IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 10TH JUNE 2011 / 20TH JYAISHTA 1933 Crl.MC.No. 1335 of 2011() ------------------------- CC.444/2010 OF JUDICIAL FIRST CLASS MAGISTRATE COURT -I, MAVELIKKARA ................. PETITIONERS / A11 TO 17 : --------------------------------------- 1. L.N.BANGUR, NO.7, MUNSHI PREMCHAND, SARANI HASTINGS, KOLKOTTA-22, (CHAIRMAN, NON EXECUTIVE PROMOTER DIRECTOR, THE PERIAKARAMALAI TEA AND PRODUCE CO.LTD., 286, RACE COURSE ROAD, COIMBATORE-18). 2. ALKA BANGUR, NO.7, MUNSHI PREMCHAND, SARANI HASTINGS, KOLKOTTA-22, (MANAGING DIRECTOR, NON EXECUTIVE PROMOTER DIRECTOR, THE PERIAKARAMALAI TEA AND PRODUCE CO.LTD., 286, RACE COURSE ROAD, COIMBATORE-18). 3. R.C.GAGGAR, 11, SARAT BOSE ROAD, (LANDS DOWN ROAD) KOLKOTTA-700 020, (NON EXECUTIVE INDEPENDENT DIRECTOR, THE PERIAKARAMALAI TEA AND PRODUCE CO.LTD., 286, RACE COURSE ROAD, COIMBATORE-18). 4. PRAKASH PARASHER, 16-A, BHARATI PARK ROAD, 2ND CROSS SAIBABA COLONY, COIMBATORE-614011. (EXECUTIVE DIRECTOR, NON PROMOTOR EXECUTIVE DIRECTOR, THE PERIAKARAMALAI TEA AND PRODUCE CO.LTD., 286, RACE COURSE ROAD, COIMBATORE-18). 5. H.M.PAREKH, 3-A, NAVIN APARTMENT, 29, BALLY GUNJ PARK, KOLKOTTA-700 019, (NON EXECUTIVE INDEPENDENT DIRECTOR, THE PERIAKARAMALAI TEA AND PRODUCE CO.LTD., 286, RACE COURSE ROAD, COIMBATORE-18). 6. P.R.RAMAKRISHNAN, 2, RAMAR KOIL STREET, RAMNAGAR, COIMBATORE-642 009, (NON EXECUTIVE INDEPENDENT DIRECTOR, THE PERIAKARAMALAI TEA AND PRODUCE CO.LTD., 286, RACE COURSE ROAD, COIMBATORE-18). ...2/- Crl.MC.No. 1335 of 2011() -2- 7. N.SWAMINATHAN, 218, THIRUVENKATASWAMI ROAD, R.S.PURAM, COIMBATORE-641 002, (NON EXECUTIVE INDEPENDENT DIRECTOR, THE PERIAKARAMALAI TEA AND PRODUCE CO.LTD., 286, RACE COURSE ROAD, COIMBATORE-18). BY ADVS. SRI.P.VIJAYA BHANU, SENIOR ADVOCATE SRI.P.M.RAFIQ SRI.M.REVIKRISHNAN RESPONDENTS / COMPLAINANT AND STATE : ------------------------------------------------------------------- 1. THE FOOD INSPECTOR, MAVELIKARA CIRCLE – 690 101. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM – 682 031. R1 & R2 BY PUBLIC PROSECUTOR SRI. JAYASURYA THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 10/06/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Mn ...3/- Crl.MC.No. 1335 of 2011() APPENDIX PETITIONER'S ANNEXURE'S ANNEXURE - A : COPY OF THE COMPLAINT IN C.C. NO. 444/2010 OF THE COURT OF THE JUDICIAL FIRST CLASS MAGISTRATE I, MAVELIKKARA, DATED 22.11.2010. RESPONDENT'S ANNEXURE'S - NIL //TRUE COPY// P.S. TO JUDGE Mn THOMAS P. JOSEPH, J. -------------------------------------- Crl.M.C. No.1335 of 2011 -------------------------------------- Dated this the 10th day of June, 2011. ORDER Petitioners are accused 11 to 17 in C.C.No.444 of 2010 of the court of learned Judicial First Class Magistrate-I, Mavelikkara arising from a complaint preferred by the first respondent under Section 20 of the Prevention of Food Adulteration Act, 1954 (for short, “the Act”). It is alleged that petitioners along with other accused committed offences punishable under Section 16(1)(a)(ii) read with Section 2(ia) (b) and 7(i) of the Act and Rule 5, Appendix B, Item No.A.14 of the Prevention of Food Adulteration Rules, 1955 (for short, “the Rules”). According to the first respondent/Food Inspector, he inspected M/s.KCS Traders on June 9, 2010 at about 2.45 p.m., purchased tea dust and the same was divided into three parts complying with the legal formalities. One of the sample parts was sent to the Public Analyst who opined that the sample is adulterated. Petitioners say that they have been implicated in the case as accused solely for the reason that they happened to be the Chairman, Managing Director and Directors of the company which (allegedly) manufactured the tea dust. Learned counsel for petitioners contend that in the absence of any averment in Annexure-A, complaint that petitioners are in charge of and responsible for the affairs of the said company, complaint against petitioners cannot stand. Reliance is placed on the decision in Maharashtra State Crl.MC No.1335/2011 2 Electricity Distribution Company Limited and another v. Datar Switchgear Limited and others ((2010) 10 SCC 479). I have heard learned Public Prosecutor also. 2. It is stated in Annexure-A, complaint that accused 11 to 17 (petitioners herein) are Directors of the company (which allegedly manufactured tea dust). Eighteenth accused is the company. In Annexure-A, complaint it is stated that in the circumstances accused 11 to 18 (including petitioners) have manufactured adulterated tea dust, distributed and sold the same through accused 1 to 10 and thereby all the accused committed offences as aforesaid. Thus, it is seen from Annexure-A that petitioners (accused 11 to 17) are sought to be implicated on the allegation that they are the Directors of the company (eighteenth accused) which (allegedly) manufactured the adulterated tea dust. On going through the complaint I do not find any allegation that petitioners (accused 11 to 17) are in charge of and responsible for the affairs and management of the company (eighteenth accused). 3. But, so far as second petitioner (twelveth accused) is concerned, he, it is not disputed is the 'Managing Director' of the company. He is so described in Annexure-A, complaint as well. By the very description of his post, he is the Managing Director, ie. the Director who is in management of the affairs of company. In the light of that description a further averment in the complaint Crl.MC No.1335/2011 3 that he is in charge of and responsible for the affairs of company is not required. A separate averment in the complaint that second petitioner is in charge of and responsible for the affairs of the company is not necessary (see National Small Industries Corporation Ltd. v. Harmeet Singh Paintal – (2010) 3 SCC 330) Therefore the contention that second petitioner (twelveth accused) is not liable for the offences and not liable to be prosecuted, cannot stand. 4. Case of petitioners 1 and 3 to 7 (accused 11 and 13 to 17) however, stand on a different pedestal. First petitioner (eleventh accused) is described in the complaint as the Chairman, Non-executive Promotor and Director of the company (the eighteenth accused). Petitioners 3 to 7 are described as the Directors of the company, either Executive Director or Non- executive independent Director. So far as the Chairman and Directors are concerned, the complaint required an averment that they are in charge of and responsible for the affairs of the company. The reason is that principle of vicarious liability is not applicable in a criminal prosecution unless the Statute so provides. The Supreme Court has considered the question in the decision referred supra and in paragraph 27, it is observed concerning second appellant Crl.MC No.1335/2011 4 therein who was the Chairman of the company that “it is settled proposition of law that one cannot draw a presumption that a Chairman of a company is responsible for all acts committed by or on behalf of the company”. 5. So far as the Directors are concerned, the Supreme Court in the said decision placed reliance on the observation in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla ((2005) 8 SCC 89) that: “..........There is no universal rule that a Director of a company is in charge of its everyday affairs. We have discussed about the position of a Director in a company in order to illustrate the point that there is no magic as such in a particular word, be it Director, manager or secretary. It all depends upon the respective roles assigned to the officers in a company. A company may have managers or secretaries for different departments, which means, it may have more than one manager or secretary.” 6. I stated that so far as petitioners 1 and 3 to 11(accused 11 and 13 to 17) are concerned, they are sought to be implicated merely for the reason that they are either the Chairman and Directors of the company (eighteenth Crl.MC No.1335/2011 5 accused) but, without any averment that they are in charge of and responsible for the affairs of the company. Hence prosecution against petitioners 1 and 3 to 7 cannot stand. Resultantly this Criminal Miscellaneous Case is allowed in part to the extent that proceeding against petitioners 1 and 3 to 11 (accused 11 and 13 to 17) in C.C.444 of 2010 of the court of learned Judicial First Class Magistrate-I, Mavelikkara will stand quashed. Criminal Miscellaneous Case however, to the extent it concerned the second petitioner (twelveth accused) will stand dismissed. THOMAS P.JOSEPH, Judge. cks