T. G. L. Groundnut Corporation v. Agricultural Market Committee, Adoni
1984-11-19
SRIRAMULU
body1984
DigiLaw.ai
Order: 1. These four petitions involve the common question of law, viz., (1) whether the partners of a firm are liable for prosecution in addition to the firm represented by its Manager or Managing Partner for violation of the terms and conditions of the licence read with the provisions of sub- rule 2 of Rule 70 of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Rules, 1969 for non-compliance of the direction given to the firm to produce the account books and other documents, (2) whether the partners of the firm can be impleaded as accused in a criminal prosecution against the firm and, (3) whether this court is entitled to quash the proceedings against such partners who are impleaded as accused in such criminal prosecution in exercise of its power under section 482 of the Criminal Procedure Code of 1973. 2. It is well settled principle of law that the inherent powers under section 482 of the Code can be exercised only when no other remedy is available to the litigant and not where any specific remedy is provided by the statute. Further the power being an extraordinary one, it has to be exercised sparingly. The limits of the power under section 482 of Criminal Procedure Code were clearly defined by the Supreme Court in Raj Kapoor v. State Raj Kapoor v. State (1980)1 S.C.J. 528: (1980) MLJ. (Crl.) 439: (1980) Crl.L.J. 202: (1980) 1 S.C.C. 43 : (1980) S.C.C. (Crl.) 72: (1980)1 S.C.R. 1081 : A.I.R.1980 S.C. 258. “Even so, a general principle pervades this branch of law when a specific provision is made; easy resort to inherent power is not right except under compelling circumstances. Now that there is absence of jurisdiction but that inherent power should not invade areas set apart for specific power under the same Code.” Another important consideration which is to be kept in mind is as to when the High Court acting under the provisions of section 482 should exercise the inherent power in so far as quashing of criminal proceedings are concerned. This matter was gone into by the Supreme Court in greater detail in Smt.Nagawwa v. Veeranna Shivalingappa Konjalgi Smt.Nagawwa v. Veeranna Shivalingappa Konjalgi (1976)2 S.C.J. 458: (1976) MLJ. (Crl.) 593: (1976)3 S.C.C. 736 : (1976) S.C.C (Crl.) 507: (1976) Crl.L.J. 1533: A.I.R. 1976 S.C. 1947.
This matter was gone into by the Supreme Court in greater detail in Smt.Nagawwa v. Veeranna Shivalingappa Konjalgi Smt.Nagawwa v. Veeranna Shivalingappa Konjalgi (1976)2 S.C.J. 458: (1976) MLJ. (Crl.) 593: (1976)3 S.C.C. 736 : (1976) S.C.C (Crl.) 507: (1976) Crl.L.J. 1533: A.I.R. 1976 S.C. 1947. Where the scope of sections 202 and 204 of the Code was considered and while laying down the guidelines and the grounds on which proceedings could be quashed the Supreme Court observed as follows: “Thus it may be safely held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside: (1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; (2) Where the allegations made in the complaint are patently absurd and inherently improbable so what no prudent person can ever reach a conclusion that there is sufficient ground for proceedings against the accused; (3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction or absence of a complaint by legally competent authority and the like.
The cases mentioned by us are purely illustrative and provide sufficient guidelines to indicate contingencies where the High Court can quash the proceedings.” Same view was taken in a later decision by the Supreme Court in Sharda Prasad Sinha v. State of Bihar Sharda Prasad Sinha v. State of Bihar (1977) Crl.L.J. 1146: (1977)2 S.C.R. 357 : (1977)1 S.C.C. 505 : (1977) S.C.C. (Crl.) 132: A.I.R. 1977 S.C. 1754 where Bhagwati, J. speaking for the court has observed as follows: “It is, now settled law what where the allegations set out in the complaint or the charge-sheet do not constitute any offence, it is competent to the High Court exercising its inherent jurisdiction under section 482 of the Code of Criminal Procedure to quash the order passed by the Magistrate taking cognizance of the offence.” These cases have been relied on and approved by the Supreme Court in a recent case in Delhi Municipality v. Ram Kishan Delhi Municipality v. Ram Kishan (1983) MLJ. (Crl.) 440: (1983)1 S.C.J. 228: (1983) Crl.L.J. 159: (1983)1 S.C.C. 1 : (1983) S.C.C. (Crl.) 115: (1983)1 S.C.R. 884 : A.I.R. 1983 S.C. 67. It is, therefore, manifestly clear that the proceedings against all the accused in the initial stages could be quashed only if, on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are, without adding or sub-tracting anything, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under section 482 of the Criminal Procedure Code. 3.
In other words, the test is that taking the allegations and the complaint as they are, without adding or sub-tracting anything, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under section 482 of the Criminal Procedure Code. 3. In the present case, the argument of Sri V.Jagannadha Rao, the learned Counsel for the petitioners, is that taking the complaint as a whole it cannot be said that the petitioners, who are the partners of the first accused firm, are liable for criminal prosecution for not complying with the directions given by the Secretary of the complaint committee calling upon the accused firm, which is a license in this case, through its notice R.O.C.No.1130/82, dated 8.10.1982 to submit monthly returns and account book relating to cotton seeds from 14.11.1974 to 30.6.1982 to ascertain and assess the market fee payable by accused firm in respect of its turn over in the notified commodities, and thereby guilty of violation of the terms and conditions of the licence and the provisions of Sub- rule (2) of Rule 70 of A.P. (A.P. and L.S.) Market Rules, 1969. From the very allegation made in the complaint, it is clear that notice was served only on the first accused-firm through its Manager. No specific allegation as such has been made against the petitioners herein who are the partners of the first accused firm that any individual notices were served on them. What transpires from the record is that the first accused firm on receipt of the notice in question from the complainant committee sent a reply on 15.10.1932 and the Secretary of the complainant committee has come to the conclusion that the facts stated in the reply are untenable. Hence, the Secretary of the complainant committee initiated criminal prosecution not only against the first accused firm but also against the petitioners herein, who are the partners of the first accused firm, for non-complaince of the terms and conditions and the provisions of Sub- rule 2 of Rule 70 contending that they are liable for prosecution under section 23 of the Andhra Pradesh (Agricultural Produce and Livestock) Market Act, 1966. 4.
4. Rule 70(2) of the Andhra Pradesh (Agricultural Produce and Livestock) Market Rules, 1969 lays down: “If any licensed person fails to send any reports or returns under this rule or if the Secretary or the Director considers it necessary to examine the account books relating to the business of any such person, to satisfy himself about the correctness of any report or returns submitted by him or for any other sufficient reason, the Secretary or the Director, as the case may be, may direct such person to produce before him the account books and other relevant records and documents for inspection and to explain the contents thereof. Such records and documents of the licensed person shall be treated as confidential except for purpose of any Government Department. If any licensed person fails, without sufficient cause, to comply with the directions of the Secretary or the Director aforesaid, he shall be punishable with fine which may extend to Rs.500/-.” 5. In the present case, the licensed person is the first accused firm and not the petitioners herein. On a reading of the aforesaid rule, it is clear from the words if any licensed person fails, that person is made personally liable for the offence committed under the rule and the liability cannot be extended to any other person merely by virtue of any office or position he holds in a company or a firm. 6. The licensed person in this case being the first accused company, the first accused company alone represented by its Manager or Managing Partner, as the case may be, will be liable for violation of Rule 70 and the liability cannot be extended to the partners of the company. In order to extend the liability for violation of Rule 70 to the partners, it has to be specifically averred in the petition of complaint that each of the partners is personally guilty of the act of commission or omission which tantamounts to an offence under Rule 70. 7.
In order to extend the liability for violation of Rule 70 to the partners, it has to be specifically averred in the petition of complaint that each of the partners is personally guilty of the act of commission or omission which tantamounts to an offence under Rule 70. 7. In the petition filed by the complainant committee bald allegations have been made against the petitioners that they are the partners of the first accused firm and no specific allegation, as such, has been made in the complaint that any notice was served on each of them individually and that each of them is personally guilty of the act of omission which according to the complainant would tantamount to an offence punishable under Rule 70. 8. On a reading of the averments in the complaint, it is apparent that the petitioners were sought to bemade liable by virtue of an assumption that they were the partners of the firm and as such were responsible to the company for the conduct of its business at the relevant time when the offence is alleged to have been committed. 9. As already observed above, there is no averment in the complaint that notices were served on all or any of the petitioners and that they are guilty of any specific act of omission which would tantamount to violation of rule 70 of the Andhra Pradesh (Agricultural Produce and Livestock) Market Rules, 1960. 10.
9. As already observed above, there is no averment in the complaint that notices were served on all or any of the petitioners and that they are guilty of any specific act of omission which would tantamount to violation of rule 70 of the Andhra Pradesh (Agricultural Produce and Livestock) Market Rules, 1960. 10. In State of Karnataka v. Pratap Chand Karnataka v. Pratap Chand (1981) Crl.L.J. 595: 128 I.T.P. 3: (1981)2 S.C.C. 335 : (1981) S.C.C. (Crl.) 453: (1031) All W.R. 295: A.I.R. 1981 S.C. 872 their Lordships of the Supreme Court while dealing with a case under sections 34 and 13 of the Drugs and Cosmetics Act considered the question of liability of a partner of a firm in a criminal prosecution launched not only against the firm but also against the individual partners of the firm in respect of the provisions of section 34 of the Act to the effect that “where an offence under this act has been committed by a company, every person who at the time the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.” Their Lordships held that a partner who is not liable to beconvicted for the offences. In that case the second respondent was not held liable to be convicted merely because he had the right to participate in the business of the firm under the terms of the Partnership deed. 11. In Kedarnath v. Supdt. of Central Excise Kedarnath v. Supdt. of Central Excise (1979) Crl.L.J. 421: 83 Cal.W.N. 39 a Division Bench of the Calcutta High Court happened to construe section 9(1)(b) of the Central Excise and Salt Act (I of 1944) which reads as follows: “9(1). Who ever commits any of the following offences namely: ………. (b) removes any excisable goods in contravention of any of the provisions of this Act or any rule made thereunder or in any way concerns himself with such removal; ……. shall be punishable…..” 12.
Who ever commits any of the following offences namely: ………. (b) removes any excisable goods in contravention of any of the provisions of this Act or any rule made thereunder or in any way concerns himself with such removal; ……. shall be punishable…..” 12. As regards the scope of the said provision Justice P.C.Borooah speaking for the Bench observed: “On a reading of the aforesaid section it is clear from the words”whoever commits“that a person is made personally liable for an offence committed under the Act and the liability cannot be extended to any other person merely by virtue of any office or position he holds in a company or firm. In order to extend the liability for an offence committed under the Act to any individual, it has to be specifically averred in the petition of complaint that particular person is personally guilty of any act of commission or omission which tantamounts to an offence punishable under the Act.” 13. Taking into consideration the fact that there was no averment in the complaint that one or any of the partners were guilty of any specific act of omission or commission which would tantamount to an offence under section 9(1) sub-clauses (b)or (bb) of the Act, their Lordships mashed criminal proceedings initiated against the partners. 14. Accordingly I hold that the complaint, in the present case taken at its face value does not make out a prima facie case against the petitioners. As such, proceedings pending against the petitioners herein STC Nos.393, 399 of 1983, 134 and 212 of 1984 on the file of the Additional Munsif Magistrate, Adoni are quashed. 15. The petitions are allowed accordingly. Crl.M.Ps. allowed.