Crl.Misc.No.M-17043 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Crl.Misc.No.M-17043 of 2008 Date of Decision:- 27 .08.2009 M/s Mount Everest Mineral Water Ltd. ....Petitioner(s) vs. Food Inspector, Chandigarh ....Respondent(s) *** CORAM:- HON'BLE MR.JUSTICE AUGUSTINE GEORGE MASIH *** Present:- Mr.Hitesh Pandit, Advocate, for the petitioner. Mr.N.S.Shekhawat, Advocate, for the respondent. *** AUGUSTINE GEORGE MASIH, J. The present petition has been filed challenging the order dated 28.4.2008 (Annexure P-5) passed by the Chief Judicial Magistrate, Chandigarh, vide which the application filed by the petitioner-company under Section 305 Cr.P.C. for allowing it to be represented through a representative of the company who has been duly appointed for the purpose of facing the trial before the Court, has been dismissed. Counsel for the petitioner-company contends that prosecution had been launched against the company on the basis of a complaint filed by the Food Inspector under Sections 16 and 17 of the Prevention of Food Adulteration Act, 1954 (herein-after referred to as 'the Act'). The company was summoned as an accused by the trial Court vide order dated 5.8.1997. On being summoned, the petitioner company moved an application under Section 305 Cr.P.C. for permitting its authorized representative Sh.S.S.Chaudhary, to appear before the trial Court in order to defend the Crl.Misc.No.M-17043 of 2008 -2- Company. It was the contention of the company that as per Section 305 Cr.P.C., the company can appoint a representative for the purpose of enquiry or trial to be conducted as per the provisions of the Criminal Procedure Code. These provisions entitle a company to be present for facing trial before the Court through any person, who has been duly appointed as a representative under Section 305 Cr.P.C. irrespective of the fact whether he is a nominee or person in-charge of and responsible for conduct of the business of the company. The requirement is only that the authorization has to fulfill the requirement of Section 305 Cr.P.C. and the resolution passed by the Board of Directors of the petitioner-company dated 30.10.2003 fulfills the said requirement of law and, therefore, Sh.S.S.Chaudhary, Authorized Representative as per Section 305 Cr.P.C. may be allowed to face the trial. Counsel for the petitioner contends that the trial Court has over-looked the provisions of Section 305 Cr.P.C. and has not appreciated the difference between Section 305 Cr.P.C. and Section 17 of the Act which operate in different fields and has rejected the application of the company on erroneous grounds and, thus, the order passed by it cannot be sustained. He submits that Section 305 Cr.P.C. relates to the representation of the company during enquiry or trial while Section 17 of the Act relates to liability in the case of the offence is committed by the company. In support of this contention, he relies upon a judgment of Orissa High Court in the case of Food Inspector, Cuttack Municipality, Cuttack vs. M/S. B.P.Oil Mills Limited, 1995 Criminal Law Journal 3043. He also relies upon a judgment of this Court in the case of M/s Hindustan Pulverising Mills vs. State of Haryana, 1995 (1) RCR (Criminal), 724, wherein again this Court while accepting the contention of Crl.Misc.No.M-17043 of 2008 -3- the company has held that where the company is an accused, it can appoint a representative for the purpose of enquiry or trial before the Court. On the basis of these submissions, counsel for the petitioner prays for setting aside of the impugned order. On the other hand, counsel for the respondent supporting the order dated 28.4.2008 passed by the trial Court submits that if the application under Section 305 Cr.P.C. preferred by the petitioners is allowed, Section 17 of the Act would be rendered in-operative as far as it states that in case there was no nomination made under Section 17-1(i), every person who at the time when the offence was committed was in- charge of and was responsible to the company for the conduct of business of the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. He, on the basis of these provisions submits that the word “proceeded against” and “punished” clearly spells out the intent of the Legislature which requires such persons to be present in Court to face the trial. I have heard counsel for the parties and have gone through the records of the case. To understand the ambit and operation of the two provisions which have been pressed into service by the counsel for the parties, reproduction of the same would be appropriate at this stage. Section 305 Cr.P.C. reads as follows:- “305. Procedure when corporation or registered society is an accused.-(1) In this section, “corporation” means an incorporated company or other body corporate, and includes a society registered under the Societies Registration Act, 1860 (21 of 1860). Crl.Misc.No.M-17043 of 2008 -4- (2) Where a corporation is the accused person or one of the accused persons in an inquiry or trial, it may appoint a representative for the purpose of the inquiry or trial and such appointment need not be under the seal of he corporation. (3) Where a representative of a corporation appears, any requirement of this Code that anything shall be done in the presence of the accused or shall be read or stated or explained to the accused, shall be construed as a requirement that that thing shall be done in the presence of the representative or read or stated or explained to the representative, and any requirement that the accused shall be examined shall be construed as a requirement that the representative shall be examined (4) Where a representative of a corporation does not appear, any such requirement as is referred to in sub- section (3) shall not apply. (5) Where a statement in writing purporting to be signed by the managing director of the corporation or by any person (by whatever name called) having, or being one of the persons having the management of the affairs of the corporation to the effect that the person named in the statement has been appointed as the representative of the corporation for the purposes of this section, is filed, the Court shall, unless the contrary is proved, presume that such person has been so appointed. Crl.Misc.No.M-17043 of 2008 -5- (6) If a question arises as to whether any person, appearing as the representative of a corporation in an inquiry or trial before a Court is or is not such representative, the question shall be determined by the Court.” Section 17 of the Act reads as follows:- “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 (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 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. Crl.Misc.No.M-17043 of 2008 -6- (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) The person nominated under sub-section (2) shall, until- (i) further notice cancelling such nomination is received from the company by the Local (Health) Authority; or (ii) he ceases to be a director or, as the case may be, manager of the company; or (iii) he makes a request in writing to the Local (Health) Crl.Misc.No.M-17043 of 2008 -7- 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 accordingly. Explanation.- For the purposes of this section- (a) “Company” means any body corporate and includes a Crl.Misc.No.M-17043 of 2008 -8- 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.]” A bare perusal of the provisions which have been reproduced herein-above clearly indicates the ambit and operation of the respective Sections. Section 305 Cr.P.C. deals with the procedure when Corporation or Registered Society is an accused. It is not in dispute that in the present case, it is the company which is an accused before the Court. Code of Criminal Procedure fills in the gaps being procedural where there is no specific bar under the specific Act under which the prosecution has been launched. Section 17 of the Act, as reproduced above, deals with the offence by the companies as also the person who would be guilty of the offence and shall be liable to be proceeded against and punished accordingly. This is a substantive Section and does not deal with the procedural aspect. It pins down and fixes the responsibility of the persons for and on behalf of the company as also that of the company and, therefore, operates in a different field than that of Section 305 of the Code of Criminal Procedure. Section 305 Cr.P.C. only relates to the representation of the company during enquiry or trial whereas Section 17 of the Act relates to liability in case the offence is committed by the company as also that of the persons responsible for and to the company. A corporate body does not have a physical presence or mind of its own. It, therefore, where it is an accused, has to be given a fair Crl.Misc.No.M-17043 of 2008 -9- opportunity during an enquiry or trial. A corporate body functions through living individuals and, therefore, it requires its representation through such living persons before the Court. For such presence, a representative needs to be appointed for the said purpose and that requirement is fulfilled through Section 305 of the Code of Criminal Procedure by a person duly appointed fulfilling the requirement of Section 305 Cr.P.C., the corporate body is duly represented before the Court for the purpose of enquiry or trial. These requirements are provided for in Section 305 Clauses (ii) to (v) of the Cr.P.C. Clause (vi) of Section 305 Cr.P.C. gives power to the Court to determine whether a person appearing as a representative of the corporate body, is or is not such representative. A presumption, therefore, arises under Section 305 Code of Criminal Procedure that if the appointment of a person who has been duly appointed as a representative of the Corporation is disputed, the same is required to be proved to the contrary and this power to decide in case of a dispute with regard to the appointment of a representative of a corporate body is with the Court. The Court, thus, can decide this aspect of the dispute. Section 17 of the Prevention of Food Adulteration Act, 1954 relates to the offences committed by the company. It provides that if a person is duly nominated under sub-section (2) to be in-charge of and responsible to the company for the conduct of business of the company, he shall be deemed to be guilty of the offences and shall be liable to be proceeded against and punished accordingly. In case no person has been nominated as per sub-section (2) of Section 17 of the Act, every person who at the time the offence was committed, was in-charge of and was Crl.Misc.No.M-17043 of 2008 -10- responsible to the company for conduct of business of the company shall be accordingly deemed to be guilty of offences and also liable to be proceeded against and punished. A proviso is however added thereto wherein the onus is on the person who claims that he is not liable to any punishment. For this, he has to prove that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of offence. It further proceeds to fix up the liability upon all the persons responsible to the company for the offences committed by the company. This difference between the two provisions clearly establishes the field of operation of the two sections i.e. Section 305 of the Code of Criminal Procedure and Section 17 of the Act. In the light of the above, the impugned order passed by the trial Court cannot be sustained and deserves to be set aside and the application moved by the company under Section 305 Cr.P.C. is directed to be considered and decided afresh in the light of the observations made above. It is ordered accordingly. In the present case, it is an admitted position by the company that no person was nominated by the company as per sub-section (2) of Section 17of the Prevention of Corruption Act, 1954. That being so, Section 17(1) (A)(ii) would come into play and 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 would be guilty of the offence and liable to be proceeded against and punished accordingly. This information is required to be furnished by the accused-company. This communication can be culled out from the provisions of sub-section (4) of Section 17 of the Act. The object appears to punish everybody who is Crl.Misc.No.M-17043 of 2008 -11- responsible for the commission of the offence, however, subject to certain exceptions. Under these circumstances, it is always open to the Prosecutor to request the Court to direct the company to aid it in coming to a conclusion as to on whom the liability is to be fixed in case the company is found guilty. Accordingly, if an application is moved by the Prosecutor to the Court, it can direct the accused-company to indicate the details of the person(s) who is/are liable to be proceeded against or punished in case the company is found guilty. On such details having been furnished, the Court is to proceed and adjudicate the matter. Criminal Miscellaneous Petition stands allowed in the afore- stated terms. August 27, 2009 ( AUGUSTINE GEORGE MASIH ) poonam JUDGE Whether referred to Reporters Yes/No.