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2013 DIGILAW 1108 (BOM)

Afzal Abdul Khalek Ahmed v. State of Maharashtra

2013-06-19

A.P.BHANGALE

body2013
Judgment: 1. The petitioner, who is Director of M/s Recon Oil Industries Ltd., having its registered office at M.Vasanji Road, J.B.Nagar, Andheri (E), Mumbai 400 059 questions impugned order passed by learned Judicial Magistrate, First Class, Kannad dated 9th May 2003, whereby the application Exh.27 in the pending R.C.C.No.20/1996 was rejected. 2. Heard submissions at the Bar. It is the case of the petitioner that he had applied before the learned trial Magistrate to drop the criminal proceedings against him on the ground that prosecution is not maintainable against the petitioner, Director of a Company, sought to be prosecuted on the ground that it has committed an offence punishable under Prevention of Food Adulteration Act, 1954. It is submitted that complainant can prosecute only the nominee, who is declared as in-charge of and responsible to the accused-company for the conduct of its business. Director may be indicted as accused only in the absence of declaration of such nominee. Learned Advocate for the petitioner submitted that in the present case the nominee was already declared and the complainant indicted him as accused No.3 besides the accused-company. Therefore, the petitioner could not have been indicted on the ground that company has committed an offence punishable under the Act, merely because he is Director of the accused-company. Learned Advocate for the petitioner submitted that it is an admitted fact that nominee was appointed by the accused-company, who alone can be statutorily responsible to the company for the conduct of its business and if any offence is committed by the company punishable under the provisions of Food Adulteration Act 1954. 3. Section 17 (1) of the Food Adulteration Act, 1954 reads thus: “17. 3. Section 17 (1) of the Food Adulteration Act, 1954 reads thus: “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 92) to be in charge of, and responsible to, the company for the conduct of the business of the company (hereafter 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 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 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 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 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.]” In view of Section 17 (1) (a) of the Food Adulteration Act, learned Advocate for the petitioner submitted that the petitioner could not have been indicted on the ground that company has committed an offence, more so when the said company has already declared nominee as to be in-charge of and responsible to the company for the conduct of its business. It is also contended that the petitioner could have been indicted as accused only in the absence of such declared nominee. It is also contended that the petitioner could have been indicted as accused only in the absence of such declared nominee. According to learned Advocate for the petitioner there ought to have been specific averment in the complaint that the petitioner-accused was in-charge of and was responsible tot he company for the conduct of its business at the time when offence punishable under the Act was committed. 4. Learned A.P.P. found it difficult to counter these submissions, as she is not in a position to dispute that the accused-company had on 18.8.1993 declared Mr Gyanbahaddursing Suryapalsing, Supervisor of the company as nominee by resolution of the company to be in-charge and responsible to the accused-company Recon Enterprises Private Ltd. since the complainant has already prosecuted said nominee indicting him as accused No.3, while also naming the company as accused No.5. Thus, indicting the petitioner also as accused No.4 was contrary to law enacted under Section 17 (1) (a) of the Prevention of Food Adulteration Act, 1954. The prosecution can subject the indicted accused to unnecessary harassment when it is not essential to indict him according to law. Suffice it to say that when company was indicted as an accused in addition to the nominee, there was no need to indict any other Director without accusation that he was in charge of and was responsible to the company for the conduct of its business. Assuming for the sake of argument that indicting such Director in addition to nominee is essential. Even otherwise in the course of trial if essential, the prosecution may apply to the trial trial Magistrate to add the accused in view of Section 319 of the Cr.P.C. At this stage, however, prima facie it appears that when Company itself is prosecuted as an accused and its nominee is also named as an accused was declared as in charge of and responsible to the company for the conduct of its business, the accused No.4 (petitioner) ought not to have been indicted by the complainant as an accused. 5. 5. Learned Advocate made reference to ruling in PannalalSunderlal Choksi and ors., v. State of Maharashtra, reported in 2000 (4) Mh.L.J.674 to point out that when offence is committed by company, only that person would be responsible, who is expressly by its resolution was declared as nominee to be in charge of and responsible to the business of the company and not any other person merely because such person or persons were Directors of the Company. Reference is also made to ruling in Municipal Corporation of Delhi v. Ram Kishan Rohtagi and ors., reported in AIR 1983 SC 67 in order to argue that in the absence of clear accusations pleaded against Director that he was responsible to the company and was in-charge of the Company when offence was committed, such person cannot be prosecuted merely because he was Director of the Company. In such cases when allegations against Director are unjustified, extraordinary power under Section 482 of the Cr.P.C. can be exercised for quashing the criminal proceedings as against such Director. Learned Advocate has also placed reliance on ruling in PepsicoIndia Holdings Pvt.Ltd. v. Food Inspector and Anr., reported in 2011 CRI.L.J.1012 to argue that mere bald statement in the complaint that accused is Director of the Company against whom allegations have been made, cannot be sufficient to hold such Director liable for offence by company in the absence of specific allegations in the complaint that he was in the management of the Company, i.e. in-charge of and responsible to company for its business when offence was committed. Finally, reference is made to R.Banerjeeand ors., v. H.D.Dubey and ors., reported in 1992 (1) Prevention of Food Adulteration Cases 128 to argue that where Company has committed an offence punishable under Prevention of Food Adulteration Act, primarily, the person nominated under Section 17 (1) (a) of the Act is answerable for the offence. In other words, in the absence of declared nominee alone, the Director, Manager, Secretary or any other official of the Company may be proceeded with in respect of the offence alleged on the pretext that such person is responsible to the Company for the conduct of its business and was in charge of the management thereof. 6. In other words, in the absence of declared nominee alone, the Director, Manager, Secretary or any other official of the Company may be proceeded with in respect of the offence alleged on the pretext that such person is responsible to the Company for the conduct of its business and was in charge of the management thereof. 6. The contention of learned A.P.P. that in addition to nominee, Director may also be answerable for the offence committed by the company and furthermore, that such person can ask for discharge from the trial Magistrate, is not acceptable contention at this stage because when statutorily complainant is required to proceed against the accused-company and/or its nominee, indicting any other Manager or Director or Secretary in addition to the nominee is not legally permissible when there was resolution to appoint a particular person as nominee to defend the company. The criminal liability of a “company” arise by statutory fiction under Section 17 of the Prevention of Adulteration Act and, therefore, primarily the person, who is in-charge of and responsible to the company for the conduct of its business is alone imputed with vicarious responsibility. Thus, when nominee is statutorily declared, such person has to face the prosecution and answer the charges as intention of the legislature appears to save Directors of the company, who by resolution had already declared a nominee in the event the company is required to face prosecution for alleged offences committed by company as “nominee” is declared responsible for overall control over day to day business of the company to hold him vicariously liable and punishable under the provisions of Food Adulteration Act, 1954. Notwithstanding earlier order of discharge, no doubt it is true that if later on evidence led in the course of trial disclose that any Director, Manager, Secretary or other official of the company is imputable with criminal conspiracy; connivance or neglect, the trial Court may use its power under Section 319 Cr.P.Code in view of Section 17 (4) of the Prevention of Food Adulteration Act. But, even Sec. 17 (4) does not exclude nominee’s vicarious liability. 7. Taking the allegations in the complaint as they are, no offence is made out against the petitioner-accused for the aforesaid reasons. Impugned order is unjust; incorrect, improper as also contrary to law. It is unsustainable as against the present petitioner-accused. But, even Sec. 17 (4) does not exclude nominee’s vicarious liability. 7. Taking the allegations in the complaint as they are, no offence is made out against the petitioner-accused for the aforesaid reasons. Impugned order is unjust; incorrect, improper as also contrary to law. It is unsustainable as against the present petitioner-accused. Hence, the trial Magistrate is directed to drop proceedings as against the present petitioner and shall proceed further according to law and on merits against rest of the accused. Petition is allowed and Rule is made absolute accordingly.