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2011 DIGILAW 355 (GAU)

Dulal Mandal v. State of Assam

2011-04-21

I.A.ANSARI

body2011
JUDGMENT I.A. Ansari, J. 1. In a complaint made to a Magistrate against a company and its directors for their prosecution alleging commission of offence under Section 16 of the Prevention of Food Adulteration Act, 1954, ('the PFA Act'), whether it is necessary for the complainant to indicate, in the petition itself, as to whether the person, who is sought to be prosecuted, as a director, was in-charge of, and responsible to, the company for the conduct of the business of the company, or a bare statement, made in a complaint, that a person, who is sought to be prosecuted, was a director of the company at the relevant point of time, when the company had sold an adulterated article for food, would be sufficient to frame charge under Section 16 of the PFA Act? In the answer to the question, so raised, lies the decision in this criminal revision. 2. Before entering into the discussion on the question posed above, it is necessary to take note of the material facts and various stages, which have given rise to this revision. It may be noted, in this regard, that a complaint was lodged by a Food Inspector in the court of the Chief Judicial Magistrate, Kamrup, his allegation being, in substance, as under: (a) On 8.12.1998, the complainant, as a Food Inspector, purchased, in presence of witnesses and in accordance with law, a sample of Arahar Dal (Hathi Brand) weighing 750 grams from accused No. 1, namely. Nab Kumar Mandal, a partner of Mandal & Brothers, from one sealed packet, out of total stock of 30 packets, containing about 50 kgs. of Arahar Dal each, which were kept lying there for sale for human consumption and paid, in consideration thereof, Rs. 26.25, which was the cost of the dal (pulses), (b) On 9.12.1998, one packet of the said sample along with a memorandum, affixing specimen impression seal on the body of the memorandum, was sent to the Public Analyst for analysis and the Local Health Authority, Kamrup, was accordingly informed by sending to the Local Health Authority the remaining parts of two samples and two copies of the memorandum in one sealed packet. A copy of the said memorandum, affixing specimen seal impression on its body, was sent to the Public Analyst on the same day. A copy of the said memorandum, affixing specimen seal impression on its body, was sent to the Public Analyst on the same day. (c) In his report, the Public Analyst pointed out that the said Arahar Dal was artificially colored with non-permitted collar colour (Metanil Yellow) and unfit for human consumption and was, therefore, adulterated within the meaning of Section 2(ia)(b) of the PFA Act. (d) The Food Inspector, thereafter, wrote to the Deputy Director, Food and Civil Supplies, Kamrup, and, then to the Registrar of Firms, Government of Bihar, Patna, to know the name or names of the proprietor(s)/partner(s), who was/were responsible for the conduct of the business of the firm, namely, Mandal & Brothers and Tulsyan Traders, Upper Bazar, Ranchi. Having collected the names of the partners of Mandal and Brothers and Tulsyan Traders and alleging that the said firm and its partners had committed-offence under Section 17 and were, therefore, punishable under Section 16 of the PFA Act for selling and having stored for sale the adulterated Arahar Dal, the Food Inspector obtained the consent from the appropriate authority for prosecution of all the accused under Section20(1) of the PFA Act and instituted prosecution against all of them as indicated above. The complaint aforementioned gave rise to CR case No. 1893/1998. 3. On appearance of the accused persons, recording of the evidence before charge commenced. The prosecution accordingly examined two witnesses including the Food Inspector (PW1) and he was partly cross-examined by the defence. The case, then, came to be fixed for consideration of charge. 4. At the stage of hearing of the charge, the present Petitioners submitted that they were merely sleeping partners of Mandal & Brothers and they were not in-charge of, and responsible to, the firm for the conduct of the business of the firm. It was also contended by them that the complaint, made by the Food Inspector, does not disclose that the offence was committed within the knowledge of the present Petitioners as partners of the said firm and, therefore, prosecution of the Petitioners was bad in law inasmuch as they were implicated in the complaint as accused merely because they happened to be partners of the firm, which had allegedly committed an offence under the PFA Act. 5. 5. By order, dated 19.5.2003, the learned Special Judicial Magistrate, Kamrup, Guwahati, rejected the above submissions of the Petitioners by observing to 'the effect that the question as, to whether the accused-petitioners were involved in selling the adulterated article of food to the Inspector (i.e., the complainant) is a matter to be decided at the time of final adjudication of the case, when the accused Petitioners would be able to take their defence, while being examined under Section 313, Cr.PC. Observing further that the question as to whether the accused-petitioners were in charge of, and responsible to, the firm for the conduct of the business of the firm, is a question to be decided at the time of taking final decision in the case and, hence, the plea of the accused-petitioners, seeking their discharge from the case, was premature. Aggrieved by the decision, so arrived at by the order, dated 19.5.2003, aforementioned, this revision has been filed by those persons, who are partners of M/s. Mandal & Brothers, but not the one, who had sold the said adulterated Arahar Dal inasmuch as the sale, in question, was made, admittedly, by one Naba Kumar Mandal as the vendor. 6. I have heard Mr. S.S. Sarma, learned senior counsel, appearing on behalf of the Petitioners, and Mr. B.S. Sinha, learned Additional Public Prosecutor, Assam. 7. Referring to the provisions of Section 17, which provides for prosecution of companies under the PFA Act, Mr. Sarma points out that Section 17 makes it clear that apart from the company, even the person, who, at the time of the commission of the offence, was in-charge of, and responsible to, the company for the conduct of the business of the company, would be liable to prosecution. Necessarily, therefore, contends Mr. Sarma, it must be alleged by the prosecution, in the complaint itself, that the person, sought to be prosecuted, was, though not a vendor, a director of the company and was, in his capacity as director in-charge of, and responsible to, the company for the conduct of the business of the company at the time of commission of the alleged offence. 8. In the case at hand, points out Mr. 8. In the case at hand, points out Mr. Sarma, the Food Inspector, did not even know as to whether the Petitioners were or were not partners of Mandal & Brothers and he claims to have obtained information from the Deputy Director of Food and Civil Supplies, Government of Assam, Kamrup, Guwahati, that the present Petitioners were, at the relevant point of time, partners of the said firm and, having received this information and acting thereupon, the Food Inspector has lodged complaint against the present Petitioners without ascertaining if the Petitioners were, as partners of the said firm, in-charge of, and responsible to, the firm for the conduct of business of the firm. No wonder, therefore, points out Mr. Sarma, there is no assertion and not even a whisper in the complaint, that the present Petitioners were, as partners, in charge of, and responsible to, the firm for the conduct of the business of the firm. In such circumstances, contends Mr. Sarma, no complaint against the present Petitioners, for commission of offence under the PFA Act by the firm, namely, Mandal & Brothers, could have been validly instituted or sustained and the question, in such a situation, of a charge having been framed against the present Petitioners, did not legally arise. In support of his submission, Mr. Sarma places reliance on Pepsico India Holdings (P.) Ltd. v. Food Inspector and Anr. (2011) 1 SCC 176 . 9. It is further submitted by Mr. Sarma that in the impugned order, the learned court below, while deciding to frame charge, has observed to the effect that the plea of the Petitioners that they were sleeping partners and that there is no accusation against them, in the complaint, that they were in-charge of, and responsible to the firm for the conduct of the business of the firm, is a plea, which can be taken and shall be taken by the accused-petitioners at the time, when they would be examined under Section 313, Cr.PC and when they would have the opportunity to take their defence and given their evidence. These observations, according to Mr. Sarma, are wholly alien to the scheme of framing of charge as envisaged by Section 244, Cr.PC. The reasons, therefore, assigned by the learned Magistrate for deciding to frame charge against the accused persons, are, according to Mr. Sarma, not sustainable in law. 10. These observations, according to Mr. Sarma, are wholly alien to the scheme of framing of charge as envisaged by Section 244, Cr.PC. The reasons, therefore, assigned by the learned Magistrate for deciding to frame charge against the accused persons, are, according to Mr. Sarma, not sustainable in law. 10. Resisting the revision, the learned Additional Public Prosecutor submits that the learned court below is wholly justified in taking the view that the plea, as to whether the accused-petitioners herein were merely sleeping partners or not or they were, or they were not, in-charge of, and responsible to the firm for the conduct of the business of the firm is a question, which would be decided at the end of the trial, when the accused-petitioners would be able to either elicit the supporting materials, in this regard, from the cross-examination of the prosecution witnesses including the Food Inspector or adduce their own evidence. 11. Let me, now, determine the merit of the rival contentions raised before this Court. While considering the present revision, it needs to be noted that the penalties, prescribed by Section 16of the PFA Act, show that a person may be punished with imprisonment for a term, which may extend to three years and when an offence is punishable by imprisonment for a term exceeding two years, it becomes a warrant case as defined by Section 2(x) of the Cr.PC. The procedure for trial, contained in Chapter XI, relates to trial of warrant cases by Magistrates. 12. Notwithstanding the fact that an offence, in the circumstances as indicated above, is required to be tried by the procedure meant for trial of warrant cases, what is pertinent to note is that Section 16A of the PFA Act empowers a Magistrate to try an accused in a summary way provided that he has been so empowered specifically, in this behalf, by the State Government. It is not, however, necessary for the Magistrate to mandatory try cases under the PFA Act in summary way. 13. In the case at hand, the trial, which has commenced against the Petitioners, is, admittedly, in terms of the provisions, embodied in the Cr.PC, for trial of warrant cases instituted otherwise than on police report. When can a charge be framed, in a warrant case instituted otherwise than on police report, is the primary question in this revision. 13. In the case at hand, the trial, which has commenced against the Petitioners, is, admittedly, in terms of the provisions, embodied in the Cr.PC, for trial of warrant cases instituted otherwise than on police report. When can a charge be framed, in a warrant case instituted otherwise than on police report, is the primary question in this revision. It needs to be noted, in this regard, that charge, in a trial of warrant case, registered on the basis of a police report, is framed under the provisions of Section 240, Cr.PC whereas charge, in a trial of warrant case instituted otherwise than on police report, is framed under Section 245, Cr.PC. The standards of materials required for the purpose of framing of the charge, in the two cases, are substantially different. If in a warrant procedure trial, based on police report, the materials, collected by investigation, give rise to a presumption that the accused has committed an offence, a charge, in terms of Section 240, Cr.PC, can be framed. However, on the basis of such a presumption, no charge can be framed in a trial of warrant case instituted otherwise than on police report inasmuch as a Magistrate can frame charge in a warrant case instituted otherwise than on police report only when the evidence brought on record, if remains rebutted, would warrant conviction of the accused. If, therefore, the evidence, adduced before charge, does not, even if remains unrebutted, warrant conviction of the accused, no charge, in the light of the provisions of Section 245, Cr.PC, can be framed in a warrant case instituted otherwise than on police report. 14. Now, turning to the question as to whether prosecution of the present Petitioners is permissible in law in the absence of, admittedly, any allegation in the complaint that they were in charge of, and responsible to, the firm for the conduct of the business of the firm, it needs to be noted that it is Section 17, which embodies provisions penalizing a firm or company and partners or directors thereof, as the case may be. Sub-section (1) of Section 17, which contains the provisions, relevant for this revision, are, therefore, reproduced below: 17. Offences by companies. Sub-section (1) of Section 17, which contains the provisions, relevant for this revision, are, therefore, reproduced below: 17. Offences 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 the offence was committed was in charge of, and 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. 15. From what Section 17(1) embodies, it becomes manifestly clear that while it is possible to prosecute a company for commission of an offence under the PFA Act, no director of the company can be prosecuted unless it is alleged that at the time of the offence, so committed, the person, sought to be prosecuted, was in-charge of, and responsible to, the company for the conduct of the business of the company. 16. Coupled with the above, the Explanation to Section 17(4) read as under: (4) Explanation - For the purpose 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. 17. 17. From a bare reading of the Explanation to Section 17(4), if becomes abundantly clear that the word 'company', which appears in Section 17, not only refers to a body corporate, but also includes a firm and the word 'director' has not only been used, in the PFA Act, in relation to a company, but also in relation to a firm as well inasmuch as a partner, in a firm, has to be treated as a director meaning thereby that the firm, under the scheme of the PFA Act, is treated as a company for the purpose of its prosecution under Section 17 and its partners are treated and regarded as directors of a company necessarily, therefore, when a partner is sought to be prosecuted, because of the fact that the, firm, whose partner he is, has committed an offence, under the PFA Act, it must be alleged, in the complaint itself, that the person, sought to be prosecuted, was in-charge of, and responsible to, the company for the conduct of the business of the company. In the absence of any such allegation in the complaint, the complaint cannot be sustained, because in the absence of any allegation that a natural person, sought to be prosecuted for commission of offence under the PFA Act by a body corporate, was in-charge of, and responsible for, the conduct of the business of the body corporate, the question of framing charge against him and putting him to trial does not arise at all. 18. I may pause here to point out that according to Section 2(d), Cr.PC, a 'complaint' means, any allegation made, orally or in writing, to a Magistrate with a view to his taking action under this Code, that some person, whether known or unknown, has committed an offence, but does not include a 'police report'. 19. A careful reading or the definition of 'complaint', as contained in Section 2(d), makes it clear that unless there is an allegation, made either orally or in writing, to a Magistrate, that a person has committed an offence, there is really no complaint in the eyes of law. 19. A careful reading or the definition of 'complaint', as contained in Section 2(d), makes it clear that unless there is an allegation, made either orally or in writing, to a Magistrate, that a person has committed an offence, there is really no complaint in the eyes of law. In the context of Section 17, therefore, a person cannot be made liable to prosecution unless he is shown that the person, sought to be prosecuted, as a director or as a partner, in the company or firm, as the case may be, was, at the relevant point of time, in-charge of, and responsible to, the company or the firm for the conduct of the business of the company or the firm, as the case may be. Logically extended, this will mean that in order to make a complaint valid in terms of Section 2(d), there must be made a specific allegation, in the complaint itself, that the person, named as accused in his capacity as a director or partner, was the one, who was in-charge of, and responsible to, the company or the firm, as the case may be, for the conduct of the business of the company or the firm, as the case may be. This position of law does not really remain in dispute inasmuch as the Supreme Court, having examined the question, in detail, in Pepsico India Holdings (P) Ltd. (supra), has laid down as under: It is now well established that in a complaint against a company and its directors, the complainant has to indicate in the complaint itself as to the company for its day-to-day management, or whether they were responsible to the company for the conduct of its business. A mere bald statement that a person was a director of the company against which certain allegations had been made is not sufficient to make such director liable in the absence of any specific allegations regarding his role in the management of the company. 20. A mere bald statement that a person was a director of the company against which certain allegations had been made is not sufficient to make such director liable in the absence of any specific allegations regarding his role in the management of the company. 20. In the face of the law laid down, in Pepsico India Holdings (P.) Ltd. (supra), making it crystal clear that a person cannot be proceeded against for commission of an offence by his company merely on the ground that he is a director unless the complaint itself indicate that the director concerned was in-charge of, and responsible to, the company for the conduct of the business of the company, a mere bald assertion, in the complaint, that the person was a director at a company, which is proceeded against as accused, for commission of an offence, under the PFA Act, is not sufficient. 21. What logically follows from the above discussion is that the learned Magistrate's observation made to the effect that the plea, which the accused-petitioner had taken that they were sleeping partners, is a plea, which is required to be taken, when the trial reaches the stage of recording of statement of the accused-petitioners under Section 313, Cr.PC, is wholly misconceived in law and cannot be sustained. It is against the basic principle of law to put a person to trial by framing a charge in a warrant procedure case instituted on the basis of a complaint, when the evidence, adduced before the charge, does not, if remains unrebutted, makes out a case for conviction of the accused, meaning thereby that all the ingredients of an offence must be disclosed in the evidence before the charge is framed. In the case at hand, there was, as can be clearly seen, no accusation that the present Petitioners were in-charge of, and responsible to, the firm, in question, namely, Mandal & Brothers, for the conduct of the business of the said firm. 22. What crystallizes from the above discussion is that the impugned order, framing charge against the present Petitioners, is not sustainable in the context of the facts of the present case and the law relevant thereto. This revision, therefore, succeeds. The impugned order is set aside and the accused are held not liable to be prosecuted on the basis of the complaint, which has been lodged against them in the present case. 23. This revision, therefore, succeeds. The impugned order is set aside and the accused are held not liable to be prosecuted on the basis of the complaint, which has been lodged against them in the present case. 23. With the above observations and directions, this revision stands disposed of. 24. Let the LCR be sent back.