Allowed

M/S Acc Limited v. State of Karnataka

Karnataka HC20 Sept 2021CRL.P/3195/2017

Case brief

AI extract

What is this about?

Criminal petition to quash proceedings against a cement company's directors on a private complaint alleging underweight and duplicate packaged cement. The court held the complaint bad for not arraigning the company, for breach of the mandatory inquiry under Section 202 Cr.P.C., and for taking cognizance of Section 15(1) of the Legal Metrology Act, a provision that creates no offence. Proceedings q

What did the court decide?

Criminal Petition allowed; order dated 26 March 2015 of the Principal Civil Judge & JMFC, Mudigere in C.C.No.333 of 2015 and the proceedings therein quashed.

M/S Acc Limited Vs State of Karnataka — Quashing and FIR | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 20^TH DAY OF SEPTEMBER, 2021

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BEFORE

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THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

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CRIMINAL PETITION No.3195/2017

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BETWEEN

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M/S ACC LIMITED THONDEBHAVI CEMENT WORKS, MADHUGIRI ROAD, THONDEBHAVI, GAURIBIDANUR TALUK, CHIKKABALLAPUR DISTRICT-561213 REPRESENTED BY ITS DIRECTOR PLANT, MR.AMITAV SINGH.

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MR.HARISH BADAMI CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR, M/S. ACC LIMITED, THONDEBHAVI CEMENT WORKS, MADHUGIRI ROAD, THONDEBHAVI, GAURIBIDANUR TALUK, CHIKKABALLAPUR DISTRICT – 561 213.

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... PETITIONERS

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(BY SRI C.V.NAGESH, SR. ADVOCATE A/W SRI YASHODHAR HEGDE, ADVOCATE (VIDEO CONFERENCE))

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AND

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STATE OF KARNATAKA REPRESENTED BY THE INSPECTOR OF LEGAL METROLOGY, CHIKAMAGALURU SUB DIVISION, CHIKKAMAGALURU – 577 102 MR.R.K.KOPPAR.

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MR.VINCENT FURTADO S/O MINGLE FURTADO, AGED ABOUT 41 YEARS, M/S. M.F.ENTERPRISES, HIREBYLE, MUDIGERE TALUK, CHIKKAMAGALURU – 577 121.

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... RESPONDENTS

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(BY SRI V.M.SHEELVANT, SPP - I, A/W SMT.NAMITHA MAHESH B.G., HCGP FOR R1 (PHYSICAL HEARING) SRI M.S.HARINTH, ADVOCATE FOR R2)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO QUASH THE ORDER DATED 26.03.2015 PASSED BY THE PRL. CIVIL JUDGE AND JMFC, MUDIGERE IN C.C.NO.333/2015 (ANNEXURE-A) AND CONSEQUENTLY QUASH THE CRIMINAL COMPLAINT BEARING C.C.NO.333/2015 PENDING BEFORE PRL. CIVIL JUDGE AND JMFC, MUDIGERE.

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THIS CRIMINAL PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 17.08.2021, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING :-

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ORDER

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Petitioners have filed the subject criminal petition

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seeking to quash the proceedings in C.C.No.333/2015 pending before the Principal Civil Judge and JMFC, Mudigere.

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Adumbrated in brief, the facts obtaining as

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projected by the petitioners are as follows:

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1^st petitioner is engaged in the business of

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production of cement and claims to be one of the largest cement producers in India and the only cement company to have obtained a super-brand status. It has its manufacturing units in various States in India and one such manufacturing unit is at Thondebhavi of Chikkaballapura and the 2^nd petitioner is the Managing Director of the 1^st petitioner. It is the further claim of the 1^st petitioner that it has enormous manufacturing plants across India, their operations and management are under the supervision of Directors of each plant and

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the Board of Directors do not have direct supervision over each plant for day-to-day functioning of these plants.

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On 29^th September, 2014 a complaint is received by the 1^st respondent/Inspector of Legal Metrology from the Police Sub-Inspector of Kalasa Police Station, Mudigere Taluk through the Assistant Controller of Legal Metrology, Chikkamagaluru complaining that one Sri H.N. Manjunath and Sri M.R.Sundaresh purchased ACC cement bags from one Vincent Furtado, the 2^nd respondent and the cement bags were duplicate and had under-weighed than what was projected on the bags. The moment complaint was received, the 1^st respondent along with the staff inspected the premises of the said Mr.M.R.Sundaresh where Mr. H.N.Manjunath had also brought the cement bags purchased by him and upon inspection, the 1^st respondent claims to have found discrepancies in the

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actual weight of 72 bags than what was inscribed on the

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bags. On 26^th September, 2014 Mr.H.N.Manjunath informed the call centre of the 1^st petitioner that he had purportedly purchased cement bags which were lower in quality and lower in weight.

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Pursuant to the said complaint made to the call

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centre, Mr. Ashok Kumar and Mr. Chethan of the company visited the place where Mr.H.N.Manjunath had kept the cement bags and inspected; upon inspection it was found that the bags were not of the 1^st petitioner they were duplicated and the name of the 1^st petitioner Company was inscribed on them in a manner in which generally was not inscribed. It also came to light that it was adulterated cement with underweight of bags. On coming to know the aforesaid facts, the 1^st petitioner lodged a complaint immediately before the SubInspector, Kalasa Police Station, Mudigere Taluk on 30^th September, 2014 and an FIR is registered on the same

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day i.e., 30^th September, 2014. The FIR is registered on

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the complaint given by Mr. Ashok Kumar, employee of the 1^st petitioner.

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respondent/Inspector of Legal Metrology registers a private complaint under Section 200 of the Cr.P.C. against the said Sri Vincent Furtado and all the Board of Directors of the 1^st petitioner alleging offences under Sections 31, 36(1) and 36(2) of the Legal Metrology Act, 2009¹ . On registration of the complaint, no investigation was conducted and on 26^th March, 2015 the 1^st respondent files a charge sheet before the trial Court under Section 15(1) of the Act against all the Board of Directors of the Company without making the Company itself a party. The trial Court took cognizance of the charge sheet filed for the offence under Section 15(1) of the Act and issued summons to all the Board of Directors of the Company. The Directors who are on the

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1 ‘The Act’ for short

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Board of the Company were not only in India but in several parts of the world. On taking such cognizance by the trial Court on 26^th March, 2015 for offence under Section 15(1) of the Act registers a criminal case in C.C.No.333 of 2015, against which the petitioners have knocked the doors of this Court.

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Heard Sri C.V.Nagesh, learned Senior Counsel for petitioners, Sri V.M. Sheelavanth, learned State Public Prosecutor-I along with Smt.Namitha Mahesh.B.G., learned High Court Government Pleader for respondent No.1 and Sri.M.S.Harinath, learned counsel for respondent No.2.

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Learned Senior Counsel for petitioners would

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make the following submissions:

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(i) The company not having been made a party, the criminal case before the trial Court was not maintainable against the Board of Directors of the Company.

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(ii) When a complaint was received under Section 200 of Cr.P.C., the offence or the

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Company was not within the jurisdiction and as such, the learned Magistrate ought to have conducted an inquiry under Section 202 of the Cr.P.C. and having not done so before issuance of summons, the entire proceedings are vitiated.

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(iii) For issue of summons by taking cognizance under Section 190(a) there should be sufficient ground and without there being any sufficient ground, in a mechanical manner, cognizance is taken and criminal case is registered.

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(iv) What is searched is the house of the customer and not the unit of the 1^st petitioner and there is violation of Section 36 of the Act and there is no plea against any of the other Directors of the company to simply implead them into the proceedings.

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8. On the other hand, Sri.V.M.Sheelvant, the

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learned State Public Prosecutor-I would admit the fact that proceedings have been instituted in a haste, as without even a notice being issued on the petitioners, the proceedings ought not to have been instituted and would therefore seek indulgence of this Court to quash the entire proceedings and remit the matter back to the hands of the department to act in accordance with law.

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The learned Senior Counsel appearing for

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petitioners in reply to the said opportunity that is sought by the learned State Public Prosecutor would submit that the proceedings are vitiated from the word

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go for having set the criminal law in motion in a reckless manner and the complaint itself does not make out any offence against the petitioners and the liberty should not be reserved for the Department to act any further as the facts narrated do not even remotely link the petitioners to the offence alleged.

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I have given my anxious consideration to the submissions made by learned Senior Counsel and the learned State Public Prosecutor-I and in furtherance thereof, the points that arise for my consideration are dealt with herein.

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The first contention of the learned Senior Counsel for the petitioners is,

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‘ Whether the complaint was

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maintainable without the company being made a party to the proceedings but only the

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Board of Directors?’

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To consider this contention, it is germane to

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notice Section 49 of the Act. Section 49 of the Act reads as follows:

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“49. Offences by companies and power of court to publish name, place of business, etc., for companies convicted. - (1) Where an offence under this Act has been committed by a company,—

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(a)(i) the person, if any, who has been nominated under sub-section (2) to be in charge of, and responsible to, the company for the conduct of the business of the company (hereinafter in this section referred to as a person responsible); or

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(ii) where no person has been nominated, every person who at

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the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company; and

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(b) the company,

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shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

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Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.

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(2) Any company may, by order in writing, authorise any of its directors to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the company of any offence under this Act and may give notice to the Director or the concerned Controller or any legal metrology officer

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authorised in this behalf by such Controller (hereinafter in this section referred to as the authorised officer) in such form and in such manner as may be prescribed, that it has nominated such director as the person responsible, along with the written consent of such director for being so nominated.

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The issue with regard to Board of Directors or

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Officers of a company being made parties in the criminal proceedings without the company itself not being arrayed as a party should not detain this Court for long or delve deeper into the matter as the issue stands covered by the judgment of Apex Court in the case of ANEETA HADA v. GODFATHER TRAVELS AND

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TOURS PRIVATE LIMITED² wherein the Hon’ble Apex Court considering the identical submission in a provision akin to Section 49 (supra) has held as follows:-

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“39. The word “deemed” used in Section

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141 of the Act applies to the company and the persons responsible for the acts of the

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2 (2012) 5 SCC 661

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company. It crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. What averments should be required to make a person vicariously liable has been dealt with in S.M.S. Pharmaceuticals Ltd. [(2005) 8 SCC 89 : 2005 SCC (Cri) 1975] In the said case, it has been opined that the criminal liability on account of dishonour of cheque primarily falls on the drawee (sic drawer) company and is extended to the officers of the company and as there is a specific provision extending the liability to the officers, the conditions incorporated in Section 141 are to be satisfied.

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50. However, it is noticeable that the Bench thereafter referred to the dictum in Sheoratan Agarwal [(1984) 4 SCC 352: 1984 SCC (Cri) 620] and eventually held as follows: (Anil Hada case [(2000) 1 SCC 1: 2001 SCC (Cri) 174] , SCC p. 10, para 21)

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“21. We, therefore, hold that even if the prosecution proceedings against the company were not taken or could not be continued, it is

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no bar for proceeding against the other persons falling within the purview of subsections (1) and (2) of Section 141 of the Act.”

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In the light of the aforesaid judgment of the Apex Court, the proceedings without making the company a party was not maintainable. The said judgment is followed in plethora of orders passed by co-ordinate benches of this Court, one of which is cited herein is in the case of

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MR. ARVIND MEDIRATTA v. STATE OF KARNATAKA³

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wherein this Court held as follows:

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“8. I have given my careful consideration to the submissions of the learned senior counsel and the learned High Court Government Pleader.

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9. In the light of the submissions of the parties, the point that arises for consideration of this court is;

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Whether the impugned orders passed by the learned Magistrate taking cognizance of the offences mentioned in the complaints filed by the

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3 Crl.R.P. No.344/2017 and connected cases dd. 16-03-2017

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Labour Department against the petitioner as an individual without making the company, in which he is a member on Board, are maintainable?

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10. The Hon’ble Supreme court in the case of ANEETA HADA (supra) while considering a case arising out of Section 138 of the Negotiable Instruments Act, 1881, has held as follows:

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“Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words “as well as the company” appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is

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a juristic person and it has its own responsibility. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted”.

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The said authority has been following by this Court in the case of SANJAY JAIN (supra).

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11. A perusal of the complaints show that the petitioner is arraigned as an accused in his individual capacity, although his position as a Director in the company is mentioned. It is one thing to say that the company is the accused represented by its Director and it is another to say that an individual being described as a Director in a particular company satisfies the requirement of law. An individual can be a member on the Board of several companies. Unless a company, which is a juristic person, is arraigned as a party, the Labour Department could not have initiated prosecution only against an individual. In the circumstances, respectfully following the Authority in the

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case of ANEETA HADA (supra), in my view, the complaints filed by the Senior Labour Inspector qua an individual without the Corporate entity being made as a member, were not maintainable. In the circumstances, these petitions merit consideration and are accordingly allowed.”

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In the light of the judgment of the Apex Court as noticed hereinabove, the complaint itself was not maintainable without arraigning the company as a party but having brought only the Board of Directors or the officers of the company as accused. Section 49 of the Act is identical to Section 141 of the Negotiable Instruments Act, 1881, what the Apex Court considers in ANEETA HADA (supra). This is the first ground that vitiates the proceedings and the point is answered accordingly.

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The next contention that would arise for

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consideration is,

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‘Whether the direction to investigate the

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matter after having received the complaint is in violation of Section 202 of the Cr.P.C ?’

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Section 202 of the Cr.P.C. which deals with

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postponement of issue of process reads as follows:

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“ 202. Postponement of issue of process .-(1) Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance or which has been made over to him under Section 192, may, if he thinks fit, [and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction,] postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding:

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Provided that no such direction for investigation shall be made,—

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(a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or

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(b) where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under Section 200.

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(2) In an inquiry under sub-section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath:

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Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainant to produce all his witnesses and examine them on oath.

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(3) If an investigation under sub-section (1) is made by a person not being a police officer, he shall have for that investigation all the powers conferred by this Code on an officer in charge of a police station except the power to arrest without warrant.”

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(Emphasis supplied)

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In terms of the said provision, the Magistrate on receipt of a complaint who is authorized to take cognizance shall in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction postpone the issue of process against the accused and order an enquiry or investigation for the purpose of deciding whether or not there is sufficient ground for proceeding.

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The plant or the unit of the accused in the case at hand, as described, is at Chikkaballapura. The criminal complaint is registered in the Court of the Principal Civil Judge and JMFC at Mudigere, Chickmagalur District. On the face of it, the complaint against the Chief Executive Officer and Managing Director of the Company was not maintainable without, at the outset, the learned Magistrate conducting an inquiry or directing investigation in terms of Section 202 of Cr.P.C. The Apex Court interpreting these very

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sections has in the cases of UDAI SHANKAR AWASTHI

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v. STATE OF UTTAR PRADESH AND ANOTHER⁴ and

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VIJAY DHANUKA AND OTHERS v. NAJIMA MAMTAJ

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AND OTHERS⁵ has held that requirement of conducting an inquiry in terms of Section 202 of Cr.P.C. cannot be dispensed with. The Apex Court in the case of UDAI SHANKAR AWASTHI ( supra ) has held as follows:

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“40. The Magistrate had issued summons without meeting the mandatory requirement of Section 202 CrPC, though the appellants were outside his territorial jurisdiction. The provisions of Section 202 CrPC were amended vide the Amendment Act, 2005, making it mandatory to postpone the issue of process where the accused resides in an area beyond the territorial jurisdiction of the Magistrate concerned. The same was found necessary in order to protect innocent persons from being harassed by unscrupulous persons and making it

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4 (2013) 2 SCC 433

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5 (2014) 14 SCC 638

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obligatory upon the Magistrate to enquire into the case himself, or to direct investigation to be made by a police officer, or by such other person as he thinks fit for the purpose of finding out whether or not, there was sufficient ground for proceeding against the accused before issuing summons in such cases. (See also Shivjee Singh v. Nagendra Tiwary [(2010) 7 SCC 578: (2010) 3 SCC (Cri) 452: AIR 2010 SC 2261], SCC p. 584, para 11 and National Bank of Oman v. Barakara Abdul Aziz [(2013) 2 SCC 488: JT (2012) 12 SC 432].)”

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(Emphasis supplied)

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and in the case of VIJAY DHANUKA ( supra ), the Apex

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Court held as follows:-

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“11. Section 202 of the Code, inter alia, contemplates postponement of the issue of the process “in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction” and thereafter to either inquire into the case by himself or direct an investigation to be made by a police

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officer or by such other person as he thinks fit. In the face of it, what needs our determination is as to whether in a case where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, inquiry is mandatory or not.

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12. The words “and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction” were inserted by Section 19 of the Code of Criminal Procedure (Amendment) Act (Central Act 25 of 2005) w.e.f. 23-6-2006. The aforesaid amendment, in the opinion of the legislature, was essential as false complaints are filed against persons residing at far off places in order to harass them. The note for the amendment reads as follows:

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“False complaints are filed against persons residing at far off places simply to harass them. In order to see that innocent persons are not harassed by unscrupulous persons, this clause seeks to amend sub-section (1) of

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Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall enquire into the case himself or direct investigation to be made by a police officer or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused.”

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The use of the expression “shall” prima facie makes the inquiry or the investigation, as the case may be, by the Magistrate mandatory. The word “shall” is ordinarily mandatory but sometimes, taking into account the context or the intention, it can be held to be directory. The use of the word “shall” in all circumstances is not decisive. Bearing in mind the aforesaid principle, when we look to the intention of the legislature, we find that it is aimed to prevent innocent persons from harassment by unscrupulous persons from false complaints. Hence, in our opinion, the use of the expression “shall” and the

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background and the purpose for which the amendment has been brought, we have no doubt in our mind that inquiry or the investigation, as the case may be, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate.

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14. In view of our answer to the aforesaid question, the next question which falls for our determination is whether the learned Magistrate before issuing summons has held the inquiry as mandated under Section 202 of the Code. The word ‘inquiry’ has been defined under Section 2(g) of the Code, the same reads as follows:

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“2(g) ‘‘ inquiry’’ means every inquiry, other than a trial, conducted under this Code by a Magistrate or court”

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It is evident from the aforesaid provision, every inquiry other than a trial conducted by the Magistrate or the court is an inquiry. No specific mode or manner of inquiry is provided

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under Section 202 of the Code. In the inquiry envisaged under Section 202 of the Code, examination of the complainant only is necessary with the option of examining the witnesses present, if any. This exercise by the Magistrate, for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused, is nothing but an inquiry envisaged under Section 202 of the Code.”

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(Emphasis supplied)

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It is an admitted fact that the aforesaid mandate is not

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complied with by the learned Magistrate. Therefore, the entire proceedings without complying with the mandatory requirement in terms of Section 202 of Cr.P.C., stands vitiated. This is the next ground of illegality in the entire proceedings.

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The proceedings of the learned Magistrate who

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took cognizance of the offence and directed registration

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of the case against the accused on 26^th March, 2015 reads as follows:

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“The Inspector of Legal Metrology, Chikmagalur Sub-Division has submitted charge sheet against the accused person for an offence punishable U/s 15(1) of the Legal Metrology Act, 2009.

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Charge sheet, Panchanama, Seizure copy, Inspection Report and relevant papers are enclosed herewith.

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Complainant is public servant. He has filed complaint indirectly of his official capacity. Hence, sworn statement is not necessary as per Section 200(a) of Cr.P.C. Hence, I proceed to pass the following:

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ORDER

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Cognizance taken for the offence punishable U/s 15(1)of the Legal Metrology Act, 2009 against the accused persons.

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Office is directed to register the case against the accused persons in the concerned register.

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Issue summons to accused persons by 27/5.”

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(Emphasis supplied)

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The proceedings indicate that charge sheet is submitted against the accused for offences punishable under Section 15(1) of the Act, and cognizance is taken for such offence. It becomes important to notice Section 15(1) of the Act, which reads as follows:-

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“15. Power of inspection, seizure,

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etc. - (1) The Director, Controller or any legal metrology officer may, if he has any reason to believe, whether from any information given to him by any person and taken down in writing or from personal knowledge or otherwise, that any weight or measure or other goods in relation to which any trade and commerce has taken place or is intended to take place and in respect of which an offence punishable under this Act appears to have been, or is likely to be, committed are either kept or concealed in any premises or are in the course of transportation,-—

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(a) enter at any reasonable time into any such premises and search for and inspect any weight, measure or other goods in relation to which trade and commerce has taken place, or is intended to take place and any record, register or other document relating thereto;

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(b) seize any weight, measure or other goods and any record, register or other document or article which he has reason to believe may furnish evidence indicating that an offence punishable under this Act has been, or is likely to be, committed in the course of, or in relation to, any trade and commerce.”

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Under Section 15(1) of the Act, it is power of inspection and seizure. It is beyond comprehension as to how the learned Magistrate takes cognizance of a violation of Section 15(1) which deals with search and seizure to be done by the Director or controller or any other officer of

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Legal Metrology Department. This can hardly be considered to be an offence against the

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accused/petitioners.

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The cognizance being taken for the offence punishable under Section 15(1) of the Act displays blatant non-application of mind on the part of the learned Magistrate, as Section 15(1) of the Act is not an offence punishable under the Act. There cannot be a better example than the afore-narrated cognizance being taken, which bears the stamp of recklessness and nonapplication of mind. Setting the criminal trial in motion is a serious matter and cannot be a frolicsome act on the part of the learned Magistrate to misuse such power in such a cavalier manner. Therefore, the order taking cognizance is in violation of Section 204 of the Cr.P.C.

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The mandate of Section 204 of the Cr.P.C. is required to be noticed and reads as follows:-

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“204. Issue of process .- (1) If in the opinion of a Magistrate taking cognizance of an offence there is sufficient ground for proceeding , and the case appears to be—

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(a) a summons-case, he shall issue his summons for the attendance of the accused, or

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(b) a warrant-case, he may issue a warrant, or, if he thinks fit, a summons, for causing the accused to be brought or to appear at a certain time before such Magistrate or (if he has no jurisdiction himself) some other Magistrate having jurisdiction.

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(2) No summons or warrant shall be issued against the accused under subsection (1) until a list of the prosecution witnesses has been filed.

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(3) In a proceeding instituted upon a complaint made in writing, every summons or warrant issued under sub-section (1) shall be accompanied by a copy of such complaint.

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(4) When by any law for the time being in force any process-fees or other fees are payable, no process shall be issued until the fees are paid and, if such fees are not paid within a reasonable time, the Magistrate may dismiss the complaint.

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(5) Nothing in this section shall be deemed to affect the provisions of Section 87.

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The afore-extracted mandate of the code is unequivocal,

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that if in the opinion of the Magistrate taking cognizance of an offence ‘ there is sufficient ground for

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proceeding’, only then it can be proceed further. Therefore, sufficient ground for proceeding requires the learned Magistrate to apply his mind while taking cognizance of the offence and directing registration of a criminal case against the accused.

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The interpretation of this provision insofar as it concerns existence of sufficient ground, again, need

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not detain this Court for long or delve deeper into the matter as the Apex Court and this Court have held that existence of sufficient ground is sine qua non to the act of the Magistrate in issuing process and setting the criminal trial in motion. The Apex Court in the case of GHCL EMPLOYEES STOCK OPTION TRUST v. INDIA

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INFOLINE LIMITED⁶ holds as follows:-

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“14. Be that as it may, as held by this Court, summoning of accused in a criminal case is a serious matter. Hence, criminal law cannot be set into motion as a matter of course. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. The Magistrate has to record his satisfaction with regard to the existence of a prima facie case on the basis of specific allegations made in the complaint supported by satisfactory evidence and other material on record.”

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6 (2013) 4 SCC 505

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The Apex Court in the case of SUNIL BHARTI MITTAL v. CENTRAL BUREAU OF INVESTIGATION⁷ holds as follows:

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“53. However, the words “sufficient ground for proceeding” appearing in Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect.”

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(Emphasis supplied)

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The Apex Court has held that sufficient ground for proceeding in terms of Section 204 of Cr.P.C. is of immense importance and violation of such action would 7 (2015) 4 SCC 609

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render the order a nullity, the violation would become apparent, if no reason is given while coming to conclude that there is prima facie case against the accused, though not elaborate reasons, but should bear application of mind to the fact that sufficient grounds do exist.

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This Court following the judgment in the case of SUNIL BHARTI MITTAL (supra), in the case of MALLIKARJUNA AND OTHERS v. THE STATE OF KARNATAKA THROUGH THE POLICE INSPECTOR, HOSAPETE TOWN POLICE STATION AND ANOTHER⁸ , holds as follows:

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“10. The Principal Civil Judge (Jr. Dn.) & JMFC, Hospet, while taking cognizance, appears to have very casually put his signature to the filled-up portion of the computerised order sheet, wherein Section 504 of IPC is also included which is neither the case of the prosecution nor is the content

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8 ILR 2018 KAR 353

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of the chargesheet. This shows the nonapplication of judicious mind by the jurisdictional Magistrate. The order sheet of the Magistrate in taking cognizance reads as follows:

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“Perused the papers.

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Cognizance taken against accused for the offence punishable Under Section – 143, 147, 504, 188 R/W 149 IPC.

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Register the Case as C.C. in Register No. III. By: 20/7”

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17. Section 190 of the Criminal Procedure Code, in fact, imposes a responsibility on the Magistrate before taking cognizance to comply with the said provision. Section 190 of the Code reads as under:

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“190. Cognizance of offences

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by Magistrates. -(1) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under subsection (2), may take cognizance of any offence—

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(a) upon receiving a complaint of fact which constitute such office,

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(b) upon a police report of such facts;

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(c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.

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(2) The Chief Judicial Magistrate may empower any Magistrate of the second class to take cognizance under sub-section (1) of such offences as are within his competence to inquire into or try.”

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On a meticulous understanding of the above said provision, it makes it clear that the Magistrate has no jurisdiction to take cognizance even upon receiving a complaint or any police report on facts which does not constitute any offence. Therefore, whenever a Magistrate has to take cognizance of any offence, he has to apply his judicious mind,

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meticulously read the contents of the police report or the contents of the private complaint filed by the parties, ascertain whether the facts narrated therein constitute any offence, and only thereafter specifically mentioning the said offences, the Magistrate has to take cognizance and proceed with the further proceedings. In the absence of any such facts, constituting any offence, the Magistrate has no jurisdiction to take cognizance and proceed further.

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12. The Judicial Magistrates, who are empowered to summon the accused under Section 204 of the Code of Criminal Procedure, should always keep it in mind that summoning the accused is a serious matter and the criminal law cannot be set into motion as a matter of course. The summoning order must reflect that the Magistrate has applied his judicious mind to the facts of the case and the law applicable thereto. The order of summoning the accused need not be a speaking order and a detailed

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one. But, it should not suffer from any infirmity or illegality. Where reasons are not assigned, however short it may be, for coming to the conclusion that it is a fit case for issuance of summons, such summoning order would become bad in law. The Magistrates, while issuing process, are not required to meticulously examine and evaluate the materials on record. However, he is only required to record reasons, however short, or brief it may be, which indicate the application of mind by the Magistrate. That is all expected from him at that stage. The expression “opinion” and “sufficient ground” under Section 204 gives an indication that before issuing process, the Magistrate should show that on what material, at least, he has formed his opinion that it is a fit case to issue process. Without applying his judicious mind and without even looking to the facts of the case, mechanically, issuing process only on the basis of the operative portion of the charge sheet or the

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complaint does not amount to application of mind by a Magistrate.”

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(Emphasis supplied)

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If the order taking cognizance, as extracted hereinabove,

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is considered on the bedrock of the Code, its interpretation by the Apex Court as followed by this Court ( supra) it would leave none in doubt that the order impugned dated 26^th March, 2015 suffers from blatant non-application of mind, as there is no assessment of existence of sufficient ground. This is the third leg of the entire proceedings being vitiated.

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The submission of the learned State Public Prosecutor- I that proceedings have to be remitted back to the hands of the Department for initiation of proceedings afresh is unacceptable and deserves to be rejected as nothing worth the name under the Act has even begun by the Department. All that the Department would do is to inspect a customer’s place in

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Chickmagalur, raise an issue with regard to underweight in the bag and straight away register a complaint against the company which is situated in Chikkaballapur. No notice or any intimation about any

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of the proceedings is ever communicated to the petitioners.

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It is also germane to notice the complaint being registered against the petitioners which make out no offence. The narration in the complaint are as follows:

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“4. The complainant received the complaint from police sub- Inspector, Kalasa Police station, Mudigere Taluk, through Assistant Controller of Legal Metrology, Chikkamagaluru, on 29.09.2014 at 01- 00 pm at Kalasa Police Station. Which stated Mr.H.N.Manjunath, Hatlamane, Hirebyle po, Mudigere Taluk and Mr. M.R.Sundaresh, Mavinakuduge, Marasanige po, Mudigere Taluk, purchased ACC cement bags from

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Sri. Vincent Furtado S/o. Mingle Furtado, (Retailer) age 39 M/s. M.F.Enterpriess, Hirebyle, Mudigere Taluk, Chikkamagaluru Dist. Cement bags were abnormal under weight and duplicate quality. So both the complaints were lodged on 27.09.2014 at Kalasa Police Station.

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5. The Complainant further submits that, on date: 29.09.2014 at 0.3.00 pm., Sri. R.K.Koppar, Inspector of Legal Metrology, Chikkamagaluru sub division Chikkamagaluru, Karnataka, along with Staff, has inspected at the user premises of Sri. M.R.Sundaresh Mavina Kudige Estate, Marasanige: PO, Mudigere Taluk, Chikkamagaluru. Dist and has found that ACC CEMENT BAGS (71+1) seventy one bags belongs to Mr.Sundaresh and one bag belongs to Mr.Manjunath who brought from his premises to check the cement bag to Sundaresh premises and all 72 bags are having Net weight declared 50 kg , found lesser than declared net weight. Were kept for use and seized and detained from the

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user, Under Section 15(1) of The Legal Metrology Act 2009 for violations as below.

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(The said seized prepacked package of ‘ACC Cement bags’ comes under “ Pre- Packed commodity’’ as defined under Section 2(1) of The Legal Metrology Act 2009) .

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6. xx xx xx

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7. The complainant further submits that no person shall manufacure, pack, sell import, distribute, deliver, offer, expose or possess for sale any prepackaged commodity unless such package is in such standard quantities or number. These packages without complying the provisions of Section 18(1) of The Legal Metrology Act 2009 and Rule 11 and Rule 18 of The Legal Metrology (Packaged Commodities Rules 2011. It is an offence under the said Act and Rules. For Manufacutring/ Packing/ Districuting/ deliver for sale and have committed and offence punishable under 36(2) of The Legal Metrology Act 2009. By Manufacturing / importing and Supplying

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the product to the user through retailer. Hence the case against (A1), (A2), (A3), (A4), (A5- A13).

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8. The Complainant also submits that Section 49 0f The Legal Metrology Act 2009, If an offence is committed by a company each and every person associated is liable to be prosecuted under the said provisions including the Managing Director/Chairman/ Vice Chairman/ Manager/ Partner/ Proprietor and this offence is punishable under 36(1) and 36(2) The Legal Metrology Act 2009.”

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The narration in the complaint is that the complainant

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receives a complaint from Kalasa police station, Mudigere taluk through the Assistant Controller of Legal Metrology alleging that one Mr.H.N.Manjunath and one Mr.M.R.Sundaresh purchased ACC cement bags from Vincent Furtado, a retailer and cement bags were abnormally under weight. The complaint further alleged that cement bags belonged to one Sundaresh and one bag belonged to Manjunath who brought from his

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premises to check the cement bag, which were found lesser than the declared weight. The cement bags were checked or the place that was searched was that of a retailer. Section 36(1) and (2) of the Act reads as follows:

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“36. Penalty for selling, etc., of nonstandard packages. —

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(1) Whoever manufactures, packs, imports, sells, distributes, delivers or otherwise transfers, offers, exposes or possesses for sale, or causes to be sold, distributed, delivered or otherwise transferred, offered, exposed for sale any pre-packaged commodity which does not conform to the declarations on the package as provided in this Act, shall be punished with fine which may extend to twenty-five thousand rupees, for the second offence, with fine which may extend to fifty thousand rupees and for the subsequent offence, with fine which shall not be less than fifty thousand rupees but which may extend to one lakh rupees or with

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imprisonment for a term which may extend to one year or with both.

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(2) Whoever manufactures or packs or imports or causes to be manufactured or packed or imported, any pre-packaged commodity, with error in net quantity as may be prescribed shall be punished with fine which shall not be less than ten thousand rupees but which may extend to fifty thousand rupees and for the second and subsequent offence, with fine which may extend to one lakh rupees or with imprisonment for a term which may extend to one year or with both.”

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Whoever manufactures or packs or imports or causes to be manufactured or packed or imported any prepackaged commodity, with error in net quantity would be punished as obtaining in under the Act.

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The petitioners though are manufacturers what was found is the complaint is against a retailer. But the accused named are all the Board of Directors of

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the company. A few of the Board of Directors are not the ones who are within the country, this fact is not disputed that they were citizens of Switzerland, Ireland, Norway etc., It is here it becomes germane to notice the description of the accused in the complaint which reads as follows:

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“1. Name and address of the accused at Retail point .

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(A1) Sri Vincent Furtado S/o Mingle Furtado, aged 39 M/s M.F. Enterprises Hirebyle, Mudigere Taluk, Chikkmagaluru Dist. (Retailer).

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2. Name and address of the accused at Distribution point.

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Registered post with A.D. not received by Distributor, Wrote letter to Commercial Tax Department, Enforcement-1, Mysore.

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3. Name and address of the accused at Manufacturing point.

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Board of Directors: M/s ACC Limited, Thondebhavi Cement Works, Madhugiri Road, Thondebhavi, Gowribidanur (T), Chikkaballapur Dist-561 213, Karnataka

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(A2) Mr. N.S. Sekhsaria, Chairman, M/s ACC Limited, Thondebhavi Cement Works, Madhugiri Road, Thondebhavi, Gowribidanur (T), Chikkaballapur Dist-561 213, Karnataka.

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(3) Bernard Terver, Deputy Chairman, M/s ACC Limited, Thondebhavi Cement Works, Madhugiri Road, Thondebhavi, Gowribidanur (T), Chikkaballapur Dist-561 213, Karnataka.

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(4) Harish Badami, Chief Executive Officer & Managing Director, M/s ACC Limited, Thondebhavi Cement Works, Madhugiri Road, Thondebhavi, Gowribidanur (T), Chikkaballapur Dist-561 213, Karnataka.

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(A5-A13) (1)Mr. Bernard Fontana, (2) Mr. Shailesh Haribhakti, (3) Mr. Aidan Lynam, (4) Mr. Sushil Kumar Roonga, (5) Mr. Ashwin Dani, (6) Mr. Farrokh K. Kavarana, (7) Mr. Vijay Kumar Sharma, (8) Mr. Arunkumar Ramanlal Gandhi, (9) Mrs. Falguni Nayar.”

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A few of the accused are noticed with addresses and few

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of the accused are arrayed without any address. There cannot be a better illustration of recklessness of the

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complaint registered by the Department and cognizance taken by the learned Magistrate.

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There is no offence, even after considering the complaint averments, against the petitioners who are not involved in any of the acts that are alleged. Therefore, even on the perusal of the complaint, there cannot be any offence made out against the petitioners. Therefore, in my considered view, reserving liberty to the department to initiate proceedings afresh against the accused and drive them to face the rigmarole of the proceedings, for the reasons assigned hereinabove, would result in miscarriage of justice and undoubtedly become an abuse of the process of the law. Therefore, the submission of the learned State Public Prosecutor does not merit acceptance and is accordingly repelled.

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