The Associated Cement Cos. Ltd. & ... vs Union Of India & Anr.
2013 Latest Caselaw 5364 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                              Date of Decision: 21.11.2013

+                         WP(C) No.5597 of 2002

THE ASSOCIATED CEMENT COS. LTD. & ANR...... Petitioners
             Through: Ms. Mrinal Mazumdar, Adv. For Mr.
                      U.A. Rana, Adv. for the Petitioners.

                                      Versus

UNION OF INDIA & ANR.                                   ..... Respondents
               Through:              Mr. Prasook Jain, Adv. for
                                     Mr. B.V. Niren, CGSC for the
                                     Respondents.
CORAM:
HON'BLE MR. JUSTICE V.K.JAIN

                                  JUDGEMENT

V.K.JAIN, J. (Oral)

In exercise of the powers conferred by the Jute Packaging Materials (Compulsory use in packing commodities) Act, 1987 (hereinafter referred to as the „said Act‟), the Central Government, vide order dated 15.3.1995, inter alia directed that 50 per cent of total production of cement will be in jute packaging material. The petitioner before this Court being manufacturer of cement, the aforesaid order applied to it.

2. Vide show cause notice dated 11.12.1996 issued to various cement manufacturers, the Jute Commissioner, noticing that they had not been using any jute material at all for packaging of cement and thereby disobeying the aforesaid statutory order, and also referring to a judgement of the Supreme Court of April, 1996 upholding the constitutional validity of the said Act, called them upon to show cause as to why penal action be

not taken against them and every person in charge of the concerned company for the conduct of its business, for continued violation of the directions contained in the aforesaid Order of the Government. The petitioner before this Court responded to the said show cause notice vide reply dated 30.12.1996 giving various reasons on account of which the aforesaid Order could not be complied with. It was further stated in the reply that since the validity of the Act had been challenged in various Courts, there was some doubt regarding the legality of the said Act. It was also stated in the reply that it would be fair and proper to await a decision of the Government after the Standing Advisory Committee gave its fresh recommendations in the matter.

3. It appears that the respondents did not proceed further in the matter after receiving the reply to the show cause notice dated 11.12.1996. A fresh notice dated 14.8.2002 was then issued by the Jute Commissioner to the petitioner-Company referring to the previous notice dated 11.12.1996 and giving it an opportunity to appear before him to explain why penal action should not be taken against the Company for violation of the Orders dated 15.3.1995 and 30.6.1997. Being aggrieved from the aforesaid show cause notice, this writ petition was filed.

4. When the petition came up for hearing on 4.9.2002, the petitioner was directed to appear before the Jute Commissioner on 5.9.2002. It was further directed that the order, if any, passed shall be subject to the outcome of the writ petition though no coercive steps would be taken for recovery of any fine, if imposed till the next date.

5. In their counter affidavit the respondents have stated that the Jute industry being an agro-based labour intensive industry, was facing a severe crisis on account of unequal competition from synthetic substitute and therefore it was thought necessary to afford protection to the said industry

by providing for compulsory use of jute packaging material in certain key commodities, declared to be essential commodities under the Essential Commodities Act, 1955 and cement was one such commodity. It is further stated in the counter affidavit that the show cause notice dated 11.12.1996 was issued on noticing violation of various Orders issued under the said Act and the notice dated 14.8.2002 was a notice of personal appearance so as to give a final opportunity to the petitioner to make its submissions regarding non-compliance of the order of the Government of India dated 15.3.1995 and 30.6.1997.

6. Neither the said Jute Commissioner nor the orders dated 15.3.1995 and 30.6.1997 are under challenge in this writ petition. Therefore, the validity or otherwise of the Act and the orders issued thereunder cannot be gone into in the present petition. In any case, the vires of the Act have been upheld by the Hon‟ble Supreme Court in Dalmia Cement (Bharat) Ltd. & Anr. Vs. Union of India & Ors. And connected matter (1996) 10 SCC 104.

7. The Jute Packaging Materials (Compulsory use in packing commodities) Act, 1987 to the extent it is relevant for the purpose of this writ petition reads as under:

"(9) Whoever packs any commodity, class of commodities or any percentage thereof any material in contravention of section 5 shall be punishable with fine any which may extend to an amount equal to double the cost of the jute packaging material which should have been use in accordance with the order made under section 3.

(10) If any person when required by any order made under section 6 to furnish Penalty any information or sample, fails to furnish such information or sample, or makes any statement or furnishes any information which is false in any material particular and which he knows, or has reasonable, or makes any statement or sample, fails to furnish such information or sample, or makes any

statement or furnishes any information which is false in any material particular and which he knows, or has reasonable statement, or makes any statement or sample, fails to furnish such information or etc cause to believe, to be false or does not believe it to be true, he shall be punishable with fine which may extend to five thousand rupees.

(11) 1.Where an offence under this Act has been committed by a company, Of fences 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.

2. Notwithstanding anything contained in sub-section (1), where an offence under this Act 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.

Explanation-for the purposes of this section, a. "company" means any body corporate and includes a firm or other association of individuals;

and b. "director", in relation to a firm, means a partner in the firm.

(12) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, every offence punishable under this Act shall be cognizable."

8. It would be seen from a perusal of the aforesaid provision of the Act that neither the Central Government nor the Jute Commissioner has

jurisdiction to impose fine on account of contravention of the order issued by the Central Government in exercise of the powers conferred upon it by Section 3 of the said Act. It is also evident from the aforesaid provision that under the Scheme of the Act, contravention of the provisions of the Act whether it be contravention of Section 5 or Section 6 is considered to be a criminal offence punishable only with fine. This becomes evident from the use of the expression "offence used in Sections 11 and 12 of the Act". The fine for committing offence can be imposed only after a trial is held, in accordance with the procedure prescribed in the Code of Criminal Procedure, and that too by a Court, not by the Government or any of its officers, unless the powers of a Competent Court are conferred upon him. Therefore, the fine in case of contravention of the order under Section 5 or Section 6 of the Act can be imposed only by a criminal court. The purpose of show cause notice given by the Jute Commissioner, in my view, can be only to give an opportunity to the notice to satisfy him that no contravention of the provisions of the Act had been committed by him. In case the Jute Commissioner is not satisfied with the reply to the show cause notice, he cannot impose and/or recover fine from the noticee and the only option available to him would be either to lodge an FIR for offences under the Act, such offence, being cognizable, or to file a criminal complaint before a Court of competent jurisdiction. Therefore, the issuance of show cause notices dated 15.3.1995 and 30.6.1997, did not prejudicially affect the petitioner in any manner. The petitioner rather got an opportunity to satisfy the Jute Commissioner that no contravention of the Act was committed by it or to explain the circumstances under which it could not comply with the provisions of the Order dated 15.3.1995 issued by the Central Government. Therefore, no ground for quashing the aforesaid show cause notices dated 15.3.1995 & 30.6.1997 is made out.

9. It is submitted by the learned counsel for the petitioner that for about six (6) years no action was taken by the respondents after issuing the first show cause notice on 11.12.1996. Since the respondents are yet to decide whether to prosecute the petitioner or not, this plea in my view, needs to be raised by the petitioner before the Jute Commissioner in the first instance. In case, the Jute Commissioner, after considering the reply given by the petitioner and giving an opportunity of personal hearing to it, decides that the petitioner-Company should be prosecuted and either files a complaint or lodges an FIR, it would be open to the petitioner to take recourse to such legal remedies as may be available to it in this regard on the ground, inter alia, on the ground that no action in the matter was taken by the Government for almost six (6) years though in terms of Section 468 of the Code of Civil Procedure, the period of limitation for taking cognizance for offences punishable and submission of reply only with fine is six months.

10. For the reasons stated hereinabove, the writ petition is disposed of with direction to the petitioner to appear before the Jute Commissioner through an authorized representative at 11:00 a.m. on 16.12.2013. The Jute Commissioner, after hearing the authorized representative of the petitioner- Company and taking its reply into consideration shall pass an order deciding whether to prosecute the petitioner-Company or not. If the Jute Commissioner prosecutes the petitioner, it shall be open to the petitioner- Company to avail such remedy as may be open to it in law in this regard.

There shall be no orders as to costs.

November 21, 2013                                              V.K. JAIN, J.
b'nesh