Orissa High Court
State vs Dindayal Agarwala And Ors. on 6 November, 1990
Equivalent citations: 1991CRILJ2786
JUDGMENT S.C. Mohapatra, J.
1. Accused persons having been acquitted from offence alleged against them Under Section 7 of the Essential Commodities Act, 1955 (in short 'the Act') this appeal has been filed.
2. Admittedly, the three accused persons are Partners of a Firm M/s Khubram Asharam carrying on business of wholesale supply of baby foods amongst others at Plant site road, Rourkela. The Firm has a valid licence for carrying on wholesale business as dealer in respect of baby food as required under the Orissa Baby Food Licensing Order, 1966 (hereinafter referred to as 'the Orissa Order') made by State Government under the Act.
3. On 11-10-1983 at about 3 p.m. P.Ws. 1 and 2 along with other officials of supply department inspected the business premises of the Firm and found cases of Packed Lactogen (infant formula) tins containing 500 grams and I kilogram each with same loose packed tins. They verified the stock register of baby foods where there was no entry in respect of these stocks. They also found that in the cash memo book licence number has not been mentioned in respect of lactogen (infant formula) sold. Being of opinion that term Nos. 4, 6 and 9 of the licence granted to the firm, P. W. 1 submitted prosecution report in the Court of Special Judge against the three partners of the Firm alleging commission of offence Under Section 7 of the Act.
4. After cognizance being summoned accused persons were explained substance of accusation since trial was to be made adopting summary procedure. Pleading not to be guilty, they claimed to be tried.
5. Prosecution examined two witnesses and proved the seizure list (Ext. 1), zimanama (Ext. 4), cash memo book (Ext. 2) containing counter-foils of three receipts (Ext. 2/a to 2/c) along with others and stock register (Ext. 3). Accused No. 1 Dindayal Agarwala was present in the business at the time of inspection and seizure, examined himself as D.W.1 and proved the stock register of Lactogen (infant formula) between 1-1-1983 to 31-12-1983 (Ext. A) with entries dated 21-9-83, 22-9-83, 24-9-83 and 1-10-1983 (Exts. A/1 to A/4) along with other entries therein.
6. Case of the accused in trial was that Lactogen (infant formula) is not lactogen as listed in Schedule-I of the order and accordingly, is not baby food for carrying on business of which the provisions of the order and terms of the licence are to be followed, and Firm not having been made accused, Partners are not liable to be convicted.
7. Trial court held that Lactogen (infant formula) is baby food under the order but acquitted the accused persons as Firm has not been made an accused. This appeal is directed against the aforesaid acquittal.
8. Mr. A.S. Naidu, learned counsel for the accused respondents raised a preliminary point that cognizance and trial by the learned Special Judge on the basis of prosecution report by P.W. 1 which is not a Police report as required Under Section 12AA(e). Said provision as in 1983 read as follows :--
"(e) Special Court may, upon a perusal of police report of the fact constituting an offence under this Act take cognizance of that offence without the accused being committed to it for trial."
9. Three decisions of this Court reported in (1985) 59 Cut LT 324 (Ranendra Kumar Swain v. State of Orissa), (1988) 66 Cut LT 696 Hindustan Cycle Store v. State of Orissa, (1988) 1 O Cri Rep 501 (Simadhari Viswanatham v. State), support submission of Mr. Naidu. However, correctness of aforesaid three decisions rendered by Honourable single Judges of this Court were examined by a Division Bench in the decision reported in (1990) 3 OCR 480 (M. Surya Rao v. State of Orissa) where it was clearly laid down that Special Court can take cognizance on a report by a public servant. It was held that the three decisions on this question have not been correctly decided. In view of decision of the Division Bench in the decision reported in (1990) 3 O Cri Rep 480 (Supra) preliminary submission of Mr. Naidu is not entertainable.
10. Mr. Debasis Das, learned Public Prosecutor assailed acquittal of the three accused persons. According to Mr. Das, it is not necessary to prosecute the Firm or a Company to bring home guilt of Partners or person in charge or responsible to the Company. Section 10 of the Act material for consideration of this submission reads as follows:--
"10. Offences by Companies:--
(1) If the person contravening an order made Under Section 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly;
Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in Sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of any Director, Manager, Secretary or other Officer of the Company, such Director, Manager, Secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation -- For the purposes of this section --
(a) "Company" means any body corporate, and includes a firm or other association of individuals; and
(b) "Director' in relation to a firm means a partner in the firm".
11. Trial court relied upon the decision of this Court reported in ILR (1975) Cut 86 (Santikumar Agarwala v. State, (1979) 48 Cut LT 1 (State of Orissa v. Paban Kumar Agrawal, where relying upon observation of Supreme Court in the decision reported in AIR 1971 SC 447 : (1971 Cri LJ 418). (The State of Madras v. C. V. Parekh) partners were acquitted on the ground that term (firm) has not been made an accused. In another unreported decision in Cri. Revn. No. 183 of 1978 decided on 19-4-1979 (Chandra. Sekhar Das v. State) same view has been taken. However, in the decision in ILR (1978) .' Cut 291 (State of Orissa v. Sib Narayan Patro, it has been observed (at page 304):
".......But merely because the firm has not been prosecuted, that cannot absolve the responsibility of the respondents who are directly connected with the transaction."
Of course, in this decision, earlier decision reported in ILR (1975) Cut 86 (supra) has not been taken into consideration possibly because the same was not brought to the notice of the Court. In (1979) 48 Cut LT 1 (supra) it has not been followed on the ground that the learned Judge has relied only on Section 10 of the Act and decision of the Supreme Court in AIR 1971 SC 447 (supra) as well as of this Court in ILR (1975) Cut 85 (supra) were not brought to the notice of the Court. In case, Section 10 as applied by this Court would have continued, the earlier decision reported in ILR (1975) Cut 86 (supra) would have been binding on me unless I would have preferred to refer the matter to the Division Bench to examine correctness of either of the decisions. However, considering the decisions reported in ILR (1975) Cut 86 (supra) and AIR 1971 SC 447 (supra) Supreme Court has now decided in AIR 1984 SC 1824 (supra) that it is not necessary that the company or the firm is to (be) made an accused to sustain conviction of the officers, director, or partners. In the said decision, it has been observed as follows (at page 1825):--
".........If the contravention of the order made Under Section 3 is by a Company, the persons who may be held guilty and punished are (1) the Company itself (2) every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company whom for short we shall describe as the person in charge of the company, and (3) any, director, manager, secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom the offence has been committed, whom for short we shall describe as an officer of the company. Any one or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The person in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person incharge or an officer of the Company may not be prosecuted unless he be ranged along side the company itself. Section 10 indicates the persons who may be prosecuted where the contravention is made by the company. It does not lay down any condition that the person-in-charge or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or any of them may be separately prosecuted or along with the Company. Section 10 lists the person who may be held guilty and punished when it is a company that contravenes an order made Under Section 3 of the Essential Commodities Act. Naturally, before the person-in-charge or an officer of the company is held guilty in that capacity it must be established that there has been a contravention of the order by the Company. That should be axiomatic and that is all that the Court laid down in State of Madras v. C. V. Parekh AIR 1971 SC 447 (supra) as a careful reading of that case will show and not that the person in-charge or an officer of the company must be arraigned simultaneously along with the Company if he is to be found guilty and punished........"
View in ILR (1975) Cut 86 (supra) and similar view in (1979) 48 CLT 1 (supra) and Cri Revn. No. 183 of 1978 decided on 19-4-1979 (supra) that Firm is to be made an accused for prosecuting partners is no longer binding on me in view of the observation of Supreme Court in AIR 1984 SC 1824 (supra) and the said view of this Court stood overruled. In case, decision reported in AIR 1971 SC 447 (supra) would not have been considered in AIR 1984 SC 1824 (supra) it might have been open to me to examine if view expressed in AIR 1984 SC 1824 (supra) can prevail over the view expressed in AIR 1971 SC 447 (supra) in case I would have come to conclusion that both views are inconsistent to each other. Said question no more arises since Supreme Court has itself explained its earlier view. Thus, analysed, there cannot be any escape from the conclusion that the ground of acquittal is not sustainable.
12. Mr. Das, learned Additional Standing Counsel invoking principles of interference in respect of findings of fact by the trial court in an appeal against acquittal submitted that on the finding by the trial court that Lactogen (;nfant formula) is baby food under Schedule-I of the State order, submitted that accused persons are liable to be convicted Under Section 7 of the Act for contravention of the State order. Mr. A. S. Naidu, learned counsel for the accused persons on the other hand submitted that in case accused persons would have been convicted, they could have been entitled to challenge all facts in appeal. When the ground of acquittal fails, the general principle of interference with appreciation of facts by trial court would not be attracted. I am inclined to accept submission of Mr. Naidu and called upon him to make his submissions on merits.
13. Mr. Naidu submitted that Lactogen (infant formula) is not baby food since the same is not included in the Schedule. His second contention is that in the maximum Dindayal Agarwalla alone is to be convicted if at all his first contention fails since prosecution has not taken any steps to prove how other accused persons are responsible for contravention of terms of the licence.
14. As regards first submission of Mr. Naidu, it is to be remembered that baby food has been defined in clause 2 (i) of the Orissa Order to be a food as specified in Schedule-I. When the State order came into force on 2-9-1966 being published in official gazette Schedule-I originally contained seven items being (1) Amul Milk food for babies (2) Canac baby food (3) Glaxo (4) Horlics (5) Lactogen (6) Lactodex, and (7) Oster Milk. This schedule has been amended or substituted from time to time. However, Lactogen has continued to remain in the schedule as such even now. Mr. Naidu submitted that Lactogen (infant formula) is not 'Lactogen' as mentioned in the Schedule. According to him there are many types of baby foods available in the market and all are not included in the schedule. In the schedule as it exists now, he brought to my notice 'Amul' and 'Amul Spray' to develop his submission that State Government does not intend to include all milk foods in category of baby foods and where it includes two brands of the same manufacturer, it specifically provides for the same as in case of Amul and Amul Spray. Mr. Naidu therefore, submitted that 'Lactogen' may be baby food as defined in the State order. Lactogen (infant formula) not having been specifically provided, the same cannot be treated as baby food. If a case would have been made out that there is a commercial commodity named 'Lactogen' which is different from Lactogen (infant formula), I would have considered submission of Mr. Naidu. From the judgment of the trial court, I find that Lactogen is of two categories. Lactogen (Full Protien follow-up formula with iron) and Lactogen (Infant formula) with iron. Both the categories are lactogen. It can safely be inferred that both categories come within the term 'Lactogen' as defined in Clause 2 (i). Trial court rightly held that Lactogen (Infant formula) is nothing else and lactogen as provided in the schedule.
15. While explaining the same, it would not be out of place to make a passing reference for consideration of the State Government that enlistment of brand name may create unfounded suspicion that at some end some management is made so that unreasonably manufacturers and dealers of some brands are favoured not to be brought within the regulatory scope of the State Order. Such suspicion fcr which State Government does not get chance to explain may ill repute the department consisting of officers and others and bona fides of individuals responsible for enlisting commodities may be doubted which shall ha.ve far reaching effect on confidence on an otherwise a good Government.
16. After coming to conclusion that the commodities seized are baby food, the stock not having been mentioned in the stock register required to be maintained under the license granted to the Firm, condition No. 4 has been violated. License number not having been mentioned in the receipts granted condition No. 9 is violated. Similarly, in the register of daily accounts maintained, the stock not having been reflected at all condition No. 9 is violated by the firm. Thus, provisions of the State order having been violated, offence Under Section 7(1)(a)(ii) of the Act has been committed.
17. Under Section 10(1) every person in charge of and responsible for business of the Firm at the time of contravention is guilty. Under Section 10(2) if offence has been committed, with consent of a Partner, he would be liable. It is true that all the three accused persons are partners. Accused Dindayal was present in the business premises and it can safely be inferred that he is responsible for business of the firm. Accused Khusiram has answered to a question in this Section 313 statement "We sold Lactogen infant formula'. From this, it can be inferred that he is also responsible for the business and is guilty. Accused Asharam stands in different footing. He is aged 62 years. In his statement Under Section 313, Cr. P.C., while admitting that he is a partner, he stated that he has no knowledge of Partnership business. This statement makes it clear that he was not responsible for the business at the time of contravention of the State order by the Firm. Accordingly, he not being responsible for the contravention by the firm of which he is Partner cannot be held guilty.
18. Mr. Naidu submitted that under a misconception without having any ill-motive the State order has been violated. It may be so. However, mens rea is not an ingredient to constitute an offence Under Section 7 of the Act. But the same may be a circumstance to consider the question of sentence.
19. It is true that violation of the order is anti-social activity for which Under Section 7 of the Act immediate punishment has been provided for. To meet contingencies as in this case, Legislature has given power to Court to impose lesser sentence. I am satisfied that after seven years of commission of the offence, to send the two accused persons to custody would be retributive in character having no influence over the society, I am conscious that if delay in conviction is utilised for the purpose of reducing sentence, the same may be utilised by unwholly accused person for delaying trial to get the lesser sentence. The court in such cases is to examine the conduct of accused persons in the proceeding from the order sheet to find if he has contributed to the delay in trial or hearing of the appeal. As I find in this case, accused persons have not made any such contribution for delay. Most of the time has been consumed in this appeal on account of preparation of paper books. When an appeal heard by a Sessions Judge from order of conviction can be effectively decided without preparation of paper books, I am not able to appreciate why an appeal to be heard by a single Judge in the High Court would require paper book to be prepared so as to delay disposal of the appeals. It is high time to consider whether such preparation of paper books shall be dispensed with. Accused Dindayal and Khusiram are accordingly sentenced till rising of the Court and are sentenced to pay a fine of Rs. 5,000/- (five thousand) each. In case, fine amounts are not paid, by each accused within two months from today, they shall undergo R.I. for three months and the amount of fine shall be collected under distress. Acquittal of Asharam is confirmed.
20. In the result, appeal is allowed in part. Appeal partly allowed.