Gautam Shantilal Adani And Anr vs State Of Mah. Thr. Food Inspector, ...
2017 Latest Caselaw 6509 Bom

                                                    1                    appln733.10.odt

          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    NAGPUR BENCH AT NAGPUR

                   CRIMINAL APPLICATION NO.733/2010

 1. Shri Gautam S. Adani s/o Shantilal Adani,
    aged 48 years, Occ. Business,  r/o Shantivan
    Farm House, B/h Karnavati Club,
    Mohemadpura, Ahmedbad, Gujarat.

 2. Shri Rajesh S. Adani s/o  Shantiall Adani,
    aged about 46 years, Occ. Business,
    r/o 14 Suryaja Bungalow, Behind Sarthi
    Restaurant, Vastrapura, Ahmedbad,
    Gujarat.                                 .....APPLICANTS
                      ...V E R S U S...

      State of Maharashtra through 
      Food Inspector, Food and Drug 
      Administration, Chandrapur.                            ...NON APPLICANT

 -------------------------------------------------------------------------------------------
 Mr.   Sunil   Manohar,   Senior   Advocate   with   Mr.   D.   V.   Chavan,
 Advocate for applicant. 
 Mr. V. P. Gangane, A.P.P. for non applicant. 
 -------------------------------------------------------------------------------------------
                               CORAM:- V. M. DESHPANDE, J.

DATED :- 24.08.2017

ORAL JUDGMENT

1. This application is filed under Section 482 of the Code

of Criminal Procedure for quashing Regular Criminal Case

No.2/2006 pending on the file of Judicial Magistrate First Class,

Chimur, Dist. Chandrapur together with order of issuance of

process dated 23.02.2006. Criminal complaint is filed against the

present applicants for the charge that the applicants are guilty for

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the offence punishable under Sections 7 (i) read with Section 2

(ia) (a) and 2 (ia) (m) punishable under Section 16 (i) (a) (ii)

read with Section 17 (1) (a) (i) and 17 (1) (b) of the Prevention

of Food Adulteration Act, 1954 and Rules thereunder.

2. Mr. S. P. Nandanwar, at the relevant time was Food

Inspector appointed under Section 9 of the Prevention of Food

Adulteration Act, 1954 and the rules made thereunder. The

complainant was authorised to launch the prosecution.

3. On 10.03.2005, the complainant along with panch

witness visited the shop premises of M/s. Wankar Kirana and

General Stores, a proprietorship concern of Mr.Laxman Wamanrao

Wankar (accused no.1). On his visit, he disclosed his identity as

Food Inspector and also disclosed his intention for drawing of

sample of food articles which were stored for sale in his shop. The

complainant inspected the shop premises in presence of panchas

and prepared the inspection report. During inspection, the

complainant found that the accused no.1 stored some food articles

for sale including "Raag Vanaspati". The complainant purchased 3

identical pockets of 5 ml. each of "Raag Vanaspati" for analysis

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and also purchased "Agmark Turmeric Powder" and paid cash to

the accused no.1. The complainant also issued notice under

Section 14-A and Form VI to the accused no.1 intimating that the

sample of "Raag Vanaspati" and "Agmark Turmerik Powder" are

purchased by him for the purpose of analysis.

As per the complaint, at the time of obtaining sample,

the Food Inspector followed regular procedure and the samples

were sent for analysis. As per the complaint, on 26.04.2005, the

complainant received letter from Local Health Authority,

Chandrapur along with copy of Analytical Report of "Raag

Vanaspati" bearing Report No.RPHL/II/163/2005 dated

11.04.2005. According to the said report, sample does not

confirm the standard of "Vanaspati". The complainant also

obtained necessary sanction from the competent authority.

With this basic assertion, on 23.02.2006 complaint was

filed. It was registered as Regular Criminal Case No. 2/2006.

The applicant no.1 was shown as accused no.5 whereas

applicant no.2 was shown as accused no.6. According to the

complaint, accused no.5 is Chairman and accused no.6 is

Managing Director of accused no.7 M/s. Adani Willmer Ltd.

Navinal Island, Village-Dhrug, Tal-Mundra, Dist. Kutch.

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4. Mr. Sunil Manohar, learned Senior Counsel appearing

for the applicants submitted that the complaint is liable to be

dismissed since it lacks assertion of material particulars against the

applicants that they are incharge of the business and day-to-day

affairs. He submitted that the averments are vague. Except the

bald statement that the applicants are Chairman and Director in

the company, there is nothing to connect them with the day-to-day

affairs of the company or any violation in question. He relied on

reported case of this Court in Keki Bomi Dadiseth Vs. State of

Maharashtra; 2002 (2) Mh.L.J. 246, and judgment of Aurangabad

Bench of this Court dated 10.07.2014 in Charandas Vallabhdas

Mariwala and ors. Vs. The State of Maharashtra thr. Sudhakar

Anna Patil, Food Inspector, (Coram: V. M. Deshpande, J.).

5. Per contra, learned A.P.P. would submit that paragraph

5 of the complaint is sufficient to connect the present applicants.

6. It would be useful to refer to the averments of the

complainant against the applicant in Keki Bomi Dadiseth, supra.

Those averments are in paragraph 38 of the said judgment, which

read thus:

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"That, the complainant further charges accused nos. 8 to 20 for committing offence by manufacturing, for sale, distributing for sale, stocking for sale and selling adulterated food article, namely, mixed fruit jam Kissan in contravention of provisions of Section 17(i)17(3) read with Section 2(ia)(a) punishable under Section 16(1)(a)

(ii), Section 7(i) read with Section 2(ia)(k) punishable under Section 16(1)(a)(i), Section 7(v) read with Rule 55(6) punishable under Section 16(1)(a)(ii) read with Section 17 of the Prevention of Adulteration Act, 1954 and rules thereunder."

Allegations against the present applicant in paragraph

5 of the present complaint and the aforesaid are somewhat

similar in nature.

7. Section 17 of the Food Adulteration Act, 1954 and

Section 141 of the Negotiable Instruments Act are somewhat

similar in nature. Both these sections deal with offences by the

company.

8. This Court in paragraphs 12 and 13 of Charandas

Vallabhdas Mariwala and ors., supra, has observed thus:

"12] It is to be noted that S.M.S.Pharmaceuticals Ltd. Vs Neeta Bhalla [AIR 2005 SC 3512] was referred

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to the Larger Bench by the Two Judge Bench of the Apex Court on certain questions. Question (b) which was posed to the Larger Bench was as under:-

"(b) Whether a Director of a company would be deemed to be in charge of, and responsible to, the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary."

The Hon'ble Apex Court in the case of S.M.S.Pharmaceuticals Ltd. (cited supra) in paragraph 19 found as under:-

"19) To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a Company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That the respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is

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satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a Director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial."

Ultimately, the Larger Bench gave its answer to question

(b) posed in Reference as under :

"(b) The answer to the question posed in sub-para (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases."

13] On the touchstone of afore said principle, if the facts about the role of the Directors as asserted in the complaint is examined, then it is clear that the complaint is lacking from the material particulars and it does not show

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as to who are the persons incharge and responsible for day- to-day conduct of the business of the Company. Section 17 (1) (a) (ii) of the Act mandates that the person must be responsible and incharge of the Company for the conduct of the business of the Company at the time of offence. Therefore, the nomenclature is not important. Merely because a person is Director or Manager that does not mean that ipso facto he is incharge and responsible for the conduct of the business of the Company. There must be clear cut accusation in the complaint that the person by whatsoever nomenclature is incharge and responsible for the conduct of the business of the Company, if such person is to be prosecuted.

Even the learned Additional Public Prosecutor was unable to point out about the whisper of the allegation about the role of the applicants in commission of the alleged offence. What is expected in the complaint for making the persons like petitioners vicariously liable is that the complaint should clearly state that the accused in his/their capacity as a Director was in charge and was responsible to the day-to-day affairs of the company for the conduct of the business of the company. Further in absence of the averments in the complaint in clear words that the offence is committed with the consent and connivance or it is attributable to any neglect on the part of a person, such person cannot be held to have committed the offence under the Act."

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9. After reading paragraph 5 of the complaint, it is clear

that there are no specific or remote allegations against the present

applicants by the complainant which would demonstrate any

aspect of consent and connivance with regard to the commission

of offence by the Directors of the company under the provisions of

the Act. Further, in the absence of any accusation in clear words

that the applicants being the Chairman and Director are

responsible for the product not in conformity with the standard, in

my view, it would be difficult to hold that the said Chairman or

Director can be prosecuted by taking the aid of any of the clause of

Section 17 of the Act.

10. Since the complaint lacks necessary averments vis-a-vis

present applicants that they are responsible for the day-to-day

affairs of the company and in absence of any material to show that

there exists prima facie nexus between the applicants and the

alleged crime, it is really difficult to hold that the applicants can be

prosecuted. In my view, merely because the applicants are

Chairman and Director, no presumption can be drawn with their

involvement without specific averments in respect of their control

over the day-to-day business of the company.

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11. In that view of the matter, following order is passed.

ORDER

(i) Criminal Application No.733/2010 is allowed.

(ii) Regular Criminal Case No.2/2006, pending on the file of Judicial Magistrate First Class, Chimur, Dist. Chandrapur is quashed and set aside against the present applicants to their extent only and consequently it is dismissed against them.

(iii) The impugned order dated 23.02.2006 passed in Regular Criminal Case No.2/2006 by Judicial Magistrate First Class, Chimur, Dist. Chandrapur is quashed and set aside qua the present applicants only.

Rule is made absolute in the above terms.

JUDGE

kahale