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2017 DIGILAW 950 (GUJ)

Samirbhai S. Vora v. State of Gujarat

2017-05-02

B.N.KARIA

body2017
JUDGMENT : B.N. Karia, J. 1. The applicant-accused No. 2 has preferred this application under Section 482 of the Code of Criminal Procedure, 1973 {"CrPC" for brevity} for quashing and setting aside the complaint, being Criminal Case No. 9066 of 2007 registered with the Chief Judicial Magistrate, Gandhinagar for the offence punishable under Sections 7(2), 7(3) and 16(1)(A)(i) and (ii) of the Prevention of Food Adulteration Act, 1954 {"PFA Act" for brevity}. 2. Brief facts of the case are that on 19.08.2006 at about 13.45 o'clock, the complainant visited Adani Super Market managed by B2C India Limited with one Shri T.V. Makwana. At that time, the accused No. 1 was present at the place and he disclosed his identity as a Manager of the firm. Upon inspection, the complainant found registration certificate No. 5409 dated 09.05.2005 of the firm in the name of Shri Samir Vora, and while making inquiry, it was found that packing of desi 'Moongdal' of 500 gram were kept for sale. The accused No. 1 stated the rate of each pack to be at Rs. 23.50 and on each of packing, mark of "Adani Veg" and packed by "Adani Retail Limited, Prasad Complex, Opp. Jain Derasar, Nehrungar Circle, Ambavadi Ahmedabad, 380015" was printed and on each of the packing stickers "Adani's 21754", "Moong Dal" Deshi-500 g. Net Wt. M.R.P. Rs. 23.50 (incl of all taxes) Pkd-14-08-2006, Best Before 13.10.06 was written and while making clarification regarding 21754, the accused No. 1 stated that it was a code for counting the price in the computer and various code numbers were given for various weight of 'deshi moongdal' and till it is not being change, it remains as it is and there being no concern with packing made from the separate stock of moongdal, and therefore, that was not the batch number. 3. That thereafter, the complainant seized the samples after following due process of law and after declaring the sample as misbranded, the permission of local health authority was sought for lodging a complaint before the Court and after getting permission on 28.02.2007, the impugned complaint came to be lodged before the court concerned against various accused persons; including the present applicant. 4. Heard learned senior advocate Mr. Sudhir I. Nanavati with Ms. Anuja S. Nanavati, learned advocate appearing on behalf of the applicant and learned APP Mr. K.P. Raval appearing on behalf of the respondent-State. 5. 4. Heard learned senior advocate Mr. Sudhir I. Nanavati with Ms. Anuja S. Nanavati, learned advocate appearing on behalf of the applicant and learned APP Mr. K.P. Raval appearing on behalf of the respondent-State. 5. Learned senior advocate Mr. Sudhir I. Nanavati appearing on behalf of the applicant has argued that the applicant is unnecessary arraigned as an accused for his being a Director of M/s. B2C India Limited and also a Director in Adani Retail Limited. The retail chain of stores was incorporated on 7th July, 2000 and was being managed by a limited company viz., B2C India Limited. That, vide resolution dated 18.10.2005 passed by the said Company in terms of Section 21 of the Companies Act, the name of the said Company was changed from B2C India Limited to Adani Retail Limited. That, in view of such change in the name, fresh certificate in name of the Company came to be issued on 21st October, 2005. Prior to that, the Company was acting and operating in the name and style of B2C India Limited and it had nominated Mr. Parag S. Padrakar as Officer-in-charge and responsible for the Company's day-to-day activities for the entire State of Gujarat under the provisions contained in Section 17 read with Rule 12B by submitting Form VIII dated 15.02.2005. Accordingly, said Mr. Parag S. Padrakar is duly nominated officer of the Company for the State of Gujarat for its activities falling within purview of the PFA Act. The Company is not manufacturer of the said sample goods. There is no direct allegation and/or role attributed against the present applicant in the complaint, or no specific averment is there to show as to how the applicant was directly responsible for and/or involved in the manufacture/purchase/sale of the said sample, and therefore, cognizance taken thereon is without proper application of mind. That, a bare perusal of the complaint does not disclose ingredients constituting the alleged offence. That, learned Judicial Magistrate ought to have applied judicial mind to the facts and circumstances of the case as made out in the complaint, in order to arrive at a just conclusion as to whether the allegations constitute an offence alleged or not. That, a bare perusal of the complaint does not disclose ingredients constituting the alleged offence. That, learned Judicial Magistrate ought to have applied judicial mind to the facts and circumstances of the case as made out in the complaint, in order to arrive at a just conclusion as to whether the allegations constitute an offence alleged or not. That, in order to foist vicarious liability under section 17 of the PFA Act against a person, who has been sought to be prosecuted for alleged offence committed by the said Company punishable under Section 16 of the said Act, it is incumbent for the prosecution to prima facie establish that at the material time, such person was in charge of the said Company and also responsible to the said Company for the conduct of its business. 6. Learned APP Mr. K.P. Raval appearing on behalf of the respondent No. 1 has strongly opposed submissions made on behalf of the applicant and argued that the applicant is prima facie liable to stand trial for the offence alleged. As per section 17 of the PFA Act, 1954, nomination was made by the Company in favour of Mr. Parag S. Padrakar on 15th February, 2005. He has further argued that this offence was committed on 19th August, 2006 and no nomination was made by Adani Retail Limited in favour of the present applicant. Registration certificate of the shop was found in favour of the present applicant. That, when no person has been nominated by the Company, the other person, who at the time of offence was in-charge of and responsible to the company for the conduct of the business of the Company, shall be liable to stand the trial. The present applicant was in-charge of the Company and was exercising powers as a Director/Manager on behalf of the Company in a supervisory capacity, and therefore, he would be liable for the affairs of the Company. Learned APP Mr. KP Raval has invited attention of this Court to Section 17(2) and (3) of the PFA Act and argued that a prima facie case is made out by the complainant involving the applicant in the alleged offence and this Court need not exercise power vested under Section 482 CrPC. Lastly, it was requested by him to dismiss the application. 7. Having considered the cross-case, submissions made by learned senior advocate Mr. Lastly, it was requested by him to dismiss the application. 7. Having considered the cross-case, submissions made by learned senior advocate Mr. Sudhir I. Nanavati appearing on behalf of the applicant and learned APP Mr. K.P. Raval appearing on behalf of the respondent No. 1 and on going through the documentary evidence produced on record, it appears that the present applicant is the accused No. 2 in the complaint lodged by the Food Inspector before the learned Chief Judicial Magistrate at Gandhinagar for the offence punishable under Section 32(e) of the PFA Rules, 1955 and Section 9(k) of the PFA Act, 1954. This offence is punishable under Section 16(1)(A)(i) of the PFA Act. As per the averments made in the complaint, the main grievance raised by both the sides is with respect to nomination made by the Company in favour of the present applicant, and for this issue this Court would like to refer nomination by the Company in Form VIII under the PFA Act. It appears that Mr. Parag S. Padrakar has been nominated by the Company by a resolution passed in a meeting held on 14th February, 2005 and is in-charge of and responsible for the said Company in Gujarat and he is authorized to take all such step, as may be necessary or expedient to prevent the commission by the said Company of any offence under the PFA Act, 1954. As per averments made in the application, the present applicant was Director of Adani Retail Limited as well as M/s. B2C India Limited. The retail chain of stores was incorporated on 07.07.2000 and is being run/managed by the said M/s. B2C India Limited. Thereafter, by resolution dated 18th October, 2005 passed by the said Company, name of the said Company was changed from M/s. B2C India Limited to Adani Retail Limited. Before 21st October, 2005, the Company was acting and operating its activities in the name and style of B2C India Limited and Mr. Parag S Padrakar was nominated as an Officer-in-charge and responsible for the company's day-to-day activities in the entire State of Gujarat under the provisions contained in Section 17 read with Rule 12B of the PFA Act. Whereas, there is no nomination made by any resolution in favour of the present applicant, either as a Director of Adani Retail Limited or M/s. B2C India Limited at the time of commission of alleged offence. Whereas, there is no nomination made by any resolution in favour of the present applicant, either as a Director of Adani Retail Limited or M/s. B2C India Limited at the time of commission of alleged offence. As per the Company, this offence was committed on 19th August, 2006, and whereas, the complainant paid visit at the place of offence with helper Shri T.V. Makwana. While visiting the place of offence, a certificate of registration of the shop, being 5409 dated 09.05.2005 was found in favour of the present applicant namely Shri Samir Vora. Here, this Court would like to refer Section 17 of the PFA Act, 1954, which reads as under: "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 (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 subsection 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, along with the written consent of such director or manager for being so nominated. (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 subsection (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." 8. Therefore, it is clear from the record that the present applicant was not nominated by the Company, hence, section 17(i)(ii) would apply, wherein it is stipulated that where no person is nominated, every person, who at the time of the offence committed, is in-charge of, and responsible to the Company for the conduct of business of the Company, shall be deemed to be guilty of the offence and shall be liable to be prosecuted against and punished in accordance with law. In absence of any nomination, as required under Section 4 of the PFA Act and averments made in the complaint, arguments advanced on this issue cannot be accepted. 9. The ground raised by the applicant in his application at Sr. No. 9 with respect to nomination in favour of Mr. In absence of any nomination, as required under Section 4 of the PFA Act and averments made in the complaint, arguments advanced on this issue cannot be accepted. 9. The ground raised by the applicant in his application at Sr. No. 9 with respect to nomination in favour of Mr. Parag S Padrakar does not find favour, as no nomination was made by the Company in favour of the present applicant (accused No. 1) under the said Act, and therefore, on this ground to quash the complaint would not be maintainable. 10. On the other grounds raised by learned advocate appearing on behalf of the applicant, it is for the prosecution to prima facie establish that at the material time of point, the applicant was (i) in-charge of the said company and (ii) responsible for the said company for the conduct of its business. Simply because, a person acts as a Director of the Company, it does not necessarily mean that he fulfills both the above requirements so as to make him liable for the affairs of the Company. As per the allegations made in the complaint by the complainant, upon analysis of samples taken from Shri Manishbhai Bhailalbhai Christian-accused No. 1, by Public Analyst at Gandhinagar, it is found that there was no batch number printed on the packing, and therefore, it violates Rule 32(C) of the PFA Rules and same falls within the definition of 'Misbranded' as defined under Section 2(ix)(k) of the PFA Act. From the complaint, nowhere it is found, nor any allegations and/or role attributed by the present applicant is described. There is no specific averment made in the complaint, as to how the applicant was directly responsible for and/or involved in the manufacture/purchase/sale of the said sample. 11. As held by the Hon'ble Supreme Court in case of State of Haryana v. Brijlal Mittal & Ors., reported in 1998 (5) SCC 343 , vicarious liability of a person for being prosecuted for an offence under the Drugs and Cosmetics Act, 1940 by a Company arises, if at the material time, he was in-charge of and was also responsible for the Company for the conduct of its business. If the complaint is read as a whole, it is clear that ingredients so as to constitute the alleged offence are not in existence. If the complaint is read as a whole, it is clear that ingredients so as to constitute the alleged offence are not in existence. Simply because, a person is Director of the Company, it does not necessarily mean that he fulfills both the requirements (i) the person in charge and (ii) responsible for the Company for the conduct of its business so as to make him liable vicariously. It is for the prosecution to prove consent and connivance of any Director, Manager, etc., in commission of the offence and only on such proof, the Director, Manager etc., could also be prosecuted. In absence of any allegation in the complaint regarding consent or connivance of Director, Manager etc., the prosecution cannot be permitted to proceed against him. 12. In case of Pepsico India Holdings Private Limited v. Food Inspector & Anr., reported in (2011) 1 SCC 176 , a complaint was lodged under Section 17(1)(2) of the PFA Act, as a food adulteration offences was committed by the Company. The Hon'ble Supreme Court was pleased to hold that facts are required to be pleaded in the complaint regarding individual liability of a Director. While role of a Director in the management of a Company, makes him liable. In this case, one particular Manager was named under Section 17(2) as a person responsible for ensuring prevention of adulteration, other Directors could not be prosecuted therefor. The Apex Court further held that a person was Director of a Company, against which, certain allegations had been made is not sufficient to make such Director liable, in absence of any specific allegations regarding his role in the management of the Company, and hence, the petition was allowed and complaint registered was quashed. 13. In Special Criminal Application No. 52 of 2006 with Special Criminal Application No. 2239 of 2006 to Special Criminal Application No. 2240 of 2006 preferred by B2C India Limited & 4, this Court was pleased to quash the complaint observing that averments with regard to the Director being responsible to the Company in its day-to-day affairs were not available, and therefore, the complaint cannot be maintained. 14. Similar view is taken by the Hon'ble Supreme Court in case of S.M.S. Pharmaceuticals Limited v. Neeta Bhalla & Ors., reported in (2005) 8 SCC 89 . 14. Similar view is taken by the Hon'ble Supreme Court in case of S.M.S. Pharmaceuticals Limited v. Neeta Bhalla & Ors., reported in (2005) 8 SCC 89 . Here also, essential averments were not made in the complaint filed by the complainant against the applicant, as it is necessary to aver that at the time, when the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the Company. Without this averment being made in the complaint, the requirements of Section 141 cannot be said to be satisfied. It is required to be noted that the complaint registered by the complainant against the present applicant was required to be examined by the learned Magistrate in the first instance, on the basis of averments contained therein. If Magistrate is satisfied with the averments, which bring the case within scope of the provision, he would issue the process. The averments made in the complaint would also serve the purpose that the person sought to be made liable would know what is the case, which is alleged against him. 15. In view of the foregoing reasons, the application succeeds. The impugned complaint, being Criminal Case No. 9066 of 2007 initiated against the present applicant for the offence punishable under Sections 7(2), 7(3) and 16(1)(A)(i) and (ii) of the PFA Act, registered with the Court of Chief Judicial Magistrate, Gandhinagar, qua the present applicant is hereby quashed and set aside. Accordingly, this application stands allowed. Rule nisi made absolute to the aforestated extent with no order as to costs.