Karnataka High Court
The Managing Director vs The State Of Karnataka on 23 September, 2023
-1-
NC: 2023:KHC-K:7622
CRL.P No. 201290 of 2023
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 23RD DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE VENKATESH NAIK T.
CRIMINAL PETITION NO.201290/2023
BETWEEN:
THE MANAGING DIRECTOR
M/S GROWMIN AGRO TECH PVT. LTD.
THROUGH ITS MANAGING DIRECTOR
SRI L. SURESH S/O. LINGAPPA
AGE: 53 YEARS, MANAGING DIRECTOR
M/S GROWMIN AGRO TECH PVT. LTD.
#23/24 BMTC DEPOT ROAD,
SIGEHALLI, MAGADI MAIN ROAD,
BANGALORE-560091.
Digitally signed ...PETITIONER
by SHILPA R (BY SRI VEDAVYAS M. ASHRIT, ADVOCATE)
TENIHALLI
Location: HIGH
COURT OF AND:
KARNATAKA
THE STATE OF KARNATAKA THROUGH
OFFICER OF AGRICULTURE DEPARTMENT AND
FERTILIZER INSPECTOR, SINDAGI
DIST. VIJAYAPURA
R/P. BY ADDL. SPP
HIGH COURT OF KARNATAKA,
AT KALABURAGI-585103.
...RESPONDENT
(BY SMT. ANITA M. REDDY, HCGP)
-2-
NC: 2023:KHC-K:7622
CRL.P No. 201290 of 2023
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CR.P.C., PRAYING TO ALLOW THE PETITION, CALL
FOR THE RECORDS AND FURTHER BE PLEASED TO QUASH
ENTIRE CRIMINAL PROCEEDINGS AND ISSUANCE OF
SUMMONS DATED 11.01.2023 TO THIS PETITIONER BY
THE CIVIL JUDGE AND JMFC AT SINDAGI IN CC
NO.6143/2022 AS AGAINST THIS PETITIONER.
THIS PETITION, COMING ON FOR ADMISSION, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner has filed this petition under Section 482 of Cr.P.C., praying to quash the entire proceedings and issuance of summons in C.C. No.6143/2022 dated 11.01.2023 for the offence punishable under Sections 3 and 7 of Essential Commodities Act, 1955 (for short 'E.C. Act') on the file of Civil Judge and JMFC Court, Sindagi.
2. For the sake of convenience, the parties are referred to as per their ranking before the trial Court. The petitioner is accused No.2 and respondent is complainant. -3-
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023
3. It is the case of the prosecution that the complainant working as Agricultural Officer-cum-Fertilizer Inspector, Sindagi has filed a private complaint in PC No.47/2022 against the petitioner and accused No.1 alleging that he conducted raid in the premises of accused No.1 - M/s. Veerabhadreshwar Agro Centre, APMC Yard, Sindagi on 11.11.2021, collected fertilizer Grade No.1(Zn- 3%, Fe-0.5%, Mn-0.2%, Bo-0.5%) samples in three packets as per the procedure from the stock and packed and sealed; out of which, one packet of sample has been sent to Quality Control Laboratory, Vijayapur, one sample packet has been kept in Agriculture Office and one sample packet has been given to accused No.1. As per the laboratory report, the fertilizer seized by the complainant was of substandard and not according to the specification, hence, he proceeded to prosecute the petitioners under the provisions of Clause 19(b) of the Fertilizer Control Order, 1985 and Sections 3 and 7 of E.C. Act. -4-
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023
4. Heard learned counsel for the petitioner and the learned High Court Government Pleader for the respondent-State.
5. It is submitted that, petitioner-accused No.2 is Managing Director of manufacturing Company and accused No.1 is retailer of said fertilizer. Along with this accused the manufacturing Company should be made as accused. Failing to array the Company as accused is said to be illegal and as such initiation of prosecution against present petitioner does not survive for consideration and liable to be quashed.
6. Per contra, learned High Court Government Pleader for respondent-State vehemently submitted that the complainant has not made the Company as accused in the proceedings, but there is scope under Section 319 of Cr.P.C., to implead the Company as accused before the trial Court, therefore not impleading the Company as accused in the proceeding is not fatal to the case of -5- NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023 prosecution and this irregularities can be cured at the time of taking cognizance. Thus, prayed to dismiss the petition.
7. Having heard the learned counsel for the parties to the lis and on perusal of the material available on record, it appears that the complainant collected sample fertilizer from the shop of accused No.1 in three packets and sealed the same and he sent one packet to laboratory, one sample handed over to accused No.1 and one sample packet has been kept in the agriculture office; later he came to know from laboratory report that the said fertilizer was of substandard and not according to the specification.
8. Admittedly, the complainant has not made the Company as party to the proceedings. Here it is necessary to refer Section 10 of the Essential Commodities Act, 1955, which reads as under:
"10. Offences by companies. _ -6- NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023 (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 -7- NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023 includes a firm or other association of individuals; and
(b) "director" in relation to a firm means a partner in the firm.
1[10A. Offences to be cognizable._ Notwithstanding anything contained in 2[the Code of Criminal Procedure, 1973 (2 of 1974)] every offence punishable under this Act shall be "cognizable 3***].
[10B. Power of court to publish name, place of business, etc., of companies convicted under the Act._(1) Where any company is convicted under this Act, it shall be competent for the court convicting the company to cause the name and place of business of the company, nature of the contravention, the fact that the company has been so convicted and such other particulars as the court may consider to be appropriate in the circumstances of the case, to be published at the expense of the company in such newspapers or in such other manner as the court may direct.
(2) No publication under sub-section (1) shall be made until the period for preferring an appeal against the orders of the court has expired without any appeal having been preferred, or such an appeal, having been preferred, has been disposed of.
-8-
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023 (3) The expenses of any publication under sub- section (1) shall be recoverable from the company as if it were a fine imposed by the court. Explanation._ For the purposes of this section, "company" has the meaning assigned to it in clause (a) of the Explanation of section 10.] [10C. Presumption of culpable mental state._(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. Explanation._ In this section, "culpable mental state" includes intention, motive, knowledge of a fact and the belief in, or reason to believe, a fact. (2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.]"
9. Also it is necessary to refer Section 33 of the Insecticides Act, 1968 Act, which reads as under: -9-
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023 "Offences by companies.--
(1) Whenever an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of, or was responsible to the company for the conduct of the business of, the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub- section shall render any such person liable to any punishment under this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-
section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any Director, Manager, Secretary or other officer of the company, such Director, Manager, Secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purpose of this section,--
- 10 -
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023
(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."
10. A careful reading of the above proposition of law, makes it clear that, if any offence committed by the Company, the Company should be made as party to the proceedings. Unless, the Company is made as a party to the proceedings, the initiation of the criminal proceedings against the other accused persons, would not be proper.
11. In the instant case, the petitioner is the Managing Director of M/s. Growmin Agro Tech Pvt. Ltd. On careful perusal of the entire contents of the complaint, the complainant committed an error in not-arraying the Company as a party to the proceedings. As such, prosecution do not survive for the aforesaid reasons.
- 11 -
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023
12. In the of case of Anil Hada v. Indian Acrylic Ltd., reported in (2000) 1 SCC 1 the Hon'ble Apex Court has held that "the provisions do not contain a condition that prosecution of the company is sine qua non for prosecution of the other persons who fall within the second and the third categories mentioned above". Therefore, unless the Company as a principal accused has committed the offence, the persons mentioned in Sub- Section (1) would not liable and cannot be prosecuted. In the case of DAYLE DE' SOUZA VERSUS GOVERNMENT OF INDIA arising out of SPECIAL LEAVE PETITION (CRL.) No.3913 OF 2020 at Para 27 the Hon'ble Apex Court has held as under:
"In terms of the ratio above, a company being a juristic person cannot be imprisoned, but it can be subjected to a fine, which in itself is a punishment. Every punishment has adverse consequences, and therefore, prosecution of the company is mandatory. The exception would possibly be when the company itself has ceased to exist or cannot be prosecuted due to
- 12 -
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023 a statutory bar. However, such exceptions are of no relevance in the present case. Thus, the present prosecution must fail for this reason as well."
13. In the case of M/s. Cheminova India Limited & Anr. vs. State of Punjab & Ors. Crl.A. No.750/2021, arising out of SLP (Crl.) No.4144/2020 the Hon'ble Apex Court has held that, "in view of the specific provision in the Act dealing with the offences by companies, which fixes the responsibility and the responsible person of the Company for conduct of its business, by making bald and vague allegations, 2nd Appellant - Managing Director cannot be prosecuted on vague allegation that he being the Managing Director of the 1st Appellant - Company. A reading of Section 33 of the Insecticides Act,1968 also makes it clear that only responsible person of the Company, as well as the Company alone shall be deemed to be guilty of the offence and shall be liable to be proceeded against".
- 13 -
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023
14. A careful reading of the above provisions and the decisions cited above and the facts and circumstances of the present case, make it clear that, if any offence committed by the Company, the Company should be made as party to the proceedings. Unless Company is made as party to the proceedings, initiation of criminal proceedings against other accused persons would not be proper. Hence, the petition deserves to be allowed.
15. In the light of the above observations, I proceed to pass the following:
ORDER
i) The petition is allowed.
ii) The proceedings in C.C. No.6143/2022 dated 11.01.2023 on the file of Civil Judge and J.M.F.C. Court, Sindagi, Vijayapur District is hereby quashed.
However, it is made clear that this quashment order will not come in the way of the complainant in initiating
- 14 -
NC: 2023:KHC-K:7622 CRL.P No. 201290 of 2023 fresh proceedings in accordance with law, subject to law of limitation.
Sd/-
JUDGE SBS List No.: 1 Sl No.: 19