Karnataka High Court
Rudrappa R vs The State Of Karnataka on 7 February, 2025
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2025:KHC:5736
CRL.P No. 5781 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
CRIMINAL PETITION NO. 5781 OF 2023 (482(Cr.PC) / 528(BNSS)
BETWEEN:
RUDRAPPA R.,
AGED ABOUT 39 YEARS,
ASSISTANT GENERAL MANAGER,
AMRUTH ORGANIC FERTILIZERS,
MALLADIHALLI POST,
HOLALKERE TALUK-577526
CHITRADURGA DISTRICT.
...PETITIONER
(BY SRI. R. SHASHIDHARA, ADVOCATE)
AND:
THE STATE OF KARNATAKA
ASSISTANT DIRECTOR OF AGRICULTURE
CUM FERTILIZER INSPECTOR,
OFFICE OF ASSISTANT DIRECTOR OF
AGRICULTURE, HARIHARA,
HARIHARA TALUK-577601.
Digitally signed by REPRESENTED BY SPP,
LEELAVATHI S R
Location: High
HIGH COURT BUILDING,
Court of BENGALURU - 560 001.
Karnataka
...RESPONDENT
(BY SRI. THEJESH P., HCGP FOR R1)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
CR.P.C PRAYING TO SET ASIDE THE ORDER OF TAKING
COGNIZANCE DATED 23.07.2021 IN C.C.NO.1183/2021, PENDING
ON THE FILE OF PRINCIPAL CIVIL JUDGE AND JMFC, AT
HARIHARA AND ETC.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
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NC: 2025:KHC:5736
CRL.P No. 5781 of 2023
CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:
"i) Call for the records.
ii) Set - aside the order of taking cognizance dated
23.07.2021 in C.C.No.1183/2021, pending on the file of Principal Civil Judge and JMFC, at Harihar.
iii) Quash the private complaint in
C.C.No.1183/2021, pending on the file of
Principal Civil Judge and JMFC, at Harihar for the offence punishable under Section 7(1) a (ii) and 3 (2) (a) of Essential Commodities Act, 1955, in the interest of justice and equity.
iv) Pass such other orders as this Hon'ble Court deems fit in the circumstances of the case in the interest of justice."
2. Heard learned counsel for the petitioner, learned HCGP for respondent No.1 and perused the material on record.
3. A perusal of the material on record will indicate that respondent instituted proceedings against the petitioner which are pending in C.C.No.1183/2021 for alleged offences punishable -3- NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 under Sections 7(1)a(ii) and 3(2)(a) of Essential Commodities Act, 1955.
4. Learned counsel for the petitioner submits that petitioner is merely an employee of Amurth Organic Fertilizers and in the absence of the said company being made a party to the proceedings as mandated under Section 10 of the Essential Commodities Act, 1955, the impugned proceedings as against the petitioner are not maintainable and same deserves to be quashed.
5. Section 10 of Essential Commodities Act 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 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 -4- NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 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 12 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. "
6. The issue as to whether the company has to be arraigned as accused in proceedings under Essential Commodities Act, came up for consideration before this Court in the case of Sangappa Tenginakayi Vs. The State of Karnataka passed in Crl.P.No.100091/2023 dated 11.04.2023, wherein it was held as under:.
-5-NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 "In this petition filed under Section 482 of Cr.P.C., the petitioner, who is arraigned as accused No.1 has challenged the initiation of criminal prosecution in C.C.No.325/2021 on the file of the Civil Judge and JMFC., Yelburga for the offences punishable U/sec.3 and 7 of Essential Commodities Act on the ground that company is not made a party and already criminal proceedings against accused No.2 are quashed in Criminal Petition No.103468/2022.
2. Learned High Court Government Pleader takes notice for respondent.
3. Brief facts leading to filing of the present petition are that, petitioner is the owner of M/s Shri Vijaya Mahanteshwar Fertilizers, Yelburga engaged in sale of fertilizers manufactured by KPR Agro Chem Limited. Accused No.2 is the Compliance Officer of KPR Agro Chem Limited. On 16.10.2020, the Assistant Agriculture Director-complainant collected samples of 17:17:17 fertilizer manufactured by KPR Agro Chem Limited, from petitioner's godown. On analyses, it was found to be of substandard quality and thereby petitioner has committed the offences punishable under Order 19(3) of Fertilizer (Control) Order r/w Sections 3 and 7 of the Essential Commodities Act, 1955.
4. During the course of the arguments, the learned counsel for petitioner submitted that without arraigning the company as party, the complaint is not maintainable. The samples were collected from the sealed -6- NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 bag and there is no allegation that there was any adulteration. Already criminal proceedings against accused No.2 who is the Compliance Officer of KPR Agro Chem Limited is quashed on the ground that company is not made a party and prays to allow the petition and quash the proceedings.
5. 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 at this stage under Section 482 of Cr.P.C disputed question of fact cannot be decided.
6. Heard the arguments and perused the records.
7. Admittedly, the charges leveled against the petitioner are that they have violated sections 3 and 7 of E.C. Act and Clause 19 of the Fertilizer (Control) Order, 1985.
8. Section 10 of E.C. Act 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:-7-
NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 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.
9. Perusal of Section 10 of the E.C. 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 therefore, until and unless the company is arraigned as accused, the petitioner cannot be held responsible.
10. In fact, the Hon'ble Apex Court in Aneeta Hada Vs. Godfather Travels and Tours Private Limited reported in (2012) 5 SCC 661 while considering the offence committed by the company has held as follows:
-8-NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 "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 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.
-9-NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 The decision 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."
11. In the light of the above judgments and having regard to the fact that the company is not arraigned as accused and as already criminal proceedings against accused No.2 are quashed, 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 petition is allowed.
The impugned proceedings in C.C.No.325/2021 on the file of the Civil Judge and JMFC, Yelburga as against the petitioner/accused No.1, is hereby quashed.
In view of disposal of the matter, pending interlocutory applications, if any, do not survive for consideration and are disposed of accordingly."
7. As held by this Court in the aforesaid judgment, in the absence of Company being made a party as mandated under Section 10 of the Essential Commodities Act, the proceedings
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NC: 2025:KHC:5736 CRL.P No. 5781 of 2023 against the accused, who is merely an employee of the Company is clearly not maintainable and the same deserves to be quashed.
8. In the result, I pass the following:
ORDER
i) The petition is hereby allowed.
ii) The private complaint and order of taking cognizance dated 23.07.2021 in C.C.No.1183/2021 on the file of Principal Civil Judge and JMFC, Harihar for the offences punishable under Section 7(1) a(ii) and 3(2)(a) of Essential Commodities Act, 1955 insofar as petitioner is concerned as hereby quashed.
Sd/-
(S.R.KRISHNA KUMAR) JUDGE MDS List No.: 2 Sl No.: 9