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Sadhuram and ors. Vs. State Through Food Inspector - Court Judgment

LegalCrystal Citation
SubjectCommercial;Food Adulteration
CourtMadhya Pradesh High Court
Decided On
Case NumberCriminal Revn. No. 342 of 1963
Judge
Reported inAIR1967MP122; 1967CriLJ549
ActsPrevention of Food Adulteration Act, 1954 - Sections 7 and 16(1)
AppellantSadhuram and ors.
RespondentState Through Food Inspector
Advocates:Dewandas, Adv.
DispositionPetition dismissed
Cases ReferredR.K. Khandelwal v. State
Excerpt:
- - often there is an inner circle of management where the responsibility will cease and immunith will start would be an interesting question which fan be answered with reference to the pattern of the arrangement for day to day business in the company......mills on that occasion. they admit they were partners and they also accept the principle that any partner in charge of and responsible for the business would be liable even if he was absent at the time of the commission of the offence. their argument is that in the circumstances of the case their absence at the time of the offence was itself evidence 'of the offence having been committed without their knowledge and their having exercised all due diligence to prevent its commission'. in fact, the argument closely analysed turns out to be twofold; firstly, that sub-section (1) of section 17 of the act has no application in their case because they were not in charge of and responsible for the conduct of the business of the firm; secondly, even if they were, the offence had been committed.....
Judgment:
ORDER

H.R. Krishnan, J.

1. The appellants in this case are three partners (or a paid manager and two partners proper) of a factory manufacturing linseed oil. A sample of the oil was taken and it being round to be below standard there was a prosecution in which each of the three partners was convicted under Sections 7 and 16(1) of the Prevention of the Food Adulteration Act (hereinafter referred to as the Act') and sentenced to pay a fine of Rs. 500 each with imprisonment in default. An appeal being dismissed, ail the three came up in revision. But the application was admitted for hearing only on the ground, namely, whether the partners other than Sadhuram the paid manager or the partner who was actually present at the time of the taking of the sample could be considered to have been in charge of the business for the purpose of Section 17 of the Act and held liable, even though they were not in the premises when the sample was taken by the Food Inspector.

2. The factual position as found is that Sadhuram was at the mills at that time. The two others--Sangatram and Laxmichand--go there from time to time but were not at the mills on that occasion. They admit they were partners and they also accept the principle that any partner in charge of and responsible for the business would be liable even if he was absent at the time of the commission of the offence. Their argument is that in the circumstances of the case their absence at the time of the offence was itself evidence 'of the offence having been committed without their knowledge and their having exercised all due diligence to prevent its commission'. In fact, the argument closely analysed turns out to be twofold; firstly, that Sub-section (1) of Section 17 of the Act has no application in their case because they were not in charge of and responsible for the conduct of the business of the firm; secondly, even if they were, the offence had been committed without their knowledge they having exercised all due diligence to prevent the commission.

3. All that we have is that they admit to be partners living in the same town and in fact the same locality as the mill. They had not dissociated themselves. Once it is established that an individual is a member of a firm especially if it is small one, it would be for him to show that he had dissociated himself from the day to day conduct of the business. The modus operandi in public limited companies is of course different, and of private limited companies would seem to be half way; but we are not concerned with them here, except to note that these are in different layers. There are share-holders who both in law and in practice do not in that capacity have any control over the conduct of the business of the company: then there are directors who have got a voice in the conduct of the business: often there is an inner circle of management

Where the responsibility will cease and immunith will start would be an interesting question which fan be answered with reference to the pattern of the arrangement for day to day business in the company. In the case of a, firm with two or three partners that question does not arise; every partner would be deemed responsible unless he shows that he has completely dissociated himself from the day to day business of the partnership. He can also show in the alternative so that he conies under the proviso, namely, being interested in the business and being responsible for it, he had taken all reasonable precautions against the commission of the offence and it had been committed without his knowledge. These two are mutually exclusive. Here the partners have not shown either fact.

4. Whether or not a partner was or was not in charge of the business or was or was not responsible for its conduct is always a question of fact which has to be decided with reference to the circumstances of each case. However, the applicants have cited case law which may be referred to for what it is worth. In Jagdish Prosad Gupta v. State of West Bengal. (1961) 65 Cal WN 1107, the facts were all disbelieved; but apart from them it was held that there was no evidence that one of the applicants before that Courl-Bajoria was in charge of or was responsible to the company for the conduct of the business though there was evidence that he was one of the proprietors.

This is essentially a finding of fact; but I respectfully disagree from the view that in the case of small partnership and the partners are all local, it would be for the prosecution to show that the partner was in charge of or responsible for the conduct of the business. In such cases there is a presumption, unless the partner concerned shows that under the agreement or the modus operandi of the day to day affairs, he was not in charge of and was not responsible to the conduct of the company. Similarly, in the case reported in Public Pro secutor v. N. Subrahmanyam, AIR 1960 Andh Pra 584, it was held as a fact that the managing director did not know that the stock of the aniline-coloured shall which had arrived on the previous day in a soaked and damaged condition was misbranded. We are not concerned whether this finding of fact could be derived from the evidence but it was a finding of fact and in those circumstances probably a sound one considering especially that the stock had come only on the previous night.

Be that as it may, the Court itself was allowing the appeal on the ground that it could not even be said on the evidence before it that the company itself had committed the offence. Of course, where the company had not committed the offence, there was no question of investigating whether this or that partner or director would be liable under Section 17(1) of the Act. Similarly, in the Madras case reported in Public Prosecutor v. R. Karuppian, AIR 1958 Mad 183, it was found on the facts that the duties of the Secretary of the Cooperative Society concerned who was being prosecuted were restricted only to checking the cash received by the clerk and examining the accounts rendered by him. On that finding the Secretary could not be held to be responsible for or being in charge of the business of supplying milk. So it was held when the Cooperative Milk Supplying Society was guilty of selling adulterated stuff the Secretary could not be convicted. There again the decision emerged out of a finding of fact.

5. Yet another case referred to is the one reported in R.K. Khandelwal v. State, 1964 All LJ 625: 1965 (2) Cri LJ 439. It was actually a case under the Drugs Act; hut Section 34 of that Act is similar to Section 17 of the Food Adulteration Act. That the director or partner should have in charge of or responsible for the conduct of the company's or firm's business before he is convicted is clear enough; but the following passage out of that judgment does seem to he worded rather too widely as being charge and responsibility ilself implies knowledge :

'No director or partner of a company can be convicted of the offence under Section 27 of the Act unless it is proved that the sub-standard drug was sold with his consent or connivance.'

Otherwise the principle is sound, the controversy usually centers round how to show that a person was in charge of or responsible for the conduct of the business. For that one has to take into account various circumstances including the size of the partnership, the residence of the partners, and the nature of the business.

6. In none of these cases has the mere physical presence or absence of the director or partner been treated as the criterion. To he in charge of or be responsible it does not at all require that the partner or director should be bodily present, charge or responsibility being something impalpable.

7. All food regulations imply what can be called vicarious liability of the absentee principal. In a partnership every partner in charge and responsible becomes the principal with reference to the paid manager or the partner who is bodily present and does the act. This vicarious liability of the absentee is accepted in our law as in all other laws relating to the regulation of trade in foodstuffs. In fact this is inherent in the wording of Section 7.

'No person shall himself or by any personin his behalf.'

8. The result of the discussion is that I would hold that all the three were in charge of and responsible for the business of the firm, and were rightly convicted. The lines also are not excessive. The application is dismissed


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