N Criminal Appeal No 243 of 1979
Appeal by Special Leave from the Judgment and Order dated 13 9 1978 of the Delhi High Court in Criminal Revision No 27178
U R Lalit R Bana M N Shroff and Miss A Subhashini for the Appellant
KL Arora R section Sodhi and H C Gulati for Respondent No 1
V B Ganatra I N Shroff and H section Parihar for Respondent No 3
The Judgment of the Court was delivered by SEN J
In this appeal by special leave from the judgment of the Delhi High Court two questions arise which are one of very general importance
The first is in a case where the manufacturer of an article of food is a company which has nominated a person under sub so 1019 2 of section 17 of the  as the person responsible whether the sales manager at one of its branches can be prosecuted for an offence punishable under s16 1 a read with s7 i of the Act when the article of food sold at the branch is found to be adulterated within the meaning of s2 ia of the Act
The second is whether after the introduction of the new s17 by Act 34 of 1976 when an offence is committed by a company which has nominated a person responsible under s17 2 it is not permissible to prosecute any other officer of the company not being nominated under subs
2 unless there is allegation that the offence had been committed with the consent or connivance of or was attributable to any neglect on the part of such officer
Upon the first question the facts lie within the smallest possible compass
On June 23 1977 the Delhi Administration filed a complaint under s7 i read with s16 1 a and s17 against 1 Ms Ahmed Oomar Bhoy Ahmed Mills Bombay manufacturers of the well known postman  brand or refined groundnut oil 2 their distributors Ms Gainda Mull Hem Raj New Delhi a partnership firm and its managing Partner Mehar Chand Jain 3 Ms Amar Provision  General Store Netaji Nagar Market New Delhi and its owner Amrik Lal the retailer 4 Y A Khan Manager Quality Control Ahmed Mills appointed by the manufacturers as the person responsible under section 172 of the Act and 5 the two Sales Managers Delhi Branch of Ms Ahmed Oomer Bhoy manufacturers I K Nangia and Y P Bhasin
It was alleged that on August 31 1976 SD Sharma Food Inspector New Delhi Municipal Committee lifted a sample of Postman  brand refined groundnut oil from Ms Amar Provision  General Store which was soldsupplied to it by Ms Gainda Mull Hem Raj on August 20 1976 and the same by the Public Analyst by his report dated September 9 1976 was found to be adulterated due to the presence of castor oil  Not an edible oil
It was further alleged that this adulterated article of food was suppliedsold to Ms Gainda Mull Hem Raj by Ms Ahmed Oomer Bhoy on August 20 1976 through its Sales Managers at Delhi I K Nangia and Y P Bhasin
The Metropolitan Magistrate Delhi by his order dated April 1 1978 found that there was a prima facie case against Ms Ahmed Oomer Bhoy the manufacturers of the Postman  brand refined groundnut oil their distributors at Delhi Ms Gainda Mull Hem Raj and Ms Amar Provision Store the retailer as well as against Y A Khan the Quality Control Manager Ahmed Mills but declined to issue any 1020 process against the respondents I K Nangia and Y P Bhasin the two Sales Managers of Ms Ahmed Oomer Bhoy at Delhi observing that though they had effected the sale of the adulterated article of food they were not concerned with the manufacture of the article in question but had only effected the sale thereof 
He accordingly dismissed the complaint against them holding that their prosecution was misconceived
The Delhi Administration moved the High Court in revision but it declined to interfere
There can be no doubt that the order made by the learned Metropolitan Magistrate refusing to issue any process against the respondents is wholly unwarranted
It cannot be said that there is no material for presuming that these respondents had not committed an offence and therefore it was not open to the learned Metropolitan Magistrate to come to the conclusion that there was no basis for proceeding against them
The test as laid down by this Court in the State of Bihar vs Ramesh Singh is that at the initial stage if there is a strong suspicion which leads the Court to think that there is a ground for presuming that the accused has committed an offence then it is not open to the Court to say that there was no sufficient ground for proceeding against the accused
In the instant case the allegations in the complaint constitute a prima facie case against the respondents of having committed an offence under s7 i read with s16 1 a of the Act
In the complaint the material allegations are as follows 6
That the adulterated article of food was supplied sold to Ms Gainda Mull Hem Raj on 20 8 76 by Ms Ahmed Oomer Bhoy through its sales managers at Delhi I K Nangia and Y P Bhasin
That accused Y A Khan is the Quality Control Manager of accused No 5 and accused I K Nangia and Y P Bhasin are the Sales Managers Local Branch of accused No 5 and were incharge of and responsible to it for the conduct of its business at the time of commission of offences by accused No 5
 The words were incharge of and responsible to it for the conduct of its business are wide enough to include all the business activities of Ms Ahmed Oomer Bhoy at Delhi
It is a common ground that they have a Delhi Office at 2 A3 Asaf Ali Road New Delhi and 1021 that the two respondents IK Nangia and Y P Bhasin are the Sales Managers
The complaint makes a specific allegation that the respondents were incharge of and were responsible to their employers for the conduct of their business at Delhi
section D Sharma Food Inspector PW 1 has stated during the enquiry under section 202 of the Code of Criminal Procedure that the adulterated article of food in question was sold by them to the distributors Ms
Gainda Mull Hem Raj vide bill No 62 dated August 20 1976
Further he goes on to say that they were incharge of and responsible to Ms Ahmed Oomer Bhoy for the conduct of their business in Delhi at that time
Now the person actually effecting the sale of an adulterated article of food is directly liable under s7 i of the Act which reads 7
No person shall himself or by any person on his behalf manufacture for sale or store sell or distribute
i any adulterated food The manufactures Ms Ahmed Oomer Bhoy Bombay became liable because they were directly selling the adulterated article through their branch office at Delhi
The respondents I K Nangia and Y P Bhasin also became liable because of the words by any person on his behalf which include their agents and servants
That appears to be the true construction of the section
In view of this the learned Metropolitan Magistrate could not have dismissed the complaint against the respondents
It appears that Ms Ahmed Oomer Bhoy Bombay had appointed the accused Y A Khan Manager Quality Control Ahmed Mills to be the person responsible for the company under s17 2 on July 31 1976
It is argued on the strength of section 17 1 a i that the respondents could not therefore be prosecuted for the offence committed by Ms Ahmed Oomer Bhoy
This contention in our opinion needs only to be stated to be rejected
Not only does it involve attributing to the Legislature something which was never intended but it conflicts with the ordinary canons of constructions
The question turns upon a proper construction of the new section 17 introduced by Act 34 of 1976 which in so far as material reads 17
i 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 1022 company for the conduct of the business of the company hereafter 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 incharge 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 such manager being employed mainly in a managerial or supervisory capacity to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the company of any offence under this Act and may give notice to the Local Health Authority in such form and in such manner as may be prescribed that it has nominated such director or manager as the person responsible along with the written consent of such director or manager for being so nominated
Explanation
Where a company has different establishments or branches or different units in any establishment or branch different persons may be nominated under this sub section in relation to different establishments or branches or units and the person nominated in relation to any establishment branch or unit shall be deemed to be the person responsible in respect of such establishment branch or unit
3 x x x x x x x 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 1023 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
 On the plain meaning of the section when an offence has been committed by a company where there is no nomination under section 17 2 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 is deemed to be guilt of the offence and is liable to be proceeded against and punished
Notwithstanding the nomination of a person under s17 2 any director manager secretary or other officer of the company not being a person nominated under sub section
2 can also be vicariously made liable if 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 such person 
It is however strenuously urged that the company having nominated the accused Y A Khan Quality Control Manager Ahmed Mills to be the person responsible under s17 2 he is the only person liable to be proceeded against throughout the country and the prosecution of the respondents is wholly misconceived
Our attention has been drawn to the nomination form and it says that he shall be responsible for the company
We are afraid there is no substance in this contention
There is nothing in the document to show that the nomination is effective not only for the registered office of the company at Bombay but also for all its branches in different States
Such a construction would in our opinion render the Explanation to section 17 2 wholly illusory
Where there is a large business organization with a widespread network of sales organisations throughout the country it ought to nominate different persons for different places or face the consequences set forth in s17 1 a ii
The Explanation appended to s17 2 does in terms contemplate that where a company has different establishments or branches or different units in any establishment or branch it may nominate different persons in relation to different establishments or branches or units and the person so nominated in relation to any establishment or branch or unit shall be deemed to be the person responsible in respect of such establishment or branch or unit
The language of the Explanation shows a purpose and therefore a cons 1024 truction consistent with that purpose must reasonably be placed upon it
We are clear that the Explanation to section 172 although in terms permissive imposes duty upon such a company to nominate a person in relation to different establishments or branches or units
There can be no doubt that this implies the performance of a public duty as otherwise the scheme underlying the section would be unworkable
The case in our opinion comes with in the dictum of Lord Cairns in Julius vs Lord Bishop of Oxford There may be something in the nature of the thing empowered to be done something in the object for which it is to be done something in the conditions under which it is to be done something in the title of the persons for whose benefit the power is to be exercised which may couple the power with a duty and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so
 The Explanation lays down the mode in which the requirements of section 17 2 should be complied with
Normally the word may  implies what is optional but for the reasons stated it should in the context in which it appears mean must 
There is an element of compulsion
It is power coupled with a duty
In Maxwell on Interpretation of Statutes 11th Edn
at p 231 the principle is stated thus Statutes which authorise persons to do acts For the benefit of others or as it is sometimes said for the public good or the advancement of justice have often given rise to controversy when conferring the authority in terms simply enabling and not mandatory
In enacting that they may or shall if they think fit or shall have power or that it shall be lawful for them to do such acts a statute appears to use the language of mere permission but it has been so often decided as to have become an axiom that in such cases such expressions may have to say the least a compulsory force and so could seem to be modified by judicial exposition Emphasis supplied
Though the company is not a body or authority there is no reason why the same principle should not apply
It is thus wrong to suggest 1025 that the Explanation is only an enabling provision when its breach entails in the consequences indicated above
It is not left to one s choice but the law makes it imperative
Admittedly Ms Ahmed Oomer Bhoy had not at the material time nominated any person in relation to their Delhi branch
The matter is therefore squarely covered by section 17 1 a ii
On the two questions formulated the answer is self evident
The individual liability of the sales manager is distinct and separate from the corporate liability of the manufacturer
In case of a company prosecution  the company along with its agent that is the person nominated under s17 2 as well as the sales manager can both be prosecuted under s7 i read with s16 1 a
Notwithstanding the nomination of a person responsible under section 172 there can also be prosecution of any director manager secretary or other officer of the company under section 174
But in such a case it is necessary for the prosecution to prove that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of such person 
The result therefore is that the order of the Metropolitan Magistrate is set aside and he is directed to issue summons to the respondents and proceed with the trial according to law
VDK Appeal allowed


Summary:
On August 31 1976 the Food Inspector lifted a sample of Postman  brand refined ground nut oil from Ms Amar Provision  General Stores which was soldsupplied to it by Ms Gainda Mull Hem Raj on August 20 1976 and the same was found as per the Public Analyst s report dated September 9 1976 to be adulterated due to the presence of Castoroil not an edible oil
This adulterated article of food was suppliedsold to Gainda Mull Hemraj by Ms Ahmad Oomer Bhoy through its sales managers at Delhi T K Nangia and Y P Bhasin
On June 23 1977 the Delhi Administration filed a complaint under section 71 read with Section 161a and Section 17 against i Ms Ahmed Oomer Bhoy Ahmed Mills Bombay manufacturers of well known brand Postman groundnut oil ii their distributors Ms Gainda Mull Hemraj New Delhi a partnership firm and its managing Partner Meher Chand Jain iii Ms Amar Provision and General Stores Netajinagar Market New Delhi and its owner Amrik Lal the retailer iv Y A Khan Manager Quality Control Ahmed Mills appointed by the manufacturers as the person responsible under section 172 of the Act and v The two sales managers Delhi Branch of Ms Ahmed Oomer Bhoy manufacturers IK Nangia and Y P Bhasin
The Metropolitan Magistrate Delhi by his order dated April 1 1978 found that there was a prima facie case against all except the two sales managers and issued process accordingly
He dismissed the complaint against the respondents on the ground that they were not concerned with the manufacturer of the article in question but had only effected the sale thereof
The Delhi Administration moved the High Court in revision against dismissal but it declined to interfere
1017 Allowing the appeal by special leave the Court  HELD 1
At the initial stage if there is strong suspicion which leads the Court to think that there is a ground for presuming that the accused had committed an offence then it is not open to the Court to say that there was no sufficient ground for proceeding against the accused
1020 C D In the instant case the allegations in the complaint constitute a prima facie case against the respondents of having committed an offence under section 71 read with section 161a of the 
The words were in charge of and responsible to it for the conduct of its business are wide enough to include all the business activities of Ms Ahmed Oomer Bhoy at Delhi who have their office at Delhi and the two respondents are the sales Managers
1020 E G H 1021 A State of Bihar vs Ramesh Singh   applied
The person actually effecting the sale of an adulterated article of food is directly liable under section 7i of the Act
The manufacturers Ms Ahmed Oomer Bhoy Bombay became liable because they were directly selling the adulterated article through their branch office at Delhi
The respondents I K Nangia and Y P Bhasin also became liable because of the words by any person on his behalf in Section 7 which includes their agents and servants
In view of this the learned Metropolitan Magistrate should not have dismissed the complaint against the respondents
1021 C F 3
On the plain meaning of the new section 17 introduced by Act 34 of 1976 when an offence has been committed by a company where there is no nomination under s 172 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 is deemed to be guilty of the offence and is liable to be proceeded against and punished
Notwithstanding the nomination of a person under section 172 any director manager secretary or other officer of the company not being a person nominated under sub section
2 can also be vicariously made liable if 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 such person
1023 B D 4
To construe section 172 of the Act to mean that the only person liable to be proceeded is the namednominated person under section 172 would render the Explanation to Section 172 wholly illusory
1023 E F 5
Where there is a large business organisation with a widespread network of sales organisation throughout the country it ought to nominate different persons for different places or face the consequences set forth in section 171aii
The Explanation appended to section 172 does in terms contemplate that where a company has different establishments or branches or different units in any establishment or branch it may nominate different persons in relation to different establishments or branches or units and the person so nominated in relation to any establishment or branch or unit shall be deemed to be the person responsible in respect of such establishment or branch or unit
The language of the Explanation shows a purpose and therefore a construction consistent with that purpose must reasonably be placed upon it
1024 F H 1025 A 1018 The Explanation to section 172 although in terms permissive imposes a duty upon such a company to nominate a person in relation to different establishments or branches or units
There can be no doubt that this implies the performance of a public duty as otherwise the scheme underlying the section would be unworkable
1024 A D The Explanation lays down the mode in which the requirements of section 172 should be complied with
Normally the word may implies what is optional but for the reasons stated it should in the context in which it appears
mean must 
There is an element of compulsion
It is a power coupled with a duty
Though the company is not a body or authority there is no reason why the same principle should not apply
It is thus wrong to suggest that the Explanation is only an enabling provision when its breach entails in the consequences indicated above
It is not left to one s choice but the law makes it imperative
Admittedly Ms Anand Oomer Bhoy had not at the material time nominated any person in relation to their Delhi branch
The matter is therefore squarely conversed by section 171aii
1024D E H 1025 A Julias vs Lord Bishop of Oxford  quoted with approval
The individual liability of the sales manager is distinct and separate from the corporate liability of the manufacturer
In case of a company prosecution  the company alongwith its agent that is the person nominated under section 172 as well as the sales manager can both be prosecuted under section 7i read with section 161 a
Notwithstanding the nomination of a person responsible under section 172 there can also be prosecution of any director manager secretary or other officer of the company under section 174
But in such a case it is necessary for the prosecution to prove that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of such person 
1025 B D