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2006 DIGILAW 867 (PNJ)

Diwan Chand v. State Of Punjab

2006-03-02

SATISH KUMAR MITTAL

body2006
Judgment Satish Kumar Mittal, J. 1. This judgment shall dispose of two connected petitions i. e. Cr. Misc. Nos.17459-M of 2000 and 17461-M of 2000. These petitions have been filed for quashing of two different complaints against same person on account of two samples drawn on the different dates. In these two petitions common question of law and facts is involved. The facts, as noticed below, have been taken from Cr. Misc.17459-M of 2000. 2. Petitioner Diwan Chand, Chief Manager (Production) of Indian farmers Fertilizer Co-operative Limited (for short "the IFFCO"), who has now retired from service, has filed this petition under Sec.482 Cr. P. C. for quashing of complaint dated 9.11.1999 filed against him and some others under Sec.7 of the Fertilizer Control Order, 1985 (for short the order) and all subsequent proceedings arising therefrom. 3. The brief facts of the case are that on 22.7.1996 a sample of Dia-ammonium fertilizer was drawn by the Fertilizer Inspector from the premises of firm M/s Jindowal Co-operative Agriculture Service Society Ltd. , jindowal, District Nawanshahr, a dealer of IFFCO. The said sample was found to be non-standard by the Quality Control Laboratory, Ludhiana vide its report dated 21.8.1996. After expiry of more than 3 years on 9.11.1999, the complaint in question was filed by Chief Agricultural Officer in the Court of Special Judge, Nawanshahr against the alleged dealer as well as the petitioner, being an employee of IFFCO, manufacturer of the alleged fertilizer. 4. On 31.5.2000 the petitioner filed the instant petition for quashing of the aforesaid complaint on various grounds. However, the learned counsel for the petitioner has pressed this petition only on one ground that the offending company i. e. IFFCO who had manufactured the non-standard fertilizer and committed the alleged offence being manufacturer, has not been arrayed as an accused and in the absence of the company, the petitioner, who was the employee of the said company, cannot be prosecuted. 5. Learned counsel for the petitioner has submitted that Sec.10 of the Act provides that if the person who contravened an order made under section 3 is a company, every person who, at the time when the contravention was committed, was incharge of, and was responsible to, the company for the conduct shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. 6. 6. Learned counsel has further submitted that if the non-standard sample was taken from the premises of a dealer, and the manufacturing company is being also prosecuted for the alleged contravention then the person responsible and incharge of the business of the said company cannot individually be prosecuted without impleading the company as an accused because the offence is being committed by the company. Learned counsel has submitted that as per Sec.10 of the Act the company as well as the person responsible for the conduct of the business of the said company are liable to be prosecuted and punished. 7. Learned counsel has further submitted that in the instant case the non-standard fertilizer was manufactured and supplied by the IFFCO and the petitioner was the employee of the said firm and was looking to the production, therefore, without arraying the company as an accused, the petitioner cannot be prosecuted. 8. In support of his contention, learned counsel for the petitioner has relied upon the decisions of this Court in Sham Sunder Bassi vs. The state of Punjab, 1992 (1) FAC 43 : 1991 (3) Recent Criminal Reports 199; S. H. Chisty vs. State of Haryana, 1997 (2) FAC 9; S. C. Sharma vs. State of Haryana, 2003 (1) FAC 1 : 2003 (1) RCC 80 and a decision of this Court dated 28.4.2004 passed in Crl. Misc. No.5272-M of 1996, titled as M. N. Murli Kumar vs. State of Punjab and Surinder Kumar jain vs. State of Haryana, 2005 (2) FAC 269. 9. On the other hand, learned counsel for the respondents has submitted that the petitioner was working as a Chief Manager (Production) when the alleged sample of fertilizer was drawn from the premises of the dealer. He himself filed an affidavit with regard to the quality of the product under clause 24 of the Order. Clause 24 of the said Order provides that every manufacturing company shall appoint in its organization an officer who shall be responsible for compliance of the provisions of the Fertilizer control Order. 10. Learned State counsel has further submitted that the petitioner was nominated as person incharge of the Production Unit with regard to its quality with his consent, therefore, he cannot escape from the liability to be prosecuted. However, it has not been explained why the manufacturing company itself was not impleaded as an accused in the complaint. 11. 10. Learned State counsel has further submitted that the petitioner was nominated as person incharge of the Production Unit with regard to its quality with his consent, therefore, he cannot escape from the liability to be prosecuted. However, it has not been explained why the manufacturing company itself was not impleaded as an accused in the complaint. 11. In reply to the said contention of the learned counsel for the respondent, learned counsel for the petitioner submitted that if the nomination of the petitioner being responsible officer under Clause 24 of the Order is presumed to be true, though not admitted to be correct, even then the proceedings initiated by the respondent are contrary to Sec.10 of the Act and Clause 24 of the Order because in the complaint there are no allegations against the petitioner that he was incharge and was responsible to the company for the conduct of its over all business. Learned counsel has referred to paragraphs 10 and 11 of the complaint, which are as under:- "as non-standard fertilizer was supplied and manufactured by indian Farmers Fertilizers Cooperative Ltd. Kandla Plant and sh. L. Murugappan Chief Manager (Production) IFFCO, Kandla plant (accused No.4) was incharge and responsible person of the aforesaid company for the conduct of the business of the company, hence has violated the provision of Clause 19 (1) (a) of the Fertilizer Control Order, 1985 as such he is also liable for prosecution. A copy showing the person responsible is annexed as P-7. A show-cause notice was served to the accused by Chief Agri. Officer, Nawanshahr and a copy of analysis report was also sent, vide letter No.4200 dated 8.10.1996 and Nos.385 dated 21.4.1997 original office copies annexed as P-8 and P-9. " 12. In reply only it has been submitted that the petitioner himself filed an affidavit to the quality of the product being a Production Manager. It has not been shown that the petitioner was the person responsible for the affairs of the company. 13. During arguments it has not been disputed that the petitioner now stands retired and in his place another officer was appointed as person responsible in the year 1997 itself before filing of the complaint. 14. After hearing learned counsel for the parties and going through the record of the case, I am of the opinion that this petition deserves to be allowed. 14. After hearing learned counsel for the parties and going through the record of the case, I am of the opinion that this petition deserves to be allowed. Undisputedly, the sample of the non-standard fertilizer was drawn from the business premises of the dealer. If the alleged offence is also committed by the manufacturing company, it is also liable to be prosecuted. The petitioner has been arrayed as an accused along with the dealer being a person responsible of the manufacturing company but admittedly the offending company has not been arrayed as an accused. The petitioner was an employee of the said company and he was nominated as the person responsible under Clause 24 of the Order. 15. In a similar case, a similar question came for consideration before this Court in Sham Sunder Bassi vs. The State of Punjab (supra) when a sample of the fertilizer, which was drawn from the business premises of a dealer was found to be sub-standard without impleading the manufacturing company as an accused the Area Manager was sought to be prosecuted alone. This. Court while quashing the complaint held that the Area Manager of the manufacturing company was not liable to be prosecuted for the sale of the non-standard fertilizer by the dealer without arraigning the manufacturing company as one of the accused and observed as under :- "the question then arises whether the Area Manager of the corporation i. e. the Company, would be liable under Sec.10 of the Essential Commodities Act without the company or the corporation having been arraigned as an accused person. The provisions of Sec.10 of the Act reads as under. . . . . . . . . . A bare glance through these provisions reveals that the company has been made principal accused person and since juristic person i. e. the company acts through its officers/officials, the official directly involved in the manufacture, sale or the distribution, as the case may be, and is answerable to the company, in this regard has also been made liable. Curiously intention of the legislature in enacting these provisions was to provide deterrent effect to the officials of the company in order to restrain them from indulging in the sale, distribution etc. , of sub-standard fertilizer or other goods on one side and to pinpoint the liability of the officials of the company on the other. Curiously intention of the legislature in enacting these provisions was to provide deterrent effect to the officials of the company in order to restrain them from indulging in the sale, distribution etc. , of sub-standard fertilizer or other goods on one side and to pinpoint the liability of the officials of the company on the other. Thus non-arraigning the company as an accused person is a fatal flaw in the prosecution of the accused-petitioner for the above referred offences, which would vitiate the entire proceedings as held by the Apex Court in the State of Madras vs. C. V. Parkash and others, AIR 1971 supreme Court 447. In para No.3 of the judgment while dealing with the liability of the employees of a company for violation of the provisions of Sec.5 of the Iron and Steel Control Order, 1956, the Apex Court has discussed the import of Sec.10 of the Essential Commodities Act, as under :- "3. . . . It was urged that the two respondents were incharge of and were responsible to, the company for the conduct of the business of the company and, consequently, they must be held responsible for the sale and for thus contravening the provisions of clause 5 of the Iron and Steel (Control) Order. This argument cannot be accepted, because it ignores the first condition for the applicability of Sec.10 to the effect that the person contravening the order must be a company itself. In the present case, there is no finding either by the Magistrate or by the High Court that the sale in contravention of clause 5 of the Iron and Steel (Control) Order was made by the Company. In fact, the company was not charged with the offences at all. The liability of the persons incharge of the company only arises when the contravention is by the company itself. Since, in this case there is no evidence and no finding that the company contravened clauses 5 of the Iron and Steel (Control)Order, the two respondents could not be held responsible. The actual contravention was by Kamdar and Villabhadas Thacker and any contravention by them would not fasten responsibility on the respondents. The acquittal of the respondents is, therefore, fully justified. The appeal fails and is dismissed. " 16. The actual contravention was by Kamdar and Villabhadas Thacker and any contravention by them would not fasten responsibility on the respondents. The acquittal of the respondents is, therefore, fully justified. The appeal fails and is dismissed. " 16. Similarly, in S. H. Chistys case (supra) where sample of fertilizer was found to be misbranded and the manufacturing company was not arrayed as accused, this Court held as under :- "learned counsel for the petitioner has invited my attention to the citation reported as 1994 (1) RCR (Crl.) 347, G. S. Nagpal vs. State of Punjab and the order dated 5.2.1996 also passed by this court in Crl. Misc. No.21202-M of 1995, Prem Parkash aggarwal vs. State of Punjab. In these two citations the view taken is that without arraying his company as an accused, the office holder of the company whether he is a Managing Director or Incharge of the affairs of the manufacturing unit cannot be held responsible without adding the company as an accused itself. This Court had the occasion to go through all the citations read with all the provisions. The words as well as company appearing in Clause (1) of Sec.10 are not redundant. This Court is not in a position to subscribe to the view taken by this Lordship in 1996 (2) RCR 393 mainly on the ground that had this been the intention of the Legislature that every person incharge of the affairs of the unit would be individually liable as an accused without arraying the company as an accused, the words quoted above, as well as company would not have been superfluous. By deleting above words, the Legislature could very well say that every person who at the time the contravention was committed was incharge of and was responsible to the company for the conduct of the companys affairs shall be deemed to have committed the offence and shall be liable to be prosecuted. The words as well as company has a lot of significance and it cannot be brushed aside. In Crl. Misc. No.21202-M of 1995 there is a categorical finding by Justice Malte that the manufacturing concern should also be made a party and the person incharge of the manufacturing process would be liable along with the company manufacturing the pesticides and this is squarely the ratio expressed in Nagpals case. Though Nagpals Authority (supra) was before his Lordship Honble Mr. Misc. No.21202-M of 1995 there is a categorical finding by Justice Malte that the manufacturing concern should also be made a party and the person incharge of the manufacturing process would be liable along with the company manufacturing the pesticides and this is squarely the ratio expressed in Nagpals case. Though Nagpals Authority (supra) was before his Lordship Honble Mr. Justice M. L. Singhal when his Lordship was pleased to pass the order in Criminal misc. No.5898-M of 1996 but the view expressed by Honble mr. Justice Malte was perhaps was not placed before his lordships. Be that as it may. the plain reading of Sec.10 which is equivalent to Sec.33 of the Insecticides Act would show that a person responsible for the manufacturing unit individually cannot be prosecuted without adding the company as an accused which has not been done in the present case is evident from the complaint Annexure P-1. In these circumstances, the prosecution against the petitioner cannot be allowed to go. This Court respectfully differs with the view taken up in 1997 (II) FAC 15 : 1996 (3) RCR (Crl.) 393 M. N. Murlidhar vs. State of Punjab. " 17. In view of the above discussion, this petition is allowed, complaint, annexure P-l, along with all the consequential proceedings arising therefrom are quashed. Petition allowed.