Karnataka High Court
The Managing Director/Director vs State Of Karnataka on 1 September, 2023
Crl.R.P.No.616/2015
c/w
Crl.R.P.No.624/2015
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1st DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
CRIMINAL REVISION PETITION No.616/2015
C/w.
CRL. REVISION PETITION No.624/2015
CRIMINAL REVISION PETITION No.616/2015:
BETWEEN:
1. THE MANAGING DIRECTOR/DIRECTOR
M/S.HINDUSTAN UNILEVER LTD.,
UNIT-1, TINSUKAI 786 151
ASSAM STATE
REPRESENTED BY ITS DIRECTOR
MR. PRADEEP B.
2. THE MANAGING DIRECTOR/DIRECTOR
M/S.HINDUSTAN UNILEVER LTD.,
UNIT-1, INDUSTRIAL ESTATE
HARIDWAR 249 403.
REPRESENTED BY ITS DIRECTOR
MR. PRADEEP B.
...PETITIONERS
(BY SANDESH J.CHOWTA, SENIOR COUNSEL FOR SRI NITIN PRASAD,
ADV.)
AND:
STATE OF KARNATAKA
THE INSPECTOR OF LEGAL METROLOGY
BHADRAVATHI SUB-DIVISION
BHADRAVATHI 577 301.
KARNATAKA
...RESPONDENT
(BY SRI RAHUL RAI K., HCGP)
Crl.R.P.No.616/2015
c/w
Crl.R.P.No.624/2015
2
CRIMINAL REVISION PETITION No.624/2015
1. THE MANAGING DIRECTOR/DIRECTOR
M/S.HINDUSTAN UNILEVER LTD.,
DEPOT: HUL-CFAHUB
LINFOX LOGISTIC (I) PVT.LTD.,
105, KOTAGONDAHUNSI VILLAGE
KUNDAGOL CROSS, ADHARGUNJ
HUBLI
DHARWAD DISTRICT 580 023.
REPRESENTED BY ITS NATIONAL MANAGER-LEGAL
MR.P.P.VALSAN
2. THE MANAGING DIRECTOR/DIRECTOR
M/S.HINDUSTAN UNILEVER LTD.,
DEPOT: HUL-CFAHUB
LINFOX LOGISTIC (I) PVT.LTD.,
105, KOTAGONDAHUNSI VILLAGE
KUNDAGOL CROSS, ADHARGUNJ
HUBLI
DHARWAD DISTRICT 580 023.
REPRESENTED BY ITS NATIONAL MANAGER-LEGAL
MR.P.P.VALSAN
......PETITIONERS
(BY SANDESH J.CHOWTA, SENIOR COUNSEL FOR SRI NITIN
PRASAD, ADV.)
AND:
STATE OF KARNATAKA
THE INSPECTOR OF LEGAL METROLOGY
BHADRAVATHI SUB-DIVISION
BHADRAVATHI 577 301.
KARNATAKA
...RESPONDENT
(BY SRI RAHUL RAI K., HCGP)
THESE CRIMINAL REVISION PETITIONS ARE FILED UNDER
SECTION 397 CR.P.C PRAYING TO SET ASIDE THE ORDER DATED
Crl.R.P.No.616/2015
c/w
Crl.R.P.No.624/2015
3
1.2.2012 PASSED IN CC No.375/2012 BY THE CIVIL JUDGE AND
ADDL.JMFC, BHADRAVATHI.
THESE CRIMINAL REVISION PETITIONS HAVING BEEN HEARD
AND RESERVED FOR PORNOUNCEMENT OF ORDER, THIS DAY THE
COURT PRONOUNCED THE FOLLOWING:
ORDER
These two petitions arise out of an order dated 1.2.2012 passed by the Civil Judge and Addl. JMFC, Bhadravathi, in PCR No.60/12 culminated in registering as CC No.375/2012. Criminal Revision Petition No.616/2015 is filed by accused no.3 and 5 being shown as petitioner nos.1 and 2 in the petition and Crl. Revision No.624/2015 is filed by accused nos. 2 and 4 shown as petitioner nos. 1 and 2 in the petition.
2. As both these petitions arise out of a single order dated 01.02.2012 passed in the aforesaid PCR No.60/2012, as common argument is advanced in both these petitions, both these petitions are taken up for passing common order.
3. The facts in both these revisions are similar. In the private complaint No.60/2012 filed by respondent herein i.e. Inspector of Legal Metrology, Bhadravathi Sub-Division, Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 4 Bhadravathi, it is alleged that, the petitioners herein arraigned as accused in the aforesaid private complaint have committed the offences punishable under Rules 6(1)(c), 15(1)(b), 18(1) and 24 of the Legal Metrology (Packaged Commodities) Rules, 2011 (`Rules' for short) and Sections 36(1) and 40 of Legal Metrology Act, 2009 (in short `Act').
4. It is the case of the respondent that, the complainant along with the staff on 14.9.2011 conducted inspection of shop of accused no.1 named as `M/s.Shimsha Associates Bhadravathi'. It is alleged that, on inspection it was noticed that there were twelve retail `Fair and Lovely' tube boxes bundled in one plastic cover, there were three such plastic cover bundles. It was visible that there were retail tube packs bundled in transparent covers. There were 36 tube packs in all bundled and put together. It is alleged that there were also Vaseline packets with invoice bearing No.1013360164 'Vaseline Health White body fairness cream'. In all 12 such retail Vaseline crème tube boxes kept in one transparent plastic cover and Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 5 there were such three covers in all 36 retail packs put in three bundles together.
5. It is alleged by the complainant that such plastic bundles of fair and lovely tube boxes and Vaseline health body cream were meant for wholesale. As such, there is violation of provisions of the Act. It is alleged that, accused no.2 has supplied the product to accused no.1 under Invoice No.1013386518 dated 29.8.2011 and has violated Rule 6(1) of Rules punishable under Section 36(1) of the Act. It is alleged that accused no.3 has failed to furnish the details of the Director's and Partner's as called upon under letter dated 13.09.2011 and thereby, there is violation of Rule 15(1)(b) of the Rules punishable under Section 40 of the Act.
6. So far as the Vaseline health white body cream is concerned, accused no.4 has supplied the products to accused no.1 under Invoice No.1013386164 dated 19.12.2012 and as such, accused no.4 had violated Rule 6(1) punishable under Section 36(1) of the Act. Accused No.5 has failed to furnish the details of the Directors and Partners as called upon under letter Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 6 dated 13.09.2011 and thereby violated Rule 15(1)(b) punishable under Section 40 of the Act.
7. Because of these violations alleged to have been committed by the aforesaid accused persons, respondent being the public servant filed a private complaint against accused persons.
8. Likewise, accused no.2 and 4 arraigned in the complaint have also violated the Rules and the provisions of the Act. Therefore, it was prayed by the complainant to take necessary legal action and punish the violators of the Act. On filing the complaint, the learned Addl.JMFC, Bhadravathi based upon the private complaint filed by the public servant took cognizance of the offences and directed the office to register the criminal case against accused persons as per his order dated 1.2.2012.
9. Now the petitioners in both these revision petitions have challenged the said order dated 1.2.2012 by filing these two revision petitions and pray to set aside the said order produced at Annexure-A. Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 7
10. Heard the arguments of both the side. Perused the records.
11. It is argued by the counsel for the revision petitioners that the products which are kept for sale i.e. `Fair and Lovely' and `Vaseline White Health Body Fairness Cream' were manufactured by the manufacturing company. The said companies are not arraigned as accused which is fatal to the case of the prosecution.
12. The said `Fair and Lovely' tubes and `Vaseline health white body fairness cream' were kept in the shop for the purpose of transportation to avoid any damages. It is the case of secondary package. There is no violation of the provisions of Act and Rules as alleged by the complainant respondent. There is a provision for compounding the offences and no order is passed under Section 48 of the Act. It is further submitted by the learned Sr.Counsel that there is no application of judicious mind in taking cognizance of the offence. As the said tubes were kept in a plastic transparent cover to avoid the damages as they were supposed to be transported, but, the complainant has alleged violation of said Act and Rules by the accused persons. The Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 8 prosecution should be against the Company. The company has to nominate a person to defend the company. There is a difference between wholesale and retail. The said products were not kept for wholesale. Thus, the basic ingredients are not fulfilled by the complainant-respondent. Thus, it is submitted that the proceedings against accused persons do not stand and the very taking cognizance of the offence require setting aside. It is prayed to allow the revision petitions.
13. As against this submission, the learned HCGP supported the orders challenged in this revision petitions. It is submitted that, in view of the material being collected by the complainant, it is proved that there is a clear violation of the Act and hence, there is no merit in both these petitions. It is prayed to dismiss both the petitions.
14. I have given my anxious consideration to the arguments of both the side.
15. Along with the revision petition, the petitioners have produced the copy of the order sheet in CC No.375/2012(PC 60/2012). The order dated 1.2.2012 shows "Perused. Cognizance taken - Registered as PCR. Recording of sworn Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 9 statement dispensed with. Registered the case as CC in Reg.No.3. Issue S.S. to accused Nos. 1 to 5 returnable by 2.4.2012".
16. On perusal of the said order, it shows that the judicial Magistrate just perused and took cognizance of offence. Evidently, the manufacture of the said products being the Company are not arraigned as accused. The Managing Director of M/s.Hindustan Uniliver Ltd., are arraigned as accused. When the inspection was conducted by the respondent, Panchanama was prepared on 14.9.2011 showing the name of one Radhakrishna, Accused No.1 of M/s. Shimsha Associates. At the time of inspection, the `Fair and Lovely Multivitamin for Clear Fair Skin' packets containing 12 lose tubes and also similarly, 12 lose tubes of Vaseline health white body fairness cream were seized. In all there were three such pre-packed containers. The particulars of the seizure clearly shows that there were twelve lose tubes of each product.
17. On 13.9.2011, a notice came to be issued alleging that the said pre-packed commodities were not in accordance with the provisions of Legal Metrology Act 2009 and Rules. Crl.R.P.No.616/2015
c/w Crl.R.P.No.624/2015 10 Because of the violation and breach of provisions of the Act and Rules, accused no.1 was called upon to answer. Even such a notice was sent to M/s.Hindustan Lever Ltd., Unit No.1, Tin Sukhia, 0 768 151 Assam State (Manufacturer), M/s. HUL- CFAHUB, Linefox Logistics (I) pvt. Ltd., Kotagondahunasi village, Undagol Cross, Adhar Gungi, Hubli (Supplier) and accused no.1 Sri Radhakrishna shown as wholesaler. But, the said manufacturer being the Company is not arraigned as accused.
18. The Revision Petitioners have produced the photographs of `Fair and Lovely' packets and `Vaseline' packets. It is submitted that they were packed for the purpose of transportation and it was not for wholesale but, it was a retail sale. Even on perusal of these photographs, these products were packed in a transparent plastic cover so as to avoid the damages. Now, it is alleged that there is violation of the Act and the Rules.
19. It is submitted that, three bundles containing 12 retail pre-packed packages on which a declaration is printed as Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 11 required under the Legal Metrology Rules. The stock was distributed to M/s.Shimsha Associates being the Distributor who was not a wholesaler. So also, it is submitted that, in all these 72 packages, comes in CLDs from Company's Godown having declarations as per Rule 24 is split by the Distributor for retail sale into 12 bundles or 6 bundles or even three bundles of pre- packed packages of `Vaseline healthy white beauty fairness cream' and `fair and lovely'.
20. The learned counsel relies upon provisions of Section 2(q) of the Act which gives definition of wholesale packages. It is submitted that, the ultimate consumer has to purchase the same and they were distributed for delivery to an intermediary because what is gone out as a retail sale is from an intermediary to the ultimate consumer and the said retail packages fully comply with the provisions of the Act.
21. On perusal of all these factual features so noticed in the products as well as the documents being collected by the complainant do suggest that there is a compliance of provisions of the Act and Rules by the accused persons. Crl.R.P.No.616/2015
c/w Crl.R.P.No.624/2015 12
22. The learned counsel for the petitioners in support of his submission relied upon the following judgments:
1. Ms. Shalini K. vs. The Inspector of LegalMetrology, Yeshwanthpura Sub-
Division in WP Nos.5116/2017 & connected cases DD 26.08.2021.
2. Mr.Kaushik Mitra v. State of Karnataka - in Criminal Petition No.6178/2022 DD 19.09.2022.
3. State of Maharashtra and others v. Raj Marketing and another reported in (2011) 15 SCC 525.
4. Bausch & Lomb Eyecare (I) Private Ltd., and others v. State - in Criminal Petition No.5159/2013 and connected matters DD 29.08.2019.
5. Sri Balakrishna and others v. State of Karnataka and another - in Criminal Petition No.9401/2018 - DD 27.07.2022.
23. In the first judgment, there were five writ petitions being disposed of by the common order dated 26.8.2021 wherein the petitioners therein have called in question certain proceedings initiated by respondent-State under the provisions of Legal Metrology, 2009. The facts of the said writ petitions are Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 13 similar to the facts of this case. Relying upon these judgments, it is submitted that in order to ensure the said individual packages were handled, transported and stored safely and conveniently for the sake of convenience, 12 such packages were packed in the secondary larger packages. The co-ordinate Bench of this Court have categorically held in the said writ petitions that, company was not arraigned as accused and relying upon the case of 1 Anita Hada vs. Godfather Travels and Tours Private Limited, have held that in the case of present nature, the company is necessary party as accused. In the said judgment, the Hon'ble Apex Court has clearly held that criminal proceedings without arraigning the company as party and registering the complaint only against officers or individuals would not be maintainable.
24. Section 49 of the Act speaks about offences by companies and power of Court to publish name, place of business etc... for companies convicted. The said provision reads as under:
"49. Offences by companies and power of court to publish name, place of business, etc., for companies convicted - (1) Where an Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 14 offence under this Act has been committed by a company -1
(a) (i) 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 (hereinafter in this section referred to as a person responsible); or
(ii) where no person has been nominated, every person who at the time of the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company; and
(b) the company, Shall be deemed to be guilty of the offence 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 provided in this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.
(2) Any company may, by order in writing, authorize any of its directors 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 this Act and may give notice to the Director or the concerned Controller or any legal metrology officer authorized in this behalf by such Controller (hereinafter in this 1 (2012) 5 SCC 661 Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 15 section referred to as the authorized officer) in such form and in such manner as may be prescribed, that it has nominated such director as the person responsible, along with the written consent of such director for being so nominated."
25. Thus, in view of sub-Section (2) of Section 49 of the Act, the company ought to have been impleaded as an accused in this case. The company has addressed a letter to the respondent stating that it has not committed any offence as alleged in the complaint and requested to drop the proceedings. But, the respondent without considering the reply has filed the private complaint and the Magistrate has taken the cognizance.
26. As argued by the learned counsel for the revision petitioners, the respondent has not issued any notice to the petitioners for compounding the offences as there is a provision under the Act to compound the offences. The offences alleged against the petitioners are the violations of provisions of the Act stated supra. The prayer in the complaint was to take cognizance. The provisions relating to violation speak of imposing penalty. Even an appeal provision is also provided under the Act. So therefore, the respondent has not followed the Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 16 provisions of Section 48 of the Act regarding compounding of the offences. That means, compounding of the offences is a remedy which is available once offences are punishable under Sections 27 to 39 of the Act. The remedy of appeal is also available to the accused. When dual remedy is available, it is the choice of the petitioners to avail the remedy available under law. A liberty is very much given to the accused under the Act.
27. In the second judgment of the Co-ordinate Bench of this Court, similar question arose and the co-ordinate Bench has decided as decided in the first judgment and the proceedings were quashed.
28. In the third judgment stated supra, it is laid down with regard to the expression `wholesale package' etc. The facts of the case were, the respondent is a firm carrying on the business of buying and selling various products and used to store the products in their Godown. When the respondent visited the Gowdown and seized various packages of packed commodities like Candyman, Minto fresh,kitchens of India etc... as per the seizure memo dated 31.12.2006. The reason for Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 17 seizure was on the wholesale packets, the details regarding the name and address of the manufacturer, month, year, cost has not been mentioned. The retail sale price was not mentioned which is in violation of the rules. But, the Hon'ble Supreme Court in para. 11 of the judgment have held that to attract the violations of the rules referred in the Act, the package seized must fall within the expression `wholesale package'. A package used merely for protection during conveyance or safety would not be pre-packed commodity for the purpose of the Act and the Rules. The package must not be a secondary package. It is held that the secondary package is only for the safety convenience and the like.
29. The observation and the principles laid down in the judgments by the Apex Court are squarely applicable to the facts of the present case.
30. The products stated supra are manufactured in multiple thousands which were to be distributed for sale all over India. As they are mixed with the chemicals, if exposed to moisture, would definitely lose their quality. Thus, the span of shelf-life of such products is for a limited period. When such Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 18 products are to be sold by the retailers by getting transporting the same from the wholesaler, such retail packets require certain shrink wrapping. They are to be placed in a proper place without exposing to the light and moisture. They are to be stacked in proper manner so as to avoid any damage. Thus, this process of second packing would not partake character of wholesale package. Therefore, the contention of the State that accused no.1 being a wholesaler has violated the provisions of the Act cannot be accepted.
31. Further, a co-ordinate Bench of this Court has held in Crl.Petition No.5159/2013 and connected petitions dated 29.8.2019 with regard to the procedures being followed by the wholesalers and retailers. Yet in another judgment of the co- ordinate Bench of this Court in Crl.Petition 9401/2018 decided on 27.7.2022, wherein the Inspector of Metrology have seized 12 retail units of colgate dental cream alleging that there is violation of provisions of Section 18 of the Act. It is observed that there may be a storage of 12 retail units of Colgate dental cream of 50 grams of each in three bundles, the same even as per the allegation made in the complaint is not for sale of those Crl.R.P.No.616/2015 c/w Crl.R.P.No.624/2015 19 12 retail units, package as one. In this case also it is the duty of the complainant-Inspector to prove the essential element of the penal provision which require to be fully satisfied. Therefore, when taken as a whole, the Inspector has not followed the proper procedure. In view thereof, I am of the considered opinion that, no offence has been made out by the accused persons. The trial Court ought to have examined the ingredients of the penal provisions before taking cognizance of the offence and setting the criminal law in motion. But, the trial Court has just perused the complaint filed by the public servant and took the cognizance of the offence which in my opinion, such an order of taking cognizance clearly suffers from legal infirmities requiring this Court to interfere. Though the learned SPP submits that the learned Magistrate has applied his mind before taking cognizance but, the very order sheet so produced is silent.
32. In view of discussion herein made above, the revision petition so filed by the respective revision petitioners deserve to be allowed and the impugned order of taking cognizance require to be set aside.
Crl.R.P.No.616/2015
c/w Crl.R.P.No.624/2015 20
33. Resultantly, I pass the following:
ORDER
(i) The Revision Petitions are allowed. The order taking cognizance dated 1.2.2012 in CC No.375 of 2012 passed by the Civil Judge and Addl.JMFC, Bhadravathi, is quashed.
(ii) Consequentially, the complaint in PCR No.60/2012 is also quashed.
(iii) The notice dated 13.9.2021 being without any basis is also quashed.
(iv) The seizure having been effected in the year 2013, the products having already passed their shelf-life and having expired, the respondent is directed to destroy the same.
(v) Respondent having seized the product contrary to the applicable law, he is directed to make payment of maximum retail price thereof to accused No.1 within four weeks of receipt of a copy of this order.
Sd/-
JUDGE Sk/-