Karnataka High Court
Mr Kanik Nalik vs State Of Karnataka on 25 July, 2025
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2025:KHC:28719
CRL.P No. 3093 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
CRIMINAL PETITION NO. 3093 OF 2024 (482(Cr.PC) /
528(BNSS)-)
BETWEEN:
MR KANIK NALIK
AGED 58 YEARS
EARLIER DIRECTOR
M/S PEPSI CO INDIA HOLDINGS PVT LTD
R/O 1907A, MAGNOLIAS GOLF DRIVE ELF PHASE V
GURUGRAM 122009
...PETITIONER
(BY SRI. PRASANTH V. G., ADVOCATE)
AND:
STATE OF KARNATAKA
Digitally BY INSPECTOR OF LEGAL METROLOGY,
signed by
CHANDANA FLYAING SQUAD-I
BM NO.1, ALI ASKER ROAD
Location: BENGALURU-560052
High Court of
Karnataka REP BY SPP
HIGH COURT OF KARNATAKA-01
...RESPONDENT
(BY SRI.K. NAGESHWARAPPA HCGP)
CRL.P FILED U/S 482 CR.PC BY THE ADVOCATE FOR THE
PETITIONER PRAYING THAT THIS HONOURABLE COURT MAY BE
PLEASED TO QUASH THE COMPLAINT (ANNEXURE-A) AND THE
SUBSEQUENT PROCEEDINGS IN C.C.NO.1682/2012 (ANNEXURE-B)
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NC: 2025:KHC:28719
CRL.P No. 3093 of 2024
HC-KAR
ON THE FILE OF THE CIVIL JUDGE AND JUDICIAL MAGISTRATE,
NELAMANGALA AND GRANT SUCH FURTHER AND OTHER
ORDERS AND / OR DIRECTIONS AS THIS HONBLE COURT MAY
DEEM FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF
THE CASE.
THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, petitioner seeks the following reliefs:
"WHEREFORE, the petitioner respectfully prays that this Hon'ble Court may be pleased to quash the Complaint (Annexure-A) and the subsequent proceedings in C.C.1682/2012 (Annexure-B) pending on the file of thet Civil Judge & JMFC at Nelamangla and grant such further and other orders and/or directions as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
2. Heard learned counsel for the petitioner - accused No.6 and leaned HCGP for the respondent and perused the material on record.
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3. A perusal of the material on record will indicate that the impugned proceedings in C.C.No.1682/2012 are instituted by the respondent - complainant against the petitioner - accused No.6 and other accused persons for the offence punishable under Sections 49 and 36(1) of the Legal Metrology Act, 2009.
4. In this context, it is pertinent to note that insofar as accused Nos.1, 4 and 5 are concerned, the Co-ordinate Bench of this Court have quashed the impugned proceedings by coming to the conclusion that the Company had not been arraigned as party-
accused to the proceedings in relation to accused Nos.1, 4 and 5.
Naveen Sharma Vs. State of Karnataka - Crl.P.No.6211/2016 dated 29.03.2021 in relation to Accused No.1, Mr.Kaushik Mitra Vs. State of Karnataka - Crl.P.No.6178/2022 dated 19.09.2022 in relation to Accused No.5 and Mr. Rajiv Wakhle Vs. State of Karnataka - Crl.P.No.3108/2023 dated 23.08.2023 in relation to Accused No.4.
5. In Naveen Sharma's case supra, the Co-ordinate Bench of this Court has held as under:
"ORDER -4- NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR "Whether the proceedings in C.C.No.1682/2012 on the file of Civil Judge & JMFC, Nelamangala against the petitioner amount to abuse of process of the Court?", is the question involved in this case.
2. During 2012, petitioner was the General Manager of M/s Pepsico India Holdings Private Limited, Nelamangala, Bengaluru Rural district ('Pepsi company' for short). The second respondent/Inspector of Legal Metrology, Flying Squad-1 claims to have visited the plant of Pepsi company on 26.04.2012 at 9.45 a.m.
3. During such inspection the squad found that the petitioner and others violating Rule 8(1) and 2(h) of the Legal Metrology (Packaged Commodities) Rules, 2011 had affixed the MRP of the product on the neck of the bottle instead of on the label. Therefore, he filed complaint under Section 200 Cr.P.C. as per Annexure-A before the JMFC, Nelamangala, Bengaluru Rural District to prosecute the petitioners and 5 others for the offences punishable under Section 36(1) of the Legal Metrology Act, 2009 ('the Act' for short).
4. Accused Nos.2 to 6 are said to be the directors of Pepsi company. The learned Magistrate took cognizance of the offence and issued process against the accused. The said proceedings are sought to be quashed in the above petition.
5. Sri Udaya Holla, learned senior counsel for Sri Gerald Manoharan, learned Advocate on record for the petitioner seeks to challenge the above proceedings on the ground that the company is not made party in the complaint and there are no required allegations about the petitioner being incharge of and responsible for day-to-day affairs of the company, thereby there is violation under Section 49(1)(b) of the Act.-5-
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6. Learned senior counsel submits that though quashing of the proceedings is sought relying on the Circular dated 26.07.2012 issued in WM-9(37)/2012 by Government of India, Ministry of Consumer Affairs, Food and Distribution Department, Legal Metrology Division, he does not press that ground.
7. So far as violation of Section 49(1)(b) of the Act in filing the complaint, he relies upon the following Judgments of the Hon'ble Supreme Court:
i) Aneeta Hada vs. Godfather Travels and Tours Pvt. Ltd (2012)5 SCC 661
ii) Pepsico India Holdings (P) Ltd. vs. Food Inspector (2011)1 SCC 176
8. Per contra, Shri. Rohith B.J., learned HCGP submits that the company was not made party in the complaint. He further submits that the petition may be disposed of permitting the respondent to implead the company as the accused in the complaint.
9. Admittedly, the petitioner is arrayed as accused in the case on his alleged vicarious liability under the Companies Act.
Further, Pepsi company which is responsible for business is not arrayed as accused in the complaint.
10. Section 49 of the Legal Metrology Act, 2009 which deals with the offence by the Companies and power of the Court to publish name, place of business etc for the companies convicted. Section 49(1) and (2) of the Act are relevant for the purpose of this case.
They read as follows:
-6-NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR "49. Offences by companies and power of court to publish name, place of business, etc., for companies convicted.
(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 (hereinafter in this section referred to as a person responsible);
or
(ii) where no person has been 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 to exercise all such powers and take all such steps as may be necessary expedient to prevent the commission by the company of any offence under this Act and may give notice to the Director or the concerned Controller or any legal metrology officer authorised in this behalf by such Controller (hereinafter in this section referred to as the authorised officer) in such form and in such manner as may be prescribed, that it has nominated such director as -7- NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR the person responsible, along with the written consent of such director for being so nominated.
11. The reading of the above provisions makes it clear that in addition to the Directors of the company and the person nominated under Sub-section (2), the company shall be arraigned as accused in prosecution of the company in any offence under the Act.
12. The larger bench of the Hon'ble Supreme Court in para 58 of the judgment in Aneeta Hada's case referred to supra on reference on the point of vicarious liability of the Directors of the Company without arraying the company as accused, held that the Directors can be vicariously liable for the offences committed by the company only if company is also prosecuted. It was further held that vicarious liability of the Directors is subject to the averments in the petition that the Directors were responsible for the affairs of the company and in charge of business of the company.
13. In view of the aforesaid judgment of the Hon'ble Supreme Court, without arraying the company as a party the complaint was incompetent. Even on arraying the company, the complainant was required to state in the complaint that the Directors, the Officers or officials of the company arrayed as accused, were incharge of and responsible for day-to-day management and conduct of business of the company. In the present complaint such averments to connect the petitioner to the crime were conspicuously absent.
14. In para 50 of the judgment in Pepsico's case referred to supra Hon'ble Supreme Court held as follows:
"50. As mentioned hereinbefore, the High Court erred in giving its own interpretation to the decision of this Court in S.M.S. -8- NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR Pharmaceuticals Ltd.'s case (supra), which was reiterated subsequently in several judgments, some of which have been indicated hereinabove, and relying instead on the decision of Rangachari's case (supra), the facts of which were entirely different from the facts of this case. It is now well established that in a complaint against a Company and its Directors, the Complainant has to indicate in the complaint itself as to whether the Directors concerned were either in charge of or responsible to the Company for its day-to-day management, or whether they were responsible to the Company for the conduct of its business. A mere bald statement that a person was a Director of the Company against which certain allegations had been made is not sufficient to make such Director liable in the absence of any specific allegations regarding his role in the management of the Company."
(Emphasis supplied)
15. Having regard to the aforesaid legal position and the judgments of the Hon'ble Supreme Court, the trial Court committed error in taking cognizance without compliance of Section 49(1)(b) of the Act. Under such circumstances, even if the proceedings were to be continued against the petitioner chances of his conviction are remote. Therefore, they amount to abuse of process of the Court.
16. The next question is whether liberty as sought to implead the company in the existing complaint can be granted and whether that is a curable defect.
17. Learned Magistrate has taken cognizance for the offences punishable under Section 36(1) of the Act. The complaint is also to prosecute the accused for the offence punishable under Section 36(1) of the Act. Said offence carries maximum punishment of imprisonment up to one year. The alleged offences -9- NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR are said to have taken place on 26.04.2012. Section 468(2)(b) of Cr.P.C. bars the Magistrate from taking cognizance of such offence beyond the period of one year.
18. Having regard to Section 468(2)(b) this Court cannot grant liberty as sought by learned HCGP. For the aforesaid reasons, the petition is allowed. The impugned proceedings in C.C.No.1682/2012 on the file of the Addl. Civil Judge and JMFC, Nelamangala against the petitioner are hereby quashed.
In view of the disposal of the petition, pending IAs stood disposed of."
5.1. In Kaushik Mitra's case supra, the Co-ordinate Bench of this Court has held as under:
"Heard the learned Senior counsel Sri. Udaya Holla appearing for the petitioner.
2. The learned Senior counsel would submit that a co- ordinate Bench of this Court in Crl.P.No.6211/2016, disposed of on 29.03.2021, against the co-accused, has already quashed the very same complaint, on the score that the company is not made as a party. Therefore, the same finding would become applicable to this case as well.
3. The co-ordinate Bench of this Court has held as follows:
"7. So far as violation of Section 49(1)(b) of the Act in filing the complaint, he relies upon the following Judgments of the Hon'ble Supreme Court:
i) Aneeta Hada vs. Godfather Travels and Tours Pvt. Ltd (2012)5 SCC 661
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ii) Pepsico India Holdings (P) Ltd. vs. Food Inspector (2011)1 SCC 176
8. Per contra, Shri. Rohith B.J., learned HCGP submits that the company was not made party in the complaint. He further submits that the petition may be disposed of permitting the respondent to implead the company as the accused in the complaint.
9. Admittedly, the petitioner is arrayed as accused in the case on his alleged vicarious liability under the Companies Act. Further, Pepsi company which is responsible for business is not arrayed as accused in the complaint.
10. Section 49 of the Legal Metrology Act, 2009 which deals with the offence by the Companies and power of the Court to publish name, place of business etc for the companies convicted. Section 49(1) and (2) of the Act are relevant for the purpose of this case. They read as follows:
"49. Offences by companies and power of court to publish name, place of business, etc., for companies convicted.
(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 (hereinafter in this section referred to as a person responsible); or
(ii) where no person has been 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.
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NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR (2) Any company may, by order in writing, authorise any of its directors to exercise all such powers and take all such steps as may be necessary expedient to prevent the commission by the company of any offence under this Act and may give notice to the Director or the concerned Controller or any legal metrology officer authorised in this behalf by such Controller (hereinafter in this section referred to as the authorised officer) in such form and in such manner as may be prescribed, that it has nominated such director as the person responsible, along with the written consent of such director for being so nominated.
11. The reading of the above provisions makes it clear that in addition to the Directors of the company and the person nominated under Sub-section (2), the company shall be arraigned as accused in prosecution of the company in any offence under the Act.
12. The larger bench of the Hon'ble Supreme Court in para 58 of the judgment in Aneeta Hada's case referred to supra on reference on the point of vicarious liability of the Directors of the Company without arraying the company as accused, held that the Directors can be vicariously liable for the offences committed by the company only if company is also prosecuted. It was further held that vicarious liability of the Directors is subject to the averments in the petition that the Directors were responsible for the affairs of the company and in charge of business of the company.
13. In view of the aforesaid judgment of the Hon'ble Supreme Court, without arraying the company as a party the complaint was incompetent. Even on arraying the company, the complainant was required to state in the complaint that the Directors, the Officers or officials of the company arrayed as accused, were incharge of and responsible for day-to-day management and conduct of business of the company. In the present complaint such averments to connect the petitioner to the crime were conspicuously absent.
14. In para 50 of the judgment in Pepsico's case referred to supra Hon'ble Supreme Court held as follows:
"50. As mentioned hereinbefore, the High Court erred in giving its own interpretation to the decision of this Court in S.M.S. Pharmaceuticals Ltd.'s case (supra), which was reiterated
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NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR subsequently in several judgments, some of which have been indicated hereinabove, and relying instead on the decision of Rangachari's case (supra), the facts of which were entirely different from the facts of this case. It is now well established that in a complaint against a Company and its Directors, the Complainant has to indicate in the complaint itself as to whether the Directors concerned were either in charge of or responsible to the Company for its day-to-day management, or whether they were responsible to the Company for the conduct of its business. A mere bald statement that a person was a Director of the Company against which certain allegations had been made is not sufficient to make such Director liable in the absence of any specific allegations regarding his role in the management of the Company."
(Emphasis supplied)
15. Having regard to the aforesaid legal position and the judgments of the Hon'ble Supreme Court, the trial Court committed error in taking cognizance without compliance of Section 49(1)(b) of the Act. Under such circumstances, even if the proceedings were to be continued against the petitioner chances of his conviction are remote. Therefore, they amount to abuse of process of the Court.
16. The next question is whether liberty as sought to implead the company in the existing complaint can be granted and whether that is a curable defect.
17. Learned Magistrate has taken cognizance for the offences punishable under Section 36(1) of the Act. The complaint is also to prosecute the accused for the offence punishable under Section 36(1) of the Act. Said offence carries maximum punishment of imprisonment up to one year. The alleged offences are said to have taken place on 26.04.2012. Section 468(2)(b) of Cr.P.C. bars the Magistrate from taking cognizance of such offence beyond the period of one year.
18. Having regard to Section 468(2)(b) this Court cannot grant liberty as sought by learned HCGP. For the aforesaid reasons, the petition is allowed. The impugned proceedings in C.C.No.1682/2012 on the file of the Addl.
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NC: 2025:KHC:28719 CRL.P No. 3093 of 2024 HC-KAR Civil Judge and JMFC, Nelamangala against the petitioner are hereby quashed."
4. In the light of the order passed by the co-ordinate Bench, which would cover the issue in the case at hand on all its fours, the criminal petition is allowed. The proceedings in C.C.No.1682/2012 pending on the file of I Additional Civil Judge and JMFC, Nelamangala, qua the petitioner, stand quashed.
I.A.No.1/2022 is disposed, as a consequence."
5.2. In Rajiv Wakhle's case supra, the Co-ordinate Bench of this Court has held as under:
"The petitioner accused No.4 is sought to be prosecuted for the offences punishable under Sections 49 and 36(1) of the Legal Metrology Act, 2009.
2. The case against the petitioner is that, he along with others were found to have violated Rule 8(1) and 2(h) of the Legal Metrology (Packaged Commodities) Rules, 2011 and had fixed the MRP of the product on the neck of the bottle instead of on the label.
3. Sri Udaya Holla, learned Senior Counsel for the petitioner submits that, the accused Nos. 1 and 5 had approached this court in Crl.P No.6211/2016 and Crl.P No.6178/2022 and this Court quashed the proceeding against the said accused on the ground that the said accused cannot be held vicarious guilty of the offence, since the company was not arraigned as an accused.
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4. The learned High Court Government Pleader would submit that the averments made in the complaint discloses the contravention of the provisions of Legal Metrology Act by the petitioner herein.
5. Considered the submissions of the learned counsel for the parties.
6. The accused Nos. 1 and 5 had approached this Court in Crl.P No.6211/2016 and Crl.P No.6178/2022, and this Court by order dated 29.3.2021 and 19.9.2022 quashed the proceeding against the said accused on the ground that the company having not been arraigned as accused they cannot be held vicarious guilty of the offence. Hence, this petition also requires to be disposed of in terms of the order passed in the aforesaid petitions. Accordingly, I pass the following:
ORDER
i) Criminal petition is allowed.
ii) The impugned proceeding in CC No.1682/2012 accused pending on the file of the learned Judicial Magistrate First Class, Nelamangala, insofar as it relates to the petitioner No.4 is hereby quashed."
6. In view of quashment of proceedings as against accused Nos.1, 4 and 5 on the ground that the company has not been arraigned as accused, continuation of proceedings as against the petitioner - accused No.6 would amount to abuse of process of law and the same deserves to be quashed.
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7. In the result, I pass the following:
ORDER
(i) The petition is hereby allowed.
(ii) The impugned proceedings in C.C.1682/2012 pending on the file of the Civil Judge & JMFC at Nelamangala, insofar as petitioner - accused No.6 is concerned is hereby quashed.
Sd/-
(S.R.KRISHNA KUMAR) JUDGE HR List No.: 1 Sl No.: 3