^^- pk HJGH COURT OF CHHATTJSOARH AT BSLASRS (SB: Hon'bie Mr. T.P.SHARMA, J.) A--. Wrlt PetitiQR No.41 ot 2064 Sqbai Abdui KhaSiq Ahmed and others Vs. State of Chhattisgarh POST FOR PRONOUNCEMENT OF THE ORDER ON 9/9/2011 Sd/- T.P. Sharma Judge I.tffc. p-'*) HSGH COURT OF CHHATTiSGARH AT BiLASPUR WntPetjtionN9.41of29e4 Petitioners tetM, Respondent ^^s^^^^^k \ 1. Sqba! Abdui Khaiiq Ahmed Director, M/s Racon Oi! Industries Umited., 2. Afzal Abdui Khailq Ahmed Director, M/s Racon OiS Sndustries Umited., 3. imran Noormohamed Suiia Dlrector, M/s Racon Oii Sndustries Llmited., Petitioner No.1 to 3 are R/o 5, Chunawaia Estate, Kondivitta Road, J.B. Nagar Andheri (East), Mumbal 59 Versus State of Chhattisgarh Through S.K.Kaushik, Food Inspeotor, Food & Drugs Administration, Rajnandgaon (CG) (Writ Petition under Articie 226/227 ofthe Constitut'son of Endia) Mr.Ashish Shrivastava, coup.seS for the petitioners. Mr.Vinod Kumar Tskam, Panei Lawyer for the respondenfc/State. (SB: Hon'ble !Vlr. T.P. Sharma, J.) ORDER (Passedon 9-9-2011) By this petition under Articie 226/227 of the Constitution of india, the petitioners have chaiSenged the iegaiity and propriety of the order dated 6.8.2002 passed by the Chief Judicial Magistrate, Kawardha in Crimlnai Case No.15/2003, whereby after dismlssing the appilcation for proceeding against the petltloners under Section 319 of the Cr.P.C. for commlsslon of offence punishable under Sectlon 7/16 of the Prevention of Food Aduiteratlon Act, 1954 (for short the Act'), again ailowed the application flied under Section 20 of the Act and dlrected to impiead the petitioners i.e. Board of Director as an accused. Brief facts necessary for dlsposai of this petition are that the petltioners are members of Board of Director of M/s Recon Oi{ Industries Limlted. Vide order dated 31.8.95, the aforesaid company has sppointed Mr.Sreepathi, Commerciai SVSanager of the Company as nomtnee under Section 17(2) of the Act as nominee for eonduct of the business of the ®^ai»^^-«»-ww»eM company and intimated the same to iocal heaith authonties includlng the Jolnt Dlrector, Food & Drugs, Rajnandgaon. As per complaint. on 29.10.93 samples of oil manufactured by the company have been taRen from Ramanuj and Atturam which wsre subsequentiy found adujterated. Atter obtalning permlssson to file complaint agalnst the aforesald accused and nominee Mr.Sreepathi, the Food (nspector has flled compiaint betore the Addltlonai Chief Judteiaj Magjstrate, Kawardha. During the course of trial, the Food Inspector has flied one applicatlon for impleading the • aforesaid petttioners as an accused under Section 319 of the Cr.P.C. vvhsch was dismlssed by the Court vide orcier dated 1 .11.99. Thereafter on the basls of statement of Mr.Sreepathl aiieged nominee, appiicatson under Section 20 of the Act and the Court has proceeded agalnst the present Board of Directors by impieading them as an accused. 3. i have heard iearned counsel for the partjes, perused the order Impugned and other documents fiied OR behaif of ths pstitioners. 4. Learned counsei for the petitioners submitted that Mr.Sreepathl was duiy apposnted as nominee of the company. The compiainant has not made any allegation against the petitioners reiating to their invoivement In day- to-day affairs or commjssion of the offence, therefore, the Court below was not competent to impiead the petstioners as an accused for proceeding against nominee. The Court beiow Is required to see pnma facie whether on the date of fHing of the compiaint iVlr.Sreepathi has nominated as nominee and such order was in existence. 5. lesmed counseS piaeed reilance in the matter of S.IVS.S.Pharmaceutscais Ltd. V. r^eeta BhaSSa and another1 in which the Supreme Court has heid that in case of prosecution against Board of Director, the complalnant Is required to aver that at the tlme the offence v<?as commltted the person accused was sn charge of, and responsible for the conduct of bustness of the company. Without this averment being made in the complaint, the requirements of 3.141 cannot be said to be satisfied. Learned counsei further piaced reSiance in the matter of Everest Advertlsiiig (P) Ud. v. State Govl. of NCT of DeShl and others2 in whlch the Suprsme Court has hesd that in order to prosecute the Chalrman and Board of Dlrector of 'l < ^*. ^t.^. I— » '(•2005) 8 SCC 89 2(2007) 5 SCC 54 )^ ii, 7. the company the compSainant ts required to make averment reiatjng to act attributed to the Chsirman and Board of Director. Learned counsel aiso piaced reiiance in the matter of Pepsico Sndia Holdings Private Lii'nlted v. Food inspector and another 3 In whlch the Supreme Court has heid that in a compiaint against a company and its Directers, the compiainant has to indicate in the compiaint itseif as to whether the Directors concerned were elther in charge of or responsibje to the Company for its day-to-day management. or whether they were responslbie to the Compsny for the conduct of its business. A mere bald statement that a person was a Director of the Company against which certain aiSegations had been made Is not sufficient to make such Director liabte in the absence of any specific ailegations regarding hls roie in the management of the Company. On the other hand, iearned Panei Lawysr for the State/respondent opposed the petltion and submitted that at the time of commisslon of offence Mr.Sreepathl was not appointed as nominee and Board of Dlrectors have not intimated to (ocal authoritles that who was nominee. He has specificaily stated before the Court that at the time of commiss'son of the offence he was not nomlnee and company or Board of Directors have not intimated the name of other nominee to iocai authorlties, Food & Drugs, therefore, onfy option wouid be left to the Court to impiead the Board of Directors as an accused and by order impugned the Court beiow has not committsd any iiiegaiity. Section 17 (1) (a) (ii) & (b) of the Act reads as under:- "1 (a) (II) where no person has been so nominsted, every person who at the tlme the offence wss commltted was In charge of, and wss responsibte to, the company for the conduct of the buslness of the company; and (b) the company, shaii be deemed to be guiity of the offence and shai! be Siabie to be proceeded against and punished accordingiy Provided that nothing contained in this sub-sectlon shaii render any such person Siabie to any punishment provided sn thls Act If he proves 3(2011)SCC176 that the offence was committed without hls knowiedge and that he exercised a!S due diiigence to prevent the commission of such offence." 8. in case of offence by the company, the person responsibie to the company for the conduct of business of the company and if the Company has nominated the person, thsn the person so nomlnated shall be deemed to be guilty ofthe offence and shail be deemed to be guiity ofthe offence. As per Section 17 (1) (a) (li) of the Act, even person who at the time the offence was committed was In charge of, and was responsibie to, the company for the conduct of the business of the company wouid be an accused and shaii be deemed to be guilty. 9. Provisions are unambiguous and as per the aforesaid provisions and category of the persons shown in the aforesaid provssions at the time of offence shaES be deemed to be guiity of the offence. }n these circumstances, nominee whose authorizatjon was in existence at the time of commisslon of the offence wouid be responsibie for commjssion of such offence. 10. As per nomlnation/suthorization, SVIr.Sreepathl has nomlnated cn 31.8.1995. He has specificaiiy deposed that at the time of commission of the offence he was not nominee of the company and company has not intimated the iocai authorities reiatlng to nominee or other person nominated at the time of commissjon of the offence. The aiieged oii was manufactured by the company, therefore, the company was aSso accused. 11. in the absence of any authority, nomination of Mr.Sreepathi, his specific deniai, compiainant has fiied the appiication for impieading the petitioners i.e. Board of Director as an accused under Sections 20 and 20-A of the Act, in which it has been specificaSly pjeaded that at the instance of the Company, his nominee has bsen impteaded as an accused, who has denied the fact that at the time of commission of the offence he was nomines, inter aiia, he has spedftcaily denled the factum of nominee, therefore, the compiainant has fiied the aforesaid appiication against the Board of Directors. 12. As heid by the Supreme Court in the matter of S.i^.S.Phannaceuitlcals Ltd., Everest Advertising (P) Ltd. and Pepslco India Holcilngs Private \ Limited (supra), bald statement is not suffictent for accusation of the \ ^atSaaaExw.sSK ^. Board of Director and the compSainant was required to maRe speclfic ailegation against the member or Board of Director or any person as required under Section 17 oftheAct. 13. In the appijcation, the compiainant has not made any such aliegation except the fact that the petitioners are Directors of the Company. Directors of the Company cannot be Impieaded as an accused under Section 17 of the Act uniess it is specificaily pieaded that they were responsibie to the company and conduct of business of the company. 14. At the time of commission of the offence En the absence of such aiSegation by impieacijng the petitioners as an accused, the Court below has committed iiiegaiity. 15. Consequentiy, the writ petition is aiiowed. Order impugned dated 6.8.2002 is hereby quashed. However, it is made ctear that the compiainant is at llberty to file comprehenslve sppiication under Section 17 resd with Sectlon 20 and 20-A of the Act against the person responsible to the company for the conduct of business of the company at the time of commission of the offence. No order as to costs. Sd/- T.P. Sharma Judge ^