General Penalties and Obstruction

Some words this chapter uses

Save as otherwise expressly provided in section 94 means that the general penalty applies only where the Code has not provided a specific one for that contravention.

Employer is defined in section 2(1)(u) and principal employer in section 2(1)(zz).

Standards are the safety and occupational health standards declared under section 18.

Wilfully in section 95 means deliberately, so an accidental failure is outside it.

Requisition is a demand made by an officer in exercise of a power.

Again convicted of an offence under the same provision is the Code's formula for a repeat offence; it requires an earlier conviction under the same provision, not merely an earlier contravention.

Section 94: the general penalty

Save as otherwise expressly provided in this Code, if in, or in respect of, any establishment there is any contravention of the provisions of this Code, or of regulations, rules, bye-laws or any standards made under it, or of any order in writing given under the Code or those regulations, rules, bye-laws or standards, then:

• the employer or the principal employer of the establishment, as the case may be, shall be liable to penalty which shall not be less than two lakh rupees but which may extend up to three lakh rupees; and
• if the contravention is continued after the conviction, a further penalty which may extend to two thousand rupees for each day till the contravention continues.

Five points, and each is examinable.

It is residual. The opening words save as otherwise expressly provided mean section 94 applies only where the Code has not attached a specific penalty. Where sections 95 to 106 provide, they govern.

It reaches everything the establishment must obey, including rules, regulations, bye-laws, standards and written orders, not only the sections of the Code.

It names two possible offenders. The employer or the principal employer, as the case may be, which is how a contravention in respect of contract labour reaches the establishment that engaged them.

The floor is two lakh rupees. The court or authority cannot go below it.

The continuing penalty runs from the conviction, not from the contravention. Up to two thousand rupees for each day the contravention continues after the conviction. So the daily amount is a pressure to comply once the matter has been decided, not an addition to the original penalty.

Section 95: obstruction

Section 95(1), the four forms of obstruction. Whoever wilfully:

• (i) prevents or causes obstruction to a Chief Inspector-cum-Facilitator, an Inspector-cum-Facilitator, an officer of the appropriate Government, or a person authorised to discharge any duty or exercise any power under the Code or the rules, regulations or bye-laws, from discharging that duty or exercising that power; or
• (ii) refuses entry to the Chief Inspector-cum-Facilitator or the Inspector-cum-Facilitator, or to a person or public authority referred to in section 35(1)(i), or to an expert referred to in section 37, to any place where he is entitled to enter; or
• (iii) fails or refuses to produce any document which he is required to produce; or
• (iv) fails to comply with any requisition or order issued to him,

shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to one lakh rupees, or with both.

Section 95(2), the repeat offence. Where a person convicted of an offence punishable under sub-section (1) is again convicted of an offence under the same provision, he shall be punishable with imprisonment which may extend to six months, or with fine which shall not be less than one lakh rupees but which may extend to two lakh rupees, or with both.

Three features are worth stating.

"Wilfully" governs all four clauses. An accidental failure, or an inability to produce a document that has genuinely been lost, is not within the section.

Clause (ii) protects three classes of visitor, not only the inspectorate: the person or public authority an Inspector-cum-Facilitator may take with him under section 35(1)(i), and the expert under section 37 who conducts a third party audit or certification.

The second conviction changes the shape of the punishment. On a first conviction the fine has no floor; on a second it has a floor of one lakh rupees, and the imprisonment doubles to six months.

Section 96: registers, records and returns

Section 96(1). Any person required under the Code, the rules, regulations, bye-laws or an order made under them:

• (i) to maintain any register or other document, or to file returns, who omits or fails to do so; or
• (ii) to produce any register, plan, record, report or any other document, who omits or fails to produce it,

shall be liable to penalty which shall not be less than fifty thousand rupees but which may extend to one lakh rupees.

Section 96(2). On being again convicted of an offence under the same provision, he shall be liable to a penalty which shall not be less than fifty thousand rupees but which may extend to two lakh rupees.

Two points to notice.

The section covers two different failures. Not keeping the record, and not producing it. The second overlaps with section 95(1)(iii), and the difference is wilfulness: section 95 requires a wilful failure or refusal and carries imprisonment; section 96 covers a mere omission or failure and carries a penalty.

On a repeat, the floor does not move but the ceiling doubles. It stays at fifty thousand rupees and the maximum rises from one lakh to two lakh. Compare section 95(2), where the floor is introduced for the first time on the second conviction.

A worked example

An Inspector-cum-Facilitator arrives at Sahyadri Engineering with an expert appointed under section 37 to conduct a third party audit. The security staff, on the works manager's instructions, refuse the expert entry. The manager says the muster roll and wage register cannot be found. He also declines to produce the accident register.

Refusing the expert entry. That is section 95(1)(ii): refusing entry to an expert referred to in section 37 to a place he is entitled to enter. If done wilfully, it is punishable with imprisonment up to three months, or fine up to one lakh rupees, or both.

Refusing to produce the accident register. That is section 95(1)(iii), failing or refusing to produce a document he is required to produce, if the refusal is wilful; and it is also within section 96(1)(ii), omitting or failing to produce a register, which carries a penalty of not less than fifty thousand and up to one lakh rupees.

The registers were never kept at all. That is section 96(1)(i): omitting or failing to maintain a register or other document required to be maintained, again fifty thousand to one lakh rupees.

The company was convicted two years ago under section 96(1) and the registers are missing again. On being again convicted of an offence under the same provision, the penalty is not less than fifty thousand rupees and may extend to two lakh rupees: section 96(2).

A separate matter: the establishment has not complied with a safety standard declared under section 18, and the Code provides no specific penalty for it. Then section 94 applies. The employer or principal employer is liable to a penalty of not less than two lakh rupees and up to three lakh rupees.

The breach continues for forty days after the conviction. A further penalty which may extend to two thousand rupees for each day the contravention continues after the conviction: section 94.

The manager says he did not know the expert was entitled to enter. Section 95 requires the prevention, refusal or failure to be wilful, so his state of mind is in issue; but the entitlement of an expert appointed under section 37 is a matter of law, and a refusal on instructions is not an accident.

A contractor's workers are affected by the contravention and the establishment says the contractor is the employer. Section 94 names the employer or the principal employer of the establishment, as the case may be, which is how the establishment that engaged contract labour is reached.

What this does NOT mean

Section 94 is not the penalty for every contravention. It applies save as otherwise expressly provided, so a specific penalty elsewhere in Chapter XII displaces it.

It is not confined to breaches of sections. Rules, regulations, bye-laws, standards and written orders are all within it.

The daily penalty does not run from the contravention. It runs from after the conviction.

Section 95 does not punish an innocent failure. The prevention, refusal or failure must be wilful.

It does not protect only inspectors. It covers an officer of the appropriate Government, a person authorised under the Code, the person or public authority under section 35(1)(i) and the expert under section 37.

Section 96 is not the same offence as section 95(1)(iii). Section 96 catches an omission or failure and carries a penalty; section 95 catches a wilful failure or refusal and carries imprisonment.

The repeat provisions do not apply on a repeat contravention. They require the person to have been again convicted of an offence under the same provision.

Limits and criticism

Section 94 is a money penalty on the employer, and nothing else. For most of the Code, including a failure to provide drinking water, latrines, welfare facilities or the annual health examination, the only consequence is a sum of money on an establishment for which two lakh rupees may be a small figure. No provision requires the contravention to be remedied.

The floor may work against enforcement. A minimum of two lakh rupees for any contravention makes the penalty blunt: an authority faced with a trivial and a serious breach must impose at least the same sum for both, which invites the trivial breach to be ignored rather than penalised.

The daily penalty is capped at two thousand rupees. For an establishment saving far more each day by not complying, continuing is rational.

Section 95's fine has no floor on a first conviction, so a wilful refusal to admit an inspector may cost very little the first time.

Section 96 penalises the failure and not the consequence. The register is the evidence of everything else. An employer who keeps no record makes every other contravention unprovable, and pays between fifty thousand and one lakh rupees for the advantage.

No worker is compensated by any of these three sections. Compare section 103, where the court may direct that not less than fifty per cent of the fine be given as compensation to the victim or to his legal heirs.

Quick revision

• Section 94, general penalty: save as otherwise expressly provided, any contravention of the Code, rules, regulations, bye-laws, standards or written orders in or in respect of any establishment makes the employer or principal employer liable to a penalty of not less than two lakh and up to three lakh rupees, and, if continued after the conviction, a further penalty up to two thousand rupees a day.
• Section 95(1), obstruction, wilfully: (i) preventing or obstructing a Chief Inspector-cum-Facilitator, Inspector-cum-Facilitator, officer of the appropriate Government or authorised person; (ii) refusing entry to them, or to a person or public authority under section 35(1)(i), or an expert under section 37; (iii) failing or refusing to produce a document; (iv) failing to comply with a requisition or order. Imprisonment up to three months, or fine up to one lakh rupees, or both.
• Section 95(2): on a second conviction under the same provision, imprisonment up to six months, or fine of not less than one lakh and up to two lakh rupees, or both.
• Section 96(1): omitting or failing to maintain a register or document or file returns, or to produce a register, plan, record, report or other document: penalty not less than fifty thousand and up to one lakh rupees.
• Section 96(2): on a second conviction under the same provision, not less than fifty thousand and up to two lakh rupees.
• Penalty against punishment: sections 94 and 96 impose penalties; section 95 imposes punishment including imprisonment.

Test yourself

1. When does section 94 apply, and what is the range? Where there is any contravention, in or in respect of any establishment, of the Code, rules, regulations, bye-laws, standards or a written order made under them, and no express provision is otherwise made in the Code. The employer or principal employer is liable to not less than two lakh rupees and up to three lakh rupees, with a further penalty up to two thousand rupees for each day the contravention continues after the conviction.

2. Name the four acts punishable under section 95(1). Wilfully preventing or obstructing a Chief Inspector-cum-Facilitator, an Inspector-cum-Facilitator, an officer of the appropriate Government or an authorised person from discharging a duty or exercising a power; refusing entry to any of them, or to a person or public authority referred to in section 35(1)(i), or an expert referred to in section 37, to a place he is entitled to enter; failing or refusing to produce a document required to be produced; and failing to comply with a requisition or order.

3. What is the punishment under section 95, and how does a second conviction change it? Imprisonment up to three months, or fine up to one lakh rupees, or both. On being again convicted under the same provision: imprisonment up to six months, or fine of not less than one lakh and up to two lakh rupees, or both.

4. What does section 96 penalise, and what is the amount? Omitting or failing to maintain any register or other document or to file returns, and omitting or failing to produce any register, plan, record, report or other document. The penalty is not less than fifty thousand rupees and may extend to one lakh rupees, rising to a maximum of two lakh rupees on a second conviction under the same provision.

5. Distinguish section 95(1)(iii) from section 96(1)(ii). Both concern the failure to produce a document. Section 95(1)(iii) requires the failure or refusal to be wilful and is a punishment carrying imprisonment up to three months or fine up to one lakh rupees or both. Section 96(1)(ii) covers a mere omission or failure and is a penalty of not less than fifty thousand and up to one lakh rupees.

6. Give two criticisms of section 94. Any two of: it responds to a contravention with money and does not require it to be remedied; its floor of two lakh rupees applies alike to trivial and serious breaches, which makes enforcement blunt; the continuing penalty runs only after conviction and is capped at two thousand rupees a day, which may be less than the daily saving from not complying; and no part of the penalty reaches the worker, unlike section 103, where the court may direct at least half the fine to be paid as compensation.