2021 (8) TMI 1402 - SC - Indian Laws

Failure to follow procedure contemplated under Section 24(4) of the Act and Section 202 of the Code of Criminal Procedure - Magistrate has taken cognizance without conducting inquiry and ordering investigation - sample of insecticides was misbranded as the same was found to contain 10.09% of active ingredient only as against 15% as labelled on the packet - HELD THAT - Section 33 of the Act deals with offences by companies . A reading of Section 33(1) of the Act makes it clear that whenever 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 or 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. In the case on hand it is not in dispute that on behalf of the 1st Appellant - Company 2nd Appellant - Managing Director has furnished an undertaking dated 22.01.2013 indicating that Shri Madhukar R. Gite Manager of the Company has been nominated in the resolution passed by the Company on 28.12.2012 to be in charge of and responsible to the said Company to maintain the quality of the pesticides manufactured by the said Company and he was authorized to exercise all such powers and to take all such steps as may be necessary or expedient to prevent the commission of any offence under the Act. Filing of such undertaking with the Respondent is not disputed. Further from the averments in the counter affidavit filed on behalf of Respondents 1 2 and other material placed on record no case is made out to quash the proceedings at this stage by accepting the plea of the Appellants that the procedure contemplated Under Section 24(4) of the Act and Section 202 of the Code of Criminal Procedure is not followed. With regard to the procedure Under Section 24(4) of the Act after the 1st Appellant - Company has deposited necessary Demand Draft for sending 2nd sample to the Central Insecticide Testing Laboratory steps were taken promptly and report was also sent by the Central Insecticide Testing Laboratory within the prescribed period of 30 days. The Code of Criminal Procedure itself provides for exemption from examination of such witnesses when the complaint is filed by a public servant. In the present case 2nd Respondent/Public Servant in exercise of powers under provisions of the Insecticides Act 1968 has filed complaint enclosing several documents including reports of the Government Laboratories it is always open for the Magistrate to issue process on such complaint which is supported by documents. In any event there are no merit in the submissions of the learned Counsel that proceedings are to be quashed only on the ground that the Magistrate has taken cognizance without conducting inquiry and ordering investigation. In absence of showing any prejudice caused to the Appellant at this stage the same is no ground to quash the proceedings in exercise of power Under Section 482 of the Code of Criminal Procedure. This Criminal Appeal is partly allowed so far as the Appellant No. 2 - Managing Director is concerned and the impugned Order of the High Court dated 12.05.2020 passed by the High Court of Punjab Haryana at Chandigarh in CRM-M-12082-2016 (O M) is set aside. Consequently Complaint No. 313 dated 19.08.2015 filed by the 2nd Respondent - Quality Control Inspector Bhikhiwind District Tarn Taran Punjab pending before the learned Judicial Magistrate First Class Patti stands quashed qua the Appellant No. 2 namely Mr. Pramod N. Karlekar/Accused No. 4.

Summary

Issues:
1. Quashing of complaint under the Insecticides Act, 1968 against the Appellants.
2. Vicarious liability of the Managing Director of the Company.
3. Compliance with procedural requirements under the Act and the Code of Criminal Procedure.
4. Abuse of process of law and grounds for quashing proceedings.

Issue 1: Quashing of complaint under the Insecticides Act, 1968 against the Appellants:
The Criminal Appeal involved the Appellants who were aggrieved by the High Court's order dismissing their application to quash a complaint filed under the Insecticides Act, 1968. The complaint was regarding the misbranding of insecticides manufactured by the Company. The High Court had dismissed the petition for quashing the complaint against the Appellants, except for the Godown Watchman. The Supreme Court analyzed the facts of the case, arguments put forth by both sides, and the provisions of the Act to determine the liability of the Appellants.

Issue 2: Vicarious liability of the Managing Director of the Company:
The Court examined the provisions of Section 33 of the Act which deal with 'offences by companies'. It was established that the Managing Director, as the responsible person of the Company, could be deemed guilty of the offence if the offence was committed by the Company. However, the Court noted that the Managing Director had already nominated a Manager to be in charge of maintaining the quality of pesticides manufactured by the Company. The Court emphasized that the Managing Director cannot be prosecuted solely based on vague allegations of being the overall responsible person. The Court found that the prosecution against the Managing Director was an abuse of the process of law and allowed the appeal in favor of the Managing Director.

Issue 3: Compliance with procedural requirements under the Act and the Code of Criminal Procedure:
The Court examined whether the procedural requirements under Section 24(4) of the Act and Section 202 of the Code of Criminal Procedure were followed. It was observed that the steps for testing the samples and submitting reports were duly followed. The Court also highlighted the special provisions for public servants filing complaints and the admissibility of reports from Government Scientific Experts. The Court concluded that there was no ground to quash the proceedings based on procedural lapses at that stage.

Issue 4: Abuse of process of law and grounds for quashing proceedings:
The Court reiterated that the Managing Director should not be prosecuted based on vague allegations and that the responsibility had been clearly assigned to another individual within the Company. The Court found no basis to proceed against the Managing Director and quashed the complaint against him. The Court allowed the appeal partly, setting aside the High Court's order and quashing the complaint against the Managing Director. The Court clarified that the findings were specific to the disposal of the appeal and the Trial Court was open to record its own findings based on the evidence.

In conclusion, the Supreme Court allowed the Criminal Appeal partly, quashing the complaint against the Managing Director while upholding the proceedings against the Company. The judgment provided detailed analysis on vicarious liability, procedural compliance, and the abuse of process of law in the context of the Insecticides Act, 1968.