Full Judgment Text
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
CRIMINAL APPLICATION (APL) NO.223 OF 2023
Mr. Gautam Hari Singhania,
S/o Vijaypat Singhania,
Aged about 57 years
Chairman and Managing Director,
Raymond Limited,
Having its registered office
at Plot No.156, H. No.2, Village Zadgaon
Ratnagiri, Maharashtra-415612 … APPLICANT
// VERSUS //
State of Maharashtra,
Through Shri S.M. Saraf,
Inspector of Legal Metrology,
Nagpur-4 Division,
Plot No.19, Bhange Sadan,
Gazetted Officers Colony,
Civil Lines, Central Museum
Road, Nagpur-440001 … NON APPLICANT
Shri H.V. Thakur, Advocate for the applicant.
Shri Amit Chutke, APP for the non-applicant/State.
____________________________________________________
CORAM : G. A. SANAP, J.
DATED:- 08/06/2023
ORAL JUDGMENT
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1. Heard.
2. ADMIT. Taken up for final disposal forthwith by
the consent of learned Advocates for the parties.
3. In this application, the applicant has questioned
correctness of the order dated 19.05.2014 passed by the
learned Judicial Magistrate, First Class, Court No.4, Nagpur,
whereby the learned Magistrate was pleased to issue process
for the offences under Sections 18(1), 49 and 36 (1) of the
Legal Metrology Act, 2009 (hereinafter referred to as “the
Act of 2009” for short) read with Rule 18(1) and 24 of Legal
Metrology (Packaged Commodities) Rules, 2011
(hereinafter referred to as “the Rules of 2011” for short).
4.
Shri S.N. Saraf, Inspector of Legal Metrology,
Nagpur – 4 Division, Nagpur filed a complaint against the
company by name Raymond Limited and the applicant,
being Managing Director of the said company. The
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remaining directors were also made accused. It is stated in
the complaint that the Inspector of the Legal Metrology
during his visit to the establishment of Reliance Trends Ltd.,
at Nagpur, noticed one cardboard package of fabric of the
company Raymond Limited. The said package did not
contain a declaration about the name of the commodity,
name and particulars of manufacturer, packer, number of
pieces etc. The Inspector drew the panchanama and seized
the said package. The Inspector, Legal Metrology issued a
compounding notice to the company, which was duly replied
on 07.01.2014, disputing the charges. The Inspector, Legal
Metrology Department filed the complaint before the
Judicial Magistrate, First Class, Nagpur against the present
applicant and other directors of the company alleging that
the above violations constitute an offence under the Act of
2009. The learned Judicial Magistrate, First Class, Nagpur
took cognizance and issued process against the applicant and
other directors.
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5. It is the case of the applicant that the remaining
Directors of the company, against whom process was issued
by the learned Magistrate, had approached this Court against
the order passed by the learned Judicial Magistrate, First
Class, Nagpur. The Co-ordinate Bench of this Court on
03.10.2022 allowed the criminal application i.e. APL
No.829 of 2015 filed by eight directors of the company and
quashed and set aside the order of issuance of process against
them.
6. Learned Advocate for the applicant submitted that
the learned Magistrate mechanically passed the order of
issuance of process. Learned Advocate submitted that in view
of the facts stated in the complaint, the learned Magistrate
ought to have taken into consideration the provisions of
Section 49 of the Act of 2009. Learned Advocate submitted
that in view of the provisions of Section 49 of the Act of
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2009, the order of issuance of process on the basis of the
averments made in the complaint cannot be sustained.
Learned Advocate submitted that in order to fasten the
vicarious liability on the applicant being Managing Director,
there must be specific averments in the complaint attributing
specific role to the applicant. Learned Advocate submitted
that no person was nominated by the company in terms of
sub-section 2 of Section 49 of Act of 2009 to exercise the
powers on behalf of the Company. Learned Advocate
submitted that there is no averment in the complaint that the
applicant was in-charge of and was responsible to the
company for the conduct of the business of the company.
Learned Advocate submitted that in absence of such
averment in the complaint, the Magistrate should not have
issued process against the applicant and other Directors.
Learned Advocate submitted that the co-ordinate bench of
this Court has quashed and set aside the order of issuance of
process against the remaining Directors and, therefore, the
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same view is required to be taken in the case of the applicant.
Learned Advocate, in order to substantiate his submission,
has relied upon the decision in the case of Managing
Director, Castrol India Limited Vs. State of Karnataka and
another reported in (2018) 17 SCC 275. In this case,
Hon’ble Apex Court has held that in order to make
Managing Director/Director vicariously liable for the acts of
the company, there must be clear and categorical statement
in the complaint, specifying the role played by the Director/
Managing Director. It is held that until and unless such
averment is made, the vicarious liability cannot be fastened.
It is further held that in absence of specific allegation in the
complaint attributing role to the Director or Managing
Director in the commission of offence, the criminal
proceedings cannot continue.
7. Learned APP for the State submitted that only
difference between the case of the applicant and the
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remaining directors was that by his designation the applicant,
would be required to face the prosecution.
8. In order to appreciate the rival submissions, I have
perused the record and proceedings. Sub-section (1) of
Section 49, which is relevant for the purpose of this
application, is extracted below:-
“49. Offences by companies and power of Court to
publish name, place of business, etc., for companies
convicted.- (1) Where an offence under this Act has been
committed by a company, -
(a)(i) the person, if any, who has been
nominated under sub-section (2) to be in charge of, and
responsible to, the company for the conduct of the
business of the company (hereinafter in this section
referred to as a person responsible); or
(ii) where no person has been nominated,
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; and
(b) the company,
shall be deemed to be guilty of the offence and shall be
liable to be proceeded against the punished accordingly:
Provided that nothing contained in this sub-
section shall render any such person liable to any
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punishment provided in this Act if he proves that the
offence was committed without his knowledge and that he
exercised all due diligence to prevent the commission of
such offence.”
9. In this case, it is contended by of the applicant
that no person was nominated to exercise the powers as
required under sub-section (2) of Section 49 of the Act of
2009. No statement has been made in the reply filed by the
prosecution to counter the statement. It is seen that Section
49 sub-section (1) provides complete mechanism for fixing
the vicarious liability of the Managing Director/Directors in
case of the offences committed by the company. Perusal of
the complaint would show that no specific averments have
been made in the complaint to fasten the vicarious liability
on the applicant and other Directors. Similarly, no role at all
has been attributed to the accused in the commission of
crime. Until and unless a specific averment is made in the
complaint that Managing Director or Director was in-charge
of and was responsible to the company for the conduct of the
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business of the company, the learned Magistrate should not
have taken cognizance against the applicant and other
Directors. It is true that the company is arrayed as accused. It
is alleged that the offence was committed by the company.
As far as the company is concerned, no application has been
made for quashing the order of issuance of process. In the
facts and circumstances, the vicarious liability of the
Managing Director/Director would arise by deeming fiction
and, therefore, the necessary averments are required to be
made in the complaint to fasten the vicarious liability on the
Directors. Perusal of the complaint and particularly para
No.7 thereof, would show that the averments are as vague as
the vagueness could be. The relevant statement has been
made in the para No.7 of the complaint. It is extracted
below:-
“The Accused is the Owner/Partner/Director/
Manager of the shop/stall/Factory etc. situated at :
1) Gautam Hari Singhania-Managing director and
all other director 2) Raymond Limited, building
no.A1 B1, Saidhara complex, Mumbai Nasik
Highway, village Kukse, Borivali, Bhiwandi Dist.
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Thane- 421302.”
10. Perusal of the above averments would show that
besides stating the name of the company, it has been pleaded
in generalized form that the accused is either owner or
partner or director of the company. It is seen that no specific
averments have been made to attribute any role in any
capacity to the applicant and as such, fasten the liability for
prosecution on the accused. In my view, learned Magistrate
has not considered this fact.
11. It is further seen that considering the scheme of
the Act, particularly the provisions of Section 49 of the Act
of 2009, learned Magistrate, before issuing process, was
required to apply his mind to the provisions of law and the
facts. Learned Magistrate was required to record his prima-
facie satisfaction about the role of the applicant before
issuing process against him. Learned Magistrate, as can be
seen from the order, has mechanically issued the process.
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12. It is, therefore, apparent that on both counts, the
order passed by the learned Magistrate cannot be sustained.
The continuation of prosecution against the applicant in the
above facts and circumstances would be an abuse of process
of law.
13. Accordingly, the application is allowed.
The order dated 19/05/2014 passed by the
learned Judicial Magistrate, First Class, Nagpur issuing
process is quashed and set aside to the extent of applicant –
Shri Gautam Hari Singhania s/o Vijaypat Singhania.
14. The criminal application stands disposed of
accordingly.
JUDGE
manisha
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
CRIMINAL APPLICATION (APL) NO.223 OF 2023
Mr. Gautam Hari Singhania,
S/o Vijaypat Singhania,
Aged about 57 years
Chairman and Managing Director,
Raymond Limited,
Having its registered office
at Plot No.156, H. No.2, Village Zadgaon
Ratnagiri, Maharashtra-415612 … APPLICANT
// VERSUS //
State of Maharashtra,
Through Shri S.M. Saraf,
Inspector of Legal Metrology,
Nagpur-4 Division,
Plot No.19, Bhange Sadan,
Gazetted Officers Colony,
Civil Lines, Central Museum
Road, Nagpur-440001 … NON APPLICANT
Shri H.V. Thakur, Advocate for the applicant.
Shri Amit Chutke, APP for the non-applicant/State.
____________________________________________________
CORAM : G. A. SANAP, J.
DATED:- 08/06/2023
ORAL JUDGMENT
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1. Heard.
2. ADMIT. Taken up for final disposal forthwith by
the consent of learned Advocates for the parties.
3. In this application, the applicant has questioned
correctness of the order dated 19.05.2014 passed by the
learned Judicial Magistrate, First Class, Court No.4, Nagpur,
whereby the learned Magistrate was pleased to issue process
for the offences under Sections 18(1), 49 and 36 (1) of the
Legal Metrology Act, 2009 (hereinafter referred to as “the
Act of 2009” for short) read with Rule 18(1) and 24 of Legal
Metrology (Packaged Commodities) Rules, 2011
(hereinafter referred to as “the Rules of 2011” for short).
4.
Shri S.N. Saraf, Inspector of Legal Metrology,
Nagpur – 4 Division, Nagpur filed a complaint against the
company by name Raymond Limited and the applicant,
being Managing Director of the said company. The
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remaining directors were also made accused. It is stated in
the complaint that the Inspector of the Legal Metrology
during his visit to the establishment of Reliance Trends Ltd.,
at Nagpur, noticed one cardboard package of fabric of the
company Raymond Limited. The said package did not
contain a declaration about the name of the commodity,
name and particulars of manufacturer, packer, number of
pieces etc. The Inspector drew the panchanama and seized
the said package. The Inspector, Legal Metrology issued a
compounding notice to the company, which was duly replied
on 07.01.2014, disputing the charges. The Inspector, Legal
Metrology Department filed the complaint before the
Judicial Magistrate, First Class, Nagpur against the present
applicant and other directors of the company alleging that
the above violations constitute an offence under the Act of
2009. The learned Judicial Magistrate, First Class, Nagpur
took cognizance and issued process against the applicant and
other directors.
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5. It is the case of the applicant that the remaining
Directors of the company, against whom process was issued
by the learned Magistrate, had approached this Court against
the order passed by the learned Judicial Magistrate, First
Class, Nagpur. The Co-ordinate Bench of this Court on
03.10.2022 allowed the criminal application i.e. APL
No.829 of 2015 filed by eight directors of the company and
quashed and set aside the order of issuance of process against
them.
6. Learned Advocate for the applicant submitted that
the learned Magistrate mechanically passed the order of
issuance of process. Learned Advocate submitted that in view
of the facts stated in the complaint, the learned Magistrate
ought to have taken into consideration the provisions of
Section 49 of the Act of 2009. Learned Advocate submitted
that in view of the provisions of Section 49 of the Act of
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2009, the order of issuance of process on the basis of the
averments made in the complaint cannot be sustained.
Learned Advocate submitted that in order to fasten the
vicarious liability on the applicant being Managing Director,
there must be specific averments in the complaint attributing
specific role to the applicant. Learned Advocate submitted
that no person was nominated by the company in terms of
sub-section 2 of Section 49 of Act of 2009 to exercise the
powers on behalf of the Company. Learned Advocate
submitted that there is no averment in the complaint that the
applicant was in-charge of and was responsible to the
company for the conduct of the business of the company.
Learned Advocate submitted that in absence of such
averment in the complaint, the Magistrate should not have
issued process against the applicant and other Directors.
Learned Advocate submitted that the co-ordinate bench of
this Court has quashed and set aside the order of issuance of
process against the remaining Directors and, therefore, the
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same view is required to be taken in the case of the applicant.
Learned Advocate, in order to substantiate his submission,
has relied upon the decision in the case of Managing
Director, Castrol India Limited Vs. State of Karnataka and
another reported in (2018) 17 SCC 275. In this case,
Hon’ble Apex Court has held that in order to make
Managing Director/Director vicariously liable for the acts of
the company, there must be clear and categorical statement
in the complaint, specifying the role played by the Director/
Managing Director. It is held that until and unless such
averment is made, the vicarious liability cannot be fastened.
It is further held that in absence of specific allegation in the
complaint attributing role to the Director or Managing
Director in the commission of offence, the criminal
proceedings cannot continue.
7. Learned APP for the State submitted that only
difference between the case of the applicant and the
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remaining directors was that by his designation the applicant,
would be required to face the prosecution.
8. In order to appreciate the rival submissions, I have
perused the record and proceedings. Sub-section (1) of
Section 49, which is relevant for the purpose of this
application, is extracted below:-
“49. Offences by companies and power of Court to
publish name, place of business, etc., for companies
convicted.- (1) Where an offence under this Act has been
committed by a company, -
(a)(i) the person, if any, who has been
nominated under sub-section (2) to be in charge of, and
responsible to, the company for the conduct of the
business of the company (hereinafter in this section
referred to as a person responsible); or
(ii) where no person has been nominated,
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; and
(b) the company,
shall be deemed to be guilty of the offence and shall be
liable to be proceeded against the punished accordingly:
Provided that nothing contained in this sub-
section shall render any such person liable to any
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punishment provided in this Act if he proves that the
offence was committed without his knowledge and that he
exercised all due diligence to prevent the commission of
such offence.”
9. In this case, it is contended by of the applicant
that no person was nominated to exercise the powers as
required under sub-section (2) of Section 49 of the Act of
2009. No statement has been made in the reply filed by the
prosecution to counter the statement. It is seen that Section
49 sub-section (1) provides complete mechanism for fixing
the vicarious liability of the Managing Director/Directors in
case of the offences committed by the company. Perusal of
the complaint would show that no specific averments have
been made in the complaint to fasten the vicarious liability
on the applicant and other Directors. Similarly, no role at all
has been attributed to the accused in the commission of
crime. Until and unless a specific averment is made in the
complaint that Managing Director or Director was in-charge
of and was responsible to the company for the conduct of the
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business of the company, the learned Magistrate should not
have taken cognizance against the applicant and other
Directors. It is true that the company is arrayed as accused. It
is alleged that the offence was committed by the company.
As far as the company is concerned, no application has been
made for quashing the order of issuance of process. In the
facts and circumstances, the vicarious liability of the
Managing Director/Director would arise by deeming fiction
and, therefore, the necessary averments are required to be
made in the complaint to fasten the vicarious liability on the
Directors. Perusal of the complaint and particularly para
No.7 thereof, would show that the averments are as vague as
the vagueness could be. The relevant statement has been
made in the para No.7 of the complaint. It is extracted
below:-
“The Accused is the Owner/Partner/Director/
Manager of the shop/stall/Factory etc. situated at :
1) Gautam Hari Singhania-Managing director and
all other director 2) Raymond Limited, building
no.A1 B1, Saidhara complex, Mumbai Nasik
Highway, village Kukse, Borivali, Bhiwandi Dist.
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Thane- 421302.”
10. Perusal of the above averments would show that
besides stating the name of the company, it has been pleaded
in generalized form that the accused is either owner or
partner or director of the company. It is seen that no specific
averments have been made to attribute any role in any
capacity to the applicant and as such, fasten the liability for
prosecution on the accused. In my view, learned Magistrate
has not considered this fact.
11. It is further seen that considering the scheme of
the Act, particularly the provisions of Section 49 of the Act
of 2009, learned Magistrate, before issuing process, was
required to apply his mind to the provisions of law and the
facts. Learned Magistrate was required to record his prima-
facie satisfaction about the role of the applicant before
issuing process against him. Learned Magistrate, as can be
seen from the order, has mechanically issued the process.
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12. It is, therefore, apparent that on both counts, the
order passed by the learned Magistrate cannot be sustained.
The continuation of prosecution against the applicant in the
above facts and circumstances would be an abuse of process
of law.
13. Accordingly, the application is allowed.
The order dated 19/05/2014 passed by the
learned Judicial Magistrate, First Class, Nagpur issuing
process is quashed and set aside to the extent of applicant –
Shri Gautam Hari Singhania s/o Vijaypat Singhania.
14. The criminal application stands disposed of
accordingly.
JUDGE
manisha
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