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TMI Blog2017 (2) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, Gwalior. It was alleged that on 18-12-1997 at about 2 P.M., the complainant inspected the shop of co-accused M/s Maheshwari General Stores and sample of parachute Coconut Oil 200 gms. PKD-6/97,Lot No. KN0015 was taken. Thereafter, the sample was sent to the Public Analyst, and vide report dated 24-1-1998, it was opined that the sample was adulterated. Accordingly, the complaint was filed. It is submitted by the applicant that the applicant has been arraigned as an accused merely on the ground that he was In-charge Manager of Marico Industries Limited, Mumbai. It is submitted that there is no personal allegations against the applicant and the case of the respondent is that the coconut oil manufactured by the Marico Industries Limited, Mumbai was found to be adulterated, therefore, the prime accused is Marico Industries Limited and since, the Company has not been made an accused, therefore, prosecution of the applicant is not maintainable. To buttress his contentions, the Counsel for the applicant relied upon the Judgments of Supreme Court in the cases of Aneeta Hada Vs. Godfather Tours and Travels (P) Ltd. (2012) 5 SCC 661, Anil Gupta Vs. Star India Pvt. Limited and another A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is permissible without arraigning the Company as an accused or not? Section 17 of Prevention of Food Adulteration Act, reads as under : "17. Offences by companies.-- (1) Where an offence under this Act has been committed by a company-- (a)(i) the person, if any, who has been nominated under sub-section (2) to be in charge of, and responsible to, the company for the conduct of the business of the company (hereinafter in this section referred to as the person responsible), or (ii) where no person has been so nominated, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company; and (b) the company, shall be deemed to be guilty of the offence 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 provided in this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence. (2) Any company may, by order in writing, authorise any of its directors or managers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation.--For the purposes of this section-- (a) "company" means any body corporate and includes a firm or other association of individuals; (b) "director", in relation to a firm, means a partner in the firm; and (c) "manager", in relation to a company engaged in hotel industry, includes the person in charge of the catering department of any hotel managed or run by it.] The opening words of Section 17 of the Prevention of Food Adulteration Act are "where the offence has been committed by Company". Therefore, it would mean that when the offence has been committed by the Company, then the persons mentioned in Section 17(1)(a)(i) and (ii) shall be deemed to be guilty of the offence. Thus, only because of the legal fiction, the persons mentioned in Section 17(1)(a)(i) and (ii) shall be deemed to be guilty of committing offence. From plain reading of Section 17 of Prevention of Food Adulteration Act, it is clear that the persons as mentioned in Section 17 of Prevention of Food Adulteration Act have been made Vicariously liable for the offence committed by Company. Therefore, before the vicarious liability gets attracted, the condition precedent in Section 17 of Prevention of Food ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence, the guilty mind of the Directors or the managers will render the company itself guilty." 28. It may be appropriate at this stage to notice the observations made by MacNaghten, J. in Director of Public Prosecutions v. Kent and Sussex Contractors Ltd.: (All ER p. 124)"... A body corporate is a 'person' to whom, amongst the various attributes it may have, there should be imputed the attribute of a mind capable of knowing and forming an intention--indeed it is much too late in the day to suggest the contrary. It can only know or form an intention through its human agents, but circumstances may be such that the knowledge of the agent must be imputed to the body corporate. Counsel for the respondents says that, although a body corporate may be capable of having an intention, it is not capable of having a criminal intention. In this particular case the intention was the intention to deceive. If, as in this case, the responsible agent of a body corporate puts forward a document knowing it to be false and intending that it should deceive, I apprehend, according to the authorities that Viscount Caldecote, L.C.J., has cited, his knowledge and intention must be imputed to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be deemed to be liable for the offences under Section 138. Thus, the statutory intendment is absolutely plain. As is perceptible, the provision makes the functionaries and the companies to be liable and that is by deeming fiction. A deeming fiction has its own signification. 33. In this context, we may refer with profit to the observations made by James, L.J. in Levy, In re, ex p Walton, which is as follows: (Ch D p. 756) "... When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to." 34. Lord Asquith, in East End Dwellings Co. Ltd. v. Finsbury Borough Council, had expressed his opinion as follows: (AC pp. 132- 33) "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. ... The statute says that you must imagine a certain state of affairs; it does not say that having do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manifold purposes. The object of the legislature has to be kept in mind. * * * * * 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove. In the case of Sharad Kumar Sanghi Vs. Sangita Rane (2015) 12 SCC 781, it has been held as under : 11. In the case at hand as the complainant's initial statement would reflect, the allegations are against the Company, the Company has not been made a party and, therefore, the allegations are restricted to the Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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