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Judgment
These three appeals arise out of a judgment given in a case in which two persons were accused of contravention of the provisions of clause 13(1)(a) of the Fertilizer (Control) Order, 1957 read with Sections 3 and 7 of the Essential Commodities Act, 1955.
Appeal No. 69 of 1987 has been filed by the original accused Ashok Thorat, Manager of the Karad Co-operative Purchase and Sale Society Ltd., Karad, District Satara. He was, upon conviction, sentenced to pay a fine of Rs. 3000/- and in default to suffer simple imprisonment for three months. The second accused was one Bhogilal Gulabchand Shaha, a trader of Baramati, district Pune. He was acquitted by the trial Court and hence the State has now filed Criminal Appeal No. 260 of 1987 to take exception to his acquittal. Criminal Appeal No. 261 of 1987 has also been filed by the State taking exception to the rather mild sentence which has been awarded to the accused No. 1 Ashok Thorat upon his conviction.
The prosecution case in brief, is that the Karad Co-operative Purchase and Sale Society, Karad, deals, amongst other things, in the purchase and sale of fertilizers or rather it deals mainly in the purchase and sale of fertilizers. At the material time, in the year 1984, the accused No. 1 Ashok Kisan Thorat was the Manager of this society. The accused No. 2 Bhogilal Gulabchand Shah is a person who is also a dealer in fertilizers.
According to the prosecution, an order for supply of fertilizer of the Sanjivani brand was placed by the accused No. 1 in his capacity as the manager with the accused No. 2. This order is dated 17-9-1983. The accused No. 2 had accordingly supplied the fertilizer of the given composition and of the quantity as ordered. The fertilizer so received had come to be stocked in the godown of the society. The godown is at a very short distance from the shop where the work of selling of fertilizers is done. The complainant, Jalandhar Baburao Apradh was, at the material time in 1984, a Fertilizer Inspector with his headquarters at Kolhapur. He was attached to the Kolhapur Division of the concerned Government department. On 27th January, 1984 the said Fertilizer Inspector visited the shop and the godown of the Society. A stock of certain quantity of fertilizer was found stored in the godown. The stock consisted of the Sanjivani brand fertilizer of the composition 15 : 15 : 15. This was about five tons in quantity. So also Jyoti brand fertilizer of the composition 15 : 5 : 5. Five tons in quantity was found stored in the said godown.
In exercise of his powers under clause 20(1)(d) of the Fertilizer Control Order, 1957, the complainant took samples of both the brands of fertilizers in the prescribed manner. i.e. duly complying with the rules in regard to the taking of samples. A sample each of the Sanjivani brand fertilizer as also Jyoti brand fertilizer, since each of these has a different composition, was sent to the Analytical Chemist of the Fertilizer Control Laboratories, Pune. The Chemical Analyser reported that both these samples were found to be adulterated as well as sub-standard. Upon this report, the Fertilizer Inspector took further steps. In the first instance, immediately after taking the samples, he had served a notice on the accused No. 1 to detain the entire stock of the two brands of fertilizers as it was and not to dispose of the same in any manner. He also called upon the accused No. 1, by his letter dated 12th March, 1984, to furnish some information and a reply to the same was also given by the accused No. 1. That letter of the Fertilizer Inspector had made a query as to the person who had supplied the two brands of fertilizers to the society at Karad. The accused No. 1 informed that it was from the accused No. 2 that the fertilizers had been purchased by the society. Some further queries were also made from the accused No. 2 and his reply was also called for. The Inspector then submitted his detailed report to his superiors and upon directions given in that behalf, filed the complaint that the accused Nos. 1 and 2 had thus committed an offence punishable under clause 13(1)(a) of the Fertilizer (Control) Order, 1957 read with Sections 3 and 7 of the Essential Commodities Act, 1955. With the particulars of the offence as explained to them vide Exhibit 1 l, more particularly that the accused No. 1 society had come to stock fertilizers of the Sanjivani brand and Jyoti brand both of which were adulterated and substandard and the accused No. 1 (sic) being the person who had supplied the two brands of fertilizer to the society, both, of them had committed an offence punishable under the said Order, the penal provision being that of Section 7 of the Essential Commodities Act, 1955.
Pleading not guilty to the charge, the accused Nos. 1 and 2 both claimed to be tried. Upon consideration of the evidence of the Fertilizer Inspector J. B. Apradh, as also the witness Kalyan Dattatraya Joshi, the Chief Quality Control Officer having his headquarters at Pune as an eyewitness and also taking into consideration the documentary evidence which came to be placed on record, the learned Special Judge held that so far as the accused No. 2 was concerned, the offence as charged would not be held proved. The accused No. 1 was, however, found guilty and convicted, which conviction is challenged by this Appeal No. 69 of 1987.
All these three appeals would stand disposed of by this judgment.
The learned Counsel Shri P. R. Vakil appearing for the appellant in Criminal Appeal No. 69 of 1987, the learned Additional Public Prosecutor Shri Lambay appearing for the State in Criminal Appeals Nos. 260 of 1987 and 261 of 1987 have both been heard at considerable length.
The main contention, the one which would appear to me indeed more important to the maintainability of the prosecution, atleast so for as the appellant Ashok Kisan Thorat in Criminal Appeal No. 69 of 1987 is concerned, is that the prosecution could not have been launched even on the assumption of a fact of sale of adulterated and sub-standard fertilizer being proved, against the accused No. 1. It is the argument of the learned counsel Shri P. R. Vakil that both the allegations in the complaint Exhibit 1 as lodged, and also the particulars of the offence as have been came to be explained, very clearly show that it was in fact the Karad Co-operative Purchase and Sale Society which was intended to be proceeded against as having indulged in contravention of the provisions of Clause 13 of the Fertilizer Control Order and that it was not the accused No. 1 as a person who was really intended to be proceeded against, for, throughout the complaint the reference as the accused person has been made to the society. Though in the complaint Ashok Thorat is named as the accused No. 1, the expression that has been came to be used in the contents of the complaint is "accused No. 1 society". That, however, would not be conclusive of the liability of only the society to be prosecuted or the right of the accused No. 1 not to be prosecuted. The liability to prosecution would be essential to determine with reference to what is contemplated and envisaged by the Act, so far as commission of offences, not by an individual but by any association or someone for that matter, are concerned. Section 10 of the Essential Commodities Act, 1955 specifically deals with offences by companies and in the explanation to the said section what is provided is this : "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."
Now, there can be no dispute that the Karad Co-operative Purchase and Sale Society of Karad, district Satara is one which has been constituted and established under the Societies Registration Act and is an association of individuals as such, and, therefore, would fall within the definition of "company" as given in the explanation to Section 10.
The more important question is whether the appellant-accused No. 1 - as a person employed as a manager of the said society would be liable to be prosecuted in the event of the contravention of the provisions of the Act or any order made under the Act is proved. Therefore, the provisions of subsection (2) of Section 10 of the Act would be required to be carefully read. Sub-section (2) of Section 10 provides :
"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."
Sub-section (1) of Section 10 is to the effect that if the person found contravening any order made u/s 3 is a company, then every person who at the time the contravention-was committed, was incharge 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 contravention and shall be liable to be proceeded against and punished accordingly.
The submission of the learned Counsel Shri Vakil appearing for the appellant accused No. 1 is that the tenor of the complaint as filed and also the evidence as led clearly indicate that it was against the said Karad Co-operative Sale and Purchase Society that the accusation of storing of substandard quality of fertilizers was being made, that it was the society which was intended and in reality sought, to be punished. The learned counsel has, at some length no doubt, dealt with this aspect of the matter and pointed out that it was for some unfathomable reason though, that as against the society itself, it was the accused No. 1 alone as the manager thereof that the concerned authorities decided to proceed. Remotely enough it appears to be the suggestion of the learned counsel for the appellant that inasmuch as the prosecution of the company as such, would involve the implication of its members i.e. the directors in fact would be inevitable and such prosecution of the directors i.e. the members of the society was what was intended to be avoided and then making the accused No. 1 as a paid employee of the society the scapegoat. The learned counsel also, therefore, pointed out that it was with this awareness of the involvement of the members of the society as such and not the accused No. 1 as a mere manager that '' allegations came to be made. In the complaint, after stating that the accused No. 1 was the Manager of the said Society, it was specifically alleged that it was the society which came to be referred as accused No. 1 which was the licensed dealer under the Fertilizer (Control) Order. Again, the society was described as being the accused No. 1 and that the society was holding the stock of fertilizers in question on 27th January, 1984. A further reference is found to have been made to the society as being really the accused No. 1 at several other places in the complaint. And consistently with this, it is pointed out that in the particulars of offence as explained to the accused persons also, the learned Special Judge had come to describe the accused No. 1 as being the society and, therefore, used the expression "the accused No. 1 society". In my opinion, irrespective of whether it was the society as such, which was intended to be prosecuted and proceeded against, irrespective of whether the learned Special Judge of the trial Court also proceeded as one might say, in a somewhat confused or at any rate ambivalent manner, the liability of present accused No. 1, the Manager Ashok Thorat, is still not eliminated and this will mean clearly that the provisions of sub-section (2) of Section 10 of the Act which provides, as quoted earlier, that where an offence has been committed by a company (which expression with reference to the explanation given would also mean an association of individuals such as the present society), then, once it is proved that the offence has been so committed by the company with the consent or connivance of or is attributable to any neglect on the part of any director, manager, secretary or any officer of the company, then, such officer, manager, secretary or director would also be deemed to be guilty of that offence. What will therefore have to be seen is that though under the provisions of sub-section (2) of Section 10 the present accused No. 1, the Manager Ashok Thorat could properly be proceeded for the contravention of the provisions of the Fertilizer (Control) Order, 1957, a pre-requisite for so proceeding against him would be that an allegation to the effect that the offence had been committed with his consent or with his connivance or that it was an offence attributable to any neglect on his part would still be necessary. Such an allegation in the complaint, it will be appreciated, is prominent only by its absence. A careful reading of the complaint would show that the requirement that such an allegation of the giving of a consent or being guilty of connivance in the commission of the offence by the company or his being responsible for the neglect out of which the commission of the offence arises has not come to be made in the complaint, not merely because the society appears to have been intended to be implicated in the first instance, but the fact that the necessary prerequisite of an allegation of the conduct on the part of the appellant, has not been made, that would be the reason why the appellant would stand to be exonerated, as one might say, forthwith and without any need to proceed further on merits of the evidence at the trial.
However, the evidence on merits may be also, now, appreciated. It comes mainly from PW 1 Jalandhar Baburao Apradh who was the Fertilizer Inspector attached to the Kolhapur region. According to him, he went to Karad on 27th January, 1984 and visited the office of the society in question. The accused No. 1 as the manager thereof was present in the shop run by the society and by the side of it, at a short distance of about 300 ft. or so is the godown of the said society. He visited the godown and collected samples of Sanjivani brand fertilizer of the declared composition of 15 : 15 : 15. The fertilizer was in the granulated form. Out of a 100 bags in stock there, he took out five in a somewhat random manner and prepared the necessary samples. Similarly, he also collected sample of Jyoti brand mixture which was declared to be of the composition 15 : 5 : 5. He then gave a notice as per Exhibit 21 to the accused No. 1 as the Manager calling upon him thereby to detain the stock and not to dispose it of or part with it in any manner. The samples were then sent to the Chemical analyser who gave his report that so far as the sample of the Sanjivani brand fertilizer was concerned, it was definitely sub-standard in that though the composition of it was declared to be 15 : 5 : 15 it was actually found to be 1.03, 3.04 and 0.31 only. The sample of Jyoti brand fertilizer was also found to be sub-standard in that though its composition was declared to be 15 : 5 : 5, it was actually found to be 3.70, 2.79 and 0.73. This would make, no doubt, the said fertilizer found stocked in the society''s godown as being a sub-standard one, sub-standard in relation to what was declared and assured to be its composition of the three ingredients viz., nitro, phosphorous and potash. A detailed cross-examination followed wherein the witness would appear to have admitted more importantly that on 25th January. 1984 the accused No. 1 as the Manager of the Society had written a letter to the Quality Control Officer, expressing his grave suspicion that the fertilizer which had come to be supplied to the society, under its, order placed with the accused No. 2, was a sub-standard one. Of course, the witness denied any knowledge of such a letter having been received by the Chief Quality Control Officer. He also apparently denied the suggestion that it was because this letter Exhibit 25 had come to be received by the Chief Quality Control Officer that the latter also happened to be present at Karad on the very same day i.e. 27th January, 1984. To say the least, the presence of the Fertilizer Inspector for inspection of the stock of fertilizers held by the society and the presence of PW 2 the Chief Quality Control Officer Shri Joshi on that very day, appears to be much more than a mere co-incidence. It appears to be a very reasonable and plausible suggestion made under the circumstances that it was because such a complaint came to be made to the Chief Quality Control Officer that he had visited the society on 27th January, 1984 and the Fertilizer Inspector also visited the same on that very day, the object initially the same on that very day, the object initially being to proceed against the society in the first instance. It is only thereafter, as the learned Counsel Shri Vakil pointed out, that the complaint was also apparently made against the society as such, though it was nominally only that the accused No. 1 Ashok Thorat as the Manager was implicated as the principal accused. The Inspector further deposed that in view of the queries which he had then came to make from the accused No. 1 he learnt that it was from the accused No. 2 that the stock of both the Sanjivani and Jyoti brand fertilizers had come to be acquired. He admitted that the Sanjivani brand of fertilizer had been manufactured by the Chand Chemical Fertilizer of Mahape, District Thane and the Jyoti fertilizer was the product of one Mahendrakumar and Company of Bombay. To the complicity of accused No. 2. I will deal with at a larger stage. However, the witness admitted that the accused No. 1 as the Manager of the society had received th fertilizers from the two manufacturers. on a consignment basis and was not aware whether the accused No. 2 had merely booked orders with the society or accepted the orders placed with him by the society and had forwarded these to the said manufacturers at Thane and Bombay, for consignment being forwarded directly to the purchaser society at Karad.
That being the gist of the entire evidence, what needs to be appreciated is whether either on his own as an individual, though in his capacity as the manager of the society or on account of his relationship with the society as the company committing the offence of stocking for sale sub-standard fertilizers, the present appellant - accused No. 1 - could be held responsible. The question of fact - of prime importance undisputably - has to be whether the appellant accused No. 1 had, with awareness that sub-standard fertilizers would be supplied to him by the accused No. 2 or by the manufacturers through the accused No. 2 as their dealer- placed the order, was he aware that the goods would be of a subs-standard quality and not in conformity with the composition of the three ingredients - as declared on the sealed bags which were found stored in the society''s godown. Or alternatively, to bring the case of the accused, for establishing liability under sub-section (2) of Section 10, whether the prosecution has also proved that the accused No. 1 as the manager of the said society which is deemed to be a company, that the stocking of such sub-standard fertilizers was either with his consent or connivance or whether such stocking of the sub-standard fertilizer was attributable to any neglect as such on his part. Now, it appears from the documentary evidence - and this is only apart from the learned counsel for the appellant''s objection that the documents had come to be improperly admitted in evidence without proper formal proof - that an order was placed by the accused No. 1 the manager of the said society by a letter dated 17-9-1983 addressed to the accused No. 2 for supply of five tons of fertilizer of the 15 : 15 : 15 composition and five more tons of fertilizer of the composition of 15 : 5 : 5. When under an order so placed, the accused, No. 2 as the dealer directed the manufacturers to supply directly to the society the said quantity of fertilizers, knowing that the composition thereof would not as ordered (sic). Of that awareness that the fertilizers to be supplied would not be of the prescribed or rather the stipulated standard, there is no evidence. On the other hand, an admission appears to have been made by the Inspector that upon inspection of the stock of fertilizers in the godown and taking samples thereof, it was of the godown keeper and not of the accused No. 1 that he had obtained the acknowledgement. Obtaining such an acknowledgement from the godown keeper would appear to be entirely inconsistent with the prosecution case that it was the accused No. 1 who was aware of the sub-standard quality of the fertilizers stocked there. If the accused No. 1 was to be proceeded against for storing the sub-standard fertilizers with knowledge or awareness of such sub-standard quality, then, it would be of the accused No. 1 and not the godown keeper that an acknowledgement would be obtained in the matter of taking samples. The prosecution would have to prove that it was with the awareness of the accused about the substandard quality of the fertilizers and it was because of such awareness also that an acknowledgement was being obtained from him. The comment which the learned counsel Shri Vakil made in this behalf is that the complainant appears to have kept wavering all through about the fact of the accused No. 1''s liability in reality becomes more than patently clear. There is no evidence on record that the accused No. 1 had in fact become aware of the entire consignment from the Sanjivani and Jyoti brands fertilizers having arrived at Karad and brought to be stored in the society''s godown. Even less is any evidence on record to show that in spite of such knowledge of the sub-standard quality of the fertilizer, the accused No. 1 as the manager had taken any steps to deal with the commodity. On the other hand, the evidence also appears to be quite clear that since after the receipt of the entire consignment both of the Sanjivani and Jyoti brands, no part of the stock had come to be disposed of by sale and that all of it was in tact. Actually there appears to have been found a stock of as many as 2500 bags in the godown at that time all undisposed. The Society''s refraining itself from not proceeding to sell these fertilizers would, therefore be attributable to the fact that earlier on 25th January 1984 the accused No. 1 was shown to have written a letter to the. Chief quality Control Officer expressing his grave suspicion that the quality of fertilizers as provided, either by the accused No. 2 as the dealer or directly by the manufacturers was not what it was being declared to be. No part of the evidence, therefore, establishes that the accused had knowledge that the stock of fertilizer as was there in the society''s godown on 27th January 1984 was sub-standard and, therefore, the learned counsel for the appellant has also referred to a decision of the Supreme Court in State of Madras Vs. C.V. Parekh and Another, . In that case also under the provisions of S. 10 of the Essential Commodities Act, 1955, the godown clerk of the company conspiring with the representative of another firm had indulged in sale of pig iron in contravention of Clause (5) of the Iron and Steel Control Order (1956). Upon this contravention, along with the said godown clerk, the manager and the managing director of the company also come to be prosecuted. It was found that there was no evidence from which it could be inferred that the manager or the director had any knowledge of the sale manoeuvred by the clerk and other conspirator or that they took part in the negotiations for the sale or in the sale itself. It was noted that these two accused were in their capacity as the manager and director merely in a de facto management of affairs of the company, that they were aware of the arrival of the goods - which was subsequently sold by the said godown clerk could at best create a suspicion and that suspicion not constituting proof of the commission of offence, both, manager and director were entitled to an acquittal. In the present case also, the learned counsel for the appellant points out that at best the fact of purchase of two brands of fertilizers from the accused No. 2 might be one, which, only by a conjecture could invite some suspicion. The learned counsel Mr. Vakil is right when he submits that so far as the facts of the present case are concerned, there would not be ground even for raising the slightest suspicion against the present accused No. 1, the manager, Ashok Thorat that he had reason to be aware of the defect, the sub-standard quality of the fertilizer that had come to be supplied to the society. If anything, the step taken by the accused No. 1 in sending the letter to the Chief quality Control Officer on 25th January 1984, to come and inspect the commodity and the further fact that no part of this consignment received in the godown of the society had come to be dealt with by sale, all amply prove that the accused had not only indulged in such sale of a substandard commodity of fertilizer but that he had himself become aware of it and had harboured a suspicion about the quality and had taken, in advance, steps to have his suspicion confirmed.
In the circumstances, so far as the appellant accused No. 1 is concerned, the offence under clause 13(1)(a) of the Fertilizer (Control) Order, 1987 of stocking for sale fertilizer of a sub-standard quality cannot be said to have been brought home. I do not consider it necessary to deal further and extensively with the other two of Shri Vakil''s submissions. The first one was that the several documents which had come to be admitted in evidence on record had been so admitted in evidence without formal proof thereof and as I find, these had also come to be admitted, without resorting to the provisions of S. 294 of the Criminal Procedure Code inasmuch as it does not appear that consent of the other side had been taken. Second of his submissions was that a large number of circumstances which have been considered by the learned Special Judge as being adverse to the appellant, have not even been put to the accused in his examination under S. 313 of the Criminal Procedure Code so as to give him an opportunity to offer his reasonable explanation in that behalf. As stated earlier, on the merits of the evidence as it stands also, the charge as levelled cannot be said to have been brought home in law. It is, therefore, that this appeal i.e. Appeal No. 69 of 1987 will have to be allowed to set aside the order of conviction and sentence recorded by the learned Special Judge, Satara.
Proceeding next with Appeal No. 260 of 1987, which is directed against the acquittal of the accused No. 2, the facts must be found to lie in an even narrower compass. The complainant P.W. 1 J. 3. Apradh while under cross-examination admitted that though he came to know that the stock of fertilizer with the society had come to be supplied by the accused No. 2, he did not still know whether the accused No. 2 had only collected orders from different customers including the society in question and has sent these orders to the respective manufacturers and whether it was the manufacturers, both of them, the manufacturers of the Sanjivani Brand and the manufacturers of the Jyoti Brand, had then directly despatched the consignment to the society as its customers. In his examination u/s 313 of the Criminal Procedure Code this accused explained that he had received the order placed with him by the society at Karad and had merely forwarded the said to the company and it was the manufacturer company which had directly sent the goods to Karad Co-operative Society. He further stated that he had received a letter from the society that the goods had been accordingly received at Karad whereupon he sent his bills to the society. As for the quality, he knew nothing about it. An indication was given by P.W. 2, the Chief Quality Control Officer Shri Joshi that upon ascertaining that the Sanjivani Brand fertilizer had been manufactured by a firm by the name Chand Chemicals and Fertilizer at Mahape, District Thane, he had personally paid a visit to that place. On inquiries, he found that manufacturer of such a name did not exist though so far as Jyoti Brand fertilizer was concerned, the firm of Mahendrakumar and Company as the manufacturer did exist. This statement that any firm of manufacturers by name Chand Chemicals and Fertilizers did not exist, might appear to turn the onus on the accused No. 2 to state, depose and disclose the source from which he had obtained the Sanjivani Brand fertilizer. However, this eventuality would appear to have passed off when one considers Joshi''s cross-examination by accused No. 2. There he admitted that at Mahape he did come across a manufacturer by name Chandresh Chemicals and Fertilizers and further admitted it is true that manufacturers were known and found to have gone on changing their names and putting different marks and names on bags in which they supplied fertilizers. As it is, so far as the complicity of the accused No. 2 is concerned, the prosecution has not led any satisfactory and convincing evidence that the bags of fertilizer of Sanjivani and Jyoti brands were first sent by the manufactures to the accused No. 2, that it was the accused No. 2 who had thereafter forwarded these bags to the society and finally that he had so forwarded them with the knowledge that they were not of the declared and stipulated standard or composition. It is also in the evidence, so far as the case of both the accused Nos. 1 and 2 is to be considered, that the bags were all found to have been received and also found stocked in the duly sealed condition and it is from such sealed bags that the samples had been taken by the Fertilizer Inspector P.W. 1. Those circumstances would make it quite clear that no circumstances could the accused Nos. 1 and 2 be said to have become aware of the sub-standard quality of the fertilizer which had been provided to the fertilizer which had been provided to the society, under the orders placed to the society, under the orders placed by the accused No. 1. Therefore, so far as accused No. 2 is concerned, the acquittal as recorded has also to be confirmed and the State appeal dismissed.
Criminal Appeal No. 261 of 1987 is preferred against the sentence which was awarded to the accused No. 1 upon his conviction. It follows upon the accused the No. 1''s appeal No. 69 of 1987 being allowed that this appeal for enhancement of the sentence become entirely infructuous. It would also have to be dismissed accordingly.
In the result, Criminal Appeal No. 69 of 1987 is hereby allowed, the conviction and the sentence awarded to the appellant accused No. 1 are both, hereby set aside and the shall stand acquitted of the charge under clause 13(1)(a) of the Fertilizer (Control) Order 1957 read with Sections 3 and 7 of the Essential Commodities Act, 1955. Fine if paid be refunded to accused No. 1. The bail bonds of the appellant-accused No. 1 shall stand cancelled.
The Criminal Appeal No. 260 of 1987 challenging the acquittal of accused No. 2 is also hereby dismissed.
The Criminal Appeal No. 261 of 1987 seeking an enhancement of the sentence awarded by the trial Court to the accused No. 1 is also hereby dismissed.
Order accordingly.
