Karnataka High Court

Shri. Anil G Mathur vs Karnataka State Government on 14 September, 2022

Bench: J.M.Khazi

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                                   CRL.P No. 102637 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. 102637 OF 2022 (482-)
BETWEEN:

SHRI. ANIL G MATHUR
AGE. 58 YEARS, OCC. SERVICE,
NODAL OFFICER OF SULPHAL
15:15:15 OF RCF OM SPHALA, SAHYAGIRI,
FLAT #7, DEONAR BAUG, DEONAR,
MUMBAI-400048

                                              ...PETITIONER

(BY SRI. N L BATAKURKI, ADVOCATE)

AND:

KARNATAKA STATE GOVERNMENT
R/BY THE FERTILIZER INSPECTOR
CUM ASSISTANT AGRICULTURE OFFICER
O/O ASSISTANT DIRECTOR OF AGRICULTURE,
MUDHOL, PIN-587113
TQ. MUDHOL, DIST. BAGALKOT,
R/BY STATE PUBLIC PROSECUTOR
HIGH COURT BLDG, DHARWAD.

                                             ...RESPONDENT

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

       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
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                                          CRL.P No. 102637 of 2022

SECTION 3 AND 7 OF THE ESSENTIAL COMMODITIES ACT BY
THE PRINCIPAL CIVIL JUDGE AND JMFC, MUDHOL IN CC
NO.421/2015 DATED 27.04.2015, NOW ON THE FILE OF CIVIL
JUDGE AND JMFC, BANHATTI CASE, WHICH IS RENUMBERED
AS     C.C.NO.955/2022             AGAINST          THE    ACCUSED
NO.2/PETITIONER       HEREIN       AT    VIDE    ANNEXURE-A      AND
CONSEQUENTLY QUASH THE COMPLAINT AT VIDE ANNEXURE-
B AGAINST THE ACCUSED NO.2/PETITIONER HEREIN.

     THIS PETITION COMING ON FOR ADMISSION, 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.2 has

challenged the initiation of criminal prosecution in

C.C.No.955/2022 (Old No.C.C.421/2015) on the file of the

Civil Judge and JMFC, Banahatti.

2. Learned HCGP takes notice for respondent.

3. Though the matter is listed for admission, with

the consent of both sides, it is taken up for final disposal.

4. Brief facts leading to filing of the present

petition are that the Assistant Agricultural Officer at

CRL.P No. 102637 of 2022

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

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

petitioner/accused No.2 and another alleging that

petitioner being the Nodal Officer of Rastriy Chemical

Fertilizer Company ('RCF' for short) and accused No.1

being a retailer are indulged in selling sub-standard

fertilizers "Suphal 15:15:15" manufactured by RCF. That

on 20.10.2014, the complainant visited Sri. Venkateshwar

Fertilizers, Mahalingapura and collected three samples of

'Suphala 15:15:15' and got one sample analyzed through

the Deputy Director, Fertilizer Control Laboratory,

Dharwad and at the instance of accused No.1, got the

second sample tested through Fertilizer Quality Control

Laboratory, Ludhiana 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.

5. During the course of the arguments, the

learned Counsel for petitioner submits that as required

under Section 10 of the Essential Commodities Act, the

CRL.P No. 102637 of 2022

company is not arraigned as accused and in its absence,

the petitioner is not liable to answer the charges.

6. 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

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

innocence during trial.

7. Heard the arguments and perused the records.

8. 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.

9. 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

CRL.P No. 102637 of 2022

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 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.

10. 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

CRL.P No. 102637 of 2022

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

being an employee of Company in question and as such,

until and unless the company is arraigned as accused, the

petitioner cannot be held responsible.

11. 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

(2012) 5 SCC 661

CRL.P No. 102637 of 2022

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 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

CRL.P No. 102637 of 2022

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) 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."

12. 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: