Present: Mr. Sandeep Vermani Advocate Vs. State of Punjab - Court Judgment

Criminal Misc.-M No.22217 o”

1. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Criminal Misc.-M No.22217 of 2011 Date of decision :

28. 01.2013 Anand Fredrick .....Petitioner VERSUS State of Punjab ....Respondent CORAM:- HON'BLE MR.JUSTICE RANJIT SINGH 1

Whether Reporters of local papers may be allowed to see the judgement?.”

2. To be referred to the Reporters or not?.”

3. Whether the judgment should be reported in the Digest?.

Present: Mr.Sandeep Vermani, Advocate for the petitioner.

Mr.Kirat Singh Sidhu, DAG, Punjab for the State.

**** RANJIT SINGH, J.

This order shall dispose of Criminal Misc.

-M Nos.22217 of 2011 (Anand Fredrick versus State of Punjab) and 23692 of 2011 (Anand Fredrick versus State of Punjab).The petitioner seeks quashing of criminal complaint No.94-2 dated 27.01.2010 (in criminal Misc.

M- No.22217 of 2011) and criminal complaint No.280-2 dated 13.08.2008 (in criminal Misc.-M No.23692 of 2011) filed under Sections 3 (k) (i).17, 18 and 33 punishable under Section 29 of Insecticides Act, 1968.

As per the petitioner, he cannot be held vicariously liable because he had already resigned as Director of the Company by the time the incident Criminal Misc.-M No.22217 o”

2. took place and as such he cannot be made responsible in any manner for the allegation made in the complaint.

On 20.07.2007, the Insecticides Inspector took sample of Cartap Hydrocholride 4% G Batch No.0706147, Manufacture date 6/07, expiry date 5/09, manufactured by M/s Agrimas Chemical LTD.and marketed by M/s Chambel Fertilizers and Chemical Limited.

In second case i.e.Criminal Misc.-M No.23692 of 2011, the samples were taken on 28.07.2005.

The said samples were sent to laboratory for testing/analyzing and the same were declared misbranded with remarks “the sample does not conform to the IS specifications in respect of its percentage active ingredient contents”.It is stated that the active ingredients contents were only 3.50%.

A copy of the analysis report is annexed with both the petitions as Annexure P-2.

On the basis of this complaint, the trial Court summoned the petitioner on 27.01.2010.

The petitioner would allege that the summoning order has been passed in mechanical manner and without application of mind.

It is alleged that the trial Court without recording preliminary evidence of the complainant has summoned the petitioner to face trial.

Reference is made to the provisions of the Insecticides Act, 1968, whereby company has to appoint Incharge and responsible person for the conduct of business under Section 33 of the Insecticides Act.

One Sh.

Ramesh Kulkarni son of Sh.

Shrikrishna, Factory Manager was appointed as Incharge and responsible person.

This is on the basis of affidavit annexed with the petition as Annexure P-4.

The provisions of Section 33 of the Insecticides Act are as under:- Criminal Misc.-M No.22217 o”

3. “Offences by companies – (1) Whenever an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of, or was responsible to the company for the conduct of the business of, the company, as well as 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 under this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(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 purpose 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.”

The petitioner, accordingly, would contend that no offence whatsoever would be made out against him on the basis of this Criminal Misc.-M No.22217 o”

4. criminal complaint.

It is alleged that the petitioner was Managing Director and responsible for the affairs of the company, which had allegedly manufactured misbranded insecticides.

The petitioner would contest this and point out that this is factually incorrect.

The petitioner has averred in the petition that he was not the Director of the company at the relevant time as he had resigned from the Board of Directors of the Company on 28.06.2005 i.e.much prior to filing of complaint and prior to the date of taking of samples in the month of September, 2005.

In support of his plea that the petitioner had resigned from the office of Managing Director, reference and reliance is placed on Form 32, which indicate change of Board of Directors of the Company and the filing of receipt dated 10.08.2005, which are annexed with the petition as Annexures P-5 and P-6.

The petitioner would, accordingly, urge that he has wrongly been mentioned as Managing Director and responsible person and official of the company, who have allegedly committed this offence under the provisions of the Insecticide Act, 1968.

Plea is that the petitioner was on Board of Directors of the company till 28.06.2005 and so he cannot be held responsible for day to day conduct of the business after his resignation.

On the date when the samples were taken, the petitioner was not the incharge and was not responsible person as defined under Section 33 of the Act reproduced above.

In support, the petitioner has relied upon order passed in Criminal Misc not M- 9407 of 2011, which was filed by the petitioner himself before this Court seeking quashing of the similar complaint Criminal Misc.-M No.22217 o”

5. and the summoning order passed against him.

In this case also, the complaint against the petitioner has been quashed.

This Court, after making reference to the grounds on which the complaint and the FIR, can be quashed on the basis of law settled in the case of State of Haryana versus Bhajan Lal 1992 Supp (1) Supreme Court Cases 335 has ultimately quashed the complaint and the summoning order against the petitioner precisely on the ground that he was not the Managing Director of the company on the date the samples were taken by the Insecticides Inspector.

This is viewed by this Court on the basis of provisions of Section 33 of the Act which provides that when the company is sought to be prosecuted for an offence, every person, who at the time of commission of offence was incharge or was responsible to the company for conduct of the business would be deemed to be guilty of the offence.

Thus, the person has to be shown to be incharge of or responsible for making him vicariously liable.

In view of this legal provisions, the complainant is expected to disclose specifically or by necessary inference that a person or persons cited as accused were at the time of commission of the offence in charge or was responsible to the company for the conduct of this business.

The precise ground of the petitioner is that he was no more the Director or Managing Director of the company when the samples of the Insecticides were drawn.

The petitioner had already resigned and, thus, had retired from the company and, accordingly, pleads that he could not be held liable as being not responsible in any manner.

In support, the counsel for the petitioner has also relied Criminal Misc.-M No.22217 o”

6. upon on the observations made in Abey Yograj versus State of Haryana and another 2004 Cri.LJ 2443.where this Court has discussed the aspect of vicarious liability under the Insecticides Act.

This was also a case, where sample of insecticides was found to be misbranded.

The complaint against the Director of the company was filed.

There was no evidence on record that the Director was responsible for conduct of the business of the company or that the offence was committed with his connivance and knowledge.

There was material to show that the Manager was responsible for manufacture and quality of insecticide.

The proceedings in this case were quashed.

The counsel would also seeks support from case of Harshendra Kumar D.

versus Rabatilata Koley etc.2011 (1) RCR (Criminal) 887 to urge that the petitioner cannot he held liable vicariously.

In this case a cheque issued by the company was dishonoured.

Complaint under Section 138 of Negotiable Instruments Act was filed against the Company, Managing Director and two DirectORS.Plea of one of the Directors was that he had resigned on 02.03.2004 and his resignation was duly accepted.

While accepting this plea, it is held that the Director whose resignation has been accepted and that has been duly notified by the Registrar of the Companies then he cannot be held accountable and fastened with liability for anything done by the company after acceptance of his resignation.

The responsibility of the Director, be it for liability under the Negotiable Instruments Act or for the matter under the Insecticides Act, has to be on the basis of responsibility of his part Criminal Misc.-M No.22217 o”

7. being Director etc.No doubt, directors and Managing Director, if responsible, can always be held vicariously liability i.e.what Section 33 of the Act would provide.

In this case, I need not opine much on this aspect to see if the petitioner can be held vicariously liable for misbranded sample or not.

Once the petitioner was no more the Managing Director and this fact is proved on record by documentary evidence and is not based on oral assertions, it is reasonable to assure that this plea cannot be manipulated in any manner.

The plea that the petitioner was no more the Managing Director on the date the samples were drawn can easily be ascertained and accepted.

Accordingly, the petitioner cannot be held vicariously liable or responsible on the part of the company or person responsible for the affairs of the company.

In this background and following the precedents, as noted above, the case for quashing the complaint and the summoning order against the petitioner, therefore, is made out.

The present petitions are allowed.

The complaint and summoning order qua the petitioner is hereby quashed.

It is made clear that the company and responsible person for the company would be liable to face consequences of the allegation in the complaint and this order will not have any affect on the trial which is in progress.

January 28, 2013 ( RANJIT SINGH ) rts JUDGE