Bombay High Court
Asian Paints Limited And Anr vs The Union Of India And Ors on 28 November, 2017
Bench: T.V. Nalawade
Cri.W.P.927/2009
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
CRIMINAL WRIT PETITION NO. 927 OF 2009
Asian Paints Limited,
a company incorporated under the
provisions of Indian Companies
Act, 1913 and functioning under
the provisions of the Companies
Act, 1956 having its Registered
Office at 6A, Shantinagar, Santacruz
(East), Mumbai 400 055
through its Legal Executive and
constituted power of attorney
Mr Sunil Sharad Jaifalkar,
Age 46 years, Occu. Service,
R/o 402, Tulsishyam, M.S. Road,
Thane (West) 400 604 ..Petitioner
Versus
1. Union of India, through its
Secretary, Department of
Consumer Affairs, Ministry
of Food and Consumer
Affairs, Krishi Bhavan,
New Delhi 110 001
2. The Inspector of Legal Metrology,
Weights and Measures Department,
Parali Vaijinath Division, having his
Office at Swati Nagar, Opp. Nath
Cinema, Parali Vaijinath, District
Beed
3. The Deputy Controller of Legal
Metrology, Aurangabad Region,
Aurangabad
4. The Controller of Legal Metrology,
Maharashtra State,
Government Barracks, Near
Sachivalaya Gymkhana, Nariman
Point, Mumbai 21
5. The Director of Legal Metrology,
Department of Consumer Affairs,
Ministry of Food and Consumer
Affairs having his office at 461-A,
Krishi Bhavan, New Delhi
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Cri.W.P.927/2009
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6. The State of Maharashtra,
through the Secretary, Revenue
Department, Mantralaya,
Mumbai 400 032 ..Respondents
Mr Shirish Gupte with Mr Joydeep Chatterji, Advocates for petitioner
Mr S.J. Salgare, A.P.P. for respondents no.2 to 6
Mr D.G. Nagode, Standing Counsel for respondents 1 and 2
CORAM : T.V. NALAWADE AND
A.M. DHAVALE, JJ
DATE OF RESERVING
THE JUDGMENT: 14.11.2017
DATE OF PRONOUNCING
THE JUDGMENT : 28.11.2017
JUDGMENT (Per A.M. Dhavale, J.)
1. By this writ petition under Articles 226 and 227 and other
Articles of the Constitution, a Company 'Asian Paints Ltd.' challenges
the notice dated 21.1.2009, issued by respondent no.2 - the Inspector
of Legal Metrology, Weights and Measures Department, Parali Vaijnath
and the order passed in Appeal dated 15.9.2009 by respondent no.4 -
the Controller of Legal Metrology, M.S. Mumbai.
2. Notice of respondent no.2 dated 21.1.2009 shows that the
Inspector, Legal Metrology visited the shop M/s Kucheriya Agencies at
Subhash Chowk, Parali Vaijanath, District Beed, which is a dealer of
Asian Paints. He found three tins of Asian Paints having stickers
affixed on the containers at a place where details of M.R.P.,
manufacturing date and net contents were printed. The notice shows
that it was act of retail dealer. Respondent no.2 seized fifteen tins of
Apcolite Premium Gloss Enamel and 15 of soft Royal Luxury Emulsion
having such stickers. The stickers printed by Asian Paints were
disclosing colour shades. On 27.1.2009, respondent no.2 issued
notice to the Director of Asian Paints, Santacruz, Mumbai disclosing
Cri.W.P.927/2009
these facts and stating that prima facie crime under Section 33 read
with Rule 6 (1) (b) and Rule 23 (7) punishable under Section 51 (1) of
the Standards of Weights and Measures Act 1976 was disclosed. This
was a show cause notice as to why criminal case should not be filed
against the petitioner. By letter dated 3.9.2009, the petitioner
explained its stand. According to the petitioner, all the necessary
declarations as per the provisions of law were printed on the tins.
There was no violation of provisions of the Act and the rules. The
petitioner had provided its labels to the dealers for disclosing the
shades of the paints. There were specific instructions to the dealers
not to affix the stickers on the part of the tin where the statutory
declarations were printed. The petitioner had no control over the
activities of the dealers as they are plenty and spread over the entire
country. The petitioner has taken all the care to prevent any violation
of provisions of law. The petitioner has produced the letter of
instructions given to the dealers with regard to affixing of the stickers.
The petitioner also made representation dated 18.3.2009 to
respondent no.4 complaining about the illegal seizure and issuance of
notice to the petitioner by his sub-ordinates, including respondent
no.3 - Deputy Controller at Aurangabad. On 5.5.2009 respondent no.2
issued notice to the Managing Director of Asian Paints that he should
attend the Court of law on 15.6.2009 in connection with the above
seizure and violation of provisions of law. Then, Writ Petition No.498
of 2009 came to be filed and by order dated 10.8.2009, the petitioner
was directed to avail the remedy of filing application before
respondent no.4 with direction to respondent no.4 to expeditiously
dispose of such application, if filed. Accordingly, application dated
21.8.2009 came to be filed.
Cri.W.P.927/2009
3. The petitioner has produced letter of the retail dealer dated
10.6.2009, whereby he admitted his guilt and paid compounding
charges and specifically stated that the petitioner - Asian Paints has
no role in the above matter. The petitioner, on 21.8.2009 approached
respondent no.4 Controller of Legal Metrology. The petitioner's
Appeal no.11 of 2009 came to be rejected with a direction to the
respondents to launch prosecution, unless the action was
compounded by the petitioner and the department.
4. The petitioner has made following prayers :
(a) Writ of certiorari for calling papers in connection with the above
referred documents and examining the legality and validity thereof;
(b) Writ of prohibition restraining the respondents and their sub-
ordinates from taking any action on the basis of seizure receipt dated
21.1.2009 and notice dated 27.1.2009;
(c) Writ of mandamus for setting aside the order passed by
respondent no.4 dated 15.9.2009;
(d) (I) to direct respondent no.1 to forthwith release the petitioner's
goods;
(ii) To cease and desist the respondents from taking action against
the petitioner or its officers, directions, managing directors for the
reasons or on the grounds stated in the Seizure Receipt dated
21.1.2009 and notice dated 5.5.2009;
Cri.W.P.927/2009
(iii) To cease and desist the respondents from adopting any civil and
criminal proceedings in respect of above referred seizure and notices;
The remaining prayers (d) to (k) are for interim reliefs.
5. Respondent no.3 - Deputy Controller has filed affidavit-in-reply
dated 4.11.2009 on behalf of respondents no.2 to 4 opposing the writ.
He claimed that the action taken by respondent no.2 was within his
authority under the Act and as per the provisions of law. Section 31 of
the Act authorises the Inspector to seize the articles, documents etc.
in connection with the offences disclosed under the Act. The sticker of
Asian Paints colour was affixed on the tins covering the details of
maximum retail price, manufacturing date and net contents of the
packs which are required to be printed as per statutory declaration.
The dealer has given information that the stickers were supplied by
the petitioner. The pasting of sticker on the details of statutory
declaration is in violation of the provisions of the Act and the Rules.
The stickers were regarding the shade of the colour, which is to be
made by the consumer as per his choice. There was no necessity of
affixing such stickers. The alleged intimation to the dealers not to
affix stickers on statutory declaration is after thought. As per Section
62 of the 1985 Act, the manufacturing company and its Directors and
Officers cannot shirk their liability as they have printed and provided
the stickers as well. Hence, the petition be dismissed.
6. Heard learned Counsel Mr Shirish Gupte for the petitioner and
Mr S.J. Salgare, learned A.P.P. for the State.
Cri.W.P.927/2009
7. The learned Counsel and learned A.P.P. have advanced
arguments in consonance with the stand taken by the parties. Mr
Gupte has taken us through the relevant provisions of law, which are
as follows :
Rule 6 (1) (b) of Standards of Weights and Measures (Packaged
Commodities) Rules, 1977 - It shall not be permitted to affix stickers
on the packages for altering or making change as required under
these rules.
Rule 23 (7) - The manufacturer or packer shall not alter the
price on the wrapper once printed and used for packing.
Section 33 - Prohibition of quotations etc., otherwise than in
terms of standard units of weights, measures or numeration - No
person shall, in relation to any goods, thing or service to which this
part applies -
(a) quote, or make announcement of, whether by word of mouth or
otherwise, any prince or charge; or
(b) issue or exhibit any price list, invoice, cash memo or other
document or
(c) prepare or publish any advertisement, poster or other
document, or
(d) indicate the contents of any package either on itself or on any
label, carton or other thing; or
(e) indicate the contents on any container; or
(f) express any quantity or dimension,
otherwise than in accordance with the standard unit of weight,
measure or numeration
Cri.W.P.927/2009
Section 51 - Penalty for contravention of section 18 - Whoever
tampers with, or alters, in any way, any reference standard,
secondary standard, or working standard except where such alteration
is made for the correction of any error noticed therein on verification,
shall be punished with imprisonment for a term which may extend to
two years, or with fine which may extend to five thousand rupees, or
with both.
Section 29 provides powers of inspection to the Director or any
person authorised by him to discharge his function, to verify any
information regarding breach of rules or the Act in any manner and it
authorises him to enter in any premises and inspect any weights,
measures or goods, records, registers, documents etc. and to seize
such articles indicating commission of offence. Sub-clause (2)
provides for disposal of goods which are subjected to speedy and
natural decay and sub-clause (3) provides for following procedure
prescribed in Cr.P.C. for carrying out searches and seizure. Section 30
provides for forfeiture of the articles seized, if it is found to be false or
unverified weight, measure, false packes etc.
8. There is no dispute that when the tins of paints were packed
and sealed for distribution and sale, those contained all necessary
declarations regarding the M.R.P., manufacturing date and net
contents. The objection is to the effect that these details were
covered by a paper slip pasted on it. At many a times it happens that
the prices printed on the packages are altered by affixing paper slips
and as per Section 23 (7) this is not permissible. Though the title of
Section 23 suggests that no wholesale dealers and retail dealers, shall
sell, distribute, deliver, display or store for sale any commodity in the
Cri.W.P.927/2009
packaged form unless the package compiles with, in all respects, the
provisions of the Act and Rules, the contents of sub-clauses 2 and 7
disclose that it is equally applicable to the manufacturer which reads
as follows :
23 (2) No retail dealer or other person including manufacturer, packer
and wholesale dealer shall make any sale of any commodity in
packaged form at a price exceeding the retail sale price thereof.
23 (7) The manufacturer or packer shall not alter the price on the
wrapper once printed and used for packing.
9. It is obvious that Asian Paints is a renowned company in paints
and it is having several dealers throughout India. It cannot have any
effective control over the activities of the dealers. The petitioner can
take utmost care while sending its goods for sale to see that there is
no violation of Standards of Weights and Measures Act and the rules
thereunder, but if the dealer subsequently pastes a sticker on the tin
so as to cover the declarations, no doubt there will be an offence as
alleged, but it will be the offence by the dealer and not by the
manufacturer. When statutory declarations are printed on the tins,
then the breach of provisions of law by the manufacturer cannot be
assumed on the ground that some stickers are pasted on the tins at
the dealer's place so as to cover the statutory declarations.
10. Pertinently, these stickers are not in respect of change of price,
change of manufacturing date or change of net contents. Those
stickers are meant for showing the colour shades. The stickers
themselves bear a warning that those should not be affixed on the
statutory declarations. We find that the petitioner has taken utmost
Cri.W.P.927/2009
precaution on its side to see that there is no violation of the Act and
the rules. The admission of the dealer coupled with the statutory
warning printed on the labels disclose that the dealer or sub-dealer
were not supposed to stick up the stickers on the statutory
declarations. Unfortunately, the muddemal property namely tins
along with the labels affixed thereon is not produced before us. The
petitioner produced one tin with such sticker, but the warning on the
said sticker published now cannot be assumed to have been published
in the stickers printed in 2009. Nevertheless, the admission of the
dealer shows that he has not received the tins along with the stickers
pasted thereon.
11. The stickers were bearing the details of colour shades and not
any details of changed price, changed manufacturing date or changed
net contents. Therefore, merely because the stickers are printed by
the petitioner, it cannot be assumed that those were provided to the
dealer so as to cover up the statutory declarations in violation of the
provisions of Act and rules. We find that the prosecution of the dealer
was justified, but the prosecution of the manufacturer on the basis of
only seizure of tins containing stickers affixed on the statutory
declarations was not justified. There is no material to show that the
tins bearing the labels affixed on the statutory declarations were sent
by the petitioner to the dealers and sub-dealers.
12. However, since the offences under the Act and the Rules are
committed, the seizure of tins from the shop of Kucheria Agencies
cannot be set aside. It will be for the concerned Judicial Magistrate to
consider what order should be passed with regard to the seized
muddemal and whether the action of forfeiture was warranted or not.
Cri.W.P.927/2009
We refrain from passing any comment either way on this aspect, but
we record that the prayer of the petitioner for release of the tins
seized cannot be granted.
13. Respondent no.2 has relied on the provisions of Section 62 of
the Standards of Weights and Measurement (Enforcement) Act, 1985.
It merely states that if the person who commits offence under this Act
is a company, every person who, at the time of 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. This section does not indicate that if the
dealers commit certain faults, the manufacturer can be held
vicariously liable/responsible for the acts of the dealers.
14. If the view taken by the Controller of Legal Metrology is
accepted, no manufacturer will be able to manufacture the goods as
he would be facing litigations all over the country for the mistakes not
committed by him. We find that the petitioner cannot be held
responsible for the acts of the dealer or sub-dealer, particularly when
the sub-dealer has categorically stated that the petitioner-company
has no role to play in his act of affixing stickers.
15. While dismissing the appeal of the petitioner, the respondent
no.4 assumed that the petitioner was responsible for pasting of such
stickers at wrong place which led to the breach of provisions of Act
and the Rules. When the stickers are not bearing changed
manufacturing date or changed net contents, there is no material to
jump to such conclusion.
Cri.W.P.927/2009
16. We, therefore, hold that petition deserves to be partly allowed
so as to restrain the respondents from taking any criminal action
against the petitioner, but the prayer regarding release of the goods
cannot be granted. Hence, we pass the following order:
- ORDER -
(I) The petition is allowed in terms of prayer clause (B), (C), (D-2)
and (D-3) to the extent of the petitioner and its Directors and Officers.
(II) The petition is dismissed in respect of prayer (D-1) with respect
to the petitioner and its Directors and Officers.
(III) Rule is according made partly absolute. No order as to costs.
( A.M. DHAVALE, J.) ( T.V. NALAWADE, J.)
vvr
