Allowed

Ashutosh Bhailal Rao and Ors. v. the State of Mah and Ors.

Bombay HC11 Dec 2017APPLN/2019/2006

Case brief

AI extract

What is this about?

High Court of Bombay acquitted directors of Ruchi Soya Industries in a Writ Petition challenging prosecution for food adulteration. The Court quashed proceedings for lack of vicarious liability allegations and failure to comply with re-analysis timelines due to shelf life expiry.

What did the court decide?

Criminal Application allowed; Impugned proceedings in Regular Criminal Case No.37 of 2006 quashed and set aside; Rule made absolute.

Ashutosh Bhailal Rao and Ors. Vs the State of Mah and Ors. — Specific Performance | Bombay HC (2017)

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Cri.Appln.2019 of 2006

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( 1 )

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD

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CRIMINAL APPLICATION NO.2019 OF 2006

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1) Ashutosh Bhailal Rao Director of M/s.Ruchi Soya Industries Ltd., having office at 408, Tulsiani Chambers, Nariman Point, Mumbai – 400 021.

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2) P.S.Santhanakrishnan Director of M/s.Ruchi Soya Industries Ltd., having office at 408, Tulsiani Chambers, Nariman Point, Mumbai 400 021.

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3) Kailash Mahadeo Shahra Director of M/s.Ruchi Soya Industries Ltd., having office at 408, Tulsiani Chambers, Nariman Point, Mumbai 400 021.

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4) Dinesh Mahadeo Shahra Director of M/s.Ruchi Soya Industries Ltd., having office at 408, Tulsiani Chambers, Nariman Point, Mumbai 400 021.

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5) P.D.Nagar Director of M/s.Ruchi Soya Industries Ltd., having office at 408, Tulsiani Chambers, Nariman Point, Mumbai 400 021.

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( 2 ) Cri.Appln.2019 of 2006

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6) Shrikrishna Pralhad Joshi Director of M/s.Ruchi Soya Industries Ltd., having office at 408, Tulsiani Chambers, Nariman Point, Mumbai 400 021. ..Applicants VERSUS

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. The State of Maharashtra at the instance of Rajaram Vaman Joshi, Food Inspector, Food and Drug Administration, M.S.Station Road, Dhule. ..Respondent

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...
Advocate for Applicants : Mr.K.H.Parekh
APP for Respondent : Mr.K.S.Patil
...

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CORAM : PRAKASH D.NAIK, J.
DATE :11.12.2017

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JUDGMENT:-

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1) This is an application under Section 482 of the Code

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of Criminal Procedure seeking quashing and setting aside

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the prosecution initiated by the respondent against the
applicants. The criminal proceedings, which are sought

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to be challenged are pending in the Court of Judicial
Magistrate First Class at Navapur, Dist.Nandurbar. The
process was issued by the Court for offences under

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( 3 ) Cri.Appln.2019 of 2006

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Sections 7(i) r/w Section 2(ia) (a), 2(ia) (m) punishable
under Sections 16 and 17 of the Prevention of Food
Adulteration Act, 1954 (For the sake of brevity,
hereinafter referred as 'the Act').

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2)The applicants are the Directors of the company
M/s.Ruchi Soya Industries Ltd. The said company is
engaged in the business of manufacturing of edible oils.
The company is duly registered under the Companies Act.

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3)The brief facts as alleged in the complaint are as
follows:-

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(a)The complaint was filed by the Food Inspector,
Food and Drug Administration, Dhule. The applicants

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are impleaded as accused Nos.5 to 10 in the complaint
being Directors of M/s.Ruchi Soyal Industries Ltd.
The accused No.1 and 2 are Partners of M/s.Mahaveer

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Sons, Navapur. Accused No.3 is M/s.Mahaveer Sons
situated at Navapur, Dist.Nandurbar. Accused No.4 is
proprietor of M/s.Shri Balaji Agency having its

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( 4 ) Cri.Appln.2019 of 2006

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office at Jyoti Commercial Complex, Nandurbar.
Accused No.11 is a Firm namely M/s.Ruchi Soya
Industries Limited and accused Nos.12, 13 and 14 are
nominees of accused No.11. Accused No.15 is a Firm
having office at Sri Ganganagar, Rajasthan.

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(b)Accused No.1, who is the partner of M/s.Mahaveer

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Sons was present at the time of sampling as a vendor.
Accused No.3 is a Firm dealing with food articles.
Accused Nos.1 and 2 are the partners of accused No.3.
Accused No.4 is a Firm, who had supplied Mustard Oil
(Mandap Brand) to the Firm of Accused No.3. Accused
No.4 has purchased the said Mustard Oil (Mandap
Brand) from accused No.11 vide Invoice dated
19.6.2004 and accused No.13 is a Firm, who has
marketed said Mustard Oil (Mandap Brand) and accused
No.12 is the nominee of accused No.13. Accused No.15
is the manufacturing Firm, who had manufactured and
supplied Mustard Oil (Mandap Brand) to the Firm of
accused No.11 vide Invoice dated 16.5.2004. Accused

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( 5 ) Cri.Appln.2019 of 2006

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No.14 is the nominee of accused No.15.

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(c)On 16.9.2004, the complainant along with

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independent witness and the Assistant Commissioner
visited the shop premises of M/s.Mahaveer Sons, Light

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Bazar, Navapur, Dist.Nandurbar. Accused No.1 was
present in the premises as a vendor and partner, who

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is managing the business of Firm and selling food
article namely pure Mustard Oil (Mandap Brand) Ruchis
in 500ml pack bottle. There was stock of 12 bottles

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of Mustard Oil, which was having label as
manufactured by Ruchi Soya Industries Ltd., and
marketed by Ruchi Soya Industrial Ltd. Food

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Inspector, Mr.Joshi disclosed his identity and
intention of drawing the samples for testing and
analysis to accused No.1. Mr.Joshi demanded and
purchased three packs and sealed bottles of 500ml

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Mustard Oil (Mandap Brand) for testing and analysis
from accused No.1. The sample of food article was
also drawn. A notice in the Form VI was given to

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( 6 ) Cri.Appln.2019 of 2006

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accused No.1 intimating that samples are drawn for
testing and analysis. It is signed by accused No.1,
Pancha and Food Inspector. Notice under Section 14-A
was also served on accused No.1 to disclose the
source of product.

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(d)The sealed bottles of Mustard Oil were taken for
analysis. After completing the requisite procedure,
the Panchnama was prepared at the spot, which is
signed by the complainant, Pancha and accused No.1.

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(e)On 17.9.2004, one part of the sample was

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forwarded alongwith Memorandum in Form VII in a
sealed packet to the Public Analyst, State Public

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Health Laboratory, Pune, by registered Post. The

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complainant also forwarded separately the copy of
Form VII and specimen impression of seal used to seal

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the sample to the Public Analyst on 17.9.2004. The

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complainant sent remaining two sealed parts of the
sample alongwith two copies of Memorandum in Form VII

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( 7 ) Cri.Appln.2019 of 2006

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in a sealed packet to the Local (Health) Authority

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and Assistant Commissioner, Food and Drug
Administration (FDA), Dhule, by hand delivery along
with forwarding letter. The complainant also sent
two copies of specimen impression of seal used to
seal the sample in the sealed packet alongwith
forwarding letter to the Local (Health) Authority and
Assistant Commissioner, FDA, Dhule.

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(f)On 31.12.2004, the complainant received the
Public Analyst's report of Mustard oil from State
Public Health Laboratory, Pune through Local (Health)
Authority. The Public Analyst opined that the sample
does not conform to the standards of Mustard oil as
per the Prevention of Food Adulteration Rules.

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(g)The accused No.1 informed the office by letter
dated 28.1.2005 that the Mustard oil is purchased by
them the Firm of accused No.4 i.e. M/s.Shri Balaji
Agency having its office at Jyoti Commercial Complex,

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( 8 ) Cri.Appln.2019 of 2006

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Nandurbar, vide Invoice dated 30.8.2004. Hence, the
notice u/s 11(i)(a) was sent to the Firm of accused
No.4 on 1.2.2005. The complainant collected the
information of Firm of vendor from Licensing
Authority and also from Assistant Commissioner, FDA,
Dhule, and also collected information of other
concerned Firms.

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(h)The complainant submitted all relevant documents

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to Local (Health) Authority and Assistant
Commissioner, FDA, Dhule, for forwarding the same to
Joint Commissioner (Nashik Division), FDA, Nashik,
for obtaining consent u/s 20 of the Act to prosecute
the accused. The documents were forwarded on
15.12.2005. On 27.3.2006, the complainant received
the consent order dated 23.3.2006 from the Joint
Commissioner, FDA, Nashik, for launching prosecution
against the accused.

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(i)The Mustard oil is a food article within the

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( 9 ) Cri.Appln.2019 of 2006

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meaning of Section 2(v) of the Act. The accused
Nos.1 to 3 sold the adulterated food article from
shop to the complainant on 16.9.2004 and thereby
accused have committed the offences u/s 7(i) r/w
2(ia)(a), and 2(ia)(m) punishable u/s 16 and 17 of
the Act. The accused Nos.4 to 11 were charged for
the same offences for supplying and distributing
adulterated Mustard oil to the Firm of accused No.3.
Accused Nos.12 to 15 were charged for the offences
for manufacturing, selling, distributing and
marketing of the adulterated Mustard oil. The
complaint was filed on 21.4.2006.

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4)The learned Magistrate issued the process for the

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aforesaid offences against the accused. The applicants
were original accused Nos.5 to 10 have invoked inherent
powers of this Court to assail the said prosecution
initiated by the respondent.

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5) The learned counsel for the applicants submits that

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( 10 ) Cri.Appln.2019 of 2006

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the learned Magistrate has committed an error in issuing

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the process and taking cognizance of the complaint. It
is submitted that the applicants were impleaded as
accused being Directors of M/s.Ruchi Soya Industries. It

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is submitted that there is no mention of applicants or

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their status in the entire complaint, except mentioning
in the cause title of the complaint. There is no
allegation of any overt act against the applicants.
There are no requisite averments or evidence that the
applicants are Incharge and responsible for the business

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of the Company. In the absence of any averments or
evidence in that regard, no vicarious liability can be
fastened against the applicants in accordance with
Section 17 of the Act. It is further submitted that the
Company has nominated the nominees for their registered
Office and their Factory, who are also impleaded as

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accused nos.12 to 15 in the complaint. In the
circumstances, the prosecution of the applicants was not
warranted. It is further submitted that there is gross

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violation of Section 13(2) of the said Act. On receipt

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( 11 ) Cri.Appln.2019 of 2006

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of the report of Public Analyst to the effect that food
article is adulterated, the Local (Health) Authority
after the institution of prosecution shall forward a copy
of report of analysis to the accused persons informing

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such persons that if they desire, they can make an
application to the Court within a period of 10 days from

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the receipt of report for forwarding the samples to
Central Food Laboratory for reanalysis. The sample was
drawn on 16.9.2004 and was analysed on 20.11.2004 and the

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complaint was filed on 21.4.2006. It is further
submitted that the shelf life of the Mustard oil in

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question was 12 months from the date of packing, which is
apparent from the recital of label. The date of packing
is April 2004. The best before date is 12 months from

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packing. Thus, the shelf life of the product was upto

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April 2005. However, the complaint was filed in April
2006 i.e. after almost 12 months after expiry of shelf

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life. Thus, in view of delay in filing the complaint,

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the right granted to the accused vide Section 13(2) of

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the Act stands nullified. It is therefore, submitted

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( 12 ) Cri.Appln.2019 of 2006

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that the prosecution of the applicants for the said
offences is not tenable in law and the same deserves to
be quashed and set aside.

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6)The learned counsel placed reliance on the decision

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of the Supreme Court in the case of Pepsico India Holdings Private Limited Vs. Food Inspector and Another [ (2011) 1 Supreme Court Cases 176 ] and another decision of this Court dated 3.8.2017 delivered in Criminal Application Nos.5503 of 2004 and 5505 of 2004 in the case of Bharat Puri and others Vs. The State of Maharashtra and Another .

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7)Learned APP opposed the reliefs. It is submitted

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that the submissions advanced by the applicants cannot
be considered at this stage.

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8)On perusal of the documents, I find that there is

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merit in the submissions advanced by the learned Advocate

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for the applicants. It would be an abuse of process of

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( 13 ) Cri.Appln.2019 of 2006

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law to continue such prosecution against the applicants.

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The applicants are impleaded in the complaint as accused
Nos.5 to 10 apparently being Directors of M/s.Ruchi Soya
Industries Ltd., Mankeshwar Warehousing Co., 44/2,3,4
Uruli Devachi, Tal.Haveli, Dist.Pune. The title of the
complaint provides the designations of the applicants.
Apart from that, there is averment in the complaint with
regards to the vicarious liability of the applicants. It
is no where mentioned that the applicants are Incharge
and responsible for the said Company, which is also
impleaded as accused No.11 in the complaint. The
prosecution has invoked Section 17 of the Act. However,

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to substantiate the vicarious liability embodied vide
Section 17 of the Act, neither there is averment in the
complaint nor there is any material to fasten the
liability of the applicants. The proceedings are
therefore not tenable in law against the applicants.

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9)It is further noted that the valuable right granted

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to the accused to challenge the report of Public Analyst

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( 14 ) Cri.Appln.2019 of 2006

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in accordance with Section 13(2) of the Act, has been
nullified and on that ground also, the proceedings are
deserves to be quashed and set aside. It can be seen
that the sample was drawn on 16.9.2004. The report of
Public Analyst was received as stated in the complaint on

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31.12.2004. In the said report, it was opined that the
sample does not conform to the standards of Mustard oil

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as per the Prevention of Food Adulteration Rules. The
complainant, however, submitted the documents to the
Local (Health) Authority and Assistant Commissioner, FDA,
Dhule, for forwarding the same to the Joint Commissioner,

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FDA, Nashik Division, Nashik, for obtaining necessary
consent u/s 20 on 15.12.2005. The consent was thereafter
received on 27.3.2006 and the complaint was filed on
21.4.2006. There was no prompt action on the part of the
authorities to initiate the prosecution against the
accused. The Mustard oil has shelf life of 12 months

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from the date of packing, which was clear from the
recital of label. The date of packing was in April 2004,

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and therefore, the product was best for use before 12

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( 15 ) Cri.Appln.2019 of 2006

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months from the date of packing. Considering the
aforesaid aspect, the shelf life of the product was upto
April 2005. However, the complaint was filed after 12
months i.e. after the expiry of shelf life. Hence, in
view of delay in filing the complaint, the accused has
lost the right to re-analysis the sample in accordance
with Section 13(2) of the Act. The complaint was filed
after the expiry of the shelf life and therefore, the
question of forwarding the sample for re-analysis does
not arise. The violation of the right u/s 13(2) of the
Act vitiates the prosecution.

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10) In the case of Pepsico India Holdings Private Limited (supra), the Supreme Court has considered the aforesaid aspect and it was held that the Directors can be prosecuted on account of vicarious liability provided that there is material to show that they are responsible to the Company for its day-to-day business. It was also observed that it is mandatory to the Central Government to prescribe Laboratories u/s 23(1-A) for testing food

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( 16 ) Cri.Appln.2019 of 2006

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samples/adulterants and to prescribe methods of analysis.

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11) In the decision of this Court in the case of Bharat Puri and Others (supra) reference was made to the several decisions and it was observed that in the complaint against the Company and it's Directors, the complainant has to indicate in the complaint whether the Directors are Incharge or responsible to the Company for day-to-day management or whether they are responsible to the Company for conduct of its business.

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12)In the present case, the complaint was absolutely
silent about vicarious liability of the applicants. For
both the reasons stated herein above, the proceedings
will have to be quashed and set aside and this is a fit
case to exercise inherent powers u/s 482 of Code of
Criminal Procedure to do so. Hence, I pass the following

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Order:-

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( 17 ) Cri.Appln.2019 of 2006

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ORDER

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(I) Criminal Application No.2019 of 2006 is
allowed.

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(II) The impugned proceedings in Regular Criminal
Case No.37 of 2006 pending in the Court of
Judicial Magistrate First Class, Navapur,
Dist.Nandurbar are quashed and set aside.

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(III) Rule is made absolute.

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(IV) Application stands disposed of.

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 [PRAKASH D.NAIK, J.]

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SPT/Cri.Appln.2019 of 2006

Ashutosh Bhailal Rao and Ors. v. the State of Mah and Ors.

Case brief

What is this about?

What did the court decide?

Ashutosh Bhailal Rao and Ors. v. the State of Mah and Ors.

Case brief

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