Abhy Maheswari vs State Of Telangana
2025 Latest Caselaw 2437 Tel

Telangana High Court

Abhy Maheswari vs State Of Telangana on 21 February, 2025

              HON'BLE SRI JUSTICE K.SURENDER

 CRIMINAL PETITION Nos.4556, 5006, 5007, 5011, 5033 and 5056
                          OF 2019

COMMON JUDGMENT:

1. Criminal Petition No. 4556 of 2019 is filed by Accused No.3,

Criminal Petition No. 5006 of 2019 is filed by Accused No. 2,

Criminal Petition No.5007 of 2019 is filed by Accused No. 6,

Criminal Petition No.5011 of 2019 is filed by Accused No. 7,

Criminal Petition No.5033 of 2019 is filed by Accused No. 5, and

Criminal Petition No.5056 of 2019 is filed by Accused No. 4,

invoking Section 482 of the Cr.P.C, seeking quashing of proceedings

in S.T.C. No. 49 of 2019 pending on the file of XXII Metropolitan

Magistrate, Medchal.

2. Since all the Criminal Petitions are questioning the

proceedings against them in the same case, i.e., STC No.49 of 2019,

all the petitions are disposed off by way of this Common Judgment.

3. A complaint was filed by the District Legal Metrology Officer,

Legal Metrology, who is an officer appointed under S.14 of the Legal

Metrology Act, 2009 (hereinafter, "the Act") and is an authorized

officer to file the complaint against the Accused under Rule 28 of

the A.P Legal Metrology (Enforcement) Rules, 2011, by virtue of the

General Authorization issued by the Controller, Legal Metrology, AP,

Hyderabad, vide G.O.Ms. No. 10 CA, F&CS (CS-III) Dept., dated

1.4.2011, read with head office Memo No. 6950/T1/2011-3 dated

10.5.2012.

4. The complaint in S.T.C. No. 49 of 2019 has been filed against

Accused (A1) (Managing Director of M/s Nova Marketing); A2

(Managing Director of M/s Instakart Services Pvt. Ltd); A3, A4, A5,

and A6 (the Directors of M/s Instakart Services Pvt. Ltd); and A7

(Senior Manager and Person Incharge of M/s Instakart Services Pvt.

Ltd), alleging contravention of Sections 18 and 36 of the Act, and

Rule 4, Rule 6(2), and Rule 18(1) of the Legal Metrology (Packaged

Commodities) Rules, 2011 (hereinafter, "the Rules, 2011").

5. The genesis of the complaint is the inspection conducted by

the District Legal Metrology Officer on 3.7.2018, at about 5:00 pm

in the trading premises of M/s Instakart Services Pvt Ltd, Survey

No. 696, Gundla Pochampally Village, Medchal-Malkajgiri District.

At the time of inspection, A7 was present and conducting business

transactions in the said premises. The inspection revealed that A7

possessed, displayed, and exposed for sale 910 retail packages of

"Nova Amaze Dry Iron", manufactured by M/s Nova Marketing,

#201, 4th Cross, Lalbagh Road, Bangalore-560027, and the said

packages did not bear the statutory declaration of the person in

charge or office address for consumer complaints. Hence, it was

concluded that the packages violated Rule 4, Rule 6(2), and Rule

18(1) of the Rules, 2011. Further, the accused, by possessing and

displaying the packages for sale in their trading premises, thereby

contravened Section 18(1) of the Act r/w Rule 6(2) of the Rules,

2011, and the same is punishable under Section 36(1) of the Act.

6. During the inspection, the District Legal Metrology Officer-P

Satyanarayana, seized 5 packages from A7, out of the 910, and the

remaining 905 packages were kept under safe custody in the

premises, under S.15 of the Act, under the cover of a panchanama

in the presence of mediator LW3. A copy of the same was handed

over to A7 on the spot with proper acknowledgment.

7. The complaint also specifies that, prior to the filing of the

complaint, Notice No. 125/PC/2018-19 dated 3.7.2018 was served

on the Company-M/s Instakart, through an e-mail. The Company

replied to the notice on 19.12.2018, stating that the seizure report

had already been sent to the concerned

Brand/Seller/Manufacturer, and that in terms of Rule 18(1) of the

Rules, 2011, the concerned Brand/Seller/Manufactureris

responsible. The Company also requested the withdrawal of the

notice and for no further action to be taken against the Company

and its Directors. The Company's request was rejected vide Office

Letter No. 142/PC/2018-19 dated 26.12.2018. Thereafter, the

complaint was filed in the Court.

8. Learned Senior Counsel appearing on behalf of the petitioners

submits that:

1) The petitioners are arrayed as accused, making them

vicariously liable on behalf of M/s Instakart Services Pvt. Ltd.

However, the company is not made as an accused, and as

such, the question of prosecuting the petitioners does not

arise.

2) M/s Instakart Services Pvt. Ltd is a logistic company, which

acts as a transporter or courier in between manufacturer and

the purchaser of the property. The petitioners have nothing to

do with the manufacturing process, as such, none of the penal

provisions of the Act are attracted.

9. On the other hand, the learned Public Prosecutor appearing on

behalf of the Legal Metrology Officer/complainant would submit

that Section 18 of the Act, clearly mentions the word 'deliver'. Once

it is admitted that the petitioners, who are the Directors of the

company, are involved in the 'delivery' of the goods, the violations of

the Act are attracted.

10. The Legal Metrology Act was enacted in the year 2010, to

enforce the standards of weight and measures, regulate trade and

commerce in weights, measures and other goods, which are

distributed by weight, measure, or number, and for matters

connected with the issues which are specifically mentioned under

the provisions of the Act.

11. The violations, as alleged in the complaint, are under Sections

18 and 36 of the Act, and under Rules 4, 6(2) and 18(1) of the

Rules, 2011. For the sake of convenience, Section 18 and Section

2(l) of the Act are extracted hereunder:

"18. Declarations on pre-packaged commodities.--

(1) No person shall manufacture, pack, sell, import, distribute, deliver, offer, expose or possess for sale any pre-packaged commodity unless such package is in such standard quantities or number and bears thereon such declarations and particulars in such manner as may be prescribed.

(2) Any advertisement mentioning the retail sale price of a pre-

packaged commodity shall contain a declaration as to the net quantity or number of the commodity contained in the package in such form and manner as may be prescribed."

"2(l) "pre-packaged commodity" means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity;

12. Section 18 lays down strict requirements for the sale and

advertisement of pre-packaged commodities to ensure transparency

and consumer protection. It prohibits any person from

manufacturing, packing, selling, importing, distributing, delivering,

offering, exposing, or possessing for sale any pre-packaged

commodity unless it complies with prescribed standards. These

standards include ensuring that the package contains a specified

quantity or number of the commodity and that it clearly displays all

mandatory declarations and particulars in the prescribed manner.

Additionally, if an advertisement mentions the retail sale price of a

pre-packaged commodity, it must also include a declaration

regarding the net quantity or number of items in the package,

following the prescribed format. These provisions are designed to

prevent misleading practices, ensure uniformity in trade, and

protect consumer interests. Section 18 of the Act deals with the pre-

packaged commodities, and pre-packaged commodity has been

defined under Section 2(l) of the Act, as extracted above. Since the

product is packed by the manufacturer in the absence of the

purchaser, the details of the package has to be mentioned for a

purchaser to know about the product.

13. Section 18 of the Act uses specific terminology to regulate pre-

packaged commodities at each stage of their commercial lifecycle.

Section 18 applies, among others, to manufacturers or sellers of the

product: The following group of words used in Section 18 of the Act,

have to be understood, basing on the intent of the legislature in

enacting the law:

1) Manufacture: Involves producing or assembling a product that becomes a commodity ready for sale. The term 'Manufacturer' is defined under Section 2(i) of the Act.

2) Pack: Refers to placing a product into a package, by the manufacturer/Seller, that complies with legal metrology standards.

3) Sell: Involves the transfer of ownership in exchange for money or other consideration.

4) import with its grammatical variations and cognate expressions, means bringing into India from a place outside India.

5) Distribute: Covers the supply of such commodities to retailers, wholesalers, other businesses for further sale to consumers or to the consumers directly through online sale.

6) Deliver: Encompasses physically handing over or transporting the product to buyers, retailers, or distributors, including through couriers and e-commerce logistics.

7) Offer: Involves the process of making the product available for sale or trade.

8) Expose (for sale): Refers to displaying a product in a way that signals its availability for purchase, whether on store shelves, in showcases, or through online listings.

9) Possess (for sale): Means having control or custody of a pre-packaged commodity with the intent to sell, covering retailers, wholesalers and distributors.

14. The Act ensures that every stage of a commodity's commercial

lifecycle, from manufacture to final sale, is subject to legal scrutiny,

which helps prevent deceptive practices and protects consumer

interests.

15. The petitioners are Managing Director/Directors/Manager of

M/s. Instakart Services Pvt. Ltd. The agreement between M/s.

Instakart Services Pvt. Ltd. and Flipkart Internet Private Limited,

the company selling the product, is an agreement for logistic

services. The Exhibit A to the agreement specifies the services to be

executed by the company, M/s Instakart, which include:

i. Pickup of shipments from the company's warehouses. ii. COD/PP (Cash on Delivery/Prepaid) facility across all pin codesserved by Instakartfor delivery.

iii. Reverse pickup from end customers.

iv. ERP integration for better transaction visibility and monitoring

16. M/s.Instakart's services are for providing logistic services and

not amenable to the provisions under the Legal Metrology Act.

Section 18 of the Act applies to the entities directly involved in the

process of manufacturing, packing, selling, importing or

distributing, pre-packed commodities and none of these include the

logistic providers. The job of M/s.Instakart is only to transport the

goods, and it is, in no manner, involved in the labeling or packing

the goods sent by the manufacturer. The consumers place their

orders on Flipkart, and the manufacturers, distributers, or

retailers, deliver the products to them through the logistics

providers, such as M/s Instakart Services.

17. The term 'deliver' used in Section 18 of the Act refers to the act

of transferring the goods as part of sale. The logistics company,

M/s.Instakart is not involved in the sale of the goods. It is either

Flipkart or the manufacturer who sells the goods. The logistics

company, i.e., M/s. Instakart, confines its services to providing

transport of the goods/products. For the said reason, the logistics

company will not fall within the term 'deliver' as mentioned in

Section 18 of the Act.

18. It is not the case of the complainant that the petitioners, who

are part of M/s. Instakart Services Private Limited, are in any

manner involved with the process of labeling or packing the

commodity. The goods found in the warehouses of M/s. Instakart

are meant for transportation. Nowhere in the complaint, has the

complainant mentioned that the company has anything to do with

the product, other than to transport them, in accordance with the

agreement with Flipkart.

19. The petitioners are also alleged of contravening Rule 4, Rule

6(2), and Rule 18(1) of the Rules, 2011. Rule 4 reads as follows:

"4. Regulation for pre-packing and sale etc. of commodities in packaged form. - On and from the commencement of these rules, no person shall pre-pack or cause or permit to be pre- packed any commodity for sale, distribution or delivery unless the package in which the commodity is pre-packed, a label is securely affixed and such declarations as are required to be made under these rules.

Explanation.-The existence of packages without the declaration of retail sale price within the manufacturer's premises shall not be construed as a violation of these rules and it shall be ensured that all packages leaving the premises of manufacturer for their destination shall have declaration of retail sale price on them as required in this rule."

20. From a reading of Rule 4 and the explanation thereto, it

indicates that, it is for the manufacturer to label the product, giving

the details, which are required to be mentioned in accordance with

the Legal Metrology Act, 2009. The logistics companies are not

covered under Rule 4 since they do not engage, either in pre-

packing the product by the manufacturer, or in labeling the

contents on the goods packed by the manufacturer. The duty of the

logistics company is confined to transporting the goods, and

nowhere is it alleged in the complaint that the petitioners' company,

M/s.Instakart Services Private Limited is involved in the pre-

packing process.

21. Sub-Rule 2 of Rule 6 of the Rules, 2011 reads as follows:

"6.Declaration to be made on every package: (1)(a) the name and address of the manufacturer, or where the manufacturer is not the packer, the name and address of the manufacturer and packer and for any imported package the name and address of the importer shall be mentioned on every package.

.....

.....

(2) Every package shall bear the name, address, telephone number, e mail address, if available, of the person who can be or the office which can be, contacted, in case of consumer complaints."

22. The Rule mandates displaying of name, telephone number, or

e-mail numbers, if available of the person, who can be contacted in

case of consumer complaints. Since the logistics company is only

involved in the process of transportation, the question of making

the logistics company liable for not finding label on the packages

meant for transport, with said details of name and address etc.,

does not arise.

23. Sub-Rule 1 of Rule 18 of the Rules, 2011 reads as follows:

"18. Provisions relating to wholesale dealer and retail dealers:

(1) No wholesale dealer or retail dealer or importer shall sell, distribute, deliver, display or store for sale any commodity in the packaged form unless the package complies with in all respects, the provisions of the Act and these rules."

24. From a reading of Rule 18 of the Rules, 2011,extracted above,

it is clear that the Rule applies to wholesale dealer and retail

dealers. Even according to the complainant, the logistics company

is neither a retailer, nor a wholesaler. For the said reasons, Rule 18

does not apply to the logistics company, unless it is proved that the

logistics company had undertaken the role of a dealer of the

product either by retail or wholesale. No such allegation is made in

the complaint.

25. Notice was sent to M/s.Instakart Services Private Limited

through an e-mail. The notice of the complainant does not refer to

the names of any of these petitioners. According to the notice

addressed by the complainant, the company, M/s.Instakart, is only

mentioned. Further, no role is specifically attributed to any of the

petitioners herein. In the absence of making the company as an

accused, prosecuting the petitioners is erroneous.

26. In MD Castrol (India) Limited v. State of Karnataka1, the

Hon'ble Supreme Court quashed criminal proceedings against the

Managing Director due to the absence of any specific allegations

about his responsibility in the company's business or operations.

(2018) 17 SCC 275

27. In Himanshu v. B.Shivamurthy 2, the Hon'ble Supreme Court

held that prosecuting the directors of the company, without

implicating the 'company' is unsustainable.

28. The provisions of Legal Metrology Act and Rules thereunder,

are not attracted in case of the logistics company, M/s.Instakart.

Further, the company M/s.Instakart Services Private Limited is not

made an accused. For both reasons, the Criminal Petitions deserve

to be allowed.

29. In the result, the proceedings against the petitioners/Accused

in STC No.49 of 2019 on the file of XXII Metropolitan Magistrate at

Medchal, are hereby quashed.

30. Accordingly, all Criminal Petitions are allowed.

__________________ K.SURENDER,J Date: 21.02.2025 kvs

(2019) 3 SCC 797