Virender Goswami vs State of Punjab and Another

Sabina, J.—This petition has been filed by the petitioner u/s 482 of the Code of Criminal Procedure, 1973 (Cr.P.C. for short) for quashing of criminal complaint No. 149-2 of 2008 dated 16.4.2008 titled as "State vs. M/s. Aman Khad and others" under Clause 19(a) of the Fertilizer (Control) Order, 1985 (the Order for short), punishable u/s 7 of the Essential Commodities Act, 1955 (Annexure P-2) (the Act for short) and all the subsequent proceedings arising therefrom including summoning order dated 10.8.2011 (Annexure P-1). Learned senior counsel for the petitioner has submitted that the trial Court had erred in summoning the petitioner to face the trial as additional accused on an application moved by the accused in the absence of any evidence available on record against the petitioner. As per the case of the complainant, the fertilizer in question was being manufactured by M/s. U.S. Borax Inc. California. It was being imported and marketed by M/s. Rallis India Ltd. As per the memorandum of agreement, M/s. Rallis India Ltd. was described as the buyer and M/s. U.S. Borax Inc. California was described as seller. As per the Trade Mark License, the licensee would, inter alia, repack and redistribute the product marketed with the Trade Marks in India. Section 2 of the Act was added in the Act w.e.f. 12.2.2007. The Central Government could exercise its powers under Sub section (2) in respect of the commodity to which Parliament has power to make laws by virtue of entry 33 in List III in the Seventh Schedule to the Constitution. As per the said entry No. 33, trade and commerce in and the production, supply and distribution of the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest and imported goods of the same kind as such products. At the time of addition of the said provision in entry No. 33 during debate, it was submitted that words " and imported goods of the same kind as such products" had been added so that they come within the Government regulation.

Learned senior counsel for the petitioner has further submitted that importer was defined in the Order w.e.f. 18.6.1993. Learned Senior counsel has referred to Clauses 2 (o), 7, 19, 21, 21-A and 24 of the Order to substantiate his argument that manufacturer can be arrayed as an accused if goods are manufactured in India but in case the goods are manufactured in a foreign country and are imported by another company and are marketed by the importing company then only the importing company is liable to be proceeded against if the product is not found as per the standard prescribed under the provision of the Order.

Learned State counsel, on the other hand, has opposed the petition and has submitted that the petitioner being manager of the foreign manufacturing company in India was liable to face the criminal proceedings as the sample drawn by the fertilizer inspector on 22.12.2006 from the bags in question was found to be not up to the prescribed standard by the Analyst.

The case of the complainant, as per complaint (Annexure P-2), in brief, is that on 22.12.2006, shop of M/s. Aman Khad and Pesticide Bhandar was checked. Samples were drawn from the bags of fertilizer Solubar Disodium Octa Borate Tetra Hydrate Boron 20% (Imported) Manufactured by M/s. U.S. Borax Inc. California, imported and marketing by M/s. Rallis India Ltd.. As per the report of the Analyst, the sample was declared not according to specification and failed in nutrient content. Show cause notice was issued to the dealer along with the test report. Show cause notice was also sent to the importer along with the report of the analyst.

The trial Court ordered the summoning of the accused. During trial, Fertilizer Inspector Gurmit Singh Cheema appeared in the witness box as PW-1. During cross-examination, the said witness deposed that he had verified all the documents produced before him by Krishan Lal.

M/s. Rallis India Ltd. during trial moved an application u/s 319 Cr.P.C. for summoning the petitioner as an accused alleging therein that the fertilizer in question was being manufactured by M/s. U.S. Borax Inc. California and M/s. Rallis India Ltd. had merely taken the fertilizer in question from the company in machine stitched bags in its original condition. Petitioner was working as a manager of the said company in India and was fully responsible for the said company.

Vide impugned order dated 10.8.2011, trial Court ordered the summoning of the petitioner to face the trial as an accused.

As per clause 2 (kk) of the Order, importer has been defined as under:-

"importer" means a person who imports fertiliser in accordance with the Export and Import Policy of the Central Government, as amended from time to time." Clause 19 of the Order reads as under:-

Restriction on manufacture/import, sale and distribution of fertilisers

No person shall himself or by any other person on his behalf:-

a. manufacture/import for sale, sell, offer for sale, stock or exhibit for sale or distribute any fertiliser which Is not of prescribed standard;

b. manufacture/Import for sale, sell, offer for sale, stock or exhibit for sale, or distribute any mixture of fertilisers, which is not of prescribed standard** (subject to such limits of permissible variation as may be specified from time to time by the Central Government) or special mixture of fertilisers which does not conform to the particulars specified In the certificate of manufacture granted to him under this Order in respect of such special mixture.

c. sell, offer for sale, stock or exhibit for sale or distribute:-

i. any fertiliser the container whereof is not packed and marked in the manner laid down In this Order

ii. any fertiliser which is an [imitation of or] a substitute for another fertiliser under the name of which it is sold;

iii. any fertiliser which Is adulterated; Explanation:- A fertiliser shall be deemed to be adulterated, If it contains any substance the addition of which is likely to eliminate or decrease Its nutrient contents or make the fertiliser not conforming to the prescribed standard.

iv. any fertiliser the label or container whereof bears the name of any individual firm or company purporting to be manufacturer/Importer of the fertiliser, which individual, firm or company is fictitious or does not exist.

v. any fertiliser, the label or container whereof or anything accompanying therewith bears any statement which makes a false claim for the fertiliser of which is false or misleading in any material particular.

vi. any substance as a fertiliser which substance is not, in fact, a fertiliser; or

vii. any fertiliser without exhibiting the minimum guaranteed percentage by weight of plant nutrient.

Clause 21 of the Order reads as under:-

Manufacturers/Importers pool handling agencies to comply with certain requirements in regard to packing and marking, etc.

Every manufacturer/importer and pool handling agency shall, in regard to packing and marking of containers of fertilisers, Biofertiliser or Organic fertiliser comply with the following requirements, namely:-a. Every container in which any fertiliser is packed shall conspicuously be superscripted with the word "fertiliser" and shall bear only such particulars and unless otherwise required under any law nothing else, as may from time to time, be specified by the Controller in this behalf,

Provided that in case of containers the gross weight of which is 5 kgs or less, no such printing of superscription and other particulars shall be necessary if such superscription and other particulars are printed on a separate label which is securely affixed to such container;

(aa) Every container in which any Biofertiliser or Organic fertilizer is packed shall conspicuously be superscribed with the words "Biofertilisers/Organic fertilizers" and shall bear only such particulars and unless otherwise required under any law nothing else, as may from time to time, be specified by the Controller in this behalf;

(b) Every container shall be so packed and sealed that the contents thereof cannot be tampered with without breaking the seal;

Provided that where fertilizer manufactured in India are packed in bags stitched on hand, such bags shall bear lead seals, so that the contents thereof cannot be tampered with without breaking the seals; Provided further that lead sealing shall not be necessary:-

(i) if such bags are machine stitched in such a manner that contents thereof cannot be tampered with without a visible break in the stitching; and

(ii) in the case of fertilizers imported from abroad and packed in bags stitched in hand, in such a manner that the contents thereof cannot be tampered with without visible break in the stitching.

Provided also that in case fertilizer bags are in cut, torn or damaged condition during transportation or mishandling during loading or unloading operation, the manufacturer of such fertilizer may, under intimation to the State Government and the Central Government, repack he fertilizer in new bags or restandardise the quantity in terms of declared weight.

c. Every fertiliser bag in which any fertiliser is packed for sale shall be of such weight and size as may be specified by the Central Government from time to time in this behalf Clause 21-A of the Order reads as under:-

Manufacturers [importers] to comply with certain requirements for laboratory facilities:-

Every manufacturer [importers] shall, in order to ensure quality of their product, possess minimum laboratory facility, as may be specified from time to time by the Controller.

Clause 24 of the Order reads as under:-

"Manufacturers/[importers]/Pool handling agencies to appoint officers responsible with compliance of the Order

Every manufacturing organization, [importer] and pool handling agency shall appoint in that organization and in consultation with the Central Government, an officer, who shall be responsible for compliance with the provisions of this Order.

The definition of importer as well as the word '' importer'' had been added in clause 2 (kk), 19 and 21 of the Order w.e.f. 18.6.1993 by S.O. No. 397 (E).

As per the definition of importer, it means that a person who imports fertilizer in accordance with export and import policy of the Central Government. As per clause 19 of the Order, no person shall manufacture/import or sale any fertilizer which is not of prescribed standard. As per clause 21 of the Order, every manufacturer/importer shall in regard to packing and making of containers of fertilizers comply with the requirements mentioned therein. As per clause 21-A of the Order, manufacturer/importer shall ensure quality of the product. As per Clause 24 of the Order, manufacturer/importer shall appoint an officer, who shall be responsible for the provisions of the order. In entry No. 33 of List III of Schedule VII of the Constitution of India, the words "and imported goods of the same kind as such products" was entered with regard to trade and commerce in, and the production, supply and distribution of products of any industry so as to regulate the imported goods. Thus, it is evident that prior to the addition of the word ''importer'' in the relevant clauses of the Order w.e.f. 18.6.1993, only manufacturer was liable to maintain standard of the fertilizer and comply with the conditions with regard to packing and marketing. However, after the addition of word "importer'' along with ''manufacturer in the relevant clauses of the Order, in case of goods which were imported and marketed by a company in India then the said importer has been held responsible to maintain the quality of the fertilizer imported and comply with the provisions with regard to its marketing.

As per Trade Mark Licence executed between the manufacturer and the importer, it was agreed that the importer shall re-pack and redistribute product marketed with the Trade Marks in India. As per the case of the complainant itself, although, the fertilizer was manufactured by M/s. U.S. Borax Inc. California but it was imported and marketed by M/s. Rallis India Ltd. Thus, it is evident that it was the importer M/s. Rallis India Ltd. who was responsible to ensure that the fertilizer conformed to the standards required by the Order and imported in terms of the provisions of the Order. It appears that the importer has been held to be liable as the importer is to take care that the goods imported by it are up to the standards required to be maintained in terms of the provisions of the Order. Thus, the importer should import only those fertilizers from a foreign manufacturer as are in terms of the provisions of the Order. Every country must be having its own standards laid down qua the fertilizers in terms of its climatic conditions. Hence, it is for the importer to ensure that the fertilizer imported by it is in consonance with the requirements provided under the Order.

In the present case, application was moved by the importer u/s 319 Cr.P.C. to summon the petitioner as an accused on the ground that he was working as a manager of the manufacturer company. However, there was no evidence available before the trial Court in this regard apart from the assertion made by the importer/accused in the application.

In the present case, the manufacturer could not be summoned to face the trial as an additional accused as it was duty of the importer to conform with the standards of the fertilizer in terms of the provisions of the order. In these circumstances, trial Court fell in error in ordering the summoning of the petitioner as an additional accused; firstly without there being any evidence on record against the petitioner and secondly the foreign manufacturer could not be summoned to face the trial as an additional accused as importer, who was marketing the fertilizer had already been arrayed as an accused and the said importer is liable to face the criminal proceedings on account of the fact that the sample of fertilizer had been found to be sub-standard.. Accordingly, this petition is allowed. Impugned order dated 10.8.2011 (Annexure P-1), whereby petitioner was summoned to face the trial as an additional accused is set aside.