1 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Revision No. 60 of 2008. Reserved on : 4-11-2008. Date of Decision:18-11-2008. ____________________________________________________________ Rajesh Jain and another. Petitioners. Versus State of H.P. and others. Respondents. Coram Hon’ble Mr. Justice Surinder Singh, J. Whether approved for reporting1? Yes. For the petitioners : Mr. K.D. Sood, Advocate. For the respondent No.1: Mr. J.S. Guleria, Law Officer. For respondents No.2 & 3: Ms. Bhawna Dutta & Kamlesh Shandil Advocates. Surinder Singh, J In this petition, challenge has been made by the petitioners, the partner of ‘M/s Sailor’s Corporation Manufacturers of P.P. Foods’, to the orders dated 23-2- 2008 of Judicial Magistrate Ist Class (Court No.3) Shimla, passed in Food Case No. 103/3 of 2002, impleading them as accused, on the application of Food Inspector moved under Section 20-A of the Prevention of Food Adulteration Act 1954, in short ‘the Act’. Background facts shorn of the un-necessary details are as follows : Whether reporters of the Local papers are allowed to see the judgment?Yes. 2 On 7-1-2002, the Food Inspector inspected the shop premises of M/s Khalsa Provision Store, Gurudwara Road, Shimla and found accused Sohan Singh its partner conducting its business. The Food Inspector purchased three sealed bottles of chilli sauce for analysis. The vendor disclosed the particulars of its manufacturer “M/s Sailor India Corporation of P.P. Foods” under Section 14-A of the Act, from whom he had purchased it and produced warranty, invoice No. 271 dated 27-12-2001. A copy of notice was forwarded to them by the Food Inspector. The sample sent for analysis was found mis-branded as ‘month and year’ up to which the product was best for consumption was not found mentioned on the label. After obtaining the consent of Local (Health) Authority, criminal proceedings were launched against the respondents No.2 and 3 as also the said firm M/s Sailor’s Corporation. The statutory notice under Section 13 (2) of the Act was also sent to them. On 6.8.2002, M/s Sailor’s Corporation put in appearance through their Advocate Shri O.P. Malhotra and moved an application under Section 305 of the Code of Criminal Procedure, in short the ‘Code’ along- with a copy of resolution on the printed pad of the said firm signed by Shri Rajesh Jain petitioner and his wife Kailash as partners of the firm, authorizing Shri O.P. Malhotra to defend them. It reads as under :- “ Resolution. A meeting of all the partners was held on dated 2.8.2002 at Delhi and it was 3 resolved that Shri O.P. Malhotra, Advocate of Delhi is hereby appointed as the representative of the above said Co. M/s Sailor’s Corporation, Quatab Road, Delhi in terms of Section 305 of the Cr.P.C., of 1974 to appear and defend M/s Sailor’s Corporation, Qutab Road Delhi in the court of Chief Judicial Magistrate, Shimla. The first date fixed is 6.8.2002 that the firm shall be bound by all the acts done by him in this behalf in the above mentioned Court in the matter F.I. v/s Sohan Singh and others. Partners. 1. Sd/- Rajesh Jain. 2. Sd/- Kailash Jain I under take to appear on behalf of firm M/s Sailor’s Corporation. Sd/- O.P. Malhotra Advocate” The Food Inspector contested this application on the ground that the offence committed by the firm is under the Food Act, the authorization/nomination is not in accordance with Section 17 (2) of the Act and the provisions of Section 305 of the Code operate in the different field. Therefore, said plea taken is required to be rejected. However, vide order dated 12.6.2003, the then learned Chief Judicial Magistrate allowed the application and Shri O.P. Malhotra Advocate was accepted as representative to defend the firm and his act would bind the firm. 4 Thereafter the notice of accusation was put on 8.12.2003 to Shri O.P. Malhotra on behalf of the firm along with the co-accused Shri Sohan Singh. Accused Sohan Singh denied the accusation and claimed trial, whereas Shri O.P. Malhotra pleaded guilty for and on behalf of the firm. Food Inspector moved an application under Section 20-A of the Act to implead the partners of the firm as accused as there was no nomination in terms of Section 17 of the Act. Thereafter Shri O.P. Malhotra Advocate filed the written arguments on 14-7-2004 in the form of an application and submitted that in view of the judgment of the Supreme Court passed in Assistant Commissioner, Assessment-II Bangalore v/s M/s Villiapa Textiles Ltd., 2003 (4) RCR (Criminal) 695 the Company is only liable to the sentence of fine and cannot be sent to jail being a juristic person, therefore, the Court was requested to proceed accordingly and drop the matter. The Food Inspector resisted the above contention, in his reply submitted that an application under Section 20-A of the Act is pending enquiry and fixed for evidence, and that though the firm being a juristic person cannot be sent to jail but the person who are responsible for the conduct of business of the juristic firm are liable to both substantive sentence and fine. On 22-2-2006, the evidence on an application under Section 20-A of the Act was recorded. Thereafter 5 the case was assigned to JMIC (Court No.3) Shimla by the Chief Judicial Magistrate. On consideration of the matter, the learned Magistrate vide the impugned order dated 23-2-2008 arrayed the petitioner and his wife Kailash (now dead) as accused which has been assailed in this revision petition. Shri K.D. Sood, learned counsel for the petitioner has argued that under Section 20-A of the Act only the persons other than manufacturers, distributors or dealers could only be impleaded but in case the firm stands already impleaded, the manufacturers, partner cannot be arrayed as accused. He further argued that otherwise also, the power to implead any person not being manufacturer, distributor or dealer could only be exercised if the court is satisfied on evidence adduced before it that such persons were concerned with the offence. According to him, in the instant case, the firm stands already impleaded and the notice of accusation has been accepted by the authorized representative appointed under Section 305 of the Code, thus the Court had no power to continue with the proceedings. Contra, Shri J.S. Guleria, learned law Officer submitted that the firm accused for the offence under the Food Act has adopted the procedure not interceded by law. Though the firm was already an accused in the complaint but it did not file its authorization nominating a person in terms of Section 6 17 of the Act and played a trick and authorized an Advocate under Section 305 of the Code by-passing the specific provision of the Food Act. Since the partners of the firm were in-charge and responsible to the firm for the conduct of its business at the time the offence was committed, they were rightly arrayed as accused by the learned trial Court. To decide the controversy in hand, at the very out-set, a reference can be made to Section 305 of the Code of Criminal Procedure which reads as under: “305. Procedure when corporation or registered society is an accused: (1) In this section, ‘Corporation’ means an incorporation company or other body corporate, and includes a society registered under the Societies Registration Act, 1860 (21 of 1860). (2) Where a corporation is the accused person or one of the accused persons is an enquiry 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 the corporation. 7 (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 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 8 the Corporation to the effect that the person named in the statement has been appointed as the representative of the corporation for the purpose of this section, is filed, the Court shall, unless the contrary is proved, presume that such person has been so appointed. (6) If a question arises as to whether any person, appearing as the representative of a corporation is an inquiry or trial before a Court or is not such representative the question shall be determined by the Court”. With reference to the above provision of the Code, it shall also be relevant here to quote Section 17 of the Act which deals with the offences committed by the Companies under the Food Act. It 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 9 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 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. (2) Any company may, by order in writing, authorize 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 10 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 11 (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) Authority, under intimation to the company, to cancel the nomination (which request shall be complied with by the Local (Health) Authority, which ever is the earlier, 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 Cl. (iii), the Local (Health) Authority shall not conceal 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 12 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 purpose 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 the hotel managed or run by it”. Section 305 of the Code is a new provision generally providing a procedure where corporation or registered society is an accused and no other juristic person. It gives a restricted meaning to “company”, whereas Section 17 of the Food Act specifically provides a procedure of the offences committed under the said Act by the companies which also includes a 13 firm or other association of individuals and its partners. It gives a wider meaning to the “company”. Although the company is always liable as body corporate and is subjected to fine only, but the liability of the Managing Director or Manager or Secretary or partner or managing partner responsible for the conduct of business of company is in addition to the liability of the company. The company has option to nominate a person to be in actual control of the affairs of the company to the Local (Health) Authority. In fact, Section 17 (1) of the Food Act, is a deeming provision which provides that where an offence under the act is committed by a company/firm, the person in-charge and responsible to it, is to be held guilty, and to be liable should be proceeded against with a view to fix culpability, where offence is committed by a company. Sub-section (2) provides for a nomination so that there is no difficulty in fixing responsibility. Where, however, no person has been nominated, liability is extended to any person who was in-charge of or responsible to the company/firms in the conduct of its business. The prosecution is to find out whether any person has been nominated in terms of Section 17 (2) and if a person has been nominated to proceed against him so that he can be punished if the company is found guilty. There had to be a determination that the company/firm is guilty, where after the question of punishing the person of any of the categories indicated in clause (a) of sub- 14 section (1) arises. However, reverse is not necessary to be established. The section does not require that the person in-charge of the company should be found guilty before the company is held liable. Merely because a person is not nominated, the liability does not vanish and along with the company the person who was in-charge of or responsible to the company in the conduct of the business is rendered liable. Sub- section (1) of Section 17 of the Food Act makes all the persons in-charge of or responsible to the company in the conduct of business liable to the procedure and process in case there is no indication in terms of sub- section (2). Where a person is nominated that person is made liable in terms of clause (a) of sub-section (1) of Section 17 of the Act. However, the scope is wider where there is no nomination and the person who was in-charge of or responsible to the company in the conduct of business is liable subject of course to the proviso which casts onus on the person who claims that the offence was committed without his knowledge and he exercised all due diligence to prevent the commission of such offence. A bare reading of the provision of section 305 of the Code and Section 17 of the Food Act makes it clear that both these provisions operate in different fields. The former relates to the representation of the company during enquiry or trial while the later relates 15 to liability in case of an offence committed by the company/firm. In the instant case, “M/s Sailors Corporation Manufacturers of P.P. Foods” is already an accused. The said firm falls under the definition of “Company” defined in Section 17 (4) of the Food Act. The said firm is a juristic person, the nomination was required to be in conformity with Section 17 (2) ibid to determine liability in case the firm is held guilty of the offence alleged. Therefore, the authorization given under Section 305 of the Code cannot be taken at par with the authorization/nomination under the Food Act. On the examination of record, I find that the authorisation of Shri O.P. Malhotra Advocate under Section 305, Cr.P.C. is wrong as the firm in question does not fall within the purview of Section 305 Cr.P.C. and the notice of accusation on behalf of the firm could not have been put to Shri O.P. Malhotra Advocate for and on behalf of the firm so as to construe it in terms of Section 17 of the Food Act. Thus order dated 12-6-2003 whereby Shri O.P. Malhotra Advocate was accepted as representative of the firm by the learned trial Court is wrong and illegal, therefore, the said order is unsustainable, hence set-aside. Consequently, the plea of guilt for and on behalf of the firm recorded on 8-12-2003 looses its value being wrong and illegal therefore, it is also set aside. Further, there is nothing on record to show that petitioner Rajesh Jain and his wife Kamlesh Jain, the 16 persons impleaded by the learned trial Court were in- charge of or responsible for the firm for the conduct of its business at the relevant time. This fact is also not mentioned in the application by the Food Inspector moved under Section 20-A of the Act. Thus the impugned order dated 22-3-2008 impleading them as accused is also not in conformity with Section 17 of the Food Act. Therefore, the order dated 22.3.2008 to this effect is also set-aside and the application of the Food Inspector moved under Section 20-A of the Act stands dismissed. As an upshot of the above discussion and my findings herein above, the case is remanded back to the learned trial Court with the direction that the accused firm shall file its nomination in conformity with sub-section (2) of Section 17 of the Food Act before the trial Court before 29-12-2008 failing which the Food Inspector shall also be at liberty to move the proper application under Section 20-A of the Act and supply the particulars of the person (s), who at the time the offence was committed was/were in-charge of and responsible to, for the conduct of business of the company/firm, within a reasonable time to be fixed by the trial Court, to implead them in conformity with the aforesaid provisions and the learned trial Court may also resort to the provisions of Section 17 (4) of the Act if the facts of the case proved on record so warrant. 17 The parties, i.e. Petitioner No.2 and respondents are hereby directed to be present before the learned trial Court on 29.12.2008. The petition is accordingly disposed of. (Surinder Singh) Judge. November 18, 2008. (bm)