Court No. - 69
Case :- APPLICATION U/S 482 No. - 33713 of 2010
Applicant :- Ajay Tandon
Opposite Party :- State Of U.P.And Another
Counsel for Applicant :- G.P. Dikshit,Tarun Agarwal,Tarun Agrawal
Counsel for Opposite Party :- Govt.Advocate
Hon'ble Vivek Kumar Singh,J.
1. Heard Sri Tarun Agarwal, learned counsel for the applicant and Sri Abhinav Prasad, learned A.G.A. for the State-respondent and perused the material available on record.
2. This 482 Cr.P.C. application has been filed for quashing the proceedings of the Case No. 7692 of 2010, State Vs. Ajay Tandon, under Section 8/11 of U.P. Shira Niyantran Adhiniyam, 1964 and Section 420 I.P.C., P.S. Amroha Dehat, District Jyotiba Phule Nagar.
3. The brief facts of the case are that there is a company under the name & style M/s G.R. Solvent and Allied Industries Limited (hereinafter referred to as 'G.R. Solvent') having its Head Office in Bazar Jat, Amroha, District Jyotia Phule Nagar. It is further submitted that one Radha Kishan Tandon is the Chairman of G.R. Solvent while Ajay Tandon and Smt. Anjali Tandon are Directors of Company. Madhusudahn Rastogi is the Manager of the Aforesaid company while Amit Banerjee is the Commercial Manager of the said company. A report was lodged against the applicant by the opposite party no.2 under Section 8/11 of U.P. Shira Niyantran Adhiniyam, 1964. It is alleged that the sheera is a vaccum pan which is prepared by sugar factory. There is also open pan sheera which is prepared manufacturers of Khansari Sugar and there is no restriction in storing the open pan sheera.
4. At the time when the first information report was lodged the applicant alongwith others filed a writ petition before this Hon'ble Court for quashing the First Information Report and vide order dated 20.7.2010 passed in Criminal Misc. Writ Petition No.12857 of 2010 a Division Bench of this Court has stayed the arrest of the applicant, a copy of said order has been annexed as annexure-3 to this 482 Cr.P.C. application.
5. It is further submitted that according to Section 13 of U.P. Sheera Niyantran Adhiniyam, 1964 no court can take cognizance of an offence punishable under this Act except on a report in writing of the facts constituting such offence made by an Excise Officer or above the rank of Excise Inspector.
6. During the course of Investigation the statements of all witnesses were taken by the Police Inspector. The Investigating Officer has submitted that charge sheet against the applicant alone and Magistrate has taken cognizance of the offence.
7. As a matter of fact Madhusudan Rastogi was the Manager of the said company while Amit Banerjee was Commercial Manager of the said company and from their possession the Sheera is alleged to have been recovered. It is strange that even on the evidence of the witness it is no where said that the applicant was responsible for keeping the Sheera in the G.R. Solvent. It is further submitted that plain reading of the first information report no offence under Section 8/11 of U.P. Sheera Niyantran Adhiniyam, 1964 and Section 420 I.P.C. is made out against the applicant, which reads as under:-
"8. Sale and supply of molasses. - (1) The Controller [may, with the prior approval of the State Government, by order require] the occupier of any sugar factory to [sell or supply] in the prescribed manner such quantity of molasses to such person, as may be specified in the order, and the occupier shall, notwithstanding any contract, comply with the order.
[(1-a) Notwithstanding anything contained in sub-section (1) the occupier of a sugar factory shall sell or supply forty per cent of the molasses produced in each quarter of a molasses year in the sugar factory to such chemical industries which are actual users of molasses and are granted licence under the United Provinces Excise Act, 1910 ;
Provided that such quantum of molasses as is not required by the said chemical industries may be sold or supplied by the occupier of the sugar factory to any other unit which is actual users of molasses with the prior approval of the Controller.]
(2) The order under sub-section (1):
(a) shall require supply to be made only to a person who requires it for his distillery or for any purpose of industrial development;
[(aa) may require the person referred to in clause (a) to utilise the molasses supplied to him under an order made under this section for the purpose specified in the application made by him under sub-section (1) of Section Z-A and to observe all such restrictions and conditions, as may be prescribed];
(b) may be the entire quantity of molasses in stock or to be produced during the year or for any portion; but the proportion of molasses to be supplied from each sugar factory to its estimated total produce of molasses, during tire year shall be the same throughout the State save where, in the opinion of the Controller, a variation is necessitated by any of the following factors :
(i) the requirements of distilleries within the area in which molasses may be transported from the sugar factory at a reasonable cost;
(ii) the requirements for other purposes of industrial development within such area; and
(iii) the availability of transport facilities in the area.
(3) The Controller may make such modifications in the order under subsection (1) as may be necessary to correct any error or omission or to meet a subsequent change in any of the factors mentioned in clause (b) of sub- section (2). [(4) The occupier of a sugar factory shall be liable to pay to the State Government, in the manner prescribed, administrative charges at such rate, not exceeding [fifteen rupees] per quintal as the State Government may from time to time notify, on the molasses sold or supplied by him. (5) The occupier shall be entitled to recover from the person to whom the molasses is sold or supplied an amount equivalent to the amount of such administrative charges, in addition to the price of molasses]."
8. It is thus, submitted that the entire criminal proceedings on the basis of charge sheet dated 25.7.2010 against the applicant is nothing but abuse of process of Court, therefore, same is liable to be quashed by this Court.
9. I have heard the learned counsel for the applicant and learned A.G.A. for the State-respondent and perused the material available on record.
10. Submission of the learned counsel for the applicant is that the applicant is working as Director in the company in question and initiation of criminal proceedings against the Managing Director or any officer of the Company is bad in law where company had not been arrayed as party to the complaint, in support of his contention he placed reliance in the case of Sharad Kumar Sanghi Vs. Sangita Rane reported in (2015) 12 SCC 781 relevant paragraph thereof reads as under:-
9. The allegations which find place against the Managing Director in his personal capacity seems to be absolutely vague. when a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegations to constitute the vicarious liability. In Maqsood Saiyed Vs. State of Gujrat, it has been held, thus; (SCC p. 674, para 13).
13. Where a jurisdiction is exercised on a complainant petition filed in terms of Section 156(3) Cr.P.C. or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. The Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is the Company. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the complaint petition, even if given face value taken to be correct in its entirety, would lead to conclusion that the respondents herein were personally liable for any offence. The Bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability.
10. In this regard, reference to a three-Judge Bench decision in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla would apposite. While dealing with an offence under Section 138 of the Negotiable Instruments Act, 1881, the Court explaining the duty of a Magistrate while issuing process and his power to dismisses a complaint under Section 203 without even issuing process observed thus (SCC p. 96 para 5) "5...... a complaint must contain material to enable the Magistrate to make up his mind for issuing process. If this were not he requirement, consequences cold be far-reaching. If a Magistrate had to issue process in every case, the burden of work before the Magistrate had to issue process in every case, the burden of work before the Magistrate as well as the harassment caused to the respondents to whom process is issued would be tremendous. Even Section 204 of the Code starts with the words 'if in the opinion of the Magistrate taking cognizance of an offence there is sufficient ground for proceeding'. The word 'sufficient ground for proceedings again suggest that ground should made out in the complaint for proceeding against the respondent. It is settled law that at the time of issuing of the process the Magistrate is required to see only the allegations in the complaint and where allegations in the complaint or the charge-sheet do not constitute an offence against a person, the complaint is liable to be dismissed."
After so stating, the Court analysed Section 141 of the Act after referring to certain other authorities answered a referent and relevant part of the answer reads as follows (S.M.S. Pharmaceuticals Ltd. case, SCC p. 103, para 19) 19 ..... (a) It is necessary to specifically aver in a complaint under Section 141 that at the time of offence was committed, the person accused was incharge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied."
The same principle has been reiterated in S.K. Alagh v. State of U.P., Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd. and GHCL Employees Stock Option Trust v. India Infoline Ltd.
11. In the case in hand the complaint's initial statement would reflect, the allegations are agains the Company, the Company has not been made a party and, therefore, the allegations are restricted to the Managing Director. As we have noted earlier, the allegations are vague and in fact, principally the allegations are against the Company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened under certain statutes. It has been so held by a three-Judge Bench in Aneeta Hada v. Godfather Travels and Tours (P) Ltd. in the context of Negotiable Instruments Act, 1881.
12. At this juncture, it is interesting to note, as we have stated earlier, that the learned Magistrate while passing the order dated 22-10-2001, had opined thus:
"It appears prima facie from the complaint filed by the complainant documents, evidence and arguments that the accused company has committed cheating with the complaint delivering old and accidented vehicle to her at the cost of a new truck. Accordingly, prima facie sufficient ground exists for registration of a complaint against the accused under Section 420 I.P.C. and is accordingly registered."
13. When the company has not been arraigned as an accused, such an order could not have been passed. We have said so for the sake of completeness. In the ultimate analysis, we are of the considered opinion that that the High Court should have been well advised to quash the criminal proceedings initiated against the appellant and that have not been done, the order is sensitively vulnerable and accordingly we set aside the same and quash the criminal proceedings initiated by the respondent against the appellant.
11. If the law laid down by the Apex Court in Sharad Kumar Sanghi (supra) is confronted with the facts and circumstances of the present case as also to the submissions made by the learned counsel for the parties. A perusal of the complaint would also show that the Company/Firm has not been arraigned as accused in the complaint. It was imperative to arraign the Firm as accused for maintaining the prosecution. Since the formalities, as required under law, have not been fulfilled by the opposite party no.2 while filing the complaint, in my view, the proceedings initiated against the applicant alone cannot be permitted to continue. The concerned court below also did not consider the true aspect of the matter and erred in passing the impugned order, which deserves to be set-aside.
12. Hence, there is force in the submissions made by the learned counsel for the applicant. The application is liable to be allowed and the proceedings of the aforesaid case as well as the concerned court below order are liable to be quashed / set-aside.
13. Accordingly, the application is allowed and the proceedings of Case No. 7692 of 2010, State Vs. Ajay Tandon, under Section 8/11 of U.P. Shira Niyantran Adhiniyam, 1964 and Section 420 I.P.C., P.S. Amroha Dehat, District Jyotiba Phule Nagar, against the applicant are quashed.
Order Date :- 26.4.2019 Dev/-