Criminal Appeal No 91 of 1976
Appeal by Special Leave from the Judgment and Order dated 2971975 of the Karnataka High Court in Criminal Appeal No 364 of 1975
N Nettar for the Appellant
AK Sen SK Bisaria and VP Gupta for the Respondents
The Judgment of the Court was delivered by BAHARUL ISLAM J
This appeal by special leave has been preferred by the State of Karnataka
The three respondents being the partners of the firm Ms Mafatlal and Co and the firm itself were charged for offences under Sections 18c 18a ii and 18A of the read with Section 27a ii 27a i and Section 28 of the Drugs Control Act hereinafter the Act
The defence was a plea of Not Guilty
The Chief Metropolitan Magistrate found respondents 1 and 3 that is one of the partners and the firm guilty under Section 18a ii and Section 18c of the and sentenced respondent No 1 to suffer rigorous imprisonment for one year under section 18a ii and to pay a fine of Rs 500
in default to suffer simple imprisonment for one month and sentenced respondents 1 and 3 to pay a fine of Rs 1000 each under section 18c in default to suffer simple imprisonment for three months
The respondent No 2 was acquitted of these two offences as the Magistrate found that it was respondent No 1 and not respondent No 2 who was in charge of the business of the firm
All the respondents were acquitted of the offence under section 18A 3
The appellant preferred an appeal before the High Court of Karnataka from the order of acquittal of respondent No 2 of the 202 offence under Section 18a ii and 18c and of all the respondents under section 18A of the Act
The High Court summarily dismissed the appeal
Section 18A of the Act requires that every person who has acquired drug or cosmetic if required shall disclose to the inspector the name address and other particulars of the persons from whom the drug or cosmetic was acquired
The respondents pleaded that they did disclose to the Drugs Inspector the name address and other particulars of the person from whom the drugs were acquired by section 18A of the Act and in support of their defence they rely on Exhibit P 20 a letter dated 1771971 addressed to the Drugs Controller
The learned Chief Metropolitan Magistrate has found that Exhibit P20 contained the name address and other particulars of the person from whom the drugs were claimed to have been acquired as Ms Mangilal Jayantilal  Company 65 Princess Street Second Floor Bombay which name and address according to the prosecution were fictitious
PW3 the Assistant Commissioner Food and Drug Administration Bombay North Circle has deposed that he got it verified by his Inspector who submitted a report that the above name and address were fictitious
But the Inspector has not been examined nor his report proved
Obviously therefore the defence version remained unrebutted and violation of section 18A remained unestablished
Regarding the acquittal of the 2nd respondent of the offence under section 18 a ii and section 18c the learned counsel for the State of Karnataka submitted that under section 34 of the the firm as well as its partners were liable to be convicted
Section 34 may be extracted here section 34
1 Where an offence under this Act has been committed by a company 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 as well as 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 the sub section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without 203 his knowledge or that he exercised all due diligence to prevent the commission of such offence
2 Notwithstanding anything contained in sub section 1 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 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 purpose of this section a company means a 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
 It is seen that the partner of a firm is also liable to be convicted for an offence committed by the firm if he was in charge of and was responsible to the firm for the conduct of the business of the firm or if it is proved that the offence was committed with the consent or connivance of or was attributable to any neglect on the part of the partner concerned
In the present case the second respondent was sought to be made liable on the ground that he alongwith the first respondent was in charge of the conduct of the business of the firm
Section 23 C of the Foreign Exchange Regulation Act 1947 which was identically the same as section 34 of the came up for interpretation in G L Gupta vs D N Mehta it was observed as follows What then does the expression a person in charge and responsible for the conduct of the affairs of a company mean It will be noticed that the 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 incharge 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 204 business of the company or firm
This inference follows from the wording of section 23C2
It mentions director who may be a party to the policy being followed by a company and yet not be in charge of the business of the company
Further it mentions manager who usually is in charge of the business but not in over all charge
Similarly the other officers may be in charge of only some part of business
 The evidence in the present case shows that it was respondent No 1 and not respondent No 2 who was in over all control of the day to day business of the firm
The second respondent is not liable to be convicted merely because he had the right to participate in the business of the firm under the terms of the Partnership Deed
This appeal has no merit and is dismissed
PBR Appeals dismissed


Summary:
All the three respondents respondents nos
1 and 2 partners and respondent No 3 the firm were prosecuted for the alleged contravention of section 18A in that when asked by the Drugs Inspector to disclose the name address and other particulars of the person from whom a certain drug was acquired by them they gave a fictitious address and that therefore they were liable to be convicted under section 18a ii read with section 18c of the Act
The Metropolitan Magistrate convicted respondent No 1 the partner incharge of the business of the firm and respondent No 3 the firm but acquitted respondent No 2 on the ground that it was respondent No 1 who was incharge of the firm and sentenced them variously
The High Court summarily dismissed the State s appeal against the acquittal of respondent No 2 and of all the respondents under section 18A Dismissing the appeal  HELD Violation of the provisions of section 18A remained unestablished and the defence version remained unrebutted
202E The Assistant Commissioner Food and Drug Administration Bombay North Circle deposed that the particulars given by the respondents as to the person from whom the drugs were purported to have been acquired were verified by an Inspector who in his report stated that the name and address given by the respondents were fictitious but the Inspector has not been examined nor was his report proved
The defence version therefore remained unrebutted
202 D E The second respondent was not liable to be convicted merely because he had the right to participate in the business of the firm under the terms of the partnership deed
The term person incharge referred to in section 34 must mean that the person should be in overall control of the day to day business of the firm
A person may be a party to the policy being followed by a firm and yet not be incharge of its business or a person may be incharge of a business but not in overall charge or may be incharge or only some part of the business
In short a partner of a firm is liable to be convicted for an offence if he was in 201 charge of and was responsible to the firm for the conduct of its business or if it is proved that the offence was committed with the consent or connivance of or was attributable to any neglect on the part of the partner concerned
204A B GL Gupta vs DN Mehta  applied
In the instant case respondent No 2 was not in overall control of the business
It was respondent No 1 who was in that position
204 C