Decided on February 08,1979



M.K.SHAH - (1.) This is an appeal by the State against the order of acquittal passed by the learned Judicial Magistrate First class Bhavnagar on 31-1-1977 in summary case No. 142 of 1976 acquitting the respondentoriginal accused for the offence under sec. 92 of the Factories Act (the Act).
(2.) The accused is the Managing Director of a company called Polysteel (India) Limited Bhavnagar. The complainant-factory inspector K.N. Gandhi visited the factory premises of the company on 12 1975 and found that the factory was closed. On going through the records he learnt that a worker named S.Y. Vaishnav who had worked in the year 1975 had not been paid the amount of leave with wages though his employment was terminated with effect from 20-10-1975. As provided in sec. 79 of the Act such payment of leave with wages in respect or a retrenched worker has to be paid on or before the second working day which in the instant case would be 21st October 1975 as the workers services were terminated on 20-10-1975 and this therefore amounted to a breach of the provisions contained in sec. 79 of the Act and he therefore Sled a complaint against the accused.
(3.) The accused was tried before the learned Magistrate for the offence under sec. 92 of the Act. The learned Magistrate on the evidence led before him came to the conclusion that the factory was closed on 20 and that liquidation proceedings had been taken and that there was no dispute that before the day of the incident that is before 20 the Official Liquidator had been appointed in respect of the said company. It was also a fact that the accused had informed the Government about the closure of the factory and retrenchment of the workers. In the opinion of the learned Magistrate by virtue of the provisions of sec. 491 of the Companies Act 1956 on the appointment of a liquidator all the powers of the Board of directors and of the managing or the whole time directors managing agent secretaries and treasurers and manager if there be any of these shall cease except for the purpose of giving notice of such appointment to the Registrar in pursuance of section 493 or in so far as the company in general meeting or the liquidator may sanction the continuance thereof and that therefore the accused or any director of the company had no authority to make any such payment after the appointment of the Liquidator and this was also evident from the fact that as per the order passed by the High Court in company petition No. 31 of 1975 dated 23-10-1975 the Bank of India was directed to advance an amount of Rs. 3 0 0 for the purpose of making payment to the workers for arrears of wages which indicated that the accused was not in charge of the management of the company. He therefore passed the impugned order of acquittal aggrieved by which order the State has preferred this appeal.;

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