Full Judgment Text
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PETITIONER:
GIRDHARILAL GUPTA & ANR.
Vs.
RESPONDENT:
D. N. MEHTA, COLLECTOR OF CUSTOMS & ANR.
DATE OF JUDGMENT:
18/08/1970
BENCH:
SIKRI, S.M.
BENCH:
SIKRI, S.M.
DUA, I.D.
CITATION:
1971 AIR 28 1971 SCR (3) 748
1970 SCC (2) 530
ACT:
Foreign Exchange Regulation Act 7 of 1947-Indian currency
sought to be sent out of India in contravention of s. 8(2)
of Act-Officer making search of accused’s premises does not
necessarily need to be corroborated-Account slips found in
search and tallying with account books are good evidence-
Firm held guilty of contravention of Act-Partner incharge of
business of firm is guilty under s. 23C(1) of Act unless he
can prove that the contravention of the Act by the firm took
place without his knowledge and he had exercised diligence
to prevent the contravention-Review, justification for-
Reduction of sentence in case of vicarious liability,
considerations for.
HEADNOTE:
An air parcel declared by the consigner to contain
rasogollas and other edibles was found to contain Rs. 51,000
worth of Indian currency notes. The parcel was booked to be
sent from Calcutta to Hong Kong. The consignor’s name as
given. on the parcel was found to be false and on
investigation the suspicion of the customs authorities fell
on the appellants two of whom were partners in a firm, the
third being an employee of the firm. The office of the firm
was searched. Certain incriminating documents including
account slips and cash books of the firm were seized. In a
complaint filed by the Assistant Collector of Customs
against the appellants and their firm it was alleged that
sending out money in Indian currency was prohibited by s.
8(2) of the Foreign Exchange Regulation 7 of 1947 and any
attempt to do the same was punishable under s. 23B of the
Act. The trial court acquitted the appellants but the High
Court in appeal convicted them under s. 23(1A). By special
leave appeals were filed in this Court. Judgment was
delivered on August 18, 1970. Thereafter review petition
No. 37 of 1970, was filed. A further judgment in respect of
the contention raised therein as to the interpretation of s.
23C(i) was delivered on February 18, 1971.
HELD : (i) The proposition that if an investigating officer
conducts a search his evidence cannot be relied on unless it
is corroborated is a novel one with no principle or
authority to support it. It all depends on the facts of
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each case. In the present case there was the corroborative
evidence of P.W. 8 who signed the search document and also
the entries themselves in the account books and their
tallying with the slips. [755 G]
(ii) There was no substance in the argument that the account
slips could not be taken into consideration because they
were not evidence. These were part of the things discovered
during search and if the entries therein were carried into
the account books there was no reason why they could not be
looked at [755 H]
(iii) In the context of s. 23C(1) a person ’in-charge’
must mean that the person should be in over all control of
the day to day business of the company or firm. The
inference follows from the wording of s. 23C(2). It
mentions director who may be a. party to the policy being
followed by
749
a company and yet not be in charge of the business of the
company. Further it mentions manager who usually is in
charge of the business not in over all charge. Similarly
the other officers may be in charge of only some part of the
business. [758 G-759 A]
State v. S. P. Bhadani, A.I.R. 1959 Pat. 9, R. K. Khandelwal
v. State [1964] 62 A.L.J. 625 and Public Prosecutor v. R. K.
Karuppian, A.I.R. 1958 Mad. 183, referred to.
In the present case the appellant G had himself stated that
he alone looked after the affairs of the firm. This meant
that he was in-charge within the meaning of the section
though there may be a manager working under him [760 C-D]
When a partner in charge of a business proceeds abroad it
does not mean that he ceased to be in charge, unless there
is evidence that he gave up charge in favour of another
person. Therefore it must be held that the appellant was in
charge of the business of the firm within the meaning of
s. 23C(1). [760 E-F].
In view of the fact that G was abroad at the time of
contravention it was possible that the contravention took
place without his knowledge or lack of diligence. He was
being vicariously punished. In such a case a. sentence of
imprisonment may not be imposed but a sentence of fine only
would meet the ends of justice. [760 G]
(iv) As regards appellant P the prosecution had been unable
to prove by any reliable evidence that he took any active
part in the conduct of the business of the firm. He must
therefore be given the benefit of doubt and acquitted. [757
A]
(v) The case was fit for review because at the time of
arguments the attention of the court was not drawn
specifically to sub-s. 23C(2) and the light it throws on the
interpretation of sub-s.(1). [761 A]
JUDGMENT:
CRIMINAL, APPELLATE JURISDICTION: Criminal Appeal Nos. 211 &
212 of 1969 and Review Petition No. 37 of 1970.
Appeals by Special leave from the judgment of the Calcutta 7
High Court dated August 18, 1969 in Criminal Appeal No. 183
of 1961.
C. K. Daphtary and S. K. Dholakia, for the petitioner.
V. A. Seyid Muhammad and S. P. Nayar for the respondents.
The Judgment of the Court on August 18, 1970 was delivered
by
Sikri, J. These appeals, by special leave, are directed
against the judgment of the High Court at Calcutta whereby
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the High Court (A. K. Das and K. K. Mitra, JJ.) set aside
the order of acuittal and convicted the appellants before us
under s. 23(1A) of the Foreign Exchange Regulation Act (VII
of 1947)-hereinafter refered to as the Act. The appellant
Girdharilal Gupta, and the appellant Puranmall Jain, were
sentenced to rigorous imprisonment for six months each and
to pay
750
a fine of Rs. 2,000/- each, in default, to rigorous
imprisonment’ for a further period of three months each.
The appellant, Bhagwandeo Tewari was sentenced to rigorous
imprisonment for three months and to pay a fine of Rs.
1,000/-, in default, to rigorous imprisonment for two
months. The firm was sentenced to pay a fine of Rs.
2,000/-. It does not appear that any special leave was
obtained on behalf of the firm.
In order to appreciate the contentions made before us it is
ncessary to state the relevant facts. On October 25, 1958,
Customs Preventive Officer B. Roy examined a parcel (wooden
case) which purported to contain Rasogolla, Achar, papar and
dried vegetable, booked for Hongkong, to be taken by the
Swiss Air of which the Indian Airlines Corporation was the
,cargo handling agent. The articles had been declared to be
worth Rs. 20/- but the freight which had been paid came to
Rs. 127.73 nP. This excited the suspicion of the Customs
Preventive Officer, B. Roy, and on opening the parcel and
breaking down the case, five hundred ten currency notes of
the denomination of hundred rupees each, valuing Rs.
51,0001-, were found. The name of the consignor was
Ramghawan Singh at Karnani Mansion, Park Street, Calcutta,
but on enquiry no trace could be found of this Ramghawan
Singh at Karnani Mansion. In the course of further
investigation suspicion fell ,on M/s. Agarwala Trading
Corporation of which the appellants Girdharilal Gupta and
Fumanmall Jain were the partners and the appellant
Bhagwandeo Tewri was an employee. On January 22, 1959, the
office of the firm at 191, Mahatma Gandhi Road and the
alleged residence of the partners at 11-B Jatindra Mohan
Avenue was searched. The appellant, Bhagwandeo Tewari, on
being identified by the Traffic Assistant of the Indian
Airlines Corporation, Ambar Nath Sen, P.W. 4, and one loader
of Thai Airways, S. K. Battu, P.W. 26, was arrested.
Certain incriminating documents, including account slips and
cash books of the firm were seized.
On June 3, 1959, a complaint was lodged at the instance of
the Assistant Collector of Customs, Calcutta. After stating
the above facts it was alleged, in the complaint that
sending out money in Indian currency was prohibited under s.
8(2) of the Act and any attempt to do the same was
punishable under s. 23B of the, Act.
At the trial a number of witnesses were examined. B. Roy,
Customs Preventive Officer, gave evidence regarding the dis-
covery of Rs. 51,0001- in Indian currency notes, apart from
Rasogollas, pickles, etc. on October 25, 1958. No cross-
examination was directed to show that this did not happen on
October 25, 1958.
751
S. A. D. Moira, Traffic Assistant of the Indian Airlines
Corporation, P.W. 2, who checks freight and does other
transshipment work in course of his duties at Dum Dum
airport, deposed that he received the relevant documents on
October 25, 1958, from Calcutta office. H.-, said that the
documents were in the handwriting of N. Sen of the Freight
Section of the Calcutta Office. Armed with the letter of
authority, he took the parcel to the Customs Officer and
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P.W. 1, B. Roy, asked him to open the parcel and currency
notes of the value of Rs. 51,000/-, along, with other things
were discovered.
R. R. Mukherjee, Traffic Officer of the Indian Airlines
Corporation, P.W. 3, is another witness to the recovery of
the currency notes. P.W. 4, Ambare Nath Sen, was the
Traffic Assistant in the Indian Airlines Corporation, who
had typed out the consignment note in respect of this parcel
after seeing the shipping bill (Ext. 1). He identified the
appellant, Bhagwandeo Tewari, as the, person who had handed
over the shipping bill to him and the letter of authority,
Ext. 11 He said that he-.calculated the freight and received
the freight, from this appellant. He further said that this
appellant signed the consignment notes in Hindi in his
presence and he remembered having seen this appellant
writing a postcard on the adjoining table while he was
preparing the consignment notes. He further stated that his
immediate superior officer, P. K. Chatterjee, was also
present at the time this consignment was being booked.
Apparently this is not the first time that hiss appellant
had gone to the Indian Airlines Corporation because P.W. 4
says that seven days ahead of October 24, 1958, this
appellant had called on him with another shipment although
that consignment was booked by P. K. Chatterji.
Some days after October 25, 1958, this witness P.W. 4was
taken by the Customs Officer to some place to find the man
who is alleged to have booked the Parcel. Two or three
months thereafter he was again taken by the Customs Officers
to another place in Burrabazar area, which was the place of
Agarwal Trading Corporation, and he said that he Pointed out
the appellant, Bhagwandeo Tiwari, as the one who had taken
the Parcel to him on October 24, 1958. He was cross-
examined in order to show that he could not remember
customers. He admitted that it was not always possible for
him to remember all the men who came in contact with him in
the course of his work, but ’he said that he had told C. R.
Basu who wag investigating the case that the person who
brought the parcel was an oldish man and lean one, and had
also described his nose. He further admitted that at the
place he identified appellant Bhagwandeo Tiwari, he was the
only oldish man there. He
4-Ll 100SupCI/71
752
said that he did not think that he committed a mistake
unless the man he identified had a double in the shape- of a
twin brother and the like. He further admitted that he had
been trying to recollect the appearance of the man to
reconstruct in his mind the outline of his appearance as far
as he could.
The evidence of P.W. 4 impresses us and there is no reason
why we should not place reliance on his evidence.
P. K. Chatterjee, P.W. 5, speaks of the earlier visit of
the appellant Bhagwandeo Tiwari as the person who called on
him with the shipping bill on October 17, 1958.
C. R. Basu, P.W. 6, Officer of the Customs who
investigated the case, said that after making enquiries he
applied for the issue of search warrant to search the
premises No. 191, Mahatama Gandhi Road. He also applied for
a search warrant to search the premises of the partners of
the firm at 11-B, Jatindra Mohan Avenue. He did not himself
search 11-B, Jatindra Mohan Avenue, but went to execute the
search warrant at 191, Mahatma Gandhi Road, where on the
identification of P.W.4 he arrested the appellant Bhagwandeo
Tiwari. He then conducted the search of the premises in the
presence of the witnesses and took into possession one
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Rokar, one khata bahi, one nakal bahi, the attendance
register and three account slips which he marked 8, 9 and 10
(Ext. 9 and 9/1 and 9/2 respectively). We may reproduce his
evidence regarding the discovery of these account slips
because a great deal of argument has been addressed to us on
the recovery of these slips. He stated
"The three slips, about which I have spoken
just now, are in the same condition to-day as
I found them on the day when they were seized.
The witnesses to the search I conducted are
Radhesyam Gupta and Lalit Kumar Chandu Lal
Parekh. Here is the search list over my
signature and the signature of the witnesses.
(Ext. 10)."
In his cross-examined he stated
"You are right that Exhibits 9, 9/1 and 9/2
are included in Serial No. 38 of the search
list. Ext. 10".
The search list does not mention the slips separately but
only mentions loose sheets in ’a sealed parcel. It has been
urged that there is no evidence to show when the seal was
opened. It is suggested that these slips have been
fabricated and planted. No such question was put to the
witnesses and we are
753
unable ’to presume that the investigating officer would go
about fabricating account slips in order to rope in the
appellants.
The prosecution produced two witnesses who had signed the
recovery list. The evidence of Radheshyam Gupta, P.W. 7,
must be discarded because although he was examined before
the Chief Presidency Magistrate he was not made available
for cross-examination. The learned counsel, Mr.
Bhattacharya, suggested that if this witness had been
produced for cross-examination he would have deposed against
the prosecution. We are unable to draw any such
presumption. The other witness was Lalit C. L. Parekh, P.W.
8. He had signed the search list but on cross-examination he
stated that "Basu had taken slips of paper from the ’Agal
Bagal’ of the guddy, by which I mean from underneath the
Takia on the bed". He further said that "bits of paper Basu
found from a wooden case as well." He further stated as
follows
"You are right that Basu placed all these bits
of papers at one and the same place. How many
pieces ? I cannot say. I did not count. By
guess I can say that the number of bits of
paper would run to 50 or 60. 1 signed all the
pieces of paper which were found so. "
The learned counsel fastens on the last line and says that
these slips do not bear the signature of Lalit C. L. Parekh,
and therefore it is clear that these have been fabricated
later. We are unable to sustain this contention. The
witness had signed a number of documents including the
search list and he pay well have thought that he had signed
every piece of paper which was seized. No such question was
put to the investigating officer.
P.W. 11, N. R. Paul, who was the assistant attached to the
Appraising Department of the Calcutta Customs deposed re-
garding the preparation of the shipping bill. It appears
that the shipping bill bore the words "Thai Airways Co." and
these words were scored out and "Swiss Air" written in hand.
He could not say who corrected the entry but nothing turns
on this because it may be that the original idea was to send
the parcel by Thai Airways but later on for some reasons it
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was not possible to send that parcel through this airways.
The prosecution led evidence to show that as a matter of
fact appellant Bhagwandeo Tiwari had approached some body in
Thai Airways but we need not dwell on, this part of the
case.
754
The prosecution also produced Shridhar Chatterjee, hand-
writing expert, who examined the signature reading as "Ram
Chandra" writing in Hindi and in pencil in the two way
bills, Ext. 3 and 4, and the specimen writing, He was of the
opinion that the writer of the specimen writing was the
writer of the signature "Ram Chandra" appearing in the
airway bill. We may mention that Bhagwandeo Tiwari is
alleged to have signed as "Ram Chandra". The expert also
gave the opinion that. the type-written papers, Exts. 11 and
IX had been typed on the same machine.
Exhibit 9/2, ’one of the seized account slips, is a very im-
portant document. The official translation is printed in
the records and reads:
"Translation of EXT.9/2 dated
24-10-58.............. 2/8/-4 cases-Godown
A/C 1 - ................ /8/- 3 "opened below and
goods brought.
In Cash (Paper Torn) cases bound
(Pettis)(?)................/4/- Case I’ (Illegible)
/2/- Illegible
(Paper tom) Cases (Pettis)(Illegi
ble) 2 R.B. -/151- for coming and
going to I.A.C.
Rs.223/8/. 4/51-
127/73-HongkongShanghai (torn &
illegible)"
The High Court had to translate it again and the last line
was translated into "Hongkong Lagaya" in, place of "Hongkong
Shanghai".
In the account books of M/s. Agarwala Trading Corporation
(Exts. 21 and 21/1) under the entries dated October 24,
1958, on which date the booking is alleged by the
prosecution to have been done, on entry appears as follows:
"Rs. 415/- Through Bhagwan Deo
/8/- Colli (Janka)
115/-Rickshaw fare
2/ 14/-Cart Charge
Rs. 1/8/- Through Ghanshyam & Pandey
/4/- Bus fair 1/4/- Bus fair
1/4-Bus Tarm"
It will be noticed that the same items appear in Ext. 9(2).
The breakup in Ex. 9(2) is slightly different but in the
account book
755
the four annas and two annas entries have been added to Rs.
2/8/to make Rs. 2/14/- as cart charge.
Again the entries in Ext. 9/1 are as follows
"/1/- But hire for going home.
1/4/- Caine from home to Thai (?) Taxi
/12/- Riksha-hire from Thai
/1/- Coolie
-/4/- Thai Office Colie
______________________
2/6/-
Rs. 147/10/- In Cash"
The corresponding entry in the account books are as follows
"Rs. 2/6/- (Bus fare /1/Taxi fare
Rs. 1/4/- Rickshaw
Rs. /12/-
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Cooli 151-"
It is true that the entry of Rs. 127/73 which exists in Ext.
9/2 has not been carried over into the account books but
perhaps that would have been even too much for an accountant
to do. He never dreamt that these entries, of Rs. 4/5/- and
Rs. 2/6/- in the account books would be seized upon by the
prosecution to complete the case against the appellants.
Be that as it may, the entries in the account books demolish
the case of defence that these slips were fabricated and
that they had nothing to do with the firm. Ex. 9/2, on the
other hand, clearly shows that somebody had gone to the
I.A.C. office and paid /15/-for going and coming to the
I.A.C. office and paid the incidental charges.
Mr. Bhattacharya, who followed Mr. Chagla for the
appellants, contends that a serious question of law is
involved, the question being that if an investigating
officer conducts a search his evidence cannot be relied on
unless it is corroborated. It is a novel proposition and he
has not been able to cite any authority or principle in
support of it. It all depends on the facts in each, case.
At any rate here we have the corroborative evidence of P.W.
8, who signed the search document and also the entries
themselves in the account books and their tallying with the
slips.
It was urged on behalf of the defence counsel that these
slips could not be taken into consideration at all because
they are not evidence. We are unable to appreciate why they
are not evidence. These are part of the things discovered
during search and
756
if the entries therein are carried into the account books
there is no reason why these things could not be looked at.
The learned counsel has taken us through the judgments of
the Chief Presidency Magistrate and the High Court. We are
in agreement with the conclusions arrived at by the High
Court. We have ourselves gone into the evidence as the High
Court had reversed the order of acquittal and in one or two
places made minor mistakes.
Mr. Chagla, while arguing on behalf of the partners, said
that there was evidence that one, partner was not in
Calcutta on the 24th or 25th October, 1958,as he was in
Japan. But even if we take this fact into consideration,
which fact was not brought to the notice of the Chief
Presidency Magistrate or the High Court, it does not help
him at all. Entries were made in the account books and it
was the firm’s money which was spent and he being an active
partner is clearly liable under s. 23C(1) of the Act which
reads :
"23C(1) If the person committing a
contravention 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 contravention and
shall be liable to be proceeded against and
punished accordingly;
Provided that nothing contained in this sub-
section shall render any such person liable to
punishment if he proves that the
contravention took place without his knowledge
or that he exercised all due diligence to pre-
vent such contravention."
This sub-section deems the appellant Girdhari Lal Gupta
guilty. The question is : Has he proved that the
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contravention took place without his knowledge and he
exercised due diligence to prevent such contravention ? What
he said in his statement under s. 342, Cr-P.C., was that he
alone looks after the affairs of the firm. There is also no
evidence to show that the contravention took place without
his knowledge or that he exercised due diligence to prevent
such contravention. The entries were there in his account
books and the only thing that, he had to say about these
entries in his account books is that they pertain to the
routine work of the firm. Under the circumstances we are
unable to exonerate him of the charge.
As far as the other partner, Puramnall Jain, is concerned’
he stated that he does not look after the affairs of the
firm and further
757
that he stays all along at Sriganganagar in Rajasthan and
does not stay in Calcutta. The prosecution has not led any
reliable evidence to prove that he took any active part in
the conduct of the business of the firm. In these
circumstances we are inclined to give him the benefit of
doubt and acquit him.
In the result the appeal of Puranmall Jain is allowed and he
is acquitted of the charge. Ms bail bond shall stand
cancelled. The appeals of Girdhari Lal and Bhagwandeo
Tewari are dismissed.
[After the above judgment was delivered Review Petition No.
37 of 1970 was filed. The judgment of the Court thereon was
delivered on February 18, 1971 by]
Sikri, C.J. We disposed of Criminal Appeals Nos. 211 and 212
of 1959 by our judgment dated August 18, 1970, whereby the
appeals of Girdharilal Gupta, and Bhagwandeo Tewari against.
their convictions were dismissed. Girdharilal Gupta put in
this review petition stating that the counsel had omitted to
bring to our notice the provisions of s. 23C(2) of the
Foreign Exchange Regulation Act, 1947-hereinafter referred
to as the Act-which has a vital bearing on the case. The
judgment in Criminal Appeal No. 211 of 1959 has, therefore,
been re-opened. We may mention that Bhagwandeo Tiwari has
not filed a review petition against his conviction, upheld
by this Court.
Mr. Daphtary contends that on the facts, as found by us, the
appellant, Girdhari Lal Gupta, does not come within the
purview of s. 23C(1) or s. 23C(2) of the Act. Sections
23C(1) and 23C(2) read as follows
"23C. (1) If the person committing a
contravention 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 contravention and
shall be liable to be proceeded against and
punished accordingly :
Provided that nothing contained in this
subsection shall render any such person liable
to punishment if he proves that the
contravention took place, without his
knowledge or that he exercised
all due
diligence to prevent such contravention.
23C. (2) Notwithstanding anything contained in
sub-section (1), where a contravention under
this Act has been committed by a company and
it is proved that the contravention has taken
place with the consent or connivance of, or is
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attributable to any neglect on the
758
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.
Explanation.-For the purposes of this
section,-
(a) " company" means any body corporate and
includes a firm or other association of
individuals; and
(b) "director", in relation to a firm, means
a partner in the firm.
Mr. Daphtary contends that there is no evidence to show that
the appellant was in charge of the conduct of the business
of the firm at the relevant time and therefore, s. 23C(1)
does not apply. He further says that as the appellant was
abroad, the contravention took place without his knowledge.
We may mention, however, that the defence that he was abroad
at the relevant time was not taken in the courts below. At
the time of the last hearing learned counsel produced the
passport of the appellant before us from which it appears
that he was abroad at that time and came back a few days
after the alleged contravention.
Mr. Daphtary further contends that s. 23C(2.) also does not
apply because there is no evidence that the contravention
took place with the consent or connivance of, or was
attributable to any neglect on the part of, the appellant.
He referred to us a number of authorities of the High Courts
in India which have interpreted similar provisions and we
shall refer to them later.
It seems to us quite clear that s. 23C(1) is a highly penal
section as it makes a person who was in-charge and
responsible to the company for the conduct of its business
vicariously liable, for an offence committed by the company.
Therefore, in accordance with well-settled principles this
section should be construed strictly.
What then does the expression "a person in-charge and
responsible for the conduct of the affairs of a company
mean’ ? It will be noticed that the word ’company" includes
a firm or other association and the same test must apply to
a director in-charge and a partner of a firm in-charge of a
business. It seems to us that in the context a person ’in-
charge’ must mean that the person should be in over all
control of the day to day business of the company or firm.
This inference follows from the wording of s. 23C(2). It
mentions director, who may be a party to the policy being
followed by a company and yet not be in-charge of the
business of the company. Further it mentions manager, who
75 9
usually is in charge of the business but not in over-all-
charge. Similarly the other officers may be in charge of
only some part of business.
In State v. S. P. Bhadani(1), Kanhaiya Singh, J., in
construing a similar provision of the Employees Provident
Fund Act (1952). Section 14A-held that the first sub-
section would be confined only to officers in the immediate
charge of the management of the company. Later he observed
that "it is, therefore, manifest that all the officers of
the company not in direct charge of the management of the
business are immune from the liability for the offence,
unless they have contributed to its commission by consent,
connivance or neglect."
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In R. K. Khandelwal v. State (2 D. S. Mathur, J., in
construing s. 27 of the Drugs Act, 1940, a provision similar
to the one we are concerned with, observed :
"There can in directors who merely lay down
the policy and are not concerned with the day
to day working of the Company. Consequently,
the mere fact that the accused person is a
partner or director of the Company, shall not
make him criminally liable for the offences
committed by the Company unless the other
ingredients are established which make him
criminally liable."
In The Public Prosecutor v. R. Karuppian(3), Somasundaram
J., while dealing with a case arising under the Prevention
of Food Adulteration Act, 1954 (s. 17(1)) observed that the
Secretary of the Co-operative Milk Society, on the facts of
the case, could not be held to be a person in charge of the
Society. On the facts of that case the business of selling
milk was done by the clerk of the Society and the Secretary
was only an honorary Secretary and was not coming to. the
Society daily.
The only evidence led by the prosecution on this part of the
case was of one Sohan Lal Gupta who is a broker. He stated
in examination-in-chief :
"Who exactly the proprietors of the said firm
are, I cannot say. But I can say this much
that whenever I had been there I was referred
to Girdharilal Gupta (accused No. 2) and
Puranmal Jain (accused No. 3) as the Maliks of
the firm. I see accused No. 2 Girdharilal
Gupta in court (identified him). I know that
Bhagwandeo Tewari (accused No. 4) is the
Cashier of that firm. I see him here in court
(identifies accused No. 4).
(1) A.I.R. [1959] Pat.9. (2) [1964] 62 A.L.J. 625.
(3) A.I.R. [1958] Mad. 183.
760
.lm15
I know of another employee of the firm the manager, Jagdish
Prasad. I know another employee of the firm the accountant,
Shyamlal."
The appellant in ’his statement under S. 342, Cr.P.C. stated
thus
"You ask me, Sir, if I have to say anything about the
evidence led in this case to the effect that I happen, to be
a partner of accused No. 1 firm. To that, Sir, my answer is
that I am. " The evidence to that end is correct. I shall
only add that I alone look after the affairs of _this firm."
Mr. Daphtary says that on this evidence it cannot be held
that the appellant was in-charge of the conduct of the
business. We are unable to agree with him on this point.
The appellant has himself stated that he alone, looked after
the affairs of the firm. This means that the is in charge
of the business of the firm within the meaning of the
section though there may be a Manager working under him.
The question then arises whether the appellant was in charge
of the conduct of the business of the firm at the time the
contravention was committed. He was not physically present,
in Calcutta at the time of the commission of the offence and
the prosecution evidence shows that one Jagdish Prasad. was
the manager of the firm. It is true that the onus of
proving that the appellant was in charge of the conduct of
the business of the company at the time the contravention
took place lies on the Prosecution, but when a partner in
charge of a business proceeds abroad it does not mean that
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he ceases to be charge, unless there is evidence that he
gave up charge in favour of another person’ Therefore, we
must hold that the appellant was in charge of the business
of the firm within the meaning of sec. 23C(1).
But while imposing sentence a Court might take notice of the
fact that a person is being vicariously punished for an
offence and if he shows that it is possible that the
contravention of the Act took place without his knowledge or
neglect a sentence of imprisonment may not be imposed. In
this case he was abroad at the time of contravention and it
is possible that the contravention took place without his
knowledge or because of lack of diligence. It seems to us
that on the facts of this case a sentence of fine of Rs.
2,000/- will meet the ends of justice.
The learned counsel for the respondent State urges that this
is not a case fit for review because it is only a case of
mistaken judgment. But we are unable to agree with this
submission
761
because at the time of the arguments our attention was not
drawn., specifically to sub-s. 23C(2) and the light it
throws on the interpretation of sub-s. (1).
In the result the review petition is partly allowed and the
judgment of this Court in Criminal Appeal No. 211 of 1969
modified to the extent that the sentence of six months’
rigorous. imprisonment imposed on Girdharilal is set aside.
The sentence-, of fine of Rs. 2,000/- shall, however, stand.
G.C. Ordered accordingly.
762