M/S Cheminova India Limited & Anr. v. State of Punjab and Ors.

R. SUBHASH REDDY, J . 1. Leave granted. 2. This Criminal Appeal is filed by the Petitioners / Accused nos. 3 and 4 in CRM-M-12082-2016 (O & M) before the High Court of Punjab & Haryana at Chandigarh, aggrieved by the Or der dated 12.05.2020. By the aforesaid order, the Petitioners’ application of quashing of Complaint No. 313 dated 19.08.2015, filed by the Respondent No.2 – The Quality Control Inspector, Bhikhiwind, District Tarn Taran, Punjab for offences under Sections 3(k)(i), 17, 18 and 33, punishable under Section 29 of the Insecticides Act, 1968 (for short, “the Act”), was dismissed. The petition was allowed by the High Court for other accused, who was working as Godown Incharge, and quashed the proceedings. 3. The 1st Appellant is a Company, having its office in Mumbai, which is engaged in manufacturing of insecticides. The 2 nd Appellant was the Ex-Managing Director of the Company. On 31.12.2013, Quality Control Inspector, Bhikhiwind, District Tarn Taran, Punjab inspected the premises of M/s. Dhillon Kheti Store in the presence of its sole Proprietor, Shri Nishan Singh. The said Nishan Singh was the authorised dealer for 1st Appellant – Company, to sell its insecticides. At the time of inspection, the inspecting officer found six boxes containing 25 packet s each, of Piroxofop Propanyl (Clodinafop Propargyl 15% WP) , with each packet weighing 160 grams, stocked in the premises. From the abovesaid stock, samples were drawn and one of the samples was sent to Senior Analyst, Insecticide Testing Laboratory, Amritsar. When the report dated 15.01.2014 was received, active ingredient of Piroxofop Propanyl was found only to the extent of 11.72% as against the labelled declaration of 15%. A copy of the report was sent to the dealer at Amritsar along with a Show Cause Notice. On production of copy of the invoice by the dealer, indicating that he had purchased the insecticides in question from the 1st Appellant – Company, Show Cause Notice was also issued to the 1st Appellant – Company, which is having its manufacturing unit i n 365 Bharuch, Gujarat and to other responsible officers of the Company. On receipt of the report, the 2nd Appellant herein, on behalf of the Company, also made a request to send another sample to Central Insecticide Testing Laboratory at Faridabad vide letter dated 27.03.2014 and after depositing necessary charges, another sample was sent to Central Insecticide Testing Laboratory, which has reported that the sample was misbranded as the same was found to contain 10.09% of active ingredient only as against 15%, as labelled on the packet. After obtaining necessary sanction from the competent authority, a complaint was lodged before th e Judicial Magistrate to prosecute the appellants and other accused f or offences under Sections 3(k)(i), 17, 18 and 33, punishable under Section 29 of the Act. 4. The appellants and other accused approached the High Court, seeking quashing of the said complaint on various grounds. By impugned order, High Court has dismissed the petition, so far as appell ants are concerned, and allowed the application for the Godown Watchman. 5. Heard Mr. Sidharth Luthra, learned Senior Counsel, appearing for the Appellants and Ms. Jaspreet Gogia, learned Counsel appearing for the Respondents. 6. Learned Counsel for the appellants by referring to Section 33 of the Act has submitted that appellants have already filed an undertaking dated 22.01.2013 before the respondents, nominating the incharge and responsible officers of the Company to maintain quality of the pesticides manufactured by the Company along with the resolution of the Company’s meeting held on 28.12.2012. Learned Counsel has submitted that b y making vague and bald allegations, the appellants, who were the Company and the Managing Director, are also sought to be prosecuted. 6(a). It is submitted that unless there is a clear and categorica l averment in the complaint, indicating the role played by the appellants, there cannot be any vicarious liability on the 1 st Appellant – Company and the 2nd Appellant–Managing Director for commission of the alleged offence. In support of his arguments, learned Senior Counsel has placed reliance on the judgment of this Court in the case of Managing Director, Castrol India Limited vs. State of Karnataka & Anr.1, and also another judgment of this Court in the case of Shiv Kumar Jatia vs. State of NCT of Delhi 2. 1 2018 (17) SCC 275 2 2019 (17) SCC 193 M/S CHEMINOVA INDIA LIMITED & ANR. v. STATE OF PUNJAB AND ORS. [R. SUBHASH REDDY, J.] 6(b). It is also further contended by the learned Counsel that before taking cognizance of the offence on the complaint, learned Magistrate has not followed the procedure, contemplated under Section 24 (4) of the Act and Section 202 of the Code of Criminal Procedure. It is submitted that though, the appellants are not residing within the jurisdiction of the Magistrate, without making proper inquiry and ordering investigation, cognizance of the offence is taken. Further, it is submitted that the prosecution against the appellants, is nothing but abuse of the process of law. The High Court has not considered various grounds raised by the appellants in proper perspective and dismissed their appl ication for quashing the complaint. In support of his argument that the Magistrate has not followed the procedure under Section 202 of the Code of Criminal Procedure, learned Senior Counsel has placed reliance on the judgment of this Court in Re: Expeditious Trial of Cases under Section 138 of N.I. Act, 1881 (Suo Motu Writ Petition (Crl.) No.2 of 2020) 3. 7. On the other hand, learned Counsel, appearing fo r the Respondents, has submitted that the High Court has considered all the grounds raised by the petitioners and rejected the petition to quash the proceedings. It is submitted that the 2nd Appellant, being the Managing Director of the 1st Appellant – Company, which is the manufacturer of the product in question, was rightly prosecuted by the 2nd Respondent – Quality Control Inspector, Bhikhiwind, District Tarn Taran, Punjab. Learned Counsel has submitted that there is no violation of pr ovision under Section 24 (4) of the Act and Section 202 of the Code of Criminal Procedure and there are no grounds to interfere with the order of the High Court. It is submitted that the Appellant No. 2 was the Managing Director of the Company at the relevant point of time, as such, he is overall responsible person for quality control of the products of the Company, as such, he is also liable for prosecution. 8. Having heard the learned Counsels on both sides, we have perused the impugned Order and other material placed on record. 9. Section 33 of the Act deals with ‘offences by compan ies’. A reading of Section 33(1) of the Act, makes it clear that wh enever an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of , or was responsible to the company for the conduct of the business of , the 3 2021 SCC ONLINE SC 325 367 company, as well as the company, shall be deemed to be guil ty of the offence and shall be liable to be proceeded against a nd punished accordingly. In the case on hand, it is not in dispute that on behalf of the 1st Appellant – Company, 2 nd Appellant – Managing Director has furnished an undertaking dated 22.01.2013, indicating that Shri Madhukar R. Gite, Manager of the Company, has been nominated in the resolution passed by the Company on 28.12.2012 to be in charge of and responsible to the said Company, to maintain the quality of the pesticides manufactured by the said Company and he was authorized to exe rcise all such powers and to take all such steps, as may be ne cessary or expedient to prevent the commission of any offence under the Act. Filing of such undertaking with the respondent is not disputed. Even, at Para 5.10 in the counter affidavit filed before this Court, it is pleaded by the Respondents that by appointing persons responsible for aff airs of the Company, quality control, etc., 2nd Appellant – Managing Director cannot escape his liability from offences committed by 1st Appellant – Company. In view of the specific provision in the Act dealing with the offences by companies, which fixes the responsibility and the responsible person of the Company for conduct of its business, by making bald and va gue allegations, 2nd Appellant – Managing Director cannot be prosecuted on vague allegation that he being the Managing Director of the 1st Appellant – Company, is overall responsible person for the conduct of the business of the Company and of quality control, etc. In the instant ca se, the Company has passed a resolution, fixing responsibility of one of the Managers namely Mr. Madhukar R. Gite by way of a resolution and the same was furnished to the respondents by the 2nd Appellant in shape of an undertaking on 22.01.2013. When furnishing of such undertaking fixing the responsibility of the quality control of the products is not in dispute, there is no reason or justification for prosecuting the 2 nd Appellant – Managing Director, on the vague and spacious plea that he was the Managing Director of the Company at the relevant time. A read ing of Section 33 of the Act also makes it clear that only responsible person of the Company, as well as the Company alone shall be deemed to be guilty of the offence and shall be liable to be proceeded against. Though, the Managing Director is overall incharge of the affairs of t he company, whether such officer is to be prosecuted or not, depends on the facts and circumstances of each case and the relevant provisions of law. Having regard to specific provision under Section 33 of th e Act, and the undertaking filed in the present case, respondent cannot prosecute the M/S CHEMINOVA INDIA LIMITED & ANR. v. STATE OF PUNJAB AND ORS. [R. SUBHASH REDDY, J.] 2nd Appellant herein. Thus, we find force in the contention of Mr. Sidharth Luthra, learned Senior Counsel, that allowing the prosecution against 2nd Appellant – Managing Director is nothing but, abuse of the process of law. At the same time, we do not find any ground at this stage to quash the proceedings against the 1st Appellant – Company. 10. Further, from the averments in the counter affidavit filed on behalf of Respondents 1 & 2 and other material placed on record, w e are of the view that no case is made out to quash the proceedings at this stage, by accepting the plea of the appellants that the procedure contemplated under Section 24 (4) of the Act and Section 202 of the Code of Criminal Procedure, is not followed. With regard to the procedure under Section 24 (4) of the Act, we are satisfied that after the 1st Appellant – Company has deposited necessary Demand Draft for sending 2nd sample to the Central Insecticide Testing Laboratory, steps were taken promptly and report was also sent by the Central Insecticide Testing Laboratory within the prescribed period of 30 days. Similarly, with re gard to the procedure contemplated under Section 202 of the Code of Crimin al Procedure, the same is to be viewed, keeping in mind that the complainant is a public servant who has filed the complaint in discharge of his official duty. The legislature in its wisdom has itself placed the public servant on a different pedestal, as would be evident from a perusal of proviso to Section 200 of the Code of Criminal Procedure. Object of h olding an inquiry / investigation before taking cognizance, in cases where accused resides outside the territorial jurisdiction of such Magistrate, is to ensure that innocents are not harassed unnecessarily. By virtue of proviso to Section 200 of Code of Criminal Procedure, the Magistrate, while taking cognizance, need not record statement of such public servant, who has filed the complaint in discharge of his official duty. Further, by virtue of Section 293 of Code of Criminal Procedure, report of the Government Scientific Expert is, per se, admissible in evidence. The Code of Criminal Procedure itself provides for exemption from examinati on of such witnesses, when the complaint is filed by a public servant. In the present case, 2 nd Respondent / Public Servant, in exercise of powers under provisions of the Insecticides Act, 1968, has filed complaint, enclosing several documents including reports of the Government Laboratories, it is always open for the Magistrate to issue process on such complaint which is supported by documents. In any event, we do not find any merit in the submissions of the learned Counsel that proceedings are to be quashed only on the ground that, the Magistrate has taken cogniz ance 369 without conducting inquiry and ordering investigation. In absence of showing any prejudice caused to the appellant at this stage, the same is no ground to quash the proceedings in exercise of p ower under Section 482 of the Code of Criminal Procedure. 11. As all other nominated / responsible persons of the Company are already accused in the Complaint, we are of the view that there is no basis to proceed against the 2 nd Appellant – Managing Director to prosecute him for the alleged offences. The judgment of this Court relied on by Mr. Sidharth Luthra, learned Senior Counsel, whi ch is with reference to provisions under Negotiable Instruments Act, 1881 in Re: Expeditious Trial of Cases under Section 138 of N.I. Act, 1881 (Suo Motu Writ Petition (Crl.) No.2 of 2020) 3, is also of not much help to the Appellants at this stage, having regard to the facts and circumstances of the present case. 12. For the aforesaid reasons this Criminal Appeal is partly allowed, so far as the Appellant No. 2 – Managing Director is concerned and the impugned Order of the High Court dated 12.05.2020, passed by the High Court of Punjab & Haryana at Chandigarh in CRM-M-12082- 2016 (O & M), is set aside. Consequently, Complaint No. 313 d ated 19.08.2015, filed by the 2 nd Respondent – Quality Control Inspector, Bhikhiwind District Tarn Taran, Punjab, pending before the l earned Judicial Magistrate First Class, Patti stands quashed qua the Appellant No. 2 namely Mr. Pramod N. Karlekar / Accused No.4. Further, it is made clear that the observations and findings recorded in this order are made only for the purpose of disposal of this Appeal arising out of quash petition and it is open for the Trial Court to record its own findings, based on the evidence on record, and take such other steps, in accorda nce with law. Devika Gujral Appeal partly allowed. M/S CHEMINOVA INDIA LIMITED & ANR. v. STATE OF PUNJAB AND ORS. [R. SUBHASH REDDY, J.]