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TMI Blog1987 (8) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... garwal, J.) following the decision of this Court in State (Delhi Admn.) v. LK. Nangia Anr., [1980] 1 SCC 258 interpreting a similar provision contained in sub-s. (4) of s. 17 of the Prevention of Food Adulteration Act, 1954 had held that there was no sufficient ground against the respondents inasmuch as the allegations made in the complaint do not constitute an offence punishable under section 44 for the admitted contravention of ss. 25(1) and 26 read with s. 47 of the Act. The question essentially turns upon the rule of construction to be adopted in s. 47. The facts of the case are these. Messrs Modi Industries Limited is an existing company under the Companies Act, 1956. It is a large business organisation having diversified business activities. Prior to the commencement of the Act it had established an industrial unit called Messrs Modi Distillery at Modi Nagar, Gaziabad engaged in the business of manufacture and sale of industrial alcohol. During the process of manufacture of such industrial alcohol, the said industrial unit discharges its highly noxious and polluted trade effluents into the Kali River through the Kadrabad Drain which is a stream within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court of the Chief Judicial Magistrate, Gaziabad. Unfortunately, the complaint was inartistically drafted. It was averred in paragraph 2 that Messrs Modi Distillery i.e. the industrial unit was a company within the meaning of s. 47 of the Act, that it had been knowingly and wilfully discharging its highly noxious and polluted trade effluents into the Kali River which is a stream within the meaning of s. 2(j) of the Act through the Kadrabad Drain and thereby causing continuous pollution of the said stream. There were eleven persons arrayed as ac- cused. Instead of launching a prosecution against Messrs Modi Industries Limited, the Board impleaded its industrial unit Messrs Modi Distillery as respondent no. 1 while re- spondents nos.' 2-11 were the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited i.e. the Company owning the industrial unit. It appears that the respondents did not appear before the learned Chief Judicial Magistrate in response to the notice issued to them. The learned Magistrate after recording the statement of S.M. Pandey, Legal Assistant of the Board directed the issue of process to the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or other officer of the company, such director, manag- er, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. On a plain reading of sub-s. (1) of s. 47 of the Act, where an offence has been committed by a company, every person who at the time of the commission of the offence was in charge of and 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. Proviso to sub-s. (1) however engrafts an exception in the case of any such person if he were to prove that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. It would be noticed that sub-s. (1) of s. 47 is much wider than sub-s.(4) of s. 17 of the Prevention of Food Adulteration Act, 1954 which fell for consideration in I.K. Nangia's case. Furthermore, proviso to sub-s. (1) shifts the burden on the delinquent officer or servant of the company responsible for the commission of the offence. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake the formal amendments to the averments contained in paragraph 2 of the complaint so as to make the controlling company of the industrial unit figure as the concerned accused in the complaint. All that has to be done is the making of a formal application for amendment by the appellant for leave to amend by substituting the name of Messrs Modi Industries Limited, the Company owning the industrial unit, in place of Messrs Modi Distillery. Although as a pure proposition of law in the abstract the learned Single Judge's view that there can be no vicarious liability of the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors under sub-s. (1) or (2) of s. 47 of the Act unless there was a prosecution against Messrs Modi Industries Limited, the Company owning the industrial trait, can be termed as correct, the objection raised by the petitioners before the High Court ought to have been viewed not in isolation but in the conspectus of facts and events and not in vacuum. We have already pointed out that the technical flaw in the complaint is attributable to the failure of the industrial unit to furnish the requisite information called for by the Board. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effluent into a stream without the consent of the Board. On a combined reading of ss. 25(1) and 26 it was mandatory for the Company viz. Messrs Modi Industries Limited to make an application to the Board under sub-s. (2) of s. 25 read with s. Z6 in the prescribed form containing the prescribed particulars for grant of consent for the dis- charge of its trade effluents into the said stream, subject to such conditions as it may impose. Along with the com- plaint the appellant has placed on record several documents showing that the rejection of the application was in the public interest as it was incomplete in many respects. These documents also reveal that the Company did not have proper arrangements for treatment of the highly polluted trade effluents discharged by it and although the appellant repeatedly by its letter required the Company to obtain the consent of the Board, the Company was intentionally and deliberately avoiding compliance of the requirements of ss. 25(1) and 26 of the Act. The contravention of these provisions is an offence punishable under s. 44. The other ten persons arrayed by name as accused in the complaint are respondents nos. 2-11, the Chairman, Vice-Chair ..... X X X X Extracts X X X X X X X X Extracts X X X X
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