work for adults showing clearly for every day the periods during which adult workers may be required to work.
(2) The periods shown in the notice required by subsection (1) shall be fixed beforehand in accordance with the following 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.
(10) Any proposed change in the system of work in any factory which will necessitate a change in the notice referred to in sub section (1) shall be notified to the Inspector in duplicate before the change is made, and except with the previous sanction of the Inspector, no such change shall be made until one week has elapsed since the last change." 660 Section 62 next provides that a register of adult workers shall be maintained in which will be shown (a) name of each adult workers in the factory; (b) the nature of his work; (c) the group, if any, in which he is included; (d) where his group works on shifts, the relay to which he is allotted and (e) such be prescribed.
Section 51 to which second sub section of section 61, already hours week; section 52 refers to weekly fixes a maximum of 9 hours a day interval for rest and prescribes that exceed 5 hours at one stretch; section 56 fixes generally that the period of work and rest should be spread over 10 1/2 hours and section 58 prohibits the overlapping of shifts.
The Sessions Judge and the High Court concurred in holding that the provisions of sub section
(10) were complied with and there was thus no offence under section 63.
They treated this as a change in the system of work in the factory necessitating a change in the notice referred to in sub G. (1) and held that as the change was notified to the Inspector before it was made there was nothing illegal in employing the three workers before their shift commenced.
They also held that as this was the first change there was no need to wait for a week or to obtain the previous sanction of the Inspector as required by the latter part of the tenth sub section.
With due respect to the High Court, we do not agree that this sort of case is contemplated by the tenth :sub section.
That sub section speaks of "change in the system of work in any factory which will necessitate a change in the notice" and these words refer not to a departure from the notice but to a change in the system, a change which would require the notice to be recast.
The notice shows "the periods during which adult workers may be required to work" and these words are descriptive of the scheme of the employment of labour in the factory but are not apt to contemplate the time of employment for each individual worker.
That can only be found by referring to the register which goes with the notice.
Sub section
(1) makes no mention of the change in the register but of the change in the notice and thereby indicates that the change which is contemplated is an overall change affecting a whole group and not an individual worker.
The latter part of the sub section also points in the same direction because it implies that such changes should not be frequent and if the change is for the second time it should not be made until one week has elapsed since the last change.
This cannot possibly refer to a casual change in the hours of work of an individual worker.
661 The learned counsel sought to justify the action by referring to section 59 which provides that extra wages for over time shall be paid.
No such claim was made earlier in this case and justification was sought only from the provisions of sub section
(10) of section 61 and section 117 of the Act.
Section 59 cannot be considered in isolation: It has to be read with section 64, where the State Government has been given the power to make exempting rules '.
Under those rules a departure from the provisions of sections 51, 52, 55 and 56 can be made but only in accordance with the rules so framed; as for example, overtime work may be taken from workers engaged on urgent repairs in spite of the provisions of sections 51, 54, 55 and 56, but must be in accordance with rule 91 and the urgency which is referred to in this section and the rule is 'an urgency relating to the factory and not an urgency felt by the constituents of the factory '.
A departure from the hours of work as laid down in section 61(2) can only be made in those cases in which the exempting provisions of the rules cover the case and not otherwise.
It would, therefore, appear that the offence which was committed in the case was the employment of workers contrary to the notice displayed under section 61(1) without any justi fication by reason of any exempting provision.
The respon dent was not saved from the operation of section 63, which is peremptory, by reason of anything contained in sub section
(10) and the sending of the letter to the Inspector of Factories was therefore mis conceived.
It was contended before us that the respondent was not the occupier/manager of the factory and, in any event, section 117 of the Act protected him because he was not present there and his action was bonafide.
A: , to the first part of this argument it is sufficient to say that the Magistrate found that he was the occupier and manager.
The letter of Mr. Dangi (Ext. 15) quite clearly establishes this.
The argument under, section 117 of the Act requires a more detailed consideration.
That section reads as follows: "17.
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.
" It is argued by Mr. M. V. Goswami on the authority of cases about to be mentioned that this section gives protection against prosecution in respect of anything which is done in good faith under the Act.
He referred us to two decisions of 662 Thomas, C. J. in Ranjit Singh vs Emperor(1) and Ranjit Singh vs Emperor,(2) in which the learned Chief Justice observes that the language of section 117 is not limited to the inspecting staff but is wide enough to include occupiers, managers, foremen, workers etc.
Mr. Goswami also refers to two decisions of the Andhra Pradesh High Court in Public Prosecutor vs Mangaldas Thakker(3) and In re.
P. Lakshmaiah Naidu(1) in which the same view has been expressed.
Mr. D. R. Prem on behalf of the State of Gujarat relies on The Public Prosecutor vs Vattem Venkatramayya(5) and Provincial Government, C.P. and Berar vs Seth Chapsi Dhanji Oswal Bhate and Anr(6).
Reference was also made to Superinte dent and Remembrancer of Legal Affairs, Bengal vs H. E. Watson(7).
It is not necessary to refer to the lines of reasoning adopted in these cases.
The language of this protecting clause is not limited to officers but is made wide to include "any person".
It thus gives protection not only to an officer doing or intending to do something in pursuance or execution of this Act but also to "any person".
But the critical words are "any thing * * * done or intended to be done" under the Act.
The protection conferred can only be claimed by a person who can plead that he was required to do or omit to do something under the Act or that he intended to comply with any of its provisions.
It cannot confer immunity in respect of actions which are not done under the Act but are done contrary to it.
Even assuming that an act includes an omission as stated in the General Clauses Act, the omission also must be one which is enjoined by the Act.
It is not sufficient to ,say that the act was honest.
That would bring it only within the words "good faith".
It is necessary further to establish that what is complained of is something which the Act requires should be done or should be omitted to be done.
There must be a compliance or an intended compliance with a provision of the Act, before the protection can be claimed.
The section cannot cover a case of a breach or an intended breach of the Act however honest the conduct otherwise.
In this connection it is necessary to point out, as was done in the Nagpur case above referred to, that the occupier and manager are exempted from liability in certain cases men tioned in section 101.
Where an occupier or a manager is charged (1) A.I.R. (1943) Oudh 308.
(2) A.I.R. (1943) Oudh 311.
(3) A.I.R. (1958) Andh.
Pra. 79.
(4) I.L.R. (5) A.I.R. (1963) Andh.
Pra. 106).
(6) I.L.R. (1938) Nag. 408.
(7) 663 with an offence he is entitled to make a complaint in his own turn against any person who was the actual offender and on proof of the commission of the offence by such person the occupier or the manager is absolved from liability.
This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility.
Such a provision largely excludes the operation of section 117 in respect of persons guilty of a breach of the provisions of the Act.
It is not necessary that means rea must always be established as has been said in some of the cases above referred to.
The responsibility exists without a guilty mind.
An adequate safeguard, however, exists in section 101 analysed above and the occupier and manager can save themselves if they prove that they are not the real offenders but who, in fact, No such defence was offered here.
For these reasons we are of the opinion that the respondent is not saved by section 117.
We, accordingly, set aside his, acquittal and convict him under section 63 read with section 94 of the .
He is ,sentenced to pay a fine of Rs. 501/ in respect of each of the offences, or in default to undergo 15 days ' simple imprisonment.

dataset_name: IN-Abs

summary:
On inspection three of the workmen were found working in a factory before their shift commenced.
It was stated that the Inspector of Factories was informed by a letter written a day prior to this inspection about the change of the timing though the letter did not reach the Inspector till the day after the inspection.
This change in the hours of work was not notified and displayed as required by section 61(1) of the .
The respondent as the occupied/manager of the factory was convicted under section 63 of the Act.
On appeal, the Sessions Judge acquitted the respondent holding that the second part of section 61(10) of the Act applied to a case of second or subsequent change in the system of work in a factory and this being the first change there was no need to wait for a week or to obtain the previous sanction of the Inspector as required by the later part of section 61(101), and further section 117 of the Act protected the action because it was bonafide.
The State appealed to the High Court which agreed with the Sessions Judge in his interpretation of section 61(10) but expressed no opinion on section 117 of the Act and it dismissed the appeal.
On appeal by special leave: Held: (i) The respondent was not saved from the opera tion of section 63 which is peremptory, by reason of anything contained in section 61(10) and the sending of the letter to the Inspector of Factories was therefore misconceived.
The words "change in the system of work in any factory which will necessitate a change in the notice" in section 61(10) refer not to departure from the notice but to a change in the system, a change which would require the notice to be recast.
The notice shows "the period during which adult workers may be required to work" and these words are descriptive of the scheme of employment of labour in the factory but are not apt to contemplate the time of employment for each individual worker.
That can only be found by referring to the register which goes with the notice.
Sub section (1) makes no mention of the change in the register but of the change in the notice and thereby indicates that the change which is contemplated is an over all change affective to a whole group and not an individual worker.
The latter part of the sub section also points in the same direction because it implies that such changes should not be frequent and if the change is for the second time it should not be made until one week has.
elapsed since the last change.
(ii) The language of section 117 of the Act is not limited to officers but is made wide to include "any person".
The protection conferred can only be claimed by a person who can plead that he was required to do or omit to do something under the Act or that he intended to comply with any of its provisions.
It cannot confer immunity in respect of actions which are not done under the Act but are done contrary to it.
657 (iii) The occupier and manager, are exempted from liabi lity in certain cases mentioned in section 101.
Where an occupier or a manager is charged with an offence he is entitled to make a complaint in his own turn against any person who was the actual offender and on such proof the occupier or the manager is a solved from liability.
This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility.
It is not necessary that means rea must always be established.
The responsibility exists without a guilty mind.
Ranjit Singh vs Emperor, A.I.R. (1943) Oudh 308, Ranjit Singh vs Emperor, A.I.R. (1943) Oudh 311, Public Prosecutor vs Mangaldas Thakkar, A.I.R. , In re P. Lakshmaiah Naidu, I.L.R. , Public Prosecutor vs Vattem Venkatramayya, A.I.R. 1963.
Pra. 106, Provincial Government C.P. and Berar vs Seth Chapsi Dhanji Oswal Bhate and Anr.
I.L.R. and Superintendent and Remembrancer of Legal Affairs, Bengal vs H. E. Watson, , referred to.