Subhash Chander vs The State of Haryana

Harbans Singh Rai, J.—The charge against Subhash Chander son of Bahadur Chand partner M/S Subhash Chander Satish Kumar, Nilokheri, is that he had 173 bags of levy cement for sale in his possession, although his firm had licence only to deal with non-levy cement. He was further charged that the accounts were not properly maintained as required under the licence. He was prosecuted and the Special Court, Karnal, found him guilty u/s 7 of the Essential Commodities Act, 1955, and sentenced him to four months'' rigourous imprisonment and a fine of Rs. 1,000/- and in default of payment of fine to undergo further R.I. for two months, vide his order dated 14.5.1985. Feeling aggrieved, he has filed the appeal. Jagjit Singh son of Sohan Singh, a Government contractor was also prosecuted along with the Appellant, but he was acquitted.

S. K. Sehi, Assistant Food and Supplies Officer, Panipat, (PW 3) and Sub Inspector Raj Pal Singh (PW 5) raided the premises of the Appellant on 4.6.1984 at 6.30 P.M. 173 bags of cement with marking ''J. K. Cement Works Nimbahera-Rajasthan-levy'' were recovered. Besides the said cement bags stock register Exhibit PG of the firm containing entries upto 25.5.1984 only was also taken into possession. As Subhash chander Appellant could not produce any documents permit or order showing that his firm could deal in levy cement, the police took 173 bags of the cement into possession. The stock register Exhibit PG and licence Exhibit PH were also taken into possession. As the Appellant was not maintaining proper accounts for the sale of cement which he was bound to maintain under law and he was found to be in possession of levy cement for which he had no licence, he was arrested and after investigation challaned u/s 7 of the Essential Commodities Act, 1955. The infringement of Haryana Cement (Licensing and Control) Order, 1973, was also made out against him.

The prosecution in support of its case examined Shri J. P. Verma (PW 1) to prove partnership deed, showing that Subhash Chander was a partner in the firm Subhash Chander Satish Kumar, alongwith Bahadur Chand and Raj Pal. Shri D. V. Pardhan (PW 2) is the Sales Officer of the Cement Corporation of India and he was examined to prove the supply of cement. Shri S. K. Shahi (PW 3), Assistant Food and Supplies Officer, had conducted the raid. Sub Inspector Raj Pal Singh is the Investigating Officer.

After the close of the prosecution, the Appellant was examined u/s 313, Criminal Procedure Code, where he had taken the stand that he does not work on the shop and his father manages the business No recovery or raid was made in his presence nor he was joined in the investigation and this case has been planted upon him at the instance of a rival shopkeeper. In his defence, he has examined Manohar Lal Draftsman, (DW 1) who has prepared the plan Exhibit DL showing the location of the shop; Kashmiri Lal (DW 2) an Octroi Moharar, who has proved that on 28.3.1984, two truck loads of cement had entered Nilokheri through his octroi posts The said trucks contained 240 bags of cement, each. Bharat Bushan (DW 3) has stated that his office and shop is situated adjacent to the shop of the Appellant. Bahadur Chand father of the Appellant runs the business and he had never seen Subhash Chander Appellant on the shop Hardeep Singh (DW 4) who is the cashier of Gurdwara Nilokheri, has deposed that a shop of the Gurdwara is on rent with Bahadur Chand, who is a tenant. The Appellant is not a tenant. Jaswant Singh (DW 5) of village Ramba has deposed that Appellant resides at village Ramba and does cultivation. He had issued Chuhla tax receipt. According to Jaswant Singh, Bahadur Chand resides at Nilokheri and works there. Vinod Kumar (DW 6) is a shopkeeper of Yamunanagar. He has stated that a circular was received to the effect that old gunny bags would be used for non levy cement by the factory.

I have heard the learned Counsel for the parties and gone through the records. Mr. H. S. Gill, learned connsel for the Appellant has submitted that even if the prosecution evidence is taken on its face value, the Appellant cannot be convicted because the prosecution has not proved that at the time the contravention was committed, he was incharge and was responsible for the conduct of business. He has further submitted that, there is no evidence to this effect led by the prosecution nor any question was put to the accused when he was examined u/s 313, Criminal Procedure Code, as to whether he was in charge and responsible to the company for the conduct of the business, at the time of raid. According to him, in the absence of any evidence that the Appellant was in charge he cannot be held guilty. He has referred to a large number of judgments in support of his contention.

I have considered the arguments and find force in the same.

Section 10 of the Essential Commodities Act, 1955, reads as under:

Offences by Companies.-(1) If the person contravening an order u/s 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 Sub-section 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.

(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 purpose of this section,-

(a) "company" means any body corporate, and included a firm or other association of individuals; and

(b) "director" in relation to a firm means a partner in the firm.

In the present case, the prosecution has not led any evidence that the Appellant was incharge or responsible for the conduct of the business. On the other hand, it is the case of the prosecution that it is a partnership firm having three partners. No evidence has been led as to who runs the business and no witness has stated that it is the Appellant who is incharge of the business, nor any question was put to the Appellant in his examination u/s 313, Criminal Procedure Code, asking him to explain that he was the incharge. The prosecution cannot succeed unless it is proved on the file that the Appellant was incharge and in the absence of any evidence, I have no option but to agree with the contention of the learned Counsel for the Appellant that the prosecution must fail.

8 Taking the evidence led by the prosecution into consideration and the fact that no question was put to the Appellant in this regard in his examination u/s 313, Criminal Procedure Code, I am of the view that the prosecution cannot succeed It was bound to lead evidence to prove that the Appellant was incharge and responsible for the conduct of the business of the company No evidence has been led to that effect. In this view of the matter, the judgment and order of the learned trial Court cannot be maintained The same are hereby set as de and the Appellant is acquitted of the charge. This appeal is allowed.