Karnataka High Court
R Panchapakesan (Managing Director) vs The Inspector Of Legal Metrology on 30 August, 2018
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU R
DATED THIS THE 30TH DAY OF AUGUST, 2018
BEFORE
THE HON'BLE MR.JUSTICE B.A.PATIL
WRIT PETITION Nos.10537-10538/2014 (GM-RES)
c/w.
WRIT PETITION Nos.10539-10541/2014 (GM-RES)
IN W.P. Nos.10537-10538/2014 (GM-RES):
BETWEEN :
1. R. Panchapakesan (Managing Director)
2. M.K. Dattaraj (Director)
Both at. M/s. Food Creations Pvt. Limited
A Company registered under the
Companies Act, 1956
Survey No.P 34, Kacharakanahalli,
Naduvathi Post, Hosakote Taluk,
Bangalore Rural-560 067.
... Petitioners
(By Sri K. Kasturi, Sr. Counsel for
Smt.K.Subha Ananthi, Advocate)
AND :
1. The Inspector of Legal Metrology
The Department of Legal Metrology
Bhadravathi Sub-Division
Kanakanagar 3rd Cross, New Bridge Road
Bhadravathi-577 301.
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2. Union of India
Represented by its Secretary
Ministry of Consumer Affairs
Food & Public Distribution
Department of Consumer Affairs
Krishi Bhawan
New Delhi-110 114.
... Respondents
(By Sri I.S. Pramod Chandra, SPP-II for R1;
Sri S.R. Dodawad, Adv. for
Sri C.Shashikantha, ASG for R2)
These Writ Petitions are filed under Articles 226 and
227 of the Constitution of India r/w Section 482 of the
Cr.P.C Praying to quash the complaint Annexure-H dated
17.12.2012 in C.C.No.644/2013 and hold that the
complaint does not disclose any offence at all as against
the petitioners herein and etc.
IN W.P. Nos.10539-10541/2014(GM-RES):
BETWEEN :
1. Y.C. Deveshwar (Chairman)
2. P.V. Dhobale (Executive Director)
3. K.N.Grant (Executive Director)
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All are at. M/s. ITC Limited
A Company Registered under the
Companies Act, 1956
No.37, Jawahar Lal Nehru Road
Kolkotta-700 071.
... Petitioners
(By Sri K. Kasturi, Sr. Counsel for
Smt. K Subha Ananthi, Advocate)
AND :
The Inspector of Legal Metrology
The Department of Legal Metrology
Bhadravathi Sub-Division
Kanakanagar 3rd Cross
New Bridge Road
Bhadravathi-577 301
... Respondent
(By Sri I.S. Pramod Chandra, SPP-II)
These Writ Petitions are filed under Articles 226 and
227 of the Constitution of India r/w Section 482 of the
Cr.P.C Praying to quash the complaint Annexure-H dated
17.12.2012 in C.C.No.644/2013 and proceedings and
hold that the complaint does not disclose any offence at
all as against the petitioners herein and etc.
These Writ Petitions coming on for hearing this day,
the Court made the following:-
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ORDER
The petitioners in these two writ petitions called in question the cognizance taken by the learned Principal Civil Judge and JMFC., Bhadravathi in CC.No.644/2013 and requested this Court to quash the proceedings.
2. As per the contentions of the petitioners in WP.Nos.10539-10541/2014, petitioner No.1 is the Chairman and petitioner Nos.2 and 3 are the Executive Directors of ITC Limited, a Company within the meaning of Companies Act, 2013 having its registered Office at No.37, Jawaharlal Nehru Road, Kolkotta. Petitioners in WP.Nos.10537-38/2014 are the Managing Director and Director respectively of the said Company. The said Company is engaged in various businesses inter alia manufacture and marketing of biscuits. One of the brands under which ITC Limited markets its biscuits is "Sunfeast". This matter is with reference to a particular -5- product called "Dark Fantasy-Choco Fills" which is a chocolate filled biscuit. Each chocolate filled biscuit is sealed separately in a small packet to prevent loss of moisture and taste. The packets containing these individual chocolate filled biscuits are not intended for sale as retail packages. Five or ten such individual packages are thereafter placed in a carton box. The carton box in which the individual packages are packed is alone intended for retail sale. All the declarations required to be made in terms of Rule 6 of the Legal Metrology (Packaged Commodity) Rules, 2011 ('Rules' for short) are made on those carton boxes. In order to bring out the fact that the individual packages containing individual biscuits are not intended for retail sale separately and it is clearly printed on the inner packet containing the individual biscuits that "Not to be sold individually without the outer pack. For declarations please check the outer pack". The sample of the individual chocolate filled packet and the outer carton -6- box containing the said packets are marked as Annexures-A and B respectively.
3. It is further case of the petitioners that respondent No.1-Inspector of Legal Metrology, conducted the inspection of a retail store by name 'National Corner' in Bhadravathi on 10.11.2012 at 3.00 p.m. and seized several products along with which one was the 'Sunfeast Dark Fantasy - Choco Fills' and he issued a notice dated 10.11.2012 to M/s. ITC Limited, asking them to furnish list of Directors, copies of the nomination documents, the Registration Certificate of the packers and manufacturers and other details. ITC limited came to know about the seizure from the said notice dated 10.11.2012 which was received on 21.11.2012 by the said Company. The Company responded and asked for the opportunity of personal hearing. But as they did not receive any response from the respondents and no opportunity was also given to explain to the notice and subsequently the -7- petitioners received the summons from the Principal Civil Judge and JMFC., Bhadravathi to appear before the Court and after coming to know that a criminal proceeding has been initiated against the petitioners and a complaint has been lodged against the petitioners in the Court, the Court has taken cognizance. Challenging the same, the petitioners are before this Court in these petitions.
4. I have heard Sri K.Kasturi, learned Senior Counsel appearing for the petitioners and Sri S.R.Dodawad appearing on behalf of Sri C.Shashikantha, learned ASG for respondent No.2 and Sri I.S.Pramod Chandra, learned SPP-II for respondent No.1.
5. It is the submission of the learned Senior Counsel for the petitioners that the allegations made in the complaint are as against the Company, a criminal complaint against an Officer of the Company without arraying the Company as an accused is not maintainable in law. In order to substantiate his arguments, he relied -8- upon the decision of this Court in WP.No.13060/2013 disposed of on 30.8.2016. He has also relied upon the decision of the Hon'ble Supreme Court in the case of Anitha Hada Vs. Godfather Travels and Tours Private Limited, reported in (2012)5 SCC 661. It is his further submission that there is no violation of Rule 6 of the Rules and even in the Circular issued by the Department under Rule 9(3) of the Rules, it has been explained that when a package has two wrappers, inner and outer what is concerned to the consumer is the outer wrapper and there is no purpose of giving all the declarations on inner wrapper and as such the package which has been seized and a complaint lodged is not having any authenticity and by misconception of law and in violation of the Circular issued by respondent No.2- Ministry of Consumer Affairs, Food and Public Distribution, the said complaint has been filed. He further submitted that in catena of decisions, the legal aspect with regard to the question as to whether the -9- Company be made as a party before the Officers of the said Company have to be arrayed as accused, has been decided and keeping in view the said proposition of law the complaint which has been filed and the cognizance taken in this behalf by the Court below are not sustainable in law. He further submitted that the petitioners in WP.Nos.10537-10538/2014 are not going to press the prayer at (d) in the said writ petitions. On these grounds, he prayed to allow the petitions by quashing the proceedings initiated against the petitioners.
6. Per contra, the learned counsel appearing for respondent No.2 fairly submitted that when the petitioners are not pressing the prayer at (d) in WP.No.10537-10538/2014, then under such circumstances, he has nothing to say with regard to the other aspects are concerned. He further submitted that when the said prayer has not been pressed, question of
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prosecuting the respondent does not arise at all and in that light, he submitted that the legal remedies which are available to the petitioners may be granted by looking into law.
7. The learned SPP-II by drawing my attention to Section 49 of the Legal Metrology Act, 2009 ('Act' for short) submitted that the said Section itself clarifies that when an Officer has committed an offence and if he is responsible and having an authority to represent the Company and role has been played in this behalf by the said Officer, he can be prosecuted without arraying the Company as an accused. He further submitted that the Court below after taking into consideration the material placed on record has rightly taken the cognizance and there are no good grounds made out by the petitioners to quash the proceedings. He alternatively submitted that the petitioners are having every right to approach the Court below and file an appropriate application for
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discharge if no material is found to take the cognizance and proceed with the matter against them. On these grounds, he prayed to dismiss the petitions.
8. I have carefully and cautiously gone through the submissions of the learned counsel for the parties made at the Bar and also perused the material placed along with the writ petitions.
9. The first and foremost contention of the learned Senior Counsel is that the allegations are not only against the Officers of the Company, but also against the Company. A criminal complaint against an Officer of the Company without arraying the Company as an accused is not maintainable. In so far as this proposition of law is concerned, the Hon'ble Apex Court and this Court in many cases have dealt with in detail the said legal aspect with regard to whether the Officers of a Company can be made as parties individually without there being a Company made as an accused. In this regard he has
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relied upon a decision of the Hon'ble Apex Court in the case of Anitha Hada Vs. Godfather Travels and Tours Private Limited (cited supra). In the said decision, the Hon'ble Apex Court have summarized the liability of the Company and the Officers of the Company and have categorically laid down the principle that the corporate criminal liability with reference to the Company and the nature of its entity and the applicability of criminal liability has to be considered only if the Company is made as a party. Admittedly, in this case, the Company is not made as a party. Under such circumstances, the complaint which has been filed without arraying the Company as an accused is not maintainable in law and as such the same is liable to be quashed.
10. Before going to discuss the next contention, I feel it just and proper to quote Rule 6 of the Rules, which reads as under:-
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"6. Declaration to be made on every package.-(1) Every package shall bear thereon or on label securely affixed thereto, a definite, plain and conspicuous declaration made in accordance with the provisions of this Chapter as, to-
(a) the name and address of the
manufacturer, or where the
manufacturer is not the packer, the name and address of the manufacturer and packer and for any imported package the name and address of the importer shall be mentioned.
Explanation I.- If any name and address of a company is mentioned on the label without any qualifying words 'manufactured by' or 'packed by', it shall be presumed that such name and address shall be that of the manufacturer and the liability shall be determined accordingly;
Explanation II.-If the brand name and address of the brand owner appear on
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the label as a marketer, then the brand owner shall be held responsible for any violation of these rules and action as may be required shall be initiated against the deemed manufacturer and in the event of more than one name and address appearing in the label, prosecution shall be launched against the manufacturer indicated on the label in the first place and not against all of them.
Explanation III.- In respect of packages containing food articles, the provisions of this clause shall not apply but the provisions of, and the requirements specified in the Food Safety and Standards Act, 2006 (34 of 2006) and the rules made thereunder shall apply; (2) xxx xxx xxx (3) xxx xxx xxx (4) xxx xxx xxx (5) Where a commodity consists of a number of components and these components are packed in two or more units, for sale as a
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single commodity, the declaration required to be made under sub-rule (1) shall appear on the main package and such package shall also carry information about the other accompanying packages or such declaration may be given on individual packages and intimation to that effect may be given on the main package and if the components are sold as spare parts, all declarations shall be given on each package."
11. On going through the aforesaid Rule, it specifically states where a commodity consists of number of components and these components are packed in two or more units, for sale as a single commodity, the declaration required to be made under sub-rule(1) shall appear on the main package and such package shall also carry information about the other accompanying packages or such declaration may be given on individual packages and intimation to that effect may be given on the main package and if the components are sold as
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spare parts, all declarations shall be given on each package. Admittedly, the product which is said to have been sold and allegation has been made in this behalf in the complaint, it clearly indicates that the said packages which are called as "Sunfeast Dark Fantasy-Choco Fills"
biscuits are sealed in a separate package to prevent loss of moisture and taste and thereafter the said packages are to be kept into a carton box containing six to eight pieces and thereafter the main carton box is packed. All the declarations which are required to be made in terms of Rule 6 of the Rules are made on the carton box. This fact has also not been in dispute. When the Rule itself is very clear and the petitioners have complied with all requirements, then under such circumstances, it goes without saying that it is not in violation of Rule 6 of the Rules.
12. Be that as it may, when the circular issued by the second respondent-Ministry of Consumer Affairs,
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Food and Public Distribution, is perused, it indicates that by virtue of the clarification made, when package has two wrappers inner and outer, what is concerned is outer wrapper and there is no necessity that all declarations shall be made on the inner wrapper. The said clarification which has been given by respondent No.2- Ministry of Consumer Affairs, Food and Public Distribution appears to be just and proper and it is in consonance to Rule 6 of the Rules. It also clarifies the intention of the Rule. In that light, it appears that there is some force in the contention of the learned Senior counsel.
13. During the course of arguments, the learned counsel for respondent No.1 by drawing my attention to Section 49 of the Act contended that the Officer concerned who in charge of the Company can be arrayed as an accused apart from the Company. For the purpose of brevity I quote Section 49 of the Act which reads as under:-
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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
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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 or 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.
Explanation.-Where a company has different establishments or branches or different units in any establishment or
branch, different persons may be nominated under this sub-section in relation to different establishments or branches or units and the person nominated in relation to any
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establishment, branch or unit shall be deemed to be the person responsible in respect of such establishment, branch or unit.
(3) The person nominated under sub-
section (2) shall, until-
(i) further notice cancelling such nomination is received from the company by the Director or the concerned Controller or the authorised officer; or
(ii) he ceases to be a director of the company; or
(iii) he makes a request in writing to the Director or the concerned Controller or the legal metrology officer under intimation to the company, to cancel the nomination, which request shall be complied with by the Director or the concerned Controller or the legal metrology officer, whichever is the earliest, continue to be the person responsible:
Provided that where such person ceases to be a director of the company, he shall intimate the fact of such cessation to the
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Director or the concerned Controller or the authorised officer:
Provided further that where such person makes a request under clause (iii) the Director or the concerned Controller or the authorised officer shall not cancel such nomination with effect from a date earlier than the date on which the request is made.
(4) Notwithstanding anything contained in the foregoing sub-sections, 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 the neglect on the part of, any director, manager, secretary or other officer, not being a person nominated under sub-section (2), 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.
(5) Where any company is convicted under this Act for contravention of any of the provisions thereof, it shall be competent for
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the court convicting the company to cause the name and place of business of the company, nature of the contravention, the fact that the company has been so convicted and such other particulars as the court may consider to be appropriate in the circumstances of the case, to be published at the expense of the company in such newspaper or in such other manner as the court may direct.
(6) No publication under sub-section (5) shall be made until the period for preferring an appeal against the orders of the court has expired without any appeal having been preferred, or such an appeal, having been preferred, has been disposed of.
(7) The expenses of any publication under sub-section (5) shall be recoverable from the company as if it were a fine imposed by the court.
Explanation.-For the purposes of this section,-
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(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 but excludes nominated directors, honorary directors, Government nominated directors.
14. On close reading of Section 49 of the Act, it clearly indicates that apart from the persons contemplated under sub-sections (1)(a) and (2) of Section 49 of the Act, a Company is necessary to be arrayed as an accused in a complaint in respect of the offence under the said Act. In that view of the matter, the contention of the learned SPP-II is not acceptable and sustainable in law.
15. Keeping in view the aforesaid proposition of law and the factual matrix of the matter, I am of the
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considered opinion that the petitioners have made out a case to quash the proceedings.
Accordingly, writ petitions are allowed.
The complaint dated 17.12.2012 in CC.No.644/2013 at Annexure-H and the proceedings thereto on the file of the learned Principal Civil Judge and JMFC., Bhadravathi at Annexure-H, produced in the petitions are quashed. In so far as prayer at (d) in Writ Petition Nos.10537-10538/2014 is concerned, the same is dismissed as it is not pressed.
Sd/-
JUDGE *ck/-