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1998 DIGILAW 524 (KER)

Perfetti India Limited v. Food Inspector, Kottayam

1998-10-29

K.A.MOHAMMED SHAFI

body1998
Judgment :- Accused Nos. 3 and 4 in S.T.C. No. 25/1996 on the file of the Chief Judicial Magistrate's Court, Kottayam have filed this application under Section 482 of the Cr.P.C. to quash the entire proceedings initiated against them. 2. The 1st respondent Food Inspector, Kottayam Municipality filed a complaint against the four accused including the petitioners herein before the Chief Judicial Magistrate's Court, Kottayam allegation offence punishable under sections 2(ia), (m), 7(i), 16(1)(a)(i), 17 (1)(a)(ii)(b) and Appendix B.A. 25-02-01 of the Prevention of Food Adulteration Act alleging that the 1st accused sold the food article 'Center Fresh Liquid Filled Chewing Gum' to the Food Inspector which was found to be adulterated as it did not conform to the standard prescribed under the Prevention of Food Adulteration Rules and accused Nos. 2 to 4 are responsible for the 1st accused to sell the adulterated food article. The learned Chief Judicial Magistrate took cognizance of the offence and issued summons to the accused to appear before the Court. Therefore, accused Nos. 3 and 4 have preferred this Crl. M.C. to quash the proceedings against them. 3. The allegation made by the 1st respondent Food Inspector is that he purchased chewing gum on 19-9-1995 from the shop V.M. Enterprises of which the 1st accused is the Manager and the 2nd accused is the proprietrix, exhibited for sale for the purpose of analysis and on analysis it was found to be adulterated as it did not conform to the standard fixed under the Prevention of Food Adulteration Act and Rules. When notice was issued to accused 1 and 2, they informed that they purchased the article manufactured by the 4th accused and they gave the address of the 4th accused and the nominees of the 4th accused. When letters were sent by registered post to the nominees Sanjay Gupta and Dingra mentioned by accused 1 and 2, Dingra sent a reply dated 12-12-1995 stating that he is not a nominee of the 4th accused and Sanjay Gupta did not give any reply. Though notice in Form No. 6 dated 19-9-1995 was acknowledged by the 4th accused by letter dated 22-11-1995, nothing is stated by them about their nominee. Subsequently the 1st accused informed the Food Inspector that the Managing Director of the 4th accused is the 3rd accused. Therefore, prosecution was launched against the 4th accused-company and its Managing Director, the 3rd accused. Subsequently the 1st accused informed the Food Inspector that the Managing Director of the 4th accused is the 3rd accused. Therefore, prosecution was launched against the 4th accused-company and its Managing Director, the 3rd accused. 4. The petitioners have contended that the food article, Central Fresh Liquid Filled Chewing Gum involved in this case is not an item coming within the ambit of item A.25.02.01 of Appendix B relating to Chewing Gum and Bubble Gum and the food article in question is a proprietary food coming within Rule 37A of the Prevention of Food Adulteration Rules in respect of which no standard is prescribed in Appendix B. Rule 37A of Prevention of Food Adulteration Rules reads as follows : "37-A. Manufacture of proprietary foods and infant food :- (1) An article of infant food whose standards are not prescribed in Appendix 'B', shall be manufactured for sale, exhibited for sale or stored for sale only after obtaining the approval of such article of food and its label from Government of India. (2) In case of proprietary foods, the name of the food or category under which it falls in these rules shall be mentioned on the label. Explanation :- For the purpose of this Rule - (a) to (aa) ......................................... (b) 'proprietary food' means a food which has not been standardised under the Prevention of Food Adulteration Rules, 1995." 5. Though the copy of the label by which the petitioners have marketed the food article in questions is given as Annexure-IV to this application and vehemently contended by the counsel for the petitioners that the label did conform to sub-rule (2) of Rule 37A of the Prevention of Food Adulteration Rules, since the particulars required to be mentioned in the label as per that sub-rule are not given in that label, this contention of the petitioners cannot be accepted. 6. The petitioners have contended that the only finding in the analysis report is that the moisture content in the food article marketed by the petitioners was found to be 6.2%, much more than 3.5% prescribed under appendix B.A.25.02.01 of the Prevention of Food Adulteration Rules. 6. The petitioners have contended that the only finding in the analysis report is that the moisture content in the food article marketed by the petitioners was found to be 6.2%, much more than 3.5% prescribed under appendix B.A.25.02.01 of the Prevention of Food Adulteration Rules. According to the petitioners, since the food article in question contained two articles Chewing Gum and sweet flavoured syrup and by the nature of the food article, the possibility of more moisture content than mere Chewing Gum is there in the food article involved in this case. They have also contended that in a similar case in Haryana it was found that it conformed to the standards prescribed under the Prevention of Food Adulteration Act and Rules. 7. The above contentions raised by the petitioners are matters of evidence which is to be decided by the trial Court and not in the above petition filed under section 482 of the Cr.P.C. by this Court. 8. The further contention of the petitioners that they have moved the Government of India to fix standard regarding the food item involved in this case and the same is in the active consideration of the Government and therefore, the proceedings should be adjourned to a long date so that the Government of India can take a decision in that behalf, is also not sustainable since the documents produced by the petitioners show that the matter is under the consideration of the Government of India from 1995 onwards and nothing concrete emerged so far from the deliberations with the Union Government and the active consideration of the same by the Government. 9. The contention of the petitioners is that they have moved the Government to fix the moisture content at 3.5% only in respect of the chewing gum portion excluding the liquid filled portion at the centre in respect of their Center Fresh Chewing Gum. In the absence of any such clarification or amendment of the standard fixed for Chewing Gum issued by the Central Government, the contention of the petitioners in that behalf cannot be accepted and the case registered against the petitioners cannot be delayed indefinitely on the mere expectation that the Government of India will take a decision in favour of the petitioners. 10. 10. The last contention raised by the petitioners is that the prosecution against the 2nd petitioner who is the Managing Director of the 1st petitioner-company is not sustainable. According to the petitioners, the 2nd petitioners was not the nominee of the 1st petitioner as contemplated under section 17(2) of the Prevention of Food Adulteration Act and he was not the Managing Director of the Company during the relevant period and therefore, his prosecution in respect of the offences alleged against the company is not sustainable. As already noted that in spite of the fact that the 1st respondent Food Inspector wrote to the two nominees of the 1st petitioner company whose names were furnished by accused 1 and 2, the Manager and the owner of the shop from where the food article in question is purchased by the Food Inspector, one of them sent a reply stating that he is not the nominee and the other did not send any reply and the company itself thought acknowledged Form 6 notice dated 19-9-1995 by letter dated 22-11-1995 did not state as to who was the nominee of the company under section 17(2) of the Act to be proceeded against for the offence punishable under the Food Adulteration Act. The petitioners have no case that any other person is the nominee of the company who was responsible for the above offences at the relevant period. Therefore, in the absence of any contention raised or evidence adduced by the petitioners to show that there was a particular nominee of the 1st petitioner-company to be proceeded against under section 17(2) of the Act during the relevant period, the 2nd petitioner who is the Managing Director of the Company and who is in overall management of the business, administration and affairs of the company, cannot escape from his liability under the Prevention of Food Adulteration Act in respect of the company. 11. It is seen that the petitioners have produced documents along with Crl. M.P. 3931/98 filed before this Court in the above Crl. M.C. on 12-10-1998 to receive the documents, to show that the 2nd petitioner was appointed as the Managing Director of the 1st petitioner-company from 25-5-1995 for three years. But no such contention is raised by the petitioners either before the institution of the above case or before the trial Court. M.P. 3931/98 filed before this Court in the above Crl. M.C. on 12-10-1998 to receive the documents, to show that the 2nd petitioner was appointed as the Managing Director of the 1st petitioner-company from 25-5-1995 for three years. But no such contention is raised by the petitioners either before the institution of the above case or before the trial Court. If in fact, the 2nd petitioner was not the Managing Director of the Company during the relevant period when the 1st respondent purchased the food article for the purpose of analysis, it is up to him to establish before the trial Court that he was not the person responsible for the conduct of the business of the company and in which event the respondents can implead the real person responsible for the conduct of the business of the 1st petitioner during the relevant time in this case as provided under section 319 of the Cr.P.C. and proceed against him instead of the 2nd petitioner. Therefore, these contentions raised by the petitioners to quash the proceedings against them under section 482 of the Cr.P.C. are absolutely unsustainable. 12. The further contention raised by the petitioners is that there is absolutely no allegation in the complaint preferred by the 1st respondent before the C.J.M. to establish that the 2nd petitioner was in charge of the company and responsible for the conduct of the business of the company and therefore, the 2nd petitioner cannot be prosecuted for the offences alleged against the company. In support of this contention the learned counsel for the petitioners relied upon the decisions of the Supreme Court in Municipal Corporation of Delhi v. Ram Kishan Rohtagi (1983) 1 SCR 884 : AIR 1983 SC 67 : (1983 Cri LLJ 159), R. Banerjee v. H. D. Dubey (1992) 2 SCC 552 : (1992 Cri LJ 1523), and State of Haryana v. Brij Lal Mittal JT 1998 (3) SC 584 : (1998 AIR SCW 2240). A careful reading of the above judgments of the apex Court clearly establishes that those decisions are of no help to the 2nd petitioner in this case. 13. In the decision reported in AIR 1983 SC 67 : (1983 Cri LJ 159) accused Nos. A careful reading of the above judgments of the apex Court clearly establishes that those decisions are of no help to the 2nd petitioner in this case. 13. In the decision reported in AIR 1983 SC 67 : (1983 Cri LJ 159) accused Nos. 3 and 4 to 7 who were the Manager and Directors of the 2nd accused-company in that case, were prosecuted as the persons in charge of and responsible for the conduct of the business of the company. The High Court accepted the contention that there is no allegation in the complaint to attribute criminal responsibility against them and quashed the complaint. In appeal before the Supreme Court the apex Court upheld the finding of the High Court that no offence against the Directors is made out and the quashing of proceedings against the Directors, and allowed the appeal in respect of the quashing of proceedings against the Manager. It is pertinent to note that in that case the Manager as well as the Directors of the company were prosecuted as the persons responsible for the conduct of the business of the accused-company and the Supreme Court found that from the nature of the duties of the Manager it is manifest that he must have been in the knowledge of the manufacture and sale of the products of the company and therefore, he is vicariously liable for the offence. Since there was nothing in the complaint to indicate that the other Directors who were implicated in that case were responsible for the affairs of the company, the quashing of proceedings against them was upheld by the apex Court. 14. In the decision reported in (1992) 2 SCC 552 : (1992 Cri LJ 1523) over and above the person nominated under section 17(2) of the P.F.A. Act, the Directors of the company were also prosecuted for the offences punishable under section 17(1), (2) and (4) of the P.F.A. Act. 14. In the decision reported in (1992) 2 SCC 552 : (1992 Cri LJ 1523) over and above the person nominated under section 17(2) of the P.F.A. Act, the Directors of the company were also prosecuted for the offences punishable under section 17(1), (2) and (4) of the P.F.A. Act. In that decision the Supreme Court has observed as follows (at page 1525 of Cri LJ) : "It is clear from the plain reading of Section 17 that where an offence under the Act is alleged to have been committed by a company, where the company has nominated any person to be in charge of, and responsible to, the company for the conduct of its business that person will be liable to be proceeded against and punished for the commission of the offence. Where, however, no person has been so nominated, every person who at the time of the commission of the offence was in charge of, and responsible to, the company for the conduct of its business shall be proceeded against and punished for the said crime. Even in such cases the proviso offers a defence, in that, the accused can prove his innocence by showing that the offence was committed without his knowledge and notwithstanding the exercise of due diligence to prevent it. The scheme of sub-section (1) of Section 17 is, therefore, clear that the cases where a person has been nominated under sub-section (2) of Section 17, he alone can be proceeded against and punished for the crime in question. It is only where no such person has been nominated that every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of its business can be proceeded against and punished. The proviso, however, lays down an exception that any such person proceeded against shall not be liable to be punished if he proves that the offence was committed without his knowledge and that he had exercised all due diligence to prevent the commission thereof ......... The proviso, however, lays down an exception that any such person proceeded against shall not be liable to be punished if he proves that the offence was committed without his knowledge and that he had exercised all due diligence to prevent the commission thereof ......... Sub-section (4) of Section 17 overrides the preceding sub-sections and posits that where an offence has been committed by a company and it is proved that the offence was 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, other than the once nominated, such Director, Manager, Secretary or other officer shall also be deemed guilty and be liable to be proceeded against and punished for the same. This sub-section, therefore, makes it clear that not-withstanding the nomination under sub-section (2) of Section 17 and notwithstanding clause (a)(i) of sub-section (1) of Section 17, any Director, Manager, Secretary or other officer of the company, other than the nominated person, can be proceeded against and punished if it is shown that the offence was committed with his consent or connivance or negligence. It is crystal clear from the scheme of Section 17 that where a company has committed an offence under the Act, the person nominated under sub-section (2) to be in charge of, and responsible to, the company for the conduct of its business shall be proceeded against unless it is shown that the offence was committed with the consent/connivance/negligence of any other Director, Manager, Secretary or Officer of the company in which case the said person can also be proceeded against and punished for the commission of the said offence. It is only where no person has been nominated under sub-section (2) of Section 17 that every person, who at the time of the commission of the offence was in charge of and was responsible to the company for the conduct of its business can be proceeded against and punished under the law." 15. It is only where no person has been nominated under sub-section (2) of Section 17 that every person, who at the time of the commission of the offence was in charge of and was responsible to the company for the conduct of its business can be proceeded against and punished under the law." 15. In that case after finding that there as a nominee of the company under Section 17(2) of the P.F.A. Act and that no allegation is made in the complaint against the Directors of the company to show that the offence was committed with the consent, connivance or negligence of the Directors, though they were made as co-accused along with the nominee, the Supreme Court held that the prosecution against the Directors of the company is not sustainable since there is no allegation in the complaint to bring their case within the mischief of S. 17(4) of the P.F.A. Act. 16. In the decision reported in JT 1998 (3) SC 584 : (1998 AIR SCW 2240) the offences alleged were under sections 25(4), 27, 17A and 18A of the Drugs and Cosmetics Act, 1940 and three Directors of the manufacturer company were prosecuted with the aid of Section 34(1) of that Act. Section 34(1) of the Act reads as follows (at page 2243 of AIR SCW) : "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." 17. In that case the Supreme Court found that the Directors of the company are not liable unless and until it is established that they were in charge of and were also responsible to the company for the conduct of the business and upheld the order passed by the High Court quashing the prosecution against the Directors. In that case the Supreme Court found that the Directors of the company are not liable unless and until it is established that they were in charge of and were also responsible to the company for the conduct of the business and upheld the order passed by the High Court quashing the prosecution against the Directors. In that case the Supreme Court has observed as follows : "It is thus seen that the vicarious liability of a person for being prosecuted for an offence committed under the Act by a company arises if at the material time he was incharge of and was also responsible to the company for the conduct of its business. Simply because a person is a director of the company it does not necessarily mean that he fulfills both the above requirements so as to make him liable. Conversely, without being a director a person can be incharge of and responsible to the company for the conduct of its business. From the complaint in question we, however, find that except a bald statement that the respondents were directors of the manufacturers, there is no other allegation to indicate, even prima facie, that they were incharge of the company and also responsible to the company for the conduct of its business." 18. In all the above three cases the prosecution against the Directors of the company was quashed as there was no allegation in the complaint that they were in charge of and responsible for the conduct of the business of the company at the material time. In this case the 2nd petitioner is prosecuted as the Managing Director of the 1st petitioner. Petitioners have no case that there was a nominee for the company under section 17(2) of the P.F.A. Act to be prosecuted against in this case. The office, the rights and liabilities of the Managing Director are entirely different from that of the Directors. The Managing Director is primarily responsible for the conduct of the business and the administration of the company. The office, the rights and liabilities of the Managing Director are entirely different from that of the Directors. The Managing Director is primarily responsible for the conduct of the business and the administration of the company. Therefore, he can be prosecuted along with the company for the offence committed by the company, in the absence of a nominee under section 17(2) of the P.F.A. Act without making any allegation of consent, connivance or negligence for the commission of the offence unlike the ordinary Directors of the company or any specific allegation to the effect that he was incharge of and was responsible to the company for the conduct of its business. Therefore, the principles laid down in the above decisions are not applicable to the facts and circumstances of this case and the prosecution of the 2nd petitioner along with the 1st petitioner in this case. All the contentions raised by the petitioners in this case are matters of evidence to be raised before the trial Court. I find absolutely no ground to quash the prosecution proceedings launched against the petitioners under section 482 of the Cr.P.C. Hence this Crl. M.C. is dismissed. Petition dismissed.