TMI Blog2018 (3) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... es under Section 16(1)(a) of the Prevention of Food Adulteration Act, 1954 but inadvertently, oblivious of the correct provisions of law, cognizance was taken under Section 16(1)(A) of the Act - The company has not been arraigned as an accused in the complaint lodged by the Chief Medical Officer, only its Managing Director, all Directors, Chairman, all Administrative Officers and Production Incharge were made accused though it was an offence committed by the company. In case of offence committed by the company its officers cannot be made vicariously liable for commission of offence on the part of the company. Vicarious liability gets attracted in case of the officers of the company only when condition precedent laid down in Section 17(1) of the Act gets satisfied. Liability of the Directors of the company with respect to offence alleged to have been committed by the company - Held that: - a clear case requires to be spelled out alleging and naming the particular Director responsible to the company for the conduct of its business. In the present case, no such name with such averment is mentioned in the complaint - in the present case, only the Managing Director, all Directors, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agistrate, Patna against the Managing Director, all Directors, Chairman, all Administrative Officers and Production Incharge of the company, namely, Reckitt Benckiser (India) Pvt. Ltd. situated at Kolkatta, for committing offence, under Section 16(1)(A) of the Prohibition of Food Adulteration Act, 1954 (hereinafter referred to as the Act‟). On 19.02.2003, the Food Inspector, Patna, in exercise of his powers, under Section 10 of the Act, collected 03 cans of Barley Powder of 400 grams each from Shalimar Cold Stores, a C. F. of the company in Patna and sent to public analyst for its analysis and report. Its report dated 12.03.2003 opines that label on the Barley Powder Can does not bear best before date , which is required under the Rules 32(1) of the Prohibition of Food Adulteration Rules, 1955 (hereinafter referred to as the Rule‟) so the public analyst narrated that it amounts to misbranding in terms of Section 2(ix)(j) (k) of the Act. The Food Inspector thereafter filed a petition before the Civil Surgeon-cum-Chief Medical Officer, Patna, under Section 20(1) of the Act, seeking written consent to prosecute the Managing Director, Directors, Chairman, all Administr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial Manager (East), the petitioner of Cr. Misc. No. 36986 of 2017, who performs finance functions of the company but has no administrative role, and after arresting him produced before the Judicial Magistrate at Kolkata who granted bail to appear before the trial court. The learned counsel further submits that Amrit Bangur had joined the company only on 30.01.2017 and the purported offence was committed in 2003 so at that very point of time, petitioner Amrit Bangur was not related or concerned with affairs of the company in any manner; moreover the company by that time was unaware of issuance of any process of law by the trial court, however knowing this fact, the company has filed this quashing application before this Court. The company apprehends that like Amrit Bangur, the present Managing Director, Directors, Chairman, all Administrative Officers and Production Incharge may be arrested though they were not concerned with the affairs of the company at that point of time. 6. Learned counsel further submits that Section 17 of the Act deals with the offences committed by the companies. In case of offence committed by the company under the provisions of the Act, a person, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complaint that at the time of offence committed whether the person accused was in charge of and responsible to the company for the conduct of its business; this averment is an essential requirement, so if the answer is in negative, so merely being a Director of the company is not sufficient to make him liable for prosecution under the N.I.Act. A Director in the company cannot be deemed to be in charge of and responsible for the conduct of its business. It is submitted that it is the Board of Directors, who assigns particular functions to the Directors, as per the memorandum and articles of association of the company, so without ascertaining that which of the officers at that time was nominated under sub-section (2) of Section 17 of the Act or in case of no such nomination, who was in charge of and responsible to the company for the conduct of its business, the accused persons have been arraigned and the company was left out, so the company was not prosecuted. 8. Learned counsel also places reliance to the case of Pepsico India Holdings Private Limited vs. Food Inspector and Anr. reported in (2011) 1 SCC 176 and referring para 50 of the judgment, submits that in a complaint a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003, at that time he was a child and joined the company only on 30.01.2017, so in any case, he cannot be held liable for the affairs of the company at the relevant point of time. 11. Mr. Satyavrat Verma, learned counsel appearing on behalf of the State, concedes that unless the company is arraigned as accused, vicarious liability cannot be fastened to other officers of the company, however, he raised objection relating to locus standi of the petitioner no. 1 in Cr. Misc. No. 24952 of 2017 for the reason that as the company is not an accused, so no cause of action to file the quashing application. 12. Having considered the rival submissions and on perusal of record, the Court finds that Cans of Purity Indian Barley were taken from the premises of Shalimar Cold Stores, a C F Agent of the company on 19.02.2003 and were sent to the public analyst for its report and the report dated 12.03.2003 indicates that manufacturing date is mentioned on the product 7/02, but the label does not bear best before date which is required under Rule 32(i) of the Rules, 1955, so a case of misbranding and not a case of adulteration. The offence for misbranding comes under Section 16(1)(a) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writing to the Local (Health) Authority, under intimation to the company, to cancel the nomination which request shall be complied with by the Local (Health) Authority, whichever is the earliest, continue to be the person responsible: Provided that where such person ceases to be a director or, as the case may be, manager of the company, he shall intimate the fact of such cesser to the Local (Health) Authority: Provided further that where such person makes a request under clause (iii), the Local (Health) Authority shall not cancel such nomination with effect from a date earlier than the date on which the request is made. (4) Notwithstanding anything contained in the foregoing sub-sections, 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 not being a person nominated under sub-section (2) 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 accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, para-18 of the said judgment is referred to hereinbelow to elucidate the concept: 18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That the respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct of its business. A merely bald statement that a person was a Director of the Company against which certain allegations had been made is not sufficient to make such Director liable in the absence of any specific allegations regarding his role in the management of the Company. 52. Having considered the matter in its totality and also having regard to the fact that Somesh Dahale had been nominated under sub-section (2) of Section 17 of the 1954 Act to be a person in charge of and responsible to the Company for the conduct of its business, we are of the view that the appeals have to be allowed . 18. In the present case, only the Managing Director, all Directors, Chairman, all administrative Officers and Production Incharge have been arraigned as accused naming them in the column of the accused of the complaint in a typed format of complaint. There is no specific allegation regarding individuals‟ role in the management of the company rather all Directors and others have been made accused not even a particular managing Director or any Director by name has been made accused with the specific allegation regarding the specific role in the management of the company. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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