Karnataka High Court

Santram Balu Kadam vs State Of Karnataka on 16 May, 2023

Bench: M.Nagaprasanna

                                                 -1-
                                                       CRL.P No. 101041 of 2023




                      IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
                            DATED THIS THE 16TH DAY OF MAY, 2023
                                            BEFORE
                         THE HON'BLE MR JUSTICE M.NAGAPRASANNA
                           CRIMINAL PETITION NO. 101041 OF 2023
                 BETWEEN:

                 SANTRAM BALU KADAM
                 AGE: 52 YEARS, OCC: BUSINESS,
                 KADAM TRADERS, R/O. CHIKKALAKI CROSS,
                 JAMKHANDI, BAGALKOT - 587 301.

                                                                   ...PETITIONER
                 (BY SRI. R.M.JAVED, ADVOCATE)
                 AND:

                 1.    STATE OF KARNATAKA
                       THROUGH DEPT. OF AGRICULTURE,
                       REP. BY ITS SECRETARY, AMBEDKAR VEEDHI, SAMPANGI
                       RAMA NAGAR,
                       BENGALURU-587 301.

                 2.    R.N.TULASIGERI
                       AGE:46 YEARS,
                       FERTILIZER INSPECTOR CUM AGRICULTURAL OFFICER,
Digitally
signed by K M          RSK SAVALGI, JAMKHANDI,
SOMASHEKAR             BAGALKOT-587 301, REP. BY
Location: high
court                  STATE PUBLIC PROSECUTOR,
karnataka              HIGH COURT OF KARNATAKA,
Dharwad
bench                  BENCH AT DHARWAD-580 001.

                 3.    R.J.MAGAR
                       PRADEEP PHOSPATE LTD.
                       C/O. DY. GEN MANAGER,
                       M/S. ZUARI AGRO CHEMICALS LTD.,
                       JAIKISAN BHAVAN,
                       ZUARI NAGAR, GOA-403 726.

                                                                 ...RESPONDENTS
                 (BY SMT. GIRIJA S.HIREMATH, HCGP FOR R1)
                                    -2-
                                          CRL.P No. 101041 of 2023




       THIS CRIMINAL PETITION IS FILED U/SEC. 482 OF CR.P.C.
SEEKING     TO    CALL   FOR    RECORDS   AND   QUASH   THE    ENTIRE
PROCEEDINGS AGAINST THE PETITIONER/ACCUSED NO.1 CC NO.
2538/2021 PENDING FILE BEFORE PRL. BEFORE PRL. CIVIL JUDGE
AND JMFC, JAMKHANDI           FOR THE OFFENCE, UNDER CLAUSE 19 OF
FERTILIZER (CONTROL) ORDER 1985 AND R/W SEC. 3 AND 7(2) OF
THE ESSENTIAL COMMODITIES ACT.


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


                                 ORDER

Learned High Court Government Pleader accepts

notice for respondent No.1.

       2.      Heard     learned    counsel     appearing     of    the

petitioner     and     the    learned    HCGP   appearing     for   the

respondent-State.

3. Learned counsel for the petitioner would submit

that this court in Crl.P.No.100103/2022 concerning

accused No.2 has quashed the proceedings in terms of its

order dated 21.02.2022. This court has held as follows:

"2. The petition is filed calling in question the

proceedings instituted against the petitioner for the

CRL.P No. 101041 of 2023

offence punishable under Sections 3 and 7 of the

Essential Commodities Act, 1955. The allegation is against

the Company. The complaint without at the outset making

the Company as a party/accused to the proceedings

would be not maintainable in the light of Section 10 of the

Essential Commodities Act, 1955.

3. Section 10 of the Essential Commodities Act,

1955 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 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.

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.

CRL.P No. 101041 of 2023

4. Section 10 of the Act is in pari materia with

Section 141 of the Negotiable Instruments Act, 1881

which is interpreted by the Apex Court in the case of in

the case of Aneeta Hada vs. Godfather Travels & Tours Pvt. Ltd.,

reported in (2012) 5 SCC 661, wherein the Hon'ble Apex Court

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 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

CRL.P No. 101041 of 2023

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 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."

5. In the light of the issue standing covered by the

Judgment rendered by the Apex Court and the admitted

fact that the Company is not a party in these proceeding,

the proceedings are rendered unsustainable and therefore

stand obliterated against the petitioner."

4. The reason for quashing the proceedings

against accused No.2, is that the company has not been

made as party to the crime and it is in violation of the

judgment of the Hon'ble Apex Court in the case of Aneeta

Hada vs. Godfather Travels & Tours Pvt. Ltd.,

reported in (2012) 5 SCC 661. In the light of the said

finding, the subject petition also deserves to succeed, in

the manner in which relief is granted to accused No.2.

5. For the aforesaid reason, the following :

CRL.P No. 101041 of 2023

ORDER

(i) The criminal petition is allowed.