Case Note & Summary
The petitioners, Rajivkumar Satyapal Gupta and Peushkumar Shrikisan Gupta, were directors of M/s Dharampal Satyapal Ltd. and were original accused nos. 4 to 6 in RCC No.57/1998 pending before the Judicial Magistrate First Class, Amalner. They filed an application for discharge under Section 17(1)(A)(i) of the Prevention of Food Adulteration Act, 1954, on the ground that the complaint did not contain specific averments that they were in charge of and responsible for the conduct of the business of the company. Additionally, they argued that accused no.8, Ashok Kumar Nagar, had been appointed as a nominee under Section 17(2) of the Act on 28.2.1994, who was in charge and responsible for the company's conduct, and this fact was admitted by the prosecution. The learned Magistrate rejected their discharge application vide order dated 8.2.2001. The petitioners challenged this order in the High Court. The High Court, relying on the ruling in Nalin Thakur v. State of Maharashtra (2004 (1) FAC 68), held that specific averments in the complaint are necessary to show that the accused director was in charge of and responsible for the conduct of the business. Since the complaint lacked such averments and a nominee had been appointed, the directors could not be prosecuted. The court allowed the petition, quashed the impugned order, and discharged the petitioners from the case.
Headnote
A) Criminal Law - Prevention of Food Adulteration - Section 17(1)(A)(i) and Section 17(2) of Prevention of Food Adulteration Act, 1954 - Discharge of Directors - Complaint lacked specific averment that directors were in charge of and responsible for conduct of business - Nominee appointed under Section 17(2) admitted by prosecution - Held that directors cannot be prosecuted without specific averment and nominee bears primary liability (Paras 2-4).
Issue of Consideration
Whether directors of a company can be prosecuted under the Prevention of Food Adulteration Act without specific averments in the complaint that they were in charge of and responsible for the conduct of the business of the company, especially when a nominee has been appointed under Section 17(2) of the Act.
Final Decision
The petition is allowed. The impugned order dated 8.2.2001 passed by the Judicial Magistrate First Class, Amalner below Exh.14 in RCC No.57/1998 is quashed and set aside. The petitioners (original accused nos. 4 to 6) are discharged from the case. Petition abated as against petitioner no.2 (Satyanarayan Surajmal Gupta) due to his death.
Law Points
- Specific averment in complaint necessary to show director in charge and responsible for conduct of business
- Nominee appointed under Section 17(2) bears primary liability
- Directors cannot be prosecuted without specific averment
Case Details
2013 LawText (BOM) (06) 2
Criminal Writ Petition No. 120 of 2001
Mr. Deepak Dhingra a/w Mr. B.R. Warmaa for Petitioners, Mr. K.S. Patil APP for Respondents
Rajivkumar Satyapal Gupta, Peushkumar Shrikisan Gupta
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Nature of Litigation
Criminal writ petition challenging order rejecting discharge application under Prevention of Food Adulteration Act
Remedy Sought
Petitioners sought quashing of order dated 8.2.2001 and discharge from the case
Filing Reason
Complaint lacked specific averments that directors were in charge of and responsible for conduct of business; nominee appointed under Section 17(2) admitted by prosecution
Previous Decisions
Judicial Magistrate First Class, Amalner rejected discharge application vide order dated 8.2.2001 in RCC No.57/1998
Issues
Whether the complaint contained specific averments that the directors were in charge of and responsible for the conduct of the business of the company as required under Section 17(1)(A)(i) of the Prevention of Food Adulteration Act, 1954?
Whether the appointment of a nominee under Section 17(2) of the Act absolves the directors of liability in the absence of specific averments?
Submissions/Arguments
Petitioners argued that the complaint did not contain specific averments that they were in charge of and responsible for the conduct of business, relying on Nalin Thakur v. State of Maharashtra.
Petitioners argued that a nominee was appointed under Section 17(2) and admitted by prosecution, making the nominee primarily liable.
Respondent/State opposed the petition, but no specific arguments are recorded in the judgment.
Ratio Decidendi
Under Section 17(1)(A)(i) of the Prevention of Food Adulteration Act, 1954, a director of a company can be prosecuted only if the complaint contains specific averments that the director was in charge of and responsible for the conduct of the business of the company. When a nominee is appointed under Section 17(2) of the Act, the nominee bears primary liability, and directors cannot be prosecuted without such specific averments.
Judgment Excerpts
Learned counsel for the petitioners submitted that the fact that nominee was appointed is not in dispute and was in fact admitted by the prosecution.
My attention is also invited to section 17 offences by companies in the Prevention of Food Adulteration Act to emphasize the submission that, when any specific accused is nominated and admitted as nominee of the company prosecuted for alleged offence punishable under the act, in that case, it is the primary responsibility of the nominee for penal liability as alleged and not for director.
Procedural History
The petitioners (original accused nos. 4 to 6) filed an application for discharge before the Judicial Magistrate First Class, Amalner in RCC No.57/1998. The Magistrate rejected the application on 8.2.2001. The petitioners then filed Criminal Writ Petition No. 120 of 2001 before the Bombay High Court, Aurangabad Bench. During pendency, petitioner no.2 died on 16.5.2009, and the petition abated as against him. The remaining petitioners pursued the writ petition, which was allowed on 14.6.2013.
Acts & Sections
- Prevention of Food Adulteration Act, 1954: Section 17(1)(A)(i), Section 17(2)
