Reserve Bank of India
& ANR. Vs. State Rep. by M.R. Bhavsar, Bombay  INSC 1671 (30
IN THE SUPREME COURT
OF INDIA CRIMINAL APPELLATE JURISDICITON CRIMINAL APPEAL NO. 61 OF 2002 Reserve
Bank of India & Anr. ...Appellants Versus State rep. by M.R. Bhavsar,
Respondent (With Crl.
Appeal No.62 of 2002)
Dr. ARIJIT PASAYAT,
in these appeals is to the judgment of the learned Single Judge of the Bombay
High Court, dismissing the applications filed questioning issuance of process
and also prosecution by which they are sought to be prosecuted for alleged
contravention of provisions of Section 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.61/2002. 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.
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
Constitution'). The High Court found that the appellants are not prosecuted as
an industry but as a government department/office and, therefore, can be
treated to be an establishment under the Act. Accordingly, the petitions were
counsel for the appellants submitted that the High Court has failed to notice
that neither the RBI nor the College can be treated to be an establishment as
it is neither a governmental department nor an office.
counsel for the respondent submitted that whether it is a governmental
department or office has to be adjudicated in the trial and the High Court was
justified in rejecting the petitions filed in terms of Section 482 of the Code
and Article 226 of the Constitution.
is constituted under the Reserve Bank of India Act, 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 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."
preamble to the Act reads as follows:
"An Act to
Constitute a Reserve Bank of India 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;
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
BUT WHEREAS it is
expedient to make temporary provision on the basis of the existing monetary
system, and to leave the 4 question of the monetary standard best suited to
India to be considered when the international monetary position has become
sufficiently clear and stable to make it possible to frame permanent measures;
It is hereby enacted
6. Section 2(aii) of
the RBI Act defines the "Bank" to mean Reserve Bank of India
constituted by the Act. The expression "establishment" is defined in
Section 2(e) of The Contract Labour (Regulation and Abolition) Act, 1970 and
reads as follows:
means - (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;"
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 Section 2(e)(ii) has application to the facts of the case. It
is only based on Section 2(e)(i). The High Court proceeded on an erroneous
basis that RBI is an office or department of the Government. This conclusion is
clearly contrary to the scheme of the RBI Act.
being the position, the prosecution initiated on the basis of the complaints
filed cannot be maintained. Impugned judgments of the High Court are quashed,
so also the proceedings initiated on the basis of the complaints filed.
appeals are accordingly allowed.
(Dr. ARIJIT PASAYAT)