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2013 DIGILAW 980 (KAR)

Sanjay Jain v. State of Karnataka

2013-08-23

K.N.KESHAVANARAYANA

body2013
ORDER K.N. Keshavanarayana, J.—As these two petitions relate to one and the same case registered in C.C. No. 825 of 2012 on the file of Additional MMTC-IV, Bangalore, they were heard together and are being disposed of by this common order. Though these petitions are listed today for admission, with the consent of both the parties, petition is heard for final disposal in view of the fact that the question of law raised is covered by the decision of the Apex Court and also of this Court. 2. In this petition filed under Section 482 of Criminal Procedure Code, 1973, the petitioners arraigned as accused 1, 2 and 3 have sought for quashing the prosecution launched against them in C.C. No. 825 of 2012 on the file of Additional MMTC-IV, Bangalore, registered for the offence punishable under Section 21(2) of the Contract Labour '(Regulation and Abolition) Act, 1970 (for short, 'the Act') and Rule 72 of the Contract Labour (Regulation and Abolition) Central Rules, 1971 framed thereunder. The petitioners have sought to be prosecuted in the capacity as Directors and authorised signatories of M/s. Accenture Services Private Limited. 3. The point of law raised in these petitions is whether the prosecution launched against the petitioners for the aforesaid offence as Directors and authorised signatories of the Company without the Company having been arrayed as accused is tenable. 4. Section 25 of the Act deals with the Offences by Company and it reads as under: 25. Offences by companies.--(1) If the person committing an offence under this Act is a company, the company as well as every person incharge of, and responsible to, the company for the conduct of its business at the time of the commission of the offence 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 if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent that commission of such offence. (2) Notwithstanding anything contained in sub-section (1), 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 that the commission of the offence is attributable to any neglect on the part of any director, manager, managing agent or any other officer of the company, such Director, Manager, Managing agent or such other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. 5. Thus from reading of the aforesaid section, it is clear that if the offence alleged, is committed by the company, then the Company as well as all other persons, who at the time of commission of offence were incharge of the conduct of the company are deemed to be guilty and are directed to be punished accordingly. 6. Similar provision contained in Section 141 of the Negotiable Instruments Act, 1881 (in short, 'the NI Act') came up for consideration before the larger Bench of Apex Court in the case of Aneeta Hada v. Godfather Travels and Tours Private Limited 2012 (4) Kar. L.J. 296 (SC) : AIR 2012 SC 2795 : (2012) 3 SCC (Cri.) 241 : (2012) 172 Comp. Cas. 75 (SC): 2012 Cri. L.J. 2525 (SC): 2012 AIR SCW 2693 : (2012) 5 SCC 661 . The Apex Court has held that to prosecute the functionaries of the company for the offence committed by the company, there should be specific averments in the complaint to the effect that such person/s was/is incharge of and being responsible for conduct of business of the Company and in the absence of such specific averment, the functionaries of the Company cannot be prosecuted. It is further held in the said decision that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. It is further held that the words "as well as the company" appearing in Section make it clear that when the Company can be prosecuted, then only persons mentioned in the other categories could be vicariously liable for offence subject to the averments in the petition and proof thereof. 7. Section 141 of the NI Act, is analogous to Section 25 of the Act. 7. Section 141 of the NI Act, is analogous to Section 25 of the Act. Therefore, the principles of law laid down in Aneeta Hada's case squarely applies to the facts of the case. Admittedly, in the case on hand the Company which is the principal offender has not been prosecuted. The petitioners in the present case are stated to be the Directors and authorised signatories of the company and are being prosecuted in that capacity. 8. In the light of the law laid down in the aforesaid decision, the prosecution launched against the petitioners as functionaries of the company, is not maintainable since the company is not being prosecuted. In this view of the matter, the prosecution launched against the petitioners are liable to be quashed. Accordingly, the petitions are allowed. The prosecution launched against the petitioners in C.C. No. 825 of 2012 on the file of the Additional Metropolitan Magistrate Traffic Court-IV, Bangalore City, is hereby quashed.