Himachal Pradesh High Court

Sanjay Sharma vs H.P. Pollution Control Board on 28 December, 2022

Bench: Sandeep Sharma

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr.MMO No.128 of 2020 a/w Cr.MMO No.129 & 130 of 2020

Date of Decision: 28.12.2022

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1. Cr.MMO No.128 of 2020

Sanjay Sharma .......Petitioner Versus

H.P. Pollution Control Board ... Respondent _______________________________________________________

2. Cr.MMO No.129 of 2020

Ashok Kumar .......Petitioner r Versus

H.P. Pollution Control Board ... Respondent

_______________________________________________________

3. Cr.MMO No.130 of 2020

Vijay Kumar Arora .......Petitioner Versus

H.P. Pollution Control Board ... Respondent _______________________________________________________ Coram:

Hon'ble Mr. Justice Sandeep Sharma, Judge.

Whether approved for reporting? 1

For the Petitioner(s): Mr. R.L.Sood, Senior Advocate with Mr. Arjun Lal, Advocate.

For the Respondents: Mr. Maan Singh, Advocate. _______________________________________________________ Sandeep Sharma, Judge(oral):

Since all these petitions arise out of the same order, they

were taken up together for hearing and are being disposed of vide this

common order.

Whether the reporters of the local papers may be allowed to see the judgment?

2. Being aggrieved and dissatisfied with order dated

20.11.2019 passed by learned Judicial Magistrate Court No.2,

Nalagarh, District Solan, H.P., in case No.148/2 of 2019, whereby

learned court below having taken note of the complaint filed by

Junior Environment Engineer, Regional Office, H.P.State Pollution

Control Board, Baddi, District Solan, H.P., under Sections 33, 41,

42(d), 43, 44 and 49 of the Water (Prevention and Control of

Pollution)Act, 1974 and Sections 15, 16, 19 of the Environment

(Protection) Act, 1986, issued summons to the petitioners in the

above captioned cases, who are alleged to be Directors of M/s Baddi

Infrastructure, petitioners have approached this Court in the instant

proceedings filed under Section 482 Cr.P.C, praying therein to quash

and set-aside aforesaid summoning order as well as complaint filed

by the respondent- H.P. State Pollution Control Board.

3. Precisely, the facts of the case, as emerge from the

record are that State of Himachal Pradesh as well as H.P. State

Pollution Control Board had deemed it expedient and absolutely

essential and necessary to set up a Common Effluent Treatment

Plant with 25 MLD capacity (hereinafter referred to as 'CETP') to

cater to the effluent treatment needs of the 428 polluting industries in

the catchment area of Baddi Barotiwala Industrial Belt in District

Solan, Himachal Pradesh. Out of the total project cost of Rs. 60.95

crore, funding upto 82% of cost amounting to Rs. 50.07 crore was

contributed by centre and H.P. State Government and the balance

18% amounting to Rs. 10.88 crore was contributed by the Industry

members, who were mandated to divert all of their industrial effluent

to 'CETP' and not to have any independent treatment facility of their

own or dispose of any water effluent otherwise. To give effective

implementation to aforesaid proposal, Government decided to setup

'CETP' in collaboration with industry and a special purpose vehicle

namely Baddi infrastructure came to be constituted, wherein apart

from some Government official few industrialists were also named as

Directors and were given responsibility to run aforesaid 'CETP'.

Petitioners herein in one capacity or other had been rendering their

services for smooth functioning of CETP.

4. After having noticed certain discrepancies and violations

of various provisions contained under Water (Prevention and Control

of Pollution)Act, 1974 and Sections 15, 16, 19 of the Environment

(Protection) Act, 1986, Junior Environment Engineer H.P. State

Pollution Control Board, Regional Office, Baddi, District Solan, H.P.,

filed complaint in the Court of learned Judicial Magistrate 1st Class,

Nalagarh, District Solan, H.P.

5. In nutshell, complainant named hereinabove alleged that

as per analysis results, the working of CETP is not satisfactory and as

per sampling results, the parameters i.e. total Dissolved Solids (TDS)

Chloride and Biological Oxygen demand( BOD) are above limit.

Complainant further alleged that since the year 2018 there is further

deterioration in the working of CETP. Out of 24 samples collected with

effect from 2018, results of 17 numbers of samples are not complying

with the prescribed norms laid for CETP, which suggests that plaint

authorities/accused are not keen to operate the CETP with

sincerity(Annexure P-13 colly).

6. Having taken note of complaint as detailed hereinabove,

learned Judicial Magistrate 1st Class, Court No.2, Nalagarh issued

process against the petitioners namely Ashok Kumar, Vijay Kumar

and Sanjay Sharma, who at that relevant time were working as Vice

President of BEIL, who is operating the CETP, CEO of M/s Baddi

Infrastructure and Plant Head respectively.

7. Before reply to complaint, if any, could be filed by the

accused named in the complaint i.e. petitioners herein, petitioners

approached this Court in the instant proceedings for quashing of the

complaint as well as summoning order on the ground that since

company i.e. M/s Baddi infrastructure has been not arrayed as an

accused, petitioners, who are/were Directors or working in different

managerial position cannot be prosecuted. Besides above, it has

been further claimed by the petitioners that complaint, sought to be

quashed, is otherwise not maintainable as same has been filed by

Junior Environment Engineer, whereas as per Board's own decision

same could be filed by Member Secretary, H.P. State Pollution

Control Board.

8. Mr. Arjun Lal, learned counsel representing the

petitioners while inviting attention of this Court to Section 47 of Water

(Prevention and Control of Pollution) Act, contended that unless it is

proved that offence was committed by the company with the consent

and connivance of Director, Secretary, Manager and other officer of

the company such Director, Manager, Secretary and other officers

cannot be prosecuted. He submitted that till the time company is not

arrayed as an accused, no prosecution can be launched against his

Directors or other persons holding managerial position because at

first instance it is required to be established on record that offences

are committed by company and in commission of such offence

company was consented/assisted by Directors, Manager, Secretary

or other officers. In support of his aforesaid contention, learned

counsel for the petitioners invited attention of this Court to the

judgment rendered by Hon'ble Apex Court in Aneeta Hada versus

Godfather Travels and Tours Private Limited, (2012) 5 Supreme

Court Cases 661. Though, aforesaid judgment directly relates to

provision contained under Negotiable Instruments Act,1881 but since

Section 47 of Water (Prevention and Control of Pollution) Act, is para-

materia to Section 141 of Negotiable Instruments Act, same has

application in the instant case. He also invited attention to the latest

judgment passed by Hon'ble Apex Court in Dayle De' Souza versus

Government of India, 2021 SCC Online SC 1012, wherein it has

been reiterated that unless the company, which is an accused of

committing principle offence is not arrayed as an party, Directors and

other persons holding the managerial position of the company cannot

be prosecuted. While inviting attention to Section 33-A of the Act,

Learned counsel representing the petitioners contended that power to

give directions vest in Board, not in Environment Engineer, who has

issued show cause notice in the instant case.

9. Pursuant to notice issued in the instant proceedings,

respondent-Board has filed reply, perusal whereof clearly reveals that

facts, as noticed hereinabove, are not disputed, rather stand admitted.

10. Mr. Maan Singh, learned counsel for the respondent-

Board while refuting aforesaid submission made by Learned counsel

representing the petitioners contended that defect as has been

pointed out in the complaint is curable and as such, merely on

account of non-impleadment of company, prosecution launched

against petitioners cannot be ordered to be quashed and set-aside. In

support of his aforesaid contention, he placed reliance upon the

judgment passed by Hon'ble Apex Court in U.P. Pollution Control

Board versus Messrs Modi Distillery and others, (1987) 3

Supreme Court Cases, 684. While inviting attention of this Court to

judgment passed by Hon'ble Apex Court in Aneeta Hada case(supra),

Learned counsel representing the respondent-Board vehemently

argued that judgment rendered by Hon'ble Apex Court in U.P.

Pollution Control Board versus Messrs Modi Distillery and others

has been not overruled, rather has been upheld and as such, same

has application in the case at hand.

11. Before ascertaining the correctness of rival contentions

made by learned counsel for the parties, this Court deems it fit to

take note of Section 33-A and Section 47 Water (Prevention and

Control of Pollution) Act hereinbelow:-

[33A. Power to give directions.--Notwithstanding anything

contained in any other law, but subject to the provisions of this Act, and to any directions that the Central Government may give in this behalf, a Board may, in the exercise of its powers and performance of its functions under this Act, issue any

directions in writing to any person, officer or authority, and such person, officer or authority shall be bound to comply with such directions.

Explanation.--For the avoidance of doubts, it is hereby declared that the power to issue directions under this section includes the power to direct--

(a) the closure, prohibition or regulation of any industry, operation or process; or

(b) the stoppage or regulation of supply of electricity, water or any other service.]

47. Offences by companies.--(1) Where an offence under this Act has been committed by a company, 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

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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 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 by a company and it is proved that the offence 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. Bare perusal of Section 33-A of the Act, clearly reveals that

power to give directions under this Act only lies with the Board i.e. H.P.

State Pollution Control Board, meaning thereby, action, if any, for violation

of various provisions of law contained under the Act can be taken by Board.

Though, Sh. Maan Singh, learned counsel representing the respondent-

Board vehemently argued that Junior Environment Engineer is/was

competent to initiate action against the petitioners for their having allegedly

violated the various provisions contained under the Act, but this Court is

not persuaded to agree with his aforesaid contention for the reason that

notice to M/s Baddi Infrastructure(CETP Kenduwal) after passing of orders

dated 10.07.2019 and 23.08.2019 by Hon'ble National Green Tribunal in

O.A. No.593/2017, titled Paryavaran suraksha Samiti and another

versus Union of India and others, was issued by Senior Environmental

Engineer, H.P. State Pollution Control Board, Baddi. Though, learned

counsel representing the respondent-Board has not been able to place on

record document suggestive of the fact that Junior Environment Engineer

was ever delegated power to initiate proceedings against the polluting

companies for their having allegedly violated various provisions contained

under the Act, but even otherwise reply to the petition filed by the

respondent in CWP No.414 of 2021, titled Vardhman Textile Limited versus

The State of Himachal Pradesh and others (Annexure P-19) clearly reveals

that Pollution Control Board in its 39th Board meeting held on 10.06.1996

vide item No.39.8 delegated the powers to the Member Secretary to issue

notices/directions under Water Act, 1974 and Air Act, 1981. Relevant para

of reply filed in the aforesaid case is reproduced hereinbelow:-

"L-M. Contents of para L-M are denied. As already submitted in paras supra the Hon'ble NGT vide dated 18.6.2020 had passed directions to the State Board to close polluting activities and recover compensation from

the polluting industries. Accordingly, impugned directions dated 1.1.2021 were issued to the petitioner

unit for non-conforming to their norms for prescribed limits. It is further denied that directions issued by the respondent No.3 have been issued beyond the scope of powers and duties. As the State Board in its 39th Board

meeting held on 10.6.1996 vide item No.39.8 had delegated powers to the Member Secretary to issue notices/directions under Water Act, 1974 and Air Act, 1981."

13. Though, learned counsel representing the respondent-

Board argued that aforesaid reply was filed in other litigation and as

such, has no bearing in the instant case, but he has been not able to

dispute that Pollution Control Board in its 39th Board meeting held on

10.06.1996 had taken decision in general not in particular case, meaning

thereby as per aforesaid decision power to issue notices/directions under

Water Act 1974 and Air Act, 1981 lies with the Member Secretary.

However, in the instant case, neither show cause notice nor complaint ever

came to be issued/instituted by Member Secretary, rather by Senior/Junior

Environment Engineer and as such, complaint as well as prosecution

initiated thereupon is not sustainable in the eye of law.

14. At this stage, learned counsel representing the

respondent-Board invited attention of this Court to Section 49 of the

Act, which reads as under:-

49. Cognizance of offences.--1[(1) No court shall take cognizance of any offence under this Act except on a

complaint made by--

(a) a Board or any officer authorised in this behalf by it; or

(b) any person who has given notice of not less than sixty

days, in the manner prescribed, of the alleged offence and of his intention to make a complaint, to the Board or officer authorised as aforesaid, and no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any

offence punishable under this Act.

2[2) Where a complaint has been made under clause

(b) of sub-section (1), the Board shall, on demand by such

person, make available the relevant reports in its possession to that person:

Provided that the Board may refuse to make any such report available to such person if the same is, in its opinion, against the public interest.]

3[(3)] Notwithstanding anything contained in section 4[29 of the Code of Criminal Procedure, 1973 (2 of 1974)], it shall be lawful for any 4[Judicial Magistrate of the first class or for any Metropolitan Magistrate] to pass a sentence of imprisonment for a term exceeding two years or of fine exceeding two thousand rupees on any person convicted of an offence punishable under this Act.

15. While placing heavy reliance on aforesaid provision of

law, learned counsel representing the respondent-Board attempted to

carve out a case that any authorized officer can institute proceedings.

However, as has been taken note hereinabove, neither there is any

notification nor any executive order available on the file suggestive of

the fact that Junior Environment Engineer is /was

competent/authorized by the Board to institute proceedings against

petitioners for their having allegedly violated various provisions

contained under the Act. Moreover, as has been taken note

hereinabove, Board has already decided to delegate power to issue

direction to Member Secretary of Pollution Control Board.

16. Similarly, careful perusal of Section 47 of the Water Act,

especially Section 47(2) clearly provides that wherein offence under

this Act is committed by the company and it is proved that offence 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. If the

aforesaid provisions of law is read in its entirety, it clearly suggests

that to institute/launch criminal prosecution against director, manager

or other officer of the company, it is incumbent to first prove offence, if

any, committed by the company and for that purpose company is

necessarily required to be impleaded/arrayed as an accused.

17. In the instant case, close security of complaint sought to

be quashed nowhere suggest that respondent-Board arrayed

company i.e. M/s Baddi Infrastructure as an accused. Till the time, it

is not established on record that company has violated the various

provisions of the Act, it is not understood how and on what basis

prosecution can be launched against its director, manager and other

officers of the company.

18. Hon'ble Apex Court in Aneeta Hada case (supra) while

dealing with provisions contained in Section 141 of the Negotiable

Instruments Act, which is para-materia to section 47 of Water Act,

categorically held that company is a juristic person and concept of

corporate criminal liability is attracted to a corporation and company

and it is so luminescent from the language employed under Section

141 of the Act. Hon'ble Apex Court further held that director or any

person of the company cannot be prosecuted without impleadment of

the company. While returning aforesaid finding, Hon'ble Apex Court

overruled its earlier judgment given in Aneeta Hada vs. Indian

Acrylic Limited (2000)1 SCC 1, wherein it was held that director or

any officer can be prosecuted without company as an accused. While

passing aforesaid judgment, Hon'ble Apex Court also took note of its

earlier judgment rendered in U.P. Pollution Control Board versus

Messrs Modi Distillery and others, (1987) 3 Supreme Court Cases,

684, which is otherwise heavily relied upon by learned counsel for the

respondent-Board in the instant case.

19. Though, Hon'ble Apex Court did not overrule the finding

given in the aforesaid case i.e. U.P. Pollution Control Board versus

Messrs Modi Distillery and others, wherein on account of certain

technical flaw company in that case was permitted to cure the defect

by amending the name of the company from Messrs Modi Distillery to

Modi Industries Limited, but categorically recorded in subsequent

judgment that decision in Modi Distillery(supra)has to be treated to be

restricted to its own facts as has been explained in the instant

judgment. Though, Sh. Maan Singh, learned counsel representing the

respondent-Board vehemently argued that since judgment rendered

by Hon'ble Apex Court in Modi Distillery case (supra) has not been

overruled by the Hon'ble Apex Court in its Aneeta Hada case (supra),

it has application in the case at hand as such, no illegality can be said

to have been committed by complainant while launching prosecution

against the petitioners without there being impleadment of the

company as an accused.However, as has been taken note

hereinabove, this is not the correct interpretation of the judgment

rendered by the Hon'ble Apex Court in Aneeta Hada case (supra)

because in Aneeta Hada case, Hon'ble Apex Court though concurred

with its earlier judgment given in Modi Distillery but categorically ruled

that decision in Modi Distillery has to be restricted strictly to its own

facts and as such, same cannot be treated as precedent.

20. At this stage, it would be profitable to reproduce para Nos. 51

to 59 of the judgment rendered by Hon'ble Apex Court in Aneeta Hada

case(supra) hereinbelow:-

"51. We have already opined that the decision in Sheoratan

Agarwal (supra) runs counter to the ratio laid down in the case of C.V. Parekh (supra) which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in

Anil Hada (supra) has to be treated as not laying down the correct law as far as it states that the director or any other officer

can be prosecuted without impleadment of the company. Needless to emphasize, the matter would stand on a different footing where there is some legal impediment and the doctrine

of lex non cogit ad impossibilia gets attracted.

52. At this juncture, we may usefully refer to the decision in U.P. Pollution Control Board v. M/s. Modi Distillery and others[43]. In

the said case, the company was not arraigned as an accused and, on that score, the High Court quashed the proceeding against the others. A two-Judge Bench of this Court observed as

follows: (SCC p.690, para 6).

"6.Although as a pure proposition of law in the abstract the learned single Judge's view that there can be no vicarious

liability of the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors under sub-s.(1) or (2) of S.47 of the Act unless there was a prosecution against Messers Modi Industries Limited, the Company owning the industrial unit, can be termed as correct, the objection raised by the petitioners before the High Court ought to have been viewed not in isolation but in the conspectus of facts and events and not in vacuum. We have already pointed out that the technical flaw in the complaint is attributable to the failure of the industrial unit to furnish the requisite information called for by the Board.Furthermore, the legal infirmity is of such a

nature which could be easily cured. Another circumstance which brings out the narrow perspective of the learned single Judge is his failure to appreciate the fact that the averment in paragraph 2 has to be construed in the light of the averments contained in paragraphs 17, 18 and 19 which are to the effect that the Chairman, Vice-Chairman, Managing

.

Director and members of the Board of Directors were also

liable for the alleged offence committed by the Company."

Be it noted, the two-Judge Bench has correctly stated that there can be no vicarious liability unless there is a

prosecution against the company owning the industrial unit but, regard being had to the factual matrix, namely, the technical fault on the part of the company to furnish the requisite information called for by the Board, directed for making a formal amendment by the applicant and substitute the name of the owning industrial unit. It is worth noting that in

the said case, M/s. Modi distilleries was arrayed as a party instead of M/s Modi Industries Limited. Thus, it was a defective complaint which was curable but, a pregnant one, the law laid down as regards the primary liability of the company without which no vicarious liability can be imposed

has been appositely stated.

53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands

satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant.

54. In this context, we may usefully refer to Section 263 of Francis Bennion's Statutory Interpretation where it is stated as follows: -

"A principle of statutory interpretation embodies the policy of the law, which is in turn based on public policy. The court presumes, unless the contrary intention appears,

that the legislator intended to conform to this legal policy. A principle of statutory interpretation can therefore be described as a principle of legal policy formulated as a guide to legislative intention".

(emphasis supplied)

55. It will be seemly to quote a passage from Maxwell's The Interpretation of Statutes (12th Edition) : -

"The strict construction of penal statutes seems to manifest itself in four ways: in the requirement of express

language for the creation of an offence; in interpreting strictly words setting out the elements of an offence; in requiring the fulfilment to the letter of statutory conditions precedent to the infliction of punishment; and in insisting on the strict observance of technical provisions concerning criminal procedure and jurisdiction."

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56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to

be imposed affecting the rights of persons whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the company. The learned counsel for the respondents have

vehemently urged that the use of the term "as well as" in the Section is of immense significance and, in its tentacle, it brings in the company as well as the director and/or other officers who are responsible for the acts of the company and, therefore, a prosecution against the directors or other officers

is tenable even if the company is not arraigned as an accused. The words "as well as" have to be understood in the

context.

57. In Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. and others[44] it has been laid down that the entire statute must be first read as a whole, then

section by section, clause by clause, phrase by phrase and word by word. The same principle has been reiterated in Deewan Singh and others v. Rajendra Prasad Ardevi and others[45] and Sarabjit Rick Singh v. Union of India[46].

58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the

vicarious liability of others. Thus, the words "as well as the company" appearing in the Section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other

categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicted.

59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an

accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh (supra) which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal (supra) does not

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correctly lay down the law and, accordingly, is hereby

overruled. The decision in Anil Hada (supra) is overruled with the qualifier as stated in paragraph 51. The decision in Modi Distilleries (supra) has to be treated to be restricted to its own facts as has been explained by us hereinabove".

21. Subsequent to aforesaid judgment Hon'ble Apex Court in

Dayle De' Souza case(supra) again reiterated that directors and

other officers of the company cannot be prosecuted without there

being any impleadment of the company. At this stage, it would be

profitable to reproduce para-27 of the aforesaid judgment

hereinbelow:-

"27. However, subsequent decisions of this Court have emphasised that the provision imposes vicarious liability by

way of deeming fiction which presupposes and requires the commission of the offence by the company itself as it is a separate juristic entity. Therefore, unless the company as a principal accused has committed the offence, the persons mentioned in sub-section (1) would not be liable and cannot be

prosecuted. Section 141(1) of the Negotiable Instruments Act, extends vicarious criminal liability to the officers of a company

by deeming fiction, which arises only when the offence is committed by the company itself and not otherwise. Overruling Sheoratan Agarwal and Anil Hada, in Aneeta Hada v. Godfather Travels and Tours Private Limited,12 a 3-judge

bench of this court expounding on the vicarious liability under Section 141 of the Negotiable Instruments Act, has held:

"51. We have already opined that the decision in Sheoratan Agarwal runs counter to the ratio laid down in C.V. Parekh which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where

there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted.

xx xx xx

59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution

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under Section 141 of the Act, arraigning of a company as an

accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the

provision itself. We say so on the basis of the ratio laid down in C.V.Parekh which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The

decision in Anil Hada is overruled with the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be restricted to its own facts as has been explained by us r hereinabove."

22. It is quite apparent from the aforesaid exposition of law

that till the time company is not arrayed as an accused, its officers be

it directors, Secretary and other persons holding managerial position

cannot be prosecuted, rather before launching prosecution against

the directors of the company, it is incumbent upon complainant to

prove violation, if any, of various provisions of the Act against the

company and it is also obligatory on the part of the complainant to

establish on record that its directors and other officers of the company

aided and consented with the company in the commission of offence.

Since in the case at hand company i.e. M/s Baddi Infrastructure has

not been arrayed as an accused and complaint has not been filed by

competent person, which in the case at hand was Board or member