Ashish Kumar Gupta vs State Of Telangana
2025 Latest Caselaw 2459 Tel

Telangana High Court

Ashish Kumar Gupta vs State Of Telangana on 21 February, 2025

                HON'BLE SRI JUSTICE K.SURENDER

 CRIMINAL PETITION Nos.4545, 5009, 5012, 5015, 5041 and 5064 OF
                             2019

COMMON JUDGMENT:

1. Criminal Petition No. 4545 of 2019 is filed by Accused No.3,

Criminal Petition No. 5009 of 2019 is filed by Accused No. 7, Criminal

Petition No.5012 of 2019 is filed by A5, Criminal Petition No.5015 of

2019 is filed by A6, Criminal Petition No.5041 of 2019 is filed by A4,

and Criminal Petition No.5064 of 2019 is filed by A2, invoking Section

482 of the Cr.P.C, seeking quashing of proceedings in S.T.C. No. 46 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.46 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. 46 of 2019 has been filed against

Accused (A1) (Managing Director of M/s Redington India 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 5:30 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 36 retail packages of "MSi" Notebook-

10P6, GL638RC262IN, imported by M/s Redington Ltd., "Redington

House," Centre Point Industrial Estate, Chennai, India, 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 36,

and the remaining 34 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. 144/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/Manufacturer is 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, 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, 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 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 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, 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.

(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.46 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