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1990 DIGILAW 490 (KAR)

KISHORE LAL v. STATE OF KARNATAKA

1990-09-07

M.M.MIRDHE

body1990
MIRDHE, J. ( 1 ) THIS criminal petition is preferred under Section 482 of Criminal Procedure Code praying to quash the entire proceedings in spl/fir No. 55/1986, on the file of sessions judge, raichur. There are in all eight accused in the said case. This criminal petition is preferred by accused-1 to 5 in that case. ( 2 ) A few facts necessary for the purpose of disposal of this case as follows: the p. s. i. , sadar bazar, raichur went to the mill-ajoomal lilarm oil mill with the panchas and some members of his staff on 18-12-1986 at 7. 30 p. m. as he had the information that in ajoomal lilaram oil mill business was carried on without maintaining stock book and commodities such as oil seeds, cotton seeds were stored illegally. The p. s. i, conducted the raid and checked the oil mill and found that 28 quintals 98 k. gs. Sunflower oil was illegally stocked which was more than stock mentioned in the stock register and therefore there was violation of clauses 7 and 14 of the Karnataka edible dealers licencing order 1976-77 which is an offence under Section 3 punishable under Section 7 of the act. After the investigation of the case, the police have filed a charge sheet in the court of sessions at raichur. ( 3 ) THE petitioners who are accused 1 to 5 in that case have preferred this criminal petition. The contention of the learned counsel for the petitioners is that the petitioners are the partners of the said mill and they reside at Bombay and they are not in-charge of the management of the affairs of the mill and therefore no prosecution can be launched against them. As against this, the learned additional state public prosecutor has contended that since the petitioners are the partners of the firm, they can be prosecuted for the violation of the Provisions of the Karnataka edible dealers licencing order 1976-77 read with Section 7 of the act. ( 4 ) THE point that arises for my consideration in this case is as follows: whether the partners of a firm who are not in-charge of the affairs of the firm can be prosecuted for violation of any order made under Section 3 of the Essential Commodities Act, 1955? ( 4 ) THE point that arises for my consideration in this case is as follows: whether the partners of a firm who are not in-charge of the affairs of the firm can be prosecuted for violation of any order made under Section 3 of the Essential Commodities Act, 1955? My findings on the above point as follows: a partner who was not in-charge of and was not responsible to the company for the conduct of the business of the company cannot be held liable to be proceeded against for contravention of any order under Section 3 of the Essential Commodities Act, 1955 for the reasons stated below. ( 5 ) IT is not in dispute in this case that the ajoomal lilaram oil mill is a partnership concern and the petitioners who are the five partners of the said firm. Section 10 of the essential commodities Act, 1945 (in short 'the act') reads as follows:"10. Offences by companies:- (1) if the person contravening an order made under Section 3 is a company, every person who at the time the contravention 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 contravention and shall be liable to be proceeded against and published accordingly; provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) not withstanding anything contained in sub-section (l), where an offence under this act has been committed by a company and it is provided that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and published accordingly explanation.- for the purposes of this section,- (a) 'company' means any body corporate and includes a firm or other association of individuals; and (b) 'director' in relation to a firm means a partner in the firm. "this Section makes it clear that a partner cannot be proceeded against simply on the ground that he is the partner of that company. The prosecution must first show that the partner of the firm to be prosecuted, who was in-charge of and was responsible to the company for the conduct of the business of the company. After the prosecution establishes this fact then the burden shifts on the partner prosecuted to prove that the contravention took place without his knowledge or that he exercised all due diligence to prevent any such contravention. Sub-section (2) of Section 10 of the Essential Commodities Act, 1955 further makes it clear that where an offence under the said act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly. ( 6 ) IN Mirji Brothers, Oil Mill and others v State of Karntaka, kar. L. j. 1980 (2), 35, this question arose and this court laid down as follows:"section 10 of the Essential Commodities Act makes it clear that every person who at the time the contravention was committed and who was in-charge of and was also responsible to the company for the conduct of the business shall be deemed to be guilty of such contravention and shall be liable to be proceeded against and punished accordingly. A2 was the person who was managing the affairs of the firm during the relevant period. Nowcver in the complaint had the complainants stated that apart from a-2, the other partners of the firm were either present or in-charge of the firm when the alleged offence was committed. Therefore it would be an abuse of the process of the court if the prosecution was permitted to proceed against the other accused. "it is the case of prosecution that a-6,a-8 and a-9 were present in the mill at the time of the raid and it is also the case of the prosecution that accused no-9 ganasham was the manager of the said mill at that time. "it is the case of prosecution that a-6,a-8 and a-9 were present in the mill at the time of the raid and it is also the case of the prosecution that accused no-9 ganasham was the manager of the said mill at that time. Nowhere in the complaint it is averred that these petitioners were managing the affairs of the firm during the relevant period. Therefore, in the absence of any such averment in the complaint to the effect that these petitioners were managing the affairs of the firm during the relevant period, they cannot be proceeded against. Hence, it is a fit case for this court to exercise its powers under Section 482 of Criminal Procedure Code and to quash the proceeding in the lower court so far as these petitioners are concerned. Hence, i proceed to pass the following order: i) this criminal petition is allowed. Ii) the proceedings against these petitioners only are quashed. Petition allowed. --- *** --- .