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Delhi Development Authority Vs. Punjab National Bank and anr. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtDelhi High Court
Decided On
Case NumberCriminal Appeal No. 421 of 1976
Judge
Reported in19(1981)DLT353; 1981RLR4
ActsDelhi Development Act, 1957 - Sections 3(2); Code of Criminal Procedure (CrPC) , 1973 - Sections 378; Indian Penal Code (IPC), 1860 - Sections 21
AppellantDelhi Development Authority
RespondentPunjab National Bank and anr.
Advocates: Keshav Dayal,; R. Dayal,; B.B. Kishore and;
Cases Referred(Delhi Development Authority v. Lila D. Bhagat
Excerpt:
delhi development act, 1957 - sections 3(ii), 49, 52, 56 & 57(1)--scope--authority competent to institute legal proceedings on behalf of the d.d.a.--code of criminal procedure (1973), section 378(v)--what is the period of limitation for grant of special leave to appeal to high court--indian penal code, section 21--who is a public servant within the meaning of the section.; the punjab national bank, a nationalised bank, opened a branch in an area which the master plan had earmarked for purely residential purposes and on this ground an inspector of the delhi development authority reported the matter to the d.d.a which lodged a criminal complaint in the court of the metropolitan magistrate against the manager of the bank and the bank though its chairman. the complaint was signed and.....avadh behari rohatgi, j. (1) whore there is no vision, the people perish. (bible o.t. xxix : 18). in 1957 the parliament passed the delhi development act (the act). it came into force on december 30, 1957. the act set up a corporate body known as the delhi development authority (d.d.a.) to ensure planned development of this fast expanding city of delhi. the object of d.d.a. is 'to promote and secure development of delhi according to plan' (s. 6). the act required d.d.a. to carry out, as soon as may be, a civic survey and to prepare a master plan for delhi (the plan). the civic survey was carried out. the plan was prepared. it came into force on september 1,1962. the plan, the act says, shall serve as 'a basic pattern of framework' within which the proper development of delhi in to be.....
Judgment:

Avadh Behari Rohatgi, J.

(1) Whore there is no vision, the people perish. (Bible O.T. Xxix : 18). In 1957 the Parliament passed the Delhi Development Act (the Act). It came into force on December 30, 1957. The Act set up a corporate body known as the Delhi Development Authority (D.D.A.) to ensure planned development of this fast expanding city of Delhi. The object of D.D.A. is 'to promote and secure development of Delhi according to plan' (s. 6). The Act required D.D.A. to carry out, as soon as may be, a civic survey and to prepare a Master Plan for Delhi (the Plan). The civic survey was carried out. The Plan was prepared. It came into force on September 1,1962. The Plan, the Act says, shall serve as 'a basic pattern of framework' within which the proper development of Delhi in to be carried out. An image of the future is the core of this Plan. The planners are trying to express the vision in terms of recognisable subject matter. They vision what was once a tiny town as the future metropolis.

(2) The Plan aims a.t a modern planned capital. Delhi should be beautifully planned and admirably built. It should be a model of' urban development. Slums should be cleared, parks established, sanitation and health made a civic concern. In short Delhi should be a matter of civic pride. These are the aims of the planners and developers.

(3) THE. Plan is based on the concept of land use. It relates residential needs to commercial, industrial and public needs. The Plan has a ruling conception and design. Its main object is to place limitations on the use of the land and buildings. It prescribes a 'land use'. The city has been divided into a number of 'use zones' such as residential, commercial, industrial, recreational etc. Land is a subject of regulation' and control in terms of the Plan.

(4) Actuated by a real sense of civic and social responsibility the planners have envisioned Delhi as it ought to be. The blue print does not plan only for the immediate. Furtive moment is not its chief concern. It has an eye on the future community needs. The Plan looks ahead as far as practicable, anticipates change and provides for it, It is claimed by its authors that the Plan combines realism with vision. In other words the fabric of the biblical vision is the Plan. The Plan thus is atonce a programme and a prophocy for the orderly development of the city. It is an essay in town planning. The control of the land and its development in' and around Delhi is the subject of this essay. It deals with the use. the misuse and non-use of land planning controls. It is also a commentary on the turmoil and torment in which that control increasingly finds itself today. Tills case is an excellent illustration of these trends and tendencies.

(5) The facts :The Punjab National Bank (the Bank) is one of the nationalised banking companies under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 (the Banking Companies Act). Its head office is in Parliament Street. In 1973 it opened a branch at Babar Road. Bengali Market, New Delhi to serve the needs of local residents. Mr. A. N. Mehta was appointed manager of the branch.

(6) An inspector of the D.D.A. on his daily round noticed that a branch of the Bank had been opened in an area which in the Plan had been earmarked for purely residential purposes. He reported to the D. D. A. on February 16, 1973 that the opening of a commercial bank was in direct contravention of the Plan.

(7) On October 22. 1973 the D.D.A. lodged a criminal complaint in the court of the Metropolitan Magistrate under section 29(2) read with section 14 of the Act against (1) Shri A. N. Mehta, Manager, Punjab National Bank, 51, Babar Road, Bengali Market. New Delhi : and (2) Punjab National Bank, Parliament Street, New Delhi through its Chairman. The gist of the complaint was that the Bank was housed in building No. 51, Babar Road, Bengali Market, New Delhi in contravention of the Plan and was guilty of an offence against planning law. This complaint was signed and filed in the name of the D.D.A. by Shri H. N. Fotedar, the Secretary of the D.D.A. The Magistrate held that Bank and A. N. Mehta guilty of the offence. He convicted them and imposed a fine of Rs. 1500.00 each on the two accused.

(8) From his decision the Bank appealed. The Additional Sessions Judge by his order dated May 1, 1976 accepted the appeal and set aside the order of conviction and sentence of the Bank and its branch manager. From this decision the D.D.A. now appeals to this court after obtaining special leave.

(9) Four questions of general public importance were argued before us. Two are the preliminary objections raised by the Bank in opposition to the appeal. The other two points are canvassed by the D.D.A. in support of its appeal to contend that the Additional Sessions Judge was wrong in acquitting the Bank and its manager. We will take these four points separately.

(10) I. Is the- Complaint Validly Instituted This is the first preliminary objection raised by counsel for the Bunk. It is said that the D.D.A. has not validly instituted the complaint and thereforee, it ought to have been dismissed in liming. In order to appreciate this point it is necessary to refer to a few facts.

(11) On March 15, 1958 the D.D.A. passed a resolution granting previous sanction for launching prosecutions for uses of lands and buildings in contravention of the Plan and authorising the Secretary to institute legal proceedings on behalf of the D.D.A. as required by section 49 of the Act. It was in pursuance of this resolution that the Secretary filed the complaint in the name of the D.D.A.

(12) It is said that the D.D.A. could not file the complaint without framing rules and regulations in this behalf. Admittedly no rules have been framed by the Authority under section 56 of the Act for bringing prosecutions. Regulations were however framed on February 26, 1959 in exercise of the powers conferred by section 57(1) of the Act, But these regulations do not touch or deal with the subject matter of prosecutions. In any event there were no regulations on. January 15, 1958, when the aforesaid resolution was passed.

(13) In our opinion, this prelirninary objection has no merit. Section 49 says that no prosecution turn any offence punishable under the Act shall be instituted except with the previous sanction of the D.D.A. or any officer authorised by the D.D.A. in his behalf. The section in terms says that a prosecution can be launched by an authorised officer with the previous sanction of the D.D.A. The D.D.A. in a meeting held on March 15, 1958 passed a resolution granting previous sanction and authorising the Secretary to institute legal proceedings on its behalf.

(14) The word 'authorise', according to its natural meaning, signifies the conferring upon a person of a right to do something which, apart from the authorisation, he does not possess. When authority is conferred it means a legal power to do an act is given by one man to another. A person is said to be authorised or to have an authority when he is in such a position that he can act in a certain manner (defined by the authority) (a) without Incurring the liability to which he would be exposed in the absence of the authority; and (b) so as to produce the same effect as if the person granting the authority had himself done the act.

(15) We do not agree that the D.D.A. must necessarily frame rules and regulations before it can launch a prosecution. If we take this view it will mean that unless rules and regulations are framed the D.D.A. will be more or less moribund for years. All that the section requires is that the D.D.A. must. give a formal approval or sanction to initiate criminal proceedings. This has been done in the present case by passing a resolution in this behalf. The will of the corporate body has been expressed in the resolution. Long before a particular offence has taken place the D.D.A. under section 49 can confer power on the secretary to launch prosecution. It can be an authority to institute a particular case or even a class of cases. (Dhian Singh v. Saharanpur Municipality, : 1970CriLJ492 .

(16) We thereforee hold that the complaint has been validly institute by the D.D.A. It is unnecessary to embark on an elaborate discussion of this point because a division bench of this court (Prithvi Raj and O. N. Vohra JJ) in Delhi Development Authority v. Principal, Vocational Training School (Criminal Appeal No. 191 of 1974 decided on August 16, 1979) (2), considered this very preliminary objection and rejected it. The validity of the resolution dated January 15, 1958 in favor of the Secretary was upheld. The complaint was held to be validly instituted.

(17) IN. that case it was contened that the resolution dated January 15, 1958 amounted to a delegation of power under section 52 of the Act. This contention was also rejected. We are in respectful agreement with the view taken in that case. Section 4 speaks of delegation of powers to the Secretary and section 52 requires the D.D.A. to delegate powers by notification in the official Gazette. But section 49 does not speak of delegation. It uses the simple word 'authorised'. The word authorised', like any other word, must be controlled by its context. If the legislature uses different words they will bear different meanings according to the context in which they are used. The principle of construction that we have to bear in mind is that the legislature neither wastes words nor uses them in vain. The first preliminary objection thereforee fails.

(18) II. Limitation : The second preliminary objection is that the appeal is barred by time. The Code of Criminal Procedure, 1973, provided for the first time limitation for an application for special leave to appeal from an order of acquittal. Sub-section (5) of Section 378 of the Code reads :

'NOapplication under sub-section (4) for the grant of special leave to appeal from an order of acquittal shall be entertained by the High Court after the expiry of six months, where the complainant is a public servant, and sixty days in evedy other case, computed from the date of that order of acquittal.'

This sub-section means that where the complainant is a public servant the period of limitation is six months and in every other case the period of limitation is 60 days.

(19) It is argued by counsel for the Bank that the period of limitation in the present case is 60 days because here the D.D.A. is the complainant and not the public servant. Counsel for the D.D.A. on the other hand, says that the complainant is a public servant because' the Secretary, Shri Fotedar, is a public servant in terms of section 47 of the Act. The sole question for determination is wether the complainant in the present case before the Magistrate was a public servant or not. If the complainant is a public servant then the appeal was validly instituted within the prescribed period of six months. If not, the appeal is clearly barred by time because it was preferred long after the expiry of 60 days. In our opinion the answer to this question will depend if we ask ourselves : Who is the complinant in the contemplation of law

(20) In quite a few cases prosecutions are launched by means of complaints by public servants, such as prosecution for offences under some special laws such as relating to foreign exchange, smuggling etc. In such cases the administrative procedure for taking a decision takes quite a long time and in some cases the procedure is not completed before the prescribed period of limitation of 60 days. So the legislature has prescribed a longer period of six months for cases where the complainant is a public servant. For example section 23(3) of the Foreign Exchange Regulation's Act, 1947, provides that complaint shall be filed by the Directed of Enforcement. [See the Report of Joint Committee in Chitaley Cr. P. C. Vol. 3 p. 670 (7th ed.)]

(21) The present is a different case. The Act creates a corporate body called Delhi Development Authority which has all the attributes of legal immortality'. Blackstone says that corporate bodies enjoy a kind of legal immortality' because they maintain a perpetual succession and go on for ever even though the individuals composing them may come and go. The corporate body has a name and a common seal by which its intention may be evidenced. It is a creature of the law. It has an indefinite duration. It can be dissolved only by the Central Government under section 59 of the Act to which it owes its origin. It can own land. It has a corporate name. It can sue and be sued in its own name. This is the essence of the legal conception of a corporation. Section 3(2) says:

'THEAuthority shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable and to contract and shall by the said name sue and be sued.'

(22) It must thereforee be deemed in the contemplation of law that the Delhi Development Authority is the complainant in this case. The maximum qui per alium facit per seipsum facere videtur the who does an act through another is deemed in law to do it himself) illustrates the general doctrine on which the law relating to the rights and liabilities of principal and agent depends. We are clearly of opinion that the Secretary, Shri Fotedar. was only acting in a representative capacity and that the Delhi Development Authority was the complainant within the meaning of section 378(5) of the Code of Criminal Procedure 1973.

(23) In Delhi Municipality v. Jagdish, : 1970CriLJ1 and Ballabhdas Agarwala v. J. C. Chakravarty, : 1960CriLJ752 the Supreme Court has held that a complaint under the Calcutta Munici pal Act, 1923, or Delhi Municipal Corporation Act, 1957, can only be filed by the authorities mentioned therein and by no one else. Delhi Municipality case is a clear authority on the point. There it was held that the corporate body, Delhi Municipal Corporation, was the complainant ' in the contemplation of law' though the prosecutor, one Mr. Mathur, had instituted the complaint in his own name. The Supreme Court held that Shri Mathur was acting in a representa'tive capacity and the complainant was the Delhi Municipal Corporation.

(24) Where a power is given to do a certain thing in a certain' way, the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden. [Nazir Ahmed v. King Emperor. Air 1936 Pc 253 . It must thereforee be held that Shri Fotedar was not acting on his personal behalf but was acting as an agent authorised by the D.D.A. to file the complaint. The D.D.A. is thereforee the complainant in the eye of law.

(25) In cases of corporate bodies the principle of law is this. When a corporation is created a name is always given to it and by that name alone it must sue and be sued and do all legal acts. The Secretary cannot arrogate to himself the status of the complainant. The complainant is the D.D.A. though it is true that the Secretary was authorised by the D.D.A, to bring the complaint in its name. The Secretary signed and filed the complaint but this he was doing for and on behalf of the. D.D.A. In a world of real men and women, a corporate body can only act through individuals. But the individuals so acting in ils behalf and in its name cannot claim that they themselves are the corporation personified. They are merely its servants, agents, represontatives or delegates,

(26) The D.D.A. alone can institute proceedings for offences under the Act. No one else can do it. 'Other methods of performance are necessarily forbidden'. The complaint must invariably be lodged in the name of the D.D.A. The D.D.A. thereforee is the complainant. The Secretary is not the complainant. He is an authorised represontative. The corporate body has authorised the Secretary to launch presecution's. The body corporate has endowed him with authority to act in its name. He cannot claim to be of equal status with his authoriser. His rights and powers proceed from the D.D.A. That he possesses the evident authority of the corporate body does not make him the D.D.A. itself. He cannot say: 'I am the D.D.A.' Only Louis Xiv of France could boast 'I am the State'. It is true that the Secretary is an important functionary of D.D.A. He is to be appointed by the Central Government. He exercises such powers and performs such duties as may be prescribed by the regulations or delegated to him by the Authority or the Chairman (section 4).

(27) Counsel for the D.D.A. sought to draw support from the complaint and the order of the Magistrate. In the complaint it is stated that

'THEcomplainant is a public servant and remains busy in discharge of his official duties. As such it is not possible lor him to attend the court on everyday of hearing his personal attendance in the court may kindly be exempted and he may be permitted to appear through his pleader.'

(28) On this the Magistrate granted exemption to the public servant and did not insist on his personal appearance in court. Nor did he examine him on oath on taking cognizance of the offence. This order was obviously made under section 200(a) of the Code of Criminal Procedure. In our opinion, the statement in the complaint and the order of the court cannot alter the law of the land. Nor limitation. The averments in the complaint and their acceptance by the Magistrate will not preclude the Bank from showing that the real complaint is the D.D.A. and the period for appeal was 60 days.

(29) The statutory duty of launching prosecutions is to be performed by the Corporate body. This is why the Act creates D.D.A. as a public corporation having quasi-governmental powers charged with the duty to enforce planning. thereforee prosecution is a corporate action. The secretary is the corporate representative.

(30) The D.D.A. is treated by law as having a legal personality. It has a corporate character. One of the corporate powers of the D.D.A. is to sue in its own name. The D.D.A. thereforee is the complainant. And D.D.A. is not a public servant though, it is true, its Secrectary is a public servant. The D.D.A. is a public authority and it has special rights and duties.

(31) A corporate body cannot be a public servant within the meaning of section 21, Indian Penal Code. A corporation is an abstraction. It is a legal figment. It is incapable itself of doing any physical act. it acts through human agents. The agent can be a public servant. But in our case the complainant is the corporate body and not the public servant. To the D.D.A. the legislature has entrusted the task of prosecuting those who use lands and buildings in contravention of the Plan.

(32) The statute ought to be our guide. Look to the relevant statute to see who can complain of the offences created by it. If it is a 1528 corporate person then it cannot be a public servant. If the complainant is an individual sec further whether he is a public servant. This is all.

(33) We thereforee hold that in this case the complainant is the D.D.A. And D.D.A. is not a public servant. The appeal ought to have been filed within 60 days and as this was not done the appeal is barred by time.

(34) Iii Liability of the Branch Manager ; Counsel for the D.D.A. says that the branch manager must be held liable because he is in control of the branch at Babar Road where the branch office is functioning in a residential area in contravention of the Plan. Section 32 deals with offences by companies :

'32.(1) If the person committing an offence under this Act is 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 (1) 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. Explanationn For the purposes of this section (a) 'company' means a body corporate and includes a firm or other association of individuals: and (b) 'Director' in relation to a firm means a partner in the firm.'

The main object of these provisions is to distinguish between those who are in some degree blame worthy and those who arc not, and to enable the latter to escape from conviction if they can show that they were in no way to blame. It defines the boundaries of corporate liability. The purpose of the section is to penalise those at fault, nut those who are in no way to blame. This section is commonly found in most of the recent penal statutes.

(35) This section' deals with offences by companies. But a company is a legal abstraction. There was no such thing as criminal guilt by association in Anglo-American law. But the theoretical difficulties have been overcome, partly by statute and partly by bold decisions, so that now a corporation can be made answerable even for crimes involving mensrea on the basis that the acts of the 'supreme directorate' are the personal acts of the corporation. The regulation of behavior is always a prime concern of laws, and behavior can only be of individuals in a world of real men. Accordingly -when account has to be taken of conduct especially the performance or non-performance of duties attention moves away from the group to the individuals concerned. Herein lies the clue to the understanding of corporate liability. The Courts 'lift the mask of personality', as it is pill, to look to the realities that lie behind. This may be done in order to take account of conduct, particularly the performance and non-performance of duties, which can only be of individuals. Here the courts look at the flesh and blood actors behind the corporate facade. [G. Williams Text Book of Criminal Law Ch. 44: Smith and Hogan Criminal Law (4th ed.) p. 148]. Viscount Haldane L. C. in Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd.. (1951) A.C. 705 said :

'MYLords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation. That person may be under the direction of the shareholders in general meeting; that person may be the board of directors itself, or it may be, and in some companies it is so, that that person has an authority coordinate with the board of directors given to him under the articles of association, and is appointed by the general meeting of the company, and can only be removed by the general meeting of the company.'

Following this, Denning L.J. in H.L. Bolton (Engineering) Co. Ltd. v. T. J. Graham and Sons Ltd. (1957) 1 Qb 159 said :

'A company may in many ways be likened to a. human body. It has a brain and nerve centre which controls what it does. It also has hands which hold the tool and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who arc nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such.'

These passages clearly indicate that one has, in relation to a company, to determine who is or who are, for it may be more than one, in actual control of the operations of the company, and the answer to be given to that question may vary from company to company depending on its organisation. It will always depend on the constitution of the corporation. The obvious and the only place to look to discover by what human agents its powers are exercisable, is in its constitution. There are some officers of a company who may for some purposes be identified with it, as being or having its directing mind or will, its centre and ego, and its brains. This is the purport of Lord Haldane's classic statement and Lord Denning's vivid metaphor. Lord Raid in Tesco Supermarkets Ltd. v. Nattrass 1972 A.C. 153 laid down this principle :

'It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent.'

'Normally the board of directors, the managing director and perhaps other superior officers of a company carry out the functions of the management and speak and act as the company. Their subordinates do not. They carry out orders from above and it can make no difference that they are given some measure of discretion.' (p. 171).

(36) Now a branch manager of the Bank's several hundreds of branches cannot be identified with the company's ego nor is he an alter ego of the company. He is an employee in a relatively subordinate post in the company's hierarchy as compared to big shots and high executive in top echelon. He is not a controller of company's policies. The Bank has some hundreds of branches and it would be far from reasonable to say that everyone of the branch manager is the same person as the company. We thereforee come to the conclusion that the branch managed is not 'the directing mind and will' of the company. It is the Board of Directors which is the 'supreme directorate.' They are the 'brain and nerve centre' which control the company, to use Lord Denning's colourful phrase. They are in actual control of the operations of the banking company. Their action is the very action of the company itself. The person in charge must thereforee mean that the person should be in over all control of the day to day business of the company or firm. (G. L. Gupta v. D. N. Mehta, Air 1971 Sc 2102.

(37) Can it be said that the branch manager Shri A. N. Mehta was a person who at the time the offence was committed 'in charge of and was responsible to, the company for the conduct of the business of the company' In our opinion, the branch manager is not guilty of the offence because he was not in charge of the management of the company.

(38) The Banking Companies Act 1970 furnishes a complete answer to the contention raised by counsel for the D.D.A. Under that Act the Bank is a body corporate with a perpetual succession and a common seal with power to acquire, hold and dispose of the property, and to contract and may sue and be sued in its name (s. 3(4)). Section 702) of the Banking Act says that the 'general superintendence, direction and management of the affairs and business' of the bank shall vest in a Board of Directors which shall be entitled to 'exercise all powers and do all acts and things'. This clearly shows that the Board of Directors of the Bank is responsible for the management and control of the business of the company. In them 'the general superintendence, direction and management of affairs and business' of the Bank are vested. They can do everything. They exercise all powers of management, supervision and control of the affairs of the company.

(39) The branch manager though he exercises some managerial discretion is not a person who 'represents the directing mind and will of the company and controls what it does'. He is nowhere in the brain area of the banking company. In the ladder of responsibility he occupies a position where his duty is very out what he is ordered and directed to do. He is under the contorl of the company. A branch manager who is tightly controlled by higher officers is not himself a controller. The imposition of liability on the Corporation gives all those directing it an interest in the prevention of illegalities and they are in a position to prevent them. But a branch manager has no say. He is not in the select circle of controllers.

(40) The branch manager has not incurred any liability. He is merely a servant in their employ and has been put in charge of the branch at Babar Road. The Board of Directors took the decision to open the branch. They took the premises on lease from the landlord and opened the branch. If any liability has been incurred it is the Bank which has incurred it and not Mehta. As a corporate policy the Bank opens many hundreds of branches wherever they can find business and custom.

(41) We, thereforee, hold that the branch manager, A. N. Mehta is not responsible for the conduct of the business of the company and he cannot thereforee be held guilty of the offence of which he was charged. The statutory provisions of the Banking Companies Act make it clear beyond doubt that he is blameless.

(42) Counsel for the D.D.A. referred us to State v. 1. K. Nangia (1980) 1 Fac 1 and section 17 of the Prevention of Food Adulteration Act 1954 in support of the contention that the branch manager is liable. We do not agree. In food cases different considerations apply.

(43) IV. Lability of the Bank : Here we are concerned with the question whether the Bank has committed an offence.

(44) We have already said that those who control or manage the affairs of the company are regarded in a sense as the company itself, because they are identified with the company. Their acts and states of mind arc imputed to it whenever they are acting in their capacity as its controlling officers. This is the doctrine of identification.

(45) Applying this principle the higher directorate is acting as the banking company in this case. Its mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company (Tesco Supermarkets Ltd., supra, p. 170). This is how we find the real culprit in a notional entity, a ghostly person what lawyers call a 'legal person'.

(46) This case is a striking illustration where one corporate body is prosecuting another corporate body. We have seen that the D.D.A. is a corporate body by virtue of section 3(2) of the Act. The Punjab National Bank is also a corporate body under the Banking Companies Act by virtue of section 3(4) of that Act. The D.D.A. can sue in its own name. So can the bank be sued in its own name. Both are functioning under the aegis of the Central Government. The Government has a hand in shaping their policies. Both are public service corporations created by public welfare legislations. Both are working for the public good. One is interested in the planned development or the city. The other is trying to serve 'the needs of development of the economy'. The offence in question is also a public welfare offence. Much of the contemporary public welfare legislation has created these public welfare offences as distinguished from true crimes.

(47) Law will take its own course. If it is established that there is a contravention of the Plan and that the building is being used for a purpose other than that for which this area is earmarked in the Plan the Bank cannot escape liability. The question whether the Plan has specified a particular use of a particular building and whether the person prosecuted has incurred penalty under section 29(2) of the Act for violation' of section 14 are questions of fact. (Delhi Development Authority v. Lila D. Bhagat, : AIR1975SC495 .

(48) But in this case a strange thing happened. The head office of the Bank at Parliament Street was never served with the summons of the complaint. A. N. Mehta appeared in this case in answer to summons. He defended the case throughout. The complainant and the court of first instance were labouring under a, misconception that the Bank at Parliament Street has been duly served and the complaint can proceed. So the case went on. At the stage of the appeal it was discovered that summons were never served on the Chairman of Punjab National Bank at Parliament Street who was named accused No. 2 in the original complaint. On this ground the Additional Sessions Judge acquitted the Bank.

(49) We think in this case there has been a failure of justice. No criminal liability can be imposed on the Bank unless it is duly served with the summons and properly tried. It was the business of the Magistrate to see that the summons are properly served on the Bank, accused No. 2, before he could hold the Bank criminally responsible. A. N. Mehta could not defend the case on behalf of the head office. He had no authority. He could defend it only for himself. In our opinion there. has been no proper trial in so far as accused No. 2, the Punjab National Bank, is concerned. But for the bar of limitation we would have remanded the case to the trial court for proceeding with it in accordance with law after serving the main accused, Punjab National Bank, Parliament Street, New Delhi.

(50) As we have held that the appeal is barred by time so we dismiss it on the ground of limitation.


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