S. C. Tayal v. State — 1972 DIGILAW 212 (ALL)

ORDER C.D. Parekh, J. - These three cases can be disposed of by one single judgment as common questions of law and fact arise in these cases. 2. Cr. Ref. No. 288 of 1970 has been made by the 1st Temp. Civil and Sessions Judge, Aligarh, by order dated 22-4-1970. The learned Judge has recommended that the order for trying S.C. Tayal for not obtaining a licence under the Prevention of Food Adulteration Act, 1954, for three years (1965-66, 1966-67 and 1967-68) is untenable. He has further recommended that the charge against Capt. R.S. Gupta for the years 1965-66 and 1967-68 for not obtaining a licence for running the oil mill for extraction of mustard and ground-nut oil is also untenable and is not warranted by law. No clear or specific recommendation has been made but by making this recommendation it appears the learned judgment that the prosecution should not proceed in the matter and the charges be quashed. 3. The facts leading to this reference may be stated thus: On 11th of June, 1968 Medical Officer of Health, Municipal Board, Aligarh, filed a complaint against (1) Om Prakash Gupta, (2) Gapt. Ram Swarup Gupta, (3) S.C. Tayal, Managercum-Chemist, Tika Ram Oil Mills, Mohalla Bara Dwari, Aligarh and (4) M/S. Tika Ram and Sons (P) Ltd., Mohalla Bara Dwari, Aligarh. Inter alia it has been alleged in the complaint that M/S. Tika Ram and Sons Pvt. Ltd., Aligarh, run an oil mill for extracting mustard oil. They manufacture the oil for the purposes of sale and stock the same as well and sell the same. Om Prakash Gupta has been described as the Managing Director of the Company and being incharge of the same and responsible, for conducting the business of the company, as well as to the company itself. Ram Swarup Gupta has been arrayed as a Director and it has been stated that on behalf of the company he is responsible for purchase of the goods and sale of the manufactured goods. He is also incharge of receiving and making payments on behalf of the company. S.C. Tayal has been arrayed as an accused on the allegation that he acts as manager of the mill and conducts the business of the company and the oil is being manufactured in his supervision. He is also incharge of receiving and making payments on behalf of the company. S.C. Tayal has been arrayed as an accused on the allegation that he acts as manager of the mill and conducts the business of the company and the oil is being manufactured in his supervision. It has been stated in the complaint that on 9-6-1967 an enquiry was made from M/S. Tika Ram and Sons to show their licence for the purposes of manufacture of mustard oil but they did not show any licence, instead R.S. Gupta (accused) applied for issue of a licence. The complainant has further alleged that they had been manufacturing for sale, mustard oil and ground-nut oil, without obtaining a licence for the year 1967-68 and they have also been stoking the aforesaid oil for sale and therefore, they have contravened Rule 50(1) of the Rules framed under the Prevention of Food Adulteration Act, 1954. It has also been alleged in the complaint that they have been so manufacturing edible oil since 1960 without obtaining licence and have been indulging in manufacture for sale and for stocking the oil for purposes of sale. The magistrate took cognizance of the offence and framed charges against all the four accused named in the complaint. Three-charges have been framed by the magistrate pertaining to the years 1965-66, 1966-67 and 1967-68 stating that they had manufactured, stored, sold and distributed edible (mustard) oil from their mills in the name of M/S. Tika Ram and Sons Pvt. Ltd, without obtaining licence for these three years. Separate charges for each year has been framed for contravention of Rule 50 and stating that they have committed the offence punishable u/s 16 of the Prevention of Food Adulteration Act, 1954. 4. The prosecution examined as many as five witnesses, viz, Gyanendra Singh (PW 1) Licensing Clerk of Municipal Board of Aligarh, N.G. Das (PW 2) Medical Officer of Health, Aligarh, Dr. A.P. Sinha (PW 3) District Medical Officer of Health, Babu Lal (PW 4) Additional Accountant, Aligarh Electricity Company and Suraj Mal (PW 5) Proprietor of M/S. Tara Chand Suraj Mal Financiers of the Oil Mills. From the evidence on record it appeared to the magistrate that Licence fee of Rs. 10/- for the year 1967-68 was deposited on 22-6-1967 and a licence was issued by the Municipal Board, Aligarh on 27-6-67. From the evidence on record it appeared to the magistrate that Licence fee of Rs. 10/- for the year 1967-68 was deposited on 22-6-1967 and a licence was issued by the Municipal Board, Aligarh on 27-6-67. The learned judge has, therefore, held that the charge in respect of the year 1967-68 should not have been framed as in his opinion there was no contravention of the provisions of law. In the opinion of the judge when the Municipal Board has accepted the licence fee and issued licence for the year 1967-68 it ensures for the full year and amounts to the condonation for the period, for running the oil mill without licence, prior to 27-6-1967. The learned Judge has also held that from the evidence on record, prima faciedly it could not be shown that S.C. Tayal was acting as a manager and thus no liability as such could be fastened on him and no charge could be framed against him in respect of the three years in question. He has also observed that criminal liability of the Director of the company cannot be seen unless he be incharge of or be responsible for the conduct of the business of the company. He has, therefore, observed that the charge of not obtaining licence for 1967-68 against Capt. R.S. Gupta is untenable in view of the fact that the licence of the said year was granted. He is further of the opinion that R.S. Gupta has acted as the Managing Director and therefore, he would be regarded as a person responsible for conducting the business of the company for the year 1966-67. But as there was nothing on record to show that R.S. Gupta had been or acted as the Managing Director of the company for 1965-66 and 1967-68 the learned Judge has made this recommendation that charges for these two years are untenable against him. 5. Cr. Rev. No. 1338 of 1970 has been filed by R.S. Gupta against the order dated 22-4-1970 which is the subject-matter of Cr. Ref. No. 288 of 1970. Although initially this revision was preferred on behalf of S.C. Tayal as well but the learned Counsel appearing for S.C. Tayal made a statement on 24-2-72 that the revision on behalf of S.C. Tayal has become infructuous in view of the recommendation made by the learned judge, which is subject-matter of decision in Cr. Ref. Ref. No. 288 of 1970. Although initially this revision was preferred on behalf of S.C. Tayal as well but the learned Counsel appearing for S.C. Tayal made a statement on 24-2-72 that the revision on behalf of S.C. Tayal has become infructuous in view of the recommendation made by the learned judge, which is subject-matter of decision in Cr. Ref. No. 288 of 1970. It has been prayed in this criminal revision that charges for not taking out licence for 1965-66 and 1966-67 be quashed. 6. M/s. Tika Ram and Son. Pvt. Ltd., Aligarh and Om Prakash Gupta have filed Cr. Misc. Appln. No. 2222 of 1970 u/s 561-A Code of Criminal Procedure that the three charges framed against the Petitioners by the magistrate in the case be also quashed against them. 7. Learned Counsel for the aforesaid four persons argued firstly that there was no complaint for not taking the licence for the years 1965-66 and 1966-67. From the complaint it appears that the complaint was made for the year 1967-68 only and when a licence was taken out enuring the same for whole of the year, no charge should have been framed against any of the persons for breach of Rule 50(1) of the rules framed under the Prevention of Food Adulteration Act. In the alternative it has also been argued that the Central Government has no power u/s 23 of the Act to frame a rule for appointment of a Licensing Authority. The appointment if any made Under Sub-rule (2) of Rule 50 is illegal. The State Government was the only authority who could appoint a Licensing Authority under the rules, if any, framed u/s 24(b) of the Act and in absence of the rules framed by the State Government it should be considered that there was no Licensing Authority to issue any licence nor any licence was required. It has also been argued that to provide for; the form of the application and the conditions under which such licence may be issued, the authority empowered to issue the same and the fee payable therefor, was the exclusive function of the State Government under its rule making power as provided u/s 24. It has also been argued that to provide for; the form of the application and the conditions under which such licence may be issued, the authority empowered to issue the same and the fee payable therefor, was the exclusive function of the State Government under its rule making power as provided u/s 24. According to the learned Counsel the State Government has not framed any rule touching these subjects and therefore, if the licence has not been taken out by the aforesaid persons no offence can be said to have been committed by them nor they can be held liable to the penalty for the breach of Rule 50(1). The relevant portion of Rule 50 and Rule 51 are quoted below: 50. Conditions for Licence--(1) No person shall manufacture, sell, stock, distribute or exhibit for sale any of the following articles of food except under a Licence-- ... ... ... (f) edible oils, ... ... ... Sub-rule (2) of Rule 50 reads thus: The State Government or the Local authority shall appoint licensing authorities. Rule 51 reads thus: 51. Duration of licences:--A licence shall, unless sooner suspended or cancelled will be in force for such period as the State Government may prescribe. Provided that if application for a fresh licence is made before the expiry of the period of validity of the licence, the licence shall continue to be in force until orders are passed on the application. The Rules aforesaid have been framed by the Central Government under its rule making power as contained in Section 23 of the Act. The relevant portion of the section is quoted below: 23. Power of the Central Government to make Rules: (1) The Central. Government may, after consultation with the Committee and subject to the condition of previous publication, make Rules. (f) prohibiting the sale or defining the conditions of sale of any substance which may be injurious to health when used as food or restricting in any manner its use as an ingredient in the manufacture of any article of food or regulating by the issue of licenses the manufacture or sale of any article of food; (g) defining the conditions of sale or conditions for licence of sale of any article of food in the interest of public health; It is necessary to quote relevant portion of Section 24--Power of the State Government to make rules. The relevant portion of the section read as below: 24. Power of the State Government to make rules: (1) The State Government may, after consultation with the Committee and subject to the condition of previous publication, make rules for the purpose of giving effect to the provisions of this Act in matters not falling within the purview of Section 23. (2) In particular and without prejudice to the generality of the foregoing power, such rules say-- ... ... ... (b) prescribe the forms of licenses for the manufacture, for sale, for the storage, for the sale and for the distribution of articles of food or any specified article of food or class of articles of food, the form of application for such licenses, the conditions subject to which such licenses may be issued, the authority empowered to issue the same and the fees payable therefor; ... ... ... 8. It is admitted that the State Government did not make any rule under the powers aforesaid. The argument, therefore, is that the forms of licence, the form of application for such licence, the conditions subject to which such licence may be issued, the authority empowered to issue the same and the fees payable for the same can only be provided by the State Government by rules and not otherwise and these powers are not to be exercised by the Central Government u/s 23 of the Act as the Central Government has not been authorised to make rules touching these subjects. It has been conceded on behalf of the State that there are no rules framed by the State Government. On behalf of the Medical Officer of Health it has been argued that by the notification No. 1067/XVI (P.H.) 722-55, dated December 20, 1957 published in U.P. Gazette Part I dated December 28, 1957 the State Government has Under Sub-rule (2) of Rule 50 as directed by the Central Government, has appointed licensing authorities and such authorities are competent to issue licences for the purposes of Rule 50(1) passed by the Central Government. 9. I have given my thoughtful consideration to the arguments advanced on both the sides. 9. I have given my thoughtful consideration to the arguments advanced on both the sides. In my opinion the State Government by notification could not have appointed the licensing authority nor could have prescribed the form of licenoe, the form of application for such licence, the conditions subject to which such licence may be issued and the authority empowered to issue the same and the fees payable therefor. The matter was covered by the rule making power of the State Government and the State Government should have exercised that power instead of relying on the directions of the Central Government as contained in Sub-rule (2) of Rule 50 does not confer power on the State Government or the local authority to appoint licensing authorities. The direction is only regulatory and is a pointer to the State Government to appoint such licensing authorities by framing rules but it cannot be interpreted or read to mean that it takes away the power of the State Government to make rules. In my opinion the State Government when it has not exercised the power touching the aforesaid subjects it cannot take shelter behind Sub-rule (2) of Rule 50 framed by Central Government and rely on its notification for appointing licensing authority. The subject of appointment of licensing authority is covered by Section 24 of the Act. Either there is obvious conflict between Sub-rule (2) of Rule 50 framed by the Central Government and Section 24 of the Act authorising the State Government to frame rule for appointment of licensing authority or the rule is reconcilable in the manner that the Central Government only gave a direction to the State Government to appoint licensing authority under its rule making power. Reconciliation in my opinion is not impossible if Sub-rule (2) of Rule 50 as framed by the Central Government is treated as direction to frame rules to either make an appointment itself or authorise any local authority to appoint licensing authority. This rule is thus subordinate to Section 24 of the Act. The State Government can make rules which are liable to be laid after they have been made, before the respective State legislatures. That shows that the rules on the aforesaid subject must have the legislative authority and be not made by the executive action of the State Government and under the directions of the Central Government. 10. The State Government can make rules which are liable to be laid after they have been made, before the respective State legislatures. That shows that the rules on the aforesaid subject must have the legislative authority and be not made by the executive action of the State Government and under the directions of the Central Government. 10. In the absence of the rules by the State Government on the other subjects as given in Section 24 of the Act no licence could have been taken out nor any person can be said to have contravened the provisions of Rule 50(1) of the Act. The power u/s 24 of the Act is meant to be exercised for the purpose of giving effect to the provisions of the Act and omission to exercise those powers in my opinion would be oppressive to the persons affected. 11. In the instant case it is correct that the prosecution was lodged for not taking out the licence for the year 1967--68 and the fact that the Applicants had not taken out the licence since the year 1960 was only referred as a conduct of the offenders. In my opinion the allegations in the complaint have not been made as a ground for taking action for the breach of the rules for other years. The evidence has been led to prove the fact that they had not taken out the licence since 1960. That only shows the conduct of the offenders. No charge, therefore, could have been framed on such evidence which was led for the purposes of showing the conduct of the offenders. In my opinion the charges, in one trial could have covered offence committed within a year only and not for three years as has been done in the case. Three offences of the same nature could have been combined if committed within the period of one year, but the series of the offences of the same nature covering a period of three years should not have been combined and the charge should not have been framed in one and the same trial. The offence, therefore in one trial, in my opinion covers only the case for the year 1967-68. 12. The offence, therefore in one trial, in my opinion covers only the case for the year 1967-68. 12. As for Shri S.C. Tayal he has been proceeded against as a Manager of M/S. Tika Ram and Sons (P.) Ltd. Except for PW 2 N.C. Lal there is no evidence worth naming on the record to prove the fact that he was the Manager of this Company. This evidence shows that he was a Chemist working with the company. The liability of a manager u/s 17 of the Act arises when he is responsible to the company for the conduct of the business of the company. There is no evidence on record that S.C. Tayal was responsible to the company for the conduct of the business of the company. The evidence, that he was working as a Chemist would go to show that he was connected with the chemical examination of the edible oil which the company was manufacturing. That will not include the conduct of the business of the company. The business of the company was to manufacture edible oils for sale. There is no evidence on record that S.C. Tayal was in any way associated with or was conducting the sale of the manufactured goods and in the absence of evidence no charge was liable to be framed against S.C. Tayal as there was no prima facie case against him. 13. In the circumstances, I, therefore, accept the reference. All the charges framed against the accused persons are set aside and all the complaints for prosecution for contravention of Rule 50 of the rules framed by the Central Government are quashed. All that three cases are decided accordingly.