Madras High Court
M/S.Kumaran Chemicals vs The State on 25 September, 2015
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IN THE HIGH COURT OF JUDICATURE AT MADRAS
Date of Reserving the Date of pronouncing the
Judgment: Judgment:
19.12.2016 19.12.2017
CORAM:
THE HONOURABLE MR. JUSTICE S.BASKARAN
Crl.O.P.No.9081 of 2011
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1. M/s.Kumaran Chemicals
A Partnership Firm
Having Factory at
Keelaiyur, T.R. Pattinam
Karaikal, Puducherry.
2. N.Johnson
3. D.Thangaraj
4. D.Thillairaj
5. K.Sabitha
..Petitioners/Accused 1 to 5
Vs.
The State
Rep. By Inspector of Police, SPE, CBI
EOW
Chennai .. Respondent/Complainant
Prayer:Petition filed under Section 482 Crl.P.C., praying to call for
records relating to the Charge-sheet in C.C.No.284 of 2010 on the file
of Judicial Magistrate-II, Karaikal, and quash the same.
http://www.judis.nic.in
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For Petitioners : Mr. AR.L.Sundaresan, Senior Counsel
For Ms.A.L.Ganthimathi
For Respondent : Mr. K. Srinivasan, Special Public Prosecutor
ORDER
The Criminal Original Petition is filed seeking to quash the proceedings pending in Calendar Case No.284/2010 pending on the file of Judicial Magistrate-II, Karaikal.
2.The averments made in the petition are that the first accused is a partnership firm under the name and style of M/s.Kumaran Chemicals and it is producing pottasium chlorate, which is used as raw material for manufacturing match boxes and crackers for industrial purpose. The Petitioners 2 to 5 are the partners of the firm and they are accused 2 to 5 respectively. Accused Nos.6 and 7 in this case viz., M/s.Sri Lakshmi Agencies and M/s.Raja Agencies were not having any licence to sell potassium chloride for industrial use. The petitioners/A.1 to A.5 are alleged to have purchased fertilizers from A- 6 and A-7, who do not have licence to deal with Industrial Grade Potassium Chloride, who in turn have procured fertilizer grade potassium chloride and sold the same to A-1 firm between April 2004 http://www.judis.nic.in 3 to February 2007. The charge against the petitioners herein are that the 1st petitioner/firm is guilty of having used Fertilizer Grade Potassium Chloride without necessary licence and thereby has committed offence of cheating punishable under Section 420 I.P.C and is guilty of the offences under Sections 7 and 10 of the Essential Commodities Act, 1955 r/w Clause 25(1) and (2) of the Fertilizer (Control) Order, 1985. However, according to the petitioners, the said allegation is baseless and not supported by any material to warrant any prosecution and thus sought for quashing of the charge sheet filed in C.C.No.284 of 2010.
3.The allegation in the complaint registered against the petitioners herein is that the 1st accused firm was utilizing fertilizer grade potassium chloride smuggled from Tamil Nadu and purchased at subsidized cost, as raw material, instead of purchasing at the rate meant for industrial purpose and this was in violation of the Clause 25(1) and (2) of the Fertilizer (Control) Order, 1985, which insists for obtaining permission or licence from the Government of India, for industrial use of fertilizer and procurement of fertilizer grade as raw material for industrial use. The subsidized cost of the fertilizer grade http://www.judis.nic.in 4 Potassium Chloride is Rs.5,400/- per M.T and the actual cost of the Potassium Chloride meant for industrial purpose is Rs.30,000/- M.T. It is further alleged that the company was purchasing their raw material at a cost of Rs.5,400/- per M.T., thereby enjoying the Government subsidy of Rs.24,600/- per M.T., by mere procurement of raw material alone thus causing loss to the Govt. of India. The potassium chloride imported by the authorised companies was being distributed through licensed Fertilizer dealers and then to retailers, who ultimately sell the Muriate of Potash (MOP) to the farmers. Investigation revealed that during the period from 2004 to 2007, A-2, A-3, A-4 and A-5, all partners of A-1 firm entered into criminal conspiracy to purchase only the subsidized MOP as raw material for the company to wrongfully gain the benefit of subsidy of the Govt. of India in producing Potassium Chlorate. A-1 to A-5 willfully violated Clause 25(1) and (2) of Fertilizer (Control) Order, 1985, by sale/use of fertilizer for industrial use without having any licence for the same as required under Clause 8 and 9 of the Order. Having found that the acts of the accused persons, prima facie, constitute offences punishable under Section 120 B r/w 420 I.P.C and Sections 7(1)(a)(ii) and 10 of the Essential Commodities Act, 1955 r/w Clause 25(1) and (2) of the Fertilizer http://www.judis.nic.in 5 (Control) Order, 1985, charge sheet has also been filed in the said case before the learned Judicial Magistrate II, Karaikal, on 26.08.2010 and the same was taken on file in C.C.No.284 of 2010 and it is pending for trial.
4. The learned counsel for the petitioners herein contends that,
(a) the charges against the petitioners are baseless and not supported by any material to warrant any prosecution as against the petitioners. No sample of any such fertilizer grade potassium chlorate has been seized from the first petitioner firm nor as the same was sampled or tested as required under Clause 28 & 29 of the Fertilizer (Control) Order, 1985. There is absolutely no material as against the petitioners that the first petitioner firm is guilty of having used fertilizer grade potassium chlorate during 2004-2007.
(b) According to the prosecution, from March 2007, the first petitioner firm has been purchasing potassium chlorate from dealers who are licensed to trade for industrial purposes or from M/s. Indian Potash Limited, which is authorized to deal industrial grade potassium chlorate. The sample which was drawn by the respondent on 06-10- http://www.judis.nic.in 6 2009 has also been subjected to test and it has been found that it is industrial grade potassium chlorate and hence, the CBI has also stated that it has no objection for the said material being released to the first petitioner.
(c) There is no material placed by the prosecution to bring the petitioners 2 to 5 herein either under Section 10(1) or under Section 10(2) of the Essential Commodities Act, 1955. Merely because, Petitioners 2 to 5 are Partners of the first Petitioner’s firm, they cannot be arrayed as Accused and proceeded against them for the impugned offences.
5. On the other hand, the prosecution submits counter and stated that there is sufficient material, both oral and documentary evidence to prove the charges against the petitioners as alleged in the charge sheet. The statement of witnesses and the documents submitted by the prosecution would prove that the first petitioner firm purchased agricultural grade potassium chlorate from A6 and A7 during the relevant period. The Petitioners/Accused has no receipts or invoices for the raw material from any of the industrial supplier during 2004- http://www.judis.nic.in 7 2007 and hence the charge. The Petitioners 2 to 5 are the partners of the first Petitioner and they were conducting the business of the Partnership firm at the time of the commission of the offence and were also parties to the criminal conspiracy involved in this case.
6.The learned Senior Counsel for the Petitioner mainly contended that there is no evidence of the present petitioners having connection in day-to-day affairs of the first Petitioner firm and therefore, they have no connection with the alleged offence said to have been committed by the Petitioners/Accused punishable under the above Section. Only under such circumstances, the present petition has been filed for quashing the criminal proceedings pending against them. Further, it is contended that there is no evidence to prove that the petitioner firm utilized the muriate of potash for producing potassium chloride. Hence, the petitioner seeks to entertain the petition.
7.Per contra, the learned Special Public Prosecutor, CBI, submitted that the Petitioners have failed to submit the authentication to show that they have purchased the raw material namely, muriate of potash http://www.judis.nic.in 8 only from authorized industrial dealer. On the other hand, the prosecution has submitted documents to show that the Petitioners procured the agricultural grade potassium chlorate from A6 and A7 during the relevant period.
8. On hearing both sides and going through the final report, it is seen that the petitioner is alleged to have procured fertilizer muriate of potash illegally for industrial purpose from A6 & A7 during April 2004 to Feb. 2007 and manufactured potassium chlorate. The Petitioners have not denied that they are not manufacturing potassium chlorate during the relevant period. Admittedly, without raw material they cannot manufacture potassium chlorate. They ought to have purchased the raw material of potassium chloride either from Indian Potash Ltd. or other fertilizer companies who are authorized to sell the potassium chloride for industrial purpose. At this stage, the Petitioner is alleged to have failed to submit any relevant document to show that they purchased potassium chloride from authorized industrial dealer only. On the other hand, the list of documents submitted by the Prosecution along with the charge sheet would reveal that the Petitioner procured potassium chloride from the dealers A6 & A7 who http://www.judis.nic.in 9 are allegedly not having any authorization to sell the same for industrial purpose. Thus, it can be found out only during trial on production of evidence, as to whether the charge against the petitioner/accused is made out or not. At this stage, it is not for this court to consider whether sufficient material is available or not to prove the contention of the prosecution. At this stage, it is sufficient if prima facie, the prosecution makes out existence of a case against the petitioners.
9. The learned senior counsel for the petitioners contended that there is no material to show that the accused Nos.2 to 5, who are only partners indulged in purchasing the raw materials as alleged by the prosecution and only because they are partners, they cannot be arrayed as accused in the absence of any material placed by the prosecution to bring the petitioners 2 to 5 herein under Sections 10(1) or under Section 10(2) of Essential Commodities Act, 1955. He also relied upon the order passed by this Court in Crl.O.P.No.3111 of 2011, dated 25.09.2015, wherein, it is held as follows:
“8.Considering the fact that no specific allegations have been made against the petitioners in the final http://www.judis.nic.in 10 report, simply because the petitioners are the Directors of the first accused, the Court cannot come to a conclusion that the petitioners are also having connection with the alleged offences mentioned in the final report. Therefore, viewing from any angle, the petitioners cannot be prosecuted. Under the said circumstances, the relief sought for in the present petition can be granted.”
10.However, in the case on hand, it is contended by the prosecution that the said ruling will not apply to the facts of this case, since the accused in that case was company and its directors, but in the present case, the accused are partnership firm and partners. As such, the petitioners are partners and partnership firm individually and collectively. Further, the learned Public Prosecutor contended that Section 10(1) of Essential Commodities Act does not necessarily mandate the incorporation of the words – “was in charge of and was responsible to the firm for the conduct of the business of the firm” – in all complaints against the partners of the firm for any offence committed in contravention of the Act. Under the said circumstances also, it is contended by the Prosecution that the relief sought for in the present petition cannot be granted.
http://www.judis.nic.in 11
11. On careful perusal of the material placed before this court and final report filed by the respondent along with the oral and documentary evidence annexed therewith, the same would disclose a prima facie case and availability of sufficient incriminating materials against the petitioner to proceed further. Quashing of a charge is an exception to rule of continuous prosecution.
12. In the light of the above said discussion, taking into consideration the materials available on record and documents submitted by the prosecution, at this stage, it appears that there is sufficient ground made out for proceeding with the case against the petitioners and as such, it will not be appropriate to entertain the petition at this stage. The point is answered accordingly.
13. In the result, this Criminal Original Petition is dismissed.
19.12.2017 Index:Yes/No Internet:Yes/No Vs/nvsri http://www.judis.nic.in 12 S.BASKARAN,J., vs/nvsri To
1.The Inspector of Police, SPE, CBI EOW Chennai.
2.The Special Public Prosecutor, Madras High Court, Chennai.
Order made in Crl.O.P.No.9081 of 2011 19.12.2017 http://www.judis.nic.in