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TMI Blog2010 (7) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976 and under Sections 51 and 61 of the Standards of Weights and Measures. (Enforcement) Act, 1985 for alleged violation of Section 39 of the Standards of Weights and Measures Act, 1976 read with Rule 26 of Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The second complaint relates to the alleged offences punishable under Section 63 of the Standards of Weights and Measures Act, 1976 and under Section 51 of the Standards of Weights and Measures (Enforcement) Act, 1985, read with Section 74 of the Standards of Weights and Measures Act, 1976 and Section 62 of the Standards of Weights and Measures (Enforcement) Act, 1985, and alleged violation of Rules 2(r) 4, 6, 8, 9 and 23 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 read with Section 33 of the Standards of Weights and Measures (Enforcement) Act, 1985. The principal ground on which the quashing has been sought for is this that there is no requisite averment in the complaints in terms of Section 74 of the Standards of Weights and Measures Act, 1976 and Section 62 of the Standards of Weights and Measures (Enforcement) Act, 1985. 3. Besides above the grounds on which the quas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndran & Anr. v. Sri Sandip Mehta & Anr. He has also relied on the following decisions, viz., (i) S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr., reported in 2005 SCC (Cri) 1975, (ii) K.K. Ahuja v. V.K. Vora & Anr., reported in JT 2009 (8) SC 691. Whereas the learned Counsel appearing on behalf of the State vehemently opposed the prayer for quashing and submitted when it is an admitted position the petitioner no. 2 is the General Manager of the Company even in absence of requisite averment in terms of Section 74 of the Standards of Weights and Measures Act, 1976 and Section 62 of the Standards of Weights and Measures (Enforcement) Act, 1985, being the General Manager he is very much liable to be prosecuted in connection with the aforesaid complaint case. 5. Before adverting to the rival contentions of the parties, I am of the opinion, it would be apposite to refer to the aforesaid decisions of the Hon'ble High Court in which the Apex Court dealt with the question of quashing of complaint on the score of absence of imputing vicarious liability on the officers of the company. In the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr., (supra), a three Judges Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141." (para 19) In the case of K.K. Ahuja v. V.K. Vora & Anr. (supra), the Apex Court dealt with the question, as to who can be said to be the persons in charge and to be persons "in charge of, and was responsible to the company for the business of the company" as referred in Section 141 of the Negotiable Instruments Act, 1881 and held as follows : "The words "every person who, at the time of the offence was committed, was in charge of, and was responsible for the conduct of the business of the company" occurs not only in Section 141(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the officers specified in clauses (a) to (c), any director or directors who may be specified by the Board in this behalf or where no director is so specified, all the directors. Section 141 uses the words "was in charge of, and was responsible to the company for the conduct of the business of the company". It is evident that a person who can be made vicariously liable under sub-section (1) of Section 141 is a person who is responsible to the company for the conduct of the business of the company and in addition is also in charge of the business of the company. There may be many directors and secretaries who are not in charge of the business of the company at all. The meaning of the words "person in charge of the business of the company" was considered by this Court in Girdhari Lal Gupta v. D.N. Mehta [1971 (3) SCC 189] followed in State of Karnataka v. Pratap Chand [1981 (2) SCC 335] and Katta Sujatha v. Fertiliser & Chemicals Travancore Ltd. [JT 2002 (10) SC 134 : 2002 (7) SCC 655], This Court held that the words refer to a person who is in overall control of the day to day business of the company. This Court pointed out that a person may be a director and thus belongs to the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was guilty of consent and connivance or negligence and therefore, responsible under sub-section (2) of section 141 of the Act. (para 18) Another aspect that requires to be noticed is that only a Director, Manager, Secretary or other officer can be made liable under sub-section (2) of Section 141. But under sub-section (1) of section 141, it is theoretically possible to make even a person who is not a director or officer, liable, as for example, a person falling under clauses (e) and (f) of section 5 of the Companies Act, 1956. When in SMS Pharma (1). this Court observed that 'conversely, a person not holding any office or designation in a company may be liable if he satisfied the requirement of being in charge of and responsible for conduct of the business of the company', this Court obviously had in mind, persons described in clauses (e) and (f) of section 5 of the Companies Act. Be that as it may. (para 19) ............and finally summarized the position in Paragraph 20; The position under section 141 of the Act can be summarized thus : (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early contains the allegations regarding the visit of the Inspector to the shop of respondent No. 6 (Madan Lal) and that the sample taken by him, which was sent to the Public Analyst, was manufactured by Upper Ganges Sugar Mills, Darayaganj, Delhi, having its registered office at Calcutta and that the Public Analyst found the samples to be adulterated. There is no dispute regarding these facts. The only point on which the controversy centers is as to whether or not on the allegations, the Manager as also the other respondents 1 to 5 committed any offence. The main clause of the complaint which is the subject matter of the dispute is clause No. 5 which may be extracted thus :" "5. That the accused No. 3 is the Manager, of accused No. 2 and accused Nos. 4 to 7 are the Directors of accused No. 2 and as such they were in charge of and responsible for the conduct of business of accused No. 2 at the time of sampling." (Para 12) "According to this clause, accused No. 3 (Ramkishan) who is respondent no. 1 in this appeal and accused Nos. 4-7 who are respondent Nos. 2 to 4, were the Directors of the company, respondent No. 5. So far as the Manager, respondent No. 1, is concerned it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought for quashing of the case, viz., the petitioner No. 2 being the General Manager was only involved in dealing with policy matters and no way involved in running the day to day affairs of the company and it is the distributor through whom the retail sales are affected are responsible for such violation over whom the petitioner had no control are pure question of facts are essentially their defence and as such the same cannot be taken into consideration to decide the question whether on the basis of the same the complaint can be quashed or not. 7. However, having gone through the petition of complaint, I find in both the cases in the cause title the petitioner Nos. 1 and 2 have been described as the Chairman and the General Manager, whereas in the body of the complaint only averment was to the effect so far as they are concerned are as follows : That the persons accused Nos. 3 and 6 committing these offences are companies so every person including accused Nos. 4. 5 and 7 as well as the companies themselves are liable to be proceeded against as per Section 74 of the Standards of Weights and Measures Act, 1976 and Section 62 of the Standards of Weights and Measures (Enfor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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