[Cites 17, Cited by 0]

Bombay High Court

Bank Of India And Ors vs Thecommissioner Pune Muicipal ... on 8 December, 2025

2025:BHC-AS:53569


                                                                                 87_WP_1201_2010.doc




                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                               CRIMINAL APPELLATE JURISDICTION
                            CRIMINAL WRIT PETITION NO.1201 OF 2010
                    1. Bank Of India
                       a Body Corporate having its office at,
                       1162/2 Zonal Office, Ganesh Khind Road,
                       Shivaji Nagar, Pune - 5
                    2. Ashok Kumar Mishra
                       Chairman & Managing Director, BANK OF
                       INDIA
                       Having office at Star House, /C-5, G-
                       Block Bandra Kurla Complex, Bandra (E),
                       Mumbai - 400 051
                    3. B.A. Prabhakar
                       Executive Director, BANK OF INDIA
                       Having office at Star House, /C-5, G-
                       Block Bandra Kurla Complex, Bandra (E),
                       Mumbai - 400 051
                    4. M. Narendra
                       Executive Director, BANK OF INDIA
                       Having office at Star House, /C-5, G-
                       Block Bandra Kurla Complex, Bandra (E),
                       Mumbai - 400 051
                    5. Ramchandra Malwade
                       Dy. Zonal Manager, BANK OF INDIA
                       Zonal Office 1162/6, Shivaji Nagar,
                       University Road, Pune - 411 005         ...Petitioners
                         Versus
                    1. The Commissioner,
                       Pune Municipal Corporation, Corporation
                       Building, Shivaji Nagar, Pune - 411 005
                    2. The State of Maharashtra                ...Respondents

                    Mr. Anant B. Shinde, for the Petitioners
                    Mr. Abhijit P. Kulkarni a/w Sweta Shah and Abhishek Roy, for
                         the Respondent - PMC.


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                         CORAM                           DR. NEELA GOKHALE, J.
                         RESERVED ON:                    27TH NOVEMBER 2025
                         PRONOUNCED ON:                  8th DECEMBER 2025
 JUDGMENT:

1. The Petitioners seek to quash and set aside the

Complaint dated 02nd November 2009 bearing Criminal Case

No. 242 of 2009 filed and pending before the Judicial

Magistrate First Class (PMC), Pune ('JMFC (PMC), Pune') and

order dated 02nd November 2009, passed by the JMFC,

issuing process against the Petitioners.

2. The Petitioner No.1 is a banking company constituted

under the Banking Companies (Acquisition & Transfer of

Undertakings) Act, 1970. The Petitioner No. 2, is the

Chairman and Managing Director of the Petitioner-Bank; the

Petitioner Nos. 3 and 4 are Executive Directors of the

Petitioner-Bank; the Petitioner No. 5 was the Deputy Zonal

Manager at the Zonal Office, Pune at the relevant time. The

Respondent No. 1 is the Pune Municipal Corporation

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established under the Bombay Provincial Municipal

Corporation Act of 1949 ('BPMC').

3. The Pune Municipal Corporation ('PMC') filed a

Criminal Complaint No. 242 of 2009 against the Petitioners

before the JMFC (PMC), Pune under Sections 398 and 401 of

the BPMC Act, 1949. According to the Corporation, the

Petitioners have contravened the provisions of Section 81/1/A

of the delegation order notified by the Corporation along with

Sections 398, 149, 457, 466(1) and (2) of the BPMC Act. It

was alleged that the Petitioner-Bank had imported into the

limits of Pune Municipal Corporation, gold bullions/coins for

distribution without paying the octroi/toll to the Corporation.

The gold bullions/coins are stated to have been imported

during the period 01.04.2006 till 31.08.2009. A notice dated

11th September 2009 was issued to the Bank calling upon it

to pay the octroi duty. Despite receipt of the said notice, the

Corporation learnt that the Petitioner imported gold

bullions/coins for a period through 01.04.2006 upto

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31.08.2009. The octroi payable was computed at

Rs.14,59,959/-. However, at the time of importing the said

goods, the octroi duty was not paid. The Corporation issued

another notice dated 5th October 2009 to the Petitioner-Bank,

calling upon it to pay the amount of octroi plus the penalty as

provided under Section 398 of the Act. Finally, the

Corporation filed the complaint before the JMFC (PMC),

Pune.

4. The JMFC (PMC), Pune by its order dated 2nd

November 2009, issued process against the Petitioners. It is

this order of issue process that is sought to be quashed and set

aside by the Petitioners.

5. By order dated 23rd April 2011, this Court granted

interim stay to the proceedings of the Criminal Case No.242 of

2009 pending with the JMFC (PMC), Pune and also directed

the Trial Court, not to insist upon presence of the Petitioner or

its directors in a proceedings before it until further orders. By

order dated 5th October 2010, this Court issued Rule. While

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admitting the Petition, it was observed that perusal of the

complaint prima facie showed that there was no allegation of

existence of intention to defraud the Corporation, giving rise

to arguable questions as raised in the Petition.

6. The Petitioners have raised various grounds of challenge

in the Petition. Mr. Anant B. Shinde, learned counsel

appearing for the Petitioners, however, pressed only one

ground that being, in the absence of any averments in the

Petition against Petitioner Nos. 2 to 5, they cannot be held

liable for the alleged penalty. He submitted that the JMFC

(PMC), Pune failed to appreciate that the

allegations/averments in the complaint are generic and totally

indefinite in nature. There is nothing specifically attributed

against any of the Petitioners and the ingredients of the

offence alleged are missing. He further submitted that the

order of issuance of process by the JMFC (PMC), Pune is

based on surmises and conjectures without any evidence

against the Petitioners. Hence, he submitted that the

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complaint against the Petitioner Nos. 2 to 5 is not

maintainable and thus, deserves to be quashed and set aside.

7. Mr. Abhijit Kulkarni, learned counsel appearing for the

Corporation, submitted that the offence is complete as soon as

the goods crossed the Corporation limits and there is no

requirement of anything else to be done to allege

contravention. He placed reliance on the decision of this Court

in the case of P. D. Kashikar v. State of Maharashtra 1 to

buttress his argument that duty is cast virtually on the person,

who imports the goods into the municipal area to tender the

octroi payable thereon. Section 398 is a statutory offence and

any good intention expressed by accused is wholly irrelevant

once the goods are imported without payment of octroi. It is

at this point, Mr. Kulkarni says that the declaration of import

is required to be made and the payment tendered. He thus,

submits that the complaint is sustainable and there is no

infirmity in the orders of the JMFC (PMC), Pune.

1 (1993) Mh.L.R. 652

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8. Heard learned counsel appearing for the respective

parties and perused the record with their assistance.

9. For the purpose of better understanding, the relevant

provisions of the BPMC Act are re-produced herein below:-

"398. Penalty for evasion of octroi or toll.- Where any vehicle, animal, or goods imported into the limits of the City are liable to the payment of toll or octroi any person who, with the intention of defrauding the Corporation, causes or abets the introduction of or himself introduces or attempts to introduce within the limits of the City any such vehicle, animal or goods upon which payment of the toll or octroi due on such introduction has neither been made nor tendered, shall, on conviction, be punished with fine which may extend to ten times the amount of such toll or octroi or to two hundred and fifty rupees, whichever may be greater.

401. Offences by companies, etc.- Where a person committing an offence under this Act, or any rule, bylaw, regulation or standing order is a company, or body corporate, or an association of persons (whether incorporated or not), or firm, every director, manager, secretary, agent or other officer or person concerned with the management thereof, and every partner of the firm

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shall, unless he proves that the offence was committed without his knowledge or consent, be deemed to be guilty of such offence."

10. Section 398 of the BPMC Act thus, can be invoked if (i)

any vehicle, animal or goods, liable to octroi, are imported

into the city limits; (ii) the payment of toll or octroi is not

made and (iii) the non-compliance is with an intention of

defrauding the Corporation.

11. Section 401 of the BPMC Act creates a vicarious liability

on a person, who is a director, manager, secretary, agent or

other officer or person concerned with the management of the

company or partner of a firm in cases where the offence is

alleged against a company. It is settled law that when a

company is the accused, its directors, managers, secretary, etc,

can be roped in only if there is some incriminating role

ascribed to them.

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12. In its recent judgment in the matter of Kamalkishor

Shrigopal Taparia v. India Ener-Gen Pvt. Ltd. & Anr. 2, the

Supreme Court, in an issue involving the provisions of the

Negotiable Instruments Act, 1881 held that a mere

designation as Director does not conclusively establish liability

under Section 138 read with Section 141 of the Negotiable

Instrument Act. Liability is contingent upon specific

allegations demonstrating the director's active involvement in

the company's affairs at the relevant time.

13. The Supreme Court in National Small Industries

Corporation Ltd. v. Harmeet Singh Paintal & Anr 3, observed as

under:

"From the above discussion, the following principles emerge:

(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.

2 (2025) 7 SCC 393 3 (2010) 3 SCC 330

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(ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.

(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.

(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.

(v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.

(vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in the complaint.

(vii) 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."

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14. In N.K. Wahi v. Shekhar Singh & Ors. 4 the Apex Court

observed:

"8. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are in-charge and responsible for the conduct of the business of the company. The description should be clear. It is true that precise words from the provisions of the Act need not be reproduced and the court can always come to a conclusion in facts of each case. But still, in the absence of any averment or specific evidence the net result would be that complaint would not be entertainable."

15. In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and

Another5, the Apex Court laid down that mere designation as

a director is not sufficient; specific role and responsibility

must be established in the complaint.

4 (2007) 9 SCC 481 5 (2005) 8 SCC 89

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16. The statutory regime in the Negotiable Instruments Act

insofar as it provides for vicarious liability of Directors,

Managers, any person in charge of and responsible to the

company for conduct of its business at the relevant time, is

pari materia with the statutory regime of the BPMC Act in this