JUDGMENT K.N. Seth, J.
1. The respondents, who are Directors of the Laxmi Ratan Cotton Mills Company Limited Kanpur, were prosecuted on a complaint, filed by the Provident Fund Inspector, U.P. after obtaining previous sanction of Labour Commissioner U.P. under Section 14(3) of the Employees' Provident Funds Act, 1952 (hereinafter referred to as the Act). It was alleged that respondents failed to invest the employees' and employers' contributions for the months of July 'August and September 1965 within the specified period and thereby rendered themselves liable to penalty provided under Sub-section (2A) of Section 14 of the Act.
2. Pleading not guilty the respondents, inter alia, challenged the validity of the sanction granted by the Labour Commissioner U.P. for the prosecution. It was contended that the Central Government alone was competent to specify the authority to accord sanction for the prosecution and as the Labour Commissioner U.P. had not been so specified by the Central Government, the sanction granted by him was invalid and incompetent and no cognizance could be taken of the offence alleged to have been committed by the respondents. The trial Magistrate repelled this contention and convicted the respondents. On appeal the learned Sessions Judge. Kanpur relying on R.K.L. Gupta v. Ram Babu Lal 1969 All LJ 722 held that the Central Government alone could authorise the Labour Commissioner U.P. to accord the sanction and as the Labour Commissioner U.P. was not authorised by the Central Government, there was no proper sanction for the prosecution and no cognizance could be taken by the learned Magistrate. The State of U.P. through the Provident Fund Inspector preferred an appeal to this Court which came up before a Division Bench, The Bench felt that in R.K.L. Gupta's case 1969 All LJ 722 (Supra) this Court was not called upon to decide the question which was in controversy in the present case, but in view of certain observations made in that case it was desirable to refer the following question to a larger Bench:
As to whether by virtue of notification No. S.R.0. 1258 dated 10.4.1957 issued by the Central Government under Section 19 of the Employees' Provident Funds Act, 1952 and the corresponding notification No 5392 (ST) XXXVIA 261-54 dated December 14, 1960, issued by the Government of Uttar Pradesh. Sri J.N. Tiwari, Labour Commissioner. Uttar Pradesh, was the duly specified authority for issuing sanction under Sub-section (3) of Section 14 of the said Act for launching the prosecution for contravening the provisions of the Employees' Provident Funds Act (19 of 1952).
3. Under Sub-section (3) of Section 14 of the Act no court is to take cognizance of any offence punishable under the Act or under any Scheme except on a complaint made with the previous sanction of such authority as may be specified In this behalf by the appropriate Government. It is not disputed that the appropriate Government in relation to the Company, of which the respondents are Directors is the Central Government. The sanction could therefore, be granted by an authority to be specified in this regard by the Central Government.
4. Section 19 of the Act, which deals with the delegation of powers, provides:
19. Delegation of powers - The appropriate Government may direct that any power or authority or jurisdiction exercisable by it under this Act or any Scheme shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also-
(a) Where the appropriate Government is the Central Government, by such officer or authority subordinate to the Central Government or by the State Government or by such officer or authority subordinate to the State Government, as may be specified in the notification; and
(b) Where the appropriate Government is a State Government, by such officer or authority subordinate to the State Government as may be specified in the notification.
Under the aforesaid provision the Central Government is authorised to delegate its powers, authority or jurisdiction under the Act to any officer or authority subordinate to it or to the State Government or to such officer or authority subordinate to the State Government as may b specified in the notification. In exercise of this power the Central Government issued a notification No. S.R.O. 1258 dated 10.4.1957. which runs as follows:
In exercise of the powers conferred by Section 19 of the Employees' Provident Funds Act, 1952 (19 of 1952) and in super session of the notification of the Government of India in the Ministry of Labour No. S.R.O. 3527 dated the 4th December, 1954, the Central Government hereby directs that the powers exercisable by it as the appropriate Government Under Sub-section (3) of Section 14 of the said Act to specify the authority to issue the sanction referred to in the said subsection shall also be exercisable within each of the States specified in the Schedule annexed hereto by the Government of that State.
The State of Uttar Pradesh was mentioned at serial No. 12 of the Schedule. By the aforesaid notification the Central Government. being the appropriate Government to specify the authority to issue the sanction referred to in Section 14(3), delegated its power to specify the authority to grant sanction to the State Government concerned. In pursuance of this power the U.P. Government issued a notification No. 5392 (ST)/ XXXVI-A-261-54 dated December 14, 1960, specifying the Labour Commissioner U.P. as the authority empowered to grant the sanction as contemplated under Section 14(3) of the Act, which reads as follows:
In super session of the State Government notification No. U/15 (SM)/XXXVI-A-216-54 dated February 19, 1955, and in exercise of the power conferred by Sub-section (3) of Section 14 of the Employees' Provident Funds Act, 1952 (Act No. XIX of 1952), read with Government of India. Ministry of Labour notification No. P.F. 11/43(77) dated April 10, 1967 the Governor of Uttar Pradesh hereby specifies the Labour Commissioner. Uttar Pradesh, as the authority for the purposes of the aforesaid sub-section in respect of all industrial purposes of the aforesaid subsection in respect of all (sic) industries falling within the State or the Central sphere.
The power of the Central Government to specify the authority who could accord sanction for lodging a complaint in respect of any offence punishable under the Act or under any Scheme was delegated to the State Government which in exercise of that delegated power, specified line Labour Commissioner as the authority competent to grant such sanction. Under Section 14(3) of the Act the power to grant sanction is to be exercised not by the appropriate Government but by some authority to be specified by that Government. It is open to the appropriate Government to specify the authority itself or under Section 19 of the Act it may dele-sate its power to a State Government. Under the delegated power the State Government is vested with the power to specify an authority competent to grant the sanction. The State Government by a notification specified the Labour Commissioner as that authority. The Labour Commissioner U.P. in exercise of such power sanctioned the prosecution of the accused in the case.
5. It appears that the attention of the Bench deciding R.K.L. Gupta's case 1969 All LJ 722 (Supra) was not invited to the notification dated 10.4.1957 issued by the Central Government and the notification dated 14.12.1960 issued by the Government of Uttar Pradesh by virtue of the powers delegated to it by the Central Government under Section 19 of the Act. The observations made in R.K.L. Gupta's case 1969 All LJ 722 (supra) that only the Central Government could authorise the Labour Commissioner U.P. to accord sanction does not appear to us to be acceptable.
6. The learned Counsel for the respondents sought to question the validity of the notifications dated1 10.4.1957 and 14.12.1960 but had to concede that this argument would be beyond the ambit of the question referred to us.
7. Our answer to the question referred to us is in the affirmative.
8. Let the papers of the case be laid before the appropriate Bench for decision of the Appeal.