Karnataka High Court
Mallikarjungouda S/O Ishwaragouda vs The State Of Karnataka on 14 June, 2024
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NC: 2024:KHC-D:8067
CRL.P No. 101007 of 2024
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 14TH DAY OF JUNE, 2024
BEFORE
THE HON'BLE MR JUSTICE VENKATESH NAIK T
CRIMINAL PETITION NO. 101007 OF 2024 (482)
BETWEEN:
1. MALLIKARJUNGOUDA S/O. ISHWARAGOUDA
AGE: 36 YEARS, PROPRIETOR OF CHANDALINGESHWAR
ENTERPRISES, BESIDE KRISHNA RESTAURANT, KOLUR
COMPLEX, NEAR BASAVESHWAR CIRCLE, TALUK:
KUSHTAGI, DIST: KOPPAL, PIN CODE-583277.
2. CHANDRASHEKAR HARVI S/O. H. GURUPADAPPA
SAHUKAR, AGE: 62 YEARS, OCCUPATION: AREA SALES
MANAGER OF SAVIO-BIO-ORGANIC AND FERTILIZERSS
PRIVATE LIMITED, OFFICE NO.5,
AMAR EMPIRE, NEAR GOAVES, BELAGAVI-01.
...PETITIONERS
(BY SRI. RAJASHEKHAR B. HALLI, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA, REP.BY SPP,
HIGH COURT OF KARNATAKA, DHARWAD BENCH, DHARWAD.
Digitally signed
by MANJANNA E 2. THE GOVERNMENT OF KARNATAKA,
Location: HIGH DEPARTMENT OF AGRICULTURE, REPRESENTED BY
COURT OF
KARNATAKA SHREE MAHADEVAPPA, AGE ABOUT 58 YEARS, FERTILIZER
INSPECTOR AND ASSISTANT AGRICULTURE DIRECTOR,
ASSISTANT AGRICULTURE DIRECTOR OFFICE,
KUSHTAGI, DIST: KOPPAL, PIN.583231.
...RESPONDENTS
(BY SRI. JAIRAM SIDDI, HCGP FOR R1 & R2)
THIS CRIMINAL PETITION IS FILED U/S. 482 OF CR.P.C.,
SEEKING TO QUASH THE PROCEEDINGS AGAINST
PETITIONERS/ACCUSED NO.1 AND 2 IN CC NO.17/2023 PENDING
ON THE FILE OF THE CIVIL JUDGE AND JMFC, KUSHTAGI FOR THE
OFFENCE PUNISHABLE U/S. 7 OF ESSENTIALS COMMODITIES ACT.
THIS PETITION, COMING ON FOR FURTHER ARGUMENTS, THIS
DAY, THE COURT MADE THE FOLLOWING:
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NC: 2024:KHC-D:8067
CRL.P No. 101007 of 2024
ORDER
1. The petitioners have filed this petition under Section 482 of Cr.P.C., praying to quash the taking of cognizance in C.C. No.17/2023 for the offence punishable under Section 7 of Essential Commodities Act, 1955 (for short 'the E.C. Act') on the file of Civil Judge and JMFC Court, Kushtagi.
2. It is the case of the prosecution that the complainant, who is respondent herein, was working as Assistant Agricultural Director, Agricultural Department, Koppal, filed a private complaint before the jurisdictional Court on behalf of State on 31.05.2021 for the aforesaid offences alleging that he visited the shop of petitioner No.1 on 15.09.2020 in between 11.30 A.m. and 12.30 P.M. where he inspected 100 bags carrier of 50 kgs each and collected 17 : 17 : 17 fertilizer samples manufactured. Hence he conducted mahazer and collected samples pockets as per the procedure from the stock of 17 : 17 :
17 and packed and sealed. Out of which one packet -3- NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024 sample has been sent to Quality Control Laboratory and one sample kept in Agriculture Office. As per the laboratory report dated 02.10.2020 the fertilizer sent by the complainant was not according to the specification, hence, he proceeded to prosecute the petitioners under the provisions of Clause 28(1)C of the Fertilizer Control Order, 1985 and Section 7 of EC. Act.
3. Heard learned Counsel for the petitioners and the learned High Court Government Pleader for the respondent-State.
4. It is submitted that, the complainant has not mentioned the manufacturer name in the complaint. Company should be made as accused along with other accused Nos.1 and 2. Failing to array the Company as accused is said to be illegal and as such initiation of prosecution against present petitioners do not survive for consideration and liable to be quashed.
5. Per contra, learned High Court Government Pleader for respondent- State vehemently submitted that the complainant has not made the Company as accused in -4- NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024 the proceedings, but there is scope under Section 319 of Cr.P.C., to implead the Company as accused before the trial Court, therefore not impleading the Company as accused in the proceeding is not fatal to the case of prosecution and this irregularities can be cured at the time of taking cognizance. Thus, prayed to dismiss the petition.
6. Having heard the learned Counsel for the parties to the lis and on perusal of the material available on record, it appears that the complainant collected sample fertilizer from the shop of petitioner No.1 in two packets and sealed the same and he sent one packet to laboratory, one sample to his higher authorities. Later he came to know from laboratory report that the said fertilizer was substandard.
7. Admittedly, the complainant has not made the Company as party to the proceedings. Here it is necessary to refer Section 10 of the Essential Commodities Act, 1955, which 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 -5- NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024 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 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.
1[10A. Offences to be cognizable. Notwithstanding anything contained in 2[the Code of Criminal Procedure, 1973 (2 of 1974)] every offence punishable under this Act shall be "cognizable 3"].
[10B. Power of Court to publish name, place of business, etc., of companies convicted under the Act.-(1) Where any company is convicted under this Act, it shall be competent for 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 newspapers or in such other manner as the Court may direct.
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NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024 (2) No publication under sub-section (1) 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.
(3) The expenses of any publication under sub-section (1) shall be recoverable from the company as if it were a fine imposed by the Court.
Explanation.-For the purposes of this section, "company" has the meaning assigned to it in clause (a) of the Explanation of Section 10.] [10C. Presumption of culpable mental state.(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the Court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.
Explanation.- In this section, "culpable mental state"
includes intention, motive, knowledge of a fact and the belief in, or reason to believe, a fact.
(2) For the purposes of this section, a fact is said to be proved only when the Court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.
8. On careful reading of the above provision, makes it clear that, if any offence committed by the company, the company made as party to the proceedings. Unless, the Company is made as a party to the -7- NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024 proceedings, the initiation of the criminal proceedings against other accused persons would not be proper.
9. In the present case, petitioner Nos.1 and 2 are dealers of the fertilizer company. The complainant committed an error in not arraying the Company as party to the proceedings. As such, prosecution do not survive for the aforesaid reasons.
10. In the of case of Anil Hada Vs. Indian Acrylic Ltd1 the Hon'ble Apex Court has held that "the provisions do not contain a condition that prosecution of the company is sine qua non for prosecution of the other persons who fall within the second and the third categories mentioned above". Therefore, unless the Company as a principal accused has committed the offence, the persons mentioned in sub-section (1) would not liable and cannot be prosecuted. In the case of Dayle De Souza Vs. Government of India arising out of Special Leave 1 (2000) 1 SCC 1 -8- NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024 Petition (CrL) No.3913 of 2020 at Para 27 the Hon'ble Apex Court has held as under:
"In terms of the ratio above, a company being a juristic person cannot be imprisoned, but it can be subjected to a fine, which in itself is a punishment. Every punishment has adverse consequences, and therefore, prosecution of the company is mandatory. The exception would possibly be when the company itself has ceased to exist or cannot be prosecuted due to a statutory bar. However, such exceptions are of no relevance in the present case. Thus, the present prosecution must fail for this reason as well."
11. In the case of M/s. Cheminova India Limited & Anr. Va. State of Punjab & Ors.2 the Hon'ble Apex Court has held that, "in view of the specific provision in the Act dealing with the offences by companies, which fixes the responsibility and the responsible person of the Company for conduct of its business, by making bald and vague allegations, 2nd Appellant Managing Director cannot be prosecuted on vague allegation that he being the Managing Director of the 1st Appellant-Company. A reading of Section 33 of the Insecticides Act, 1968 also makes it clear that only responsible person of the 2 CrLA. No.750/2021, arising out of SLP (CrL.) No.4144/2020 -9- NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024 Company, as well as the Company alone shall be deemed to be guilty of the offence and shall be liable to be proceeded against".
12. A careful reading of the above provisions and the decisions cited supra and the facts and circumstances of the present case, make it clear that, if any offence committed by the Company, the Company should be made as party to the proceedings. Unless Company is made as party to the proceedings, initiation of criminal proceedings against other accused persons would not be proper.
13. In the present case the petitioners are dealers of the Fertilizer Company. The complainant must array the Company as party to the proceedings. But he committed an error in not arraying the Company as party to the proceedings. As such, the petition is deserves to be allowed. In the light of the above observations, I proceed to pass the following:
ORDER
i) The petition is allowed.
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NC: 2024:KHC-D:8067 CRL.P No. 101007 of 2024
ii) The proceedings in C.C. No.17/2023 for the offence punishable under Section 7 of Essential Commodities Act, 1955 (for short 'the E.C. Act') on the file of Civil Judge and JMFC Court, Kushtagi is hereby quashed.
iii) However, it is made clear that this quashment order will not come in the way of the complainant initiating fresh proceedings in accordance law, subject to law of limitation.
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JUDGE AC/ct-an List No.: 2 Sl No.: 43