Kerala High Court
Govinda Rao vs Food Inspector on 17 January, 2002
Equivalent citations: 2003CRILJ1796
ORDER G. Sasidharan, J.
1. The first petitioner is the Managing Partner of M/s. B.G.R. Enterprises, a partnership firm registered under the Indian Partnership Act. The firm is carrying on the business of catering food and beverages to different establishments. The firm is conducting a restaurant in M/s. Bharat (BTH), Durbar Hall Road, Ernakulam, Kochi, on contract basis. On 19.5.2000 the Food Inspector, Kochi inspected the restaurant of the petitioners and at that time the second petitioner was present in the restaurant. According to the petitioners, Food Inspector inspected the restaurant and kitchen and thereafter entered the store of the petitioners and took away some quantity of green gram and canned cherries. A debit note was prepared for the articles and a receipt was issued for the cash received from the Food Inspector. The Cherries were in sealed cans and Food Inspector took away three such cans.
2. The food articles taken by the Food Inspector were sent for analysis to the Public Analyst. The green gram was found to be a prescribed standard while the canned cherry was found to contain non-permitted synthetic colour. On the basis of the report of analysis, Food Inspector served notices on the petitioners intimating them that he has launched prosecution against them under the Prevention of Food Adulteration Act. The case was taken on file by the Chief Judicial Magistrate as C.C.1196 of 2000. This petition is filed for quashing the proceedings in the above case.
3. The case against the petitioners is that the cherries in sugar syrup kept in tins were kept by the petitioners for sale. According to the petitioners, they are neither dealers nor manufacturers of any canned products and they are conducting restaurants where only cooked food is sold by them. One of the grounds raised by the petitioners for quashing the proceedings is that the canned cherry was kept by the petitioners not for sale. It is state that cherry was not exhibited for sale and tins containing cherry were taken from the store room. The submission made on the basis of the above fact is that in so far as the canned cherry was not intended for sale, launching of prosecution under the provisions of the Prevention of Food Adulteration Act is not permissible. Another contention taken up by the petitioners is that the petitioners are not persons who are in charge of or responsible for the conduct of the business of the firm. The firm of the petitioners has nominated one P.M. Manosh to be in charge of and responsible to the firm for the conduct of the business and hence, the prosecution of the petitioners alleging commission of the offence punishable under the provision of the Prevention of Food Adulteration Act is not possible. Another point urged by the petitioners is that there is warranty under Section 14 of the Prevention of Food Adulteration Act in their favour on the basis of Annexure-VIII invoice issued by SIL Agencies from where the petitioners purchased red cherry.
4. The statement in the complaint filed by the Food Inspector in the Court of the Chief Judicial Magistrate is that the first petitioner is the licensee of B.G.R. Enterprises and he is running the hotel by same BGR Enterprises Restaurant and the second petitioner is the General Manager who is managing the sale and distribution of food articles in the restaurant. The Food Inspector, after disclosing his identity and after serving Form VI notice to the second petitioner, made purchase of "red cherries in Syrup". The averment in the complaint is that red cherries in syrup were kept in the restaurant for sale and the Food Inspector purchased 1320 grams of red cherry. An amount of Rs. 114/- was paid by the Food Inspector towards cost of the red cherry purchased by him. Even though the statement in the complaint is that red cherry was kept in the establishment of the petitioners for sale, the contention raised is that the Food Inspector after inspecting the restaurant and kitchen went to the store room and took from her red cherry. The submission made for and on behalf of the petitioners is that since the cherry was taken from the store room it cannot be said that the red cherry was kept by the petitioners for sale and hence, the petitioners cannot be prosecuted alleging commission of the offences under the provisions of the Prevention of Food Adulteration Act. Whether the red cherry was kept in the store room and it was not intended for sale or whether it was kept by the petitioners for sale, is a question on which a decision can be taken only on taking evidence.
5. In Municipal Corporation of Delhi v. Laxmi Narain Tandon (AIR 1976 SC 621) the Supreme Court said that the broad scheme of the Act is to prohibit and penalise the sale, or import, manufacture, storage or distribution for sale of any adulterated article of food. It was also observed in the above decision that "storage" or "distribution" of an adulterated article of food for the purpose other than for sale does not fall within the mischief of the section. The Prevention of Food Adulteration Act, under Section. 16(1), assigns a pivotal position to the food Inspector for enforcement of its provisions and he is authorised to take samples of an article of food from persons indulging in a specified course of business activity. In the above decision it was held that the three sub-clauses of Sub-section (1)(a) apply to a person who answers the description of a seller or conveyer, deliverer, actual or potential, of an article of food to a purchaser or consignee or his consignee after delivery of such an article to him. Sub-section (2) makes it clear that sample can be taken only of that article of food which is manufactured, stored or exposed for sale. If an article of food is not intended for sale and is in possession of a person who does not fulfil the character of a seller, conveyer, deliverer, consignee, manufacturer or storer for sale such as is referred in Sub-sections (1)(a) and (2) of the section, the Food Inspector will not be competent under the law to take a sample and on such sample being found adulterated, to launch prosecution. The expression "store" in Section 7 means "storing for sale" and consequently storing of an adulterated article of food for purposes other than for sale would not constitute an offence under Section 16(1)(a) of the Act. The submission made for and on behalf of the petitioners is that the red cherries kept in the store were not intended for sale and hence, it cannot be said that for storing of red cherries even if it is found adulterated prosecution under Section 16(1)(a) of the Act is possible. Whether the red cherry the Food Inspector purchased from the establishment of the petitioners was that kept there for sale or not for sale, is a matter for evidence. A final decision on that question cannot be arrived at by this court when dealing with a petition filed under Section 482 of the Criminal Procedure Code.
6. Section 4 of the Prevention of Food Adulteration Act says that no manufacturer or distributor of, or dealer in any article of food shall sell such article to any vendor unless he also gives a warranty in writing in the prescribed from about the nature and quality of such article to the vendor. The proviso to the above section says that a bill, cash memorandum or invoice in respect of the sale of any article of food given by a manufacturer or distributor of, or dealer in such article to the vendor thereof shall be deemed to be a warranty given by such manufacturer, distributor or dealer under that section. Section 20A of the Act provides that where at any time during the trial of any offence under the Act alleged to have been committed by any person, not being the manufacturer, distributor or dealer of any article of food, the Court is satisfied, on the evidence adduced before it, that such manufacturer, distributor or dealer is also concerned with that offence, then, the Court may proceed against him as though a prosecution had ben instituted against him under Section 20. Annexure-VIII is the invoice issued from SIL Agencies for purchase of red cherry from that agency. According to the petitioners, Annexure-VIII is a warranty under Section 14 of the Prevention of Food Adulteration Act in favour of the petitioners and therefore, the petitioners are not liable to be prosecuted for any alleged deficiency in the quality of the product.
7. A reading of Section 20A would make it clear that the power given to the Court under that Section can be exercised only after taking evidence in the case. The section says that only when the Court is satisfied on the evidence adduced before it that manufacturer, distributor or dealer is also concerned with that offence, the Court may proceed against him as though prosecution had been instituted against him under Section 20. Then the Court has the power to implead the manufacturer, distributor or dealer under Section 20A of the Act. In Omprakash Shivprakash v. K.I. Kuriakosh and Ors. ((1999) 8 SCC 633) the Supreme Court held that exercise of power under Section 20A before evidence is adduced is premature and without jurisdiction. The Supreme Court said that Court's power to implied a dealer, manufacturer or distributor under Section 20A can neither be invoked before the stage of adducing evidence in the trial nor after the conclusion of trial. So, at this stage, on the basis of Annexure-VIII invoice, it is not open to the petitioners to contend that there is warranty under Section 14 of the Prevention of Food Adulteration Act in favour of the petitioners and therefore, they are not liable to be prosecuted under the provisions of the Act.
8. The petitioners contend that they are not in charge of or responsible for the conduct of the business of the firm and that the firm of the petitioners has nominated Sri P.M. Manosh, Pottakkattil House, Kanayannoor P.O., Chottanikkara to be in charge of and responsible to the firm for the purpose of ensuring that an offence under the Prevention of Food Adulteration Act is not committed. Annexure-IX is a copy of the resolution adopted on 10th July, 1996 resolving to nominate the above said Manosh to be in charge of and responsible to the firm and authorising to take all steps as may be necessary or expedient to prevent commission by the said firm of any offence under the Prevention of Food Adulteration Act. It is seen from Annexure-IX that it is a nomination of a person by the Company made under Rule 12B of the Prevention of Food Adulteration Rules. The fact that Manosh was nominated as stated in the resolution adopted by the Company was informed to the local authority. The receipt of the nomination was acknowledged as is seen from Annexure-IX by the Health Officer and Local Health Authority, Corporation of Cochin, Kochi. The signature of the Local Authority for having received the nomination is seen to have ben put in Annexure IX on 27.7.1996. The submission made is that even though the Health Officer and Local Health Authority received the nomination made by the Company under Rule 12B of the Rules a early as on 27.7.1996 prosecution has been launched against the petitioners, who are not in charge of and responsible for the conduct of a business of the company. In the nomination it is stated that Sri P.M. Manosh will be in charge of and responsible to the company and he was also authorised to take all such steps as may be necessary or expedient to prevent commission by the said company of any offence under the Prevention of Food Adulteration Act. It is not disputed that there was nomination of Mr. Manosh as mentioned in Annexure-IX.
9. Section 17 of the Prevention of Food Adulteration Act says that where an offence under the Act has been committed by the company, 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 and the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. If no person has been nominated under Sub-section (2) of Section 17, 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 the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against. Sub-section (2) of Section 17 says that any company may, by order in writing, authorise any of its Directors or Managers 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 the Act and may give notice to the Local (Health) Authority, in such form and in such manner as may be prescribed. Annexure-IX is the notice given to the Local (Health) Authority under Rule 12B of the Rules regarding the nomination of Manosh to be in charge of and responsible to the company for the conduct of the business of the company and 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 the Act. It is seen from Annexure-IX that Manosh, who was been nominated, had given his consent in writing and put his signature accepting the nomination made under Section 17 of the Act. Proviso to Rule 12B of the Rules says that no nomination under Section 17 shall be valid unless the Director or Manager who has ben so nominated, gives his consent in writing and has affixed his signature. On going through Annexure-IX it is seen that there is compliance of what is said in the proviso to Rule 12B of the Prevention of Food Adulteration Rules.
10. If a person has been nominated under Sub-section (2) of Section 17 of the Act, that person and the company shall be deemed to be guilty of the offence. The person so nominated to be in charge of and responsible to the company for he conduct of the business of the company shall be responsible for the commission of the offence under the Act. The responsibility to exercise all powers and to take all steps as may be necessary or expedient to prevent the commission by the company of any offence under the Act when there is a nomination is on the nominee because he is in charge of and responsible to the company for the conduct of the business. In cases in which there is nomination the partners of the firm other than nominee cannot be said to be in charge of and responsible to the company for the conduct of the business of the company and hence prosecution against those partners by saying that they are also responsible to the company for the conduct of the business is not possible. But where an offence under the Act has been committed by a company and it is shown 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 they shall also be deemed to be guilty of that offence and they shall be liable to be proceeded against.
11. Sub-section (4) of Section 17 says that notwithstanding anything contained in the other sub-sections of that section, where as offence under the 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 attributed to, any neglect on the part of any Director, Manager, Secretary or other officer of the company, not being a person nominated under Sub-section (2) such Director, Manager, Secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against. Those persons who shall be deemed to be guilty of the offence under Sub-section (4) of Section 17 can be said to be guilty of the offence and can be proceeded against for the reason that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of that person. They are not being prosecuted for the reason or on the allegation that they are in charge of and responsible to the company for the conduct of the business of the company. The person, who is nominated under Sub-section (2) Section 17, is the person who is in charge of and responsible to the company for the conduct of the business of the company and hence, the prosecution of the nominee is for the reason that he is in charge and responsible to the company for the conduct of the business.
12. When any Director, Manager, Secretary or other officer of the company is being prosecuted for the reasons mentioned in Sub-section (4) of Section 17, they are not being prosecuted by saying that they are in charge of and responsible to the company for the conduct of the business of the company since there is a nominee who has to be in charge of and responsible to the company for the conduct of the business of the company. A reading of Sub-section (4) of Section 17 would make it clear that the Director, Manager, Secretary or other officer of the company, who can be held liable for the commission of the offence under that sub-section, has to be a person who is not nominated under Sub-section (2) of the section. Such a statement has been made in Sub-section (4) for the reason that nominee will become liable not under that sub-section but under sub-section (1)(a)(i) of the reason that he is in charge of an responsible to the company for the conduct of the business of the company. When there is nomination under Sub-section (2) of Section 17, the nominee along with the company will be deemed to be guilty of the offence. This is a case in which there is nomination and hence the nominee, being the person who is in charge of and responsible to the company for the conduct of the business of the company, will be deemed to be guilty of the offence. Since there is a nominee, any Director, Manager, Secretary or other officer of the company can be proceeded against alleging commission of the offences under the Act only if the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any such person. Even if any Director, Manager, Secretary or other officer of the company is proceeded against for the commission of the offence under the Act, by virtue of what is said in Sub-section (4), the nominee has to be an accused for the reason that he is the person responsible to the company for the conduct of the business of the company and the person authorised 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 the Act.
13. In R. Banerjee and Ors. v. H.D. Dubey and Ors. ((1992) 2 SCC 552) it was held that Sub-section (4) of Section 17 overrides the preceding sub-section and posits that where an offence has been committed by a company and it is proved that the offence was 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, other than the one nominated, such Director, Manager, Secretary or other officers shall also be deemed guilty and he liable to be proceeded against and punished for the same. From the scheme of Section 17 it is clear that where a company has committed an offence under the Act, the person nominated under Sub-section (2) to be in charge of, and responsible to, the company for the conduct of its business shall be proceeded against unless it is shown that the offence was committed with the consent/connivance/negligence of any Director, Manager, Secretary or officer of the company in which case the said person can also be proceeded against and punished for the commission of the offence. The further observation made by the Supreme Court is that it is only where no person has been nominated under Sub-section (2) of Section 17 that every person, who at the time of the commission of the offence was in charge of and was responsible to the company for the conduct of its business can be proceeded against the punished under the law.
14. The averment in the complaint is that the first petitioner, who is the second accused, is the licensee of BGR Enterprises and that the second petitioner, who is the first accused, is the General Manager, who is managing the sale distribution of food articles in the restaurant. As early as in 1996 nomination was made by the firm and under Annexure-IX the Local Health Authority acknowledged the receipt of nomination. As per the nomination, one Manosh is the person who is in charge of and responsible to the company for the conduct of its business. So, the nominated person can be proceeded against for the commission of the offence by the company. Once there is a nomination, prosecution has to be launched against the nominee and if any Director, Manager, Secretary or other officer of the company is proceeded against, that can be only under the circumstances mentioned in Sub-section of Section 17 of the Act. When such persons are being proceeded against, it must be shown in the complaint for what reason those persons are being proceeded against for the alleged commission of the offence by the company. On going through the complaint it is seen that there is no averment in the complaint that the petitioners are being proceeded against for the reason that the offence has been committed with the consent or connivance or negligence or is attributable to the petitioners. There is no allegation in the complaint made by the Food Inspector to bring the case within Sub-section (4) of Section 17 of the Act.
15. In the decision of the Supreme Court referred to above ((1992) 2 SCC 552) it was held that it would be necessary for the prosecuting agency to show from the averments made in the complaint that the case falls within Sub-section (4) of Section 17 of the Act and if the prosecuting agency fails to show that the offence was committed with the consent or connivance of any particular Director, Manager, Secretary or other officer of the company or on account of negligence on any one of more of them, the case set up against the accused cannot be allowed to proceed. In the above decision it was also held by the Supreme Court on relying on the decision in Municipal Corporation of Delhi v. Ram Kishan Rohtagi ((1983) 1 SCC 1) that where the allegations set out in the complaint doe not constitute any offence, no process can be issued against the co-accused other than the company and the nominated person and the Court would be justified in exercising its inherent jurisdiction under Section 482 of the Code of Criminal Procedure to quash the order passed by the Magistrate taking cognizance of the offence against such co-accused.
16. This is a case in which the company and the nominee have not been made accused. The partners of the firm are made accused for the offence alleged to have been committed by the company. It is only when no person has been nominated under Sub-section (2) of Section 17 that every person who at the time of the commission of the offence was in charge of and was responsible to the company for the conduct of its business can be proceeded against and punished under the law. When there is nomination and the company commits an offence under the Act, the nominee has to be proceeded against he being the person in charge of and responsible to be company for the conduct of the business. There is no averment in the complaint that the offence was committed with the consent, connivance or knowledge of the petitioners as mentioned in Sub-section (4) of Section 17 of the Act. For the above reasons, the proceedings in C.C.1196/2000 on the file of the Chief Judicial Magistrate, Ernakulam are liable to be quashed.
17. This petition is allowed on quashing the proceedings in C.C. 1196/2000 on the file on the Chief Judicial Magistrate, Ernakulam.