B3at-»iffii i^^^^^^t^^^;1i;^^^^l^^%^1'l^@^l^^s?^ .^.^'-•s^?^^:^^;^^^^^.^^-?,.^^^•^:^':'^ 'N^' ^SVSSaSi HISH COURT GF CHHATTISe^RH AT BILASPUR Cr.M.P. No. 175 OF 2006 PETITIONERS RESPONOENTS Versus S.K. DasA others •CTihattisgarh ^ Env|ronroent Consgrvatian BQard,ipatp,ur others <sj POST FOR QRbERS OM =?- Auaust. 2007 r\ DHIRENDRA MISdRA Judge J •ws&w ti:SI lil!llli \vs W& i-^l-l:ilii[!;i !!IBS! HIGH COURT OF CHHATTIS6ARH AT BILASPUR Cr. .175 OF 2006 Versus 83 Shri New New 67 Shri 1. S.K. Das, Aged 63 years, Son of Late Shri Hari Charan Das,- C-15, Kendriya Vihar. Noida, Section-51 U.P. 2. M.S. Sujrai, Aged years, Son of Late H.S. 6ujral,- A-6, Friends Coiony, Delhi. 3. H.C. Bhasin. Aged years, Son of Late Raja Ram Bhasin,- C-2/7, Safdar Jang tSevelopment Area, New Delhi. 4. 6.C. Mri9, Aged 69 years, Son of Shri C.R. Mrig.- C- 102, Surya Niketan, New Multan Nagar, New Oelhi. 5. C.S. Tiwary. Aged 67 years, Son of Shri B.P. Tiwary- MEIL, AAonnet Marg, AAandir Hasaud, Raipur (C.6.). 6. Sandeep Jajodia, aged 42 years, son of Shri M.K. Jajodia, 4 Bikaji Cama Piace, New Delhi. Al! described as the Dir-ectors of M/s Monnet Ispat Pvt. Ltd. (Now known as Monnet Ispat And Energy Ltd.5 havin9 its registered office at and works ct Vilage Kurud, Chand-Rakhuri Marg, Mandir Hasaud, Police Station AAandir Hasaud, Distt. Raipur (C.6.) 1. Chhattisgarh Environment Conservation Board, Raipur (C.6.) Through Regiona! Officer, Chhattisgarh Environment Conservation Board, Regional Office, New E"' • .t- ',/ H.1.6. 9, 10, <& 11, Tatibandh, Roipur, t)istr-ict Raipur (C.6,) 2. The State of Chhattisgarh, through the Pr'incipal Secretary. Department of Housing and Environment, b.K.S, Bhawan, Mantralaya, 6,E. Rood, Raipur [C&] 3, M/s Monnet Ispat Pvt, Ltd. (Now known as Monnet Ispat And Energy Ltd.) having its registered office at and works at Vilage Kurud, Chand-Rakhuri Marg, Mandir Hasaud, Police Station AAandir Hasaud, Distt. Raipur. 4. Chief Engineer, (Raipur Region) Chhattisgarh State Electricity Board, Sudhiyari, Police Station, fiudhiyar'i, ftaipur [C&] Present: &r. (Mrs.) Fouzia Mirza, Advocate for the appellants. Mr. Sudhir Bajpayee, Advocate for respondent No.l. Mr. 6.K. Beriwai, Dy. Advocate ffeneral for respondent AAr. S.K. Tiwari, Advocate for respondent No.3. Mr, A.S. Seharwar, Advocate for respondent No.4. .2 ^ By this petition under Section 482 of Cr.P.C, the petitioners have impugned the issuance of summons against them by the learned Chief Judicial Magistrote, Raipur in Complaint Csse No.3850/04 vide orders of Annexure P-3. 2) Respondent NO.I-C& Environment Conservation Board (for short the Board') fiied a compiaint vide Annexure P-1 for taking cognizance under Sections 37 & 40 of the Air (Prevention and Control of Poliution) Act, 1981 (for short 'the Act, 1981') read with Section 15 of the Environment Protection Act, 1986 (for short 'the Act, 1986') and Section 34 of the Indian Penal Code against the petitioners herein alleging therein that the petitioners No.l to 4 are the Directors of respondent No.3-Company, whereas, petitioner No.6 is lAanaging &irector & Petitioner No.5 is the Executive tSirector of the respondent No.S-Company. Accused persons without obtaining environmental clearance from ths Environment &, Forest AAiniStry, 6ovt. of India has established the industry, which is in vioiation of Section 7 of the Act, 1986 and the so.me is punishable under Section 15 of t.he Act, 1986. Their act is also in vioiation of Sections 21 & 22 of the Act, 1981. Complainant Board had given them notice under Section 31A of the Act, 1981 and had aiso requested respondent No.4 herein to disconnect the power supply to the industry, however, the directions issued by the Board were not complied with and thus al! the accused pers.ons have committed an offence which is punishable under the provisions of the Act, 1981 and Section 15 of the Act, 1986. . 3) Srievance of the petitioners is that learned Chief Judicial Magistrate has issued summons against the petitioners mechanically without applying its mind. There is no specific allegation against the petitioners that they were directly in- charge of and were responsible to the company for the conduct of the business of compony. No document has been filed to show the involvement of the petitioner in the commission of the said offence and therefore. the summons issued against the petitipners deserves to be (""-- Reliance is placed on 1990 Cr.L.J. 1856 N.A. Palkivaia and another Vs. ftadhya Pradesh Pradushan Niworan Mandal, BhopaS, S.tt.S. Pharnsaceuticals Ltd. Vs. Neeta Bhalla reported in (2005) 63 SCL 93 (SC) as aiso order of this High Court rendered in M.Cr.C. No.2786/05 between Suresh 6oel and others Vs. Chhattisgarh Environment Conservation Board, Raipur and others. 4) In reply to the instant petition it has been contended by the respondent No.l- Board that petitioner No.6- Sanjeev Jajodiya is the Managing &irector of the company, whereas, petitioner No.5-C.S. Tiwary is the Executive Oirector, as is evident from their descriptions in the complaint. They are directly responsible for the acts of omission and commission of the company and therefore, no specific ailegation is necessary in the c.omplaint as against them. So far as petitioner No.Z-AA.S. fiujral, who is Director of the company is concerned, the Board vide communication dated 8.7,2003 of Annexure R-3 had calied upon him not to undertake any work towards the capacity expansion without. obtaining clearance from the Environment & Forest AAinistry, 6ovt. of India and without obtaining conse.nt from the Board under the Act, 1981. However, this notice was ignored and the capacity was expanded without obtaining consent from the Board. Aiong with reply five documents have also been annexed by the respondent No.l-Board. 5) In the matter of N.K. Palkivala (supra) the prosecution of the Chairman 'and Deputy Chairman of the company under Section 40 was quashed .with an observation that they are not the persons directly in-charge of and responsible to the company for the conduct of its business as required under Section 40. Since there was nothing on record to connect them directly with the business of the company present in that complaint, the prosecution u/as quashed. 6) In the matter of S.M.5. Pharmaceul-icals (supra) the Hon'ble Supreme Court while dealing ,with the issuance of process under Section 141 of the Negotiable Instruments Act, 1881 n Para 9 held as under:- " A perusal of the provisions of sections 291 to 293 of the Companies Act shows that what a board of directors is empou/ered to do in relation to a particuiar company depends upon the role and functions assigned to directors as per the memorandum and articies of association of the company. There is nothing which suggests that simply by being a director in a company, one is supposed to discharge particular functions on behalf of a company. It happens that a person may be a director in a company but he may not know anything about the day-to-day functioning of the company. As a. director he may be attending meetings of the Board of Directors of the company where usually they decide poiicy matters and guide the course of business of a company. It may be that a Board of Directors may appoint sub-committees consisting of one or two directors out of the Board of the company who may be mcde responsibte for the day-to-day functions of the company. These are matters which form part of resolutions of the Board of birectors of a company. Nothing is oral. What emerges from this is that the role of a director in a company is a question of fact depending on the peculiar fccts i'n each case.'There is no unive.rsal 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 os such in a particular word, be it director, manager or secretary. It a depends upon the. respective roles assigned to the officers !n a company. A company may have managers or secretariss for different departments, which means, it may.have more than one manager or secretary. These officers may also be authorised to issue cheques under their signotures with respect to affairs of their respective departments. Will it be possibls to prosecute a secretary of Department B regar-ding a cheque issued by the secretary of Department A whi.ch is dishonoured? The secretar"/ of Department B may not be knowing anything about issuance of the cheque in question, '~v~.': Therefore, mere use of a particular designation of an officer without more, may not be enough by way of an avermeht in a complaint. When the requirement in Section 141, which extends the liability to officers of a company, is that such a person should be in charge of and responsible to the company for conduct of business of the company, how can a person be subjected to liability of criminal prosecution without it being averred in the complaint that he satisfies those requirements. Not every person connected w/ith a company is made liabl.e under Section 141. Liability is cast on persons who may have something to do with the transaction complained of. A person who is in char9e of and responsible for conduct of business of a company wouid naturally know why the cheque in question was issued cnd why it got dishonoured." 7) In the matter of Suresh 6oel (supra) the Hon'ble Single Judge of this Court placing reliance on the ratio of law laid down in the matter' of S/A5 Pharmaceuticols (supra) and considering the averments made in the complaint of thnt co.se quashed the criminal proceedings against the accused persons against whom necessary averments required under Section 40 of the'Act was absent. However, iiberty was reserved that if the complainant Board so chooses may fiie fresh complaint disclosing all those facts, which may fasten criminal liability against the accused persons whose prosecution was quashed. 8) On the other hand learned counsel for respondent Board has reiteroted the contention made in reply to the instant petition and detailed in para 4 of this order. 9) I have heard learned counsel for the parties. 10)After perusai'of the allegations present in the complaint as also the documents annexed with the compiaint, the complainant forthe reasons best known to it did not mention about the letter of Annexure R-3 in the complaint and the same is filed for the first time in this proceedings. Whether requirement under Section 40 of ttie Act, 1985 has been 's?'~1f •:?r il!'<' lli ^: fulfilled for theissuance of proc.ess to the accused persons is to be adjudged onlyon the basis of the allegations made in the coinplaint and the documents which have been annexed along with thecomplaint. Since documents referred by the respondent Boar-d in their reply was not available before the Chief Judicial Magistrate, therefore, I am of the considered opinion that :for the purposes of deciding this petition, same cannot &e looked into. ll)If we apply^the requir-ement of Section 40of the Act,^98|5 in the of the principle of law laid down in the the judgments cited above, w/e find that necessary averments required under Section 40 of the Act, 1985 agejinst petitioner No.l to 4 are missing in complaint. l2)In the resuit, the petition is partly Qllow/ed. The petjtioln preferred by petitioner No. 5 & 6, who is Executive C>ir6!^tor <& Managing Oirector respectively of the company land admittedly would be in-charge of the compariy |and rssponsible to the company for conduct of its busines^ and can be proceeded agoinst, is hereby dismissed. However', issuance of process against petitioner No.l to 4rwi+|oyt there being iany specific averments in the complaint •fhct they w/ere in-charge of and responsible for condu^t] of business of;fhe company and only on the basisof averinient .' lil: that they are the Directors, reqyjrement of sectioH ,40 cannot be soid to be satisfied and therefore, process i^ued against the petitioner No.l to 4 vide orders of AnnsxuryjP-S 1 deserves to be quashed and it is hereby quoshed. Howevbr, it Pi shall be open to the Board to file' fresh complaint, discl^sing all necessary particulqrs, JwhicN :fnay fasten the | er-ilT|inal iability dgaiinst theni, i:f;fhe^^So cteisiire.