IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF FEBRUARY, 2019 BEFORE THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION No.900 OF 2013 BETWEEN:
1. Mr. Vijay Srinivasan, Executive Director, M/s. Preethi Kitchen Appliances Private Limited, No.3/140, I.T. High Way, Oggiamthoraipakkam, Chennai – 600 097.
2. Mr. Rajiv Jivani Alwani, Director, M/s. Preethi Kitchen Appliances Private Limited, No.3/140, I.T. High Way, Oggiamthoraipakkam, Chennai – 600 097.
3. Mr. Gaurav Malik, Director, M/s. Preethi Kitchen Appliances Private Limited, No.3/140, I.T. High Way, Oggiamthoraipakkam, Chennai – 600 097. …Petitioners (By Sri. S. Basavaraj, Advocate) AND:
State of Karnataka, Through Inspector of Legal Metrology, Flying Squad – II, Ali Askar Road, Bengaluru – 560 052. ...Respondent (By Sri.I.S. Pramod Chandra, SPP-II) This Criminal Petition is filed under Section 482 of Cr.P.C. praying to quash the entire proceedings initiated by the respondent in C.C.No.20265/2012 on the file of the VI Addl. Chief Metropolitan Magistrate Court, Bengaluru, for the offences punishable under Section 18 of the Legal Metrology Act, 2009.
This Criminal petition coming on for Admission, this day, the Court made the following:
O R D E R Heard learned counsel for the petitioners and learned SPP-II appearing for respondent – State.
2. The learned counsel for the petitioners has raised two fold contentions. Firstly, placing reliance on Section 48 of the Legal Metrology Act, 2009 (hereinafter referred to as the ‘Act’, for short), the learned counsel would submit that the offences alleged against the petitioners is a compoundable offence and therefore, prosecution of the petitioners for the alleged offence is not tenable in the eye of law. Secondly, the averments made in the complaint are not clear as to whether the alleged offence is committed by the Company or by the petitioners herein in their individual capacity. The petitioners are described as Executive Director and Directors of M/s. Preethi Kitchen Appliances Private Limited. In terms of Section 49 of the Act, when an offence is committed by the company, (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, (ii) where no person has been 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 (iii) the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
3. In the instant case, company is not made as an accused. Further, there are no averments whatsoever in the entire complaint to suggest that any of the petitioners herein were either nominated under sub- section (ii) of Section 49 of the Act and were in charge and were responsible to, the company or that the petitioners herein, at the time the offences alleged was committed, were in charge of, and were responsible to, the company for the conduct of the business of the company. Hence, prosecution of the petitioners being without authority of law and contrary to the provisions of Section 49 of the Act, is liable to be quashed. In support of this submission, the learned counsel has placed reliance on the decision of the Hon’ble Supreme Court in the case of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and others reported in AIR 2005 SC 3512 and with reference to para 11 would submit that in the absence of any clear, unambiguous and specific allegations against the persons who are impleaded as accused that they were in charge of and responsible to the company in the conduct of its business at the material time when the offence was committed, prosecution of the petitioners being illegal is liable to be quashed.
4. The learned SPP-II appearing for the respondent–State has disputed the submission. On merits of the case, he contends that the offence alleged against the petitioners being second offence, in view of Section 48(4) of the Act, the offence alleged against the petitioners is not compoundable. In so far as the procedural aspects, the learned SPP-II would submit that the petitioner himself has produced Annexure – C, which discloses that before initiation of the proceedings, a legal notice was issued to the petitioners and a response was submitted on behalf of the Company – Preethi Kitchen Appliances Pvt. Ltd., wherein in unequivocal terms it is stated that petitioner No.1 – Sri. Vijay Srinivasan was the Executive Director, who was appointed to look after to the day to day business of the company. In view of this factual position, the contention urged in this regard also is not worthy of acceptance.
5. I have carefully bestowed my attention to the submissions made by the learned counsel for the petitioners and the learned SPP-II appearing for the respondent. In so far as the compoundability of the offence is concerned, Section 48 (4) of the Act, renders the second offence as not compoundable. The said sub- section(4) reads as follows:
“(4) Nothing in sub-section (1) shall apply to person who commits the same or similar offence, within a period of three years from the date on which the first offence, committed by him, was compounded.”
In the complaint it is stated that the first offence committed by the Company is compounded on 26.08.2011. The offence in question was committed by accused No.1 within three years from the date of the compounding of the earlier offence. Hence, the petitioners are not entitled for compounding of the alleged offences. Hence, the first contention is rejected.
6. In so far as the prosecution of the Company is concerned, the contention is that the company is not made as an accused. In the complaint the accused are described as under:
“A-1 Sri. Vijay Srinivas – Executive Director A-2 Sri. Rajiv Jivanlal Wani– Director A-3 Sri. Gaurav Malik – Director M/s. Preethi Kitchen Appliances Pvt. Ltd., No.3/140, I.T.Highway, Oggiam Thoraipakkam, Chennai – 600097.”
From the above description it is clear that the manufacturing company namely M/s. Preethi Kitchen Appliances Pvt. Ltd., is also arrayed as one of the accused and the petitioners are shown as the Executive Director and Directors of the said Company. There is nothing in the said complaint to indicate that the petitioners herein are sought to be prosecuted in their individual capacity. They are prosecuted in their official capacity as Executive Director and Directors of the Company, which has committed the offence. Therefore, the contention urged in this regard is also liable to be rejected.
7. Section 49 of the Act provides for a procedure for prosecution of the offences committed by the Company. Section 49 reads as follows:
“49. Offences by companies and power of court to publish name, place of business, etc., for companies convicted.-
(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 (hereinafter in this section referred to as a person responsible); or (ii) where no person has been 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 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 Director or the concerned Controller or any legal metrology officer authorised in this behalf by such Controller (hereinafter in this section referred to as the authorised officer) in such form and in such manner as may be prescribed, that it has nominated such director as the person responsible, along with the written consent of such director 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 subsection 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 Director or the concerned Controller or the authorised officer; or (ii) he ceases to be a director of the company; or (iii) he makes a request in writing to the Director or the concerned Controller or the legal metrology officer under intimation to the company, to cancel the nomination, which request shall be complied with by the Director or the concerned Controller or the legal metrology officer, whichever is the earliest, continue to be the person responsible:
Provided that where such person ceases to be a director of the company, he shall intimate the fact of such cessation to the Director or the concerned Controller or the authorised officer:
Provided further that where such person makes a request under clause (iii) the Director or the concerned Controller or the authorised officer 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 the neglect on the part of, any director, manager, secretary or other officer, 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.
(5) Where any company is convicted under this Act for contravention of any of the provisions thereof, it shall be competent for the court convicting the company to cause the name and place of business of the company, nature of the contravention, the fact that the company has been so convicted and such other particulars as the court may consider to be appropriate in the circumstances of the case, to be published at the expense of the company in such newspaper or in such other manner as the court may direct.
(6) No publication under sub-section (5) shall be made until the period for preferring an appeal against the orders of the court has expired without any appeal having been preferred, or such an appeal, having been preferred, has been disposed of.
(7) The expenses of any publication under sub-section (5) shall be recoverable from the company as if it were a fine imposed by the court. Explanation. —For the purposes of this section,— (a) “company” means any body corporate and includes a firm or other association of individuals; and (b) “director”, in relation to a firm, means a partner in the firm but excludes nominated directors, honorary directors, Government nominated directors.”
8. It is now well settled that when the company is sought to be prosecuted, necessary averments should be made in the complaint that the persons who are impleaded as accused were in charge of, and responsible to, the company in the conduct of its business at the material time when the offence was committed. In State of Karnataka V. Pratap Chand and Others, reported in 1981 Crl. LJ 595, dealing with a case under the Drugs and Cosmetics Act, containing similar provisions, it was held that a person liable for criminal action under that provision should be a person in overall control of day-to-day affairs of the company or a firm. In the instant case, the very designation of the petitioner No.1. – Sri. Vijay Srinivasan, as Executive Director would mean that petitioner No.1 was in overall control of the day-to-day affairs of the company. This position is admitted by the company in their correspondence dated 17.08.2012 (Annexure – C), wherein the company has informed to Assistant Controller of Legal Metrology, Bengaluru, that Sri. Vijay Srinivasan, Executive Director, was appointed to look after the day-to-day business of the Company. As the company is made as an accused and the said company is represented by petitioner No.1 as it’s Executive Director, there is no illegality in the presentation of the complaint as contended. The material on record indicate that petitioner No.1 was in overall control of day-to-day affairs of the company and on the date of the commission of the alleged offence.
Therefore, the complaint is maintainable against the company as well as petitioner No.1.
9. However, insofar as petitioner Nos.2 and 3 are concerned, they are made parties to the prosecution solely on the basis of they being the Directors of the said Company. Without there being any averments in the complaint that at the time of commission of offence, they were in charge and responsible of the company in the conduct of its business, prosecution of petitioner Nos.2 and 3 for the alleged offence is legally untenable and hence, petition deserves to be allowed to this extent and prosecution of petitioner Nos.2 and 3 deserves to be set aside.
Accordingly, petition is allowed in part. The proceedings in C.C.No.20265/2012 on the file of the VI Addl. Chief Metropolitan Magistrate, Bengaluru, are hereby quashed only in respect of petitioner Nos.2 and 3 namely accused Nos.2 and 3 are concerned. Trial shall proceed against accused No.1 and the Company– M/s.Preethi Kitchen Appliances Private Limited, in accordance with law.
Sd/- JUDGE SV