Limitation, Jurisdiction and Composition of Offences

Sections 111 and 114 do the same work in a different way. Section 111 takes the money penalties out of the criminal courts and gives them to an officer of Government, with an appeal. Section 114 lets most of the rest be compounded, that is settled for a fixed proportion of the maximum. Between them, the ordinary consequence of a contravention under this Code is an administrative payment rather than a trial.

Some words this chapter uses

Cognizance is a court taking notice of an offence so as to proceed with it.

Continuing offence is one that goes on from day to day, as distinct from one committed once.

Composition is the settlement of an offence or penalty by payment of a sum, after which no further proceedings lie.

Compoundable describes a penalty or offence which may be so settled.

Under Secretary and Deputy Secretary to the Government of India are ranks; the section requires the adjudicating officer and the appellate authority to be of those ranks or their equivalent in a State Government.

Unorganised workers, for the fund in section 115, has the meaning in section 2(m) of the Unorganised Workers Social Security Act 2008.

Section 110: the opportunity to comply, limitation, and the court

Section 110(1), the opportunity to comply. Notwithstanding anything in Chapter XII, the Inspector-cum-Facilitator shall not initiate prosecution proceedings against an employer for any offence under the Chapter without first giving him an opportunity to comply with the relevant provisions within a period of thirty days from the date of the notice giving that opportunity; and if the employer complies within that period, no such proceeding shall be initiated.

The proviso, the two exceptions. No such opportunity shall be accorded to an employer:

• in case of an accident; and
• if the violation of the same nature of the provisions under this Code is repeated within a period of three years from the date on which such first violation was committed,

and in such a case the prosecution shall be initiated in accordance with sub-section (2).

Section 110(2), limitation. No court shall take cognizance of any offence punishable under this Code unless a complaint is made within six months of the date on which the alleged commission of the offence came to the knowledge of the Inspector-cum-Facilitator, and the complaint is filed by him.

Section 110(3), the court. No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class shall try any offence punishable under this Code.

The Explanation, and it matters for computing the six months.

• (a) in the case of a continuing offence, the period of limitation is computed with reference to every point of time during which the offence continues;
• (b) where time is granted or extended on an application made by the employer for the performance of any act, the period of limitation is computed from the date on which the time so granted or extended expired.

Five points to hold.

The thirty days is a condition precedent to prosecution, not a defence. Without the notice, the prosecution may not be initiated at all.

Compliance within the period ends the matter. The Code says no such proceeding shall be initiated.

The proviso's second limb is narrower than it looks. It requires a violation of the same nature, repeated within three years from the date on which the first violation was committed, not from the date of any notice or conviction.

Limitation runs from knowledge, not from the offence. Six months from the date the commission came to the knowledge of the Inspector-cum-Facilitator, and only he may file the complaint.

Explanation (a) largely removes limitation for a continuing offence, because the period is computed with reference to every point of time during which the offence continues, so time begins afresh while it continues.

Section 111: penalties imposed by an officer

Section 111(1). Notwithstanding section 110, for the purpose of imposing penalty under section 12(3), or sections 94, 96, 97, 99, 106 and section 114(3), the appropriate Government may appoint any officer not below the rank of Under Secretary to the Government of India, or an officer of equivalent rank in the State Government, for holding an inquiry in the manner prescribed by the Central Government.

Section 111(2), the inquiry. The officer has power to summon and enforce the attendance of any person acquainted with the facts to give evidence or produce any document which in his opinion may be useful or relevant; and if on the inquiry he is satisfied that the person has committed any offence under those provisions, he may impose such penalty as he thinks fit in accordance with them.

Section 111(3), the appeal. Any person aggrieved may appeal, in the prescribed form and manner and on the prescribed fee, to an appellate authority appointed by the appropriate Government from among officers not below the rank of Deputy Secretary to the Government of India or of equivalent rank in the State Government, within sixty days from the date on which the copy of the order is received by him.

Section 111(4). The appellate authority shall, after giving the parties an opportunity of being heard, pass such order as he thinks fit, confirming, modifying or setting aside the order appealed against, within sixty days from the date of receipt of the appeal.

Section 111(5), non-payment. Where a person fails to pay the penalty within ninety days from the date of receipt of the copy of the order, he shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend up to two lakh rupees.

Section 111(6). The amount of penalty imposed and received shall be credited to the fund established under section 115(1).

Two features worth naming. The scheme is a complete administrative process: inquiry with power to summon, decision, appeal to a higher officer, both stages timed at sixty days, and a criminal sanction only for non-payment. And the money does not go to general revenue; it goes to the Social Security Fund for unorganised workers under section 115.

Note also which penalties are on the list: section 12(3) (a medical practitioner's failure to report a notifiable disease), 94 (general penalty), 96 (registers and returns), 97 (contravention and employment orders), 99 (omission to furnish), 106 (offences by employees) and 114(3) (failure to comply with a composition order). Every one of them is a penalty, not a punishment; the sections carrying imprisonment are not adjudicated by an officer.

Sections 112 and 113: where, and what the court may order

Section 112, jurisdiction. For the purpose of conferring jurisdiction on any court in relation to an offence under the Code, the rules, regulations or bye-laws in connection with an establishment, the place where the establishment is for the time being situated shall be deemed to be the place where the offence has been committed.

That answers a real difficulty. A decision taken in a head office in one city produces a contravention at a plant in another. The Code fixes jurisdiction at the establishment, which is where the workers and the evidence are.

Section 113, remedial orders. Where the employer of a mine, factory or dock is convicted of an offence under the Code, the court may, in addition to any punishment, by order in writing require him, within the period specified in the order, which the court may extend from time to time on application, to take such measures as may be specified for remedying the matters in respect of which the offence was committed.

Section 113(2), the effect of such an order. Where an order is made, the employer shall not be liable under the Code in respect of the continuance of the offence during that period or extended period; but if on the expiry of the period the order has not been fully complied with, he shall be deemed to have committed a further offence and shall be punishable with imprisonment up to six months, or with fine which may extend to one hundred rupees for every day after the expiry on which the order has not been complied with, or with both.

Section 113 is the only provision in Chapter XII that requires the danger to be fixed, and it should be identified as such in an answer. Its weaknesses are equally plain: it applies only after conviction, only to a mine, factory or dock, the period is extendable, and the daily fine for disobeying it is one hundred rupees, which appears to be an amount carried forward from a much older statute.

Section 114: composition

Section 114(1), what may be compounded and at what rate. Notwithstanding the Code of Criminal Procedure 1973, any penalty under section 12(3), 94, 96, 97(1), 99, 106 or 113(3), or any offence under section 97(2), 100(1), 101, 103(1)(b), 105 or 113(2), may, either before or after the holding of the inquiry or the institution of prosecution, be compounded by such officer of the appropriate Government as may be notified, in the prescribed manner:

• (a) in the case of a penalty, for a sum of fifty per cent of the maximum penalty provided for it; and
• (b) in the case of an offence, for a sum of seventy five per cent of the maximum fine provided for it.

Section 114(2), the effect. The person is discharged of the penalty or offence and there shall be no further proceedings against him in respect of it.

Section 114(3), failure to comply. A person who fails to comply with an order made by the compounding officer is liable to a penalty equivalent to twenty per cent of the maximum penalty or fine, in addition to the penalty or fine.

Section 114(4). The amount of composition received shall be credited to the fund established under section 115(1) for the unorganised workers.

Section 114(5), the bar. This is the sub-section to remember. Nothing in sub-section (1) applies to a penalty or an offence committed by a person for a second or subsequent time within a period of three years from the date of the earlier penalty or offence, (a) which was earlier compounded, or (b) for which the person was earlier convicted.

Four points.

The two rates differ and are commonly confused. A penalty compounds at fifty per cent of the maximum penalty; an offence compounds at seventy five per cent of the maximum fine.

Composition may come before or after the inquiry or prosecution.

Notably, section 103(1)(b) is compoundable. That is the accident section, in its serious bodily injury limb. Section 103(1)(a), death, is not on the list, and neither are sections 95, 98, 102 or 104. So the Code permits a serious injury case to be settled for money, and does not permit a death case to be.

And the three year bar mirrors the proviso to section 110(1), which likewise withholds the opportunity to comply where a violation of the same nature is repeated within three years. Both provisions accept a first failure and refuse to accept a second.

A worked example

An Inspector-cum-Facilitator visits Chandrapur Alloys and finds that the wage register has not been maintained for eight months and that no returns have been filed for two quarters.

May he prosecute at once? No. Under section 110(1) he must first give the employer an opportunity to comply with the relevant provisions within thirty days from the date of the notice, and if the employer complies within that period, no proceeding shall be initiated.

The company reconstructs the register and files the returns within the thirty days. No proceeding is initiated.

Fourteen months later the register is again not maintained. Now the proviso applies: no opportunity is to be accorded where a violation of the same nature is repeated within three years from the date on which the first violation was committed, and the prosecution proceeds under section 110(2).

By when must the complaint be made? Within six months of the date on which the alleged commission of the offence came to the knowledge of the Inspector-cum-Facilitator, and the complaint must be filed by him: section 110(2). As non-maintenance is a continuing offence, Explanation (a) computes the period with reference to every point of time during which the offence continues.

Which court? No court inferior to a Metropolitan Magistrate or a Judicial Magistrate of the First Class: section 110(3).

Where? The place where the establishment is for the time being situated is deemed to be the place where the offence was committed: section 112.

The failure to maintain the register carries a penalty under section 96. Must it go to court at all? No. Under section 111 the appropriate Government may appoint an officer not below the rank of Under Secretary, or of equivalent rank in the State Government, to hold an inquiry and impose the penalty. He may summon witnesses and documents.

The company is aggrieved by his order. It may appeal within sixty days of receiving the copy of the order to an appellate authority not below the rank of Deputy Secretary or equivalent, who must hear the parties and confirm, modify or set aside the order within sixty days of receipt of the appeal: section 111(3) and (4).

It does not pay. Failure to pay within ninety days of receipt of the copy of the order is punishable with fine of not less than twenty five thousand and up to two lakh rupees: section 111(5). What it does pay is credited to the fund under section 115(1): section 111(6).

Could the penalty under section 96 have been compounded instead? Yes. Section 96 is in the list in section 114(1), and being a penalty it compounds at fifty per cent of the maximum penalty, that is fifty per cent of one lakh rupees. On composition the company is discharged and there are no further proceedings: section 114(2).

A separate incident: a worker suffers serious bodily injury. The offence under section 103(1)(b) is compoundable, and being an offence it compounds at seventy five per cent of the maximum fine. Had the worker died, section 103(1)(a) is not in the list, and the case could not be compounded.

The company had compounded a section 96 penalty two years ago. Then section 114(5) bars composition of a penalty or offence committed for a second or subsequent time within three years from the date of a penalty or offence earlier compounded or for which it was earlier convicted.

On conviction over the accident, may the court require the guard to be fitted? Yes. Under section 113(1), the employer of a mine, factory or dock convicted of an offence may be required by order in writing, within a specified period, to take such measures as may be specified for remedying the matters in respect of which the offence was committed. During that period he is not liable for the continuance of the offence, but if the order is not fully complied with by the expiry, he is deemed to have committed a further offence, punishable with imprisonment up to six months, or a fine up to one hundred rupees for every day of non-compliance after the expiry, or both: section 113(2).

What this does NOT mean

Section 110(1) is not a defence raised at trial. It is a condition on initiating the prosecution.

The opportunity to comply is not available for everything. It is withheld in case of an accident, and where a violation of the same nature is repeated within three years of the first.

Limitation does not run from the offence. It runs from the date it came to the knowledge of the Inspector-cum-Facilitator, and only he may file the complaint.

Section 111 does not apply to every offence. It lists sections 12(3), 94, 96, 97, 99, 106 and 114(3), all of which are penalties.

Section 113 is not available before conviction, and not for every establishment; it applies to a mine, factory or dock.

A remedial order does not suspend liability indefinitely. Non-compliance by the expiry is a further offence.

Composition is not at a single rate. A penalty compounds at fifty per cent of the maximum penalty; an offence at seventy five per cent of the maximum fine.

Not every offence may be compounded. Death under section 103(1)(a) is not on the list, nor are sections 95, 98, 102 and 104.

Composition is not available to a repeat offender. Section 114(5) bars it for a second or subsequent penalty or offence within three years of one earlier compounded or convicted.

Limits and criticism

Section 110(1) gives every employer one free contravention of every provision. Since compliance within thirty days ends the matter entirely, the ordinary consequence of being caught is being told to stop, and the Code's several hundred duties become enforceable only against the employer who refuses.

The proviso's protection depends on the phrase "violation of the same nature". An employer whose failures are spread across different provisions may never repeat a violation of the same nature, and may receive the thirty day notice indefinitely.

Limitation of six months from the inspector's knowledge is short for a Code enforced by a thin inspectorate, particularly for occupational disease, which shows itself years after the exposure.

Only the Inspector-cum-Facilitator may complain. No worker, no union and no injured person can set a prosecution in motion, and the Code provides no remedy against an inspector who does not.

Section 113's daily fine of one hundred rupees is not a sanction. It is a figure carried forward from an older statute and it does not correspond to any cost of compliance today.

Section 114 makes a serious injury case compoundable. An offence under section 103(1)(b), which by definition required a contravention resulting in serious bodily injury, may be settled for seventy five per cent of the maximum fine before any prosecution is instituted, and section 103's compensation proviso, which lets the court send half the fine to the victim, has no counterpart in composition. What the injured worker receives from a composition is nothing.

And the money from penalties and composition goes to a fund for unorganised workers, which is a good use of it, but not to the workers of the establishment where the contravention occurred.

Quick revision

• Section 110(1): the Inspector-cum-Facilitator must give the employer thirty days from the notice to comply before initiating prosecution, and if he complies, no proceeding shall be initiated. Proviso: no such opportunity in case of an accident, or where a violation of the same nature is repeated within three years from the date the first was committed.
• Section 110(2): no cognizance unless a complaint by the Inspector-cum-Facilitator within six months of the date the offence came to his knowledge.
• Section 110(3): trial only by a Metropolitan Magistrate or Judicial Magistrate of the First Class or higher.
• Explanation: for a continuing offence, limitation is computed with reference to every point of time during which it continues; where time was granted or extended on the employer's application, from the date that time expired.
• Section 111: an officer not below Under Secretary rank may hold an inquiry, summon persons and documents, and impose the penalties under sections 12(3), 94, 96, 97, 99, 106 and 114(3); appeal within sixty days to an officer not below Deputy Secretary rank, decided within sixty days after a hearing; non-payment within ninety days is punishable with a fine of twenty five thousand to two lakh rupees; the money goes to the section 115(1) fund.
• Section 112: the place where the establishment is for the time being situated is deemed the place of the offence.
• Section 113: after conviction, the court may order the employer of a mine, factory or dock to remedy the matters within a specified, extendable period; during it he is not liable for continuance, and on non-compliance at the expiry he commits a further offence punishable with six months, or one hundred rupees a day, or both.
• Section 114: listed penalties compound at fifty per cent of the maximum penalty, listed offences at seventy five per cent of the maximum fine, before or after inquiry or prosecution; composition discharges and ends proceedings; failure to comply with the compounding order adds twenty per cent of the maximum; the money goes to the section 115(1) fund; and composition is barred for a second or subsequent penalty or offence within three years of one earlier compounded or convicted.

Test yourself

1. What must an Inspector-cum-Facilitator do before prosecuting an employer, and when is that not required? He must give the employer an opportunity to comply with the relevant provisions within thirty days from the date of the notice, and if the employer complies, no proceeding shall be initiated: section 110(1). No such opportunity is accorded in case of an accident, or where a violation of the same nature of the provisions is repeated within three years from the date on which the first violation was committed.

2. State the limitation for taking cognizance, and who may complain. A complaint must be made within six months of the date on which the alleged commission of the offence came to the knowledge of the Inspector-cum-Facilitator, and it must be filed by him: section 110(2). For a continuing offence the period is computed with reference to every point of time during which the offence continues.

3. Which court may try an offence under the Code? No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class: section 110(3). By section 112, jurisdiction is at the place where the establishment is for the time being situated.

4. Describe the adjudication of penalties under section 111. An officer not below the rank of Under Secretary to the Government of India, or of equivalent rank in a State Government, holds an inquiry in the prescribed manner, with power to summon and enforce the attendance of persons and the production of documents, and if satisfied that an offence under section 12(3), 94, 96, 97, 99, 106 or 114(3) has been committed, may impose such penalty as he thinks fit in accordance with those provisions. An appeal lies within sixty days of receipt of the order to an authority not below the rank of Deputy Secretary, who must decide within sixty days after hearing the parties, confirming, modifying or setting aside the order. Failure to pay within ninety days is punishable with a fine of not less than twenty five thousand and up to two lakh rupees, and amounts received go to the section 115(1) fund.

5. What may a court order under section 113, and what follows from disobedience? Where the employer of a mine, factory or dock is convicted, the court may, in addition to any punishment, by order in writing require him within a specified period, extendable on application, to take such measures as are specified for remedying the matters in respect of which the offence was committed. He is then not liable for the continuance of the offence during that period; but if the order is not fully complied with on its expiry, he is deemed to have committed a further offence, punishable with imprisonment up to six months, or a fine up to one hundred rupees for every day of continued non-compliance, or both.

6. State the two compounding rates and the bar on composition. A penalty may be compounded for fifty per cent of the maximum penalty; an offence for seventy five per cent of the maximum fine: section 114(1)(a) and (b). Composition is not available where the penalty or offence is committed for a second or subsequent time within three years from the date of one which was earlier compounded, or for which the person was earlier convicted: section 114(5).

7. Why is the inclusion of section 103(1)(b) among the compoundable offences criticised? Because that offence, by definition, requires a contravention which has resulted in an accident causing serious bodily injury. It may be settled for seventy five per cent of the maximum fine, before or after any prosecution, and the composition provisions contain no counterpart of the proviso to section 103 under which the court may direct not less than fifty per cent of the fine to be paid as compensation to the victim. The injured worker therefore receives nothing from a composition.