Smt. Vidya Murkumbi vs India Sugars And Refineries Limited on 4 November, 2009

[Cites 15, Cited by 1]

Karnataka High Court

Smt. Vidya Murkumbi vs India Sugars And Refineries Limited on 4 November, 2009

Bench: Jawad Rahim

1

IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 4"' DAY OF NOVEMBER 24OO9:_"H._V_

BEFORE

THE HON'BLE MRJUSTICEJAWAD=R.A'1H,I::v:f,:  "  

Crl. R No.75e;.3/2,O,O9:T  'A " A

BETWEEN:

1

ET

SMT. VIDYA MURKUMB_I_"~..V_   
DIRECTOR, M/S. sHREE'R'ER,Er»»auKA  
SUGARS LTD.      
BC 105, HAVLOCK ROAD, ,CA.,NTOA:MENT
DELGAuM--59O 0011- * ' '  
NARENDRA,,_MuRkUr»:5:,_'  V
MANAGITQTG,-DIR"ECOT'R   

j'M/S'S.H,REEi:fR'ENUK'A SUGARS LTD,

 r>OO'RH.::v:,A,'siR.T>OOcHKA:\:wALA ROAD,
WORLI   
MOMD.A1w'4O0.O;,8:-~.,,

_' " JAE EVAN AJ._VYRCV)'TI ESHAGAT,
 ;,_E).,IRTEACOTR,"M;'S SHREE RENUKA SUGARS LTD
R,/,O_E'-.-.75, GRATER KAILAsH-2,

* _ :'i\.I,_Ew*D_E'L..HI~110 O48.

S_AN:A.Y ASHER
DIRECTOR, M/S SHREE RENUKA SUGARS LTD
~ 32, MODY STREET, FORT,
MUMBAI-400 O01.

ROBERT TAYLOR,

DIRECOTR, M/S SHREE RENUKA SUGARS LTD
31, POORNIMA, SIR POOOCHKANWALA ROAD
WORLI, MUMB/5\I--4OO O25.

NV



6 SIDRAM KALUTI,
DIRECOTR, M/S SHREE RENUKA SUGARS LTD
674, T.\/. CENTRE
BELGAUM.

7 NANDAN YALGI,
WHOLE--TIME DIRECTOR,
M/S SHREE RENUKA SUGARS LTD
879, BUDA SCHEME NO.4O,
HANUMANNAGAR MARG,   ; " -
KUVENPU NAGAR, BELGAU;M--59'1'1..VO8_. -1'  '-

8 SURENDRA KUMAR TOTEJAK.   "

DIRECOTR M/5. sHRE;'E_'RENLJKR SLIGAREEASA'-L"FE3.... 

5307, 2ND FLOOR, 
PANCHASHEEL PARK,  "
NEW DELHI-11O_O_17._«"

9 NITIN ANANT PuRA.N1k),"'T" _ _
WHOLE TIME DIREL.-TOR,._"~,_
M/S. S:.H'RE'E-RE=NUKA..' '  "

 SUG'ARfS_ LTD .' FLAT N01 1 1,
*,B1NAY,AKv.R-ESLDENCY' -
6/SD, ANIL' {$>}AI'TRA.,R*OAD,
BALLYGUNGEA.PLAL-E,
_ _ KOLKV/\_TAv-.7.OO"O19, WEST BENGAL.

" sD,AL<-.sH1Nt$4U'R'"*rHY \/ISHWANATH IYER,

I-.«' V
D  .

_SECRE~TARY, M/S SHREE RENUKA SUGARS LTD.

3   105_,"_NAvALOc:< ROAD, CANTONMENT
EE'L.OA~LJM-590 001

 PETITIONERS

 N (_3_y SE: ; VEERESH R BUDIHAL, ADV., AND SR1
 _ PRASHANTH GOWDAR, ADvs., )

1. INDIA SUGARS AND NERIES LIMITED



3

HAVING ITS REGISTERED OFFICE AT
CHITTAWADIGI, HOSPET«~583211,
BELLARY DISTRICT.

(REP. BY ITS MANAGER P R & D,
SRI.S.SHI\/AKUMAR S/O SVEERANNA,
AGED~49 YEARS,

R/O CHITTAWADIGI, HOSPET-583M2m1b1.

2. THE STATE OF KARNATAKA,  {RH-n.Isaéaded:"Ve'd'éﬁ_.A 

S.P.P. OFFICE, _ Ord__er'.dated  A'
DHARWAD. * _ '13/07/-2009 In 

"RICH. No.I58_4'S/200:?) 
 -  I.ﬁ,RESPO'ND'ENTS

(By Sri: RAJA SUDRAMANI/A'jE§HAT,.._:HCGP'.;_, FOR R2
SRI SHANTANU, SENIOR'»C:OU'P+1S»EL FIORSRI H.M.
SHASHIDHAR;'~ADv., FOR R1   Li) 

CRLLP  "C,R;--P.C BY THE ADVOCATE
FOR THE --R:ET.IITTC};I'4.ER--I.IPRA'I'IN'G-THAT THIS HON'BLE HIGH
COURT  ALLOW THIS PETITION AND
BE FU.RTHER-._"P:L'E.AS«E:D TO QUASH THE PRIVATE
COAMPLAISNTV_:BEA'RINvG"No.4/2009 PENDING BEFORE THE
 _COU"R'T..O_E.TTHE PRINCIPAL CIVIL IUDGE (IRON)

I I j&.IHEIC,O%HO~SPET, IN PC No.4/2009 (NOW REGISTERED AS
 % CC «I30'9;2f0s9jI~),.--i~~AND FURTHER TO QUASH THE IMPUGNED

O.RDER."D"fATED 11.03.2009 PASSED BY THE HON'Bl_E
COU..R'T-LOP THE PRINCIPAL CIVIL }UDGE (IR. DN.) & JMFC,

A. IHOSPET, IN PC No.4/2009(NOW REGISTERED AS CC
".._"30I9'/209), VIDE ANNEXURE L.

THIS PETITION COMING ON FOR DICTATING

 ORDERS THIS BAY, THE COURT MADE THE FOLLOWING:

W



4

ORDER

The Chairperson and Director, Managing Di--i%ectfor:'a.nd Directors of a Company incorporated under the Act, in the name and style of M/s.»-Shree"ii§é*,i,.i,»i,5' gLigarS"» Limited are in petition seeking to."'oVuai_sh'the'p_,ro.peed'i'n'g.s:'o:ri Private Complaint bearing'&_o:«§/2009.,_ no,vvi.:co_n'v'ert:ed to"? C.C. l\io.309/2009 ongthe t'h..e. Prl."'Cvi.vil..3udge (Jr. Dn.) and JMFC., respondent for the of Sugar Cane (Control) ilptinishable under the provisi'on:,'V,Vo'i?j'S;ecti'on"*rﬁtiofCltiieifssential Commodities Act, ). The Company of which the gpetitlioners Director and Directors is not in':,'t:he__?party arrai\,:....n«or the State, even though it is stated ' .-tha.t_ '_'p.r:i'vate complaint has now transformed into a "criminal 'pjrjos'ecution.

E have heard Sri Veeresh R. Budihal and u",Prashant Goudar, Eearned counsel for the petitioners and "Senior Advocate Sri Shantanu, learned counsel for / 5 respondent No.1, who have at iength urged for and against the relief sought for in the petition and have suppi'~e.rn_eiz.ted their arguments drawing citationai support__-'frorn"--\;[a..riousg decisions of this Court and the Ap__e.>< ,Cour§;'."'"""~--:"'

3. Before I advert the"grounds.'=§.o-.,urged ib'-,-I3' both sides, a brief re_ference__3t'o..:t'h-e_»factu~a[:tnatrix, needs reference. 3 3

4. The ,__first"" a Company incorporated in the name and styie:¥__ of -3 and Refineries Limited, to be in business estabiished as_;gS'u-gar Féctfofrv from 1933 and while being in such ,3 'bus;n'ess,_4ciaims to be engaged in manufacture of sugar in ._th.g%.3S3t'ate.V___o~f.:;"i{'arnatai<a with its factory situate within the te'i'--ritor:iai'v'iiniits of the Eearned jurisdictionai Magistrate, nbe__fore"'whom the case is now pending. As the sugar cane '.h'as: been deciared as an essential commodity under the "provisions of the E.C. Act, in exercise of powers conferred by the Statute on the State Government, severai orders ﬁr"

have been passed regulating the suppiy, procurement and production of sugar. In that regard, an order calied Sugar Cane (control) Order, 1966, is promulgated by thveﬁiengtrai Government in exercise of its powers under__;Secti'o.n 53;_.o~f the EC. Act restricting discretionary sale. Under the said order, the minirnaurn:-.pri}ce~i_for"pu"r'c'h.case:of sugar cane is fixed taking -into Vacvctsunt issevjeral factors'. enumerated therein viz., Cultiva'tio:n',v': probable income which an Vca..ni.'V_ie'><p_ect growing alternative crops etc.',.Th'e-,grow:er"i~s.y"therefore, bound to seli sugar'_cavne:.i'tio'V notiéfield at price specified therein, -which}st-lini<,ed._to--._ti':e basic recovery of 9%.

5. Inn~._.Vs:hortA,: the complainant's case is that a . 1l'lTlii3imt5nfi-.4[5i'--OCUFement rate is fixed for sale and purchase H ~.o'f._sug'ar_"_vc_an;ef. Reference is made to clause 6 of the said order,'--Vwh'i'ch empowers the Central Government to reserve "an area for each sugar factory having regard to its "'r-crushing capacity and the minimum quantity of sugar cane "that is required for the purpose of crushing and thereby, restricting sale or purchase inter alia between any other gdlu 7 factory and the growers except notified factories. Such factory is indicated in the notification. The complainant ciaims to have such preferential right of procLir'~en1.ent under such orders from the cane growers area.

6. The grievance"lV__c';'f.,.. theﬁc'ompiia,inaxr'.t..,,"is that,' despite fixation of such cane by order dated 31.Ov3':.7.V:t)O,8«--_ the rate at Rs.829.8OPs., piper Metr'i'c-ffovrillthe complainant has not cane from the growers withi:i1i_Ape~cause of undue interference. The interterericle the prospective purchasers, burr,'lvresistancedfrorri the cane growers, which lead to .'i=eview~..o«f:'*--t,he Sale price and it has enhanced from .ii€:.,829;'8vo_Psl§,"per metric Ton to Rs.1,1DO/- per metric Ton. covimplainant was willing to pay the said rate fixed after * riegoti'ation.

7. As things stood thus, it is alleged that the 'petitioners herein, by themselves and through the avg...» 8 Company they represent, nameiy, M/s. Shree Renuka Sugars Limited, dishonestiy and frauduientiy, induced the farmers / growers of sugar cane to deliver to _,themi~..the agricuiturai produce at a rate agreed between3V_th'e'm;',t.of detriment of the cornpiainant. _,S_uch .in'duceni'ent*_w.a4S"x deiiberately to defraud the compiiainigntfand.the'rebr,?"tiiC,a"use loss. Reference is also mad:e'~t_o the-pivoytaiii',:roi.e=.p,lay.ed hbyiir Raitara Sangha with the peti_tVi"e.n_e~rs he're--i.n:V.for:?suppiy of sugar cane from the res'er,v'ed iaiiea~.ijn _contravention of the standing orders issueci'*»by" the_<__Cenv_tr,a"i}"Government and also the Siiate Tjh.us,:"it" is alleged that the Company ' n.ar"*n.eE-y:,'~ ,Wis:}"'---.Shree Renuka Sugars Ltd., in contraventionv of the control order and in active connivance the Rait'ara::Sangha, thereby, committed the offence .A _Vci-i_rni.na.l:'breach of trust punishable under Sections 403 l"~.a"n.d« It is further alleged that forewarning issued---V:Apy"the compiainant to the accused to desist from "su._c_h act, through a notice was of no avaii.

8. To sustain its charge against the petitioners and the company they represent, it is aiieged that on 3.92 9 28.11.2008, the complainant did its best to stop theillegal transportation of sugar cane from the reserved a.rea'~..ogf-._the complainant through a representation Commissioner, (the cornpetent._autli:orit'y::'_funde'_r., the". provisions of the Sugar Control C)'rcie'rc)~,'i'i3ut, alilso'-..fai'iiE.ed to take appropriate actli_o'n.,,. which ._ei'€,c'ouﬂiia.g,er§ petitioners.

9. Re_f'er_ence"'"*;.s'¥ writ petition seeking restraint of appropriate writ against ,,Co'n"smissioner, in which, it is alleged that the sought to be irnpleaded asjgla irpartyxy the subsequent event, the Deputy ."C,ornrni~ssio'nrar is said to have passed an order on ll'~_22,12';iiOvO_8'V~:,di'recting the petitioners herein including the Co"mp"a:ny"not to transport / purchase / receive sugar cane V * fronnvthe reserved area in favour of the Company. That l"-Vordber is also alleged to have been contravened, though "they had full knowledge of the impact of their activity and the consequences for its violation.

W 10

10. So urging the complainant sought prosecution of the petitioners individuaiiy hoiding them vicariousiy iiabie for the acts of the Company, of which vtheyiggare Directors. Charges are raised against offences punishable under Sections 403, of the IPC., based on the a,'iieg,a.tiAo.n's--.,, referred to above.

11. Learned 'A-jufrisd-?_ctioniai.,__»§?iagistratheH by order dated 11.03.2009, en.tertain'e_d:th"e~,c'o*i?t,ip'i'aint and issued process secufevipres.ence------o'f the-petitioners as aisoiﬁthe' Comp:'iiy',"'i._:Which' they represented. The petitione-rsare the said order.

_i1:2..1-t.earned counsel for the petitioners, having 0'~_referred?_v.t_ogthiese circumstances wouid contend that no ca'i.:se"-.V:is":n;ade out to initiate any action for the offences 00 " ,f';»*-.J¢_nisVh'abie under Sections 403, 405, 424 and 420 of IPC., wouid contend that in order to maintain such an "action, there must be aiiegations which attract the ingredients of the charges raised. It is alleged the 93/ 11 complainant has suppressed material facts while initiating action and in this regard, they contend the respondent is a sick industry and has approached Board For £ndust'r,ia'l,.and Financial Retconstruction, which issue _;i's-...jp.ei'ndi_ng consideration. The respondent had commi.tt4e'dVVd.efa_uEt'i'n__ making payment of statutory miinimumj;p'ri_ce4_(S:iViI?)v.._,toV.,thir3 sugar cane growers, co.ns,equent_ 'to '_V"'vl'i"V"'lg'(.'-iii. sé,=_v'era'l'g Eitigations germinated creatin'g~.._V'its_ Eiaoliiityllito trig tune of , Rs.6.5 Crores. The{:0"mi'i'i-lSSi00'€:r_foi".Cane Development and Director of Sugagriein order dated 26.04.2008,:o.r:deried"x reic.t5v7én,_....ief the sugar cane arrears tirid.eruii:'he"p,,ro'viTs"i'--orisi of the Sugar Cane (Control) Order, 'I9__6l6, which are made available vide Anijlevxures and 'C' respectively. It is alleged , the o_,nlyyinzte,ntion of the complainant is to block the sugar ~.c'a.neV'gr5w__eits"of its reserved area from supplying the sugar cane factory of their choice and had filed writ V 'A petition in W.P. l\io.31S32/2008, in which writ petition, the Z"-Circuit Bench of the High Court at Dharwad declined to "grant any interim order as seen from the order dated 05.12.2008. The writ appeal against the said order dated &@/ 12 05.12.2008 in W.A. No.5139/2008 is aiso another attempt of the compiainant to prevent the sugar cane gro.'wers._lfrom disposing off the yield. Dismissai of the pointed out as a circumstance to__s.ho_w thaltllth-e';vco'hd_'uct=-of"» the complainant was not fair and it;'s:'ii~ritere_st* ion';-<ii.y?1.it:o Drevent saie and Droduce._y'U~f.. the"-SUS.a!"°.Fa'i4.E~~..b.\i' suclif litlgations.

13. Asregards' Vcionltlravention of the Sugar the petitioners vehen1..e_ntiy.,d'e;r::y_ in any act, within the rnisch_i'ef--. and they would also contend that there lsvnxo hilllegaiiaprocurement of sugar cane by the C rrioainy » M,/:1. Shree Renuka Sugars and there is no . 'vl.olc:t_io~n ofany standing orders. or " d'A;3_art from denial of charge ieveiled against the of having induiged in iliegai procurement of sugar_r'ane in contravention of the standing orders, the 'petitioners seek to contend that the allegations so it 'fmade, if any, are confined to the Company, which is 0% 13 a jurisdict person and no case is made out to initiate or sustain prosecution against them on the _;J~r_i'n_ci'pIe of vicarious liability. Incidentaily, reference is'fn1.a--d,«ei"ito the order of this Court in CrE.P. Shree Renuka Sugars Limited inﬁw,:5'u:.g'ri1;3;i order and the order pa_s'se,d ..datied.ti' 11.06.2009, setting asideg_.___t'he.__ '~~iijnpu.gn«ed_AA order and remanding the case b.acl_< triai Court for consideration ,_groun'ds~ :a:fre::.h.__anti appropriate order.

S; ' raised in this petition are that under th'e__4pro\/isi_oi:V.s »'of"".Section 10 of the E.C. Act, even if there 'is aingroundi to initiate prosecution against a » :C--on;pan.y--,.,Ve'v,ery person who, at the time the contravention 'awas cornji_m_it~t'ed, was in charge of, and was responsible to, for the conduct of the business of the 0 " Croihpvany as weii as the Company, wouid be iiable and not 07-alijthe Directors. With reference to sub--section 2 of "Section 10, it is urged that no doubt, Directors would aiso be Eiabie along with the principal offender i.e., the &v 14 Company, but, such action can be sustained oniy__ when there is a proof that by consent or connivance C'F'i.I'£T"i'£i'r'vf\faS committed or are attributable to any negiectonftiheir In other words, what is urged is as.regards"pet'i'tio'ner.,Nos." 3 to 11 are concerned, the;":.,pro'se'i:ution'~_:'cann'o.t'?1be sustained for want of mateifiavfpzarticuiars. about.i._t'he,,a--i3ieged.,"

overt acts, to constitute As'.fregiarqgfipetitioner No.1, the Chairman the Managing Director is con_c'er_ned,,i"it'i'siurgectthaft against them, if action is ape sufficient materiai to re'E.é'yv;;i,r§tVtime, when the offence was :":._coznmittvedi-,.:j:,:"irii'e'ré"-aresfponsibie, in charge of or answerabie for" = of the Company to the Cohjipany.

contra, the learned senior Advocate, Sri S'h'ant--h'anuu appearing for respondent No.1 - Company "reiterates the substance of the aiiegation from the 'AA'-Zcompiaint to show that the petitioners' undisputediy were " the Managing Director and Directors of M/s. Shree Renuka Sugars i..td., and they induiged in purchase of sugar cane 3% 15 from the area reserved for the complainant in contravention of the Sugar Cane (Control) order, 1966 and undisputediy, they had knowledge of the thingsr'..._:Et_V is alleged that each one of the petitioner participated in the process of procurement»..4oj'.,Vth.e isuga'r--«.. cane in contravention of the standirrg.o1rd'er"an'd 'i=.ad__ aiso been a party to prevent «sal_e ofV"is_u°gar reserved area by the cane""-growersi to the complainant. Reference noticevissued by the complainant to the... them of their misdeeds desist from such induigence ho'idi'n.g"thr'e.at~of legai action. Learned counsel would fu'rt_hler_ contendgt'ij..atV each one of the petitioner had by._%gri'iniself v"orr..V:herseif participated in negotiation for . :purch_ase-.o'f~.Vsugar cane from the sugar cane growers was done by them in their personal ca.paci'ties"'tor the benefit of the Company they represent V "and to" the detriment of the complainant. Therefore, they to answer the charge against their overt act. He "would submit that presumption of guilt is available against the person, who at the time of commission of offence was aw 16 the Managing Director or the Principai Officer of the Company and that presumption would continue to"-apply even to the category of persons shown in sub;.se4cti:onj;2"of Section 10 of E.C. Act, unless it is pro__\/the-(ii pftnerwi'se._& Therefore, it is urged that atatst_age,i,:_"w.h.eVn'V"hth"e proceedings are in the initial Stage ofgﬁejcuring'"thep presence of the accused, row'i'ing"iienquir,r__is-not zpermissibie to decide whether . against the petitioners wouid stand submits that when the acgzuiiation commission of the aiieged ﬁtioipiroceed against them and aiso during trial upon proof ied by the comp:i"a§nVan't:of' téhiiesiriiinvoivement and participation, petyitioners ca'h.__p:urge: defence to rebut the presumption of _and.:to.._Vshow that they had not either connived or a the aiieged offence.

if When the provisions of Section 10 of the E.C. ii'-.V_VA'ct..«i"was brought to his notice to eiicit whether the = ....petitioners couid also be proceeded against aiongwith the principai offender in the absence of direct aiiegations db 17 against them of commission of the alleged offence, learned counsel would contend that the petitioners a.p~a_gift._4'_ii~rom being liabfe for prosecution under Section Act are liable for action under Se_ctio_n 8 Act for'? abetment. In view of what is u:'i?.ged_"ib§? b'o_th~ §Srid:eus;"~--_iII.VV:Ai§Nli|l be appropriate to raise"iV__th.e fo'i'iv-oi:/ving fo-rd' decision: _ _ _

1. Whe'ti':.er i._th_e*eprovisiioins of Section 10 of the __D:_ii'r--e_ctoifi'_and other officers or the :jc':"c$i>n;;;mg,i,i.':'vi»-.y_he'- i«:..{:;*e not either Princ_iVpal oiruin_..ch-a'rge'"'of day to day 3:adiniiAniistrat:i'3oVn --.be«.'___proceeded against on the x'p.rinciple Voii~v'\:_2icia'r.i E-iability '? 2'."'~-i....W.hether under the provisions of _v.b'E3iJb.j~4vsection i of Section 10 of the e.c. Act,

-.Vrr'i«veVreli,f-"because a particuiar individual is ' d_esig__nated as a Principal Officer of the if .. Vitlorhnxpany, is liable to be proceeded against in the absence of any materiaf to show that he had indulged or, was responsible to the Company for conduct of business '?

dig"

19

Section, "Corporation" means an incorporated Company or other body Corporate, and includes a Society registered under the Societies Registration Act, 1860 (21 of (2) Where a Corporation is the person or one of the accu.sed..,per'sons'~ih a'n.4_f enquiry or trial, it V',ma,yi,3ap.po.i.nt- representative for the,ipurpose,_ofi~ the i,nqu,iry"or'i triai and such appointr'ne'n~t, needxnot, L;-.nde'r"

the seai of the C,orporaAtion';i._ (3) Where a ﬂreipresent_ative of a Corporation".appears_,',ﬁan$,7'~ii'rje_quire~rnent of this be done in the presence)'of-..the_u'e._c'ct_ised or shaii be read or stated) or" to the accused, shaii be c.onstVru»ed"as a requirement that that thing 2shai'ii_be'A'"""done in the presence of the A "vr,epr'e.sen_tative or read or stated or explained to"_"_~t.he;i."representative, and any requirement ,.__th'a-tnthe accused shaii be examined shail be ".construed as a requirement that the representative shaii be exar°nir"ied. (4) Where a representative of a corporation does not appear, any such W 20 requirement as is referred to in sub--section (3) shaii not apply.

(5) Where a statement in --I~ purporting to be signed by they..Frianag:i.in'gi.y_ director of the Corporatiori'ior"'b«y_ any;

(by whatever name called}:

one of the persons having the-.managrerr.i.enit_off; the affairs of the ycorporatTi"on_to the yeriecim the person nameci in.~th'e"§tatenjent'éh'a's been appointed as ''''the- of the corporation for th-e.:.pjurp~o.s:es".of 'section; is fiied, the";CoLirti._shyaiiy contrary is p roved e'---tjjha"t- [pe;r'so n has been so "g_*(6) .I"fi:a»~ arises as to whether y'-any piiersyoinfapipeairing as the representative of 3,Corporat§o'i'r':"'in an enquiry or triai before a

-C4ouifti.é:'i's.._or is not such a representative, the « "quAVe'_stio:n'"'shaii be determined by the Court. "

yTherefnr"e, the statute aiso describes a particular mode of é'--..re.p.resentation of accused when it is a Company or a V. _._Corporation Le, a jurisdict person. If such accused on its own voiition indicates any one to represent the Company, div 21 then for all purposes including the trial, such person" would be representing the Company. In other wo»rd's,f_f'~..the Company being a jurisdict person would offender and its designate repre,S.€'7_t_btiv_e"'wo:ij'ld'V"be".a die".

facto offender. This is so far as"~act:'_jon..~un'd.er~the"'Ciim'ii.i_al Procedure Code is concerned'~--._to put a C0iijpAainy.,,Vto.w3 triaE-,_' but, when it comes to prov_i_slons*i._of S.ecti_o.n of EC. Act, apart from the Com"p_ar'iy, iits Cpirignciipal officers are aiso made liable. In the,.iinstant'case, vv_e,V"éa"r'e concerned with - section f'o___r prosecution of the offence punish_a_ble'-iindegSec_t'io:nK--'3 the EC Act. Section 10 of the E'-,_C. ' C A "'1O_V,VVrC)ffences by Companies -- (1) If the A. Epers'o.n convtravening an order made under is a company, every person who, at the contravention was committed, vvasv charge of, and was responsible to, the if company for the conduct of the business of the company as weil as the company, shall be deemed to be guilty of the contravention and shail be iiable to be proceeded against and punished accordingiy:

6%/* 22 Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that they contravention took place without knowiedge or that he exercised __ai._l"

diligence to prevent such contraven_tl9-n.:':".,, ' (2) Notwithstanding:'._any'th,ing'rr.cornt'airied,.__ if in sub--section (1), where arioffence ran-ir:leVr this} i' Act has been committ"edi"b,y a .compan_y is proved that the offe,n--cefhas.._been"co,mniritted with the consent _ol_r ;covn'nw.i_vvance of, or is attributable to any" Flegiecit G'i1.V.ti1i3;D-'art of, any directo.r,'«m'_anager,, siecr-etavr_y_,or other officer of [the " - r. .c.ompfaVny_,"»._f'such_"V""' director, manager, °;secretary' .o"r_.ot»her__o"fficer shail aiso be deemed to'-b,__e*gVui'ity.°of »th'art4offence and shall be liable 'to be,_'proce'eded against and punished ' argrcc-ard i ngly; """ '"

-- For the purposes of this Section, z "Company" means any body corporate, and inciudes a firm or other association of individuals; and (in) "director" in relation to a firm means a partner in the firm."

dz"

From the Phraseology of subsection (1) of Section to, it is clear that there is element of presumption of gu.iitﬂa'gai-npst the person, who at the time the committed, was in charge of al1_d~~Wf:lS res'po"r~.:§ihle ,t_'oVth_e'f Company for the conduct of the t3.usin_'esis oi.t'i1e"Cozhi'p.a{r.y.. in other words, such a pe_r's*o..n, who was..Vin~__"c'harge or-' responsible to the Con1pany_.._toA'rv..the conduct business would be deemed tob'eV:A'g--ui'i-tyffopfhc'o*li:tra»<.ention along with the principal o4ffeh_der:i';"e"_~.". -- Company. This --._offgfuva<lt'Hal/ailabte under sub- sectioii "is.:::,co_rtspicuous by its absence wheniyve-_('2) of Section 10. Subsection (2) anything contained in sub;-lsection'V'("1.);,V where an offence under this Act has been _Vcornmitted by a Company and it is groved that «thleVyoffe}_r;c_e~l.:has been committed with the consent or co'nnivVan'c'e of, or is attributable to any neglect on the part of, any Director, manager, Secretary or officer of the Company, such Director, ' " "Manager, Secretary or other officer shall also be deemed to be guilty of that offence and shall be 09>"

24

liable to be proceeded against and punished accordingly". The tenor of sub~Section (2) of Section 10 makes it ciear that it isoniy on Qroof that the offe.n:c.ef'has been committed with the consent or conniva-nce"'of,}L:'----or"»i.s' attributabie to any negiect on the p,ar_t of_-a'ny'*.dthe'ri o:'ffice'r'"' of the Company, he wouid be:'~,iiaTo"ihe.:' distinction between sub--secti'on.. (1)Vandt suio--siecvtiQn~i While in subwsection (1) they__p:rov_isi_on itseifivbrinigs within its mischief any person,iwho.La'ty'th'é'----tvi'nne--_of commission of the offence wasain cha'r~g.e::'of"an,3 'w'asy"responsib|e to the Company .f.n§:. t>.iisi_ne_ss _4ofj;.the'WCompany shaii be deemed to is not so in the category of personséoescribed ifiufyfsabijsection (2). For ciarity, reference COLVVJ4i.§£_V:f"V'c':ii.SO benmade: to proviso to sub--section (1) of Section' i:1..O."w._hich reads thus:

.viAf."'Pfrovided that nothing contained in this "s_ui:--section shail render any such person iiabie E if to any punishment ii he proves that the contravention took place without his knowledge or that he exercised ail due diiigence to prevent such contravention." iii"

25

If the legislative intent was to cast such burden also upon the category of persons in sub--section (2), similar Qfoviso would have been added to subsection (2) also,_.bu_t-,...l_s~uVvch proviso is conspicuous by its absence in sub5_sectiAo"n.i'gj'(Qjﬂof Section 10. Therefore, it makes it___C..l.ear th_-att"iie'_jeieme.ntof presumption against the principallofficeri'oficthe rebuttabie Casting burden "!i_pO_ri suchAi{w«h.eVreias iris subsection (2), there is nVo_l:V":s».i:i_cii_».vbulrdenﬁgcavsit on the category of persons Vt'o--..v:prov.e theilr"inlnlocence or to prove that they were contravention.

Pertinentlv...b~eﬂ.n_otigcedpthaltthelswords used in sub- section which pre--supposes sufficient materiaiprooflto person (covered by sub_§--section "2;)._by his or their consent, connivance or 'at_tribullitabienegiigence, indulged in the crime. If we keep mind and examine the fact situation in this ca.s:e,'vi'i: was imperative the complainant should have V. imade statement on fact, to indicate with clarity "overt act"

Vof"each of the persons arraigned as accused to establish a it " "prima facie case to proceed against them. But, perusal of complaint shows the allegations are general in nature. it oh"

will be appropriate to refer to the nature of ailegations in the complaint, which sets to rest any doubt on this point. "11. The complainant states that'_"'whi.fre_,:E they were undergoing turbuient times,' with' their business, particulariy:~'w'iti*i«ryots sugarcane in the greservedin:a'rea'~_ compiainant--company,' -the a'ccu'sed 11 named above, di'sho'ria.§t ",:ari"d frauduient inten:~tEon, in'd'u~c_e:'d'VVthe said"r-yots to remove and deiiivfer. to thesugarcane earmarked for per law.

Upon the'd_i:,shon_est i--n':du'cen*i7en.t__.Q:f the Accused vii<Io's.--.1:"l:o .i;'i};,"--and,"-imm'e'di~a'tely thereafter, the :':Qffi:c'e Raithara Sangha negotilatedftii,itgd..,.,;1h'€ﬁ accused No.1 whereby

--.,they'"'agreed supply and the first accused~ ,C_Torn__panyV"'ag.reed to purchase the sugarcane V _,frorn,:'t-he reserved area of the compiainant, 'wr'ri,cfa contrary to the provisions of the 4' Commodities Act, 1955 and the ' ..§dgarcane (Controi) Order, 1966. The 'Complainant states that this action of the A accused Nos.1 to 11 amounts to an offence of 'Dishonest or fraudulent removal of property' punishabie under Section 424 of IPC. The complainant further states that the accused at 1 ' co m'pir.:-jin a ntf, 27 i\ios.1 to 11 have dishonestly misappropriated and have converted for their own use, the property i.e., sugarcane in vioiation of have committed the offence of criminai-hreachriii' of trust punishabie under_S.e,ction_s"'4'G.3'_':.a'ndV"_ 405 of the IPC. The comp_|ain.antV that the Accused i\ios.,1_ to 171gi"n_ this :rna'ArivnerV,*:.4"~~ V"

with a criminai inte-n'ti~opn right' inception induced the_____a'b,ov'e_v saici'~._ryots? to deiiver to therr;-,__"ti-he7_property,_i:ep., sugarcane grown in the area-1res',e'r\r*ed_.-inrtfai/'our of the Compia.ir..a;nt. ﬁjandif; de'ii,\f%3_rav'bi"i3 to the com.p-Ea»ina5nt_,-.'_iri order to_«n?)'aE<e:i'I'E'egai gains and causﬁy 'ii.fugrther' harm to the V'thjusgi"haveV"coVmmitted offence of :"C_hea:_ting 'pu"in.i:shVahbE_e"under Section 420 IPC. fact, earlier to this other :,corr~.panie's""b'y"name M/s. Sadashiva Sugars ».A'v!_,td.;;-.imamatti, M/s. Sirugappa Sugars and Ltd, Deshanur and others had also iilegaiiy purchasing the sugarcane " grown in the reserved area of the cornpiainant~ Company and as such it was obliged to cornpiain the same to the Deputy Commissioner, Beiiary by a complaint dated 28.11.2008 to stop the iiiegai transportation of the sugarcane from the reserved area of the §rQV t'i"i'€: if 28 complainant. The Deputy Commissioner, Beliary, who is the competent authority under the Sugarcane (Control) Order, 1966, failed take action against the concerned and preve.n't«._,l_l'~._ illegal transportation of sugarcane frorﬁ"i'tlr'i~e._j:

reserved area of the complainahnt"-._sugar factory. Then the complainantapproached',_the./j', Hon' tile High Court of l<arr:':atE.[lf<'ai.'iln :l"i.i.iFlg:"V\/viii}---..' No.31532/2008. However, the' prayer 'Viin:4_vthe:; . writ petition is mainl'y.:against*._tnef'.=DVé.puty Commissioner V and CCV"-»t,Thereio--re,VE the present compl"aint.. C'-*5 mua'iVn"ta'i'n.a_ble. in pursuance of Deputy Commi's'sigon'er,i=__Be§§as~'y,'~.h'asf--issued a general er 2 . prohi biting sale a nd supply _oi'.,'v'suga,rcan'e__ grown in the reserved ar'ea_"to factory other than the compla»ina'n't--.cornpany. In view of the said C 3..O'.rde[iOf tVhe""Deputy Commissioner, Beiiary the No.1 Company is not supposed to V'pti,r;c_,ha;se / receive any sugarcane from the ..s'aa'rli'reserved area and any violation thereof " would amount to an offence under Section 7 of the Essential Cornrriotiitles Act and thereby, they are liable for prosecution under the provisions of the Essential Commodities Act, 1955. Despite the said order when the illegal lifting of sugarcane from the reserved area air 29 continued unabatediy, then the Deputy Commissioner, Beilary, issued another Order dated 24.12.2008 whereby he directed the--.,_ Assistant Commissioner, Tahasiidar Deputy Superintendent of Poiice of Hospet' prevent the said iiiegai transp0_rt_atio_n'f_i'pfn_ sugarcane and aiso to ,siei2'e«,th'_e _:\/"eir'i»écie:s»._i'.» invoived in such iilegai t:r,an--spoi'rtati.o'r:1,:

wotiid aiso be pertinent-to state"herein'V'%'t'.ijnt_V:in:1 the case of M/s. E">'Vi"re1:.g-cuppaS_u'gars Chemicals Ltd., r'n,amed*'aL10:veV,""which' 'wrasvaiso illegaiiy iifting the reserved area, the,._Deptivt,.y..C0rmn1is,sio.nerfiﬁeiiary, has issued ;_"t'0'i',a:iEy four: a~Edé«r§" --dat_e_;if' 04.01.2009, and 17.01.2009 cieariy' from receiving the suga_rcane" reserved area and also H'"directiri-g_'the t'aIuka Eevei officers to strictiy C i.mpi"ernenttheivorders by seizing the transport 2 " = . , 'veh i;ci.e's _"

From t.i=ie.e«><Ctracted portion of the compiaint, it is noticed that 'there is no aiiegation speiiing out what was the role

--..Vpiay=ed by each of the petitioners herein (who fail in the C 1. _..categories of persons in subwsection 2 of Section 10 of EC. <99"

Act) to hold them responsible for the alleged contravention. Aiiegations are:

"accused nos.J. to 11 na_me_ci4 al:5ciye,:'_'§V,-iri"i:hV"'.VV dishonest and fraud=,§Iien.tlfiv induced the said ryots4'to"--._remov;e' deliver to them,'-vsthe 3__ug--ar'v_: earmarked for__the co_mup%ai'n_yant as _per_l§aw. Upon the dishonest7_VAinduce.I:nenty_of accused 'Nos.1 to 11 and i'im_mi'ediate--lyZ"t.hereafter, the office _.,b»e:ar=ers Sangha negotiavtgedivriitht_:a_ccuse_d iI\l.o.1V:,""whereby, they agreed'ftiofiVsuippix/'V'i'aVir'.dV:1" agccused -- Company th_"e"'sVugarcane from the :"res'e'_rv'edV"a'a=ea=yoiigithgecomplainant, which is coritrarydtoal'Atheiihprovisions of the Essentiai _"'Commodi't'i'é"s 1955 and the Sugarcane V i.(-Controi) order, 1966''.

.'On'*this' bu-a'siVs',VVthe complainant presumes that the purchase of "sugar cane by the first accused ie, the Company was xgriesiiit of inducement by the accused (petitioners herein) 'gupon sugar cane growers. If that be so, who did what must necessarily be spelled out for ascertainment as to whether the alleged overt acts come within the mischief of (}Q2/ 31 Sections 403, 405 and 424 of IPC. The provisions of Sections 403 and 405 of WC, wouid be available if the allegations even remotely suggest that the Vxaccused dishonestly misappropriated or converted to th;e"i'r«'t1,ig~.<'_;*iVitise.y any movable property or that they any manner entrusted with the property ,o.t'nwiuth over property, dishonestiy miisapproprlated their own use that property',~«.:'otVV distloynestlyfg used or disposed of that propiertr-'y in vy-io,i'"a'tio-n"'«of any direction of law prescribing__the trust is to be discharged."

2O'.'g__4 iThex"a_ilegatiens are that the accused induced the}¥srjg'ar caneigrowers to sell the sugar cane to them for r a«..pVric_e,:.hig:her than the price, which the complainant was ~li,a.h.i,e procurement. The purchase is undoubtedly from the growers by the Company and the same may be in "con_travention of the standing orders under the Sugar Cane 'AA'-Zfffilfointrol) Order, but, for the purpose of bringing the if "offence under the mischief of Section 403 of IPC., dishonesty in the transaction must have affected the ﬁxilvx iii 32 owner thereof, namely, the sugar cane growers. Even under Section 405 of IPC, it is necessary to prove that the accused (petitioners herein) were in any manner entrt;i»sted with the property or with any dominion over had converted to their own use that proper.tyf.dishionesftiy or disposed of the same in violation o_f4T'ajny:_diryectio-niofliaw to the detriment of the actual ownfer. g4,.;§.wA.y"far 'thesef provisions would be availablefvftoﬁproVsecVu'te:titie Caoimfpany is a different matter, péirgbners are concerned, we Aexpect'VVat:"EeaistV»a on fact as to how the in what manner thereis in "appropriation.

'V21. Lear-rned counsel for the petitioners has further » :re.ferred«.toy_'pa__ra 13, wherein the complainant has averred 'th.a.t' itt¥.ae,isf}s'ued a legal notice dated 31.01.2009 to ali the accused' (petitioners herein) informing them that the act of "pur_cha'sing sirgar cane from the reserved area would 'tarnount to offence under Section 7 of the EC. Act. The averments in the said para are also of no avail for the reasons explained above. If at ail there was caution to the 5% 33 accused about the provisions of Section 7 of the E.C. Act and no warning is given regarding launching of prosecution for the offence defined under the Indian Penai

22. I do not wish to ex;3'n*i'irae. the allegations for the purpose allegations make out coh'e..t:it"ute any'ofjfthlegéuoffiencesiV' alleged. What we are how tosee whether there is any materiai alleged offences committed by wheitifiervV'thie:petitiooers herein were partyy is about their vicario,us'-- 'iiahVi'Vl'if\;'-»::s:Vbe4"'--Tp'I'ose'cuted. Undoubtedly, the proCuren*i'eot is by the Company and the pe.tii§jioni'ers, hieii-n9. ..... Directors are being roped in to be » pr--o_secutedpwithout disclosing their overt acts. x2V3a."'fThis issue had come up for consideration Abefotrevhthe Bombay High Court (Aurangahad Bench) in the igase of UMESH SHARMA AND ANOTHER Vs. S.G. BHAKTA V' "AND OTHERS (2002 Crl. L1. 4843) and the Borriby High Court considering the scope of Section 34 of the Drugs and (kw 34 Cosmetics Act, observed in paras 15 and 16 of the judgement as under:

15. In the matter of RamMAgVKishan~'-i'2.oh~atagi (1983 cr:. LJ 159) (supra),theApt-gxiricotgi-:_':wasVf7' concerned with the case ot7.lYEana'ger»"a_nd.r:«ot that of Managing Director, For"-the finding out distinction roles" by these two authoiitiies a Company, I have referrediitoptih-ef'cIefi:ﬁit§'on'S-.. of these terms from __the Section 2(24)_Vc3iiefiri'es. as foHows:--

tttt H Maunvaiger means an I the managing agVeVn't).'4'i.'.wh:o,4 subject to the hisupgeﬂinteindence, controi and ._direction'sV of the Board of _ ""i.|:j'i.*-ectors, has the management of whole or substantiailv the swhole of the affairs of the company, and inciudes a Director or any other person occupying the position of Manager by whatever name calied and whether under the contract of service or not."

«W 36 resolution passed by the Board of Directors in___ its generai meeting or by virtue of memorandum or article of association. not the name by which the person is ca'i'-iii;-id the position he occupies and~t.h.e fun'ct'i'oiisfVan'dV"' duties which he discharge; that?

whether in fact, he: is in"~--gcl'i~argeg,iCif'A'and responsible to the comp'ag:nygor not...' ' " Taking this-._d'is_tin_cti;on. into"C~o_nsideration, there need not b_e_'l'a_ accused No.3 "_in~cijarge}of._o*r"_resV'pdrisibie to the company__ pi'od_u"ct_iori ovbjectionai drug. Aithough 1>V.:':>>FO"C)t'j'*. 'lA'=insVp'e--cto§r V has obtained zvvivnfovrlmiatieonfiflronfirtlhe company itseif that the respondent:..'" _.the Managing Di rector, furth_e"r deVtaii4s.'.suc'F\,.c,as agreement between him "and the .c_V_o'rripaVny or resoiution passed by the B"oar"d_ of Directors etc., by which substantial ""pow'_e'rs"*-of management are conferred upon 'Vacc"use'd"'V No.3 are neither obtained nor i._nco.r«:porated in the complaint.

16. On reference to Section 34 as a whole, there is a presumption of being guilty against the person, who is in-charge of and responsible to the company, and such a person is liabie to be punished unless he proves that (WV 37 offence was committed, without his knowledge or inspite of exercise of due diligence4..,tVo_"i._ prevent the commission of offence. By of sub--section (1) by non--obstante clause' injitis"

opening part, the prosecutionyis prove that the offence has b_-eeri with the consent ori_conn'i--yahce of-Kor his":

attributable to any neg'E~e.ct,on the if Director, Manager, SeCr.e.ta'r'y o.:_omer~ o.ffice§r of the Company be--f_oreAo.ra\:ging~--..a..pr~esurnption of guilt against suchV_i_n'd.iy:d'__Lia:»l, «'Ta.lgii5[g_g'.into: .co«n_si:i"eration the overriding effect..V.g--iv"egn (2) it will be ,"respof'risi_bility:iojfﬁtlie prosecution to first i"ndic.at'e objectionable drug was ma'i:.L;fiactLired'.. the consent or in "'cQnnivan,ce"'ofV' the Managing Director or ipi-.od'u.ctionAyofthe said drug is attributable to 'a.ny;"'nyegEect on the part of the Managing ioii4'e;:m;,t oniy thereafter, he would be p'res.i.r'med to be the person in charge of and is " responsible to the Company for conduct of business and will be obliged to estabiish absence of knowledge or exercise of due diiigence in order to seek exoneration." «Vi» 38 Learned single Judge while dealing with this issue has referred to case of Ram Kishan Rohatagi (1983_4.CVr'i.,LL.,3.

159), where the Apex Court considering indictment of a Manager held thatgthere ifi1'us't-'be"eilernent"= if of guilt manifestly appearing fronV'i,th:;,~':-'railIégatfdns'fri:_acir;;é Then referring to Section":_2--{_26)"where Director is defined, the Court o_bse_rved th"us.:l_:' "17_.=~vIn the-"'» in the case '_Poilutio:.n"éCo:_nt:ro:l"'Board Vs. Mohan Meaiang."t:la".'}----i2or0'o)"l-3. 745: (2000 Crl L] Vvr1"79§))u,ii;he:':o;rde'r~.,Vissuiing"'pro§cess passed by the :'Chief Juciici-ai'iYialg:ist--rate against the Directors of for the offence under A..,the 'il\ia_t:er.{.E'>re'veVn"tion and Control of Pollution) ;s9xict,.,y_197'¥i"'vv'.a.s.quashed by the Sessions Judge.

.V_~vlf'§"i€'i?'(Zi.il_.L}tiO|'i Control Board moved the High .i'n~:revision, which was dismissed by the Court. While dismissing ghe appeal ~. preferred by the Pollution Control Board and Vclllirecting the trial Court to proceed with the case, Supreme Court observed in para No.12:

" In the above context what is to be looked at during the stage of day 39 issuing process is whether there are allegations in the complaint by which the Managers or Directors D the Company can also be"

proceeded against, I when Company is alleged to be_:y4gp-jilty "of" "

the offence." T if '(yEﬁ3Dhé"s%s_ ad.dé-dA)A'?.j""- The compr/ai'nt c.5fntaAivne_d.ivafirermentsunthat accused personslie, ,"_;l..v"l\'l.anagers / Partner.s4.:Vo_f were reSDo.n§si'ble":foti. txhelproper works and for of their highly ,'fpollVLitir~rifg_V tradle elffltlent solllas to conform to the V"sta'n.dai'dV'lVa'i-dh__by the Board. It also alleg_ed_tha_t 'accused persons were deliberately aryoidllin-g_Vtotabiyde by the provisions of the said $C'\ct."-- ._It walswin' the light of factual averments in :V'co:rn-plaint, the Supreme Court was of the that the Directors and Managing Directors the company were liable to be proceeded " against according to law.

In the matter at hands, except the bare Statement that accused Nos.3 and 4 are the Directors of the company, there are no averments that they are in charge of or 093.9% 40 responsibie to the company, not even in the form of baid statement. "

From the said judgement, it is clear that whvereia _ was sought to be prosecuted tco'n,_tr'ave'n--t.i:on_V.of'7thé Drugs Control Act, it was, _notice.d:"-that Director was not bestowedttwtwiith anV'._VF"E*5!"3VonV"9'«':tt)VtiVEtY fort manufacture of avyctgailyéth'e"c1uty of a separate officerin the .fr'§jf;a_t_'..context, it was heid that toesE'ﬁ»~hat«%o:n',i_"-th_¢:f'IVtanaging Director would *unless it is shown that he was" to the Company for its Vt also he made to decision of the A,pexhC'otIrt~ tr: thettcase of u.r:>. POLLUTION CONTROL 'Bo../§R:3-s..vs~.).Mor?iAE\z"'i~>iEA;<1Ns LTD, (2000) 3 scc 745. the case of R.K. KHANDELWALA AND Amomtee vs. STATE (1965(2) Cri. LJ. 439), Ailahabad Court, with reference to the iéability of the Managing __5DErector heid that the Director cannot be equated to the «:9»?

41 position of Managing Director for the purpose of prosecution as also the Managers.

25. From the case laws, it is clear that thevstatute has to be read and interpreted in its nakedness"a«'n_'d..:iriri:Vei2_ we do that we find ciear distinction betw--een.:'i§he'l~peoestait on which the principal officers of the,c7ompainy'- a'iid-ir.__ot:he'r Directors and the person .»irri<_charg"e,_'of the"'h'i:iu.s_ines'S areiih. piaced. I am, therefore, satisiieycl thatiri instant case the position of the 'p--eti-tior--iVersi.iri'~«..th,Ae"~Company must be taken into con,s_ideratAi,on,:._to decigdé'yiih:ei;~?iVer the action is justified.._ -AsVfaras'ipetitioners 3 to 11 are concerned, they faii in the Cavtegory,'ofwpiersons referred to in sub--section (2,i§,ol*' section' of the E.C. Act and in the absence of any .' 'm.,ateria»i_ aiiegations showing their overt acts revealing ".a'ctive"covn_niya'nce, consent or attributable negligence, it wiii be-.':imp'roper to sustain any prosecution against them. '.As__ regards petitioners 1 and 2 are concerned, first "I.p'et'itioner claims to be the Chairman and Director, whiie, ' V' "second petitioner is described as a Managing Director, they stand on a different footing and wouid come in the (gﬂw 42 category of persons referred to in subsection (1) of section 10 of the EC. Act. it is also noticed that of their office, they could be termed as charge or responsible to the Company for"its' element of presumption betngv'-__avair!able..against:f».th'ern, generaliy they would also bepvroceieded agaVi'n;:;v.a_ioVn_o the Company tili they rebut thie'-.p_re.sumptioin of ciiuilt raised statutorily against tvh'ehf:._' 'l._Hc;.yyey"er;i :i'n._the instant case, there appears to be not-dis'pute"a_s"petitioners. 1 and 2 are con_ceVrne}d',_'.v1ho1h_'ave,twhVems'éives described their designationsh No.1 is concerned, she claims to be and Director while the second petitioner.._ch|a.iyrns_to'rbe».t_'l:1e Managing Director. the reasons discussed in the paras supra, "'--p.etii'tione"rLs succeed in their legal pursuit. The prlocyeedingvs initiated against petitioners 3 to 11 in PCR " No.4/V2N0O9 new converted into cc !\.Io.3O9/2009 on the file 'u'§of"lPrinCipal Civii Judge (3r.Dn.), JMFC, Hospet for the H offences punishabie under Sections 403, 405, 424 and 421 of IPC and also for the offences punishable under Section 7 W"

and 8 of Essential Commodities Act, 1955, are quashed. Consequently, the order dated 11.3.2009 SU,FIW.ET:Efi"Ql1§.[lg them to answer the charges is also quashed. *'

27. As this Court by its o'rder'_'_'idateld_ Crl.P.No.73S4/2009 has set_V:"'a.sideA"-the.irri,ou'§;_ir"ie»d, me.-,i[r against the principal,offendervllja'M/s,.$hree".ReAnual€a Sugars Limited (accused the matter to the trial COU.vFt.::fO.f' «.the:..,V'.i:'mCougned order in cc No.309;:g,g<§i,,[gW;,il§_g,/ages; far as it relates to and 3) is also set aside.

The the trial Court directing it to reconsidelraadd the in the complaint, sworn stailgement and_o_thAer relevant documents to ascertain ' _Vwh,et--h_er, it._rna_kes out a prima facie case to proceed against .*them'.Vf'o'--r'[:thaevloffences punishable under Section 403, 405,

424., xsof {PC and Sections 7 and 8 with reference to it it su.b--Section 1 of Section 10 of the Essential Commodities Aét. 1955.

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Karnataka High Court