Ramchandra Rungta vs State Of Jharkhand And Others

Sanjay Kumar Dwivedi, J

Heard Mr. Pandey Neeraj Rai, learned counsel for the petitioner, Mr. Rahul Saboo, learned counsel for the Jharkhand State Pollution Control Board-opposite party no.2 and Mr. Rajesh Kumar, learned counsel for the State.

This petition has been filed for quashing of the entire criminal proceeding arising out of the Complaint Case No.331/2013 including the order taking cognizance dated 15.01.2014, pending in the court of the learned Sub Divisional Judicial Magistrate, Hazaribagh.

The complaint case was filed alleging therein that the petitioner is the Director of the accused unit M/s Jharkhand Ispat Pvt. Ltd. located at District- Ramgarh, Jharkhand. It was further alleged that the accused unit has established 2 x 100 TPA DRI Kiln and 2 x 12 T induction furnace (Billet Caster) in November, 2006 and put them in operation without obtaining Environmental clearance from the Ministry of Environment and Forest, Government of India, New Delhi in violation of the EIA Notification, 2006. The Office Memorandum no. J-11013/41/2006-IA-II(I) dated 12.12.2012 and letter no. J-11011/41/2013-IA II (I) dated 12.06.2013 of MoEF, Government of India, New Delhi direct to take creditable action against the accused unit under Section 15 of the Environment (Protection) Act, 1986.

Mr. Pandey Neeraj Rai, learned counsel for the petitioner submits that petitioner had established Company in the name and style of M/s Jharkhand Ispat Pvt. Ltd. in the year 2003 after taking no objection from the Jharkhand State Pollution Control Board. Subsequently, no objection was taken in the year 2005 when there was an expansion of the unit. Thereafter, the petitioner went on having no objection from the Jharkhand State Pollution Control Board every year. He further submits that when an application was filed for having no objection in the year 2012-13, an objection was raised to the effect that the petitioner since had expansion of the unit, need to have environmental clearance in terms of the Notification dated 14.09.2006 issued by the Central Government. Since it had not been taken, an order was passed for closer of the expanded unit. That order was challenged before this Court and this Court vide its order dated 24.03.2014 passed in W.P.(C) No.1125 of 2014 stayed that part of the order. He further submits that in spite of that, a complaint was filed, wherein, allegation is made against the company and the company is not made accused. He submits that the cognizance has been taken under Section 15 of the Environment (Protection) Act, 1986 against the petitioner, who is the Director of the said Company. He refers to Section 16 of the said Act, 1986 and submits that the person can be prosecuted looking to his day-to-day affairs of the company. He submits that vicarious liability in absence of any averment cannot be made against the petitioner, who happens to be the Director of the said company.

Mr. Rahul Saboo, learned counsel for opposite party no.2 justified the order and submits that since the petitioner is the Director of the company, he is vicariously liable.

In view of the above submissions of the learned counsel for the parties, the Court has gone through the materials on record. It appears that the allegation in the complaint is made against the company and the company is not made an accused. Section 16 of the Environment (Protection) Act, 1986 speaks as under:

“16. Offences by companies.- (1) Where any offence under this Act has been committed by a company, every person who, at the time the offence was committed, was directly 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:

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 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.”

Looking to the above section, it appears that the person who is looking to the day-to-day affairs of the company, can only be liable to be prosecuted under the said Act and this section is identical to the other statute like Negotiable Instruments Act, Contract Labour Act and Minimum Wages Act and this aspect of the matter has been settled by several judgments of the Hon'ble Supreme Court as well as the High Courts. A reference may be made to the judgment passed by the Hon'ble Supreme Court in the case of Aneeta Hada vs. Godfather Travels & Tours (P) Ltd., reported in (2012) 5 SCC 661. Paragraph 59 of the said judgment is quoted hereinbelow:

“59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove.”

In view of the above and considering that there is no allegation against the petitioner that he was looking to the day-to-day affairs of the company and he is said to be the Director of the said company and the company is not made an accused in the complaint petition and in view of that, the submission of learned counsel for opposite party no.2 is not accepted by this court.

In view of the above facts, the entire criminal proceeding arising out of the Complaint Case No.331/2013 including the order taking cognizance dated 15.01.2014, pending in the court of the learned Sub Divisional Judicial Magistrate, Hazaribagh is quashed.

Accordingly, this petition is allowed and disposed of.

Pending I.A., if any, is disposed of.

Interim order, if any granted by this Court, stands vacated.