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2018 DIGILAW 826 (JHR)

Barun Samanta v. State of Jharkhand

2018-04-11

ANANT BIJAY SINGH

body2018
JUDGMENT : Anant Bijay Singh, J. Cr. M.P. No. 1196 of 2009 has been filed on behalf of petitioner Barun Samanta and Cr. M.P. No. 1200 of 2009 has been filed on behalf of petitioner Biswajit Mohanty and in both the criminal miscellaneous petitions, petitioners have prayed for quashing the entire criminal proceeding initiated as against the petitioners in connection with Case No. C-N 67 of 2008 including the order dated 20.12.2008 passed by the learned Chief Judicial Magistrate, Ranchi, whereby and whereunder he has been pleased to take cognizance of the offences under Section 16(1)a (i), (ii) of the Prevention of Food Adulteration Act, 1954 as against the petitioners and other accused persons named in the prosecution report and all proceedings subsequent thereto in the said Case No. C-N 67 of 2008, now pending in the Court of learned Sub-Divisional Judicial Magistrate, Ranchi. 2. The prosecution case, in short, is that, on 07.11.2008, the opposite party No. 2 herein took sample of "Sudham Mustard Oil" along with• other products from the Store/Retail Outlet of M/s. Spencer's Retail Limited situated at Samriddhi Complex, South Office Para, Doranda, Ranchi and allegedly issued Form VI to the petitioners. It is further alleged that thereafter the opposite party No.2 sent the sample of "Sudham Mustard Oil" to the Public Analyst at Ranchi which was received by the Public Analyst on the same day i.e. on 07.11.2008. The Public Analyst vide its report being report No. 883 PFA/2008 dated 28.11.2008 opined that "the Batch No./Lat NO/TF NO is not specified clearly and unable to read and hence the sample of Sudham Mustard Oil is misbranded within the meaning of Section 2(ix) (i) and (k) of the PFA Act, 1954 by virtue of violation of Rule 32 read with Rule 36(7)(e) of the PFA Rules, 1955. Thereafter the opposite party No.2 being the Food Inspector filed the present case against the petitioner and another alleging commission of offence for alleged violation of the aforesaid Rules under the Prevention of Food Adulteration Act and Rules framed there under. On that basis of these and another allegations, the instant case has been instituted. 3. Learned counsel appearing for the petitioners has submitted that on 20.12.2008, learned Chief Judicial Magistrate, Ranchi has taken cognizance and the cognizance has been taken in most mechanical way i.e. in, printed format, so it is vitiated in the eye of law. 4. On that basis of these and another allegations, the instant case has been instituted. 3. Learned counsel appearing for the petitioners has submitted that on 20.12.2008, learned Chief Judicial Magistrate, Ranchi has taken cognizance and the cognizance has been taken in most mechanical way i.e. in, printed format, so it is vitiated in the eye of law. 4. Learned A.P.P appearing on behalf of the State has opposed the prayer made on behalf of the petitioners, Learned counsel for the O.P. NO.2-Food Inspector, has appeared and opposed the prayer made on behalf of the petitioners. Learned counsel for the O.P. No. 2 filed counter-affidavit stating therein that the sample of "Sudham Mustered Oil” taken by O.P. No.2 on 07.11.2008. The petitioner-Baron Samanta was nominated by the M/s. Spencer Retail Ltd. under sub-section (2), Section 17 of Food Adulteration Act, 1954 and on the same day sample of Sudham Mustard Oil, sent to the Public Analyst, Jharkhand, Ranchi who submitted report that Sudham Mustard Oil is misbranded within the meaning of Section 2(ix) (J) and (k) of the PFA Act, 1954 by virtue of violation of Rule 32 read with Rule 36(7) of the PFA Rules, 1955. It is further submitted that after receiving the Public Analyst Report the same has been communicated to the petitioner through registered post dated 11.12.2008 as per provision of Section 13(2) of the Prevention and Adulteration Act, 1954. It is further submitted that all the Civil Surgeon-cum-Chief Medical Officer, Jharkhand of the State has been notified as District Health Authority vide Notification dated 13.11.2001 and accordingly the civil surgeon-cum-Chief Medical Officer, Ranchi given written consent with endorsement "it is fit case for sanction of prosecution". Further, it has been submitted that the petitioner was responsible under Section 17(s) of Food Adulteration Act, 1954 for selling misbranded mustard oil from outlet namely M/s. Spencer Retail Ltd, therefore criminal case lodged again the petitioner who was nominated by the company and Biswajit Mohanty (petitioner in Cr. M.P. No. 1200 of 2009) for selling misbranded mustard oil. 5. Further, it has been submitted that the petitioner was responsible under Section 17(s) of Food Adulteration Act, 1954 for selling misbranded mustard oil from outlet namely M/s. Spencer Retail Ltd, therefore criminal case lodged again the petitioner who was nominated by the company and Biswajit Mohanty (petitioner in Cr. M.P. No. 1200 of 2009) for selling misbranded mustard oil. 5. Learned counsel for the petitioners assailing the impugned order relied on a judgment of the Hon'ble Supreme Court in the case of Aneeta Hada v. M/s. Godfather Travels and Tours Pvt. Ltd., reported in 2012 (4) EastCrC 18 (SC) : 2012 (5) SCC 661 and has submitted that from perusal of complaint it is made clear that company has not been party in this case. Relying on the aforesaid judgment of the Hon'ble Supreme Court, in which Hon'ble Supreme Court has observed as under : "11. The learned senior counsel appearing for the appellants, in support of the proponement that the impleadment of the company is a categorical imperative to maintain a prosecution against the directors, various signatories and other categories of officers, have canvassed as follows : (a) The language of Section 141 of the Act being absolutely plain and clear, a finding has to be returned that the company has committed the offence and such a finding cannot be recorded unless the company is before the Court, more so, when it enjoys the status of a separate legal entity. That apart, the liability of the individual as per the provision is vicarious and such culpability arises, ipso facto and ipso jure, from the fact that the individual occupies a decision making position in the coi-porate entity. It is patent that unless the company, the principal entity, is prosecuted as an accused, the subsidiary entity, the individual, cannot be held liable, for the language used in the provision makes the company the principal offender. (b) The essence of vicarious liability is inextricably intertwined with the liability of the principal offender. If both are treated separately, it would amount to causing violence to the language employed in the provision. (c) It is a fundamental principle of criminal law that a penal provision must receive strict construction. (b) The essence of vicarious liability is inextricably intertwined with the liability of the principal offender. If both are treated separately, it would amount to causing violence to the language employed in the provision. (c) It is a fundamental principle of criminal law that a penal provision must receive strict construction. The deeming fiction has to be applied in its complete sense to have the full effect as the use of the language in the provision really ostracizes or gets away with the concepts like "identification", "attribution" and lifting the corporate veil and, in fact, puts the directors and the officers responsible in a deemed concept compartment on certain guided parameters. (d) The company, as per Section 141 of the Act, is the principal offender and when it is in existence, its non-impleadment will create an incurable dent in the prosecution and further, if any punishment is inflicted or an unfavourable finding is recorded, it would affect the reputation of the company which is not countenanced in law. (e) The decision in Sheoratan Agarwal and another (supra) has incorrectly distinguished the decision in C.V. Parekh (supra) and has also misconstrued the ratio laid down therein. That apart, in, the said decision, a part of the provision contained in Section 10 (1) of the Essential Commodities Act, 1955 (for brevity 'the 1955 Act') has been altogether omitted as a consequence of which a patent mistake has occurred. (f) The decision in Anil Hada (supra) has not appreciated in proper perspective the ratio decidendi in C.V. Parekh and further there is an inherent contradiction in the judgment inasmuch as at one point, it has been stated that "the payee can succeed in the case only if he succeeds in showing that the offence was actually committed by the company" but at another place, it has been ruled that "the accused can show that the company has not committed the offence, though such company is not made an accused". (g) The. terms used "as well as the company" in Section 141(1) of the Act cannot mean that no offence need be committed by the company to attract the vicarious liability of the officers in-charge of the management of the company because the first condition precedent is commission of the offence by a person which is the company. 12. (g) The. terms used "as well as the company" in Section 141(1) of the Act cannot mean that no offence need be committed by the company to attract the vicarious liability of the officers in-charge of the management of the company because the first condition precedent is commission of the offence by a person which is the company. 12. The learned counsel for the respondents, resisting the submissions propounded by the learned counsel for the appellants, have urged the following contentions : (i) If the interpretation placed by the appellant is accepted, the scheme, aims, objects and the purpose of the Legislature would be defeated in asmuch as Chapter XVII of the Act as introduced by the Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988) is to promote efficacy of banking to ensure that in commercial or contractual transactions, cheques are, not dishonoured and the credibility in transacting business through cheques is maintained. The Chapter has been inserted with the object of promoting and inculcating faith in the efficacy of the banking system and its operations and giving credibility to negotiable instruments in business transactions. The fundamental purpose is to discourage people from not honouring their commitments and punish unscrupulous persons who purport to discharge their liability by issuing cheques without really, intending to do so. If the legislative intendment is appositely understood and appreciated, the interpretation of the various provisions of the Act is to be made in favour of the paying- complainant. To bolster the aforesaid submission, reliance has been placed on Electronics Trade and Technology Development Corporation Ltd., Secunderabad v. Indian Technologists and Engineers (Electronics) (P) Ltd. and another, (1996) 2 SCC 739 ; C.C. Alavi Haji v. Palapetty Mohammed and another, (2007) 6 SCC 555 , and Vinay Devanna Nayak v. Ryot Sewa Sahakaro Bank Ltd., (2008) 2 SCC 305 . (ii) The reliance placed by the appellants on the decision in C.V. Parekh (supra) is absolutely misconceived. In the first case, the Court was considering the question of acquittal or conviction of the accused persons after considering, the entire evidence led by the parties before the trial Court but in the present case, the challenge has been at the threshold where summons have been issued. That apart, the 1955 Act and the Act in question operate in different fields having different legislative intents, objects and purposes and further deal with offences of various nature. That apart, the 1955 Act and the Act in question operate in different fields having different legislative intents, objects and purposes and further deal with offences of various nature. In the case at hand, the new dimensions of economic growth development and revolutionary changes and the frequent commercial transactions by use of cheques are to be taken note of. Further, Section 141 creates liability for punishment of offences under Section 138 and it is a deemed liability whereas the criminal liability created for an offence under Section 7 of the 1955 Act is not a deemed offence. (iii) After the amendment of the Act, the unscrupulous drawers had endeavoured hard to seek many an escape route to avoid the criminal liability but this Court with appropriate interpretative process has discouraged the innovative pleas of such accused persons who had issued cheques as the purpose is to eradicate mischief in the commercial world. To buttress the aforesaid submission, heavy reliance has been placed on D. Vinod Shivappa v. Nanda Belliappa, 2006 (4) EastCrC 193 (SC) : AIR 2006 SC 2179 ; M/s. Modi Cement Ltd. v. Shri Kuchil Kumar Nandi, 1998 (1) EastCrC 713 (SC) : AIR 1998 SC 1057 ; Goaplast Pvt. Ltd. v. Chico Ursula D'souza and another, 2003 (2) EastCrC 108 (SC) : AIR 2003 SC 2035 ; NEPC Micon Ltd. and others v. Magma Leasing Ltd., 1999 (3) EastCrC 407 (SC) : (1999) 4 SCC 253 ; Dalmia Cement (Bharat) Ltd. v. M/s, Galaxy Traders and Agencies Ltd. and others, 2001 (2) EastCrC 81 (SC) : AIR 2001 SC 676 ; I.C.D.C. Ltd. v. Beena Shabeer and another, 2002 (3) EastCrC 152 (SC) : 2002 CriLJ 3935 (SC) and S.V. Majumdar and others v. Gujarat Fertilizers Co. Ltd and another, 2005 (2) EastCrC 291 (SC) : AIR 2005 SC 2436 . (iv) The company being a legal entity acts through its directors or other authorized officers and it authorizes its directors or other officers to sign and issue cheques and intimate the bank to honour the cheques if signed by such persons. The Legislature in its wisdom has used the word 'drawer' in Sections 7 and 138 of the Act but not "an account holder". The Legislature in its wisdom has used the word 'drawer' in Sections 7 and 138 of the Act but not "an account holder". A notice issued to the Managing Director of the company who has signed the cheques is liable for the offence and a signatory of a cheque is clearly responsible for the incriminating act and, therefore, a complaint under Section 138 of the Act against the director or authorized signatory of the cheque is maintainable. In this regard, reliance has been placed upon M/s. Bilakchand Gyanchand Co. v. A. Chinnaswami, 2006 (4) EastCrC 193 (SC) : JT 1999 (10) SC 236; Rajneesh Aggarwal v. Amit J. Bhalla, JT 2001 (1) SC 325; SMS Pharmaceuticals Ltd. v. Neeta Bhalla (supra); Anil Hada v. Indian Acrylic Ltd. (supra) and R. Rajgopal v. S.S. Venkat, AIR 2001 SC 2432 . (v) There is no postulate under Section 141 of the Act that the director or the signatory of the cheque cannot be separately prosecuted unless the company is' arrayed as an accused. The company, as is well-known, acts through its directors or authorised officers and they cannot seek an escape route by seeking quashment of the proceedings under' Section 482 of the Code of Criminal Procedure solely on the foundation that the company has not been impleaded as an accused. The words "as well as the company" assumes significance inasmuch as the deemed liability includes both the company and the officers in-charge and hence prosecution can exclusively be maintained against the directors or officers in-charge depending on the averments made in the complaint petition. 13. The gravamen of the controversy is whether any person who has been mentioned in Sections 141(1) and 141(2) of the Act can, be prosecuted without the company being impleaded as an accused. To appreciate the controversy, certain provisions need to be referred to, Section 138 of the Act, which deals with the ingredients of the offence for dishonour of the cheque and the consequent non-payment of the amount due thereon, reads as follows :- "138. Dishonour of Cheque for in-sufficiency, etc., of funds in the account. To appreciate the controversy, certain provisions need to be referred to, Section 138 of the Act, which deals with the ingredients of the offence for dishonour of the cheque and the consequent non-payment of the amount due thereon, reads as follows :- "138. Dishonour of Cheque for in-sufficiency, etc., of funds in the account. – Where any cheque drawn by a person on account maintained by him with a banker for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an arrangement made with the bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with a fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless – (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier, (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (c) the drawer of such cheque fails to make the payment of said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice." 14. The main part of the provision can be segregated into three compartments, namely, (i) the cheque is drawn by a person, (ii) the cheque drawn on an account maintained by him with the banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of a debt or other liability, is returned unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque or it exceeds the amount arranged to be paid from that account by an arrangement made with the bank and (iii) such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of the Act, be punished with imprisonment for a term which may extend to two years or with fine which may extend to twice the amount of the cheque or with both. The proviso to the said section postulates under what circumstances the section shall not apply. In the case at hand, we are not concerned with the said aspect. It will not be out of place to state that the main part of the provision deals with the basic ingredients and the proviso deals with certain circumstances and lays certain conditions where it will not be applicable. The emphasis has' been laid on the factum that the cheque has to be drawn by a person on the account maintained by him and he must have issued the cheque in discharge of any debt or other liability. Section 7 of the Act defines 'drawer' to mean the maker of a bill of exchange or a cheque. An authorised signatory of a company becomes a drawer as he has been, authorised to do so in respect of the account maintained by the company. 15. At this juncture, we may refer to Section 141 which deals with offences by companies. As the spine of the controversy rests on the said provision, it is reproduced below :- "141. Offences by companies. 15. At this juncture, we may refer to Section 141 which deals with offences by companies. As the spine of the controversy rests on the said provision, it is reproduced below :- "141. Offences by companies. – (1) If the person committing an offence under Section 138 is a company, 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, as well as 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 person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: Provided further that where a person is nominated as a Director of a Company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (2) Notwithstanding anything contained in sub-section (1), where any 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, 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." 16. On a reading of the said provision, it is plain as day that if a person who commits offence under Section 138 of the Act is a company, the company as well as every person in charge of and responsible to the company for the conduct of business of the company at the time of commission of offence is deemed to be guilty of the offence. The first proviso carves out under what circumstances the criminal liability would not be fastened. Sub-section (2) enlarges the criminal liability by incorporating the concepts of connivance, negligence and consent that engulfs many categories of officers. The first proviso carves out under what circumstances the criminal liability would not be fastened. Sub-section (2) enlarges the criminal liability by incorporating the concepts of connivance, negligence and consent that engulfs many categories of officers. It is worth noting that in both the provisions, there is a 'deemed' concept of criminal liability.” has submitted that in absence of company being not a party, proceeding cannot be initiated, although learned A.P.P and learned counsel for the O.P. No.2 opposed the submissions made on behalf of the petitioners. 6. Having heard the learned counsel for the parties and after close scrutiny of the aforesaid judgment, as the company has not been made party, proceeding cannot be initiated, I find merit in the instant criminal miscellaneous applications. Accordingly, impugned order dated 20.12.2008 passed by the learned Chief Judicial Magistrate, Ranchi is hereby set-aside. Cr. M.P. No. 1196 of 2009 and Cr. M.P. No. 1200 of 2009 stand allowed. 7. Let a copy of this order be communicated to the Court concerned through FAX. Petition allowed. Petition allowed.