Nishant Vermon vs The State Of Telangana
2025 Latest Caselaw 2440 Tel

Telangana High Court

Nishant Vermon vs The State Of Telangana on 21 February, 2025

             HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION Nos.4540, 4807, 4808, 4809, 4810 and 5028
                         OF 2019

COMMON JUDGMENT:

1. Criminal Petition No. 4540 of 2019 is filed by Accused No.3,

Criminal Petition No. 4807 of 2019 is filed by Accused No. 2,

Criminal Petition No.4808 of 2019 is filed by Accused No. 5,

Criminal Petition No.4809 of 2019 is filed by Accused No. 7,

Criminal Petition No.4810 of 2019 is filed by Accused No. 4, and

Criminal Petition No.5028 of 2019 is filed by Accused No. 6,

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

proceedings in S.T.C. No. 45 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.45 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. 45 of 2019 has been filed

against Accused (A1) (Managing Director of M/s Freewill Sports

Pvt Ltd.); 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 5:50

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 525 retail packages of "Nivia" Tummy Twister, Dynamic with

Magnetic Platform,manufactured by M/s Freewill Sports Pvt Ltd.,

Works-372, Leather Complex, Kapurthala Road, Jalandhar-

144021, 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 2 defective packages from A7, out of the

525, and the remaining 523 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 mediators LWs 3 and 4. 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. 143/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/sInstakart 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 codes served by Instakart for delivery.

iii. Reverse pickup from end customers. iv. ERP integration for better transaction visibility and monitoring

16. 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 Karnataka 1, 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.

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

(2018) 17 SCC 275

(2019) 3 SCC 797

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.45 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