Karnataka High Court

Shri. Shanmukhappa P. Malligar vs The State Of Karnataka on 14 September, 2022

Bench: J.M.Khazi

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                                   CRL.P No. 102651 of 2022

   IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

        DATED THIS THE 14TH DAY OF SEPTEMBER, 2022

                          BEFORE
             THE HON'BLE MS. JUSTICE J.M.KHAZI
        CRIMINAL PETITION NO. 102651 OF 2022 (482-)
BETWEEN:

SHRI. SHANMUKHAPPA P. MALLIGAR
AGE: 65 YEARS, OCC: BUSINESS,
M/S S.P. MALLIGAR AGRO CENTRE
CHIKABASUR-581106.
TQ: BYADAGI, DIST: HAVERI.

                                              ...PETITIONER
(BY SRI. N. L. BATAKURKI, ADVOCATE)
AND:

THE STATE OF KARNATAKA
BY ASSISTANT DIRECTOR OF AGRICULTURE AND
FERTILIZER INSPECTOR, KAGINELE-581106,
TQ: BYADAGI, DIST: HAVERI,
R/BY STATE PUBLIC PROSECUTOR,
HIGH COURT BLDG, DHARWAD.

                                             ...RESPONDENT
(BY SMT. GIRIJA S. HIREMATH, HCGP)


       THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C.,
SEEKING TO ADMIT THE PETITION AND QUASH THE ORDER OF
ISSUE OF PROCESS FOR THE OFFENCE PUNISHABLE UNDER
CLAUSE 19 OF FERTILIZER (CONTROL) ORDER, 1985 R.W
SECTION 7 OF THE ESSENTIAL COMMODITIES ACT 1955 BY
THE SENIOR CIVIL JUDGE AND JMFC, BYADAGI DISTRICT
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                                          CRL.P No. 102651 of 2022

HAVERI, IN CC NO.315/2021 DATED 15.07.2021 AGAINST THE
ACCUSED NO.1/PETITIONER HEREIN AT VIDE ANNEXURE-A
AND   CONSEQUENTLY         QUASH        THE    COMPLAINT    AT    VIDE
ANNEXURE-B       AGAINST     THE        ACCUSED     NO.1/PETITIONER
HEREIN.

      THIS CRIMINAL PETITION COMING ON FOR ORDER, THIS
DAY, COURT MADE THE FOLLOWING:
                                 ORDER

In this petition filed under section 482 of Cr.P.C., the

petitioner, who is arraigned as accused No.1 has

challenged the initiation criminal prosecution in C.C.No.

315/2021 on the file of the Senior Civil Judge and JMFC,

Byadagi, District Haveri.

2. Learned HCGP takes notice for respondent.

3. Brief facts leading to filing of the present

petition are that the Assistant Agriculture Officer at

Kaginele (hereinafter referred to as "complainant"), filed a

private complaint under section 200 of Cr.P.C. against the

petitioner/accused No.1 and another alleging that

petitioner being a retailer and accused No.2, the General

Manager, Rashtriya Chemical and Fertilizer Ltd., ('RCF' for

CRL.P No. 102651 of 2022

short) are indulged in selling sub-standard fertilizer called

"15:15:15" manufactured by RCF. On 10.11.2016 at 11.30

a.m., the complainant visited the business premises of

accused No.1 and collected three samples of fertilizer in

question and got one sample analyzed through Deputy

Director of Agriculture, Dharwad and at the instance of

accused No.1 and 2, got the second sample tested through

Commissioner of Agriculture, Bangalore and both the

samples are found to be of sub-standard and accordingly,

the complaint is filed and the same is challenged in this

petition.

4. During the course of the arguments, the

learned Counsel for petitioner submits that as required

under Section 10 of the Essential Commodities Act, the

company is not arraigned as accused and in its absence,

the petitioner is not liable to answer the charges.

5. On the other hand, the learned HCGP would

submit that the action of the complainant in filing the

complaint and registering the case is justified and it is a

CRL.P No. 102651 of 2022

matter for trial and it is for the petitioner to prove his

innocence during trial.

6. Heard the arguments and perused the records.

7. Admittedly, the charges leveled against the

petitioner are that he has violated section 3 and Clause 19

of the Fertilizer (Control) Order, 1985 read with Section 7

of the Essential Commodities Act, 1955.

8. Section 10 of the Essential Commodities Act,

1955, deals with the offence by Companies and it reads as

follows:

10. Offences by companies.-- (1) If the person contravening an order made under section 3 is a company, every person who, at the time the contravention 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 contravention 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

CRL.P No. 102651 of 2022

punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(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.

9. Perusal of Section 10 of the Essential

Commodities Act, 1955 makes it evident that wherever

contravention is by a Company, then every person who, at

the time the contravention 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 contravention and shall be

liable to be proceeded against and punished accordingly.

Therefore, petitioner is being made liable on account of he

CRL.P No. 102651 of 2022

being an employee of Company in question and therefore,

until and unless the company is arraigned as accused, the

petitioner cannot be held responsible.

10. In fact, the Hon'ble Apex Court in Aneeta

Hada Vs. Godfather Travels and Tours Private

Limited1 while considering the offence committed by the

company has held as follows:

"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.

                       ...          ...                      ...

               56. We      have   referred    to   the       aforesaid

passages only to highlight that there has to be strict observance of the provisions regard being had

(2012) 5 SCC 661

CRL.P No. 102651 of 2022

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.

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 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 [(1970)

CRL.P No. 102651 of 2022

3 SCC 491 : 1971 SCC (Cri) 97] which is a three- Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove."

11. In the light of the above judgment and having

regard to the fact that the company is not arraigned as

accused, I am of the considered opinion that the complaint

is not tenable as against the petitioner and therefore, the

proceedings are liable to be quashed insofar as the

petitioner is concerned. Accordingly, I proceed to pass the

following:

ORDER

The Criminal petition is allowed.

The impugned proceedings in C.C.No.315/ 2021 on the file of Senior Civil Judge and JMFC,

CRL.P No. 102651 of 2022

Byadagi, Haveri District as against the petitioner/accused no.1, is hereby quashed.