Inspector , Facilitator, Offences & Penalties
Section 51. Appointment of Inspector-cum-Facilitators and their powers.
(1)
The appropriate Government may appoint Inspector-cum-Facilitators through a notification.
These officers can exercise the powers given under sub-section (4) in:
the entire State, or
specific geographical areas within the State, or
specific establishments (even if outside assigned geographical boundaries)
as decided by the Government.
In simple terms:
The Government decides where each Inspector-cum-Facilitator will have jurisdiction.
(2)
The Government may introduce an inspection scheme by notification.
This scheme may include:
web-based or online inspection processes,
electronic submission of inspection-related information.
This allows digital, transparent, and efficient inspections.
(3)
In addition to sub-section (2), the Government may give Inspector-cum-Facilitators the power to conduct random inspections, if specified in a notification.
Meaning:
Some inspections may not be pre-scheduled but selected randomly through the system.
(4)
Every Inspector-cum-Facilitator appointed under sub-section (1) is considered a public servant under section 21 of the Indian Penal Code.
This gives them official legal status and protection while performing their duties.
(5)
The Inspector-cum-Facilitator may:
(a)
Provide advice to employers and workers about complying with the Code.
(b)
Conduct inspections of establishments assigned to him by the Government,
subject to Government-issued guidelines or instructions.
In short:
They are not only enforcement officers but also advisors who help establishments comply with the law.
(6)
Subject to sub-section (4), the Inspector-cum-Facilitator may:
(a)
Examine any person found within the premises of the establishment if the Inspector-cum-Facilitator has reasonable cause to believe that the person is a worker of that establishment.
Meaning:
They can question people on-site to verify employment status.
(b)
Ask any person to provide information in their power regarding names and addresses of persons related to the establishment.
Meaning:
They can request identity-related details necessary for inspection.
(c)
Search, seize, or take copies of:
registers,
wage records,
notices, or
portions of such documents
if the Inspector-cum-Facilitator believes they are relevant to an offence under this Code and has reason to believe that the employer has committed such an offence.
Meaning:
They can collect documentary evidence during inspection.
(d)
Inform the appropriate Government about defects or abuses found in the establishment that are not covered by any existing law.
Meaning:
They can report gaps that need regulatory attention even if not currently legislated.
(e)
Use any additional powers that may be prescribed by the rules.
Meaning:
Future rules may give them more authority as needed.
(7)
Any person who is asked by an Inspector-cum-Facilitator to:
produce a document, or
provide any information
under sub-section (5) is considered legally bound to do so under sections 175 and 176 of the Indian Penal Code.
Meaning:
Refusing to provide documents or information when required by law can lead to legal consequences.
(8)
The rules and procedures of the Code of Criminal Procedure, 1973 (CrPC) will apply to any search or seizure carried out by the Inspector-cum-Facilitator under sub-section (5), as far as possible, in the same way that they apply to a search or seizure conducted under a warrant issued under section 94 of the CrPC.
In simple terms:
When the Inspector-cum-Facilitator searches or seizes documents, records, or registers under this Code,
He must follow the same safeguards, procedures, and legal standards used in CrPC when a court issues a warrant for search and seizure under section 94.
This ensures that:
searches are lawful,
the employer’s rights are protected, and
evidence is properly collected and handled.
Section 52. Cognizance of offences.
(1)
A court cannot take up (cannot “take cognizance” of) any offence under this Code unless the complaint is made by one of the following:
the appropriate Government, or
an officer authorised by the Government for this purpose, or
an employee, or
a registered Trade Union (registered under the Trade Unions Act, 1926), or
an Inspector-cum-Facilitator.
In simple terms:
Only these specified persons or authorities are allowed to file a valid complaint for prosecution under this Code.
A private outsider or unrelated person cannot initiate such cases.
(2)
Regardless of what the Criminal Procedure Code, 1973 normally provides, only the following courts can try offences under this Code:
a Metropolitan Magistrate, or
a Judicial Magistrate of the First Class.
Meaning:
Lower-level courts cannot try offences under this Code — only courts of these ranks have the authority.
Section 53. Power of officers of appropriate Government to impose penalty in certain cases.
(1)
Despite what Section 52 says about courts taking cognizance of offences, the appropriate Government may appoint a senior officer (not below the rank of Under Secretary to the Government of India or an equivalent State Government officer) specifically for the purpose of imposing penalties under:
Section 54(1)(a)
Section 54(1)(c)
Section 54(2)
Section 56(7)
This officer will conduct an enquiry in the manner prescribed by the Central Government.
In simple terms:
For certain penalties, instead of going to court, a senior Government officer can conduct the enquiry and impose penalties directly.
(2)
While conducting the enquiry, the officer appointed under sub-section (1) has the power to:
Summon any person who knows facts of the case,
Make them appear and give evidence,
Require them to produce documents that the officer considers relevant or useful.
If after the enquiry the officer is satisfied that the person has committed an offence under the sections mentioned in sub-section (1), the officer may impose the appropriate penalty.
In simple terms:
The officer has powers similar to a court for the purpose of enquiry—calling witnesses, collecting documents, and finally deciding whether a penalty should be imposed.
Section 54. Penalties for offences.
(1)
This section specifies penalties for employers who violate the provisions of this Code.
(a)
If an employer pays an employee less than what the Code requires, the employer can be punished with a fine up to ₹50,000.
In simple terms:
Underpayment of wages can lead to a substantial financial penalty.
(b)
If an employer has already been convicted once for underpaying wages under clause (a), and is found guilty again within five years, then on the second or further offence:
the employer may face imprisonment up to 3 months, or
a fine up to ₹1,00,000, or
both.
Meaning:
Repeat offenders face stricter punishment including possible jail time.
(c)
If an employer violates any other provision of this Code (i.e., not underpayment of wages) or any rule or order issued under it, then the employer is punishable with a fine up to ₹20,000.
Example:
Not issuing wage slips, not maintaining registers, not displaying notices, etc. fall under “other provisions.”
(d)
If an employer has already been convicted once for an offence under clause (c) and is again found guilty within five years, then on the second or subsequent offence:
the employer may face imprisonment up to 1 month, or
a fine up to ₹40,000, or
both.
Meaning:
Repeat violations of general provisions also result in harsher penalties.
(2)
Despite the general penalties in Section 54(1), if the offence relates specifically to:
not maintaining records, or
improperly maintaining records
in the establishment (such as registers, wage records, attendance, etc.), then:
The employer is punishable with a fine up to ₹10,000.
This is a separate, specific penalty for record-related violations.
(3)
Even though penalties exist under Section 54(1)(c) and Section 54(2), the law provides a compliance-first opportunity.
Before starting prosecution for these offences, the Inspector-cum-Facilitator must:
Give the employer a written direction requiring compliance.
Specify a time period within which the employer must fix the violation.
If the employer complies within the given time, then:
No prosecution will be initiated.
However:
If the same type of violation is repeated within five years, then the employer will not be given another opportunity to comply.
In this case, prosecution must be initiated directly according to the Code.
Section 55. Offences by companies.
(1)
When an offence under this Code is committed by a company, then:
Every person who was in charge of and responsible for the conduct of the company’s business at the time of the offence, and
The company itself
will be considered guilty and can be prosecuted and punished.
Proviso:
Such a person will not be punished if they can prove either:
The offence happened without their knowledge, or
They exercised all due diligence to prevent the offence.
In simple terms:
Company heads and responsible officers are liable—but they can escape punishment if they prove lack of knowledge or that they took all reasonable steps.
(2)
Even if a person is not generally in charge of the company’s business, they can still be punished if:
The offence was committed with their consent, or
Done with their connivance (i.e., they knowingly allowed it), or
Caused due to their neglect.
This applies to:
directors
managers
secretaries
any other officers of the company
If any of them were involved through consent, connivance, or negligence, they are also deemed guilty and can face punishment.
In simple terms:
If any senior officer helped, allowed, or carelessly caused the offence, they are also liable.
Explanation
(a)
A “company” means any body corporate and includes:
a firm
a limited liability partnership (LLP) registered under the LLP Act, 2008
any association of individuals
Meaning:
The liability rules apply not just to companies but also to firms, LLPs, and associations.
(b)
A “director” in the case of a firm means a partner.
Meaning:
Partners in a firm are treated like directors for liability purposes.
Section 56. Composition of offences.
(1)
Despite what the Criminal Procedure Code says, certain offences under this Code can be compounded (i.e., settled by paying a prescribed amount instead of facing prosecution).
This applies only to offences not punishable with imprisonment alone or with imprisonment plus fine.
Key points:
The accused person can apply for compounding before or after prosecution begins.
A Gazetted Officer, notified by the appropriate Government, may compound the offence.
The amount to be paid for compounding is 50% of the maximum fine for that offence.
The procedure will be as prescribed in the rules.
In simple terms:
For minor, fine-based offences, the accused can pay half of the maximum fine to settle the case without a full trial.
(2)
Compounding is not allowed if the person has committed a second or subsequent similar offence within 5 years, counted from:
(i) the date of the earlier similar offence that was compounded, or
(ii) the date of the earlier similar offence that resulted in conviction.
In simple terms:
Repeat offenders within 5 years cannot settle by compounding. They must face prosecution.
(3)
The Gazetted Officer who is authorised to compound offences must exercise his powers under:
the direction,
control, and
supervision
of the appropriate Government.
Meaning:
The officer cannot act independently—his compounding decisions remain under government oversight.
(4)
Applications for compounding offences must be made in the prescribed manner as laid out in the rules.
Meaning:
There will be a specific form and procedure that must be followed.
(5)
If an offence is compounded before prosecution begins, then:
No prosecution will be started for that offence
Against the person who paid the compounding amount
In simple terms:
If you settle the offence early by compounding, you will not face any criminal case for that offence.
(6)
If an offence is compounded after prosecution has already begun, then:
The authorised officer must inform the court in writing about the compounding.
Once the court receives this notice,
The accused person will be discharged from the case.
In simple terms:
If compounding happens during the trial, the court will close the case once notified.
(7)
If a person fails to comply with an order issued by the authorised Gazetted Officer under sub-section (1), then:
They are punishable with an additional amount equal to 20% of the maximum fine for that offence,
In addition to the original fine.
In simple terms:
Ignoring or disobeying the compounding officer’s order results in a penalty of an extra 20% of the maximum fine.
(8)
No offence under this Code can be compounded in any manner other than what is provided in Section 56.
In simple terms:
Compounding is allowed only according to the rules and procedures in this section—no shortcuts, no alternative methods.
