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Jagdish Prasad Gupta Vs. State of Orissa - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtOrissa High Court
Decided On
Judge
Reported in52(1981)CLT558; 1982CriLJ113
AppellantJagdish Prasad Gupta
RespondentState of Orissa
Cases ReferredMangaldas v. State of Maharashtra.
Excerpt:
.....is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. - and was 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: this provision clearly envisages that the company is deemed to be guilty and the person in charge is also to be deemed guilty. the section itself is very clear that if any offence is committed by a firm, the pei-son in charge of the business as well as the firm both are to be prosecuted. the supreme court had also to consider a case of the like nature under the drugs and cosmetics act, 1940 in 1981crilj595 ,(state of karnataka v. it seems a real sale as..........firm or other association, and the same test must apply to a director in-charoe and a partner of a firm in-charge of a business. it seems to us that in the context a person 'in-charge', must mean that the person should be in overall control of the day to day business of the company or firm.in pratao chand case 1981 cri lj 595 (supra) the supreme court came to the conclusion that the evidence adduced in that case shows that it was respondent 1 and not respondent 2 who was in overall control of the day to day business of the firm. respondent 2 was not liable because he had the right to participate in the business of the firm under the terms of the partnership deed.it would thus be seen that if the petitioner, in the instant case, is found to be in charge of the business and is responsible.....
Judgment:

N.K. Das, J.

1. Petitioner was convicted Under Section 16(1)(a)(i) of the Prevention of Food Adulteration Act and was sentenced to undergo R. I. for six months and to pay a fine of Rs. 1,000/- in default to undergo R- L for three months more by the trial court. In appeal, the order of conviction and sentence has been confirmed and this revision is directed against the appellate order.

2. Prosecution case is that the petitioner is a partner of the firm M/s. Trade Link Enterprises. On 6-9-1975, the Food Inspector (P- W. 1) was informed by the Sanitary Inspector (P- W. 3) and the S. D. O. that the petitioner had stored for sale several bags of adulterated food, namely, Arhar Dal and Chana Dal in his godown. These foodstuffs were unfit for human consumption. P. W- 1 along with P.W. 3 and a police party went to he godown of the petitioner and found 192 bags of Arhar Dal and 17 bags of Chana Dal infested by insects. P.W. 3 seized the stock and kept the same in the Zima of the petitioner. He served notice on the petitioner intimating to take sample of those articles for examination by public analyst. Samples were taken from each of the Dais. These werp divided into three equal parts and each part was put in a dry bottle. The bottles were labelled and sealed and one bottle from each variety was handed over to the petitioner on receipt. Then the bottles were sent for examination by public analyst, who opined that both the Dais were adulterated and did not conform to the standard. After complying with the formalities, prosecution report was filed against the petitioner.

3. The petitioner admits that he is a partner of M/s. Trade Link Enterprises and the Food Inspector inspected his godown and seized Arhar Dal and Chana Dal. These Dais were also infested by insects. He admits service of notice and the samples taken by the Food Inspector. His plea is that the Dais were stored for cattle feeding and not meant for human consumption. He denies service of copy of the report of the analyst.

4. Both the courts below have held the analyst's report was handed over to the petitioner. He was in charge of the business and his plea that the Dais were not meant for human consumption is not acceptable.

5. Admittedly, petitioner is a partner of the firm M/s. Trade Link Enterprises. The godown in which the Dais were found belongs to the aforesaid firm. The fact that the Dais were adulterated being infested by insects is also not disputed. Both the courts below have negatived the contention of the petitioner that he did not receive the report of the public analyst.

6. It is contended on behalf of the petitioner that as the firm has not been proceeded against, the proceeding against the petitioner is not maintainable. The petitioner was not charged being in 'charge of the business and there was no sale of the stock to the Food Inspector.

Section 17 of the Prevention of Food Adulteration Act existing at the relevant time was as follows:-

17 (1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of. and was 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:

Provided that nothing contained in this Sub-section (shall render any such person liable to any. punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence,.(2) Notwithstanding anything contained in Sub-section () where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of. or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, 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.

Sub-section (1) of S- 17 provides that if the offence has been committed by a company, not only the company is deemed to be guilty, but also the person who was in charge and was responsible to tae company for the. conduct of the business is deemed to be guilty. If the person proves that the offence was committed without his knowledge, or he exercised all due diligence to prevent the commission of such offence, then he shall not be liable to any punishment. This provision clearly envisages that the company is deemed to be guilty and the person in charge is also to be deemed guilty. The, provision does not say that unless the company is proceeded against, a partner; or the person in charge cannot be held liable. According to the provisions of j the Act, a partnership firm is also ' i-' eluded in the definition of 'Company' and the expression 'Director' in relation to a firm means 'a partner of the firm'. If an offence under this Act is committed, the firm is undoubtedly liable. Any person or a partner of the firm can be held liable if he is in charge of the management of the business and responsible to the company.

Reliance has been placed on the case of Chander Bhan v. The State (1975) 2 FAC 77 (Delhi). That was a case where it was found that no offence was committed by the firm- So, the person in charge of the business of the firm could not be convicted unless the partnership firm prosecuted. The facts and circumstances, of that case are absolutely different. The Section itself is very clear that if any offence is committed by a firm, the pei-son in charge of the business as well as the firm both are to be prosecuted. It is not the intention of the enactment that unless the firm is prosecuted, a director in charge of the business of the firm cannot be prosecuted.

Reliance has also been placed on a decision of this Court in Santikumar, Agarwala v. State ILR (1975) Cut 86. It has been held in that decision;

Where the licence is in the name of the firm the primary liability for prosecution on account of contravantion of the order and the conditions of the order and the conditions of the licence lies on the firm. The partner of a firm or director of company cannot be convicted for such an offence unless the firm itself is prosecuted.

That was a case of violation of the Orissa Baby Food Licensing Order and tne licence was in the name of the firm. For the aforesaid decision reliance was placed on State of Madras v. C. V. Parekh : 1971CriLJ418 . The question that was considered by the Supreme Court related to the provisions of Section 10 of the Essential Commodities Act and those provisions are found to be the same as in S- 17 of the Prevention of Food Adulteration' Act. In that; case there was no evidence that the person proceeJ-ed against had any knowledge of any negotiation or sale by the company ji the firm through other persons and, therefore, it was held that in such a case the company was directly responsible. The Supreme Court held (para 2):

In order to justify conviction of the respondents, evidence was needed o show that they knew of the sale or were parties to it. No such evidence was available. On this ground, the High Court set aside the conviction of the two respondents. The order of the High Court is obviously correct. No evidence on the record has been pointed out from which it could be inferred that the two respondents had any knowledge of the sale which was manoeuvred by Kamdar and Vallabhadas Thacker, nor is there evidence io show that they took any part in the negotiations for sale, or in the sale itself. Consequently, it is clear that their convicuon was not justified.

The argument advanced before the Supreme Court was that as the respondents in that appeal were in charge of and were responsible to the company for the conduct of the business, they should be held liable. The Supreme Court repudiated the contention holding that (para 3):

This argument cannot be accepted, because it ignores the first condition for the applicability of Section 10 to the effect that the person contravening the ordei must be a company itself. In the present case, there is no finding either by tae Magistrate or by the High Court that the sale in contravention of Clause 5 of the Iron & Steel (Control) Order was made by the company. xx xx Since, in the case, there is no evidence and no finding that the Company contravened Cl. 5 of the Iron & Steel (Control) Order the two respondents could not be held responsible. The actual contravention was b> Kamdar and Vallabhadas Thacker and any contravention by . them would not fasten responsibility on the respondents.' In SanUkumar case (supra) there was no finding by the Magistrate that the firm had committed any offence. On the other hand, the accused was prosecuted in that case while the licence was in the name of the firm. this Court held that there was no evidence for the prosecution to fasten Santikicmar with the responsibility for the conduct of the business or that he was in charge of the affairs of the business.

The Supreme Court had also to consider a case of the like nature under the Drugs and Cosmetics Act, 1940 in : 1981CriLJ595 , (State of Karnataka v. Pratarj Chand). It was held therein (at n 597 of Cri LJ):

A persen 'in charge of' and 'responsible to the company for the conduct of the business of the company'1, contemplated in Section 34(1) must be a person in overall control of the day to day business of the company or firm. If a partner of a firm is not in such overall control he cannot be liable to be convicl-ed merely because he had the right to participate in the business of the firm under the terms of partnership deed.Reliance was placed by the Supreme Court on a previous decision under the Foreign Exchange Regulation Act in G. L.. Gupta v. D. N. Mehta. : [1971]3SCR748 . It was held theren (at p. 2163):What then does the expression 'a person in-charge and responsible for the conduct of the affairs of a company' means? It will be noticed that the word 'company' includes a firm or other association, and the same test must apply to a director in-charoe and a partner of a firm in-charge of a business. It seems to us that in the context a person 'in-charge', must mean that the person should be in overall control of the day to day business of the company or firm.

In Pratao Chand case 1981 Cri LJ 595 (supra) the Supreme Court came to the conclusion that the evidence adduced in that case shows that it was respondent 1 and not respondent 2 who was in overall control of the day to day business of the firm. Respondent 2 was not liable because he had the right to participate in the business of the firm under the terms of the partnership deed.

It would thus be seen that if the petitioner, in the instant case, is found to be in charge of the business and is responsible to the firm for conduct of the business, he is certainly liable to be prosecuted. Admittedly, the godown belongs to the partnerghio firm and the petitioner is a partner of that firm from the evidence available on record, it appears that the petitioner was conducting the business. In the prosecution report, it has been stated that the adulterated food stuffs were stored for sale in the godown of the petitioner who was a partner of M/s. Trade Link Enterprises, P.W. 1 has also stated in his evidence that the godown belongs to the firm and the petitioner was the proprietor. This means that the petitioner was managing the affairs of the business. He has further stated that he could come to know of this from some records shown to him. The petitioner also received notice and gave sample without any objection. P. W- 4 who has been declared hostile by the prosecution has also stated that the petitioner used to sell articles. In para-4 of his evidence, he has stated that the godown belongs to one Chiranjilal Agar-wala and the petitioner had taken that on rent and used to sell there. From the trend of the statements of the petitioner recorded Under Section 313 Cr. P. C, it appears that he has never taken the stand that he had no concern with the business nor was he responsible to the firm. On the other hand, the stand taken by him is that different types of Dais seized from the godown were meant for sale as cattle feed and a signboard was also there. This would show that the petitioner was selling the Dais and wants to be exonerated by saying that those were meant for cattle feed. On the aforesaid materials available on record, we would hold that the petitioner was managing the business of the firm and therefore he was responsible to the firm.

7. The next contention of the petitioner is that as the Food Inspector did not pay the price of the sample taken by him, the transaction cannot be said to be 'sale' under the Act, This contention has no basis. Relying on three decisions of the Supreme Court and the decision of the Allahabad High Court and Andhra Pradesh High Court, it has been held by a Fun Bench of the Allahabad High Court in Fakhruddin v- State, 1976 Cii LJ 1210 (paee 1214):

A transaction in which the possessor of an adulterated food refuses to sell but only lets the sample be taken and no price for the sample is paid to him by the Food Inspector amounts to 'sale' within the meaning of Section 2(xiii) of the Prevention of Food Adulteration Act. This is because when the Food Inspectoi, in exercise of his powers Under Section 10 of the Act, takes the sample of any article of food from a person, he necessarily makes an offer to purchase the goods. That offer is under compulsion of law bound to be accepted by the person possessing the article of food and a contract of sale comes into existence. Under the Prevention of Food Adulteration Act it has to be deemed to be 'sale'. As soon as the goods are ascertained, a transfer of property in the goods takes place and the sale becomes complete even under the Sale of Goods Act-There is no provision of law under which a refusal by a person to accept the price can convert the transaction of sale into some other type of transaction leading to the transfer of property in goods. If the seller accepts the price, the whole transaction comes to an end. If the purchaser does not pay the price he dots not perform his part of the contract and for that he may be liable to pay the price and the seller may have certain rights which are known as the unpaid seller's lien. But the non-payment of price cannot have the effect of converting a sale into a sift which is not contemplated by the law in a case where the Food inspector purchases the goods for analysis.

The Supreme Court in Municipal Corporation of Delhi v. Laxmi Narain Tandon : 1976CriLJ547 , while discussing about supply or offer of food by a hotelier to a customer has observed that if the expression 'store' in Section 7 means 'storing for sale', the provisions of the Prevention of Food Adulteration Act come into operation. Section 7 prohibits a person to 'manufacture'' for sale or 'store', 'sale' or 'distribute' any adulterated food. Contravention of this prohibition is punishable as an offence Under Section 16. The broad scheme of tiie Act is to prohibit and penalise the sale, or import, manufacture, storage or distribution for sale of anv adulterated article of food. The connotation of 'sale' for the purposes of the Food Act is far wider than the meaning assigned to it in the Sales Tax Act. Under the Food Act 'sale' would include a mere 'offer for sale', 'exposing for sale' or having in 'possession for sale'. In the instant case, as we have already held, all these articles were in the godown for sale and the petitioner was selling those articles, though he takes the stand that the articles were for cattle feed.

In the State of Tamil Nadu v. R. Kn-shnamurthy : 1980CriLJ402 , it has been held that the definition of 'sale' is designedly wide. It seems a real sale as well as an 'embryonic' sale (like agreement for sale, offer for sale, exposure for sale, possession for sale, attempt at sale) are sales for the purpose of the Act. The sale may be for cash or credit or by way of exchange. The sale may be be wholesale or retail. Thus every kind, manner and method of sale are covered. Finally, the sale may be 'for human consumption or use, or for analysis'. In the context, these words can only mean 'whether for human consumption or for any other purpose (including analysis)'. The object is to emphasise that whatever be the purpose of the sale it is a sale for the purposes of the Act, Just as the words 'whether by wholesale or retail' or 'whether for cash or credit or by way of exchange' are intended to emphasise that it is- immaterial for the purposes of the Act what manner and method and of sale is adopted. To give any other interpretation to the definition of 'sale' would be to exclude from the ambit of the Act that which has been included by the definition of 'food'. Further, a sale 'for analysis' can never be a sale 'for human consumption' but it is nonetheless a sale within the meaning of the definition. It is an unqualified sale for the purposes of the Act. To insist that an article sold for analysis should have been offered for sale for human consumption would frustrate the very object of fie Act. A person selling an adulterated sample to a Food Inspector could invariably inform him that it was not for human consumption and thereby insuie himself against prosecution for selling adulterated food. If sale for analysis 's an unqualified sale for the purposes of the Act, there is no reason why other sales of the same articles should not be sales for the purposes of the Act. The question may be asked why sale for analysis should be specifically mentioned if all manner of sales are included in the definition. It is only to prevent the argument that sale for analysis is not a consensual sale and hence no sale, an argument which was advanced and rejected in Mangaldas v. State of Maharashtra. : 1966CriLJ106 .

It was further held that the sale of gingerly oil mixed with groundnut oil is punishable Under Section 16(1)(a)(i) read with Section 2(1)(a) notwithstanding the fact that the seller had expressly stated at the time of sale that it was intended for external use only.

The Supreme Court has further held that in order to be 'food' for the purposes of the Act, an article need not be 'fit for human consumption; it need not be described or exhibited as intended for human consumption, it may even be otherwise described or exhibited; it need not even the necessarily intended for human consumption; it is enough if it is generally or commonly used for human consumption or in the preparation of human food.

8. In view of the aforesaid dictun of the Supreme Court, we hold that Arhar Dal and Chana Dal are commonly used for human consumption and the transaction between the petitioner and the Food Inspector amounted to 'sale' within the meaning of the Act. The contentions raised by the learned Counsel for the petitioner are not tenable.

9. The revision fails and is accordingly dismissed.

R.N. Misra, C.J.

10. I agree.


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