Karnataka High Court
Shri. Mahesh Naik vs The State Of Karnataka on 7 February, 2023
Author: Mohammad Nawaz
Bench: Mohammad Nawaz
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CRL.P No. 100296 of 2023
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 7TH DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE MOHAMMAD NAWAZ
CRIMINAL PETITION NO. 100296 OF 2023 (482-)
BETWEEN:
1. SHRI. MAHESH NAIK
AGE. 47 YEARS, COMPLIANCE OFFICER
ZUARI AGRO CHEMICALS LTD.,
JAIKISAN BHAVAN, ZUARI NAGAR,
GOA 403726
...PETITIONER
(BY SRI. M.J.PEERJADE, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA THROUGH
SHRI. M.R. NAGUR, AGE. 47 YEARS,
FERTILIZER INSPECTOR
Digitally signed
ASSISTANT DIRECTOR OF AGRICULTURE (HQ)
by J MAMATHA OFFICE OF JOINT DIRECTOR OF AGRICULTURE
Location: High
J Court of BAGALKOT, R/O. BAGALKOT, 580011.
MAMATHA Karnataka,
Dharwad REPRESENTED BY SPP
Date: 2023.02.10
11:28:37 +0530 HIGH COURT OF KARNATAKA
BENCH DHARWAD.
...RESPONDENT
(BY SMT.GIRIJA S.HIREMATH, HCGP)
THIS CRIMINAL PETITION IS FILED U/SEC. 482 OF
CR.P.C. SEEKING THAT THE COMPLAINT AND CHARGE
SHEET AND PROCEEDINGS IN C.C.NO. 573/2021 BEFORE THE
COURT OF PRL. CIVIL JUDGE AND J.M.F.C. MUDHOL,
AGAINST THE PETITIONER/ACCUSED NO.2 OF THE OFFENCE
UNDER CLAUSE OF THE 19 OF THE FERTILIZER CONTROL
ORDER 1985 R/W SEC. 3 AND 7 OF THE ESSENTIAL
COMMODITIES ACT 1955 BE QUASHED.
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CRL.P No. 100296 of 2023
THIS PETITION COMING ON FOR ORDERS, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
Learned High Court Government Pleader takes notice for respondent/State.
2. The question involved in this petition since being covered by a decision of this Court rendered in Crl.P.No.102651/2022 dated 14.09.2022, with the consent of both the learned counsel, petition is taken up for disposal.
3. The petitioner has sought to quash the proceedings in C.C.No.573/2021 pending on the file of the Court of Prl. Civil Judge and JMFC, Mudhol.
4. A private complaint is filed by the Fertilizer Inspector-cum-Assistant Director of Agriculture, (HQ), O/o Joint Director of Agriculture, Bagalkote, against the petitioner and another alleging that they have committed an offence under Clause 19 of the Fertilizer (Control) Order, 1985 ('FCO, 1985' for short) read with Sections 3 and 7 of the Essential Commodities Act, for having manufactured and sold the non-
standard fertilizer.
-3- CRL.P No. 100296 of 20235. Accused No.1 is said to be the owner/proprietor of the firm - M/s.Mahantesh Enterprises, doing business as a retailer in fertilizers and the petitioner/accused No.2 is said to be the Compliance Officer of one ZUARI AGRO CHEMICAL LTD.
It is alleged that he is responsible officer for 19-19-19 complex fertilizer of Zuari Agro Chemical Ltd., as per Clause 24 of the FCO, 1985 and the said company has manufactured the non-
standard fertilizers in question and supplied to the retailers and thereby committed the aforementioned offence.
6. The charges leveled against the petitioner is that he has violated Clause 19 of the FCO, 1985 read with Sections 3 and 7 of the Essential Commodities Act. Admittedly, the company is not arraigned as an accused in the complaint. In similar circumstances, a co-ordinate bench of this Court in the above referred petition has held as under:
"8. Section 10 of the Essential Commodities Act, 1955, deals with the offence by Companies and it 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 -4- CRL.P No. 100296 of 2023 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.
9. Perusal of Section 10 of the Essential Commodities Act, 1955 makes it evident that wherever contravention is by a Company, then 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. Therefore, petitioner is being made liable on account of he being an employee of Company in question and -5- CRL.P No. 100296 of 2023 therefore, until and unless the company is arraigned as accused, the petitioner cannot be held responsible.
10. In fact, the Hon'ble Apex Court in Aneeta Hada Vs. Godfather Travels and Tours Private Limited1 while considering the offence committed by the company has held as follows:
"53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant.
... ... ...
56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the company. The learned counsel for the respondents have vehemently 1 (2012) 5 SCC 661 -6- CRL.P No. 100296 of 2023 urged that the use of the term "as well as" in the section is of immense significance and, in its tentacle, it brings in the company as well as the Director and/or other officers who are responsible for the acts of the company and, therefore, a prosecution against the Directors or other officers is tenable even if the company is not arraigned as an accused. The words "as well as" have to be understood in the context.
59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag- net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [(2000) 1 SCC 1 :
2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove."
7. In the light of the above decision, proceedings against the petitioner is not sustainable in law.-7- CRL.P No. 100296 of 2023
8. Hence, the following:
ORDER
i) Petition is allowed,
ii) The proceedings against the petitioner/accused No.1 in C.C.No.573/2021 on the file of the Court of Prl. Civil Judge and JMFC, Mudhol, is quashed.
IA-1/2023 is disposed of.
(Sd/-) JUDGE JM List No.: 1 Sl No.: 54