RESERVE BANK OF INDIA & ANR.versusSTATE REP. BY M.R. BHAVSAR, BOMBAY

                               [2008] 13 S.C.R. 1212


       A               RESERVE BANK OF INDIA & ANR.
                                         V.
                   STATE REP. BY M.R. BHAVSAR, BOMBAY
                       (Criminal Appeal No.61 of 2002)
                             SEPTEMBER 30, 2008                             '
       B
               (DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM
                              SHARMA, JJ.)

                The Contract Labour (Regulation and Abolition) Act,
       c   1970; Ss. 2(e) and 7/Code of Criminal Procedure, 1973; S.482:
               Office/establishment of Government - College of Agri-
         cultural Banking run by Reserve Bank of India - Issuance of
         show cause Notice for alleged contravention/violation of pro-
         visions under s. 7 of the Act - Application for quashing of pro-
       D ceeding dismissed by High Court - Correctness of - Held:
         Incorrect - High Court proceeded on an erroneous basis that
         RBI is an office/department of Government - The conclusion
         is clearly contrary to Scheme of RBI Act -Hence, judgments
         of High Coult and also proceeding initiated against the ap-
       E pel/ant quashed - Reserve Bank of India Act.
               In a complaint filed against the principal of a College
         of Agricultural Banking, the enforcement officer issued a
         Show Cause Notice alleging violation of provisions un-
         der s.7 of the Contract Labour (Regulations and Aboli-
       F tion) Act, 1970. The Principal, appellant in the connected
         appeal, filed an application for quashing of the proceed-
         ings on the ground that the Act does not apply to the Re-
         serve Bank of India and/or the College because neither
         of them can be treated to be established under the Act.
       G The Application was dismissed by the High Court. Hence
         the present appeal.
               Allowing the appeals, the Court
               HELD: A bare reading of the provisions under s.2(e)
       H                           1212
....
        RESERVE BANK OF INDIA & ANR. v. STATE    1213
 REP. BY M.R. BHAVSAR, BOMBAY [DR. ARIJIT PASAYAT, J.]

of the Contract Labour (Regulations and Abolition) Act, A
1970 makes the position clear that the Act applies to an
establishment which is either an office or department of
the Government or local authority in terms of Section 2(e)(i)
of the Act. It is not the case of the respondent that Sec-
tion 2(e)(i) has application to the facts of the case. The B
High Court proceeded on an erroneous basis that RBI is
an office or department of the Government. This conclu-
sion is clearly contrary to the scheme of the RBI Act.
Hence, the prosecution initiated on the basis of the com-
plaints filed cannot be maintained. Impugned judgments C
of the High Court are quashed, so also the proceedings
initiated on the basis of the complaints filed. (Paras -7 &
8) [1215,G-H; 1216,A-B]
     C~IMINALAPPELLATE JURISDICTION: Criminal Appeal
No. 61 of 2002                                                      D
     From the Judgment and Order dated 23.2.2001 of the High
Court of Judicature at Bombay in Crominal Application No. 3089
of 1993
      Raju Ramachandran, Kuldeep S. Parihar and H.S. Parihar        E
for the Appellant.
     Varuna Bhandari Gugnani, D.S. Mahra and B.V. Balaram
Das for the Respondent.
     The Judgment of the Court was delivered by                     F
       DR. ARIJIT PASAYAT, J. 1. Challenge in these appeals
is to the judgment of the learned Single Judge of the Bombay
High Court, dismissing the applications filed questioning issu-
ance of process and also prosecution by which they are sought
to be prosecuted for alleged contravention of provisions of Sec- G
tion 7 of the Contract Labour (Regulation and Abolition) Act,
1970 (in short the 'Act'). The appellant in Criminal Appeal no.62/
2002 is Principal of the College of Agricultural Banking, Pune
(in short 'the College'), which is run by the Reserve Bank of
India (in short 'RBI'), the appellant in criminal appeal no R~/200?. H
    1214       SUPREME COURT REPORTS                    [2008] 13 S.C.R.


A   The Labour Enforcement Officer (Central) issued show-cause
    notice alleging that there was violation of the provisions of the
    Act thereby attracting prosecution. The appellants in Criminal
    Appeal no.61/2002 took the stand before the High Court that
    the Act does not apply to the RBI and/or the college because
    neither can be treated to be an establishment under the act.             '
B
    The High Court did not accept the stand and held that there
    was no scope of exerCising power in terms of Section 482 of
    the Code of Criminal Procedure, 1973 (in short 'the Code') or
    Article 226 of the Constitution of India, 1950 (in short 'the Con-
c   stitution'). The High Court found that the appellants are not pros-
    ecuted as an industry but as a government department/office
    and, therefore, can be treated to be an establishm_ent under the
    Act. Accordingly, the petitions were dismissed.

       2. Learned counsel for the appellants submitted that the
D High Court has failed to notice that neither the RBI nor the Col-
  lege can be treated to be an establishment as it is neither a
  governmental department nor an office.

          3. Learned counsel for the respondent submitted that
    whether it is a governmental department or office has to be
E   adjudicated in the trial and the High Court was justified in re-
    jecting the petitions filed in terms of Section 482 of the Code              r,-
    and Article 226 of the Constitution.

          4. RBI is constituted under the Reserve Bank of India Act,
F   1934 (in short 'RBI Act'). In the introduction of RBI Act it is stated   .
    as follows:
           "To regulate the issue of Bank notes and for the keeping
           of reserves with a view to securing monetary stability in
           British India and generally to operate the currency and
G          credit system of the country to its advantage it was found
           expedient to constitute a Reserve Bank of India.
           Accordingly, the Reserve Bank of India Bill was introduced
                                                                             ~
           in the Legislature."
           5. The preamble to the Act reads as follows:
H
        RESERVE BANK OF INDIA & ANR. v. STATE    1215
 REP. BY M.R. BHAVSAR, BOMBAY [DR. ARIJIT PASAYAT, J.]

     "An Act to Constitute a Reserve Bank of India                   A
     WHEREAS it is expedient to constitute a Reserve Bank
     for India to regulate the issue of Bank notes and the keeping
     of reserves with a view to securing monetary stability in
     India and generally to operate the currency and credit
     system of the country of its advantage;                         B
     AND WHEREAS in the present disorganization of the
     monetary systems of the world it is not possible to
     determine what will be suitable as a permanent basis for
     the Indian monetary system;                                     c
     BUT WHEREAS it is expedient to make temporary
     provision on the basis of the existing monetary system,
     and to leave the question of the monetary standard best
     suited to India to be considered when the international
     monetary position has become sufficiently clear and stable      D
     to make it possible to frame permanent measures;
     It is hereby enacted as follows:-"
      6. Section 2(aii) of the RBI Act defines the "Bank" to mean
Reserve Bank of India constituted by the Act. The expression E
"establishment" is defined in Section 2(e) of The Contract
Labour (Regulation and Abolition) Act, 1970 and reads as fol-.
lows:
     "establishment" means -
                                                                     F
     (i)    any office or department of the Government or a local
            authority, or            ·
     (ii)   any place where any industry, trade, business,
            manufacture or occupation is carried on;"
                                                                     G
      7. A bare reading of the provisions makes the position
clear that the Act applies to an establishment which is either an
office or department of the Government or local authority in terms
of Section 2(e)(i). It is not the case of the respondent that Sec-
tion 2(e)(ii) has application to the facts of the case. It is only   H
    1216       SUPREME COURT REPORTS                 [2008] 13 S.C.R.


A   based on Section 2(e)(i). The High Court proceeded on an er-
    roneous basis that RBI is an office or department of the Gov-
    ernment. This conclusion is clearly contrary to the scheme of
    the RBI Act.
          8. That being the position, the prosecution initiated on the
B   basis of the complaints filed cannot be maintained. Impugned
    judgments of the High Court are quashed, so also the proceed-
    ings initiated on the basis of the complaints filed.

           9. The appeals are accordingly allowed.
C S.K.S.                                           Appeals allowed.