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TMI Blog2015 (2) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion that for maintaining the prosecution Under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. After analyzing all the provisions and having noticed the different decisions rendered by this Court, the three Judges' Bench arrived at the irresistible conclusion that for maintaining the prosecution Under Section 141 of the Act, arraigning a company as an accused is imperative. Hence in this case, we find no reason to refer the matter to the larger Bench. In the present case, only the Appellant was impleaded as an accused. In that view of the matter, we are of the view that complaint with respect to the offence Under Section 138 read with 141 of the Act was not maintainable following the decision in Aneeta Hada - Appellant stands acquitted. Appeal allowed. - CRL. A. NO. 402 OF 2015 (ARISING OUT OF SLP (CRL.) NO. 1001 OF 2013) - - - Dated:- 24-2-2015 - S.J. MUKHOPADHAYA AND N.V. RAMANA, JJ. JUDGMENT 1. Leave granted. This appeal has been preferred by the accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a complaint was filed by the Respondent-company before the Trial Court, which after hearing the parties and on appreciation of evidence convicted the accused-Appellant for the offence Under Section 138 of the Act. 4. Aggrieved by the judgment dated 17.04.2010 passed by the sub-Division Judicial Magistrate, Sambalpur in I.C.C. No. 259/2008, the Appellant preferred Criminal Appeal No. 26/2010 before the District Sessions Judge, Sambalpur which was dismissed on 27.05.2011. Against the same, Criminal Revision was preferred before the High Court which was rejected by the impugned judgment. 5. The learned Counsel for the Appellant contended that the Appellant was the Director of M/s. Naina Devi Steel Castings Pvt. Ltd. The cheque was issued on behalf of the said Company. Though the complainant/Respondent arraigned the Appellant-Director as an accused, the Company, namely M/s. Naina Devi Steel Castings Pvt. Ltd. was not arraigned as accused. It is contended that in absence of impleadment of the Company as per Section 141 of the Act, the punishment Under Section 138 on the Director cannot be sustained. 6. The learned senior counsel appearing on behalf of complainant/Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10 to the effect that the person contravening the order must be a company itself. In the present case, there is no finding either by the Magistrate or by the High Court that the sale in convention of Clause (5) of the Iron Steel (Control) order was made by the Company. In fact, the Company was not charged with the offence at all. The liability of the persons in charge of the Company only arises when the contravention is by the Company itself. Since, in this case, there is no evidence and no finding that the Company contravened Clause (5) of the Iron Steel (Control), order the two Respondents could not be held responsible. The actual contravention was by Kamdar and Villabhadas Thacker and any contravention by them would not fasten responsibility on the Respondents. The acquittal of the Respondents is, therefore, fully justified. 8. In Sheoratan Agarwal's case while dealing with Section 10 of the Essential Commodities Act, two Judges' Bench observed as follows: Section 10 of the Essential Commodities Act is as follows: (1) If the person contravening an order made Under Section 3 is a company, every person who, at the time the contravention was committed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer of the Company may not be separately prosecuted if the Company itself is not prosecuted. Each or any of them may be separately prosecuted or alongwith the Company. Section 10 lists the person who may be held guilty and punished when it is a Company that contravenes an order made Under Section 3 of the Essential Commodities Act. Naturally, before the person in-charge or an officer of the Company is held guilty in that capacity it must be established that there has been a contravention of the order by the Company. That should be axiomatic and that is all that the Court laid down in State of Madras v. C.V. Parekh (supra) as a careful reading of that case will show and not that the person-in-charge or an officer of the Company must be arraigned simultaneously along with the Company if he is to be found guilty and punished. The following observations made by the Court clearly bring out the view of the Court. It was urged that the two Respondents were in charge of, and were responsible to, the company for the conduct of the business of the Company and, consequently, they must be held responsible for the sale and for thus contravening the provisions of Clause 5 of the Iron an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant. 58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words as well as the company appearing in the Section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicted. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution Under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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