Heard Sri V.P. Srivastava, learned Senior Counsel, assisted by Sri Harish Chandra Mishra, learned counsel for the revisionist and Sri Sanjay Sharma and Ajay Kumar Pathak, learned A.G.A. for the State.
Present revision has been filed against the order dated 16.05.1988 passed by Munsif Magistrate (Economic Offences), Bijnor in Criminal Case No. 1578 of 1986 directing for framing of charges against revisionist under Section 7/16 of Prevention of Food Adulteration Act,1954 (hereinafter referred to as the Act, 1954).
Brief facts of the case is that revisionist was working as Deputy Sales Manager D.C.M. Chemical Works, Najafgarh Road, New Delhi-10005, (Later on known as Shri Ram Foods and Fertilizer Industries, Shivaji Marg, New Delhi), Branch Delhi Cloth Mills Ltd. (hereinafter referred to as the "Company"). A raid was conducted by Food Inspector at the shop of Babu Singh. He has purchased Rath vegetable oil weighing 1500 grams/1.5 kilograms after payment of Rs. 27/- by adopting due procedure of law. Rath Vegetable oil was manufactured by "Company". He has sent Rath vegetable oil to Public Analyst U.P., Lucknow for chemical examination and as per report no. 2588 dated 24.02.1984, same was found adulterated. Thereafter, he has lodged Complaint before the Special Judicial Magistrate (Crime), Bijnor under the provisions of the Act, 1954. Order dated 16.05.1988 was passed for framing charges against revisionist and revisionist filed discharge application under Section 245(2) Cr.P.C. dated 19.01.1988. Apart from many other grounds, he has also taken ground that provisions of Section 17 of the Act, 1954 has not been complied with as "Company" was not made the accused. The said discharge application was rejected by the Court below vide order dated 16.05.2018, hence the present revision.
Sri V.P. Srivastava, learned Senior Counsel for the revisionist submitted that present revision has been filed on many grounds, but he is pressing only ground no. 5 i.e. while filing the Complaint, Section 17 of the Act, 1954 has been violated as the "Company" has not been made an accused and mandatory provision under Section 17 (1) (b) of the Act, 1954 has been violated. Section 17(1)(a) of the Act, 1954 provides for nomination of a person and Section 17(1)(b) provides liability upon Company, therefore, Section 17(1) (a) and (b) of the Act, 1954 requires that the nominated person and the Company must be made an accused. It is further submitted that Section 17(1) (a) of the Act, 1954 provides that there should have been nomination of person for the conduct of the business of the Company and when no person is nominated, every person who at the time the offence was committed was in charge of, be responsible for the conduct of business of the Company. Further Section 17(1)(b) provides that the Company responsible for offence and further made clear that in case of offence persons referred in Section 17(1) (a), they shall be liable to be guilty. It is next submitted that Section 17 (2) provides that any Company may, by order in writing, authorize any of its directors or managers (such manager being employed mainly in a managerial or supervisory capacity) to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission of offence by Company by this Act and may give notice to the Local (Health) Authority, in such form and in such manner as may be prescribed, that it has nominated such director or manager as the person responsible, alongwith the written consent of such director or manager for being so nominated.
In the present case, revisionist was never nominated in terms of Section 17(1) and (2) of the Act, 1954 and "Company" has also not been made accused, therefore, Complaint is bad and impugned order is liable to be set aside.
It is next submitted that while rejecting the discharge application dated 19.01.1988, learned Judge has not returned proper finding and stated that the said provision is directory, which according to Section 17 of the Act, 1954 is incorrect as it is mandatory. Therefore, it is necessarily required for the Complainant to make "Company" as accused and also mention this fact in the Complaint filed before the Special Judicial Magistrate (Crime), Bijnor, which is missing and not considered by the Court below.
In support of his contention, learned Senior Counsel for the revisionist has placed reliance upon the judgments of Apex Court and this Court in the cases of B.K. Varma Vs. Corporation of Madras, 1971 CRI. L.J. 60 (Vol. 77 C. N.15), N.N. Mukerjee and others Vs. The State of U.P. and another, passed in Criminal Reference No. 645 of 1974 decided on 16.2.1979, The State Vs. R. P. Mehta, 1982 CRI. L. J. NOC 159 (ALL.), Sharad Kumar Sanghi Vs. Sangita Rane, 2015 0 Supreme (SC) 177, Sushil Sethi and another Vs. The State of Arunachal Pradesh and others, 2020 0 Supreme (SC) 100 and Hindustan Unilever Limited Vs. The State of Madhya Pradesh, 2021 (218) AIC 246 and submitted that once "Company" has not been made accused, impugned order is bad and liable to be set aside.
Sri Sanjay Sharma, learned A.G.A. opposed the submissions made by learned Senior Counsel for the revisionist and submitted that in discharge application revisionist has never taken this ground that revisionist is not the nominee as provided in Section 17(1) and (2) of the Act, 1954, but in the present revision, he accepted this fact that he is nominee of the "Company" and revision has been filed by him as S.P. Mathur, nominee, D.C.M. Chemical Works Nazaf Road, New Delhi, later on known as Shri Ram Food and Fertilizers Industry , Shiva Ji Marg, New Delhi. Not only this, even in the impugned order in the first line, he was shown as nominee of the "Company", which is not disputed by learned counsel for the revisionist even before this Court. It is further submitted that Section 17(1) of the Act, 1954 clearly provides that in case there is nominee, by making him accused, proceeding may be initiated and learned Judge, while rejecting the discharge application, has given specific finding that as provided in Section 17 of the Act, 1954 for prosecution, "Company" or his nominee can be made accused. It is not required to implead "Company" also as accused. He further submitted that in case not impleading "Company" as accused of offence, there would be no effect upon trial of the prosecution case. So far as the word used directory is concerned, once the finding is given by the court that revisionist is nominee that would have no effect as the learned Judge has not ignored the provisions of Section 17 of the Act, 1954.
It is next submitted that new legal submissions made by learned Senior Counsel for the revisionist is not applicable in the case of the revisionist as first of all, he should dispute his nomination for "Company", but he never raised objection before the Court below or even before the High Court. In contrary to that, he accepted this fact that he is nominee of the "Company". It is also submitted that once the revisionist has accepted that he is nominee of the "Company", Section 17 of the Act, 1954 has been complied with. Further, he has never pressed or argued this ground that Section 17(1)(b) has not been complied with. Therefore, in the impugned order there is no illegality or perversity and the revision is liable to be dismissed.
Sri V.P. Srivastava, learned Senior Counsel in rejoinder argument submitted that though revisionist has not taken ground that he is not the nominee of the "Company", but he has taken specific ground in paragraph 3 of the discharge application dated 19.01.1988 moved under Section 245 (2) Cr.P.C. that Sri Ram Food and Fertilizer Industry is "Company" and provisions of Section 17 of the Act, 1954 is applicable in the present case. Perusal of Section 17(a)(b) of the Act would show that in case of prosecution, "Company" is pre-requisite condition and if "Company" is not arrayed as accused, prosecution of the "Company" is bad in law. He further submitted that in case it is admitted by the revisionist that he is nominee of the "Company", even though it is statutory requirement on the part of Complainant to make "Company" accused. Even in case, if this plea has not been taken in discharge application, its a legal plea can be taken at any stage of legal proceeding and there is no bar under the law.
In support of his contention, learned Senior Counsel for the revisionist has placed reliance upon the judgments of Apex Court in the cases of Gurucharan Singh Vs. Kamla Singh and others, 1977 AIR, 5, G.M. Contractor Vs. Gujarat Electricity Board, 1972 AIR (SC) 792 and Rajendra Shankar Shukla and others Vs. State of Chhatisgarh and others, (2015) 10 Supreme Court Cases 400.
I have considered the rival submissions made by learned counsel for the parties and perused the paper book and other relevant documents as well as judgments relied upon by learned counsel for the parties.
From perusal of the record, there is no dispute that Complaint was filed against the revisionist under Section 7/16 of the Act, 1954 and also "Company" is manufacturer of Rath Vanaspati. Revisionist was made accused in the capacity of Sales Manager D.C.M. Chemicals Firm, Najafgarh Road, New Delhi. Once proceeding has been initiated under Section 7/16 and Section 17 of the Act, 1954 revisionist in the capacity of Sales Manager of the "Company" has been made accused, there is no occasion for the Complainant to done away with other provisions of Section 17 of the Act, 1954 including accusation of "Company".
Section 17 of the Act, 1954 deals with the offence of the Company which is quoted below:-
"[17. Offences by companies.--(1) Where an offence under this Act has been committed by a company --
(a) (i) the person, if any, who has been nominated under sub-section (2) to be in charge of, and responsible to, the company for the conduct of the business of the company (hereafter in this section referred to as the person responsible), or
(ii) where no person has been so nominated, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company; and (b) the company, shall be deemed to be guilty of the offence 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 provided in this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.
(2) Any company may, by order in writing, authorise any of its directors or managers (such manager being employed mainly in a managerial or supervisory capacity) to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the company of any offence under this Act and may give notice to the Local (Health) Authority, in such form and in such manner as may be prescribed, that it has nominated such director or manager as the person responsible, along with the written consent of such director or manager for being so nominated. Explanation.--Where a company has different establishments or branches or different units in any establishment or branch, different persons may be nominated under this sub-section in relation to different establishments or branches or units and the person nominated in relation to any establishment, branch or unit shall be deemed to be the person responsible in respect of such establishment, branch or unit.
(3) The person nominated under sub-section (2) shall, until--
(i) further notice cancelling such nomination is received from the company by the Local (Health) Authority; or
(ii) he ceases to be a director or, as the case may be, manager of the company; or
(iii) he makes a request in writing to the Local (Health) Authority, under intimation to the company, to cancel the nomination [which request shall be complied with by the Local (Health) Authority], whichever is the earliest, continue to be the person responsible: Provided that where such person ceases to be a director or, as the case may be, manager of the company, he shall intimate the fact of such cesser to the Local (Health) Authority: Provided further that where such person makes a request under clause (iii), the Local (Health) Authority shall not cancel such nomination with effect from a date earlier than the date on which the request is made.
(4) Notwithstanding anything contained in the foregoing sub-sections, 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 [not being a person nominated under sub-section (2)] 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;
(b) "director", in relation to a firm, means a partner in the firm; and
(c) "manager", in relation to a company engaged in hotel industry, includes the person in charge of the catering department of any hotel managed or run by it.]"
Section 17(1)(b) clearly provides that the "Company", shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Therefore, in case, it is admitted by revisionist that he is nominee of the "Company" under the provisions of Section 17(1)(a) of the Act, 1954, even though it is required on the part of the Complainant to make "Company" accused as provided under Section 17(1)(b) of the Act, 1954. Therefore in light of provisions of Section 17 (1)(b) of the Act, "Company" is necessary party and no Complaint can be maintained without impleading "Company" as accused.
This issue was considered by the Apex Court and this High Court in different cases.
In the matter of B.K. Varma (supra), very similar matter came up before the Court and the Court has held that Complaint must have been filed against the "Company" and then against the person against whom they could proceed under Section 17 (1) and (2) of the Act, 1954. Finally Court allowed the revision in favour of the revisionist. Paragraph 4 of the said judgment is quoted below:-
"4. It is, therefore, clear from Sec. 17, that under clause (1) if the offence was committed by the Company, the Company as well as the person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the Company, and under clause (2) if the offence was committed with the consent or connivance of, or was attributable to any neglect on the part of, any director, manager, secretary or other officer of the Company, such persons mentioned therein shall be liable to be proceeded against and punished. The prosecution, therefore, must have filed a complaint, against the Company first and then against the persons against whom they could proceed under Section 17(1) and (2) of the Act. It is, therefore, clear from the complaint itself that the revision petitioner has been prosecuted not in his individual capacity as a vendor but in the capacity of a person employed by the firm as the Plant Superintendent.
"There is nothing on record to show, as suggested by the learned counsel for the petitioner, that the Plant Superintendent was a person responsible or in charge of or responsible to the manufacture or sale of Coca-Cola. In this statement under Section 342, Crl. P. C. the petitioner stated that he was only responsible for the bottling of the liquid and for nothing else. In this circumstance, it is doubtful whether the revision petitioner was in charge of the firm in respect of the manufacture or sale of Coca-Cola. He will however, be entitled to the benefit of doubt. Apart from this, I am of the view that this is a case where Section 95 I.P.C., can be applied, taking into consideration nature of the offence committed Sec. 95 I.P.C. reads thus:
"Nothing is an offence by reason that it cause or that it is intended to cause or that it is known to be likely to cause, any harm, if that harm, is so slight that no person of ordinary sense and temper would complain of such a harm.'' In the case of N.N. Mukerjee (supra), the Court has held that Company is required to be impleaded. Paragraph 3 of the said judgment is quoted below:-
"3. I have carefully perused the complaint, which was filed as for back as 8th November, 73. I do not find any allegation herein whether the accused apart from Shri Prem Chandra Jaiswal were persons, who were incharge of or responsible for the conduct of the business of the Company, or whether the offence in question was committed with the consent or connivance of these officers. I also find that the Company has not been impleaded as a party. The Sessions Judge, Allahabad has in fact recommended the removal of the infirmities in the complaint after quashing the order of the Magistrate issuing process. I do not think such an action would be justified in the interest of justice, particularly when a long period of six years has already elapsed, since the offence is alleged to have Been committed. The order passed by the Magistrate taking cognizance was an illegal order. The failure of the complainant to implead the company is the vital defect. The allegations against the other co-accused are wanting requisite particulars. In these circumstances, I consider that while the recommendation of the Sessions Judge for quashing the order of the Magistrate should be accepted, the entire proceedings under section 7/16 of the Prevention of Food Adulteration Act should be quashed."
Lucknow Bench of this Court in the case of The State Vs. R.P. Mehta (supra) has given clear cut finding that the prosecution of the Company is a pre-condition. The relevant paragraph of the said judgment is quoted below:-
"Where a sample of ice candy found to be adulterated by prohibited saccharin was taken for inspection from the manufacturing firm before it reached the sale-section the prosecution of the partner in charge before whom the sample was taken, without making the firm a party, was illegal. A partnership firm is included in the definition of a company as per explanation attached to Sec. 17 (4) of the Act. The prosecution of the company is a pre-condition before the partner also could be convicted irrespective of whether he is in charge of the company firm or not, especially where the produce, when the sample was taken, was not on sale thus ruling out the prosecution of the partner as its "vendor".
The Apex Court in the case of Sharad Kumar Sanghi (supra) after considering the matter given specific finding that if the Company has not been arrayed as accused, no order could have been passed. Paragraphs 13 and 14 of the said judgment are quoted below:-
"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 the High Court should have been well advised to quash the criminal proceedings initiated against the appellant and that having 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.
14. The appeal stands allowed accordingly."
The Apex Court in the case of Sushil Sethi and another (supra) was of the opinion that main allegation can be said to be against the Company, but Company has not been made party. In that case impugned criminal proceedings are required to be quashed. Paragraph 8.2 of the said judgment is quoted below:-
"8.2. It is also required to be noted that the main allegations can be said to be against the company. The company has not been made a party. The allegations are restricted to the Managing Director and the Director of the company respectively. There are no specific allegations against the Managing Director or even the Director. There are no allegations to constitute the vicarious liability. In the case of Maksun Saiyed v. State of Gujarat (2008) 5 SCC 668, it is observed and held by this Court that 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. It is further observed and held that the vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. It is further observed that statute indisputably must contain provision fixing such vicarious liabilities. It is further observed that 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. In the present case, there are no such specific allegations against the appellants being Managing Director or the Director of the company respectively. Under the circumstances also, the impugned criminal proceedings are required to be quashed and set aside".
Similar issue again came up before the Apex Court in the case of Hindustan Unilever Limited (supra). Paragraph 22 of the said judgment is quoted below:-
"22. Clause (a) of Sub-Section (1) of Section 17 of the Act makes the person nominated to be in charge of and responsible to the company for the conduct of business and the company shall be guilty of the offences under clause (b) of Sub-Section (1) of Section 17 of the Act. Therefore, there is no material distinction between Section 141 of the NI Act and Section 17 of the Act which makes the Company as well as the Nominated Person to be held guilty of the offences and/or liable to be proceeded and punished accordingly. Clauses (a) and (b) are not in the alternative but conjoint. Therefore, in the absence of the Company, the Nominated Person cannot be convicted or vice versa. Since the Company was not convicted by the trial court, we find that the finding of the High Court to revisit the judgment will be unfair to the appellant/Nominated Person who has been facing trial for more than last 30 years. Therefore, the order of remand to the trial court to fill up the lacuna is not a fair option exercised by the High Court as the failure of the trial court to convict the Company renders the entire conviction of the Nominated Person as unsustainable".
From the perusal of the aforesaid judgments, it is crystal clear that for maintaining the Complaint under Section 7/16 of the Act, 1954, "Company" is necessary party and no Complaint is maintainable until "Company" is made party.
So far as second issue with regard to raising new legal plea at this stage is concerned, this issue has came up before the Apex Court in a catena of decisions.
Apex Court in the case of Gurucharan Singh (supra) has held that a pure question of law going to the root of the case and based on undisputed or proven facts could be raised even before the Court of last resort. Paragraphs 8 and 9 of the said judgment are quoted below:-
"8. Before we examine this quintessential aspect presented before us will complex scholarship by Shri S. C. Misra we Had better make. short shrift of certain other questions raised by him. He has desired ` us, by way of preliminary objection, not to give quarter to the plea, founded on s. 6 of the Act, to non-suit his client, since it was a point raised be nova at Letters Patent state. The High Court have thought to this objection but overruled it, if we may say so rightly. The Court narrated the twists and turns of factual and legal circumstances which served lo extenuate the omission to urge the point earlier but hit the nail on the head when it held that it was well-settled that a pure question of law going to the root of the case and based on undisputed or proven facts could be raised even before the Court of last resort, provided the opposite side was not taken by surprise or otherwise unfairly prejudiced. Lord Watson, in Connecticut Fire Insurance Company v. Kavanach,(1) stated the law thus:
"9. When a question of law is raised for the first time in a Court of last resort upon the construction of a document or upon facts either admitted or proved beyond controversy, it is not only competent but expedient in the interest of justice to entertain the plea. The expediency of adopting that course may be doubted when the plea cannot be disposed of without deciding nice questions of fact in considering which the Court of ultimate review is placed in a much less advantageous position than the courts below. But their Lordships have no hesitation in holding that the course ought not any case to be followed unless the Court is satisfied that the evidence upon which they are asked to decide establishes beyond doubt that the facts if fully investigated would have supported the new plea." (1) [1892] A. C. 473, 480.
17-L925SupCI /75 We agree with the High Court that the new plea springs from the common case of the parties, and nothing which may work injustice by allowance of this contention at the late stage of the Letters Patent Appeal has been made out to our satisfaction. Therefore, we proceed to consider the impact and applicability of s.6 of the Act to the circumstances of the present case."
In the case of G.M. Contractor (supra), Apex Court has taken the same view. Paragraph 2 of the said judgment is quoted below:-
"It is stated that this ground goes to the very root of the matter but was not raised before the High Court. The appellants objected to this fresh ground being allowed to be taken up, but we consider that as this ground goes to very root of the matter it should be allowed after the appellants are compensated by costs."
In the case of Rajendra Shankar Shukla and others (supra), this issue was again came before Apex Court and after considering the judgments of the Privy Council as well as Apex Court, the Court has taken the same view that legal plea can be raised at any stage of proceeding even before the Court of last resort. Paragraphs 28, 29, 30, and 31 of the said judgment are quoted below:-
"28. We are not able to agree with the contention of the respondent that a ground raised before this Court for the first time is not maintainable because it has been raised before us for the first time and has not been raised before the courts below. Though the said legal plea is raised for the first time in these proceedings, the learned senior counsel on behalf of the appellants placed reliance upon the judgment of the Privy Council In Connecticut Fire Insurance Co. v. Kavanagh wherein, Lord Watson has observed as under: (AC p.480) "....when a question of law is raised for the first time in a court of last resort, upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is not only competent but expedient, in the interests of justice, to entertain the plea."
The aforesaid views of the Court of Appeal have been relied upon by this Court in Gurcharan Singh v. Kamla Singh.
29. The above mentioned aspect of Article 243ZD, although is being raised before this Court for the first time, we are of the view that the same is based on admitted facts. The legal submission made on behalf of the appellants under Article 243ZD of the Constitution has to be accepted by this Court in view of the similar view that a new ground raising a pure question of law can be raised at any stage before this Court as laid down by this Court in V.L.S. Finance Limited v. Union of India & Ors. which reads thus :- (SCC p. 281 para 7) "7. Mr Shankaranarayanan has taken an extreme stand before this Court and contends that the Company Law Board has no jurisdiction to compound an offence punishable under Section 211(7) of the Act as the punishment provided is imprisonment also. Mr Bhushan, however, submits that imprisonment is not a mandatory punishment under Section 211(7) of the Act and, hence, the Company Law Board has the authority to compound the same. He also points out that this submission was not at all advanced before the Company Law Board and, therefore, the appellant cannot be permitted to raise this question for the first time before this Court. We are not in agreement with Mr Bhushan in regard to his plea that this question cannot be gone into by this Court at the first instance. In our opinion, in a case in which the facts pleaded give rise to a pure question of law going to the root of the matter, this Court possesses discretion to go into that. The position would have been different had the appellant for the first time prayed before this Court for adjudication on an issue of fact and then to apply the law and hold that the Company Law Board had no jurisdiction to compound the offence."
30 Further, this Court in Greater Mohali Area Development Authority & Ors. v. Manju Jain & Ors held as under :- (SCC pp. 164-65, paras 26-27) "26. Respondent 1 raised the plea of non-receipt of the letter of allotment first time before the High Court. Even if it is assumed that it is correct, the question does arise as to whether such a new plea on facts could be agitated before the writ court. It is settled legal proposition that pure question of law can be raised at any time of the proceedings but a question of fact which requires investigation and inquiry, and for which no factual foundation has been laid by a party before the court or tribunal below, cannot be allowed to be agitated in the writ petition. If the writ court for some compelling circumstances desires to entertain a new factual plea the court must give due opportunity to the opposite party to controvert the same and adduce the evidence to substantiate its pleadings. Thus, it is not permissible for the High Court to consider a new case on facts or mixed question of fact and law which was not the case of the parties before the court or tribunal below. [Vide State of U.P. v. Dr. Anupam Gupta, Ram Kumar Agarwal v. Thawar Das, Vasantha Viswanathan v. V.K. Elayalwar, Anup Kumar Kundu v. Sudip Charan Chakraborty, Tirupati Jute Industris (P) Ltd. v. State of W.B. and Sanghvi Reconditioners (P) Ltd. v. Union of India.]
27. In the instant case, as the new plea on fact has been raised first time before the High Court it could not have been entertained, particularly in the manner the High Court has dealt with as no opportunity of controverting the same had been given to the appellants. More so, the High Court, instead of examining the case in the correct perspective, proceeded in haste, which itself amounts to arbitrariness. (Vide Fuljit Kaur v. State of Punjab.)"
31. In National Textile Corporation Ltd. v. Naresh Kumar Badrikumar Jugad, it was held as under:-(SCCp.706, para 19) "19. There is no quarrel with the settled legal proposition that a new plea cannot be taken in respect of any factual controversy whatsoever, however, a new ground raising a pure legal issue for which no inquiry/proof is required can be permitted to be raised by the court at any stage of the proceedings. [See Sanghvi Reconditioners (P) Ltd. v. Union of India and Greater Mohali Area Development Authority v. Manju Jain.]"
In light of judgments of Apex Court discussed hereinabove, answer of the second issue is that non compliance of Section 17(1)(b) of the Act, 1954 is pure legal issue going to the root of the case based on undisputed and proven facts and can be raised at any stage of legal proceeding. It is further held that pure question of law or legal issue based on undisputed or proven facts can be raised at any stage even before the Court of last resort.
I have perused the Complaint dated 19.01.1988. In the Complaint revisionist has been made accused only for the reason that he was Sales Manager of the "Company" and there is no allegation against him which clearly shows that he was made party only following the provisions of Section 17(1) of the Act, 1954, therefore, it is also required for the Complainant to make "Company" accused following the provisions of Section 17(1)(b) of the Act, 1954. In paragraph 3 of the discharge application, revisionist had taken specific ground that prosecution of the "Company" is the prerequisite condition and if the "Company" is not arrayed as an accused, the prosecution would be bad in law and vitiates the entire trial. In discharge application, there is also reference of cases 1979 FACI 251 (All), 1971 Cr.L.J. 60 (Madras) and 1982 Cr.L.J. 159 (N.O.C.) supporting the case of revisionist.
In discharge application, undisputedly this ground as well as judgments were referred, but not considered by the Magistrate only for the reason that this ground has not been argued and no written submission has been filed, which is bad in practice as it goes to the root of the case. In fact, Magistrate was required to consider this ground taken i.e. compliance of Section 17(1)(b) of the Act, 1954 as well as judgments referred before deciding the discharge application, even if it has not been argued before him. It was very fundamental issue and Complaint may be rejected alone on the ground for non compliance of Section 17(1)(b) of the Act, 1954, but the learned Magistrate is done away with his duty and rejected the discharge application.
In light of the discussions made hereinabove as well as judgments relied upon, it is held that in light of Section 17(1)(b) of the Act, 1954, "Company" is necessary party and no Complaint under Section 7/16 of the Act, 1954 can be maintained or order can be passed against the revisionist without impleading the "Company" as accused. Therefore, Complaint dated 22.08.1984 filed under Section 7/16 of the Act, 1954 as well as impugned order dated 16.05.1988 is not sustainable.
In usual course after allowing the revision, it is required that matter be remanded for fresh decision, but in the present case Complaint was filed on 22.08.1984, discharge application was filed on 19.01.1988 and impugned order was passed on 16.05.1988. The revision was filed in the year 1988, now more than 33 years have been passed and at the time of filing of revision, age of the revisionist was 50 years (As per record his date of birth is 01.01.1934). Now as on date, age of the revisionist would be about 87 years.
Similar issue was also raised before the Supreme Court in the matter of Sushil Sethi and another (supra) and the Court has held as follows:-
"8.3. At this stage, it is required to be noted that though the FIR was filed in the year 2000 and the charge sheet was submitted/filed as far back as on 28.5.2004, the appellants were served with the summons only in the year 2017, i.e., after a period of approximately 13 years from the date of filing the charge sheet. Under the circumstances, the High Court has committed a grave error in not quashing and setting aside the impugned criminal proceedings and has erred in not exercising the jurisdiction vested in it under Section 482 Cr.P.C."
In present case too, it is required on the part of the Magistrate to allow the discharge application, but he has rejected the same without considering the provisions of law as well as judicial pronouncement by the Court resulting into inordinate delay of criminal proceeding. Therefore, in the larger interest of justice, it is required that discharge application be allowed and revisionist be discharged.
Therefore, under such facts and circumstances of the case as well as law discussed hereinabove, the impugned order dated 16.05.1988 passed by Munsif Magistrate (Economic Offences), Bijnor in Criminal Case No. 1578 of 1986 is quashed. Discharge application dated 19.01.1988 and revision are allowed. Revisionist be discharged from criminal proceedings.
No order as to costs.
Let a copy of this order alongwith lower court record be transmitted to the trial court forthwith for compliance.
Order Date :- 30.07.2021 Rmk.