Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS. 1734-1736 OF 2019
(arising out of SLP (Crl.) …… Diary No.23247/2017)
KARNATAKA STATE POLLUTION
CONTROL BOARD ...APPELLANT(S)
VERSUS
B. HEERA NAIK & ORS. ETC. ...RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN,J.
These appeals raise an important question as to
whether Commissioner of City Municipal Council and
Chief Officers of City Municipal Council can be
prosecuted under Section 48 of the Water (Prevention
and Control of Pollution) Act, 1974 (hereinafter
referred to as “Act, 1974”). By these appeals, the
Karnataka State Pollution Control Board has
challenged the judgment of High Court of Karnataka
Signature Not Verified
dated 16.02.2015 by which applications under Section
Digitally signed by
MEENAKSHI KOHLI
Date: 2019.11.26
18:07:42 IST
Reason:
482 Cr.P.C. filed by the respondents, who were
1
working as Municipal Commissioner and Chief Officers
of Municipal Council, were allowed and the proceeding
initiated for their prosecution by appellant under
the Act, 1974 has been quashed.
2. The High Court vide impugned judgment dated
16.02.2015 has allowed three separate applications
under Section 482 Cr.P.C. being Criminal Petition
Nos.2627 of 2012, 1537 of 2011 and 1010 of 2011. All
the three applications were filed on the basis of
similar facts. It is sufficient to refer to the
facts in Criminal Petition No.2627 of 2012 filed in
the High Court, for deciding these appeals.
3. The brief facts necessary to be noticed for
deciding these appeals are:-
3.1 The appellant Karnataka State Pollution
Control Board is a statutory body established
under Section 4 of the Act, 1974. The Board
is a body corporate having perpetuate
succession and common seal. The Act, 1974
provides for special procedure for taking
2
cognizance of the offence punishable under
the Act, 1974.
3.2 First respondent to the appeal is Shri B.
Heera Naik, who was working as the
Commissioner, City Municipal Council,
Krishnarajapuram, Bangalore. The second
respondent M.A. Baig and the third respondent
D.L. Narayan were also Ex-Commissioner of
City Municipal Council, Krishnarajapuram,
Bangalore.
3.3 The Karnataka State Pollution Control Board
filed a complaint being C.C. No.1101 of 2006
in the Court of Metropolitan Magistrate at
Bangalore praying for taking cognizance of
the offence punishable under Sections 43 and
44 of the Act, 1974 against the accused
persons and to punish them for the offences.
In the complaint, the City Municipal Council,
Krishnarajapuram, Bangalore was impleaded as
accused No.1 and respondent No.2 was the
3
Commissioner of the City Municipal Council
and respondent Nos. 3 to 7 were all Ex-
Commissioners, who had held the office of
Commissioner from different periods from
03.11.2004 till the date of filing of
complaint. The complaint stated that Board
had accorded a consent to the accused persons
to discharge sewage effluent after treatment
which was expired on 30.06.2006 and
thereafter the same has not been renewed.
One of the conditions of the said consent was
that the accused persons should provide
Sewage Treatment Plant within six months to
treat sewage generated in the City Municipal
Council Area which has not been done so far,
nor any steps have been taken in that regard,
and on the other hand, the accused persons
have continuously discharging the untreated
sewage into the water bodies like ponds,
lakes, natural valleys. The Complaint stated
that non-obtaining of the consent after
30.06.2006, non-providing of Sewage Treatment
4
Plant, Under Ground Drainage facility and
discharging the untreated sewage into the
neighbouring water bodies constitute the
violation of Section 25 of the Act, 1974,
which is punishable under Section 44 of the
Act, 1974.
3.4 Similar complaints were filed by Karnataka
State Pollution Control Board with regard to
the Town Municipal Council, Kengeri,
Bangalore and the Chief Officer of the Town
Municipal Council as well as complaint
against City Municipal Council,
Rajarajeshwari Nagar, Mysore Road and its
Commissioner.
3.5 The respondents to these appeals filed
criminal petitions under Section 482 Cr.P.C.
praying to quash the entire proceeding
initiated by appellant for prosecution of the
respondents under the Act, 1974.
5
3.6 The learned Single Judge of the High Court
vide its judgment dated 16.02.2015 allowed
all the three applications filed under
Section 482 Cr.P.C. quashing the proceedings
initiated by the appellant following an
earlier judgment of Karnataka High Court
dated 18.01.2012 in Criminal Petition No. 831
of 2007, which in turn had relied on a
Division Bench judgment of the Karnataka High
Court in Writ Petition No. 30610 of 2008.
The Division Bench had held that Commissioner
of Municipal Council, Chief Officer or
Council cannot be termed as Head of the
Department and they cannot be prosecuted
under Section 48 of the Act, 1974. Aggrieved
against the judgment of the High Court, these
appeals have been filed.
4. We have heard the learned counsel for the
appellant. None appeared for the respondents, though
served.
6
5. Learned counsel for the appellant contends that
the Corporation constituted under the Karnataka
Municipal Corporations Act, 1976 (hereinafter
referred to as “Act, 1976”) and Municipalities
constituted under the Karnataka Municipalities Act,
1964 (hereinafter referred to as “Act, 1964”) are
entrusted with large number of municipal functions
and statutory duties. The provisions of the Act,
1974 provide for penalties and procedure also and
whosoever contravenes any of the provisions of the
Act, 1974, is liable to be prosecuted. The Municipal
Corporation and the Municipalities, who violate the
provisions of Act, 1974 are also liable to be
prosecuted with. The Commissioner of the Municipal
Corporation, the Municipal Council and the Chief
Officers of the Municipal Council are Chief Executive
Officers of the respective Corporation and Council
and they being Head of the Department, being of the
Corporation or the Council, are liable to be
prosecuted with under Section 74. The High Court
committed error in quashing the prosecution launched
against Commissioner and Chief Officer by taking an
7
erroneous view that they are not liable to be
prosecuted they being not Head of Department.
6. Learned counsel relies on a judgment of this
Court in Criminal Appeal No. 755 of 2010 – V.C.
Chinnappa Goudar Vs. Karnataka State Pollution
Control Board & Anr. decided on 10.03.2015 by which
the judgment of the High Court of Karnataka rejecting
the applications of Commissioner and Chief
Commissioner challenging their prosecution under the
Act, 1974 was affirmed. He submits that High Court
ought not to have quashed the proceeding in exercise
of jurisdiction under Section 482 Cr.P.C. which
judgment deserves to be set aside.
7. Before we proceed to consider submissions of the
appellant, it is useful to refer to certain
provisions of the Act, 1974. The Act, 1974 was
enacted by the Parliament to provide for the
prevention and control of water pollution and the
maintaining or restoring of wholesomeness of water,
8
for the establishment, with a view to carrying out
the purposes aforesaid, of Boards for the prevention
and control of water pollution, for conferring on and
assigning to such Boards powers and functions
relating thereto and for matters connected therewith.
In Act, 1974, the Central Board and State Boards are
constituted by notification in the Official Gazette.
Powers and functions of the Board are provided in
Chapter IV. Section 24 provides for prohibition on
use of stream or well for disposal of polluting
matter, etc. and Section 25 provides for restrictions
on new outlets and new discharges. Section 26
contains provision regarding existing discharge of
sewage or trade effluent. Section 27 deals with
refusal or withdrawal of consent by State Board.
Chapter VII of the Act provides for penalties and
procedure. Section 41 enumerate circumstances and
acts on which any person can be prosecuted. Sections
43 to 46 deals with different penalties. Section 47
deals with offences by companies and Section 48 deals
with offences by Government Departments, which are
relevant, are as follows:-
9
“ 47. Offences by companies .--(1) Where
an offence under this 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:
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 or
that he exercised all due diligence to
prevent the commission of such offence.
(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.
Explanation.-- For the purposes of
this section-
(a) "company" means any body
corporate, and includes a firm or
other association of individuals;
and
10
(b) "director" in relation to a firm
means a partner in the firm.
48. Offences by Government
Departments.-- Where an offence under this
Act has been committed by any Department
of Government, the Head of the Department
shall be deemed to be guilty of the
offence and shall be liable to be
proceeded against and punished
accordingly:
Provided that nothing contained in
this section shall render such Head of the
Department liable to any punishment if he
proves that the offence was committed
without his knowledge or that he exercised
all due diligence to prevent the
commission of such offence.
8. The High Court in the impugned judgment for
coming to the conclusion that Commissioner of
Municipal Council, Chief Officer or a Council cannot
be termed as Head of the Department, has placed
reliance on two earlier judgments of the High Court
namely, (i) Criminal Petition No. 831 of 2007 dated
18.01.2012 and (ii) a Division Bench judgment of the
High Court dated 30.10.2008 in Writ Petition (C)
No.30610 of 2008 – Sri V.C. Chinnappa Goudar Vs.
Karnataka State Pollution Control Board.
11
9. We have gone through the judgment of the Division
Bench of the Karnataka High Court in V.C. Chinnappa
Goudar (supra) , which was a writ petition filed by a
Commissioner of City Municipal Council challenging
the proceeding initiated by Karnataka State Pollution
Control Board, the challenge in the writ petition was
to quash the proceedings on the ground that action
initiated against the petitioner is without
jurisdiction for want of previous sanction from the
Government as per Section 197 Cr.P.C. The Division
Bench after considering the provisions of Act, 1974
and Criminal Procedure Code came to conclusion that
no previous sanction is required for initiating the
legal action against such person by Board for offence
contravening Section 48 of the Act, 1974 and the writ
petition was accordingly dismissed. There was
neither any discussion in the judgment that
Commissioner of Municipal Council is not Head of the
Department of any Department of Government nor there
was any ratio to the above effect. Another judgment
relied by High Court is the decision of the High
Court in Criminal Petition No.831 of 2007 - – Shri
12
D.H. Raya Vs. Karnataka State Pollution Control
Board , which is also brought on the record as
Annexure P-11. The said judgment was also a petition
under Section 482 Cr.P.C. filed by Chief Officer of a
Town Municipal Council praying for quashing the
complaint filed by Karnataka State Pollution Control
Board for offence under Section 25 of Act, 1974. The
High Court relied on the earlier Division Bench
judgment of this Court in Criminal Appeal No. – 755
of 2010 - V.C. Chinnappa Goudar (supra) and allowed
the petition. There was neither any discussion in
the judgment that Chief Officer is not the Head of
the Department of any Department of Government nor
there was any ratio to the above effect.
Thus, the judgment of the High Court quashing the
complaint was misplaced.
10. We now need to consider as to whether Municipal
Commissioner of City Municipal Council or Chief
Officer of City Municipal Council are Head of the
Department of any Department of Government, which was
the supposed basis of the judgment of the High Court.
13
11. Section 48 of the Act, 1974 provides that “Where
an offence under the Act has been committed by any
Department of Government, the Head of the Department
shall be deemed to be guilty of the offence and shall
be liable to be proceeded against and punished
accordingly……………”. The heading of the section is
“Offences by Government Departments”. Section 48,
thus, is attracted where the offence is committed by
any Department of Government. The question to be
answered, thus, is as to whether Commissioner of City
Municipal Council or Chief Officer of City Municipal
Council constituted under the Karnataka
Municipalities Act, 1964 can be treated to be the
Head of the Department of any Department of
Government. The provisions of Act, 1974 as well as
the Karnataka Municipalities Act, 1964 have to be
looked into to find answer to the above question. The
City Municipal Council is a Council, incorporated
under Section 10 of the Karnataka Municipalities Act,
1964, which is as follows:-
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“ 10. Incorporation of city and town
municipal councils.— (1) In every municipal
area, there shall be a municipal council,
and every such municipal council shall be
a body corporate by the name of “the City
Municipal Council of ........” or “the
Town Municipal Council of ........”, as
the case may be, and shall have perpetual
succession and a common seal with power,
subject to the provisions of this Act, to
acquire, hold and dispose of property and
to contract and may by the said name sue
and be sued through its Chief Officer or
Municipal Commissioner.
(2) Save as otherwise provided in this
Act, the municipal Government of a
municipal area shall vest in the municipal
council.”
12. City and Town Municipal Councils as per Section
10 as quoted above is “ a body corporate ”. Similarly,
under the Karnataka Municipal Corporations Act, 1976,
the Municipal Corporations are constituted as
Corporation by virtue of Section 10.
13. The concept of creating body corporate and
corporation to carry out the functions of the
Government is a modern concept of the Government.
The modern Governments have undertaken on themselves
large functions touching the life of its citizens,
15
inhabitants. The Scheme underlying the Constitution
of India entrust and oblige the Governments to carry
out different functions for achieving the
constitutional objectives to secure justice, liberty
equality and fraternity. This Court in Ramana
Dayaram Shetty Vs. International Airport Authority of
India and Others, (1979) 3 SCC 489 : AIR 1979 SC 1628
has noted necessity to forge a new instrumentality or
administrative device to keep up with governmental
functions. Following was laid down by this Court:-
“Now, it is obvious that the Government
which represents the executive authority
of the State, may act through the
instrumentality or agency of natural
persons or it may employ the
instrumentality or agency of juridical
persons to carry out its functions. In the
early days, when the Government had
limited functions, it could operate
effectively through natural persons
constituting its civil service and they
were found adequate to discharge
governmental functions, which were of
traditional vintage. But as the tasks of
the Government multiplied with the advent
of the welfare State, it began to be
increasingly felt that the framework of
civil service was not sufficient to handle
the new tasks which were often of
specialised and highly technical
character. The inadequacy of the civil
service to deal with these new problems
came to be realised and it became
necessary to forge a new instrumentality
16
or administrative device for handling
these new problems. It was in these
circumstances and with a view to supplying
this administrative need that the public
corporation came into being as the third
arm of the Government.”
14. The Municipal City Council and Municipal
Corporation, which have been created by State
enactments are controlled by the Government, which
bodies also receive financial assistance from the
Government. It is well settled that Municipal
Corporations are instrumentality or agency of the
Government. The question to be answered as noted
above is whether City Municipal Council constituted
under the Municipalities Act can be treated as
Department of Government. Under Act, 1974, the State
Government has been defined in Section 2(i). In
constitution of the State Boards, the State
Government nominates members of the local authorities
functioning within the State, members to represent
the companies or corporations owned, controlled or
managed by the State Government as well as officials
to represent that Government. Section 4 of Act,
17
1974, which deals with the constitution of the State
Boards is as follows:-
“ 4. Constitution of State Boards (1) The
State Government shall, with effect from
such date as it may, by notification in
the Official Gazette, appoint, constitute
a State Pollution Control Board, under
such name as may be specified in the
notification, to exercise the powers
conferred on and perform the functions
assigned to that Board under this Act.
(2) A State Board shall consist of the
following members, namely,-
(a) a Chairman, being, a person
having special knowledge or
practical experience in
respect of matters relating to
environmental protection or a
person having knowledge and
experience in administering
institutions dealing with the
matters aforesaid, to be
nominated by the State
Government:
Provided that the Chairman
may be either whole-time or
part-time as the State
Government may think fit;
(b) such number of officials, not
exceeding five, to be
nominated by the State
Government to represent that
government;
(c) such number of persons, not
exceeding five, to be
nominated by the State
Government from amongst the
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members of the local
authorities functioning within
the State;
(d) such number of non-officials,
not exceeding three, to be
nominated by the State
Government to represent the
interests of agriculture,
fishery or industry or trade
or any other interest which,
in the opinion of the State
Government, ought to be
represented;
(e) two persons to represent the
companies or corporations
owned, controlled or managed
by the State Government, to be
nominated by that government;
(f) a full-time member-secretary,
possessing qualifications,
knowledge and experience of
scientific, engineering or
management aspects of
pollution control, to be
appointed by the State
Government.
(3) Every State Board shall be a body
corporate with the name specified by the
State Government in the notification under
sub-section (1), having perpetual
succession and a common seal with power,
subject to the provisions of this Act, to
acquire hold and dispose of property and
to contract, and may, by the said name,
sue or be sued.
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(4) Notwithstanding anything contained in
this section, no State Board shall be
constituted for a Union Territory and in
relation to a Union Territory, the Central
Board shall exercise the powers and
perform the functions of a State Board for
that Union Territory:
Provided that in relation to any Union
Territory the Central Board may delegate
all or any of its powers and functions
under this sub-section to such person or
body of persons as the Central Government
may specify.”
15. The Scheme of the Act as delineated by above
provision indicate that there are separate members to
represent the Government in the Board, separate
members to represent the local authorities
functioning in the State and separate members to
represent the companies or corporations owned,
controlled or managed by the State Government. The
Government, local authorities and companies or
corporations owned, controlled or managed by the
State Government are all different expressions used
in the Act. Whether an institution is a corporation
or a Department of the Government has to be found out
from the Scheme under which it has been created. One
of the tests to find out as to whether an institution
20
is a Corporation or a Department of the Government is
to enquire whether the undertaking functions as a
responsible independent organisation and not as part
of any Department of the State. Second test would be
to see whether it is endowed with the capacity to
contract obligations and of suing and being sued.
Further, the power to possess, use and change a seal
is incidental to a corporation and a corporation
aggregate can, as a general rule, only act or express
its will by deed under its common seal. The
Karnataka Municipalities Act, 1964 as noted above,
provides for a Town and City Municipal Councils as a
body corporate. The control of the State Government
on the Municipality is provided in a separate
chapter, i.e., Chapter XII. The Scheme of
constitution of Municipal area and other provisions
of Act, 1964 clearly indicate that Municipalities are
not a Department of the Government.
16. We may also notice the constitutional provisions
of Part IXA, “the Municipalities” inserted by
Constitution (Seventy Fourth) Amendment Act, 1992.
21
Article 243P sub-clause (e) defines “Municipality” as
an institution of self-Government constituted under
Article 243Q. The Constitution also envisages
Municipality as a body of self-Government. The
provisions of the Act, 1964 and Act, 1974 makes it
clear that City Municipal Council cannot be treated
as Department of the State Government. After having
found that City Municipal Council is not Department
of the Government – whether they are immuned from
prosecution under Act, 1974 is the next question to
be answered.
17. Chapter VII of the Act, 1974 deals with penalties
and procedure. Section 41, which provides for
punishment and penalty begins with phrase “whoever
fails to comply…………”. Similarly, Section 42, which
deals with penalty for certain acts also begins with
the expression “whoever”. Similar expression is
found in Sections 43, 44 and 45A, which begins with
the word “whoever”. The Act, 1974, thus, envisages
conviction of any person, who contravenes and
violates the provisions of the Act.
22
18. City Municipal Council and City Municipal
Corporation are created or incorporated by the State
and entrusted with the Municipal functions. One of
the main functions entrusted to the Corporation is to
ensure clean environment to the residents, to control
pollution in a Municipal area, which is one of the
duties of the Municipal Council and the Corporation.
19. When an offence is committed by City Municipal
Council or Corporation, whether they can be
prosecuted under the Act, 1974 and what is the
procedure for initiating proceeding for prosecution
of such bodies? Section 47 of the Act, 1974 in this
context is relevant. Section 47 contains a heading
“offences by companies”. Section 47(1) is similar to
Section 48. Whether the expression “companies” as
used in Section 47 can include other corporate bodies
including City Municipal Council and Corporation?
The answer is to be found in the Explanation to
Section 47, which provides as follows:-
23
“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.”
20. In a Statute, the definition of an expression has
to be found out in accordance with the context and
Scheme of the enactment. The definition of company
is contained in the Companies Act, 1956 in Section 3.
The definition of company as contained in the
Companies Act, 1956 is clearly not borrowed in the
expression of company as used in Section 47 of Act,
1974. The company has been defined in Section 47 of
Act, 1974 in a very wide and inclusive manner.
Explanation states that “company” means “ any body
corporate” . Thus, all body corporates are included
within the definition of company as per Section 47.
There cannot be any dispute that City Municipal
Council is a body corporate, which has been clearly
provided under Section 10 of Act, 1964 as noted
above.
24
21. In Hakam Singh Vs. M/s. Gammon (India) Ltd.,
(1971) 1 SCC 286, this Court while considering the
Explanation II to Section 20 C.P.C. had held that use
of word “Corporation” in Explanation II also includes
the “company”. In paragraph 6, following has been
laid down:-
“6. The argument of counsel for the
appellant that the expression
“corporation” in Explanation II includes
only a statutory corporation and not a
company registered under the Indian
Companies Act is, in our judgment, without
substance. The Code of Civil Procedure
uses the expression “corporation” as
meaning a legal person and includes a
company registered under the Indian
Companies Act. Order 29 of the Code of
Civil Procedure deals with suits by or
against a corporation and there is nothing
in the Code of Civil Procedure that a
corporation referred to under Order 20
means only a statutory corporation and not
a company registered under the Indian
Companies Act.”
From the above, it is clear that the meaning and
definition of an expression used in an enactment has
to be determined from the particular Statute. In
C.P.C., Explanation to Section 20, only word
25
“corporation” was used, which was held to include a
“company” also.
22. The expression “company” has been used in
different statutes with different purpose and object.
This Court as well as the High Courts had occasion to
consider the meaning of company in reference to
different Statutes. We may notice some of the cases
of this Court as well as of the High Court in the
above reference.
23. In Subhash Chandra Vs. Gulab Bai and Others,
(2016) 4 SCC 750 , the question as to whether within
the meaning of Section 23-J(ii) of M.P. Accommodation
Control Act, 1961, the expression “company owned and
controlled by the State Government” can held to
include a “corporation” came for consideration. This
Court noted a Full Bench judgment of M.P. High Court
wherein it was held that retired employees of a
Municipal Corporation will not be covered by Section
23-J, whereas the Division Bench of M.P. High Court
in Ranjit Narayan Haksar Vs. Surendra Verma, 1995
26
MPLJ 21 held that M.P. State Road Transport
Corporation was a company owned and controlled by the
State Government. Against the Division Bench
judgment in Ranjit Narayan’s case, matter was taken
in this Court by special leave petition, which was
dismissed and this Court while dismissing the special
leave petition agreed with the Division Bench
judgment that word “company” in Section 23-J would
include “corporation”. Paragraphs 2, 4 and 5 of the
judgment is extracted below:-
“2. The short question that falls for
determination in these appeals is whether
a retired Municipal Corporation employee
can also maintain an application for
eviction under Chapter III-A of the Madhya
Pradesh Accommodation Control Act, 1961
and, in particular, whether any such
“ retired employee ” is an employee of a
“ company owned or controlled by the State
Government ” within the meaning of Section
23-J( ii ) of the Act aforementioned. A Full
Bench of the High Court of Madhya Pradesh
at Indore has by a 2:1 decision (Gulab Bai
V. Subhash Chandra, (2013) 3 MPLJ 434)
answered the said question in the negative
and declared that “ retired employees ” of
municipal corporation will not be covered
under Section 23-J( ii ) of the Act to
maintain an application for eviction under
Chapter III-A thereof.
4. In Ranjit Narayan case a Division Bench
of the High Court of Madhya Pradesh was
27
examining whether Madhya Pradesh State
Road Transport Corporation was a “ company
owned or controlled by the State
Government ” so as to entitle any employee
who retired from its service to maintain
an eviction petition under Chapter III-A
of the Madhya Pradesh Accommodation
Control Act, 1961. Answering the question
in the affirmative, the High Court held
that keeping in view the objects and
reasons and the scheme of the Act,
especially the scheme underlying Chapter
III-A thereof, the expression “ company
owned or controlled by the State
Government or the Central Government ” must
be understood to include even statutory
corporations like Madhya Pradesh State
Road Transport Corporation established
under the State Road Corporation Act. The
High Court while saying so, approved the
ratio in Vipin v. Ranajitnarayan, 1986
MPRCJ Note 11, while overruling the
decision in Sobhagyamal v. Prakash
Pharmaceuticals, AIR 1990 MP 345 .
5. In a special leave petition filed
against the said judgment and order, this
Court by a short order affirmed the
reasoning and the view taken by the High
Court. This Court observed:
“We agree with the view taken
by the Division Bench that the
word “company” in Section 23-
J( ii ) would include “corporation”
created under the special statute
which is owned or controlled by
the Central or the State
Government. Hence, the SLP is
dismissed.”
( Surendra Verma v. Ranjeet Narayan Haksar,
1995 Jab LJ 460 (SC) )
28
24. This Court in the above case noticing conflicting
pronouncements referred the matter to a Larger Bench.
The Larger Bench judgment has been delivered on
22.01.2019 in Civil Appeal No.1696 of 2016 – Subhash
Chandra (D) Thr. LRs. Vs. Gulab Bai & Ors. Two
questions, which were referred before the Larger
Bench has been noticed in paragraph 4 of the
judgment, which is to the following effect:-
“ 4. Calling into question the entitlement
of the landlord to avail of the special
procedure under Chapter IIIA of the Act on
the ground that he is not a landlord
within the meaning of the said expression
as appearing in Section 23-J(ii) of the
Act, a revision petition was filed before
the High Court. The said revision led to a
reference to a Full Bench of the High
court. Two learned Judges of the High
Court held that the appellant would not be
a landlord within the meaning of Section
23-J(ii) of the Act. Aggrieved, the
present appeal has been filed wherein two
Judges Bench of this Court had referred
the following questions for an
authoritative pronouncement:
(i) Whether the expansion of the word
‘company’ to statutory Corporations
by the Madhya Pradesh High Court in
Ranjit Narayan Haksar vs. Surendra
Verma, 1995 MPLJ 21 has to be
understood to be confined only to
Corporations engaged in trading
29
activities and statutory
Corporations including Municipal
Corporations would be outside the
scope of the said expression
“company” appearing in Section 23-
J(ii) of the Act.
(ii) If the answer to the above question
is in the negative, whether the
expression “company owned and
controlled either by the Central or
State Government” appearing in
Section 23-J(ii) of the Act would
require an expansive and liberal
interpretation to save the said
provision from being declared to be
unconstitutional on the touch-stone
of Article 14 of the Constitution
of India.”
25. This Court after considering the object and
purpose of M.P. Accommodation Control Act, 1961,
specially the object of Section 23-J(ii) held that
although Section 23-J(ii) only used the word
“company”, the said expression shall also include
Municipal Corporations and the employees of the
Municipal Corporations cannot be denied the benefit
of such beneficial provision. In paragraphs 5, 6 and
7 following has been laid down:-
“ 5. We have noticed the special procedure
and the special forum available for the
categories of landlords specified in
Section 23-J of the Act. They include:
30
retired Government servants; retired
servant of a company owned or controlled
either by the Central or State Government;
a widow or a divorced wife; physically
handicapped person; a retired member of
the defence service. The object of
creating a special procedure and special
forum by incorporating Chapter IIIA in the
Act is to provide a more efficacious and
speedy remedy to a category of landlords
to obtain speedy possession of the
premises which he/she/they may have let
out. The special category of landlords
envisaged under Section 23-J of the Act
are persons who have either retired from
Government service or defence service or
company owned or controlled either by the
Central or State Government or such
persons who suffer from some kind of
disadvantages like a physically
handicapped person or a widow or divorced
wife. The Madhya Pradesh High Court itself
had expanded the meaning of the term
‘company’ appearing in Section 23- J(ii)
of the Act by including within the ambit
of the said expression the Madhya Pradesh
State Road Transport Corporation. The said
order of the Madhya Pradesh High has been
affirmed by this Court by dismissing the
Special Leave Petition against the said
order.
6. If the object of Chapter IIIA of the
Act is to provide a speedy remedy and a
special forum for a category of persons
who have retired from service we do not
see how the retired employees of a
Municipal Corporation can be legitimately
excluded from the provisions of Section
23-J(ii) of the Act. Doing so would be
putting Section 23-J of the Act itself to
jeopardy. The object of the Act being what
has been noticed above, the classification
of retired persons by inclusion of one
31
class i.e. Government service etc. and
exclusion of another i.e. of Municipal
Corporation, in our considered view, would
render the provisions of Section 23-J(ii)
constitutionally fragile.
7. We, therefore, are of the view that
reading the provisions of Section 23-J(ii)
of the Act to include retired employees of
the Municipal Corporation would further
the object behind the enactment of Chapter
IIIA of the Act. We, therefore, hold that
the appellant – landlord was fully
entitled to avail of the special procedure
enjoined by Chapter IIIA of the Act and
the decree of eviction obtained by him
cannot be faulted on the ground of lack of
jurisdiction of the Tribunal/Forum which
had decided the matter.”
26. In the above case, thus, although Section 23-
J(ii) of the M.P. Accommodation Control Act, 1961
used the expression “company” but it was held that it
shall also include M.P. State Road Transport
Corporation as well as Municipal Corporation.
27. In the Negotiable Instruments Act, 1881, Section
141 provides for “offences by companies”. Section
141 also uses expression “a company”. This Court had
observed that concept of corporate criminal liability
as contained in Section 141 is attracted to
corporation and a company. This Court in Aneeta Hada
32
Vs. Godfather Travels and Tours Private Limited,
(2012) 5 SCC 661 while considering Section 141 of
Negotiable Instruments Act laid down following in
paragraphs 21 and 24:-
“21. At this juncture, we may refer to
Section 141 which deals with offences by
companies. As the spine of the controversy
rests on the said provision, it is
reproduced below:
“ 141. Offences by companies .—(1) If
the person committing an offence
under Section 138 is 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:
Provided that nothing contained
in this sub-section shall render
any person liable to punishment if
he proves that the offence was
committed without his knowledge, or
that he had exercised all due
diligence to prevent the commission
of such offence:
Provided further that where a
person is nominated as a Director
of a company by virtue of his
holding any office or employment in
the Central Government or State
Government or a financial
corporation owned or controlled by
the Central Government or the State
33
Government, as the case may be, he
shall not be liable for prosecution
under this chapter.
(2) Notwithstanding anything
contained in sub-section (1), where
any 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.”
24. Section 141 uses the term “person” and
refers it to a company. There is no trace
of doubt that the company is a juristic
person. The concept of corporate criminal
liability is attracted to a corporation
and company and it is so luminescent from
the language employed under Section 141 of
the Act. It is apposite to note that the
present enactment is one where the company
itself and certain categories of officers
in certain circumstances are deemed to be
guilty of the offence.”
28. Patna High Court in Criminal Misc. No. 7268 of
2005 - Arun Kumar Singh vs. The State of Bihar and
Ors. while noticing Section 141 specifically the
Explanation held that the definition of Company as
given therein is wider than the definition of Company
34
in the Companies Act and it includes any body
corporate. Paragraphs 12 and 13 of the judgment is
as follows:-
“ 12. Then so far offence under Section 138
of N.I. Act, it is apt to refer, at first,
the provisions of Section 141. Section 141
of the Act reads as follows:
141. Offences by companies.
(1) If the person committing an
offence under Section 138 is 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:
Provided that nothing contained in
this sub-section shall render any
person liable to punishment if he
proves that the offence was
committed without his knowledge, or
that he had exercised all due
diligence to prevent the commission
of such offence;
Provided further that where a
person is nominated as a Director
of a Company by virtue of his
holding any office or employment in
the Central Government or State
Government or a financial
Corporation owned or controlled by
the Central Govt. or the State
35
Govt., as the case may be, he shall
not be liable for prosecution under
this Chapter.
(2) ...
Explanation: For the purpose of
this section.
(a) "Company" means any body
corporate and includes a firm or
other association of individuals;
and
(b) "director", in relating to a
firm, means a partner in the firm.
13. The Explanation (a) of the above
section, therefore, is clear that the
definition of Company as given therein is
wider than the definition of Company in
the Companies Act and it includes any body
corporate. Section 5 of the Patna
Municipal Corporation Act also shows that
the Company is a body corporate.
Therefore, there cannot be any doubt that
Patna Municipal Corporation is a Company
under the N.I. Act.”
The above is correct interpretation of
Explanation (a) by the Patna High Court. The
Explanation of Section 47 of Act, 1974 and the
Explanation (a) to Section 141 of the Negotiable
Instruments Act are pari materia .
36
29. We, thus, looking to the purpose and object of
Act, 1974, are of the opinion that Section 47 can be
resorted to for offences by body corporate and
Karnataka State Pollution Control Board by filing a
complaint before the Magistrate for taking cognizance
of offence under Section 49 did not commit an error.
30. There is one more aspect of the matter, which
need to be noticed. Section 49 of the Act, 1974
deals with cognizance of offences, which is as
follows:-
“49. Cognizance of offences.-- (1) No court
shall take cognizance of any offence under
this Act except on a complaint made by-
(a) a Board or any officer
authorised in this behalf by it; or
(b) any person who has given notice
of not less than sixty days, in the
manner prescribed, of the alleged
offence and of his intention to
make a complaint, to the Board or
officer authorised as aforesaid,
and no court inferior to that of a
Metropolitan Magistrate or a Judicial
Magistrate of the first class shall try
any offence punishable under this Act.
(2) Where a complaint has been made under
clause (b) of sub-section (1), the Board
37
shall, on demand by such person, make
available the relevant reports in its
possession to that person:
Provided that the Board may refuse to
make any such report available to such
person if the same is in its opinion,
against the public interest.
(3) Notwithstanding anything contained in
section 29 of the Code of Criminal
Procedure, 1973 (2 of 1974), it shall be
lawful for any Judicial Magistrate of the
first class or for any Metropolitan
Magistrate to pass a sentence of
imprisonment for a term exceeding two
years or of fine exceeding two thousand
rupees on any person convicted of an
offence punishable under this Act.”
31. Section 49 embraces cognizance of all offences
under the Act. Whether the offences are covered by
Section 47 or 48 has no bearing on the power of the
Court to take cognizance of an offence. Karnataka
State Pollution Control Board has filed complaint for
taking cognizance specifically referring to Section
49 of the Act, 1974. Thus, in event any offence is
committed by anyone, its cognizance can be taken
under Section 49. We, however, reiterate that
offences by a body corporate are to be covered by
Section 47, since in event offences by body
38
corporates are not covered by Section 47, the benefit
of Section 47(1) proviso shall not be available to
those body corporates, which cannot be the intention
of the Legislature. We, thus, conclude that offences
by body corporate like City Municipal Council are
covered under Section 49 treating it to be offence as
by company as provided in Section 47.
32. We may also notice the judgment of this Court in
Criminal Appeal No. 755 of 2010 – V.C. Chinnappa
Goudar Vs. Karnataka State Pollution Control Board &
Anr. decided on 10.03.2015, where the judgment of the
Division Bench of the Karnataka High Court in V.C.
Chinnappa Goudar (supra) had been affirmed. In the
above case although this Court dismissed the appeal
filed by the appellant, who was also a Municipal
Commissioner of the Municipal Council, for quashing
of the complaint filed by the Karnataka State
Pollution Control Board, but the ratio of the
judgment is to the effect that sanction under Section
197 Cr.P.C. is not required for proceeding under
Section 49 of the Act, 1974. Although reference to
39
Section 48 has been mentioned in the judgment of this
Court but there is no further consideration with
regard to Section 48.
33. In view of the foregoing discussions, we are of
the view that High Court erred in quashing the
complaint filed by Karnataka State Pollution Control
Board against the respondents.
34. In result, the judgment of the High Court is set
aside. The applications filed under Section 482
Cr.P.C. by the respondents stand dismissed. The
Magistrate/Metropolitan Magistrate may proceed with
the complaints in accordance with law.
......................J.
( ASHOK BHUSHAN )
......................J.
( M.R. SHAH )
New Delhi,
November 26, 2019.
40