Madhya Pradesh High Court
Sandeep Shukla vs The State Of Madhya Pradesh on 11 July, 2024
Author: Sanjeev S Kalgaonkar
Bench: Sanjeev S Kalgaonkar
1
IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE SANJEEV S KALGAONKAR
CRIMINAL REVISION No. 2226 of 2024
SANDEEP SHUKLA
Vs
THE STATE OF MADHYA PRADESH
Appearance:
(SHRI SANJAY KUMAR BAHIRANI- ADVOCATE FOR THE
PETITIONER)
(SHRI LOKENDRA SHRIVASTAVA- PUBLIC
PROSECUTOR FOR RESPONDENT/STATE)
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Reserved on : 29.05.2024
Pronounced on : 11.07.2024
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This revision having been heard and reserved for order,
coming on for pronouncement this day, Justice Sanjeev S
Kalgaonkar pronounced the following:
ORDER
This Criminal Revision under Section 397/401 of the Code of Criminal Procedure, 1973 (for brevity "the Code"), is filed assailing the order dated 26.04.2024 passed in Sessions Trial No.67 of 2022 2 by the VII Additional Sessions Judge, Bhind (M.P.) whereby, the application under Section 319 of the Code was allowed and cognizance of offence punishable under Section 409 of IPC and Section 7 of Essential Commodities Act, 1955 (hereinafter referred to as the "Act") was taken against revision/petitioner Sandeep Shukla.
(2) The exposition of facts giving rise to this revision-petition is as under:-
(A) Complainant Sunil Kumar Mudgal, Junior Food Supply Officer, Bhind (M.P.) submitted a typed complaint on 24.06.2019 to the Station House Officer, Police Station Umri, District Bhind (M.P.) inter alia alleging criminal misappropriation of ration material at government fair price shops by the transporter of M.P. State Civil Supplies Corporation- M/s Shukla Enterprises, its employee Deepak Sharma and the Seller and Manager of the fair price shop for the month of June, 2019. It is stated in the complaint that the transporter- M/s Shukla Enterprises has not supplied ration material for the month of June, 2019 to fair 3 price shops at Gusing, Bilav, Har Ki Jameh, Nayagaon and Kharika and misappropriated various quantities of food stuff in connivance with the sellers of the Government Fair Price Shops. Sandeep Shukla, proprietor of M/s Shukla Enterprises, his representative Arvind Sharma, Deepak Sharma-employee of the M.P. State Civil Supplies Corporation, Hotam Singh- Seller and Anil Shakya-
Secretary at fair price shop-Gusing, Seller and Secretary-
Anil Sharma at fair price shop Bilav, Kuldeep Singh-
Seller and Ravindra Singh- Secretary at fair price shop-
Har ki Jameh, Harendra Singh Rajawat-Seller and Anil Shakya- Secretary at fair price shop- Kharika, and Kuldeep Singh - Seller and Ravindra Singh- Secretary at fair price shop- Naya Gaon are involved in misappropriation of ration material in violation of Condition No.13(2) of the M.P. Public Distribution System (Control) Order, 2015. On such allegations, Police Station Umri, District Bhind (M.P.) registered offence punishable under Sections 3 and 7 of the Act against (1) Sandeep Shukla, (2) Arvind 4 Sharma, (3) Deepak Sharma, (4) Hotam Singh Yadav, (5) Anil Shakya, (6) Anil Sharma, (7) Kuldeep Singh Bhadoriya, (8) Ravindra Singh Bhadoriya and (9) Harendra Singh Rajawat. Statements of witnesses were recorded. Relevant seizures were made. Opinion of hand-
writing expert was sought with regard to receipt of the ration material by concerned sellers of government fair-
price shops.
(B) Sandeep Shukla- proprietor of M/s Shukla Enterprises applied to the Superintendent of Police for fair investigation stating that M/s Shukla Enterprises has appointed Arvind Sharma as Manager for transportation work on behalf of the Firm, therefore, no offence is made out against him. On directions of Superintendent of Police, Deputy Superintendent of Police, Bhind enquired into the matter. After completion of investigation Sandeep Shukla and Deepak Sharma were exonerated and the final report was submitted against other accused.
(C) During trial in ST No.67 of 2022, the prosecution 5 submitted an application under Section 319 of the Code dated 20.11.2023, inter alia, stating that complainant Sunil Kumar Mudgal (PW-1) has made allegations against Sandeep Shukla, proprietor of M/s Shukla Enterprises, therefore, in view of the evidence and material available on record Sandeep Shukla may also be added as an accused in the matter.
(D) Learned Trial Court vide order dated 26.04.2024 allowed the application and took cognizance of the offence punishable under Section 409 IPC and Section 7 of the Act. The court further directed for issuance of bailable warrant for appearance of Sandeep Shukla.
(3) Feeling aggrieved by the order dated 26.04.2024, this revision-petition is filed assailing the impugned order on following grounds:
(a) The petitioner was exonerated by the investigation officer and police authorities after detailed enquiry.
Petitioner is merely a partner in M/s Shukla Enterprises.
The Firm has appointed Manager Arvind Sharma by 6 executing appointment and authorization letter, authorizing him to look after and manage the transportation work.
There was no material in the charge-sheet that petitioner was responsible for the offence punishable under Section 7 of the Act. He was not in charge or responsible for conduct of the business of M/s Shukla Enterprises. Therefore, in view of Section 10 of the Act, petitioner cannot be prosecuted.
(b) On registration of FIR, a representation was submitted on behalf of M/s Shukla Enterprises to the Superintendent of Police, Bhind stating that Sandeep Shukla is only a partner in the said Firm. The Firm has authorized Arvind Sharma for the work of transportation.
The Deputy Superintendent of Police, Bhind, conducted enquiry and found that Arvind Sharma was receiving food articles on behalf of M/s Shukla Enterprises and the shopkeepers at government fair-price shops had received the food article from the transporter. The signatures on receipt of food articles by the price shopkeepers of the fair-
7price shops were verified by the hand-writing expert. On the basis of enquiry, Sandeep Shukla was exonerated under the orders of the Superintendent of Police, Bhind and no charge-sheet was filed against against him.
(c) Learned Trial Court did not consider the enquiry report dated 27.11.2020 exonerating the petitioner from the alleged offence. The Trial Court did not consider the hand-
writing expert's report with regard to receipts issued by the shopkeepers of the government fair-price shops. No allegation with regard to involvement of the petitioner in the alleged offence were made by Sunil Kumar Mudgal (PW-1), Manish Dubey (PW-2) and G.M. Mishra (PW-3).
(d) Learned Trial Court did not consider the requirement of Section 10 of the Act before implicating Sandeep Shukla as an accused, for the reason of being partner in the firm.
(e) In absence of specific allegation with regard to criminal misappropriation of food articles, no offence punishable under Section 409 IPC is made out against the 8 petitioner. Learned Trial Court has committed an error in adding the petitioner as an accused in a mechanical manner.
On these grounds, it is requested that the impugned order dated 26.04.2024 be set aside and petitioner be discharged.
(4) Learned counsel for the petitioner referring to the power of attorney executed by the M/s Shukla Enterprises in favour of Arvind Sharma, Manager, submits that the firm has authorized Arvind Sharma for the transportation work of M.P. State Civil Supplies Corporation. The revision-petitioner was not responsible or in charge of the transportation work. Therefore, the police authorities have rightly exonerated the petitioner on completion of investigation.
Referring to the judgment of the Apex Court in the case of Shyam Sunder & Others Vs. State of Haryana [1990(1) EFR 1] and order dated 14.11.2019 passed in M.Cr.C. No.1810 of 2009 [Smt. Fulkaria Ekka Vs. The State of Madhya Pradesh] by the co-
ordinate Bench of this Court, learned counsel contends that no offence punishable under Section 7 of the Act is made out against 9 the revision-petitioner as he was not responsible for the transportation work on behalf of the firm. Learned counsel submits that the impugned order is devoid of reason and therefore deserves to be set aside.
(5) Per contra, learned counsel for the State submits that in view of the specific allegations in the enquiry report submitted by the Junior Food Supply Officer and complainant Sunil Kumar Mudgal, the First Information Report and the evidence of Sunil Kumar Mudgal (PW-1) before the Trial Court, involvement of petitioner in the alleged offence is made out. The learned Trial Court has committed no error in taking cognizance of the alleged offence against the petitioner. The petition is devoid of merits.
(6) Heard both the parties and perused the record.
(7) The Constitution Bench of the Supreme Court in case of Hardeep Singh Vs. State of Punjab and Others reported in (2014) 3 SCC 92 laid down the principles governing the exercises of jurisdiction under Section 319 of the Code, observing that it is the duty of Court to do justice by punishing the real culprit. Expounding upon this duty, the Constitution Bench held as under:-
10"18. The legislature cannot be presumed to have imagined all the circumstances and, therefore, it is the duty of the court to give full effect to the words used by the legislature so as to encompass any situation which the court may have to tackle while proceeding to try an offence and not allow a person who deserves to be tried to go scot free by being not arraigned in the trial in spite of possibility of his complicity which can be gathered from the documents presented by the prosecution.
19. The court is the sole repository of justice and a duty is cast upon it to uphold the rule of law and, therefore, it will be inappropriate to deny the existence of such powers with the courts in our criminal justice system where it is not uncommon that the real accused, at times, get away by manipulating the investigating and/or the prosecuting agency. The desire to avoid trial is so strong that an accused makes efforts at times to get himself absolved even at the stage of investigation or inquiry even though he may be connected with the commission of the offence.
105. Power under Section 319 Cr.P.C. is a discretionary and an extra-ordinary power. It is to be exercised sparingly and only in those cases where the circumstances of the case so warrant. It is not to be exercised because the Magistrate or the Sessions Judge is of the opinion that some other person may also be guilty of committing that offence. Only where strong and cogent evidence occurs against a person from the evidence led before the court that such power should be exercised and not in a casual and cavalier manner.
106. Thus, we hold that though only a prima facie case is to be established from the evidence led before the court not necessarily tested on the anvil of Cross- Examination, it requires much stronger evidence than mere probability of his complicity. The test that has to be applied is one which is more than prima facie case as 11 exercised at the time of framing of charge, but short of satisfaction to an extent that the evidence, if goes unrebutted, would lead to conviction. In the absence of such satisfaction, the court should refrain from exercising power under Section 319 Cr.P.C. In Section 319 Cr.P.C. the purpose of providing if "it appears from the evidence that any person not being the accused has committed any offence" is clear from the words "for which such person could be tried together with the accused." The words used are not "for which such person could be convicted". There is, therefore, no scope for the Court acting under Section 319 Cr.P.C. to form any opinion as to the guilt of the accused.
(Emphasis added) In case of Hardeep Singh (supra), the Constitution Bench answered the questions:-
.
.
.
.
Question No. IV- "What is the nature of the satisfaction required to invoke the power under Section 319 Cr.P.C. to arraign an accused? Whether the power under Section 319 (1) Cr.P.C. can be exercised only if the court is satisfied that the accused summoned will in all likelihood be convicted?
117.5 Though under Section 319(4)(b) Cr.P.C. the accused subsequently impleaded is to be treated as if he had been an accused when the Court initially took cognizance of the offence, the degree of satisfaction that will be required for summoning a person under Section 319 Cr.P.C. would be the same as for framing a charge. The difference in the degree of satisfaction for summoning the original accused and a subsequent accused is on account of the fact that the trial may have already commenced against the original 12 accused and it is in the course of such trial that materials are disclosed against the newly summoned accused. Fresh summoning of an accused will result in delay of the trial - therefore the degree of satisfaction for summoning the accused (original and subsequent) has to be different.
Question (V) "Does the power under Section 319 Cr.P.C. extend to persons not named in the FIR or named in the FIR but not chargesheeted or who have been discharged?"
117.6 A person not named in the FIR or a person though named in the FIR but has not been chargesheeted or a person who has been discharged can be summoned under Section 319 Cr.P.C. provided from the evidence it appears that such person can be tried along with the accused already facing trial. However, in so far as an accused who has been discharged is concerned the requirement of Sections 300 and 398 Cr.P.C. has to be complied with before he can be summoned afresh.
(8) In the light of the aforementioned proposition of law, the facts and circumstances and material available on record is considered.
(9) Section 10 of the Act reads as under:-
10. Offences by companies.--
(1) If the person contravening an order made under section 3 is a company, every person who, at the time the contravention 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 contravention 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 13 proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.
(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 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.
Explanation.--For the purposes of this section,--(a) "company" means any body corporate, and includes a firm or other association of individuals; and (b) "director" in relation to a firm means a partner in the firm.
Thus, a Firm or other association of individuals is also included in the definition of company for the purpose of Section 10 of the Act. A bare perusal of Section 10 of the Act makes it clear that a person shall be guilty of contravention of order made under Section 3 provided he was in charge and responsible to the firm for the conduct of business of the firm. Further, such person as well as the firm shall be liable to be proceeded and punished. It is further provided that the Manager, Secretary or other officer shall be deemed to be guilty of offence, if it is proved that the offence has 14 been committed with the consent or connivance of or is attributable to any neglect on the part of such officer.
(10) The Apex Court in case of Aneeta Hada v. Godfather Travels & Tours (P) Ltd. reported in (2012) 5 SCC 661 held as under:-
42. Presently, we shall deal with the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] . In the said case, a three-Judge Bench was interpreting Section 10 of the 1955 Act. The respondents in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] , were active participants in the management of the company. The trial court had convicted them on the ground that the goods were disposed of at a price higher than the control price by Vallabhadas Thacker with the aid of Kamdar and the same could not have taken place without the knowledge of the partners of the firm. The High Court set aside the order of conviction on the ground that there was no material on the basis of which a finding could be recorded that the respondents knew about the disposal by Kamdar and Vallabhadas Thacker.
43. A contention was raised before this Court on behalf of the State of Madras that the conviction could be made on the basis of Section 10 of the 1955 Act. The three-Judge Bench repelled the contention by stating thus: (C.V. Parekh case [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] , SCC p. 493, para 3) "3. The learned counsel for the appellant, however, sought conviction of the two respondents on the basis of Section 10 of the Essential Commodities Act under which, if the person contravening an order made under Section 3 (which covers an order under the Iron and Steel Control Order, 1956), is a company, every person who, at the time the 15 contravention 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 contravention and shall be liable to be proceeded against and punished accordingly. It was urged that the two respondents were in charge of, and were responsible to the company for the conduct of the business of the company and, consequently, they must be held responsible for the sale and for thus contravening the provisions of Clause (5) of the Iron and Steel Control Order. This argument cannot be accepted, because it ignores the first condition for the applicability of Section 10 to the effect that the person contravening the order must be a company itself. In the present case, there is no finding either by the Magistrate or by the High Court that the sale in contravention of Clause (5) of the Iron and Steel Control Order was made by the company. In fact, the company was not charged with the offence at all.
The liability of the persons in charge of the company only arises when the contravention is by the company itself. Since, in this case, there is no evidence and no finding that the company contravened Clause (5) of the Iron and Steel Control Order, the two respondents could not be held responsible. The actual contravention was by Kamdar and Vallabhadas Thacker and any contravention by them would not fasten responsibility on the respondents."
(emphasis supplied) The aforesaid paragraph clearly lays down that the first condition is that the company should be held to be liable; a charge has to be framed; a finding has to be recorded, and the liability of the persons in charge of the company only arises when the contravention is by the company itself.
16The Supreme Court in case of Dayle De'Souza v. Union of India reported in (2021) 20 SCC 135 while considering the similar provisions of Section 141 of the Negotiable Instruments Act, 1881, Section 22C of Minimum Wages Act, 1948 and Section 319 of the Code observed as under:-
12. In Aneeta Hada v. Godfather Travels & Tours (P) Ltd. [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] , this Court had reiterated that the proviso to general vicarious liability under Section 141 of the Negotiable Instruments Act, 1881, applies as an exception, by observing : (SCC p. 678, para 22) "22. On a reading of the said provision, it is plain as day that if a person who commits the 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. It is worth noting that in both the provisions, there is a "deemed" concept of criminal liability."
(emphasis supplied) *********
16. Way back in 1982, in MCD v. Ram Kishan Rohtagi [MCD v. Ram Kishan Rohtagi, (1983) 1 SCC 1 : 1983 SCC (Cri) 115] , this Court had quashed criminal proceedings under the Prevention of Food Adulteration Act, 1954 17 against the Directors of a manufacturing company at the summoning stage, observing that the presumptive assertion made in the complaint that the Directors of the accused company "as such" were in-charge of and responsible for the conduct of the business of the company at the time of sampling was vague. The use of the words "as such" in the complaint indicated that the complainant had merely presumed that the Directors must be guilty because they held the office of the Director. The Court opined that such presumptive accusations against the Directors without any specific averment or criminal attribution being made in the complaint would be insufficient. Thereafter, reference was made to Section 319 of the Criminal Procedure Code, 1973 which empowers the court to take cognizance of and proceed against a person who is not an accused before it and try him along with others.
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19. The legal position has undergone further elucidation in a number of judgments [See Pooja Ravinder Devidasani v. State of Maharashtra, (2014) 16 SCC 1 : (2015) 3 SCC (Civ) 384 : (2015) 3 SCC (Cri) 378; Gunmala Sales (P) Ltd. v. Anu Mehta, (2015) 1 SCC 103 : (2015) 1 SCC (Civ) 433 : (2015) 1 SCC (Cri) 580; Shailendra Swarup v. Enforcement Directorate, (2020) 16 SCC 561 : (2020) 4 SCC (Cri) 27.] . However, for the present decision, we would refer to the summarisation in National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal [National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 : (2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113] , to the following effect : (National Small Industries case [National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 : (2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113] , SCC pp. 345-46, para 39) "39. From the above discussion, the following principles emerge:
(i) The primary responsibility is on the complainant 18 to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.
(ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.
(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.
(v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.
(vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in the complaint.
(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases."19
It was further observed that-
22. There is yet another difficulty for the prosecution in the present case as the Company has not been made an accused or even summoned to be tried for the offence. The position of law as propounded in State of Madras v. C.V. Parekh [State of Madras v. C.V. Parekh, (1970) 3 SCC 491 : 1971 SCC (Cri) 97] , reads : (SCC p. 493, para 3) "3. The learned counsel for the appellant, however, sought conviction of the two respondents on the basis of Section 10 of the Essential Commodities Act under which, if the person contravening an order made under Section 3 (which covers an order under the Iron and Steel Control Order, 1956), is a company, every person who, at the time the contravention 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 contravention and shall be liable to be proceeded against and punished accordingly. It was urged that the two respondents were in charge of, and were responsible to, the Company for the conduct of the business of the Company and, consequently, they must be held responsible for the sale and for thus contravening the provisions of clause (5) of the Iron and Steel Control Order. This argument cannot be accepted, because it ignores the first condition for the applicability of Section 10 to the effect that the person contravening the order must be a company itself. In the present case, there is no finding either by the Magistrate or by the High Court that the sale in contravention of clause (5) of the Iron and Steel Control Order was made by the Company. In fact, the Company was not charged with the offence at all. The liability of the persons in charge of the Company only arises when the contravention is by 20 the Company itself. Since, in this case, there is no evidence and no finding that the Company contravened clause (5) of the Iron and Steel Control Order, the two respondents could not be held responsible. The actual contravention was by Kamdar and Vallabhdas Thacker and any contravention by them would not fasten responsibility on the respondents. The acquittal of the respondents is, therefore, fully justified. The appeal fails and is dismissed."
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28. This position was again clarified and reiterated by this Court in Himanshu v. B. Shivamurthy [Himanshu v. B. Shivamurthy, (2019) 3 SCC 797 : (2019) 2 SCC (Civ) 423 :
(2019) 2 SCC (Cri) 271] . The relevant portion of the judgment reads thus : (SCC pp. 799-802, paras 6-7 & 12-
13) "6. The judgment [Himanshu v. B. Shivamurthy, 2006 SCC OnLine Kar 880] of the High Court has been questioned on two grounds. The learned counsel appearing on behalf of the appellant submits that firstly, the appellant could not be prosecuted without the company being named as an accused. The cheque was issued by the company and was signed by the appellant as its Director.
Secondly, it was urged that the observation of the High Court that the company can now be proceeded against in the complaint is misconceived. The learned counsel submitted that the offence under Section 138 is complete only upon the issuance of a notice of demand and the failure of payment within the prescribed period. In absence of compliance with the requirements of Section 138, it is asserted, the direction of the High Court that the company could be impleaded/arraigned at this stage is erroneous.
7. The first submission on behalf of the 21 appellant is no longer res integra. A decision of a three-Judge Bench of this Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd. [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] governs the area of dispute. The issue which fell for consideration was whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without the company being arraigned as an accused. The three-Judge Bench held thus : (SCC p. 688, para 58) "58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company"
appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted.' In similar terms, the Court further held : (Aneeta Hada case, SCC p.688, para 59)
59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an 22 accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself."
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12. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or 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.
13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused.
34. Almost every statute confers operational power to enforce and penalise, which power is to be exercised consistently from case to case, but adapted to facts of an individual case [B. v. Secy. of State for Work & Pensions, (2005) 1 WLR 3796, para 43 : 2005 EWCA Civ 929, para 43 (CA)] . The passage from Hindustan Steel Ltd. [Hindustan Steel Ltd. v. State of Orissa, (1969) 2 SCC 627] highlights the rule that the discretion that vests with the prosecuting agencies is paired with the duty to be thoughtful in cases of technical, venial breaches and genuine and honest belief, and be firmly unforgiving in cases of deceitful and mendacious conduct. Sometimes legal provisions are worded in great detail to give an 23 expansive reach given the variables and complexities involved, and also to avoid omission and check subterfuges. However, legal meaning of the provision is not determined in abstract, but only when applied to the relevant facts of the case [ See Bennion on Statutory Interpretation, 6th Edn., Part VI at p. 371.] . Therefore, it is necessary that the discretion conferred on the authorities is applied fairly and judiciously avoiding specious, unanticipated or unreasonable results. The intent, objective and purpose of the enactment should guide the exercise of discretion, as the presumption is that the makers did not anticipate anomalous or unworkable consequences. The intention should not be to target and penalise an unintentional defaulter who is in essence law-abiding.
35 There are a number of decisions of this Court in which, with reference to the importance of the summoning order, it has been emphasised that the initiation of prosecution and summoning of an accused to stand trial has serious consequences [ See --Pepsi Foods Ltd. v. Special Judicial Magistrate, (1998) 5 SCC 749 : 1998 SCC (Cri) 1400; GHCL Employees Stock Option Trust v. India Infoline Ltd., (2013) 4 SCC 505 : (2013) 2 SCC (Cri) 414; Krishna Lal Chawla v. State of U.P., (2021) 5 SCC 435 :
(2021) 2 SCC (Cri) 601.] . They extend from monetary loss to humiliation and disrepute in society, sacrifice of time and effort to prepare defence and anxiety of uncertain times. Criminal law should not be set into motion as a matter of course or without adequate and necessary investigation of facts on mere suspicion, or when the violation of law is doubtful. It is the duty and responsibility of the public officer to proceed responsibly and ascertain the true and correct facts. Execution of law without appropriate acquaintance with legal provisions and comprehensive sense of their application may result in an innocent being prosecuted."
(11) The written complaint whereupon the FIR at Crime 24 No.187/2019 was registered states that Sandeep Shukla is the proprietor at M/s Shukla Enterprises and Arvind Sharma was the representative of M/s Shukla Enterprises. Except this statement of the complainant Sunil Kumar Mudgal, no evidence was submitted with the final report suggesting that Sandeep Shukla was involved in transportation of ration material from the warehouse of State Warehousing Corporation to the fair price shops, rather Manish Dubey, Branch Manager of Choudhary Warehouse, Bhind, G.M. Mishra, Branch Manager of SWC Bhind, Sanjay Singh Godown Incharge of SWC Bhind and other witnesses have specifically stated that the transportation of ration material was supervised and conducted by Arvind Sharma as representative of M/s Shukla Enterprises, on the basis of power of attorney given in his favour by the Firm.
(12) Learned Trial Court relied on the statement of Sunil Kumar Mudgal (PW-1) in para 3 to implicate Sandeep Shukla for the alleged offence. Sunil Kumar Mudgal (PW-1), (in fact in para 5), stated that he has submitted report to Collector Bhind dated 24.06.2019 Ex.P-19 that Sandeep Shukla, Proprietor of M/s Shukla 25 Enterprises, his representative Arvind Sharma and others have embezzled the ration material. This statement is opinion of the Enquiry Officer which needs to be substantiated by the material showing involvement of the petitioner Sandeep Shukla. Learned Trial Court did not consider the fact that Firm M/s Shukla Enterprises is a partnership firm and the firm has specifically authorized and appointed Arvind Sharma for the transportation work. There is nothing on record to suggest that Arvind Sharma misappropriated the ration material at the instance of or on the directions of or in connivance with Sandeep Shukla, partner in M/s Shukla Enterprises. Such a fact is missing even in the statement of Arvind Sharma recorded under Section 27 of the Evidence Act. The stray statement, which is opinion of enquiry officer without any supporting material cannot be treated as "evidence" sufficient to take cognizance of alleged offence under Section 319 of the Code against the petitioner (Hardeep Singh Supra relied).
(13) Learned Trial Court ignored important aspect of the matter that for taking cognizance against any partner in the firm, a positive finding need to be recorded that such partner was in-charge of and 26 was responsible to the firm for the conduct of business and such partner as well as the firm can be proceeded with together. Learned Trial Court did not take cognizance against the Firm M/s Shukla Enterprises. Therefore, the impugned order suffers from legal infirmity. In absence of any material suggesting involvement of the petitioner in transportation of the ration material and his association or connivance with other co-accused in criminal misappropriation of the ration material, learned Trial Court committed an error in taking cognizance against him for the offence punishable under Section 409 of IPC and under Section 7 of the Act.
(14) Thus, the impugned order suffers from manifest illegality and impropriety. It deserves to be set aside in exercise of supervisory jurisdiction. Consequently, the revision petition under Section 397 read with Section 401 of the Code is allowed and the order dated 26.04.2024 passed by VII Additional Sessions Judge, Bhind (M.P.) in ST No.67 of 2022 is hereby set aside.
(Sanjeev S. Kalgaonkar) Judge pd PAWAN Digitally signed by PAWAN DHARKAR DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH GWALIOR, ou=HIGH COURT OF MADHYA PRADESH BENCH DHARK GWALIOR, 2.5.4.20=5da1b3ce5c6aee672b1f51a5cff 5661c113046ab7ebb8031c36dcac4472c 040a, postalCode=474001, st=Madhya Pradesh, AR serialNumber=C72B9531562BC6028F5D 6E42E82477C85878470B30E4A7672CCA 523E83C0BCB9, cn=PAWAN DHARKAR Date: 2024.07.11 19:23:42 +05'30'