Karnataka High Court
Zuari Agro Chemicals Ltd vs The State Of Karnataka on 15 September, 2022
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 15TH DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MS. JUSTICE J.M.KHAZI
CRIMINAL PETITION NO. 101492 OF 2022 (482-)
BETWEEN:
ZUARI AGRO CHEMICALS LTD.
JAIKISAN BHAVAN ZUARI NAGAR, GOA,
R/BY MAHESH NAIK, COMPLIANCE OFFICER,
PIN: 403726.
...PETITIONER
(BY SRI. M.J.PEERJADE, ADVOCATE)
AND:
THE STATE OF KARNATAKA
THROUGH FERTILIZER INSPECTOR AND
AGRICULTURE OFFICER
RAIT SAMPARK KENDRA BETAGERI,
TQ: GADAG, DIST: BAGALKOT.
R/BY STATE PUBLIC PROSECUTOR
HIGH COURT OF KARNATAKA, BENCH DHARWAD.
...RESPONDENT
(BY SMT. GIRIJA S. HIREMATH, HCGP)
THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C.
SEEKING THAT, THE COMPLAINT AND ALL FURTHER
PROCEEDINGS IN C.C.NO.3133/2021 FILED AND PENDING
BEFORE THE COURT OF II ADDL. CIVIL JUDGE AND J.M.F.C.-II
COURT GADAG AGAINST THE PETITIONER OF THE OFFENCES
UNDER CLAUSE OF THE 19(a) AND (b) OF THE FERTILIZER
CONTROL ORDER 1985 R/W SEC. 7 OF THE ESSENTIAL
COMMODITIES ACT 1955 BE KINDLY QUASHED.
-1-
CRL.P No. 101492 of 2022
THIS CRIMINAL PETITION COMING ON FOR ADMISSION,
THIS DAY, COURT MADE THE FOLLOWING:
ORDER
In this petition filed under section 482 of Cr.P.C., the petitioner, who is arraigned as accused has challenged the initiation of criminal prosecution in C.C.No.3133/2021 on the file of the II-Additional Civil Judge and JMFC-II, Gadag.
2. Learned HCGP takes notice for respondent.
3. Though the matter is listed for admission, with the consent of both sides, it is taken up for final disposal.
4. Brief facts leading to filing of the present petition are that the petitioner is the compliance officer of Zuari Agro Chemicals, Goa. On 23.05.2016 at 11.00 am, the complainant i.e., Fertilizer Inspector cum Agriculture Officer, Raith Sampark Kendra Betageri (hereinafter referred to as "complainant"), visited Basasveshwar Traders Lakkundi and collected three samples of 10:26:26 fertilizers manufactured by Zuari Agro-Chemicals Limited. -2- CRL.P No. 101492 of 2022
5. The samples examined by Fertilizer Control Laboratory Dharwad and The Commissioner of Agriculture Fertilizers Bengaluru are found to be of sub-standard. Accordingly, he filed a private complaint under section 200 of Cr.P.C. against the petitioner and the same is registered in C.C.No.3133/2021.
6. During the course of the arguments, the learned Counsel for petitioner submits that as required under Section 10 of the Essential Commodities Act, the company is not arraigned as accused and in its absence, the petitioner is not liable to answer the charges.
7. On the other hand, the learned HCGP would submit that the action of the complainant in filing the complaint and registering the case is justified and it is a matter for trial and it is for the petitioner to prove his innocence during trial.
8. Heard the arguments and perused the records. -3- CRL.P No. 101492 of 2022
9. Admittedly, the charges leveled against the petitioner are that he has violated Clause 19 of the Fertilizer (Control) Order, 1985 read with Section 7 of the Essential Commodities Act, 1955.
10. Section 10 of the Essential Commodities Act, 1955, deals with the offence by Companies and it reads as follows:
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 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 -4- CRL.P No. 101492 of 2022 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.
11. Perusal of Section 10 of the Essential Commodities Act, 1955 makes it evident that wherever contravention is by a Company, then 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. Therefore, petitioner is being made liable on account of he being an employee of Company in question and as such, until and unless the company is arraigned as accused, the petitioner cannot be held responsible. -5- CRL.P No. 101492 of 2022
12. In fact, the Hon'ble Apex Court in Aneeta Hada Vs. Godfather Travels and Tours Private Limited1 while considering the offence committed by the company has held as follows:
"53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant.
... ... ...
56. We have referred to the aforesaid
passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of 1 (2012) 5 SCC 661 -6- CRL.P No. 101492 of 2022 punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the company.
The learned counsel for the respondents have vehemently urged that the use of the term "as well as" in the section is of immense significance and, in its tentacle, it brings in the company as well as the Director and/or other officers who are responsible for the acts of the company and, therefore, a prosecution against the Directors or other officers is tenable even if the company is not arraigned as an accused. The words "as well as" have to be understood in the context.
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 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. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is a three- Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision -7- CRL.P No. 101492 of 2022 in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC 684 :
1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove."
13. In the light of the above judgment and having regard to the fact that the company is not arraigned as accused, I am of the considered opinion that the complaint is not tenable as against the petitioner and therefore, the proceedings are liable to be quashed insofar as the petitioner is concerned. Accordingly, I proceed to pass the following:
ORDER The Criminal petition is allowed.
The impugned proceedings in C.C.No.3133/2021 on the file of II-Additional Civil Judge and JMFC-II Gadag, as against the petitioner/accused, is hereby quashed.
In view of disposal of the matter, pending interlocutory applications, if any, do not survive -8- CRL.P No. 101492 of 2022 for consideration and are disposed of accordingly.
SD/-
JUDGE YAN