Allowed

Shri Kotresh v. the State of Karnataka

Karnataka HC3 Sept 2022CRL.P/102427/2022

Case brief

AI extract

What is this about?

In a criminal petition under Section 482 Cr.P.C., the High Court of Karnataka allowed the challenge against criminal proceedings initiated for alleged sale of sub-standard fertilizers. The court held that since the company was not arraigned as an accused, the prosecution against the employee could not proceed under Section 10 of the Essential Commodities Act.

What did the court decide?

Criminal proceedings in C.C.No.315/2021 insofar as the petitioner is concerned were quashed.

Shri Kotresh Vs the State of Karnataka — Constitutional and Fundamental Rights | Karnataka HC (2022)

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CRL.P No. 102427 of 2022

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 3^RD DAY OF SEPTEMBER, 2022

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BEFORE

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THE HON'BLE MS. JUSTICE J.M.KHAZI CRIMINAL PETITION NO. 102427 OF 2022 (482-)

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BETWEEN:

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SHRI KOTRESH AGE. 45 YEARS, OCC. SERVICE MANAGER, RCF LTD., HUBBALLI, TQ. HUBBALLI-580009, DIST. DHARWAD.

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…ACCUSED NO.2/PETITIONER

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(BY SRI. N. L. BATAKURKI, ADVOCATE)

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AND:

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THE STATE OF KARNATAKA BY ASSISTANT DIRECTOR OF AGRICULTURE AND FERTILIZER INSPECTOR, KAGINELE-581110, TQ. BYADAGI, DIST. HAVERI, R/BY STATE PUBLIC PROSECUTOR, HIGH COURT BLDG, DHARWAD.

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…COMPLAINANT/RESPONDENT (BY SRI. GIRIJA S HIREMATH, HCGP)

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THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C., SEEKING TO ADMIT THE PETITION AND QUASH THE ORDER OF ISSUE OF PROCESS FOR THE OFFENCE PUNISHABLE UNDER CLAUSE 19 OF FERTILIZER (CONTROL) ORDER, 1985 AND SECTION 7 OF THE ESSENTIAL COMMODITIES ACT BY THE SENIOR CIVIL JUDGE AND JMFC, BYADAGI IN C.C. NO.315/2021

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CRL.P No. 102427 of 2022

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DATED 15.07.2021 AGAINST THE ACCUSED NO.2/PETITIONER HEREIN AT VIDE ANNEXURE-A AND CONSEQUENTLY QUASH THE COMPLAINT AT VIDE ANNEXURE-B AGAINST THE ACCUSED NO.2/PETITIONER HEREIN.

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THIS CRIMINAL PETITION COMING ON FOR ADMISSION, THIS DAY, COURT MADE THE FOLLOWING:

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ORDER

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In this petition filed under section 482 of Cr.P.C., the

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petitioner, who is arraigned as accused No.2 has challenged the initiation criminal prosecution in C.C.No.315/2021 on the file of the Senior Civil Judge and JMFC, Byadagi.

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Brief facts leading to filing of the present petition are that the Assistant Agricultural Officer at Kaginele (hereinafter referred to as “complainant”), filed a private complaint under section 200 of Cr.P.C. against the petitioner/accused No.2 and another alleging that petitioner being manufacturer and accused No.1 being a retailer are indulged in selling sub-standard fertilizers. That on 10.11.2016 at 11.30 a.m., the complainant visited the shop of accused No.1 and collected three samples of

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CRL.P No. 102427 of 2022

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‘fertilizer 15:15:15’ and sent one sample to laboratory i.e.

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to the Deputy Director (Agriculture, Fertilizer Control) Laboratory, Dharwad for testing. On 15.12.2016 he received a report to the effect that the fertilizer sample sent for test is of sub-standard quality. At the request of accused No.1, the second sample was sent to Fertilizer Laboratory Gwalior through Commissioner of Agriculture Bengaluru and the said report also states that the sample is of sub-standard quality and therefore, based on the private complaint filed by the complainant, cognizance was taken and case is registered in C.C.No.315/2021 and summons came to be issued to the petitioner. The same is being challenged in this petition.

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During the course of the arguments, the learned Counsel for petitioner submits that as required under Section 10 of the Essential Commodities Act, the company is not at all arraigned as accused and in its absence, the petitioner is not liable to answer the charges.

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CRL.P No. 102427 of 2022

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On the other hand, the learned HCGP would

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submit that the action of the complainant in filing the complaint and registering the case is justified and it is a matter of trial and it is for the petitioner to prove his innocence during trial.

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Heard the arguments and perused the records.

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Admittedly, the charges leveled against the petitioner are that he has violated section 3 and Clause 19 of the Fertilizer (Control) Order, 1985 read with Section 7 of the Essential Commodities Act, 1955.

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Section 10 of the Essential Commodities Act,

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1955, deals with the offence by Companies and it reads as

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follows:

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10. Offences by companies.— (1) If the person contravening an order made under section 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the

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CRL.P No. 102427 of 2022

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contravention 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 if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

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(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

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Perusal of Section 10 of the Essential Commodities Act, 1955 makes it evident that wherever contravention is by a Company, then every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall

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CRL.P No. 102427 of 2022

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be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. Therefore, petitioner is being made liable on account of he being an employee of Company in question and therefore, until and unless the company is arraigned as accused, the petitioner cannot be held responsible.

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In fact, the Hon’ble Apex Court in Aneeta

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Hada Vs. Godfather Travels and Tours Private

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Limited¹ while considering the offence committed by the company has held as follows:

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“53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant.

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1 (2012) 5 SCC 661

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CRL.P No. 102427 of 2022

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… … …

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56. We have referred to the aforesaid

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passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the company. The learned counsel for the respondents have vehemently urged that the use of the term “as well as” in the section is of immense significance and, in its tentacle, it brings in the company as well as the Director and/or other officers who are responsible for the acts of the company and, therefore, a prosecution against the Directors or other officers is tenable even if the company is not arraigned as an accused. The words “as well as” have to be understood in the context.

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59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is

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CRL.P No. 102427 of 2022

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imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is a threeJudge Bench decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove.”

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In the light of the above judgment and having

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regard to the fact that the company is not arraigned as accused, I am of the considered opinion that the complaint is not tenable as against the petitioner and therefore, the proceedings are liable to be quashed insofar as the petitioner is concerned. Accordingly, I proceed to pass the following:

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CRL.P No. 102427 of 2022

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ORDER

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The Criminal petition is allowed.

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The impugned proceedings in C.C.No.315/ 2021 pending on the file of Senior Civil Judge and JMFC, Byadagi, insofar as petitioner is concerned, is hereby quashed.

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In view of disposal of the matter, pending interlocutory applications, if any, do not survive for consideration and are disposed of accordingly.

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Sd/JUDGE

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YAN

Shri Kotresh v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

Shri Kotresh v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

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