Raghav Gupta vs State & Anr
2020 Latest Caselaw 1691 Del

$~2 & 3
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

                                           Reserved on:      03.03.2020
                                           Pronounced on:    23.03.2020

+     CRL.M.C. 535/2017 & Crl.M.A. 2297/2017
      RAGHAV GUPTA                                           ..... Petitioner
                  Through                  Ms.Geeta Luthra, Sr. Adv. with
                                           Mr.Anshul Duggal, Mr.Prateek
                                           Yadav & Mr.Altamish Siddiki, Advs.
                                versus
      STATE & ANR                                           ..... Respondents
                                Through    Mr. Izhar Ahmad, APP for State.

+     CRL.M.C. 580/2017 & Crl.M.A. 2517/2017
      DEEPAK KUMAR & ANR                                     ..... Petitioners
                  Through                  Ms.Geeta Luthra, Sr. Adv. with
                                           Mr.Anshul Duggal, Mr.Prateek
                                           Yadav & Mr.Altamish Siddiki, Advs.

                                versus

      STATE & ANR                                           ..... Respondents
                                Through    Mr. Izhar Ahmad, APP for State.

      CORAM:
      HON'BLE MR. JUSTICE SURESH KUMAR KAIT

                                         JUDGMENT

1. Since the facts and issues are same in the present petitions and are

filed against the common impugned order dated 06.06.2016, therefore, both

petitions are being disposed of vide this common judgment.

2. These petitions have been filed under Section 482 of Code of

Criminal Procedure for quashing of complaint case bearing No.4/2012 and

order dated 06.06.2016 passed by Ld. ACMM, New Delhi, Patiala House

Courts, New Delhi whereby learned Judge was pleased to frame notice

under Section 251 Cr.P.C. against the petitioners.

3. Case of petitioners is that they were erstwhile Directors of the

company namely V & V Beverages, importer of „Snapple Juice Drink‟,

(hereinafter referred to as the alleged food article), which it imported from

the United States, among other vendors and supplied to M/s A&M

Enterprises, a distributor company, which in turn distributed the same to M/s

Barista Coffee Company Limited, the end vendor. All the abovementioned

are co-accused in the complaint.

4. Facts as alleged in the complaint are that on 03.05.2011, food officials

including Food Inspector and Field Assistant under the alleged supervision

of the Local Health Authority (LHA)/SDM reached at premises of M/s

Barista Coffee Company Ltd., Connaught Place, New Delhi and lifted

sample of 6 bottles of alleged misbranded product which were stored for

sale in sealed glass bottles of 473 ml each. One counterpart of the sample

was deposited with the Public Analyst (PA) and the remaining two

counterparts were deposited with SDM/LHA. Vide report dated 30.05.2011,

the PA reported that alleged article was conforming to standards, yet the

sample was found misbranded being in violation of Rule 32 (e) of the

Prevention of Food and Adulteration Rules 1955, as amended, because there

was ostensibly no batch number/ code number mentioned on the label.

5. Rule 32(e) reads as, "Lot/Code/Batch Identification - Batch number

Or Code number or Lot number which is a mark of identification by which

the food can be traced in the manufacture and identified in the distribution,

shall be given on the label". However, after obtaining due sanction of the

Director, PFA, the complaint came to be filed against 9 accused, including

petitioners for alleged violation of Section 2 (ix)(k) read with Rule32 (e) of

the Prevention of Food and Adulteration Rules 1955, as amended,

punishable under Section 5/7 /16(1)(a) of Prevention of Food Adulteration

Act,1954. Section 2(ix)(k) defines a food article to be "misbranded" if it is

not labeled in accordance with the requirements of this Act or Rules.

6. Ms. Geeta Luthra, learned senior counsel appearing on behalf of

petitioners submitted that the sample of "snapple" juice drink is not

misbranded under Section 32(e), since the barcode/ Julian code mentioned

on the packaging of the sample sufficiently complies with requirement of

batch/code/lot number i.e. a combination which can be used to find the batch

of product the sample is a part of.

7. She further submitted that the complaint was filed by a public servant

and petitioners were summoned vide order dated 05.05.2012.Other accused

i.e. 1 to 6 were given benefit of warranty under section 19(2) of the

Prevention of Food Adulteration Act and were ordered to be discharged.

Subsequently, court ordered notice to be framed against the petitioners, V &

V Beverages & Deepak Kumarie. However, Ld. Trial Court has failed to

observe that allegation made against petitioners herein is without

specifically prescribing any role against them. Thus, there is insufficient

material available against which the cognizance should have been taken

against petitioners. Only allegation against petitioners is ''as such both the

above said directors are in-charge of and responsible for day to day conduct

of its business". The above said allegation in the complaint made by

respondent no.2 does not constitute a sufficient cause of action to prosecute

and move further with the complaint.

8. Learned senior counsel submitted that the law is settled that use of

words "as such" in the complaint to rope in persons who are directors of the

company can be said to be inadequate for the criminal court to proceed to

summon them. A logical corollary of the present facts and circumstances

and settled law makes it evident that the averment / allegation made by the

respondent against the petitioners in the present complaint are insufficient to

proceed with the trial.

9. Learned senior counsel further submits that the petitioners had in a

previous complaint case bearing no. 26/2010 titled Food Inspector versus

Jogi Rawal been implicated for similar offence on similar facts. This Court

in the case titled Raghav Gupta vs. Food Inspector: 2012 SCO On Line

Del 580 was pleased to quash the complaint stating, "In view of above

discussion and having regard to the fact that petitioners in the present case

have been arrayed as accused persons for their being partners and directors

of the respective firms and there being no independent averment or material

of their being in charge and responsible for conducting day-to-day business

of their firms, the petition is consequently allowed and complaint case

bearing no. 26/2010 and the summoning order dated 02.03.2010 passed by

learned ACMM, Delhi qua them are hereby quashed."

10. Learned senior counsel argued that similarly in the present complaint,

Complainant has failed to furnish a single independent averment or material

of petitioners herein being in charge and responsible for conducting day-to-

day business of their firms. Thus, the present complaint deserves to be

quashed qua the petitioners. Moreover, petitioners had already resigned from

the Company and were not in-charge or responsible for/or discharging any

day to day activity and business of accused company, when the samples

were seized by Complainant.

11. To strengthen her arguments, learned senior counsel has relied upon

the case of Municipal Corporation of Delhi vs. Ram Krishan Rohtagi:

(1983) 1 SCC 1, wherein Hon‟ble Supreme Court of India held that:

"Reliance has been placed on the words 'as such' in order to argue that because the complaint does not attribute any criminal responsibility to accused Nos. 4 to 7 except that they were in-charge of and responsible for the conduct of the business of the company. It is true that there is no clear-averment of the fact that the Directors were really in-charge of the manufacture and responsible for the conduct of business but the words 'as such' indicate that the complainant has merely presumed that the Directors of the company must be guilty because they are holding a particular office. This argument found favour with the High Court which quashed the proceedings against the Directors as also against the Manager respondent No. 1."

12. She further submits that this Court has taken into consideration the

above issue placing reliance on Municipal Corporation of Delhi vs. Ram

Krishan Rohtagi: (1983) 1 SCC 1; Shyam Sunder Bhartia vs. State

(Through Food Inspector Govt. of NCT Delhi): 2009 (1) JCC 518 and

Subhas Chand Gupta Vs. State: 2009 (3) Crimes 310 (Del); Padam Chand

Jain vs. State: ILR 1978 Delhi 116 and proceeded to quash the complaints

against the partners and directors on identical facts. Therefore, even though

the petitioners are not directors and are not involved in the day to day

conduct of its business, the Complaint deserves to be quashed against the

petitioners herein even if in arguendo we consider the petitioners to be "as

such said director in-charge of and responsible for day to day conduct of its

business".

13. Learned senior counsel has pointed out that petitioners had moved an

application under Section 294 Cr.P.C. r/w Section 19 (2) of the PFA Act for

being discharged as an accused taking benefit of "warranty". As per Section

19(2) of the PFA Act, what is necessary for the accused is to show that he

has purchased the article from any manufacturer, distributor, dealer with a

written warranty in the prescribed form. Section 14 of the Act provides that

a bill or cash memorandum given by the manufacturer or distributor would

itself be deemed to be a warranty. Under Section 19(2) of the Act an accused

shall not be deemed to have committed an offence pertaining to the sale of

an adulterated article if he proves that he has purchased the article of food

with the written warranty and that he sold it in the same state as he

purchased. However, in the impugned order, it is specifically mentioned in

para 20, "...There have been many instances where the distributors/suppliers

have been given the benefit and acquitted of the charges of selling

misbranded/adulterated food on the ground that the material was not

sufficient to establish that the food article lifted from the vendor was a part

of the same lot as was sold by them through a particular bill/invoice. It is

therefore essential that the manufacturer/packer give a batch number/lot

number/code number to his products so as to identify the same in the

distribution process. Therefore, the intention of the legislature behind

adding a batch number is purely to have a mechanism for tracing the

product in the distribution process, which is provided through the bar code

sufficiently."

14. She further submitted that petitioners had submitted original

invoices/bills at the time of purchase of the sample commodity from U.S.

based manufacturer, Shwepps International Ltd., before the Ld. ACMM

along with the Application under Section 294 Cr.P.C. r/w Section19(2) PFA

Act, however, the Ld. Judge failed to appreciate the documents submitted

herein and found no merit in the Application stating, "...the complainant

cannot be asked to verify those documents when such documents were not

supplied during the course of the investigation and the complaint has

already been filed. Similarly, the accused persons cannot be discharged at

this stage on the ground that the goods were cleared by the customs...."

15. In addition to above, learned senior counsel submitted that according

to Circular No.58/2001-CUS dated 25th October, 2001 regarding

Application of PFA Act, 1954 and other Acts for the clearance of

consignments of food articles -instructions, under point 2.1(c), the Central

Board of Excise and Customs decided that the Customs shall undertake the

following general checks "...The product should meet the labelling

requirements under the Prevention of Food Adulteration Rules and the

Packaged Commodities Rules. This includes ensuring that the label is

written not only in any foreign language, but also in English. The details of

ingredients in descending order, date of manufacture, batch no., best before

date etc. are mandatory requirements. All products will also have to indicate

details of best before on all food packages. (Reference Ministry of Health

notification No. GSR 537(E) dated 13th June 2000)...". Since the

consignment containing the sample was cleared by the custom authorities,

accused no. 9, the Company herein is said to have a written warranty in the

prescribed form as mentioned under Section 14 of the Act which puts the

onus on the manufacturer/packer of the product. However, vide order dated

06.12.2013 Ld. ACMM had discharged accused nos. 1 to 6, allowing their

applications under Section 294 Cr.P.C. r/w Section 19(2) of the PFA Act on

the ground that they had no role in the matter of printing and affixation of

label declaration and the sample lifted by the Food Inspector on 03.05.2011

were sold to accused nos. 1 to 3 by accused nos. 4 to 6 and to accused nos. 4

to 6 from accused no.9 via undisputed bills/invoices without there being any

dispute regarding tampering of label declaration of the sample commodity.

The petitioners raised similar grounds, having purchased commodities from

the manufacturer, Schwepps International Ltd. which was duly cleared for

adherence to labelling requirements under the Prevention of Food

Adulteration Rules and the Packaged Commodities Rules which includes

checking for batch number by the Customs Authority while being imported

to India. Therefore, applying the doctrine of parity, if co-accused nos. 1 to 6

were discharged under "warranty", petitioners herein are entitled to have

been discharged on similar grounds.

16. It is further submitted that bar code is a globally recognized standard

of labeling and instituted to make the entire system of supply and billing

quick and efficient and easily readable through Bar Code Scanning

Facilities. Thus, it is clear that purpose of the statute is that the manufacturer

of the product can be traced in case of any violation of any of the provisions

of the Act and that whole batch of the product can be traced before it is

distributed to the mass or identified, if it has already been distributed.

17. On the other hand, case of the respondent is that as per the complaint,

on 03.05.2011, food officials including Food Inspector and Field Assistant

under the supervision of Local Health Authority (LHA)/SDM reached the

premises of M/s. Barista Coffee Company Ltd., Shop No. 9, Regal Building,

Connaught Place, New Delhi, and lifted sample of 6 bottles of "Snapple

Juice Drink" which were stored for sale in sealed glass bottles of 473 ml

each. Sample was lifted as per procedure prescribed under the PFA Act and

Rules and necessary documents were prepared at the spot. One counterpart

of the sample was deposited with the Public Analyst (PA) and remaining

two counterparts were deposited with SDM/LHA. Vide report dated

30.05.2011, the PA reported that the article was conforming to the standards,

yet the sample was found misbranded being in violation of Rule 32(e),

because there was no batch number / code number mentioned on the label.

Based on the report of PA, investigation was carried out by Food Inspector

as per the instructions of the SDM/LHA. After obtaining due sanction of the

Director, PFA, present complaint came to be filed against 9 accused persons

for violation of the section 2(ix)(k) read with Rule 32(e), as Punishable

under Section 5/7/16(l)(a) of PFA Act. Accused no. 3 was the vendor

company, of which accused no. 1 was the manager and accused no.2 was the

whole time director. Accused no. 6 was the distributor firm of which

accused nos. 4 and 5 were stated to be the partners. Accused no. 9 is stated

to be the importer and supplier company, of which accused no.7 and 8 are

the directors responsible for its business affairs.

18. Learned counsel for respondents submitted that there is no stage of

„discharge‟ contemplated in Cr.P.C. Moreover, Trial Court is not required to

go into minute details of the matters and has to make out a prime facie view

on the basis of material placed on record by the complainant. Present case is

not like a warrant triable complaint case where the evidence has to be

sufficient to convict an accused if considered un rebutted. Accordingly, the

learned Trial Court has observed that the present case is only a case of

misbranding as per the labelling standards in violation of Section 2(ix)(k) of

PFA Act. In the complaint, it is alleged that accused no. 7 to 9 have

imported such misbranded food in violation of section 5 and supplied them

in violation of section 7of PFA Act, as punishable under section 16(l)(a) of

PFA Act. As far as Rule 32(e) is concerned, the petitioners have relied upon

the judgment titled as Dwarka Nath vs. MCD: (1971) 2 SCC 314 wherein

Hon‟ble Supreme Court of India had struck down said provision being

beyond the rule making power under section 23(1) of the PFA Act. After

going through the said judgment as well as the applicable rules, learned Trial

Court observed that there was no definition of the expression "batch

number" or "code number" in the Act or in the Rules. No affidavit had been

filed on behalf of respondent to show whether any technical meaning in the

trade was given to these expressions and the matter was based only on the

evidence of the Food Inspector. Moreover, no notification issued by the

Central Government had been brought to the notice of the court with respect

to the food article in question showing the applicability of Section 23(l)(c)

of PFA Act. As per Rule 32(e) [as it existed at that time (the said judgement

was passed on 23.04.1971)], "batch number or code number", had to be

mentioned in Hindi or English or numericals or alphabets or in combination,

on every label. Accordingly, the Hon‟ble Supreme Court has held that:-

(a) There was nothing in clauses (c), (f) and (g) of section 23(1) of PFA Act which would give power to the Central Government to frame rules requiring the batch number or code number to be given on the labels, particularly there was no notification brought to the notice of the Hon'ble Court under clause (c).

Clause (b) and (d) of section 23 (1) would also not be applicable as there was no rational or remote connection between the batch or code number artificially given by a packer and the public or the purchaser being prevented from being deceived or misled as to the character, quality or quantity of the article, contained in a sealed tin.

(c) As there is no definition of the expression "batch number" or "code number" either in the Act or the Rules, and it was admitted that even where batch or code number was to be given, there was no further obligation to specify in the label the date of packing and manufacture of the article of food or the period within which the article of food had to utilised, used or consumed, merely giving an artificial batch number or code number will not be of any use to the public or to the purchaser. Hence, Rule 32(e) was held to be beyond the rule-making power even under section 25(1)(d) of the Act.

19. This Court has heard learned counsel for the parties and perused the

material available on record.

20. Learned Trial Court in my considered view after going through the

case of Dwarka Nath (Supra), observed that there has been a lot of

difference in the language of Rule 32(e) as it existed at the time when the

Judgments of Dwarka Nath (Supra) or in Bharat Arora vs. State were

passed and that as it existed on the day when the sample was lifted.

21. It is also pertinent to mention here that after 1971, when the judgment

of Dwarka Nath (Supra) was passed holding Rule 32(e) as ultra vires of the

Constitution, said rule was amended. It was last amended in 2006 and

clauses (d), (e), (f), (g) and (h) of Rule 32 were substituted by G.S.R. 491(E)

dated 21.08.2006 (w.e.f 20.02.2008) as corrected by G.S.R.518(E) dated

31.07.2007. Thus, at the time of Dwarka Nath (supra) Rule 32(e) read as "a

batch number or code number either in Hindi or English numericals or

alphabets or in combination".

22. It is pertinent to mention here that Rule 32(e) as it is existed prior to

the G.S.R. 491(E) read as "a distinctive batch number or lot number or code

number, either in numericals or alphabets or in combination, the numericals

or alphabets or their combination, representing the batch number or lot

number or code number being preceded by the words "Batch No.", or

"Batch, or lot No.", or "lot" or any distinguishing prefix." Thus, Rule 32(e)

as it stood on the day of sampling in the present case read as "lot/Code/Batch

Identification- A Batch number or Code number or Lot number which is a

mark of identification by which the food, can be traced in the manufacture

and identified in the distribution, shall be given on the label".

23. Thus, an apparent distinction, which can be seen in the language of

Rule 32(e) as it existed earlier and as it exists today, is that the purpose of

giving batch number / code number / lot number has been specified, that is

to identify the food article by any identification mark so as to enable it to be

traced in the manufacturing and distribution process. Such meaning /purpose

was earlier missing from the language of Rule 32(e).

24. Accordingly, the Trial Court held that in view of the present language

of Rule 32(e), it cannot be said that there is no definition of these

expressions in the Act or in the rules so as to reveal their purpose, as

observed by the Hon‟ble Supreme Court in Dwarka Nath (Supra) decided in

1971. The purpose of mentioning such batch number /code number /lot

number has now been made clear by the legislature.

25. In view of above, it cannot be said now that a purchaser would not

have any concern with the batch number or code number or lot number on

the label artificially given by the manufacturer / packer. It is to be

understood that if such a separate number is given to various lots of products

prepared, it would be possible to trace the manufacturer /supplier/dealer and

to fix their liability for selling adulterated or misbranded food.

26. This Court has noted that under PFA Act, not only the seller but

distributors / suppliers and manufacturers are also liable for prosecution.

Therefore, unless it is established that any particular product lifted from the

vendor was purchased from a particular supplier/distributor, it shall not be

possible to apprehend any such person and fix his responsibility. In the

absence of any such mark of identification, it would be very easy for any

distributor/supplier to deny/disown the lifted incriminating food product to

be the one sold by him through a particular invoice.

27. It is important to note that as per section 14 of PFA Act, every

manufacturer or distributor or dealer has to sell an article of food by giving a

warranty in writing in the prescribed form. As per section 19(2) of PFA Act,

a vendor can seek benefit of warranty, if he is able to prove that he had

purchased the article of food from any manufacturer, distributor or dealer

with a written warranty in the prescribed form. Rule 12-A of PFA Rules

provides that every manufacturer, distributor or dealer selling the article of

food to a vendor shall give either separately or in the bill, cash memo or

label, a warranty in Form-VI-A. Therefore, to get warranty under section

19(2) of PFA Act, every such vendor or supplier has to establish that he was

having a written warranty conforming to Rule 12-A and Form VI-A as

prescribed. This Form VI-A specifically provides a column of Batch number

or Code number to be mentioned with respect to the product sold. This

becomes necessary so as to identify the product as lifted by the food

officials. Moreover, if a vendor has been purchasing a particular food article

from the distributor/supplier continuously in routine course for a long time,

it is only through the batch number or code number mentioned on the article

that it could be established as to by what bill/invoice the said product was

purchased. In absence of any such batch number or code number having

been mentioned on the bills and the products, it would almost be impossible

for the food officials to identify if the product lifted for sampling is the same

product as was sold to the vendor vide any particular bill or any bill prior

thereto or any bill of some other supplier.

28. It is not out of place to mention here that the position would get all the

more complicated if there are various distributors / suppliers and multiple

vendors involved. The manufacturer might be supplying its product to

various distributors who might supply them to multiple whole-sellers who in

turn would supply the article to various vendors/retailers. In such position, if

the bills/invoices do not mention batch / code / lot number, it cannot be

ascertained with certainty as to from which supplier/distributor a particular

product was purchased which was found to be adulterated or misbranded.

Any such supplier/distributor can deny his liability merely by taking a stand

that the product sold by him through a particular bill was not the one as

lifted by the food officials. In the absence of any such batch/lot/code number

on the product itself, there remains no scope for its being mentioned on any

bill / invoice, making it impossible to track the chain of distribution.

29. In view of above, there have been many instances where the

distributors/suppliers have been given the benefit and acquitted of the

charges of selling misbranded /adulterated food on the ground that the

material was not sufficient to establish that the food article lifted from the

vendor was a part of the same lot as was sold by them through a particular

bill/invoice. Thus, it is essential that the manufacturer/packer gives a batch

number / lot number /code number to his products so as to identify the same

in the distribution process.

30. Accordingly, it is to be taken into consideration that the Hon'ble

Supreme Court had held Rule 32(e), as it existed at that time, ultra vires.

Thus, upon passing of the said judgment, Rule 32(e) no more existed in the

eyes of law. However, when Rule 32(e) in modified language was again

inserted and then substituted with a different language as it exists now, such

a provision cannot be said to have been declared ultra vires merely because

the number of Rule 32(e) is the same. The said provision inserted /

substituted by G.S.R, 491(E) as corrected by G.S.R. 518(E) has to be

considered as valid unless declared unconstitutional by any court.

31. Since Rule 32(e) stood amended and substituted in 2006 /2007, it

would be applicable in the present case where the sample was lifted on

03.05.2011. The said rule has not been declared unconstitutional or ultra

vires and is therefore binding.

32. As far as the policy no. F6(228)/85/ENF/PFA dated 23.09.1985 is

concerned, it mandated that in case of misbranding under Rule 32 of PFA

Rules, only a written warning was to be issued for the first offence and the

prosecution had to be instituted only upon a subsequent offence. However, it

is to be noted that this policy was subsequently withdrawn vide office order

no. 5/07 dated 14.09.2007, as also observed in the judgment titled as S. S.

Gokul Krishnan vs. State: 2009(1) FAC 132, as relied upon by the

petitioners. It is not in dispute that said precedent was followed in

Hindustan Unilever Ltd. vs. State: 2011(1) FAC 183; Jaykal Exports vs.

NCT of Delhi: (2011)122 DRJ 432; Pepsi Food Pvt. Ltd. vs. State:

(2012)194 DLT 468 and Gupta Tea Traders vs. State: 2012(2) FAC 415

only because the policy was in existence when the samples in those cases

had been lifted. But the samples in the case in hand were lifted on

03.05.2011 on which date there was no such policy in existence, therefore,

petitioners cannot seek benefit of such policy that already stood withdrawn.

33. It is important to note here that there is specific averment that in

addition to the accused no. 9 company, accused nos. 7 and 8 i.e. the directors

were also liable for prosecution as they were in charge of or responsible to

the company for conduct of its business affairs under section 17 PFA Act.

Vide his letter dated 11.07.2011, Food Inspector had sought reply from the

company to inform him about the directors responsible for conduct of its

business. In response, the company had named the accused nos.7 and 8

(petitioners herein) as its directors. Thus, prima facie, such information was

in the personal knowledge of the company as to the particulars of the person

who was in charge of or responsible to it for its affairs. When the accused

no. 9 had not furnished specific details and only named accused nos. 7 and 8

to be such persons, the material would be sufficient to take a prima facie

view to frame notice against them.

34. In view of above facts, the judgments relied upon by the petitioners

are not relevant.

35. Accordingly, I find no illegality or perversity in the impugned order

passed by Ld. ACMM,-II, New Delhi, Patiala House Courts.

36. Accordingly, I find no merit in the present petitions and they are,

accordingly, dismissed.

Crl.M.A. 2297/2017 in Crl.M.C.535/2017 Crl.M.A. 2517/2017 in Crl.M.C.580/2017

37. In view of the order passed in the present petitions, these applications

have been rendered infructuous and are, accordingly, disposed of.

(SURESH KUMAR KAIT) JUDGE MARCH 23, 2020 ms