Punjab-Haryana High Court
Suresh Kumar Kochhar And Another vs State Of Punjab on 21 December, 2013
Author: Amol Rattan Singh
Bench: Amol Rattan Singh
Crl. Misc. No.M-14289 of 2013 -1-
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND
HARYANA AT CHANDIGARH
Crl. Misc. No.M-14289 of 2013
Date of Decision: September 20, 2013
Suresh Kumar Kochhar and another
...Petitioners
Versus
State of Punjab
...Respondent
CORAM: HON'BLE MR. JUSTICE AMOL RATTAN SINGH
Present:- Mr. Rakesh Verma, Advocate
for the petitioners.
Mr. Amit Chaudhary, DAG, Punjab
***
Amol Rattan Singh, J.
Learned counsel for the petitioners relies upon three judgments of coordinate Benches of this court, as also a judgment of the Supreme Court in the case of Aneeta Hada vs M/s Godfather Travels and Tours Pvt. Ltd., 2012(2) Recent Apex Judgments, 562, to contend that where the company or partnership firm itself has not been impleaded as a respondent in the complaint filed, proceedings against the directors/partners/other officers and officials of the company or partnership, cannot be sustained. As such, in the present case, where, though a partner of M/s Shivalik Agro Chemicals, Mohali, and its Chief Chemist, have been impleaded as respondents in the complaint filed before the trial court, the firm itself not having been impleaded, proceedings cannot be sustained.
Mr.Amit Chaudhary, learned DAG, Punjab, submits that the explanation to Section 33 of the Insecticides Act, 1968, states that for the purpose of the said Section, the company would mean any body corporate and would include a firm `or other association of individuals'. Chander Vikas 2014.01.14 16:54 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No.M-14289 of 2013 -2- He further submits that the petitioners would be covered by the last phrase, i.e. `or other association of individuals'.
This, obviously, cannot be the interpretation given to the said phrase, in view of the fact that this phrase is intended to cover any other association, which is not a company or a firm. In the present case, it is a firm, i.e. M/s Shivalik Agro Chemicals, Mohali, which had manufactured the insecticides, which has, admittedly, not been impleaded as party in the complaint (Annexure P-1). Section 33 of the Insecticides Act, 1968, is reproduced further down in this judgment and it obviously applies to both, Companies and Firms, as can be seen from clause (a) of the Explanation given in the provision itself.
It has been held in Aneeta Hada's case (supra), which dealt with the provisions of Section 141 of the Negotiable Instruments Act, 1881, as also with Section 10 of the Essential Commodities Act, 1955, that arraying of only a person/s incharge of the company, without arraying the company itself, is not permissible.
After considering various judgments on the issue, their Lordships arrived at a conclusion that the law laid down in the case of Sheoratan Agarwal Vs. State of Madhya Pradesh, (1984) 4 SCC 352, is not correctly laid down and the ratio of the law laid down in the case of State of Madras Vs. C.V. Parekh, 1973 SCC 491, would hold.
Para 59 of the Aneeta Hadas' case holds as under:
"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 Chander Vikas 2014.01.14 16:54 imperative. The other categories of offenders can only be brought in I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No.M-14289 of 2013 -3- the dragnet 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 (supra) which is a three- Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal (supra) does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Aneeta Hada (supra) is overruled with the qualifier as stated in paragraph 37. The decision in Modi Distilleries (supra) has to be treated to be restricted to its own facts as has been explained by us hereinabove."
Though the Supreme Court was primarily dealing with the provisions of the Negotiable Instruments Act, however, it also dealt with Section 10 of the Essential Commodities Act, 1955. That provision is pari materia with Section 33 of the Insecticides Act, 1968, which is what the present petition is concerned with.
Section 10 of the 1955 Act, was also dealt with in C.V Parekhs' case, which has been held to be good law.
Section 33 of the Act of 1968 stipulates as under:-
"33. Offences by companies.(1) Whenever an offence under this Act has been committed by a company, a person who at the time the offence was committed, was in charge of, or was responsibly 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 such person liable to any punishment under this Act if he proved that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(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 of 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 office shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.- For the purpose of this Section, Chander Vikas 2014.01.14 16:54 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No.M-14289 of 2013 -4-
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."
Section 10 of the 1955 Act is reproduced 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 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 purpose 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."
Obviously, both the provisions are pari materia to each other and hence, in view of the ratio of Aneeta Hadas' case, to the effect that the Directors/Partners/Persons in-charge of a company/firm, can only be held vicariously liable, if the company itself has been impleaded and not otherwise.
Therefore, the complaint filed by the respondent-State, invoking the provisions of the Act of 1968, including Section 33 thereof, is held to be not maintainable, the firm, i.e. M/s Shivalik Agro Chemicals, Mohali, which had manufactured the products in question Chander Vikas 2014.01.14 16:54 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No.M-14289 of 2013 -5- and of which petitioner No.1 is an employee and petitioner No.2 a partner, not having been impleaded as a party therein.
This petition is, consequently, allowed and the complaint (Annexure P-1), in the present form, is quashed.
September 20, 2013 (Amol Rattan Singh)
vcgarg Judge
Chander Vikas
2014.01.14 16:54
I attest to the accuracy and
integrity of this document
Chandigarh