S.H.Chisty vs State of Haryana

R.L. Anand, J.

S.H. Chisty, styling himself as Deputy General Manager (Works) of M/s Khaitan Fertilizers, resident of Rampur (UP) has filed the present petition under Section 482 Cr.P.C. against the State of Haryana praying for the quashment of complaint under Section 7 of the Essential Commodities Act, 1955 read with the provisions of Fertilizer (Control) JUDGMENT 1985 and the summoning order Annexure P2 and all consequential proceedings.

The facts of the case can be described in a narrow compass. The Govt. of Haryana through Shri O.P. Phogat, Quality Control Inspector, Jind filed a criminal complaint under clause 19(1)(a) of Fertilizer (Control) JUDGMENT 1985 against Satpal Aggarwal (also) and S.H. Chisty, the present petitioner. A sample of Single Super Phosphate 16 per cent was taken from the premises of the dealer M/s Aggarwal Trading Co. Mal Godam Road, Narwana and it was found to the substandard. On the basis of the report of incharge, Fertilizer Quality Control Lab. Karnal, Satpal Aggarwal and the present petitioner S.H. Chisty were prosecuted under Clause 19(1)(a) of the Fertilizer (Control) JUDGMENTOn the basis of the complaint, the learned Special Judge, summoned the present petitioner to face the prosecution. Aggrieved by the complaint as well as the summoning order, the present petition.

The basis for the petition made by the present petitioner is that he cannot be prosecuted in the absence of the company which is the manufacturing Unit of the Single Super Phosphate. On the contrary, the defence of the respondent is that Mr. Chisty gave as affidavit on 29.6.1994 to the effect that the single Super Phosphate Manufacturing in the Khaitan Fertilizers Rampur would compromise to all the statutory requirements of the Fertilizer (Control) JUDGMENT and the petitioner further declared that under the provisions of Clause 24 of the Fertilizer (Control) JUDGMENT he was responsible for manufacturing activities of Single Super Phosphate at factory level.

Clause 24 of the Fertilizer (Control) JUDGMENT 1985 lays down that "Every manufacturing organisation and pool handling agency shall appoint in that organisation and in consultation with the Central Government, an office, who shall be responsible for compliance with the provision of this order.

In compliance to the provisions as contained in Clause 24 of the Fertilizer (Control) JUDGMENT 1985, Mr. S.H. Chisty has submitted the above affidavit the main portion of which I have reproduced.

The main point for determination of this case is whether the petitioner without arraying the company as an accused in the complaint, can be prosecuted or not. In this regard we will have to bank upon the provisions of Section 10 of the Essential Commodities Act, 1955 which lays down that with regard to the offences committed by the company and it lays down that if the person contravening an order made under Section 3 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.

Provided that nothing contained in this subsection shall render any such person liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

In the Insecticides Act 1968, similar provisions as contained in the Essential Commodities, have also been incorporated. I need not reproduce the same in order to burden this order.

The contention raised by the learned counsel appearing on behalf of the respondent is that as per undertaking given by the present petitioner in the affidavit that he would be responsible for this manufacturing unit, therefore, he has been rightly prosecuted. Learned AAG, Haryana further submitted with the assistance of Section 10 of the E.C. Act as well as Section 33 of the Insecticides Act that the petitioner can be individually prosecuted without arraying the company as accused. So much so, the learned AAG derived support from 1996(3) RCR 393 M.N. Murli Kumar v. State of Punjab, a judgment of this Court and my attention has been invited to para No. 14 of the judgment which I want to reproduce in order to appreciate the controversy involved in the present petition:

"In this case, however, I do not see any reason to quash this complaint against the petitioner as his very designation suggests that he was Chief Chemist in M/s Hindustan Pulverising Mill, G.T. Karnal Road, Delhi manufacturing this insecticide. As Chief Chemist, he was incharge of and responsible to the company for the quality of the insecticides being manufactured by him as it was his duty to see that the insecticides manufactured by it conformed to the standard laid down in the Insecticides Act. It would bear repetition that whenever an offence under this Act is committed by the company, every person who, at the time the offence was committed, was incharge of, and was responsible to the company for the conduct of the business of the company as well as the incharge of the company shall be liable to be punished. The use of the words ''as well as the company'' suggests that every person who at the time, when offence was committed was incharge or responsible to the company for the conduct of the business of the company, cannot run away from criminal liability. Company is also criminally liable. He is also criminally liable. He can escape the dragnet of criminality if he says that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. It would be a question of evidence whether M.N. Murli Kumar was incharge or responsible to the company for the conduct of the business of the company."

Learned counsel for the petitioner has invited my attention to the citation reported as 1994(1) RCR 347 G.S. Nagpal v. State of Punjab , and one more order dated 5.2.1996 also passed by this Court in Crl. Misc. 21202M of 1995 Prem Parkash Aggarwal v. State of Punjab. In these two citations the view taken is that without arraying his company as an accused, the office holder of the company whether he is a Managing Director or Incharge of the affairs of the manufacturing unit cannot be held responsible without adding the company as an accused itself. This Court has the occasion to go through all the citations read with all the provisions. The words ''as well as company'' appearing in Clause (1) of Section 10 are not redundant. This Court is not in a position to subscribe to the view taken by his Lordship in 1996(3) RCR 393 mainly on the ground that had this beem the intention of the Legislature that every person incharge of the affairs of the unit would be individually liable as an accused without arraying the company as an accused, the words quoted above, as well as company'' would not have been superfluous. By deleting above words, the Legislature court very well say that every person who at the time the contravention was committed or incharge was responsible to the company for the conduct of the company''s affairs shall be deemed to have committed the offence and shall be liable to be prosecuted. The words ''as well as company'' has a lot of significance and it cannot be brushed aside. In Crl. Misc. No. 21202M of 1995 there is a categorical finding by Justice Malte that the manufacturing concern should also be made a party and the person incharge of the manufacturing process would be liable along with the company manufacturing the pesticides and this is squarely the ratio expressed in Nagpal''s case. Though Nagpal''s authority (supra) was before his Lordship Hon''ble Mr. Justice M.L. Singhal when his Lordship was pleased to pass the order in Criminal Misc. No. 5898M of 1996 but the view expressed by Hon''ble Mr. Justice Malte was perhaps was not placed before his Lordships. Be that as it may, the plain reading of section 10 which is equivalent to Section 33 of the Insecticides Act would show that a person responsible for the manufacturing unit individually cannot be prosecuted without adding the company as an accused which has not been done in the present case is evident from the complaint Annexure P1. In these circumstances, the prosecution against the petitioner cannot be allowed to go. This Court respectfully differs with the view taken up in 1996(3) RCR 393 M.N. Murlidhar v. State of Punjab .

Resultantly, the present petition is hereby allowed. The complaint as well as the summoning order visavis the present petitioner are hereby ordered to be quashed as in view of this Court the present petitioner alone cannot be prosecuted until and unless the Company was added as an coaccused. Directions are now given to the Ld. Special Judge not to proceed with the complaint visavis the present petitioner. Copy of the order be given dasti to the petitioner and one copy of the order be sent to the learned Special Judge through the District and Sessions Judge, Jind. This petition is hereby allowed as prayed for.