TMI Blog2017 (2) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... shable under Section 7(i) and 16(1)(a) of Prevention of Food Adulteration Act. The necessary facts for the disposal of the present application in short are that the applicant is the Managing Director cum Incharge of Marico Industries Limited. It is alleged that the complainant was posted as Sanitary Inspector and has taken training for Food Inspection and Sampling Work. By Notification dated 16-8-1991, the State of Madhya Pradesh has also conferred the powers of Food Inspector. Further the complainant has taken sanction for prosecution from Local Health Authority Deputy Director, Food and Medicine Department, 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 submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Parachute Coconut Oil and the Company has not been arraigned as an accused. It is not the case of the respondent that the applicant in his private capacity had committed any offence punishable under Prevention of Food Adulteration Act. On the contrary, it is the specific stand of the respondent that the applicant has been arraigned as an accused in his official capacity and office bearer of a Corporate entity as Managing Director and In-charge. Now the moot question is that whether the Primary accused is the Company or not? If the Company is an accused, then whether the prosecution of an office bearer of the Company 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 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 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 accordingly. Explanation.--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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such. In certain cases, where the law requires personal fault as a condition of liability in tort, the fault of the manager will be the personal fault of the company. The learned Law Lord referred to Lord Haldane's speech in Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd., AC at pp. 713-14. Elaborating further, he has observed that: ... in criminal law, in cases where the law requires a guilty mind as a condition of a criminal 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no immunity to the companies from prosecution merely because the prosecution is in respect of offences for which the punishment is mandatory imprisonment and fine. 32. We have referred to the aforesaid authorities to highlight that the company can have criminal liability and further, if a group of persons that guide the business of the companies have the criminal intent, that would be imputed to the body corporate. In this backdrop, Section 141 of the Act has to be understood. The said provision clearly stipulates that when a person which is a company commits an offence, then certain categories of persons in charge as well as the company would 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 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter, the courts have to give full effect to such a statutory fiction and it has to be carried to its logical conclusion. 38. From the aforesaid pronouncements, the principle that can be culled out is that it is the bounden duty of the court to ascertain for what purpose the legal fiction has been created. It is also the duty of the court to imagine the fiction with all real consequences and instances unless prohibited from doing so. That apart, the use of the term deemed has to be read in its context and further, the fullest logical purpose and import are to be understood. It is because in modern legislation, the term deemed has been used for 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-J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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