1983 (10) TMI 56 - HC - Central Excise

Prosecution - Complaint against Directors of the company not maintainable when there is no specific allegation in the complaint against them

Summary

Issues:
- Summoning order against the petitioners under Section 482 of the Criminal Procedure Code based on a complaint filed under Section 9 of the Central Excise and Salt Act, 1944.
- Liability of the directors of a company for excise duty evasion due to the removal of steel ingots without payment.
- Lack of specific allegations against the directors in the complaint.
- Vicarious liability of the manager of the company versus the directors.
- Comparison with previous judgments regarding the liability of directors under Section 9(1) of the Central Excises and Salt Act.
- Decision on whether the proceedings against the petitioners should be allowed to continue.

Analysis:
The judgment concerns a petition filed under Section 482 of the Criminal Procedure Code against a summoning order issued to the petitioners, who are directors of a company, under the Central Excise and Salt Act, 1944. The complaint alleged the removal of 80 M.T. of steel ingots without paying excise duty, implicating the directors. However, the complaint lacked specific allegations against the present petitioners, only mentioning the manager's failure to explain the shortage. The judgment cited the Supreme Court's ruling in a similar case, emphasizing that vicarious liability of directors requires evidence of their involvement, which was absent in this case. The court noted that the manager could be held responsible, but without specific allegations against the directors, they could not be held liable. The judgment highlighted the need for a direct link between the directors' actions and the alleged offence under the Excise Act.

The judgment referenced a previous decision by the Calcutta High Court, reinforcing the principle that directors cannot be prosecuted under Section 9(1) of the Excise Act without specific acts of omission or commission amounting to an offence. The court noted that the prosecution against the directors in this case was not legally sustainable due to the lack of such averments. Despite the respondent's failure to provide contrary authorities, the court concluded that the proceedings against the petitioners could not continue based on the insufficient allegations in the complaint. Consequently, the court allowed the petition, quashing the summoning order dated 27th September, 1982. However, the judgment left room for the respondent to proceed against the petitioners or other directors if additional incriminating evidence is discovered.