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1986 (4) TMI 365 - HC - Indian Laws

Issues Involved:
1. Whether Section 10(1) of the Essential Commodities Act requires the incorporation of specific words in complaints against partners of a firm.
2. Whether Section 10(2) of the Act mandates the incorporation of allegations regarding consent, connivance, or neglect in the complaint itself.

Issue-wise Detailed Analysis:

Issue 1: Incorporation of Specific Words in Complaints (Section 10(1) of the Essential Commodities Act)
The court examined whether Section 10(1) of the Essential Commodities Act mandates the explicit inclusion of the words "was in charge of and was responsible to the firm for the conduct of the business of the firm" in complaints against partners. The court noted the broader perspective of the Essential Commodities Act, which aims to address rampant economic offenses. The Act's provisions are intended to be construed liberally to protect the populace.

Section 10(1) creates a deeming legal fiction whereby every person who is in charge of or responsible to the firm for the conduct of its business becomes automatically guilty of the offense committed by such a firm. The court emphasized that this vicarious liability does not require the complaint to explicitly plead the rule of evidence or the deeming fiction provided by the statute. The administration of criminal law should focus more on substance than on form, avoiding hyper-technical arguments.

The court concluded that Section 10(1) does not necessarily mandate the incorporation of the specific words "was in charge of and was responsible to the firm for the conduct of business of the firm" in all complaints against partners for offenses under the Act. This conclusion was supported by binding precedents, including Full Bench judgments in Mahmud Ali v. State of Bihar and Badri Prasad Gupta v. State of Bihar.

Issue 2: Allegations of Consent, Connivance, or Neglect (Section 10(2) of the Essential Commodities Act)
The court examined whether Section 10(2) of the Act mandates the incorporation of allegations that the offense was committed with the consent, connivance, or neglect of the partner in the complaint itself. Section 10(2) begins with a non-obstante clause, indicating its independent effect and wider application compared to Section 10(1). It applies to a larger class of officers, including directors, managers, secretaries, or other officers of the company, and imposes vicarious liability if the offense is committed with their consent, connivance, or neglect.

The court emphasized that Section 10(2) is both a rule of evidence and a deeming fiction for vicarious culpability. The use of the word "proved" indicates that this subsection comes into play during the trial when adequate proof is available. The court held that rules of evidence or deeming fictions of law are not required to be pleaded at the foundational stage of a complaint. Therefore, the complaint need not inflexibly plead consent, connivance, or neglect at the threshold stage.

The court concluded that Section 10(2) does not mandate the incorporation of allegations regarding consent, connivance, or neglect in the complaint itself. This conclusion was supported by the Full Bench judgment in Mahmud Ali v. State of Bihar.

Conclusion:
The court dismissed the criminal miscellaneous petition, concluding that there was no merit in the arguments presented. The trial court was directed to expeditiously proceed with the trial, noting the significant delay caused by the pendency of the petition.

Separate Judgments:
- P.S. Sahay, J.: Agreed with the majority view, emphasizing that the point of law stands concluded by the Full Bench decision.
- S.S. Hasan, J.: Dissented, reiterating his views from previous cases and emphasizing the need for specific facts in the complaint to indicate how an accused is in charge of and responsible for the firm's affairs.

The majority view prevailed, leading to the dismissal of the petition and the continuation of the trial.

 

 

 

 

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