Quashed

The Divisional Chief Executive v. State of Kerala

Kerala HC16 Oct 2019Crl.MC/6857/2019

Case brief

AI extract

What is this about?

The High Court of Kerala allowed a petition to quash criminal proceedings against a company officer. The court held that the complaint was not maintainable as it named an individual by official capacity rather than by name, failed to aver responsibility for the company's conduct, and did not implead the company as an accused.

What did the court decide?

Proceedings against the petitioner in C.C. No.3498/2016 are quashed.

The Divisional Chief Executive Vs State of Kerala — Service and Employment | Kerala HC (2019)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI

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WEDNESDAY, THE 16TH DAY OF OCTOBER 2019 / 24TH ASWINA, 1941

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Crl.MC.No.6857 OF 2019(F)

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AGAINST THE ORDER/JUDGMENT IN CC 3498/2016 OF JUDICIAL MAGISTRATE OF FIRST CLASS -III,THRISSUR

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PETITIONER/2ND ACCUSED:

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THE DIVISIONAL CHIEF EXECUTIVE TOBACO DIVISION, M/S. ITC LTD, J.L. NEHRU ROAD, KOLKATHA-700071

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BY ADVS. SRI.V.B.UNNIRAJ SMT.R.S.GEETHA SMT.K.SEEMA SRI.ENOCH DAVID SIMON JOEL SMT.P.ANITHA

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RESPONDENTS/STATE & COMPLAINANT:

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1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM

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2 HEALTH INSPECTOR, PRIMARY HEALTH CENTRE, PUTHUR, THRISSUR-680014

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SRI CS HRITHWIK -SR PP, SRI BECHU KURIAN THOMAS- SR ADV

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THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 16.10.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Crl.MC.No.6857 OF 2019

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ORDER

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This petition is filed under Section 482 of the Code of Criminal Procedure, 1973 for quashing the proceedings against the petitioner in the case C.C No.3498/2016 on the file of the Court of the Judicial First Class Magistrate-III, Thrissur.

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The petitioner is the second accused in the case. The allegation against the petitioner is that he has committed an offence punishable under Section 20 of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution Act, 2003(hereinafter referred to as 'the Act').

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The case against the petitioner is based on a complaint filed before the Magistrate's Court by the Health Inspector, Primary Health Centre, Puthur. As per the complaint filed by him, when he conducted inspection of shop of the first accused on 13.06.2016, tobacco products manufactured by the petitioner were found stored there. It is alleged that the tobacco products had no proper statutory warning labels on them.

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Crl.MC.No.6857 OF 2019

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The proceedings against the petitioner are sought to be quashed on the ground that the the petitioner is shown as an accused in the case not by his name but by his official capacity as the Divisional Chief Executive of a company. It is also stated that a complaint filed, without impleading the company which produced or manufactured the tobacco products as an accused in the case, is not maintainable.

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Heard learned senior counsel who appeared for the petitioner and also the learned Public Prosecutor.

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The offence allegedly committed by the accused in the case is under Section 20 of the Act. Section 20(1) of the Act states that any person produces or manufactures cigarettes or tobacco products, which do not contain, either on the package or on their label, the specified warning and the nicotine and tat contents, shall be liable for punishment. Section 20(2) of the Act states that any person who sells or distributes cigarettes or tobacco products, which do not contain, either on the package or on their label, the specified warning and the nicotine and tar contents, shall be liable for punishment.

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Crl.MC.No.6857 OF 2019

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Section 26(1) of the Act provides that where an offence under the Act has been committed by a company, every person, who, at 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, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Section 26(2) of the Act states that, notwithstanding anything contained in Sub-section (1), where any offence under the 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 be proceeded against and punished accordingly.

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The complaint against the second accused is not maintainable for more that one reason. In the first place, the petitioner, who is the second accused in the case, is described in the complaint as “the Divisional Chief Executive, Tobacco Division, ITC Ltd.” The name of the second accused is

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Crl.MC.No.6857 OF 2019

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nowhere mentioned in the complaint. The offence was detected on 13.06.2016. The complaint is dated 06.09.2016. The person holding the post of the divisional chief executive of the company at the time of commission of the alleged offence may not be the person holding that post or office at the time of filing the complaint or at the time of the trial of the case. Only that particular individual, who has allegedly committed the offence, can be prosecuted. The proceedings against the second accused are liable to be quashed on this ground alone.

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In the second place, the complaint lacks necessary averments to make the second accused liable for an offence committed by the company of which he/she is the Divisional Chief Executive. As per Section 26(1) of the Act, in order to make any person liable for an offence committed by a company, that person should have been, at the time the offence was committed, in charge of, and was responsible to, the company for the conduct of the business of the company. In the instant case, there is no averment in the complaint that the second accused was in charge of, and was responsible to, the company for the conduct of the business of the company,

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Crl.MC.No.6857 OF 2019

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at the time of commission of the offence by the company. There is also no averment in the complaint that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of the second accused.

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In the third place, the company, which has allegedly committed the offences and of which the second accused is the Divisional Chief Executive, is not arrayed as an accused in the complaint. In Aneeta Hada v. Godfather Travels and Tours Private Limited : (2012) 5 SCC 661 , the Apex Court has held that unless the company is made an accused, there cannot be a valid prosecution against an officer of it who has got only vicarious liability. Arraigning of the company as an accused is imperative to make the officers of the company liable. True, this decision was rendered by the Apex Court in the context of the provision contained in Section 141 of the Negotiable Instruments Act, 1881. But, the provisions contained in Section 26 of the Act are almost in pari materia with the provisions contained in Section 141 of the Negotiable Instrument Act. Therefore, the dictum laid down in the aforesaid decision squarely applies to the facts of the present

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Crl.MC.No.6857 OF 2019

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case. On this ground also, the proceedings against the petitioner are liable to be quashed.

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Consequently, the petition is allowed. The

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proceedings as against the petitioner in the case C.C No.3498/2016 on the file of the Court of the Judicial First Class

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Magistrate-III, Thrissur are hereby quashed.

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Sd/-

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R. NARAYANA PISHARADI

JUDGE

rpk

Crl.MC.No.6857 OF 2019

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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ANNEXURE-A1 TRUE COPY OF THE MAHAZAR DATED 13.06.216 PREPARED BY THE 2ND RESPONDENT FROM THE SHOP OF THE 1ST ACCUSED IN ANNEXURE A1 COMPLAINT

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ANNEXURE-A2 TRUE COPY OF THE COMPLAINT IN CC NO.3498/2016 INSTITUTED BY THE 2ND RESPONDENT BEFORE THE JUDICIAL FIRST CLASS MAGISTRATE'S COURT-III,THRISSUR1

The Divisional Chief Executive v. State of Kerala

Case brief

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The Divisional Chief Executive v. State of Kerala

Case brief

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