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Himachal Pradesh High Court · body

2001 DIGILAW 81 (HP)

AJIT SINGH v. STATE OF H. P.

2001-05-10

KAMLESH SHARMA

body2001
JUDGMENT Ms. Kamlesh Sharma, J.—Petitioner No. 1 Ajit Singh is the Managing Director, whereas, his wife petitioner No. 2 Manjit Kaur is the Director of Metro Milk Products Pvt. Ltd. (hereinafter called the Company). In a complaint under Section 16(l)(a)(i) read with Section 7(i) of the Prevention of Food Adulteration Act, 1954 (hereinafter called the Act) the Company was arrayed through its Managing Director. In response to the summons issued to the Company, its Marketing Manager Sanjay Kumar appeared and gave bail bond and surety on 13.11.1998. He had appeared in his capacity as nominee of the Company, in proof of which he had placed on record a copy of the resolution passed by the Board of Directors of the Company in its meeting held on 1.10.1997 whereby he was nominated under the Act to be incharge of and responsible to the Company for the conduct of its business and was authorised to exercise all such powers and take such steps as might be necessary to prevent the commission by the Company of any offence under the Act. It was also resolved that such resolution alongwith the nomination of Sanjay Kumar in the prescribed form be sent to the Local Health Authority concerned. The nomination in the prescribed form (Form No. VIII) was duly sent to the Local Health Authority and acknowledged by it on 13.10.1997. A copy of Form VIII is on record as Annexure P-5 to the petition. 2. At the time of consideration of charge petitioner No. 1 being Managing Director of the Company put in appearance on 29.9.1995 and furnished bail bond and surety as directed by the trial Court. Thereafter the list of Directors of the Company was placed on record by petitioner No. 1 and as per this list petitioner No. 2 was summoned in her capacity as Director. The petitioners are aggrieved by this order and they have challenged it in the present petition under Section 482 Cr.P.C. and under Article 227 of the Constitution. 3. This Court has heard learned Counsel for the parties and gone through the record. Learned Counsel for the petitioners referring to sub-section (2) of Section 17 of the Act has argued that since the company has duly nominated Sanjay Kumar its Marketing Manager as its nominee, there was no occasion for the trial Court to summon firstly the Managing Director and thereafter the Director. Learned Counsel for the petitioners referring to sub-section (2) of Section 17 of the Act has argued that since the company has duly nominated Sanjay Kumar its Marketing Manager as its nominee, there was no occasion for the trial Court to summon firstly the Managing Director and thereafter the Director. He has further urged that the trial was yet to commence, as such, it cannot be said that it has been proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of the petitioners in the capacity of Managing Director and Director of the Company, as envisaged under sub-section (4) of Section 17 of the Act. On the other hand, learned Additional Advocate General has supported the impugned order and has submitted that the petitioners being incharge of the Company were responsible for the conduct of the business in the capacity of Managing Director and Director and have been rightly summoned by the trial Court. 4. After giving its best consideration to the respective submissions of the learned Counsel for the petitioners and the learned Additional Advocate General this Court finds that in the facts and circumstances on record the trial Court was not justified in summoning petitioner No. 2 in her capacity as Director. So far petitioner No. 1 is concerned, it is not clear from the order of the trial Court whether he had appeared in pursuance of the summons issued by the trial Court or of his own. Both the petitioners, Managing Director and Director of the Company, could not be summoned until Sanjay Sharma continued to be the nominee of the Company or it is proved on record that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of the petitioners. Section 17 of the Act which pertains to offences by companies, is very clear in this regard. It is:— "17. Offences by companies.— (1) Where an offence under this Act has been committed by a company— (a)(i) the person, if any, has been nominated under sub-section (2) to be in charge of, and responsible to the company for . Section 17 of the Act which pertains to offences by companies, is very clear in this regard. It is:— "17. Offences by companies.— (1) Where an offence under this Act has been committed by a company— (a)(i) the person, if any, has been nominated under sub-section (2) to be in charge of, and responsible to the company for . the conduct of the business of the company (hereinafter in this section referred to as the person responsible), or (ii) where no person has been so nominated, 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; and (b) 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 and he exercised all due diligence to prevent the commission of such offence. (2) Any company may, by order in writing, authorise any of its directors or managers (such manager being employed mainly in a managerial or supervisory capacity) to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the company of any offence under this Act and may give notice to the Local (Health) Authority, in such form and in such manner as may be prescribed, that it has nominated such director or manager as the person responsible, along with the written consent of such director or manager for being so nominated. Explanation.—Where a company has different establishments or branches or different units in any establishment or branch, different persons may be nominated under this sub-section in relation to different establishments or branches or units and the person nominated in relation to any establishment, branch or unit shall be deemed to be the person responsible in respect of such establishment, branch or unit, (3) The person nominated under sub-section (2) shall, until— (i) further notice cancelling such nomination is received from the company by the Local (Health) Authority; or (ii) he ceases to be a director or, as the case may be, manager of the company; or (iii) he makes a request in writing to the Local (Health) Authority, under intimation to the company to cancel the nomination (which request shall be complied with by the Local (Health) Authority), whichever is the earliest, continue to be the person responsible: Provided that where such person ceases to be a director or, as the case may be, manager of the company, he shall intimate the fact of such cesser to the Local (Health) Authority: Provided further that where such person makes a request under clause (iii) the Local (Health) Authority shall not cancel such nomination with effect from a date earlier than the date on which the request is made. (4) Notwithstanding anything contained in the foregoing subsections, 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 of the company not being a person nominated under sub section (2), 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 punished accordingly. Explanation.—For the purposes of this Section,— (a) "company" means any body corporate and includes a firm or other association of individuals; (b) "Director", in relation to a firm, means a partner in the firm; and (c) "Manager" in relation to a company engaged in hotel industry, includes the person in charge of the catering department of any hotel managed or run by it." 5. From the facts on record it is clear that Sanjay Kumar was nominated under sub-section {2) of Section 17 of the Act on 1.10.1997 before the sample of curd was taken on 7.7.1998 and complaint was filed on 24.8.1998. Therefore, it cannot be said that Sanjay Kumar was nominated by the petitioners to avoid their presence before the trial Magistrate. It is also clear that the charge is yet to be framed by the trial Court and there is no evidence on record to hold that 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 the petitioners in their capacity as Managing Director and Director of the Company to implead them party in person as envisaged under sub-section (4) of Section 17 of the Act. In State (Delhi Administration) v. I. K. Nangia and another, AIR 1979 SC 1977, the learned Judges of the Supreme Court have laid down that : "......The individual liability of the sales manager is distinct and separate from the corporate liability of the manufacturer. In case of a company prosecution, the company along with its agent, that is, the person nominated under Section 17(2) as well as the sales manager can both be prosecuted under Section 7(i) read with Section 16(1)(a). Notwithstanding the nomination of a person responsible under Section 17(2), there can also be prosecution of any director, manager, secretary or other officer of the company under Section 17(4). But in such a case it is necessary for the prosecution to prove that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of such person." (Emphasis supplied) . 6. In the result, the petition is allowed and the impugned order dated 7.10.1999 is set aside. The trial Court is directed to proceed with the trial in accordance with law. Records be sent back to the trial Court immediately. The parties are directed to appear before the trial Court on 18.6.2001. Petition allowed.