Sudhir Nayar Vs. the State of Jharkhand and - Court Judgment

SooperKanoon Citationsooperkanoon.com/521104
SubjectFood Adulteration
CourtJharkhand High Court
Decided OnJul-24-2008
Judge D.P. Singh, J.
Reported in[2008(4)JCR126(Jhr)]
AppellantSudhir Nayar
RespondentThe State of Jharkhand And; Shri K.P. Singh
DispositionApplication dismissed
Cases ReferredHari Ghankar v. Food Inspector
Excerpt:
- constitution of india. articles 12 & 226: [m. karpaga vinayagam, c.j., narendra nath tiwari & d.p.singh, jj] writ petition - maintainability - whether state co-operative milk producers federation ltd., is a state within meaning of article 12 ? - held, from perusal of relevant rules of byelaws, it is clear that state government has no role to play either in policy decision for raising funds for federation or its expenditure and thus have no financial control. further there is nothing to indicate that government has any functional and administrative control over federation. state government has no role to play in matter of appointment of any of officials of federation including managing director. federation is totally independent in all respects and in no way subservient to state government in conduct of its business. federation in no way can be termed as agency of state government and does not come within meaning of article 12 of constitution. writ petitions against federation is not maintainable. - 9. at the time of argument this pertinent question remained unanswered by arguing counsel whether the petitioner as well the company has duly nominated some person under sub-section 2 of section 17 with consent of such nominated person as required under the law. hindustan liver ltd as provided under the provision of section 17(2) of pfa act, 1954. before taking this plea, the petitioner as well as the company were obliged to nominate under sub-section 2 to be in-charge of and responsible to the company for the conduct of the business of the company. for better appreciation of the provisions their lordships in air (1992) sc 1168 have gone through the provisions as quoted below: even the scored out word does not read like jabalpur. 13. having considered all the facts and circumstances discussed above, i find that the prayer of the petitioner to quash the cognizance as well as prosecution for alleged offences under the prevention of food adulteration act, 1954 in absence of the nomination of a person under section 17(2) is not acceptable.d.p. singh, j.1. heard the parties.2. the short question involved in the present petition is whether the prosecution of the petitioner as corporate manager of hindustan liver ltd. is maintainable in contravention of specific provisions of section 17 of the prevention of food adulteration act, 1954.3. brief facts leading to this petition are that on 13.12.2003 at 12.30 p.m. krishna prasad singh, food inspector, ranchi visited m/s. meenakshi enterprises at tata road, namkom, ranchi. he collected flora refined sunflower oil, three one liter pouch after making payments of rs 207/- only along with taaza tea, annapurna iodized salt and modern [energy biscuits. the purchased items were sent for test by the concerned authorities at dhanbad which was reported to be misbranded as per rule 32 of pfa rules 1955 and for curtain missing declarations. accordingly an official complaint case was lodcied with the consent of civil surgeon-cum-chief medical officer, ranchi against the petitioner and one anand khernka, owner of m/s. meenakshi enterprises.4. the learned cjm on the basis of complaint no. 21(f) dated 22.6.2004 treated it as complaint case no 3 of 2004. the learned cjm, further took cognizance on the basis of this written complaint under section 16(1)(a)(i)(ii) of the pfa act, 1954 against the petitioner and anand khemka.5. by filing this cr.m.p. the petitioner has prayed that in view of the provisions under section 17 of the pfa act, 1954, he should not have been summoned to face trial. it is further submitted that under this provision any offences allegedly committed by the company, the prosecution could be launched only against a person nominated by the said company and not the director or the managers of the company.6. the learned counsel appearing on behalf of state and op no. 2 opposed this contention of the grounds that since the misbranded item was being sold by accused no. 2 under the dealership of the company of the petitioner and any violation of the provisions of prevention of food adulteration act was punishable. it is further submitted that the petitioner has not disclosed who has been nominated under sub-section 2 of section 17 to be incharge or responsible for the conduct of the business of the company.7. sri mazumdar submitted that in the light of the consistent view of the hon'ble apex court, even if no person was nominated under sub-section 2 of section 17 of the act, the petitioner could not be prosecuted by way of vicarious liability. sri mazumdar relied upon (2005) 8 scc 89, (2006) air 5 scw 4582, air (2007) scw 656 and 2008 supreme today 152. in all the decisions cited above, their lordships have been pleased to lay down that the director or the manager of a company cannot be held liable vicariously for offences under section 138 n.i. act unless the offences was committed with their knowledge or consent.8. mr. mazumdar further relying upon air (1992) sc 1168 reiterated that in such offences alleged to have been committed by the company directors of the company need not be prosecuted. their lordships have been pleased to consider this aspect at length. the plea taken by the petitioners before the hon'ble apex court was that both the petitioner company lifton india ltd. and hindustan liver ltd. has made the nomination as required under section 2 of section 17 of the act. as such only nominated person could be prosecuted and punished since the complaint has not lodged the case under sub-section a of section 14 of the act. their lordships were pleased to allow the appeals and remand it back to enquire into whether any nomination as such has been made and duly informed to the concerned authorities as required under the provisions of sub-section 2 and 4 of section 17 of the act.9. at the time of argument this pertinent question remained unanswered by arguing counsel whether the petitioner as well the company has duly nominated some person under sub-section 2 of section 17 with consent of such nominated person as required under the law. nothing has come on record that on 13.12.2003 when misbranded sunflower oil was purchased by the complainant as per rules, some one has been nominated by m/s. hindustan liver ltd as provided under the provision of section 17(2) of pfa act, 1954. before taking this plea, the petitioner as well as the company were obliged to nominate under sub-section 2 to be in-charge of and responsible to the company for the conduct of the business of the company. for better appreciation of the provisions their lordships in air (1992) sc 1168 have gone through the provisions as quoted below:paragraph 10 of the above cited decision is quoted below:10. that brings us to the question whether process could be issued against such co accused under sub-clause (ii) of clause (a) of sub-section (1) of section 17 of the act. this would depend on the court's finding whether there was a valid nomination in favour of h. dayani and dr. nirmal sen. if there was a valid nomination in existence at the date of the commission of the offence there can be no doubt that the case would be governed by section 17(1)(a)(i) of the act and section 17(1)(a)(ii) would not be attracted. the nomination in favour of h. dayani shows that it was received by the local (health) authority on 21st february, 1989 and the same was signed by the health officer, municipal corporation, jabalpur on the same day and a copy thereof was returned to the company sometime in march, 1989. although in the letter of the food inspector dated 21st marcy, 1999 it was stated that the nomination form could not be accepted as it was not signed by the local (health) authority, no such averment was made in the complaints subsequently filed. in the complaints all that in said is that the nominations are not valid as they are incomplete. now during the pendency of these appeals the health officer has by his letter dated 3rd october, 1991 informed as under:however, it is beyond my knowledge that who has cut jabalpur and written panagarh in place of jabalpur when the nomination was handed over to the party the word jabalpur was written on the document, form no. viii.a perusal of the nomination form of h. dayani shows that some word has been scored out and panagarh has been written by its side. however, if it is the contention of the complainant that this change was subsequently made after a copy of the nomination was handed over to the party, the original document in the possession of the health officer could have been produced to show that panagarh was subsequently added for jabalpur. even the scored out word does not read like jabalpur. nowhere in the complaint has it been contended that the document has been tampered with subsequently. it is clear from this communication that the nomination war, sent in form viii and the same was duly received and acknowledged by the health officer, municipal corporation, jabalpur. it is, however, contended that since of godown in which the offending goods were stored was situate at phutatal (panugarh) of jabalpur district, the local (health) authority was not the health officer of the jabalpur municipality but the civil surgeon or the chief medical officer of district jabalpur. a notification issued by the slate government dated 14th februaiy, 1983 under clause (viii) of section 2 of the act has been relied upon. it is, therefore, nvcessary to inquire into the question whether the nomination of h. dayani was sent to, received and acknowledged by the competent local (health) authority.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 (hereinafter) 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, t he 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 ho exercised all due diligence to prevent the commission of such offence.(2) 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 ail 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 establishment, 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'. sub section (4) which begins with a non obstante clause next provides that where an offence under this act has been committed by a company and it is proved that the offence has been commuted 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 doomed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.10. after considering the relevant points, their lordships allowed the appeal and remanded the matter to learned trial magistrate with direction to enquire into whether such nomination forms naming some persons to be authorized on behalf of the company was sent to the concerned authorities or not. before this their lordships considered the plea taken by the appellant that the company has made a valid nomination before the date of alleged offence.11. in 1999 scc criminal 960 similar view has been taken where their lordships in hari ghankar v. food inspector as observed as under-1. the appellant, in his capacity as the chairman of foremost dairies ltd., is being prosecuted under section 16 read with section 20-a of the prevention of food adulteration act, 1964 (for short 'the act'). assailing his prosecution he moved the high court under section 482 cr.p.c and contended inter alia, that his company had passed a resolution in terms of section 17(2) of the act nominating one p.k. sunderaj as the person who would only be liable for any breach of the provisions of the act and therefore he could not be prosecuted. by the impugned order the high court rejected the petition observing that the contention of the petitioner could be decided only during the trial. hence this appeal.2. we are in complete agreement with the high court that the question whether the appellant's company had passed a resolution in terms of section 17(2) of the act is one of fact which can only be gone into and decided at the stage of the trial. we, therefore, dismiss this appeal.12. in view of the above referred law, the petitioners were required to inform local health authority regarding the nomination of any authorized person under the provisions of section 17 of the act so that in case of any violation of the act, the said nominated person would have been prosecuted.13. having considered all the facts and circumstances discussed above, i find that the prayer of the petitioner to quash the cognizance as well as prosecution for alleged offences under the prevention of food adulteration act, 1954 in absence of the nomination of a person under section 17(2) is not acceptable.accordingly, this application is found without merit and stands dismissed.
Judgment:

D.P. Singh, J.

1. Heard the parties.

2. The short question involved in the present petition is whether the prosecution of the petitioner as Corporate Manager of Hindustan Liver Ltd. is maintainable in contravention of specific provisions of Section 17 of the Prevention of Food Adulteration Act, 1954.

3. Brief facts leading to this petition are that on 13.12.2003 at 12.30 p.m. Krishna Prasad Singh, Food Inspector, Ranchi visited M/s. Meenakshi Enterprises at Tata Road, Namkom, Ranchi. He collected Flora Refined Sunflower Oil, three one liter pouch after making payments of Rs 207/- only along with Taaza Tea, Annapurna Iodized Salt and Modern [Energy biscuits. The purchased items were sent for test by the concerned authorities at Dhanbad which was reported to be misbranded as per Rule 32 of PFA Rules 1955 and for curtain missing declarations. Accordingly an official complaint case was lodcied with the consent of Civil Surgeon-cum-Chief Medical Officer, Ranchi against the petitioner and one Anand Khernka, owner of M/s. Meenakshi Enterprises.

4. The learned CJM on the basis of complaint No. 21(F) dated 22.6.2004 treated it as Complaint Case No 3 of 2004. The learned CJM, further took cognizance on the basis of this written complaint under Section 16(1)(a)(i)(ii) of the PFA Act, 1954 against the petitioner and Anand Khemka.

5. By filing this Cr.M.P. the petitioner has prayed that in view of the provisions under Section 17 of the PFA Act, 1954, he should not have been summoned to face trial. It is further submitted that under this provision any offences allegedly committed by the company, the prosecution could be launched only against a person nominated by the said company and not the Director or the Managers of the company.

6. The learned Counsel appearing on behalf of State and OP No. 2 opposed this contention of the grounds that since the misbranded item was being sold by accused No. 2 under the dealership of the company of the petitioner and any violation of the provisions of Prevention of Food Adulteration Act was punishable. It is further submitted that the petitioner has not disclosed who has been nominated under Sub-section 2 of Section 17 to be incharge or responsible for the conduct of the business of the company.

7. Sri Mazumdar submitted that in the light of the consistent view of the Hon'ble Apex Court, even if no person was nominated under Sub-section 2 of Section 17 of the Act, the petitioner could not be prosecuted by way of vicarious liability. Sri Mazumdar relied upon (2005) 8 SCC 89, (2006) AIR 5 SCW 4582, AIR (2007) SCW 656 and 2008 Supreme Today 152. In all the decisions cited above, their Lordships have been pleased to lay down that the Director or the Manager of a Company cannot be held liable vicariously for offences under Section 138 N.I. Act unless the offences was committed with their knowledge or consent.

8. Mr. Mazumdar further relying upon AIR (1992) SC 1168 reiterated that in such offences alleged to have been committed by the company Directors of the company need not be prosecuted. Their Lordships have been pleased to consider this aspect at length. The plea taken by the petitioners before the Hon'ble Apex Court was that both the petitioner Company Lifton India Ltd. and Hindustan Liver Ltd. has made the nomination as required under Section 2 of Section 17 of the Act. As such only nominated person could be prosecuted and punished since the complaint has not lodged the case under Sub-section A of Section 14 of the Act. Their Lordships were pleased to allow the appeals and remand it back to enquire into whether any nomination as such has been made and duly informed to the concerned authorities as required under the provisions of Sub-section 2 and 4 of Section 17 of the Act.

9. At the time of argument this pertinent question remained unanswered by arguing counsel whether the petitioner as well the company has duly nominated some person under Sub-section 2 of Section 17 with consent of such nominated person as required under the law. Nothing has come on record that on 13.12.2003 when misbranded Sunflower oil was purchased by the complainant as per rules, some one has been nominated by M/s. Hindustan Liver Ltd as provided under the provision of Section 17(2) of PFA Act, 1954. Before taking this plea, the petitioner as well as the company were obliged to nominate under Sub-section 2 to be In-charge of and responsible to the company for the conduct of the business of the company. For better appreciation of the provisions their Lordships in AIR (1992) SC 1168 have gone through the provisions as quoted below:

Paragraph 10 of the above cited decision is quoted below:

10. That brings us to the question whether process could be issued against such co accused under Sub-clause (ii) of Clause (a) of Sub-section (1) of Section 17 of the Act. This would depend on the Court's finding whether there was a valid nomination in favour of H. Dayani and Dr. Nirmal Sen. If there was a valid nomination in existence at the date of the commission of the offence there can be no doubt that the case would be governed by Section 17(1)(a)(i) of the Act and Section 17(1)(a)(ii) would not be attracted. The nomination in favour of H. Dayani shows that it was received by the Local (Health) Authority on 21st February, 1989 and the same was signed by the Health Officer, Municipal Corporation, Jabalpur on the same day and a copy thereof was returned to the company sometime in March, 1989. Although in the letter of the Food Inspector dated 21st Marcy, 1999 it was stated that the nomination form could not be accepted as it was not signed by the Local (Health) Authority, no such averment was made in the complaints subsequently filed. In the complaints all that in said is that the nominations are not valid as they are incomplete. Now during the pendency of these appeals the Health Officer has by his letter dated 3rd October, 1991 informed as under:

However, it is beyond my knowledge that who has cut Jabalpur and written Panagarh in place of Jabalpur when the nomination was handed over to the party the word Jabalpur was written on the document, Form No. VIII.A perusal of the nomination form of H. Dayani shows that some word has been scored out and Panagarh has been written by its side. However, if it is the contention of the complainant that this change was subsequently made after a copy of the nomination was handed over to the party, the original document in the possession of the Health Officer could have been produced to show that Panagarh was subsequently added for Jabalpur. Even the scored out word does not read like Jabalpur. Nowhere in the complaint has it been contended that the document has been tampered with subsequently. It is clear from this communication that the nomination war, sent in Form VIII and the same was duly received and acknowledged by the Health Officer, Municipal Corporation, Jabalpur. It is, however, contended that since of godown in which the offending goods were stored was situate at Phutatal (Panugarh) of Jabalpur District, the Local (Health) Authority was not the Health Officer of the Jabalpur Municipality but the Civil Surgeon or the Chief Medical Officer of District Jabalpur. A notification issued by the Slate Government dated 14th Februaiy, 1983 under clause (viii) of Section 2 of the Act has been relied upon. It is, therefore, nvcessary to inquire into the question whether the nomination of H. Dayani was sent to, received and acknowledged by the competent Local (Health) Authority.

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 (hereinafter) 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, t he 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 ho exercised all due diligence to prevent the commission of such offence.

(2) 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 ail 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 establishment, 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'. Sub Section (4) which begins with a non obstante clause next provides that where an offence under this Act has been committed by a company and it is proved that the offence has been commuted 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 doomed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

10. After considering the relevant points, their Lordships allowed the appeal and remanded the matter to learned trial Magistrate with direction to enquire into whether such nomination forms naming some persons to be authorized on behalf of the company was sent to the concerned authorities or not. Before this their Lordships considered the plea taken by the appellant that the company has made a valid nomination before the date of alleged offence.

11. In 1999 SCC Criminal 960 similar view has been taken where their Lordships in Hari Ghankar v. Food Inspector as observed as under-

1. The appellant, in his capacity as the Chairman of Foremost Dairies Ltd., is being prosecuted under Section 16 read with Section 20-A of the Prevention of Food Adulteration Act, 1964 (for short 'the Act'). Assailing his prosecution he moved the High Court under Section 482 Cr.P.C and contended inter alia, that his Company had passed a resolution in terms of Section 17(2) of the Act nominating one P.K. Sunderaj as the person who would only be liable for any breach of the provisions of the Act and therefore he could not be prosecuted. By the impugned order the High Court rejected the petition observing that the contention of the petitioner could be decided only during the trial. Hence this appeal.

2. We are in complete agreement with the High Court that the question whether the appellant's Company had passed a resolution in terms of Section 17(2) of the Act is one of fact which can only be gone into and decided at the stage of the trial. We, therefore, dismiss this appeal.

12. In view of the above referred law, the petitioners were required to inform Local Health Authority regarding the nomination of any authorized person under the provisions of Section 17 of the Act so that in case of any violation of the Act, the said nominated person would have been prosecuted.

13. Having considered all the facts and circumstances discussed above, I find that the prayer of the petitioner to quash the cognizance as well as prosecution for alleged offences under the Prevention of Food Adulteration Act, 1954 in absence of the nomination of a person under Section 17(2) is not acceptable.

Accordingly, this application is found without merit and stands dismissed.