Andhra Pradesh High Court - Amravati
Giridhar Bhai Dhayabai Patel vs State Of Andhra Pradesh on 5 September, 2023
THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR
CRIMINAL PETITION No.7912 of 2019
ORDER:
Accused No.4 in C.C.No.702 of 2018 on the file of learned IV Additional Junior Civil Judge, Guntur filed this Criminal Petition under Section 482 of Code of Criminal Procedure (Cr.P.C.) seeking to quash the criminal proceedings against him. The offences alleged against him are under Section 420 I.P.C. and Section 15 of the Environment (Protection) Act, 1986 and Sections 6, 7, 21 and 23 of the Seeds Act, 1966.
2. Respondent No.1 is State. Respondent No.2 is the de facto complainant.
3. Sri M.Chalapati Rao, the learned counsel for petitioner and learned Assistant Public Prosecutor representing respondent No.1 - State submitted arguments.
4. Point that falls for consideration is:
"Whether a person in managerial position of an incorporated company could be prosecuted without the company being made an accused and whether continuance of such criminal 2 Dr. VRKS, J Crl.P.No.7912 of 2019 proceedings against such person of a company would be abuse of process of Court?"
POINT:
5. On a written information lodged by Assistant Director of Agriculture (Regular), Guntur, Crime No.189 of 2018 was registered by Lalapet Police Station, Guntur Urban. Inspector of Police duly investigated the case and filed charge sheet arraigning four accused as A.1 to A.4, namely, Sri Vajraala Chandra Sekhar Reddy, Sri Pilli Ratnakar, Sri Pinjaari Masoomvali and Sri Giridhar Bhai Patel. In the charge sheet, it is alleged that A.2 and A.3 are persons looking after the legal matters and A.4 is a Managing Director of M/s. Narmada Sagar Agri Seeds Private Limited, Kurnool. A.1 is stated to be Proprietor of M/s. Surya Chandra Seeds and Pesticides, which is distributing the products of M/s. Narmada Sagar Agri Seeds Private Limited to the farmers. Be it noted, the juristic persons, namely, M/s. Narmada Sagar Agri Seeds Private Limited and M/s. Surya Chandra Seeds and Pesticides are not made accused of this charge sheet. Only persons working in the above referred companies are made accused. The allegations are that on 07.07.2018 Agricultural Officer and Seed Inspector 3 Dr. VRKS, J Crl.P.No.7912 of 2019 of the Office of the Joint Director of Agriculture, Guntur had drawn cotton seed samples produced by M/s. Narmada Sagar Agri Seeds Private Limited. The samples were picked up from the premises of M/s. Surya Chandra Seeds and Pesticides, Guntur. They were scientifically tested and analysed and were found having Herbicide Tolerant Trait. That was illegal. That the presence of Herbicide Tolerant Trait was also not printed on the labels. By producing, marketing and distributing such unauthorized Herbicide Tolerant Trait cotton sample seed to the farmers those institutions have been cheating the public. In the charge sheet it is alleged that with such allegations the Assistant Director of Agriculture filed the complaint and the police registered the same as crime. During the course of investigation, police visited the scene of offence, examined the witnesses and prepared a rough sketch and filed charge sheet. The record also contains the complaint of Assistant Director of Agriculture which was registered by the police as F.I.R. In the last paragraph of the said complaint what is mentioned is extracted here:
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Dr. VRKS, J Crl.P.No.7912 of 2019 "Hence, I request that to file a criminal case against the below mentioned agencies and their responsible persons for cheating the farmers.
1) M/s Narmada Sagar Agri Seeds Private Limited, D.No.77-112-A-1, Chintalamuni Nagar, Kalluru Estate, Kurnool-518003 represented by its responsible persons for legal and day to day administration and Managing Director.
A) D.Masum Vali S/o Pinjari China Modin, D.No.77-112-A1, Chinthalamuni Nagar, Kallur Estate, Kurnool-518003-Responsible for legal matter day to day administration.
B) P.Ratnakar S/o. P.Pitchireddy, D.No.45/142-26-E-11-C-4, Veenus Nagar, Near V R Raithu Bajar, Kurnool 518003-
Responsible for legal matter day to day administration.
C) Giridhar Bhai Patel, #45/46, G.I.D.C.Mothipura, Himatnagar, 383001, S.K.(Dist), Gujarat-Managing Director.
2) M/s Surya Chandra Seeds and Pesticides, D.No.24-2-111, Old Union Bank Road, Patnam Bazar, Guntur represented by Vajrala Chandra Sekhar Reddy S/o Siva Rami Reddy, Age 40 years, Harika Apartment, Flat No.103, Koritipadu, Guntur 522006 - Dealer/Distributor."
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6. It is against those criminal proceedings, A.4 - Sri Giridhar Bhai Dhayabai Patel filed the criminal petition.
7. Learned counsel for petitioner submits that even according to the written information filed by the Assistant Director of Agriculture and the charge sheet, the alleged offences were committed by the companies and not by the individuals themselves. However, the investigative police omitted the companies and filed charge sheet only as against the employees and in the absence of company being prosecuted, continuance of prosecution against the employees is against law.
8. Learned counsel cited Sharad Kumar Sanghi v. Sangita Rane1 and K.P.Narasimhan v. State of Karnataka 2. Learned counsel further submits that a reading of the entire charge sheet does not indicate any mens rea for committing any offence on part of the petitioner and it does not make any allegation as to the exact role allegedly played by the accused in commission of any of the offence. For sheer absence of any 1 (2015) 12 SCC 781 6 Dr. VRKS, J Crl.P.No.7912 of 2019 allegation against this petitioner available in the charge sheet, the proceedings shall be quashed. Learned counsel further submits that prosecution under the two special enactments is not expected on a police report and the facts completely failed to disclose any cheating on part of the accused and Section 420 I.P.C. is slapped only to make it appear that the police have jurisdiction to investigate the case and with such mala fides the case was filed and the same deserves quashment.
9. As against it, learned Assistant Public Prosecutor for the State submits that the contentious facts may be left to be decided by the trial Court and there is no case for quashment.
10. If the charge sheet and accompanying material contain allegations indicating commission of any offence by the present petitioner, then the trial Court shall proceed further with the trial. However, if the charge sheet and accompanying material do not disclose any offence being committed by the petitioner, then institution of criminal proceedings against him shall be held as abuse of process of the Court. A reading of the written 2 2022 LawSuit (Kar) 3101 7 Dr. VRKS, J Crl.P.No.7912 of 2019 information lodged with the police by the Assistant Director of Agriculture and a reading of the entire charge sheet and the accompanying material show that an incorporated company by name M/s. Narmada Sagar Agri Seeds Private Limited produced the alleged illegal seeds namely Herbicide Tolerant Trait Seeds. Thus, the alleged spurious product was an act of an incorporated company. It is undisputed that the said company which committed that criminal act is not arraigned as an accused. The petitioner who is shown to be the Managing Director of the said company is made an accused. The role played by him is not even averred in the charge sheet. What facts gathered by the investigating agency compelled it to charge sheet the petitioner/A.4 is not disclosed in the charge sheet. Even if all the facts mentioned in the charge sheet are considered to be true and correct, they would not lead to the conclusion that this petitioner/A.4 is personally liable for any offence. Vicarious liability of the Managing Director of a company would arise only in such events where a legal provision exists in that behalf in the statute. There are no requisite allegations made against the petitioner /A.4 attracting his complicity or attracting his vicarious liability. In Sharad 8 Dr. VRKS, J Crl.P.No.7912 of 2019 Kumar Sanghi's case (supra 1), the Hon'ble Supreme Court of India, after tracing the precedent, categorically held that when a company has not been arrayed as a party, no proceeding can be initiated against its Managing Director or other employees. Their Lordships further held that if company is not arrayed as a party, even vicarious liability cannot be fastened on its managerial personnel. Nothing contrary is shown to this Court by the respondent - State. The said ratio squarely governs the present case. At the risk of repetition it is to be stated that the charge sheet and accompanying material has not disclosed any factual allegation as against the petitioner/A.4 to show his prima facie complicity for any of the offence alleged so as to make him personally liable. In such circumstances, continuance of criminal proceedings against the petitioner is clear abuse of process of Court.
11. To make the matters complete, the following aspects may also be noted:
This petitioner is charged for the offence under Section 15 of the Environment (Protection) Act, 1986. In this regard, it is 9 Dr. VRKS, J Crl.P.No.7912 of 2019 required to notice here what is provided by Section 15 as well as Section 16 of the said enactment:
"15. PENALTY FOR CONTRAVENTION OF THE PROVISIONS OF THE ACT AND THE RULES, ORDERS AND DIRECTIONS.-
(1) Whoever fails to comply with or contravenes any of the provisions of this Act, or the rules made or orders or directions issued thereunder, shall, in respect of each such failure or contravention, be punishable with imprisonment for a term which may extend to five years with fine which may extend to one lakh rupees, or with both, and in case the failure or contravention continues, with additional fine which may extend to five thousand rupees for every day during which such failure or contravention continues after the conviction for the first such failure or contravention.
(2) If the failure or contravention referred to in sub-
section (1) continues beyond a period of one year after the date of conviction, the offender shall be punishable with imprisonment for a term which may extend to seven years.
16. OFFENCES BY COMPANIES:-
(1) Where any offence under this Act has been committed by a company, every person who, at the time the offence was committed, was directly 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 offence and shall be liable to be proceeded against and punished accordingly:10
Dr. VRKS, J Crl.P.No.7912 of 2019 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 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 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 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;
(b) "director", in relation to a firm, means a partner in the firm."
Section 21 of the Seeds Act, 1966 reads as below:
"21. OFFENCES BY COMPANIES:-
(1) Where any offence under this Act has been committed by a company, 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, 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:11
Dr. VRKS, J Crl.P.No.7912 of 2019 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 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 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 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;
(b) "director", in relation to a firm, means a partner in the firm."
The above provisions make it clear that natural persons are made vicariously liable for an offence when it is established that the offence was committed by a company and the natural persons had either connived at it or his conduct amounted to criminal negligence.
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12. Section 19 of the Environment (Protection) Act, 1986 is extracted below:
"19. COGNIZANCE OF OFFENCES:-
No court shall take cognizance of any offence under this Act except on a complaint made by--
(a) the Central Government or any authority or officer authorised in this behalf by that Government1, or
(b) any person who has given notice of not less than sixty days, in the manner prescribed, of the alleged offence and of his intention to make a complaint, to the Central Government or the authority or officer authorized as aforesaid."
This provision makes it clear that the prosecution under that enactment shall be on a complaint and the said complaint should be one emanating from the Central Government or any authority or officer authorized in this behalf by that Government or by any other person who had given a prescribed notice as detailed in the provision.
13. Charge sheet does not disclose and the learned Assistant Public Prosecutor could not make any statement whether police in the State have been authorized by the Central Government to initiate any prosecution under this enactment. Moreover, what 13 Dr. VRKS, J Crl.P.No.7912 of 2019 was filed against the petitioner was a police report and not on a complaint by the public officer. All this makes the prosecution sensitively vulnerable.
14. In the above referred circumstances, this Court finds that continuance of prosecution against the petitioner is abuse of process of Court. Hence, point is answered in favour of the petitioner.
15. In the result, this Criminal Petition is allowed. Criminal proceedings as against the petitioner/A.4 in C.C.No.702 of 2018 on the file of learned IV Additional Junior Civil Judge, Guntur registered for the offences under Section 420 I.P.C. and Section 15 of the Environment (Protection) Act and Sections 6, 7, 21 and 23 of the Seeds Act stand quashed.
As a sequel, miscellaneous applications pending, if any, shall stand closed.
_____________________________ Dr. V.R.K.KRUPA SAGAR, J Date: 05.09.2023 Ivd 14 Dr. VRKS, J Crl.P.No.7912 of 2019 THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR CRIMINAL PETITION No.7912 of 2019 Date: 05.09.2023 Ivd