Calcutta High Court (Appellete Side)
Ms. S. De ...... For The vs Godfather Travels And Tours Pvt. Ltd on 12 November, 2013
Author: Kanchan Chakraborty
Bench: Kanchan Chakraborty
L. 50
2013
ar.
CRR 322 of 2013
with
CRR 297 of 2013
Ms. Sutapa Sanyal
Mr. Ayan Bhattacharya
Mr. Abhijit Sarkar
Ms. S. De ...... For the Petitioner in
CRR 322 of 2013 &
CRR 297 of 2013
Mr. Pradip Roy ... ...For the Opposite Party in
CRR 322 of 2013 &
CRR 297 of 2013
Since the applications captioned above are arising out of the same order,
both are disposed of by a common order below.
A complaint case being no. 159C/2011 under Section 9 read with Section
9AA of the Central Excise Act, 1944 was filed in the Court of learned Chief Judicial
Magistrate, Bankura by Assistant Commissioner, Central Excise & Service Tax,
Durgapur-IV Division, City Centre, Durgapur, against the petitioner and two
others.
Learned Magistrate, upon perusal of the petition of complaint issued
process against all the accused persons including the petitioner.
The petitioners Vikash Jain @ Goel and Ajay Gupta have come up with
these applications praying for quashing of the proceeding on the ground that the
complaint itself is misconceived and illegal, the Magistrate should not have
entertained the same.
The gist of the complaint is that M/s SRC Metalicks Private Limited,
(Formerly known as M/s VSS Electrocast Private Limited), Nandanpur,
Ramkrishnapur, P.O Mejia, District-Bankura, having its registered office at 27,
Netaji Subhas Road, 6th floor, Kolkata-700001 and holding the Central Excise
Registration No. AABCV9942LXM001 have contravened the provision of Rule
4,6,8,10,11 & 12 of the Central Excise Rules 2002 in as much as the Company and
its Directors have intentionally removed finished products, namely, M.S. Ingot, M.S.
Beam, M.S Flat, M.S Angle & M.S Channel falling under Chapter 72 of the First
Schedule of the Central Excise Tariff Act, 1985 from their factory by suppressing
the actual production and clearing out 695.102 metric ton of M.S Ingot and
288.850 MT of M.S Beam and using parallel set of invoices during the period from
25.5.2007to 13.12.2007 without assessment and without payment of duty for their wrongful gain causing loss to the Government as such did not maintain proper accounts of manufacture and clearance, cleared the excisable goods without issuance of proper invoice and without submission of return and thereby secured illegal huge quantity of monetary gain/profits.
The petitioners are shown in the petition of complaint as former Directors of the Company, namely, M/s SRC Metalicks Private Limited Ms. Sutapa Sanyal and Mr. Ayan Bhattacharya, learned counsel for the petitioner in respective application, contend that they do not want to go to the merit of the applications filed by their clients but would like to raise a common question of law. They contend that in the complaint petition, all the allegations and aspirations are putforth against the Company itself. The persons shown as accused in the petition of complaint are either Directors or former Directors of the Company. The Company itself has not been impleaded as an accused by the complainant. Company being a juristic person has to be sued by the complainant as the main accused, besides the Directors and former Directors. Since the Company itself has not made an accused, the complaint entertained by the learned Magistrate is not maintainable in law. In support of their contention, Ms. Sanyal and Mr. Bhattacharya, referred to a decision of Apex Court in Aneeta Hada Vs. Godfather Travels and Tours Pvt. Ltd., reported in (2012)5 SCC 661.
They draw my attention to Section 9AA of the Central Excise Act, 1944 which is set out below:-
"9AA. Offences by companies
(i) Where 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, 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 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 or that he had exercised all due diligence to prevent the commission of such offence.
(ii) 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 an punished accordingly.
Explanation: For the purposes of this section,-
(a) "company" means any body corporate and includes a firm or other association and individuals; and
(b) "director" in relation to a firm means a partner in the firm."
It is contended by them that sub-section (1) of Section 9AA deals with offences by Companies and it says unequivocally that other person 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 offence and shall be liable to be proceeded against and punished accordingly.
No doubt, a bare reading of sub-section (1) of Section 9AA of the Act makes it obligatory on the part of the complaint to make the company as an accused together with the person who was in charge or was responsible to the company for the conduct of the business of the company. Unless and until the company, who is the main offender being a juristic person, has not been made an accused the Director and former Directors cannot be prosecuted in a criminal trial.
Although the decision of the Apex Court in the case of Aneeta Hada Vs. Godfather Travels and Tours Pvt. Ltd. (supra) was in connection with Negotiable Instrument Act, 1981, the legal principle propounded by the Apex Court is squarely applicable in the instant case under the Central Excise Act, 1944, as per as making the company an accused in the case, besides the other persons who are in charge of or responsible to the company for the conduct of the business of the company.
In the instant case, the company is not arraigned as an accused. Therefore, I also think that there is no need to go into the merit of the applications because the complaint itself, which is subject matter of these applications, is not maintainable in the eye of law.
Mr. Pradip Roy, learned counsel, appearing for the opposite party, Central Excise, contends that a petition of complaint has to be read as a whole not in an isolated manner. He contends that if the petition of complaint is read as a whole, it would clearly disclose that the company has been made an accused in the case, although not shown as an accused in the caption of the petition of complaint under the heading "accused persons". He states that it was a mistake on the part of the Magistrate concern who issued process simply going through the front page of the petition of complaint without perusing the entire facts stated in the body of the petition of complaint. Court can, he submits, take cognizance of offence, in such a case against the complainant.
I have considered the rival contentions of learned counsel for the parties. There cannot be any room of doubt that without arraigning the company as an accused, the Directors of the company cannot be fastened in a criminal action specially when the allegation and aspiration are atributed to the company itself. I take support of the legal principle propounded by the Apex Court in Aneeta Hada Vs. Godfather Travels and Tours Pvt. Ltd. (supra) in coming to such a conclusion.
Accordingly, I quash the proceeding, as prayed for by the petitioners. However, because of mistake of the Court as well as the complaint, a criminal action cannot be thwarted at the initial stage. Therefore, while quashing the proceeding, I also express my view that the complainant may file fresh complaint on the self-same cause of action before a competent Court.
The revisional applications, being CRR 322 of 2013 and CRR 297 of 2013, are thus disposed of.
Urgent photostat certified copy of this order, if applied for, be supplied to the parties on usual undertaking.
(Kanchan Chakraborty, J.)