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Madhya Pradesh High Court · body

2010 DIGILAW 10 (MP)

KAILASH AGARAWAL v. STATE OF M. P.

2010-01-05

S.S.DWIVEDI

body2010
Judgment S.S.Dwtvedi, J. ( 1. ) The applicants have filed this petition under Section 482 of the Code of Criminal Procedure, for quashment of the criminal complaint case no. 2436/07 pending before JMFC Gwalior arising out of a complaint filed by the Food Inspector, Gwalior against the applicants for the offence punishable under Section 7 read with section 16 of the Prevention of Food Adulteration Act (hereinafter referred to as the PFA Act). ( 2. ) Briefly stated the facts of the case are, the applicants are the partners of the registered partnership firm doing the business of oil trade and industry situated at near Gauram Dharamkanta,A.B.Road, Gwalior. As per the direction of Food Controller, Gwalior the Flying Squad of Food and Drug Administration, Gwalior had taken the search of the premises belonging to the applicant-firm and found certain oil stored for sale. At the time of inspection it is alleged that one employee alleged to be the Accountant (Muneem) namely Kailash S/o Late Ramswaroop Agarwal was found present there in the oil industry concerned. After giving him necessary notice for taking sample of the oil stored for sale the necessary sample of 375 Gms. oil had been purchased, the requisite price of the sample had also been paid to the concerned employee Kailash Agarawal/applicant no. 1 and the sample had been divided into three parts all the three parts were sealed properly; necessary Panchnama had been prepared thereafter the sealed packet of the article had been sent for its chemical analysis to the Food Laboratory, from where the report had been received wherein the sample of the concerning oil was found below standard. Thereafter, complaint had been filed against the applicants before the JMFC. Gwalior for the offence punishable under section 7 read with section 16 (1) (a) of the PFA Act. On receipt of the information about filing of the charge sheet the applicants came up before this Court by this petition under Section 482 Cr.P.C. for quashment of the criminal proceedings initiated against them. ( 3. ) Having heard the learned counsel for the applicants as well as learned Public Prosecutor for the State and perused the record. ( 4. ) It is submitted en behalf of the applicants that admittedly the applicants no.2 and 3 are the partners of the registered partnership firm/applicant no.4 Firm Ajeet Kumar Rakesh Kumar Oil Trade and industries. ( 3. ) Having heard the learned counsel for the applicants as well as learned Public Prosecutor for the State and perused the record. ( 4. ) It is submitted en behalf of the applicants that admittedly the applicants no.2 and 3 are the partners of the registered partnership firm/applicant no.4 Firm Ajeet Kumar Rakesh Kumar Oil Trade and industries. The applicant no.1 is simply shown to be the Accountant (Muneem), who is authorised for maintaining the accounts of firm only, he is nowhere related for manufacturing of the oil concerned in the oil industry. It is farther submitted that as per the provisions of Section 17 of PFA Act when the offence is committed by a registered company or registered partnership firm with regard to the offence related to PFA Act then the person authorised by the company or the firm concerned, as the case may be, can only be prosecuted by the competent authority for the offence punishable under the PFA Act. The applicants had already declared respondent no.2 Manoj Kumar as the person who is responsible for the prosecution for the offence under PFA Act as per the provisions of Section 17 (2) of PFA Act, therefore, the implication of the present applicants in the concerned criminal proceedings is erroneous and illegal. Therefore, on this sole ground the prosecution initiated against the applicants is liable to be quashed. ( 5. ) Learned Public Prosecutor for the State submits that the applicant no.1 was found at the time when sample of the oil concerned had been taken by the Food inspector. He had received the amount/price of the sample concerned; therefore, he is liable to be prosecuted. Similarly being the partners of the registered partnership firm the applicants no.2 and 3 are also responsible for the day to day Business of the firm concerned and they have been rightly made accused in this case and no grounds are available for the quashment of the criminal proceedings against the applicants. Therefore, prayed for dismissal of the petition. ( 6. Therefore, prayed for dismissal of the petition. ( 6. ) On consideration of rival contentions of both the counsel for the parties it is apparent that the applicants have challenged their prosecution on the solitary ground as per the previsions of sub-Section (2) of Section 17 of the PFA Act on the allegation that being the partners of the registered partnership firm they are not liable to be prosecuted for the offence punishable under PFA Act. Only the person responsible for day to day business and authorised or nominated by the company or the firm can only be prosecuted under this offence. It will be useful here to quote the provisions of Section 17 of the PFA Act to ascertain the point for dispute in between the parties, which reads here as under:- "17. Offence by companies.- (1) Where an offence under this Act has been committed by a company- (a)(i) the person, if any, who 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 of 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 that 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, alongwith 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 inrelation 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 sub-sections, 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.) ( 7. ) On perusal of the aforesaid provision of Section 17 of the PFA Act, which relate to the offence by companies. ) On perusal of the aforesaid provision of Section 17 of the PFA Act, which relate to the offence by companies. It is pertinent to note that the company may authorise in writing a person, who is liable for prosecution under this Act as per the provisions of sub-section (2) of Section 17. Thereafter Sub-section (3) of Section 17 deals with the procedure for the person, who has been authorised or nominated by the company as per sub-section (2) of Section 17. Similarly the explanation of Section. 17 clearly indicates that the provisions made for the offence related to the company which means any body corporate and also includes a firm or other association of individuals. Meaning thereby in the present case the applicants no.2 and 3 are the partners of registered partnership firm Ajeet Kumar,Rakesh Kumar Oil Trade and Industries, therefore, under the provisions the person to be held liable for the prosecution as shown by the applicants is respondent no.2-Manoj Kumar, who has been legally authorised and nominated by the firm as per the provisions of Section 17 (2) of the PFA.Act. ( 8. ) Insofar as the authorisation or nomination of respondent no.2 is concerned, the applicants have filed a document, Annexure P/2, whereby the Managing Director of the company namely Ajeet Kumar,Rakesh Kumar Oil Trade and Industries had authorised respondent no.2-Manoj Kumar as the person nominated as per the provisions of sub-section (2) of section 17 of the PFA Act. In this Annexure P/2 the respondent no.2-Manoj Kumar had accepted the aforesaid liability and this nomination form Annexure P/2 has also been accepted by the Local (Health) Authority/Deputy Director, Food and Drags Administration Gwalior. In view of the aforesaid admitted documentary evidence Annexure P/2 the applicants have proved the fact that as per provisions of sub-section (2) of Section 17 of the PFA Act the applicants no.2,3 and 4 had legally nominated respondent no.2 Manoj Kumar as the person, who can be prosecuted on behalf of the registered partnership firm for the offence punishable under PFA Act. ( 9. ) Learned Public Prosecutor cannot dispute the fact that Annexure P/2 is the document by which the respondent no.2 had been legally nominated as per the provisions of sub-section (2) of Section 17 of PFA Act. ( 9. ) Learned Public Prosecutor cannot dispute the fact that Annexure P/2 is the document by which the respondent no.2 had been legally nominated as per the provisions of sub-section (2) of Section 17 of PFA Act. In view of this, the prosecution of the present applicants as the partners of the registered partnership firm is apparently found to be illegal. ( 10. ) For this proposition the reliance can be placed on the decision of the Honble Apex Court in Municipal Corporation Delhi vs. Ram Kishan, reported in AIR 1983 SC 67 , dealing with the prosecution of Directors and Managers of the company held here as under:- " Proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under section 482. In the instant case the complaint clearly contains the allegations regarding the sample taken by the Inspector from a shop which was sent to the Public Analyst, was manufactured by the Company in question and that the Public Analyst found the sample to be adulterated. The complaint was filed against the Company, its Directors and the Managers. So far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complainant, that there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable. In these circumstances, therefore it can be said that no case against the Directors has been made out ex-facie on the allegations made in the complaint and the proceedings against them were rightly quashed by the High Court. However, the Manager of the Company who is directly incharge of its affairs, could not fall in the same category as the Directors. However, the Manager of the Company who is directly incharge of its affairs, could not fall in the same category as the Directors. It could not be reasonably argued that no case is made out against the Manager because from the very nature of his duties it is manifest that he must be in the knowledge about the affairs of the sale and manufacture of the disputed sample. From the very nature of his duties it can be safely inferred that the Manager would undoubtedly be vicariously liable for the offence; vicarious liability being an incident of an offence under the Act. Hence the order of the High Court quashing the proceedings against the Manager is liable to be set aside. ( 11. ) The same view has been re-iterated by the Honble Apex Court in R. Banerjee and others v. H.D.Dubey and others, reported in AIR 1992.SC 1168, wherein also the Honble Apex Court has held here as under- "9. On a careful perusal of the complaints lodged by the Food Inspector under the Act it is evident that intimation regarding the nomination in favour of H.Dayani and Dr. Nirmal Sen had been communicated to the Food Inspector before the complaints came to be lodged. This is evident from the averments made in the respective complaints. The nomination was, however, not acted upon by the complainant on the ground that it was incomplete. It was, therefore, said that in the absence of a valid nomination from the concerned company the Directors of the company were liable to be proceeded against and punished on proof of the charge levelled against them in the complaint. It will thus be seen that there is no allegation in the complaint which would bring the case within the mischief of Section 17(4) of the Act. There is no allegation in the complaint that the offence was committed with the consent/connivance/negligence of the Directors, other than the nominated person, who were impleaded as co-accused. We are, therefore, satisfied that the allegations in the complaint do not make out a case under sub-section (4) of Section 17 of the Act. That being so, the inclusion of the co-accused other than the company and the nominated person as the persons liable to be proceeded against and punished cannot be justified. We are, therefore, satisfied that the allegations in the complaint do not make out a case under sub-section (4) of Section 17 of the Act. That being so, the inclusion of the co-accused other than the company and the nominated person as the persons liable to be proceeded against and punished cannot be justified. As held by this Court in Municipal Corporation of Delhi v. Ram Kishan Rohtagi, (1983)1 SCR 884 : (AIR 1983 SWC 67) where the allegations set out in the complaint do not constitute any offence, no process can be issued against the co-accused other than the company and the nominated person and the High Court would be justified in exercising its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 to quash the order passed by the Magistrate taking cognizance of the offence against such co-accused." ( 12. ) The same decision is also followed by the Single Bench of this Court in Yogesh Chandra and another vs. State of Madhya Pradesh, reported in 2005 (1) MPLJ 282, wherein the prosecution of the Directors of the company had been quashed on the ground that the Manager being responsible person authorised under sub-section (2) of Section 17 of the PFA. Act can only be prosecuted. ( 13. ) The same view has also been taken by the High Court of Gujarat in Loknath Bhattacharya, Managing Director and another v. State of Gujarat and another, reported in 2009 Cri.L.J. 3577, wherein it was held hereas under:- "21. Apart from the above, in the facts of this case, under sub-section (2) of Section 17 of the Act, the petitioner company had nominated one Mr.Ashutosh Maity, Factory Superintendent of the Company by passing resolution on 25.01.1993 and the same was duly communicated therefore, there was no justification for filing complaint against the petitioner company involving the Managing Director and other directors. Therefore, the complaint deserves to be quashed and set aside on this ground also." ( 14. Therefore, the complaint deserves to be quashed and set aside on this ground also." ( 14. ) Same view has been taken by the High Court of Delhi in Vidyapati Kanodia vs. Local Health Authority of PFA, reported in 2001(2) FAC 120, wherein it was held, hereas under: - "If a person is nominated by a company for prosecution under Sub-Section (2) of Section 17 of the PFA Act then he alone can be prosecuted by the , competent authority and not all the Directors or partners of the firm." ( 15. ) Same view has been taken by the Single Bench of this Court also in K.B. Dadi vs. Food Inspector and others, reported in 2003 FAJ 125; Hindustan Food Products India vs. State of MP and another, reported in 2008(2) MPLJ 63 ; Hardeep Singh and others vs. Food Inspector, Department of PFA and others, reported in 2008(1) FAC 116; and, Ramesh Chandra Jain and another vs. State of Rajasthan and another, reported in 2008(2) FAC 97. ( 16. ) In view of the aforesaid decisions of the Honble Apex Court as well as of this Court it is clear that the applicants no.2 and 3 have legally nominated the respondent no.2 as the person who can be prosecuted for the offence punishable under the provisions of PFA Act. In view of this, the prosecution of the applicants no.2 and 3 as the partners of the registered partnership firm is found to be erroneous and liable to be quashed. ( 17. ) Insofar as the applicant no.1 is concerned, he is shown to be the Accountant (Muneem,) of the firm, who is responsible for maintaining the accounts only and his prosecution is also not found to be valid unless, he is found to be responsible for the manufacturing of the oil concerned. For this proposition learned counsel for the applicants placed reliance on the decision of the Himachal Pradesh High Court in BihariLal and another vs. The State of HP, reported in 1987 FAJ 420, wherein it is held here as under: - "4. So far as petitioner Bihari Lai is concerned it is an admitted fact that he was a mere employee of the owner of the shop in question. So far as petitioner Bihari Lai is concerned it is an admitted fact that he was a mere employee of the owner of the shop in question. Jaishi Ram, co-petitioner, who was present in the shop at the time when the impugned sample was taken by the Food Inspector by purchasing the sample (sabatrash) from said Bihari Lal who admittedly, acted as muneem of said Jaishi Ram in the said shop. Under these circumstances no criminal liability under the Act is attracted qua this petitioner Bihari Lal. Apparently being a muneem,he was not supposed to engage himself as a salesman in the shop and indulge in the act of selling. But, since he alone was present in the shop, it was he who sold the article in question to the Food Inspector when required to do so by the said Food Inspector. I am fortified in coming to the conclusion by a judgment of the Supreme Court in an appeal by special leave against a judgment of this Court in Criminal Appeal No.10 of 1985 (Brij Mohan and another vs. The State of H.P.), decided on May 30, 1986, which was registered as 1720 of 1986 in the Supreme Court and decided vide order dated July 16, 1986. The facts in that case were that one Brij Mohan was running a shop at Hamirpur in the name and style of M/s Mohan General Store, Hamirpur, dealing in general provisions of merchandise and he had employed Rattan Chand as a salesman in the said shop. The Food and Supplies Inspector, Hamirpur, checked the said shop when only Rattan Chand, the employee of Brij Mohan was present in the shop and challaned said Rattan Chand and also the proprietor of the shop Brij Mohan for offences under Section 3 read with Section 7 of the Essential Commodities Act, 1955 and the Judge Special Court after trial of the case found both of them guilty and sentenced each of them to undergo simple imprisonment for a period of three months and to pay fine of Rs.lOO/-. The appeal in this Court against this order was dismissed and the co-accused Rattan Chand employee in the said shop took an appeal to the Supreme Court against the order of this Court. The appeal in this Court against this order was dismissed and the co-accused Rattan Chand employee in the said shop took an appeal to the Supreme Court against the order of this Court. Their Lordships of the Supreme Court then in that case held: "We see no necessity to issue notice and delay disposal of the matter as the admitted position is that the appellant was an employee of the shop. He was not found engaged in the act of selling. We accept his appeal and set aside his conviction and vacate the sentences of imprisonment and fine. The appeal is allowed." On the analogy of this finding I hold that even this Bihari Lai being Muneem in the shop was not engaged in the act of selling at the time of taking of sample and was only an employee in the shop: under section 7 read with section 16(i)(a) of the Act. His revision petition is, therefore, accepted and order of conviction passed against him is set aside and consequently the sentences of imprisonment and fine passed against him are vacated." ( 18. ) In view of the aforesaid decision, which has been relied upon, .the decision of the Honble Apex Court in Criminal Appeal No .10 of 1985 (Brij Mohan vs. State of H.P.J squarely covers the status of the applicant no.1 being the Muneem of the firm, he cannot be held liable for the prosecution because he is not responsible for day to day manufacturing and sale of the oil concerned. His duty is only to maintain the accounts of the firm. ( 19. ) Similarly, it has been objected by learned Public Prosecutor for the State that as the charge sheet has been filed and all these grounds can be taken by the applicants before the trial Court itself, therefore the petition for quashment of the proceedings will not lie under the provisions of Section 482 Cr.P.C. ( 20. ) This Court is not much impressed by the aforesaid submission of learned Public Prosecutor for the State. If a wrong complaint has been filed against the applicants then certainty the complaint can be quashed under the provisions of Section 482 Cr.P.C. by this Court if apparently the prosecution is found to be illegal. ) This Court is not much impressed by the aforesaid submission of learned Public Prosecutor for the State. If a wrong complaint has been filed against the applicants then certainty the complaint can be quashed under the provisions of Section 482 Cr.P.C. by this Court if apparently the prosecution is found to be illegal. For this reliance can be placed on a decision of this Court in Pappu and another vs. State of M.P., reported in 2000 (1) JLJ 391 , wherein the decision of the Honble Apex Court in Ashok Chaturvedi and others vs. Shital H. Chanchani and another, reported in 1998 SCC (Criminal 1704 is also relied upon and held that "if on the averments made in the complaint no case is made out against the applicant then the proceedings can be quashed under the provisions of Section 482 Cr.P.C. ( 21. ) Same view has also been taken again in Puranmal s/o Badrilal Gupta and another vs. State of MP and others, reported in 2007 (1) MPLJ 90 , also. ( 22. ) Thus, on the basis of the aforesaid case law on the point and on perusal of the facts of the present case it is apparent that the applicants no.2 and 3 have legally nominated respondent no-2-Manoj Kumar as a person responsible under PFA Act he has been authorised under the provisions of sub-Section (2) of Section 17 of PFA Act then the prosecution can be initiated only against the respondent no,2 as nominated person of applicant, no. 4-firm and not against all the partners of the firm concerned/Therefore, criminal prosecution of the applicants no.1 to 3 is found to be erroneous and liable to be quashed. ( 23. ) Resultantly, the petition filed on behalf of the applicants succeeds and is hereby allowed. The criminal proceedings of Criminal Case No. 2436/07, pending, before the JMFC Gwalior for the offence punishable under Section 7 read with section 16 of PFA Act, initiated against the applicants no.1, 2 and 3 by respondent no.1 is hereby quashed.. The respondent no.1 can proceed with the concerning case only against the applicant no.4 the registered firm through respondent no.2-Manoj Kumar, who is legally nominated as the person as per provisions of subsection (2) of Section 17 of PFA for the alleged act. Petition allowed.