Judgment:
Mirdhe, J.
1. This criminal petition is preferred under section 482 of the Criminal Procedure Code praying to quash the entire proceedings in SPL/FIR No.55 of 1986, on the file of the Sessions Judge, Raichur. There are in all eight accused in the said case. This criminal petition is preferred by accused Nos. 1 to 5 in that case.
2. A few facts necessary for the purpose of disposal of this case are as follows:
The P.S.I. Sadar Bazar, Raichur, went to the mill-Ajoomal Lilaram Oil Mill with panchas and some members of his staff on December 18, 1986, at 7.30 p.m. as he had information that, in Ajoomal Lilaram Oil Mill, business was carried on without maintaining a stock book and that commodities such as oil seeds, cotton seeds, etc., were stored illegally. The P.S.I. conducted a raid and checked the oil mill and found that 28 quintals 98 kgs. of sunflower oil was illegally stocked which was more than the stock mentioned in the stock register and, therefore, there was violation of clauses 7 and 14 of the Karnataka Edible Oils Dealers Licensing Order, 1976-77, which is an offence under section 3 punishable under section 7 of the Act. After the investigation of the case, the police have filed a charge-sheet in the Court of Sessions at Raichur.
3. The petitioners who are accused Nos.1 to 5 in that case have preferred this criminal petition. The contention of learned counsel for the petitioners is that the petitioners are the partners of the said mill and that they reside at Bombay and they are not in charge of the management of the affairs of the mill and that, therefore, no prosecution can be launched against them. As against this, the learned Additional State Public Prosecutor has contended that since the petitioners are the partners of the firm, they can be prosecuted for violation of the provisions of the Karnataka Edible Oils Dealers Licensing Order, 1976-77, read with section 3 of the Act.
4. The point that arises for my consideration in this case is as follows:
Whether the partners of a firm who are not in charge of the affairs of the firm can be prosecuted for violation of any order made under section 3 of the Essential Commodities Act, 1955
5. MY findings on the above point as follows:
A partner who was not in charge of and was not responsible to the company for the conduct of the business of the company cannot be held liable to be proceeded against for contravention of any order under section 3 of the Essential Commodities Act, 1955, for the reasons stated below.
6. It is not in dispute in this case that the Ajoomal Lilaram Oil Mill is a partnership concern and that the petitioners are the five partners of the said firm. Section 10 of the Essential Commodities Act, 1955 (in short, 'the Act'), read as follows:
'10. Offences by companies.-(1) If the person contravening an order made under section 3 is a company, every person who at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the business of the company as well as the company, shall be deemed to be guilty of the contravention 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 if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), 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, 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; and
(b) 'director' in relation to a firm means a partner in the firm.' .' This section makes it clear that a partner cannot be proceeded against simply on the ground that he is a partner of that company. The prosecution must first show that the partner of the firm to be prosecuted was in charge of and was responsible to the company for the conduct of the business of the company. After the prosecution establishes this fact, the burden shifts to the partner prosecuted to prove that the contravention took place without his knowledge or that he exercised all due diligence to prevent any such contravention. Sub-section(2) of section 10 of the Essential Commodities Act, 1955, further makes it clear that where an offence under the said 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, such director, manager, secretary or other officer shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly. In Mirji Brothers Oil Mill v. State of Karnataka [1980] 2 Kar LJ 35, this question arose and this court laid down as follows: 'Section 10 of the Essential Commodities Act makes it clear that every person who at the time the contravention was committed and who was in charge of and was also responsible to the company for the conduct of the business shall be deemed to be guilty of such contravention and shall be liable to be proceeded against and punished accordingly. A-2 was the person who was managing the affairs of the firm during the relevant period. Nowhere in the complaint had the complainants stated that apart from A-2, the other partners of the firm were either present or in charge of the firm when the alleged offence was committed. Therefore, it would be an abuse of the process of the court if the prosecution were permitted to proceed against the other accused.'
7. It is the case of the prosecution that A-6, A-8 and A-9 were present in the mill at the time of the raid and it is also the case of the prosecution that accused No.9, Ganasham, was the manager of the said mill at that time. Nowhere in the complaint is it averred that the petitioners were managing the affairs of the firm during the relevant period. Therefore, in the absence of any such averment in the complaint to the effect that these petitioners were managing the affairs of the firm during the relevant period, they cannot be proceeded against. Hence, it is a fit case for this court to exercise its powers under section 482 of the Criminal Procedure Code and to quash the proceedings in the lower court so far as these petitioners are concerned. Hence, I proceed to pass the following order:
(i) This criminal petition is allowed.
(ii) The proceedings against these petitioners only are quashed.