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Madhya Pradesh High Court · body

1997 DIGILAW 759 (MP)

SHANTABAI v. STATE OF M. P.

1997-11-18

SHAMBHOO SINGH

body1997
SHAMBHOO SINGH, J. ( 1 ) THIS is an application u/s. 482 of the Cr. P. C. 1973 (For short 'the Code') for quashing the proceedings in Cr. Case No. 5303/91 with respect to applicants-accused No. 6 Shantabai and accused No. 7 Praveen. ( 2 ) BRIEFLY stated, the facts of the case, are that the applicants accused No. 6 Shantabai and accused No. 2 Praveen and accused No. 5 Sharanappa are partners of accused No. 4 M/s. Mahendra Enterprises, a firm, engaged in the business of sale of varieties of drugs. Accused No. 2 and 3 Sewamal and Jinsibai who are partners of accused No. 1 M/s. Sangeeta Formaceuticals, conduct the business of formulation of different varities of drugs under licence No. 28/14/81 issued by the Controller of Food and Drugs, Bhopal. They also manufactured capsule Sangowit. On 31-10-84 Drugs Inspector drew sample of sangowit capsule, batch No. HB 8304 from the shop of accused No. 4, the firm M/s. Mahendra Enterprises, Latur from accused No. 5. The sample was found sub-standard by Drug analyst. After investigation, the Drugs Inspector, Indore filed complaint for offences punishable under Sections 18 (A) (F) and 27 (D) of the Drugs and Cosmetics Act, 1940 (For short 'the Act') against the applicants and other accused. The learned Magistrate registered the complaint (Cr. C. No. 5303/91) and issued summons to the accused. ( 3 ) THE applicants-accused Nos. 6 and 7 made an application to the trial Court for quashing the proceedings against them as they were not incharge of and were not responsible for the conduct of the business of the firm, therefore, they could be prosecuted in view of Section 34 of the Act. This application was not decided by the trial Court, therefore, they moved an application u/s. 482 of the Code (MCRC No. 233/94) wherein the Magistrate was directed to dispose of the application of the applicants within one month. Thereafter the learned trial Judge heard arguments on the application and passed impugned order and dismissed the same vide order dated 15-11-95 holding that the fact, whether the applicants were not managing partners of the firm and were sleeping partners, can be decided after recording evidence and directed the proceedings to continue against them. The applicants have challenged this order in this petition. The applicants have challenged this order in this petition. ( 4 ) LEARNED counsel Shri A. H. Khan and Shri Sanjay Sharma for the applicants, submitted that from the partnership deed filed by the prosecution it is clear that the applicants-accused Nos. 6 and 7 were sleeping partners and accused No. 5 was a managing partner and was incharge of and was responsible to the firm for the conduct of its business. As the applicants were not incharge of the business of the firm, therefore, they are not liable to be prosecuted, in view of Section 34 of the Act. Shri Desai, learned Government Advocate, frankly admitted that the applicants were sleeping partners of the firm, accused No. 4 and this fact does not require any evidence to be proved as it is clear from the partnership deed itself which has been filed by the prosecution. ( 5 ) I heard the arguments and perused the record. The allegation against the accused persons is that the firm, accused No. 4 committed offences punishable under Sections 18 (A) (F) and 27 (D) of the Act, and they are partners of this firm, therefore, they are vicariously liable for these offences in view of Section 34 of the Act. Provision has been made in Section 34 about the offences committed by companies. Section 34 is quoted below : 34. "offences by companies. (1) 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; Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this 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 shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. "explanation- For the purpose of this section- (a) "company" means a 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. From the perusal of this section, it is clear that 'company' includes 'a firm' and 'director'. in relation to a firm means a partner, in the firm. According to this Section if offence is committed by a company or firm every person who, at the time, when offence was committed, was in charge of and was responsible for the conduct of the business of the company or firm, as the case may be, would be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Admittedly, the applicants are partners of accused No. 4, the firm, therefore, the question is as to whether the applicants were incharge of and were responsible to the firm for the conduct of its business on the date of offence. The burden of establishing that a particular partner was in charge of and conduct of the business of the firm and was responsible to the partnership firm for conduct of its business lies on the prosecution unless and until such burden is discharged by the prosecution, the accused is not supposed to lead evidence to prove that he had no control over the conduct of the business of the firm. In the instant case, no averments have been made in the complaint that the applicants were in charge of and were responsible for the conduct of the business of the firm, accused No. 4. The Drugs Inspector has filed copy of the partnership deed of this firm. Para 7 of this deed makes it clear that applicants No. 6 and 7 were inactive and sleeping partners. The Drugs Inspector has filed copy of the partnership deed of this firm. Para 7 of this deed makes it clear that applicants No. 6 and 7 were inactive and sleeping partners. They were not managing partners and were not incharge of and were not responsible to the firm for the conduct of its business. In AIR 1983 SC 67 , Municipal Corporation, Delhi v. Ramkishan Rohtagi, it has been held that the vicarious liability is an incidence of an offence under the Act, it is only on the fulfilment of specified conditions that a partner may be liable. 1985 Cri LJ 618, Municipal Corporation of Delhi v. Des Raj, also supports this view. ( 6 ) THE grounds on which the tenability of the complaint can be assailed, have been enumerated by Their Lordships of the Supreme Court in case of Smt. Nagawwa v. Veeranna Shivalingappa Konjalqi, AIR 1976 SC 1947 : (1976 Cri LJ 1533) it has been observed :" (1) where the allegation made in the complaint or the statement 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 improbably so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding 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. " ( 7 ) IT is settled law that even at the preliminary stage an application for quashment of the proceedings can be moved and if Court finds that it is not expedient and in the interest of justice to permit the prosecution to continue, the proceedings can be quashed. " ( 7 ) IT is settled law that even at the preliminary stage an application for quashment of the proceedings can be moved and if Court finds that it is not expedient and in the interest of justice to permit the prosecution to continue, the proceedings can be quashed. The Supreme Court in case of Madhavrao Jiwaji Rao Scindia v. Sambhajirao Chandroji Rao Angre, AIR 1988 SC 709 : (1988 Cri LJ 853) held that :"the legal position is well settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the incontroverted allegation as made prima facie establish the offence. It is also for the Court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the Court cannot be utilised for any oblique purpose and where in the opinion of the Court chances of an ultimate conviction are bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the Court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage. " ( 8 ) NOW the question is as to whether this Court should invoke its inherent powers u/s. 482 of the Cr. P. C. The Apex Court in case of Madhu Limaye v. State of Maharashtra, AIR 1978 SC 47 : (1978 Cri LJ 165) held :"the following principles may be stated in relation to the exercise of the inherent power of the High Court :- (1) That the power is not to be resorted to if there is a specific provision in the Code for the redress of the grievance of the aggrieved party; (2) That it should be exercised very sparingly to prevent abuse of process of any Court or otherwise to secure the ends of justice; (3) That it should not be exercised as against the express bar of law engrafted in any other provision of the Code. " ( 9 ) IT is clear that the inherent powers u/s. 482 of the Code are extraordinary powers and they should be exercised very sparingly. " ( 9 ) IT is clear that the inherent powers u/s. 482 of the Code are extraordinary powers and they should be exercised very sparingly. In the instant case, the prosecution did not aver in the complaint that the applicants were in charge of and were responsible to the firm, accused No. 4 for conduct of its business, the partnership-deed also indicates that they were sleeping partners. There appear no chances of ultimate conviction. It is clear that the law is being misused to harass the applicants. It is certainly in the interest of justice that a person who on the allegation made by the prosecution does not appear to have committed an offence is not required to face criminal prosecution for the same. This is a fit case where inherent powers should be exercised to prevent abuse of the process of the Court. ( 10 ) UNDER the circumstances, the proceedings instituted against the present applicants deserves to be dropped. ( 11 ) IN the result, the application is allowed. The proceedings in the criminal case No. 5303/91 with respect to applicants-accused Nos. 6 and 7 are dropped. Application allowed. .