Case: Asstt. Commissioner Vs. Velliappa Textiles Ltd

been examined by some of the High Courts. In Municipal Corporation vs. Delhi vs. J.B. Bottling Co. 1975 Crl. L.J. 1148 a Full Bench of Delhi High Court held that the conviction of a company under Section 16 Prevention of Food Adulteration Act and award of fine only would be perfectly valid even though it cannot be sentenced to imprisonment which was the mandatory requirement of law. Similar view was taken by a Full Bench of Allahabad High Court in Oswal Vanaspati & Allied Industries vs. State of U.P. (1993) 1 Company Law Journal 172 and it was held that a company cannot enjoy immunity from prosecution on the ground that mandatory punishment of imprisonment cannot be awarded to it. In both these cases it was held that the company can be prosecuted and if found guilty a sentence of fine alone can be awarded. In Manian Transports vs. S. Krishnamurthy (1991) 72 Company Cases 746 it was held by a learned Single Judge of Madras High Court that a company or firm can be prosecuted under Section 276C and 277 of the Act and if convicted a sentence of fine alone could be awarded. I am of the opinion that the view taken in these cases is the legally correct view. 19. Proof of mens rea or guilty mind is not absolutely essential in every case. In P.K. Tejani vs. M.R. Dange AIR 1974 SC 228 , a Constitution Bench held that in food offences strict liability is the rule. In Sarjoo Prasad vs. State of U.P. AIR 1961 SC 631 and Ashu Jaiwant vs. State of Maharashtra AIR 1975 SC 2175 it was clearly held that mens rea in the ordinary or usual sense of term is not required for proof of offence under Section 7 P.F. Act and it is enough if the articles sold or distributed contravene any provision of the Act or the Rules. Same principle applies for offences under Section 7 Essential Commodities Act, namely, mens rea or knowledge are not essential ingredients. (See State of M.P. vs. Narayan Singh (AIR 1989 SC 1789 ). In Radhey Shyam Khemka and Anr. vs. State of Bihar, 1993 (3) SCC 54 it has been held that there is a basic difference between offences under the Penal Code and acts and omissions which have been made punishable under different Acts and Statutes. It has been further held that for framing charges in respect of those acts and omissions, in many cases, mens rea is not an essential ingredient; the concerned statute imposes a duty on those who are in charge of the management, to follow the statutory provisions and once there is a breach or contravention, such persons become liable for punishment. 20. In M.V. Javali vs. Mahajan Borewell & Co. and others 1997 (8) SCC 72 this Court after examining the question of maintainability of prosecution against a company and the nature of sentence to be imposed on it and the individuals liable for the offence, held as under: "From a plain reading of Section 276-B of the IT Act, it is manifest that if an offence under the Act is committed by a company the persons who are liable to be proceeded against and punished are: (i) the company (which includes a firm); (ii) 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; and (iii) any director (who is relation to a firm means a partner), manager, secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom, the offence has been committed. The words ‘as well as the company’ appearing in the section also make it unmistakably clear that the company alone can be prosecuted and punished even if the persons mentioned in categories (ii) and (iii), who are for all intents and purposes, vicariously liable for the offence, are not arraigned, for it is the company which is primarily guilty of the offence.Even though in view of Section 278-B, a company can be prosecuted and punished for an offence committed under Section 276-B (besides other offences under the Act), the sentence of imprisonment which has got to be imposed thereunder cannot be imposed, it being a juristic person. This apparent anomalous situation can be resolved only by a proper interpretation of section. Keeping in view the recommendations contained in paras 8.1 and 8.3 of 47th Report of Law Commission of India and principles of interpretation, the only harmonious construction that can be given to Section 276-B is that the mandatory sentence of imprisonment and fine is to be imposed where it can be imposed, namely on persons coming under categories (ii) and (iii) above, but where it cannot be imposed, namely on a company, fine will be the only imprisonment." 21. Courts would be shirking their responsibility of imparting justice by holding that prosecution of a company is unsustainable merely on the ground that being juristic person it cannot be sent to jail to undergo the sentence. Companies are growing in size and have huge resources and finances at their command. In the course of their business activity they may sometimes commit breach of the law of the land or endanger other’s lives. More than four thousand people lost life and thousands others suffered permanent impairment in Bhopal on account of gross criminal act of a multinational corporation. It will be wholly wrong to allow a company to go away scot free without even being prosecuted in the event of commission of a crime only on the ground that it cannot be made to suffer part of the mandatory punishment. 22. In view of the discussion made above, I am of the opinion that the view taken by the High Court is wholly erroneous in law. The appeal accordingly deserves to be allowed and the judgment and order of the High Court is liable to be set aside.ORDER

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]4. It is a basic principle of criminal jurisprudence that a penal statute is to be construed strictly. If the act alleged against the accused does not fall within the parameters of the offence described in the statute the accused cannot be held liable. There is no scope for intendment based on the general purpose or object of law. If the Legislature has left a lacuna, it is not open to the Court to paper it over on some presumed intention of the Legislature.The maxim "Judicis est jus dicere, non dare" pithily expounds the duty of the Court. It is to decide what the law is and apply it; not to make it.6. The question of criminal liability of a juristic person has troubled Legislatures and Judges for long. Though, initially, it was supposed that a Corporation could not be held liable criminally for offences where mens rea was requisite, the current judicial thinking appears to be that the mens rea of the person in-charge of the affairs of the Corporation, the alter ego, is liable to be extrapolated to the Corporation, enabling even an artificial person to be prosecuted for such an offence. I am fully in agreement with the view expressed on this aspect of the matter in the judgment of brother Mathur, J. What troubles me is the question whether a Corporation can be prosecuted for an offence even when the punishment is a mandatory sentence of imprisonment.recommendations focussed on the fact that the law as it exists renders it impossible for a court of law to convict a Corporation where the statute mandates a minimum term of imprisonment plus fine. It would not be open to the court of law to hold that a Corporation would be found guilty and sentenced only to a fine for that would be re-writing the statute and exercising a discretion not vested in the court by the statute. It is precisely for this reason that the Law Commission recommended that where the offence is punishable with imprisonment, or with imprisonment and fine, and the offender is a corporation, the Court should be empowered to sentence such an offender to fine only. These recommendations have not been acted upon, though several other recommendations made by the 47th Report of the Law Commission have been accepted and implemented by Parliament vide the Taxation Laws (Amendment) Act, 1975. Hence, the state of law as noticed by the Law Commission continues.Though, Javali, (supra) refers to the recommendations of 47th report of the Law Commission of India dated 28.2.1972 in support of its view, I find it difficult to agree with its reasoning. The report of the Law Commission indicates a lacuna in the law and suggests a possible remedy by amending the law. Since the function of the court of law is jus dicere and not jus dare, the court of law cannot read the recommendations of the Law Commission as justifying an interpretation of the Section in tune with them, even when the words of the Section are plain and unambiguous. Though Javali (supra) also refers to the general principles of interpretation of statutes, the rule of interpretation of criminal statutes is altogether a different cup of tea. It is not open to the court to add something to or read something in the statute on the basis of some supposed intendment of the statute. It is not the function of this Court to supply the casus omissus, if there be one. As long as the presumption of innocence of the accused prevails in this country, the benefit of any lacuna or casus omissus must be given to the accused. The job of plugging the loopholes must strictly be left to the legislature and not assumed by thethe legislature has granted discretion to the court in the matter of sentencing it is open to the court to use its discretion. Where, however, the legislature, for reasons of policy, has done away with this discretion, it is not open to the court to impose only a part of the sentence prescribed by the legislature, for that would amount re-writing the provisions of the statute.I am of the view that the Court should be slow in interpreting a penal statute in a manner which would amount to virtual re-writing of the statute to prejudice to the accused.A court cannot breach a casus omissus and no canon of construction permits the court to supply a lacuna in a statute; nor can courts of law fill up the lacuna in an ill-drafted and hasty legislation.The observations in Tolaram Relumal & Anr. vs. The State of Bombay (AIR 1954) SC 496 ), Bijawa Kumar Agarwala vs. State of Orissa (1996) 5 SCC 1 , Sanjay Dutt vs. State through CBI, Bombay (II) (1994) 5 SCC 410 , Niranjan Singh Karam Singh Punjabi, Advocate vs. Jitendra Bhimraj Bijjaya & Others (1990) 4 SCC 76 , make it clear that while interpreting a penal statute, if more than one view is possible, the court is obliged to lean in favour of the construction which exempts a citizen from penalty than the one which imposes the penalty. The observations of Lord Esher, M.R. in formulating, "the settled rule of construction of penal Sections", that "if there is a reasonable interpretation which will avoid and penalty in any particular case, we must adopt that construction. If there are two reasonable constructions, we must given the more lenient one". (See Tuck & Sons vs. Priester (1887) 19 QBD 629 and London & Norm Eastern Railway vs. Berriman (1946) 1 All ER 255.For the aforesaid reasons, I am of the view that the first respondent company cannot be prosecuted for offences under Sections 276C, 277 and 278 read with Section 278 since each one of these Sections requires the imposition of a mandatory term of imprisonment coupled with a fine and leave no choice to the Court to impose only a