Ajit NaraIn Haksar and ors. Vs. Assistant Commissioner of Central Excise (Legal), Bangalore - Court Judgment

Excerpt:
criminal proceedings - validation--supplementary complaint is not permissible in law--additional accused can be brought in by taking recourse to section 319 cr. p.o. at the appropriate stage--section 9aa of the central excise & salts act, 1944 is a substantive law creating specific offence against two categories of persons specified in sub-sections (1) and (2) and is not retrospective in operation--invoking of the same as against the petitioners in respect of their acts of commission and omission during the period from 1.10.1975 to 28.2.1983 would be violatlve of article 20(1) of the constitution--both petitions allowed and impugned proceeding is quashed so far as petitioners are concerned. - indian penal code, 1890.section 376: [arali nagaraj, j] sentence offence of rape - accused.....orderg. patribasavan goud, j.1. alleging evasion of payment of duty under the central excise and salt act, 1944 ('act' for short) punishable under sections 9(1) and 9-aa of the act, respondent-assistant commissioner of central excise filed a complaint under section 200 of the criminal procedure code before the special court for economic offences, bangalore on 27-7-1995 against m/s. india tobacco company limited (ttc' for short) as the first accused and ashok bhatia, director of itc as the second accused. on the same day, the learned magistrate took cognizance of the offences punishable under sections 9(1) and 9-aa of the act and directed issuing of summons to the said two accused. a case was registered at cc no. 1227 of 1995. 2. in the very case cc no. 1227 of 1995 on 31-10-1995,.....

Judgment:
ORDER

G. Patribasavan Goud, J.

1. Alleging evasion of payment of duty under the Central Excise and Salt Act, 1944 ('Act' for short) punishable under Sections 9(1) and 9-AA of the Act, respondent-Assistant Commissioner of Central Excise filed a complaint under Section 200 of the Criminal Procedure Code before the Special Court for Economic Offences, Bangalore on 27-7-1995 against M/s. India Tobacco Company Limited (TTC' for short) as the first accused and Ashok Bhatia, Director of ITC as the second accused. On the same day, the learned Magistrate took cognizance of the offences punishable under Sections 9(1) and 9-AA of the Act and directed issuing of summons to the said two accused. A case was registered at CC No. 1227 of 1995.

2. In the very case CC No. 1227 of 1995 on 31-10-1995, respondent-complainant filed before the said learned Magistrate, what he termed 'supplementary complaint' under Section 200 of the Criminal Procedure Code alleging commission of the very offences punishable under Sections 9(1) and 9-AA of the Act, but this time, apart from the above said two accused as A-1 and A-2, respondent arrayed A-3 to A-24 and several others connected with ITC in various capacities. That very day, i.e., on 31-10-1995, the order-sheet would disclose that the learned Magistrate heard the complainant's Counsel, perused the supplementary complaint and the documents produced along with it, referred to the fact that cognizance had already been taken of the offences alleged in the said supplementary complaint, and then concluded that there were grounds to issue process to A-3 to A-24 mentioned in the supplementary complaint, and then directed issuing of summons to the said A-3 to A-24. This was done in the very CC No. 1227 of 1995.

3. The acts of omission and commission attributed to the accused in the main, as well as in the supplementary complaint, related to the same set of acts of commission and omission for one single period, namely for the period from 1-10-1975 to 28-2-1983. In these criminal petitions under Section 482 of the Criminal Procedure Code, some of the accused brought in by means of supplementary complaint, are seeking quashing of the same, they being A-3 to A-7 in Criminal Petition No. 1327 of 1996, A-9 to A-14, 16, 18 to 21, 23 and 24 in Criminal Petition No. 1328 of 1996.

The original two accused, namely ITC and Ashok Bhatia have not questioned issuing of process against them.

4. I have heard at length Sri Natarajan, learned Senior Counsel for the petitioners in the two cases, and Sri Aravind Kumar, learned Additional Central Government Standing Counsel for the respondent.

5. At the outset, the procedure adopted by the learned Magistrate in permitting the additional accused to be brought in by way of what the complainant calls 'supplementary complaint' is to be found fault with. Here was the original complaint against two accused filed under Section 200 of the Criminal Procedure Code by the respondent. Learned Magistrate took cognizance. Complaint being from a public servant acting in discharge of his official duties, in view of Clause (a) of the proviso to Section 200 of the Criminal Procedure Code, complainant was not examined. On perusal of the complaint and the documents produced, learned Magistrate found sufficient ground to proceed and a direction issued to issue process against two accused, namely, ITC and Ashok Bhatia for offences under Sections 9 and 9-AA of the Act. Thereafter, if any more accused were to be brought in, the only procedure known to law in a proceeding like the one that was there before the learned Magistrate, was by taking recourse to Section 319 of the Criminal Procedure Code and by invoking the said provision at the appropriate stage. There was no scope under any of the provisions of the Criminal Procedure Code for the complainant to go on filing supplementary complaint/s to bring in some accused at one point of time, and by the other supplementary complaint to bring in some other accused at another point of time, etc. Once the learned Magistrate has taken cognizance under Section 190(1)(a) of the Criminal Procedure Code upon a complaint presented under Section 200 of the Criminal Procedure Code and has directed issuance of process, the further course of action shall have to be governed by Chapter XIX or XX of the Criminal Procedure Code as the case may be. It is not legally permissible for the complainant to file what he calls 'supplementary complaint' and then bring in any other person as accused. In a case like the one that was there before the learned Magistrate initiated under Section 200 of the Criminal Procedure Code, the only course known to law to bring in as accused someone not there at the initial stage, would be by invoking Section 319 of the Criminal Procedure Code at the appropriate stage. Entertaining, by the learned Magistrate, of the supplementary complaint, therefore, is not legally sustainable.

6. The offence alleged, by its very nature, can be committed by the company, namely ITC. But, the petitioners in these two petitions are now sought to be arrayed by taking aid of Section 9-AA of the Act, which reads thus:

'9-AA. Offences by companies.--(1) Where 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, and 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 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 or that he had 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 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'.

The said provision has been inserted by the Central Excises and Salts (Amendment) Act, 1985, with effect from 27-12-1985. The period concerned with the alleged evasion of payment of duty is from 1-10-1975 to 28-2-1983. Sri Natarjan, learned Senior Counsel for the petitioners submits that Section 9-AA being a provision under which the new offence is created, even according to the complainant, it being not possible to rope in these petitioners without the aid of the said Section 9-AA and merely under Section 9, invoking Section 9-AA of the Act as against the petitioners for the period from 1-10-1975 to 28-2-1983, when the said Section 9-AA was not there in the statute book, would be a violation of Article 20(1) of the Constitution, which, inter alia, mandates that no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence.

Sri Aravind Kumar, learned Senior Standing Counsel for the respondent, however, would urge that Section 9-AA does not create any offence, and that the offence as such is one punishable under Section 9(1) of the Act, but that Section 9-AA is only procedural.

Contending that Section 9-AA is substantive law, it cannot have retrospective effect in the absence of any indication to that effect, express or implied, Sri Natarajan, learned Senior Counsel for the petitioner urges that the said Section 9-AA brought in with effect from 27-12-1985 cannot be made applicable to the period concerned herein, namely the one commencing from 1-10-1975 to 28-2-1983. Sri Aravind Kumar, learned Senior Standing Counsel for the respondent, however, would urge that since Section 9-AA is only procedural, and it could have retrospective effect.

7. If Section 9-AA is substantive law, creating an offence by itself, then, obviously same not having been made retrospective, the said provision, having come into force in December 1985, cannot be applied to the petitioners in respect of the period from 1-10-1975 to 28-2-1983, as that would be violative of Article 20(1) of the Constitution. On the other hand, if the said provision is only procedural, then, same would have retrospective effect, and there would be nothing wrong with application of the said provision in respect of the period prior to the coming into force of the said provision also.

8. If Section 9-AA is only procedural and not substantive, there would be no need for the same to be specifically mentioned in the complaint as well as in the order of the learned Magistrate while taking cognizance and directing issuance of the process, as the offence under which the acts of commission and omission of the accused are punishable. The provision in the realm of procedural law only is neither mentioned in the complaint nor would it be a provision mentioned by the learned Magistrate as an offence of which he was taking cognizance. In the present case, not only that the complainant has specified it as a provision under which a particular offence is punishable, but that the learned Magistrate also has taken cognizance of that particular offence punishable under the said section, in addition to one under Section 9. In other words, the manner in which it has been done would be termed as Section 9 read with Section 9-AA of the Act.

9. If someone could be convicted of a particular offence punishable under Section 9 without the aid of Section 9-AA, that means that Section 9-AA is redundant. For example, under Sub-section (1) of Section 9-AA, 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, was also punishable under Section 9 along with the company, and, for example, if an officer of the company with whose consent or connivance or negligence, the offence concerned has been committed, as covered by Sub-section (2) of Section 9-AA, could also be punishable under Section 9(1) itself, then, one fails to understand as to where was the necessity for the legislature to bring in a provision like Section 9-AA which, on acceptance of the said argument, shall have to be rendered redundant. The kind of escape routes that are read in the proviso to Sub-section (1) are not even there for those covered by Sub-section (2). If the Legislature has felt it necessary for enacting a provision like Section 9-AA for two separate categories, one covered by Sub-section (1) and the other one by Sub-section (2), that means that till the said provision was enacted, it was not possible for the said categories of persons to be convicted merely under Section 9.

10. The wording of the provision under Section 9-AA also leaves one in no doubt as to specific offence having been created thereunder for the first time. No doubt, the offence that sub-sections (1) and (2) of Section 9-AA speak of is the offence with which the company should first be guilty of. In this case, it is Section 9(1). But, then, it is because of Sub-section (1) of Section 9-AA that all those who, at the time the offence was committed, were in charge of and were responsible to the company for the conduct of the business of the company, would also be deemed to be guilty of the offence of which the company is guilty and would be liable to be proceeded against and punished accordingly. What was therefore an offence merely by the company earlier is now made an offence by such persons also. It is no defence to say that if the offence was committed without their knowledge, or that they had exercised all due diligence to prevent the commission of such offence, they would escape the net. While prior to introduction of Section 9-AA(1), mere knowledge of commission of the offence by the company still could not make him guilty, after introduction of Section 9-AA(1), if a person was in charge and was responsible to the company for the conduct of the business of the company at the time the offence was committed, then, mere knowledge of the commission of the offence would render him liable for the offence for which the company is to be punished. It would be still worse for those covered by Sub-section (2), inasmuch as, mere negligence on their part would render them liable for punishment, whereas earlier it was not so.

11. In my opinion, Section 9-AA is a substantive law creating, for the first time, the offence in respect of two categories of persons, one covered by Sub-section (1) and the other by Sub-section (2), the same having been brought on the statute book with effect from 27-12-1985. It is not retrospective in operation. Punishing thereunder someone for something done during 1-10-1975 to 28-2-1983 when the said provision was not there, would be violative of Article 20(1) of the Constitution.

12. In Venkataraman T. Pai v. C.R. Shah, : 1996(81)ELT467(Guj) the Gujarat High Court observed in paragraphs 15 and 16 thus:

'... The Section quoted hereinabove, clearly indicates that what was till then an offence by a company only would be an offence not only by the company but also by the persons who are running the affairs of the company and those persons being one specified in Section 9-AA. The moment this aspect is borne in mind it is quite clear that Section 9-AA is not a procedural Section or a Section describing rule of evidence merely shifting the burden of proof. It introduces criminality in relation to the persons who are in charge of the affairs of the company along with the company. In other words, it is a substantive law and not a procedural or adjectival law.

16. On analysing the Section the aforesaid conclusion will be borne. In sub-sections (1) and (2), both the last 2 lines clearly indicate that the persons specified 'shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly'. Now, they are to be deemed guilty along with the company, which till the introduction of Section 9-AA was the only one answerable for the alleged offence...'.

In paragraph 18 it said thus:

'18. Section 9-AA quoted hereinabove by deeming fiction makes the person in charge for the conduct of the business of the company guilty only because he was in charge at the time of commission of offence. If Section 9-AA is given retrospective effect, obviously, the act of being in charge which was definitely innocent and had no legal consequence as the one brought in by Section 9-AA it will be clearly hit by Article 20(1) of the Constitution of India'.

The Gujarat High Court further observes in paragraphs 20, 21 and 22 thus:

'20. Now, turning to Section 9-AA, it is quite clear that the language used itself does not make it retrospective. In application 5/28 before the Trial Court also, it has been categorically stated in para 3 at page 113 that the bill which contained the said amending provision of Section 9-AA and others which eventually became, on passing, Act No. 79 of 1985, did not assign any reason for the amendment, nor did it indicate any object that was to be fulfilled by introducing the amendment including Section 9-AA. Thus, the position is that, neither is there any indication by way of reasons and objects in the amending Act, nor is there anything in the language of Section 9-AA which would warrant its retrospective operation. It is, therefore, clearly hit by Article 20(1) of the Constitution of India.

21. It can arguably be said that Sub-section (1) of Section 9-AA contains a proviso whereby lack of knowledge or exercise of due diligence is permitted to be a defence for the person made liable on account of legal fiction contained in Sub-section (1). However, as rightly submitted by learned Counsel Shri P. Chidambaram, Sub-section (2) does not afford any defence whatsoever provided it is proved that the offence has been committed with the consent or connivance or is attributable to any neglect on the part of any Director, Manager, Secretary or other Officers and he or they shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

22. Even in the proviso to Sub-section (1) lack of knowledge might be possible to plead and prove, but the exercise of due diligence introduced by way of defence for the first time in relation to the deeming fiction contained in Sub-section (1) could not per se have been exercised as that was not expected of the Director or the person in charge of the affairs of the company, because, till then, he did not know that this will be the requirement to escape liability from deeming fiction...'.

The Gujarat High Court therefore concluded that the provisions creating the offence for the first time by amendment cannot operate retrospectively. It also observed that the learned Magistrate had been led away by the submission that the amendment introduced by Section 9-AA was only procedural, whereas, in fact, it was not so.

13. In P.M.D. Thackersay v. Assistant Collector of Central Exdse, : 1991(52)ELT497(Bom) the Bombay High Court held that it is not possible to consider Section 9-AA of the Act retrospectively because that could be against the normal value of interpretations, which would render a person, who was not criminally liable on the date of the offence, liable.

14. In S.L. Kirloskar v. Union of India, 1993 (68) ELT 533 (Bom.) the Bombay High Court was dealing with the matter wherein Directors and Officers of a public limited company were sought to be made liable for levy of penalty under the provisions of the Central Excise Act, 1944. The Bombay High Court said that the duty was payable by the producer or manufacturer for payment of penalty, and the manufacturer in the case concerned was a public limited company. It was the company that was liable for payment of excise duty and the company being legal entity, the liability of the company cannot be foisted on the Directors of the company. The Bombay High Court said that under the Companies Act, the affairs of the company and the ultimate control of the company lies with the Board of Directors and neither the Board of Directors, nor the individual Director is liable to discharge the liabilities of the company unless the statute so specifically provides. It was then that Rule 209-A was sought to be pressed into service. This is what the High Court said in that regard:

'Shri Desai, learned Counsel appearing on behalf of the Department, submitted that though the company is legal entity, the functions of the company are performed in accordance with the desire of the Board of Directors and the Executives and, therefore, the Board of Directors and the Executives are liable for payment of penalty. The submission is only required to be stated to be rejected. It is impossible to accept the claim that the penal liability can be enforced against a person in absence of specific provision under the statute. Shri Desai then referred to the provisions of Rule 209-A. The submission cannot be accepted for more than one reason. In the first instance, Rule 209-A was enacted with effect from April 14, 1986. Being a rule for levy of penalty, the rule cannot be construed with retrospective effect. The show-cause notice, in the present case, is in respect of evasion of excise duty for the period between January 1, 1981 and November 30, 1985. Rule 209-A which came on the statute book for the first time in April 1986 cannot be attracted to make Directors and Executives liable'.

What the Bombay High Court said in respect of making the Directors liable for penalty by taking recourse to a provision subsequently brought into force, would apply on all fours to the present situation wherein ihp petitioners are sought to be brought in with the aid of Section 9-AA, the provisions subsequently brought in respect of something that happened prior to its coming into force.

15. In Manian Transports and Others v. S. Krishna Moorthy, Income-tax Officer, : [1991]191ITR1(Mad) the Madras High Court was dealing with the arguments advanced on the basis of Section 278-B of the Income-tax Act, 1961, which was inserted by the Taxation Laws (Amendment) Act, 1975 in order to charge the petitioners 2 and 3 therein for the alleged commission of offence under Section 276-C(1), which itself was brought into the statute book only with effect from 1st October, 1975. It was contended on behalf of the petitioners 2 and 3 therein that since the law in force on the date of the commission of the offence alone will be applicable, and as these sections, which had been invoked for prosecuting petitioners 2 and 3, were not existing prior to October 1, 1975, the said two petitioners could not be prosecuted for the offence under Section 276-C(1) of the Act for the three assessment years 1973-74, 1974-75 and 1975-76. It was then that Section 278-B of the Income-tax Act was pressed into service. The said Section also had been inserted with effect from 1st October, 1975 by the Taxation Laws (Amendment) Act, 1975. The said Section took in its fold the offences committed by a company. In such cases, it provided that 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 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. There is a provision attached to the said Sub-section which read that nothing contained in that Sub-section would render any such person liable to any punishment if he proved that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. Sub-section (2) of Section 278-B states that where an offence under the Act had been committed by a company and it was proved that the offence had been 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 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 notwithstanding anything contained in Sub-section (1). The Madras High Court in the above background, said thus:

'Before the introduction of this section, a firm alone could have been proceeded against. Therefore, earlier to the introduction of Section 278-B, the partners could not be prosecuted, but the firm alone could be prosecuted, In case the partners were to be proceeded against in the absence of Section 278-B, there was no need for the Legislature to have introduced Section 278-B, as it had been done in 1975. It must also be mentioned here that, in its wisdom, the Legislature has not allowed the prosecution of partners who may be christened as sleeping partners and who may not, in anyway, be connected with the conduct of the business of the firm. Section 278-B can have no retrospective effect and can operate only with effect from October 1, 1975. Therefore, petitioners 2 and 3 cannot be prosecuted with the aid of Section 278-B for an offence under Section 276-C of the Act for the assessment years 1973-74, 1974-75'.

In respect of the very provision Section 278-B of the Income-tax Act, this is what the Punjab and Haryana High Court said in Commissioner of Income-tax, v. Jagdish Lal Behl and Others, (1983) 139 ITR 623 already referred to:

'So far as the liability of the directors of the company is concerned, we might add that Section 278-B which was brought on the statute book with effect from October 1, 1975, by the Taxation Laws (Amendment) Act, 1975, makes only the director who was in charge of the business of the company guilty of the offences in question. Since the offences were committed in the year 1965-69, we cannot apply the principle enshrined in this Section to create ex post facto offences. To do so would tantamount to acting contrary to the clear mandate contained in Article 20 of the Constitution. Mr. Awasthy has submitted that even prior to the coming into force of Section 278-B of the Act, position of law was the same. We are, however, of the view that if the Legislature itself thought of clarifying the position of law, it would not be proper for us to assume something to be in existence and then to go on to punish a person for a criminal offence'.

16. Thus, wherever an offence is created afresh and where it is sought to be fastened on a person in respect of something he did when the said provision was not on the statute book, Article 20(1) of the Constitution is always pressed into service. Section 9-AA of the Act is one such provision. As noticed earlier, the complainant has referred to the Section as a punishable Section along with Section 9(1). Even in the accusation/charge, the said Section 9-AA needs to be referred to if the case were to continue. That would not be the position if the provision were to be merely a procedural law. That it is not procedural, but, is a substantive law under which specific offence in respect of two categories of persons referred to in Sub-sections (1) and (2) of Section 9-AA, is apparent from the very wording of the Section wherein a particular act of commission or omission is deemed to be an offence and is made punishable. The said Section 9-AA is not made retrospective. Any attempt to apply the said provision in respect of the petitioners herein in respect of something they did or did not do during the period from 1-10-1975 to 28-2-1983, and at which time Section 9-AA was not on the statute book, would be violative of Article 20(1) of the Constitution. Since the provision concerned is a substantive law, unless it is made retrospective, there is also no scope to apply it to what is done or not done during 1975-1983, since the provision itself came on the statute book in 1985. As already noticed, it is not provided to be retrospective. The argument that it is merely procedural and therefore should have retrospective effect, should fail. I am, therefore, of the opinion that, Section 9-AA of the Act cannot be pressed into service as against the petitioners.

17. A Full Bench decision of the Patna High Court (Mahmud Ali v. State of Bihar and Anr., : AIR1986Pat133 ) no doubt supports the submission that Sri Aravind Kumar, learned Counsel for the respondent, is making with regard to Section 9-AA of the Act being only a procedural law and not substantive law and therefore operates retrospectively. In respect of provisions similar to Section 9-AA of the Act, viz., in respect of Section 47 of the Water (Prevention and Control of Pollution) Act, 1974, the Patna High Court took a view that the said provision is a rule of evidence. With great respect to the learned Judges, I am unable to agree with the said view. The minority view in the said decision was to the effect that Section 47(1) of the Act similar to Section 9-AA(d) concerned herein created vicarious Liability. The learned Judge, who held the minority view, also did not agree with the majority view that Sub-section (2) of Section 47 similar to Sub-section (2) of Section 9-AA herein is only a rule of evidence.

18. Sri Aravind Kumar, learned Counsel for the respondent then refers to a decision of the Supreme Court in Rai Bahadur Seth Shreeram Durgaprasad v. Director of Enforcement, : 1987CriLJ1123 . The Supreme Court was concerned with Section 23(1) of the Foreign Exchange Regulation Act, 1947, that came to be amended by Central Act 39 of 1957. The question before the Supreme Court was whether, in respect of failure to repatriate foreign exchange prior to the date of amendment, adjudicatory proceedings could be initiated. The Supreme Court pointed out that a person accused of the commission of an offence has no vested right to be tried by a particular Court or a particular procedure except insofar as there is any constitutional objection by way of discrimination or violation of any other fundamental right is involved. The Supreme Court said that it is we 11-recognised that 'no person has a vested right in any course of procedure', and that, there was no principle underlying Article 20 of the Constitution which made a right to any course of procedure a vested right. That is how the Supreme Court held that an adjudicatory procedure could be initiated in respect of failure to repatriate foreign exchange on shipments of manganese ore prior to the date of amendment. The relevant provision thus was held to be a procedural one. Same, however, cannot be said in respect of Section 9-AA of the Act.

19. In Smt. Maya Rani Punj v. Commissioner of Income-tax, Delhi, : [1986]157ITR330(SC) the question was whether for default in furnishing the return withinSeptember 20, 1961, penalty had to be levied under the provisions ofSection 28 of the 1922 Act or Section 271(1)(a) of 1961 Act. If the 1922Act had been applied, then, in the absence of a prescription of anyparticular rate or the minimum, it was open to the Tribunal to reducethe penalty in the manner it had done, and no objection could be raisedto the reduction of the quantum of penalty. A prescribed rate of penaltyfor imposition under Section 271(1)(a) of the 1961 Act had been provided. The Supreme Court referred to what had been said earlier in K.Satwant Singh v. State of Punjab, : [1960]2SCR89 by the Constitutional Bench to theeffect that what is prohibited under Article 20 of the Constitution wasthe imposition of a penalty greater than that which might have beeninflicted under the law in force at the time of the commission of theoffence, and that a law which provides that a minimum sentence of fineon conviction cannot be read as one which imposes a greater penaltythan that which might have been inflicted under the law at the time ofthe commission of the offence where for such an offence there was nolimit as to the extent of fine which might be imposed.

We are not concerned herein with a provision which, after amendment, deals with imposition of a minimum penalty which was not there prior to amendment.

20. Sri Aravind Kumar, learned Counsel for the respondent, then refers to another decision of the Supreme Court in Gurbachan Singh v. Satpal Singh and Ors., : 1990CriLJ562 to the effect that Section 113-A of the Indian Evidence Act is procedural and therefore has retrospective application. No support can be derived from this decision by Sri Aravind Kumar, learned Counsel for the respondent because, in my opinion, Section 9-AA of the Act cannot be placed on par with Section 113-A of the Indian Evidence Act. The Supreme Court in para 36 of the judgment specifically held that Section 113-A of the Indian Evidence Act did not create any new offence, and as such, did not create any substantial right, but, it was merely a matter of procedure of evidence, and as such, was retrospective. I have pointed out earlier as to how Section 9-AA of the Act creates a new offence as against two categories of persons viz., those covered by Sub-section (1) and the other one covered by Sub-section (2).

21. Sri Aravind Kumar, learned Counsel for the respondent nest refers to another decision of the Supreme Court in Chaman Singh and Another v. Srimathi Jaikaur, : [1970]1SCR803 . The question therein was whether one Smt. Jaikaur, step-daughter of Smt. Sobhi, was entitled to right of preemption under Section 15(2} of the Punjab Pre-emption Act, 1913, as amended by the Punjab Pre-emption Act, 1960. While the learned Single Judge of the Punjab High Court took the view that Smt. Jaikaur, not being the daughter of the vender Smt. Sobhi, had no right of pre-emption under Section 15(2) of the Punjab Pre-emption Act, 1913, as amended by the Punjab Pre-emption Act, 1960, a Division Bench of the High Court in letters patent appeal and fully relying on the amendment made by Punjab Pre-emption Amendment Act, 1964, reversed the judgment of the learned Single Judge. When the matter came up before the Supreme Court, the question that arose was whether the Amendment Act, 1964 could be regarded as having retrospective operation so as to affect pending proceedings. The contention taken was that, there was no indication in the Amendment Act of 1964 that it was to have retrospective operation, and therefore, it should be deemed to be only prospective. The Supreme Court held that the Amendment Act of 1964 was merely of a clarificatory or declaratory nature, and that, even in the absence of the words which were inserted by Amendment Act of 1964 in Section 15(2)(b), the only possible interpretation and meaning of the words 'in the son or daughter of such female' could have reference to and cover the son or daughter of the husband of the female. The Supreme Court concluded that, in that view of the matter, there was no difficulty in attributing a retroactive intention to the Legislature when the Amendment Act of 1964 was enacted. The Supreme Court said that, if a statute is curative or merely declares the previous law, retroactive operation would be more rightly ascribed to it than the legislation which may prejudicially affect past rights and transactions. The Supreme Court concluded that the respondent therein, i.e., Smt. Jaikaur was entitled to exercise her right of pre-emption under the first paragraph of Clause (b) of Sub-section (2) of Section 15 even before the amendment made in 1964, and that, at any rate, whatever doubts that existed were removed by the Amendment Act of 1964 which must be given retrospective operation.

If this decision were to be made applicable to the facts of the present case with an understanding as urged by Sri Aravind Kumar, learned Counsel for the respondent, then, it must be possible to say that, even without the aid of Section 9-AA of the Act, it was possible for all these petitioners to be brought in within the purview of Section 9(1) of the Act, and that such possibility having been there, all that has now happened is of a clarificatory or a declaratory nature by bringing in Section 9-AA also. In my opinion, this submission of Sri Aravind Kumar cannot be accepted. The evasion of duty was by the company and it was the company that was liable to be punished under Section 9(1) of the Act. If it was possible for all these petitioners also to be brought in merely under Section 9(1), there was no need for the supplementary complaint to be filed. If the two categories of persons specified in sub-sections (1) and (2) of Section 9-AA of the Act were possible to be brought in under Section 9(1) itself, Section 9-AA would be redundant and Legislature would not have taken pains to enact a redundant provision. I am of the clear opinion that the categories of persons specified in sub-sections (1) and (2) of Section 9-AA, without the aid of Section 9-AA, cannot be punished along with the company under Section 9(1), and that, therefore, it is on introduction of Section 9-AA for the first time that in respect of the said categories of persons a specific offence is created, which prior to amendment, was only against the company under Section 9(1). I am therefore of the opinion that the amendment brought about in 1985 by way of inserting Section 9-AA is not merely of a clarificatory or declaratory nature.

22. Sri Aravind Kumar then referred to another decision of the Supreme Court in Employees' State Insurance Corporation v. Dwarka Nath Bhargaiva, : AIR1997SC3518 with regard to insertion of Section 45-B enabling the recovery of contribution as arrears of land revenue. The Supreme Court said that it was a procedural provision and could obviously apply retrospectively to cover all contributions which had remained unpaid even prior to the date on which the Section came into force. This decision would be of no avail to the respondent, because, the provision providing for the manner in which the contribution should be recovered can hardly be called substantive. It is definitely procedural and therefore can have retrospective operation.

23. Among the decisions Sri Aravind Kumar, learned Counsel for the respondent has referred to above, it is only the Full Bench decision of the Patna High Court in Mahmud Ali's case, supra, that is applicable on all fours to the facts of the present case in respect of Section 47 of the Water (Prevention and Control of Pollution) Act, 1974, which provision is similar to Section 9-AA of the Act. As already said, with respect to the learned Judges who have decided the said case, I am unable to agree with the view taken by the Full Bench of the Patna High Court. The other decisions that are referred to by Sri Aravind Kumar, learned Counsel for the respondent, as explained at each stage, are not applicable to the question that has arisen herein.

24. For two reasons I hold that the impugned proceeding needs to be quashed. One is, that the taking of cognizance by the learned Magistrate on what is called supplementary complaint is not permissible in law since, in a case like the present one, the only manner in which additional accused can be brought in is by taking recourse to Section 319 of the Criminal Procedure Code at the appropriate stage. The second reason is that, Section 9-AA, brought in in the year 1985, is substantive law creating specific offence against two categories of persons specified in sub-sections (1) and (2) of the said Section 9-AA for the first time, and is not retrospective in operation, and invoking of the same as against the petitioners in respect of their acts of commission and omission during the period from 1-10-1975 to 28-2-1983 would be violative of Article 20(1) of the Constitution.

25. In the result, both the petitions are allowed and the impugned proceeding is quashed so far as the petitioners are concerned.