K.R.Dass, M.D., Vantech Industries Ltd. vs State of Punjab

B. Rai, J.

This petition under section 482 Cr.P.C. has been filed by Mr. K.R. Dass, Managing Director of M/s. Ventech Industry Limited, Hyderabad for quashing of complaint Annexure P1 filed under sections 3K(i), 17, 18, 29 and 33 of the Insecticides Act, 1968 (hereinafter referred to as the Act) read with Rule 27(5) of the Insecticides Rules, 1971 in the Court of Chief Judicial Magistrate, Bhatinda and all subsequent proceedings taken therein.

Brief facts of the case are that on 9.4.1996, one Sher Singh Agriculture Development OfficercumInsecticide Inspector inspected the premises of M/s. Maheshwari Pesticides, Raman Mandi and took samples of monocrotophos 36% SL. The Insecticide Inspector took three pieces of half litres each manufactured in September 1992, the expiry date of which was February 1994, manufactured by M/s. Ventech Pesticides Limited, Hyderabad. A sample was sent to the insecticide testing Laboratory, Ludhiana by the Chief Agricultural Officer vide his letter No. 142 dated 27.3.1993 for analysis. On analysis, sample was declared misbranded as it did not conform to the ISI specifications as the active ingredient was found to be 32.16% instead of 36% SL. On the request of M/s. Maheshwari Pesticides, the sample was sent to Central Insecticides Testing Laboratory, Faridabad. After analysis, that sample was also declared misbranded as active ingredients were found to be 31.5% instead of 36% SL. After obtaining consent of the Joint Director of Agriculture, who is the competent authority under section 31(1) of the Act, prosecution was launched against Jagdish Lal, B.A.V. Parsad, Quality Control Officer and the present petitioner who is stated to be Managing Director of M/s. Ventech Pesticides, referred to above. Copy of the complaint is annexed as Annexure P1 with this petition.

Petitioner and his coaccused were summoned by the Chief Judicial Magistrate, Bhatinda, by issuing bailable warrants vide order dated 16.10.1997. According to the petitioner, complaint against him is false and no offence is made out against him. On the basis of the complaint made against him, Chief Judicial Magistrate could not take cognizance of the same. It has been contended that filing of the complaint and proceedings taken therein are abuse of the process of Court and as such the same are liable to be quashed.

In response to the notice issued, a detailed written statement has been filed on behalf of the State by Sher Singh Insecticide Inspector controverting the averments made in the petition and reiterating those taken in the impugned complaint Annexure P1.

I have heard the learned counsel for the parties and have perused the record.

Section 33 of the Act lays down that whenever an offence under this Act has been committed by a company, every person who at the time of offence was committed was in charge of, or was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. A perusal of the complaint Annexure P1 would show that it does not contain even a fraction of allegation that at the time of commission of offence, petitioner was incharge of the company manufacturing the insecticide in question or was responsible to the company for the conduct of the business of the company. No documentary evidence has been brought on record by the respondents to show that the petitioner had given any undertaking to that effect. It cannot be disputed that the provisions of section 33 of the Act have been incorporated in the Act providing protection to the Directors of the company against any criminal liability. A similar view was also taken in B.B. Nagpal v. The State of Haryana, 1985(2) RCR 291 and Crl. M. No. 17095M of 1995 decided on 19.4.1996. A reference may also be made to a decision in Katuri Subha Rao and others v. State of Haryana. Crl. M.No. 18488M of 1995.

It is also significant to note that in the complaint Annexure P1, the company manufacturing the insecticide allegedly found to have been misbranded or substandard has not been arrayed as an accused.

Officebearers of the company can be held liable only if the company itself was found to be responsible for the contravention of certain provisions of the Act. A reference with advantage can be made to a decision in V.K. Sharma v. State of Punjab, 1996(2) Recent Crl. Reports 216, R.C. Gupta, Accountant, M/s. Pesto Chem. India Ltd. v. State of Haryana, 1996(2) Recent Crl. Reports 418. Similar view was also taken by this Court in Sh. Sham Sunder Bassi v. The State of Punjab, 1992 Punjab Legal Reports and Statutes 505. To cap and crown, a reference may be made to a decision of the apex Court in The State of Madras v. C.V. Parekh and another, AIR 1971 Supreme Court 447. In this case C.V. Parekh and A.C. Parekh were acquitted by the Supreme Court for the offences under section 120B of the Indian Penal Code read with Sections 7 and 8 of the Essential Commodities Act, 1955 and Clause (5) of the Iron and Steel Control JUDGMENT after applying Section 10 of the Essential Commodities Act. C.V. Parekh was the Manager of Microtee Castings (Private) Limited while his son A.C. Parekh was the Managing Director of the company. They were also partners of a Firm known as C.V. Parekh and Company. Both the Company and the Firm had the offices in the same premises.

A.C. Parekh was in charge of the general management of the business and affairs of the Company, so that he was empowered to make all purchases and sale, and to enter all contracts and do all other acts on behalf of the Company. C.V. Parekh was also active participant in the management of the company so that the two respondents were in de facto charge of the management of the affairs of the company. On appeal they were, however, acquitted by the High Court of Madras. The State of Madras challenged the decision of the High Court by filing a Special Leave Petition. The contention of the learned counsel for the appellant was that on the basis of section 10 of the Essential Commodities Act under which, if the person contravening an order made under section (which covers an order under the Iron and Steel (Control) JUDGMENT 1956) is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the 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. It was urged that the two respondents were in charge of, and were responsible to the company for the conduct of the business of the company and consequently, they must be held responsible for the sale and for contravening the provisions of clause 5 of Iron and Steel (Control) JUDGMENT but this argument was not accepted by their Lordships of the Supreme Court by observing that it ignores the first condition for the applicability of section 10 to the effect that the person contravening the order must be a company. In the present case there is no finding either by the Magistrate or by the High Court that the sale in contravention of clause 5 of the Iron and Steel (Control) order was made by he company. In fact, the company was not charged with the offence at all. The liability of the person incharge of the company only arises when the contravention is by the company itself. Since in this case, there is no evidence and no finding that the company contravened Clause 5 of the Iron and Steel (Control) JUDGMENT the two respondents could not be held responsible. It was observed that the actual contravention was by Kamdar and Vallabhadas Thacker and any contravention by them would not fasten responsibility on the respondents. The acquittal of the respondents was held justified and the appeal of the State was dismissed. The case in hand is squarely covered by the decision of the apex Court in C.V. Parekh''s case (supra). In the case in hand, the complainant has not arrayed the company as accused for contravening the provisions of the Act. Therefore, the petitioner though Managing Director of M/s. Ventech Pesticides Limited, cannot be held liable.

For the reasons recorded above, this petition is accepted. Complaint Annexure P1 and all subsequent proceedings taken therein are hereby quashed.