M/S CHEMINOVA INDIA LIMITED & ANR. versus STATE OF PUNJAB AND ORS. on 4 August 2021

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SUPREME COURT REPORTS

[2021] 8 S.C.R.

AM/S CHEMINOVA INDIA LIMITED & ANR.

v.

STATE OF PUNJAB AND ORS.

(Criminal Appeal No. 750 of 2021)

BAUGUST 4, 2021

[NAVIN SINHA AND R. SUBHASH REDDY, JJ.]

Insecticides Act, 1968: s.33 – Allegation of misbranding –Complaint against the appellant-manufacturing company andappellant-Managing Director of the company and other accusedCunder ss.3(k)(i),17,18 and 33 – High Court dismissed the petitionfor quashing the complaint – In the instant appeal, plea of appellantswas that they had nominated the manager to be incharge andresponsible officer of the company to maintain quality of thepesticides manufactured by company and had filed the undertakingDto that effect before the respondents along with the resolution ofthe Company’s meeting – Held: Filing of the undertaking with therespondents is not disputed – The specific provision of the Actdealing with the offence by companies states that only responsibleperson of the company as well as the company alone shall be deemedto be guilty of offence and shall be liable to be proceeded against –EIn view of that, Managing Director of the company cannot beprosecuted on vague allegation that he being Managing Directorwas overall responsible for conduct of business of company and ofquality control – As all other nominated / responsible persons ofthe Company are already accused in the complaint, there is no basisFto proceed against the appellant-Managing Director to prosecutehim for the alleged offences – However, there is no ground at thisstage to quash the proceedings against the appellant-Company.

Code of Criminal Procedure, 1973: s.202 – Plea of appellantthat before taking cognizance of offence on complaint, MagistrateGhas not followed the procedure, contemplated under s.24(4) of theInsecticides Act and s.202 Cr.PC and that though the appellantsare not residing within the jurisdiction of the Magistrate, thecognizance of offence was taken without making proper inquiryand ordering investigation – Held: The legislature in its wisdomhas itself placed the public servant on a different pedestal, as isH

evident from a perusal of proviso to s.200 of the Code – Object ofholding an inquiry/investigation before taking cognizance, in caseswhere accused resides outside the territorial jurisdiction of suchMagistrate, is to ensure that innocents are not harassedunnecessarily – By virtue of proviso to s.200 of Code, the Magistrate,while taking cognizance, need not record statement of such publicservant, who has filed the complaint in discharge of his officialduty – Further, by virtue of s.293 of Code, report of the GovernmentScientific Expert is, per se, admissible in evidence – The Code ofCriminal Procedure itself provides for exemption from examinationof such witnesses, when the complaint is filed by a public servant –In the instant case, the second Respondent/Public Servant, inexercise of powers under provisions of the Insecticides Act, 1968had filed complaint enclosing several documents including reportsof the Government Laboratories, therefore, it was always open forthe Magistrate to issue process on such complaint which wassupported by documents – In any event, there is no merit in thesubmissions that proceedings are to be quashed only on the groundthat, the Magistrate has taken cognizance without conductinginquiry and ordering investigation – In absence of showing anyprejudice caused to the appellant at this stage, the same is no groundto quash the proceedings in exercise of power under s.482 of theCode – Insecticides Act, 1968: ss.24(4). 33.

Partly allowing the appeal, the Court

Conclusion

Partly allowing the appeal, the Court

HELD: 1.1 Section 33 of the Act deals with ‘offences bycompanies’. A reading of Section 33(1) of the Act, makes it clearthat whenever an offence under this Act has been committed bya company, every person who at the time the offence wascommitted, was in charge of, or was responsible to the companyfor the conduct of the business of, the company, as well as thecompany, shall be deemed to be guilty of the offence and shall beliable to be proceeded against and punished accordingly. In thecase on hand, it is not in dispute that on behalf of the 1[st] Appellant– Company, 2[nd] Appellant-Managing Director has furnished anundertaking indicating that Shri Madhukar R. Gite, Manager ofthe Company, has been nominated in the resolution passed bythe Company on 28.12.2012 to be in charge of and responsible tothe said Company, to maintain the quality of the pesticides ABC

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Amanufactured by the said Company and he was authorized toexercise all such powers and to take all such steps, as may benecessary or expedient to prevent the commission of any offenceunder the Act. Filing of such undertaking with the respondent isnot disputed. In view of the specific provision in the Act dealingwith the offences by companies, which fixes the responsibilityBand the responsible person of the Company for conduct of itsbusiness, by making bald and vague allegations, 2[nd] Appellant –Managing Director cannot be prosecuted on vague allegation thathe being the Managing Director of the 1[st] Appellant-Company, isoverall responsible person for the conduct of the business of theCCompany and of quality control, etc. Allowing the prosecutionagainst 2[nd] Appellant-Managing Director is nothing but, abuse ofthe process of law. At the same time, there is no ground at thisstage to quash the proceedings against the 1[st] Appellant –Company. [Para 9][366-G-H; 367-A-E; 368-A-B]

D1.2 Further, from the averments in the counter affidavit filedon behalf of Respondents 1 & 2 and other material placed onrecord, no case is made out to quash the proceedings at thisstage, by accepting the plea of the appellants that the procedurecontemplated under Section 24 (4) of the Act and Section 202 ofthe Code of Criminal Procedure, is not followed. With regard toEthe procedure under Section 24 (4) of the Act, after the 1[st]Appellant – Company has deposited necessary Demand Draft forsending 2[nd] sample to the Central Insecticide Testing Laboratory,steps were taken promptly and report was also sent by the CentralInsecticide Testing Laboratory within the prescribed period of F30 days. Similarly, with regard to the procedure contemplatedunder Section 202 of the Code of Criminal Procedure, the sameis to be viewed, keeping in mind that the complainant is a publicservant who has filed the complaint in discharge of his officialduty. The legislature in its wisdom has itself placed the public servant on a different pedestal, as would be evident from aGperusal of proviso to Section 200 of the Code of CriminalProcedure. Object of holding an inquiry/investigation beforetaking cognizance, in cases where accused resides outside theterritorial jurisdiction of such Magistrate, is to ensure thatinnocents are not harassed unnecessarily. By virtue of provisoHto Section 200 of Code of Criminal Procedure, the Magistrate,

while taking cognizance, need not record statement of such publicservant, who has filed the complaint in discharge of his officialduty. Further, by virtue of Section 293 of Code of CriminalProcedure, report of the Government Scientific Expert is, per se,admissible in evidence. The Code of Criminal Procedure itselfprovides for exemption from examination of such witnesses, whenthe complaint is filed by a public servant. In the present case, 2[nd]Respondent/Public Servant, in exercise of powers underprovisions of the Insecticides Act, 1968, has filed complaint,enclosing several documents including reports of theGovernment Laboratories, it is always open for the Magistrateto issue process on such complaint which is supported bydocuments. The proceedings should not be quashed only on theground that, the Magistrate has taken cognizance withoutconducting inquiry and ordering investigation. In absence ofshowing any prejudice caused to the appellant at this stage, thesame is no ground to quash the proceedings in exercise of powerunder Section 482 of the Code of Criminal Procedure. As all othernominated/responsible persons of the Company are alreadyaccused in the Complaint, there is no basis to proceed againstthe 2[nd] Appellant-Managing Director to prosecute him for thealleged offences. [Paras 10, 11][368-B-H; 369-A-C]

Managing Director, Castrol India Limited v. State ofKarnataka & Anr. (2018) 17 SCC 275; Shiv KumarJatia v. State of NCT of Delhi (2019) 17 SCC 193 :[2019] 11 SCR 210 – referred to.

Re: Expeditious Trial of Cases under Section 138 ofN.I. Act, 1881 (Suo Motu Writ Petition (Crl.) No.2 of2020) (2021) SCC ONLINE SC 325 – distinguished.

Case Law Reference

(2018) 17 SCC 275referred toPara 6(a)[2019] 11 SCR 210referred toPara 6(a)CRIMINAL APPELLATE JURISDICTION: Criminal AppealNo.750 of 2021.

From the Judgment and Order dated 12.05.2020 of the High Courtof Punjab and Haryana at Chandigarh in CRM-M No.12082 of 2016.

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AGuru Krishnakumar, Sidharth Luthra, Sr. Advs., S. Hariharan, NitinThatai, Ms. Jaikriti S. Jadeja, Ms. Sneha Ravi Iyer, Advs. for theAppellants.

Ms. Jaspreet Gogia, Ms. Mandakini Singh, Karanvir Gogia,Ms. Shivangi Singhal, Ms. Ashima Mandla, Advs. for the Respondents.BThe Judgment of the Court was delivered by

R. SUBHASH REDDY, J.

1. Leave granted.

2. This Criminal Appeal is filed by the Petitioners / Accused nos.C3 and 4 in CRM-M-12082-2016 (O & M) before the High Court ofPunjab & Haryana at Chandigarh, aggrieved by the Order dated12.05.2020. By the aforesaid order, the Petitioners’ application of quashingof Complaint No. 313 dated 19.08.2015, filed by the Respondent No.2 –The Quality Control Inspector, Bhikhiwind, District Tarn Taran, PunjabDfor offences under Sections 3(k)(i), 17, 18 and 33, punishable underSection 29 of the Insecticides Act, 1968 (for short, “the Act”), wasdismissed. The petition was allowed by the High Court for other accused,who was working as Godown Incharge, and quashed the proceedings.

3. The 1[st] Appellant is a Company, having its office in Mumbai,which is engaged in manufacturing of insecticides. The 2[nd] AppellantEwas the Ex-Managing Director of the Company. On 31.12.2013, QualityControl Inspector, Bhikhiwind, District Tarn Taran, Punjab inspected thepremises of M/s. Dhillon Kheti Store in the presence of its sole Proprietor,Shri Nishan Singh. The said Nishan Singh was the authorised dealer for1[st] Appellant – Company, to sell its insecticides. At the time of inspection,Fthe inspecting officer found six boxes containing 25 packets each, ofPiroxofop Propanyl (Clodinafop Propargyl 15% WP), with eachpacket weighing 160 grams, stocked in the premises. From the abovesaidstock, samples were drawn and one of the samples was sent to SeniorAnalyst, Insecticide Testing Laboratory, Amritsar. When the report dated15.01.2014 was received, active ingredient of Piroxofop Propanyl wasGfound only to the extent of 11.72% as against the labelled declaration of15%. A copy of the report was sent to the dealer at Amritsar along witha Show Cause Notice. On production of copy of the invoice by thedealer, indicating that he had purchased the insecticides in question fromthe 1[st] Appellant – Company, Show Cause Notice was also issued to theH1[st] Appellant – Company, which is having its manufacturing unit in Bharuch, Gujarat and to other responsible officers of the Company. Onreceipt of the report, the 2[nd] Appellant herein, on behalf of the Company,also made a request to send another sample to Central Insecticide TestingLaboratory at Faridabad vide letter dated 27.03.2014 and after depositingnecessary charges, another sample was sent to Central Insecticide TestingLaboratory, which has reported that the sample was misbranded as thesame was found to contain 10.09% of active ingredient only as against15%, as labelled on the packet. After obtaining necessary sanction fromthe competent authority, a complaint was lodged before the JudicialMagistrate to prosecute the appellants and other accused for offencesunder Sections 3(k)(i), 17, 18 and 33, punishable under Section 29 of theAct.

4. The appellants and other accused approached the High Court,seeking quashing of the said complaint on various grounds. By impugnedorder, High Court has dismissed the petition, so far as appellants areconcerned, and allowed the application for the Godown Watchman.

5. Heard Mr. Sidharth Luthra, learned Senior Counsel, appearingfor the Appellants and Ms. Jaspreet Gogia, learned Counsel appearingfor the Respondents.

6. Learned Counsel for the appellants by referring to Section 33of the Act has submitted that appellants have already filed an undertakingdated 22.01.2013 before the respondents, nominating the incharge andresponsible officers of the Company to maintain quality of the pesticidesmanufactured by the Company along with the resolution of the Company’smeeting held on 28.12.2012. Learned Counsel has submitted that bymaking vague and bald allegations, the appellants, who were the Companyand the Managing Director, are also sought to be prosecuted.

6(a). It is submitted that unless there is a clear and categoricalaverment in the complaint, indicating the role played by the appellants,there cannot be any vicarious liability on the 1[st] Appellant – Companyand the 2[nd] Appellant–Managing Director for commission of the allegedoffence. In support of his arguments, learned Senior Counsel has placedreliance on the judgment of this Court in the case of Managing Director,Castrol India Limited vs. State of Karnataka & Anr.[1], and also anotherjudgment of this Court in the case of Shiv Kumar Jatia vs. State ofNCT of Delhi[2].

1 2018 (17) SCC 275

2 2019 (17) SCC 193

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1 2018 (17) SCC 275

2 2019 (17) SCC 193

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A6(b). It is also further contended by the learned Counsel that beforetaking cognizance of the offence on the complaint, learned Magistratehas not followed the procedure, contemplated under Section 24 (4) ofthe Act and Section 202 of the Code of Criminal Procedure. It is submittedthat though, the appellants are not residing within the jurisdiction of theMagistrate, without making proper inquiry and ordering investigation,Bcognizance of the offence is taken. Further, it is submitted that theprosecution against the appellants, is nothing but abuse of the process oflaw. The High Court has not considered various grounds raised by theappellants in proper perspective and dismissed their application forquashing the complaint. In support of his argument that the MagistrateChas not followed the procedure under Section 202 of the Code of CriminalProcedure, learned Senior Counsel has placed reliance on the judgmentof this Court in Re: Expeditious Trial of Cases under Section 138 ofN.I. Act, 1881 (Suo Motu Writ Petition (Crl.) No.2 of 2020)[3].

7. On the other hand, learned Counsel, appearing for theDRespondents, has submitted that the High Court has considered all thegrounds raised by the petitioners and rejected the petition to quash theproceedings. It is submitted that the 2[nd] Appellant, being the ManagingDirector of the 1[st] Appellant – Company, which is the manufacturer ofthe product in question, was rightly prosecuted by the 2[nd] Respondent –Quality Control Inspector, Bhikhiwind, District Tarn Taran, Punjab.ELearned Counsel has submitted that there is no violation of provisionunder Section 24 (4) of the Act and Section 202 of the Code of CriminalProcedure and there are no grounds to interfere with the order of theHigh Court. It is submitted that the Appellant No. 2 was the ManagingDirector of the Company at the relevant point of time, as such, he is Foverall responsible person for quality control of the products of theCompany, as such, he is also liable for prosecution.8. Having heard the learned Counsels on both sides, we haveperused the impugned Order and other material placed on record.

9. Section 33 of the Act deals with ‘offences by companies’. AGreading of Section 33(1) of the Act, makes it clear that whenever anoffence under this Act has been committed by a company, every personwho at the time the offence was committed, was in charge of, or wasresponsible to the company for the conduct of the business of, the

company, as well as the company, shall be deemed to be guilty of theoffence and shall be liable to be proceeded against and punishedaccordingly. In the case on hand, it is not in dispute that on behalf of the1[st] Appellant – Company, 2[nd] Appellant – Managing Director hasfurnished an undertaking dated 22.01.2013, indicating that Shri MadhukarR. Gite, Manager of the Company, has been nominated in the resolutionpassed by the Company on 28.12.2012 to be in charge of and responsibleto the said Company, to maintain the quality of the pesticidesmanufactured by the said Company and he was authorized to exerciseall such powers and to take all such steps, as may be necessary orexpedient to prevent the commission of any offence under the Act. Filingof such undertaking with the respondent is not disputed. Even, at Para5.10 in the counter affidavit filed before this Court, it is pleaded by theRespondents that by appointing persons responsible for affairs of theCompany, quality control, etc., 2[nd] Appellant – Managing Director cannotescape his liability from offences committed by 1[st] Appellant – Company.In view of the specific provision in the Act dealing with the offences bycompanies, which fixes the responsibility and the responsible person ofthe Company for conduct of its business, by making bald and vagueallegations, 2[nd] Appellant – Managing Director cannot be prosecuted onvague allegation that he being the Managing Director of the 1[st] Appellant– Company, is overall responsible person for the conduct of the businessof the Company and of quality control, etc. In the instant case, theCompany has passed a resolution, fixing responsibility of one of theManagers namely Mr. Madhukar R. Gite by way of a resolution and thesame was furnished to the respondents by the 2[nd] Appellant in shape ofan undertaking on 22.01.2013. When furnishing of such undertaking fixingthe 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 theManaging Director of the Company at the relevant time. A reading ofSection 33 of the Act also makes it clear that only responsible person ofthe Company, as well as the Company alone shall be deemed to be guiltyof the offence and shall be liable to be proceeded against. Though, theManaging Director is overall incharge of the affairs of the company,whether such officer is to be prosecuted or not, depends on the factsand circumstances of each case and the relevant provisions of law. Havingregard to specific provision under Section 33 of the Act, and theundertaking filed in the present case, respondent cannot prosecute the AB

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A2[nd] Appellant herein. Thus, we find force in the contention of Mr. SidharthLuthra, learned Senior Counsel, that allowing the prosecution against 2[nd]Appellant – Managing Director is nothing but, abuse of the process oflaw. At the same time, we do not find any ground at this stage to quashthe proceedings against the 1[st] Appellant – Company.

B10. Further, from the averments in the counter affidavit filed onbehalf of Respondents 1 & 2 and other material placed on record, weare of the view that no case is made out to quash the proceedings at thisstage, by accepting the plea of the appellants that the procedurecontemplated under Section 24 (4) of the Act and Section 202 of theCode of Criminal Procedure, is not followed. With regard to the procedureCunder Section 24 (4) of the Act, we are satisfied that after the 1[st] Appellant– Company has deposited necessary Demand Draft for sending 2[nd] sampleto the Central Insecticide Testing Laboratory, steps were taken promptlyand report was also sent by the Central Insecticide Testing Laboratorywithin the prescribed period of 30 days. Similarly, with regard to theDprocedure contemplated under Section 202 of the Code of CriminalProcedure, the same is to be viewed, keeping in mind that the complainantis a public servant who has filed the complaint in discharge of his officialduty. The legislature in its wisdom has itself placed the public servant ona different pedestal, as would be evident from a perusal of proviso toSection 200 of the Code of Criminal Procedure. Object of holding anEinquiry / investigation before taking cognizance, in cases where accusedresides outside the territorial jurisdiction of such Magistrate, is to ensurethat innocents are not harassed unnecessarily. By virtue of proviso toSection 200 of Code of Criminal Procedure, the Magistrate, while takingcognizance, need not record statement of such public servant, who hasFfiled the complaint in discharge of his official duty. Further, by virtue ofSection 293 of Code of Criminal Procedure, report of the GovernmentScientific Expert is, per se, admissible in evidence. The Code of CriminalProcedure itself provides for exemption from examination of suchwitnesses, when the complaint is filed by a public servant. In the present case, 2[nd] Respondent / Public Servant, in exercise of powers underGprovisions of the Insecticides Act, 1968, has filed complaint, enclosingseveral documents including reports of the Government Laboratories, itis always open for the Magistrate to issue process on such complaintwhich is supported by documents. In any event, we do not find any meritin the submissions of the learned Counsel that proceedings are to beHquashed only on the ground that, the Magistrate has taken cognizance without conducting inquiry and ordering investigation. In absence ofshowing any prejudice caused to the appellant at this stage, the same isno ground to quash the proceedings in exercise of power underSection 482 of the Code of Criminal Procedure.

11. As all other nominated / responsible persons of the Companyare already accused in the Complaint, we are of the view that there is nobasis to proceed against the 2[nd] Appellant – Managing Director toprosecute him for the alleged offences. The judgment of this Court reliedon by Mr. Sidharth Luthra, learned Senior Counsel, which is withreference to provisions under Negotiable Instruments Act, 1881 in Re:Expeditious Trial of Cases under Section 138 of N.I. Act, 1881 (SuoMotu Writ Petition (Crl.) No.2 of 2020)[3], is also of not much help tothe Appellants at this stage, having regard to the facts and circumstancesof 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 theimpugned Order of the High Court dated 12.05.2020, passed by theHigh Court of Punjab & Haryana at Chandigarh in CRM-M-12082-2016 (O & M), is set aside. Consequently, Complaint No. 313 dated19.08.2015, filed by the 2[nd] Respondent – Quality Control Inspector,Bhikhiwind District Tarn Taran, Punjab, pending before the learnedJudicial Magistrate First Class, Patti stands quashed qua the AppellantNo. 2 namely Mr. Pramod N. Karlekar / Accused No.4. Further, it ismade clear that the observations and findings recorded in this order aremade only for the purpose of disposal of this Appeal arising out of quashpetition and it is open for the Trial Court to record its own findings, basedon the evidence on record, and take such other steps, in accordancewith law.

Devika Gujral

Appeal partly allowed.

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