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Girdhari Lal Gupta Versus D.H. Mehta and anr.

1970 (8) TMI 83 - SUPREME COURT OF INDIA

Criminal Appeal No. 211 of 1969 and Review Petition No. 37 of 1970 - Dated:- 18-2-1971 - S. M. Sikri And I. D. Dua, JJ. For the Petitioner : C. K. Daphtary, S. K Dholakiya For the Respondent : V. K. Seyid Muhammad, S. P. Nayer JUDGMENT S. M. Sikri, CJ. 1. We disposed of Criminal Appeals Nos. 211 and 212 of 1959 by our judgment dated August 18, 1970, whereby the appeals of Girdharilal Gupta, and Bhagwandeo Tewari against their convictions were dismissed. Girdharilal Gupta put in this review petit .....

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Gupta, does not come within the purview of Section 23C(1) or Section 23C(2) of the Act. Sections 23C(1) and 23C(2) read as follows : 23C. (1) If the person committing a contravention 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 accordin .....

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lect 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. 3. Mr. .....

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t before us from which it appears that he was abroad at that time and came back a few days after the alleged contravention. 4. Mr. Daphtary further contends that Section 23C(2) also does not apply because there is no evidence that the contravention took place with the consent or connivance of, or was attributable to any neglect on the part of, the appellant. He referred to us a number of authorities of the High Courts in India which have interpreted similar provisions and we shall refer to them .....

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word 'company' includes a firm or other association and the same test must apply to a director in-charge and a partner of a firm in-charge of a business. It seems to us that in the context a person 'in-charge' must mean that the person should be in over all control of the day to day business of the company or firm. This inference follows from the wording of Section 23C(2). It mentions director, who may be a party to the policy being followed by a company and yet not be in-charge .....

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t;it is, therefore, manifest that all the officers of the company not in direct charge of the management of the business are immune from the liability for the offence, unless they have contributed to its commission by consent, connivance or neglect." 8. In R.K. Khandelwal v. Stated [1964] 62 A.L.J. 625 D.S. Mathur, J., in construing Section 27 of the Drugs Act, 1940, a provision similar to the one we are concerned with, observed : There can be directors who merely lay down the policy and ar .....

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observed that the Secretary of the Co-operative Milk Society, on the facts of the case, could not be held to be a person in charge of the Society. On the facts of that case the business of selling milk was done by the clerk of the Society and the Secretary was only an honorary Secretary and was not coming to the Society daily. 10. The only evidence led by the prosecution on this part of the case was of one Sohan Lal Gupta who is a broker. He stated in examination-in-chief: Who exactly the propri .....

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he firm : the accountant, Shyamlal. 11. The appellant in his statement under Section 342, Cr.P.C. stated thus : You ask me, Sir, if I have to say anything about the evidence led in this case to the effect that I happen, to be a partner of accused No. 1 firm. To that, Sir, my answer is that I am. The evidence to that end is correct. I shall only add that I alone look after the affairs of this firm. 12. Mr Daphtary says that on this evidence it cannot be held that the appellant was incharge of the .....

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