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State of Gujarat Vs. New Swadeshi Mills and Etc. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtGujarat High Court
Decided On
Judge
Reported in1983CriLJ1268; (1983)1GLR594
AppellantState of Gujarat
RespondentNew Swadeshi Mills and Etc.
Excerpt:
.....1977. with this clear assertion, it is not possible to come to an irresistible conclusion that the accused were in fact holding the positions of managing director and the president respectively at the material time. shah, the learned counsel for the mill-company has urged that the company was not able to produce controlled cloth due to its weak financial position and in fact, it had incurred such heavy losses that the unit had ultimately to be passed on to a new management......impunity and get away with an insignificant punishment of a nominal fine which would ultimately result into the mockery of law. the learned public prosecutor has urged that by not producing the controlled cloth the mill-company has averted what they consider to be a loss of over nine lakhs of rupees. according to him the reasonable and adequate punishment would be to impose a fine of at least rupees 25,000/-. mr. d. k. shah, the learned counsel for the mill-company has urged that the company was not able to produce controlled cloth due to its weak financial position and in fact, it had incurred such heavy losses that the unit had ultimately to be passed on to a new management. in the circumstances of the case, mr. shah urged that the imposition of the fine of rs. 3,000/- may be treated.....
Judgment:

A.S. Qureshi, J.

1. These two appeals arise out of the judgment and order dated 15-1-1980 passed by the learned Metropolitan Magistrate, Court No. 3, Ahmedabad. Both these appeals are filed by the State. Appeal No. 380/80 is directed against the order of the learned Metropolitan Magistrate acquitting the accused Nos. 1 and 2 of the offence for which they were charged. Appeal No. 378/80 is directed against the same judgment and order whereby the learned Magistrate has imposed a fine of Rs. 3,000/- on the accused No. 3.

2. All the three accused were charged for an offence of contravening the order of the Textile Commissioner bearing No. cc/Tech/ Ahd/41/77/318 dated 11-1-77 whereby the accused were alleged to have failed to produce the quantity of controlled cloth which they were directed to produce during the quarter 1-1-77 to 31-3-77 and thus contravened the provisions of Rule 21-A of the Cotton Textile Control Order 1948 and under the provisions of Essential Commodities Act, 1955.

3. The prosecution case was that at the relevant time the accused No. 1 was the Managing Director and accused No. 2 was the President of the Mill-company which was accused No. 3. The prosecution examined one Prabha Ranjan Rameshchandra Sarkar who was Assistant Enforcement Officer in the Regional Office of the Textile Commissioner to the Government of India at Ahmedabad. Witness has stated that the accused were required to produce 12,85,792 sq. mtrs. of controlled cloth in the relevant quarter, but they produced only 3,15,403 sq. mtrs. of the said cloth and the balance was not produced either during the said quarter or any time subsequent to.

4. Mr. H.K. Thakore, the learned Counsel for the respondent Nos. 1 and 2 in Appeal No. 380/80 has urged that the prosecution has failed to establish that the accused were holding the positions of Managing Director and the President at the relevant time. Mr. Thakore has pointed out that in their written reply the said two accused have raised the objections that there is no material on the record of the case to prove conclusively that they are holding the positions which they are alleged to have been holding.Mr. Thakore has also urged that in their statements under Section 313 the accused have stated that the production of controlled cloth was not their responsibility and that the production of controlled cloth was the responsibility of the Sales Manager of the company. Mr. Thakore has also pointed out that whatever the positions the accused may have been occupying in the company they had left the same during that quarter and that they were not holding the said positions on 31-3-77 when that quarter ended. It is also urged by Mr. Thakore that the controlled cloth required to be produced in any given quarter can be produced even subsequently during the grace period extending to one month and it is possible to transfer obligations to some other Mill Company even beyond the one month grace period. According to Mr. Thakore the accused Nos. 1 and 2 having left the Mill Company they cannot be held liable for the alleged offence of the contravention of the aforesaid control order. Mr. Thakore has pointed out that under Section 10 of the Essential Commodities Act, 1955 the prosecution must prove that the contravention was committed by a person who is in charge of and was responsible to the company for the conduct of business of the company for the purpose of holding him responsible for the alleged contravention. He has urged that in this case the prosecution has not proved that the accused Nos. 1 and 2 were in charge of the production of Mill cloth and, therefore, they cannot be said to have contravened the said order.

5. Mr. S.R. Divetia, the learned Public Prosecutor has urged that the accused Nos. 1 and 2 had been the Managing Director and President respectively and that they have not denied this fact categorically although they have disowned the liability on the ground that the Sales Manager was responsible for the alleged breach. In fact, the said two accused were managing the affairs of the company and, therefore, they were liable and that the learned Magistrate was not justified in acquitting the said two accused.

6. Before the criminal liability can be fastened on an accused person it is essential for the prosecution to prove that the accused has committed the act alleged. In the very nature of things the offence alleged here is of a nature where the accused Nos. 1 and 2 would be vicariously liable for the alleged offence. In the circumstances it is essential for the prosecution to prove that the accused were, in fact, holding the positions of Managing Director and the President as alleged. The evidence of the prosecution on this score is, to say the least, very unsatisfactory and quite unconvincing, although the said accused have not categorically denied that they were the Managing Director and the President respectively; but that did not absolve the prosecution from proving that the accused were, in fact, holding those posts. For fastening criminal liability, it is neither safe nor proper to draw inferences from the facts proved or the material on the record. There must be direct evidence proving the guilt of the accused person. On top of this failure of the prosecution to adduce direct evidence there is a categorical statement by the Assistant Enforcement Officer in his deposition wherein he says that he knew that the Executive Management of the Mill Company had changed hands somewhere in March, 1977. With this clear assertion, it is not possible to come to an irresistible conclusion that the accused were in fact holding the positions of Managing Director and the President respectively at the material time. In this view of the matter, the original accused Nos. 1 and 2, who are respondents in Criminal Appeal No. 380/80, were quite rightly acquitted by the trial Court. State's appeal, therefore, fails and is dismissed.

7. As regards Criminal Appeal No. 378/80 the Mill Company has been convicted and a fine of Rs. 3,000/- has been imposed which according to the learned Public Prosecutor is totally inadequate. The learned Public Prosecutor has urged that if the offences of the magnitude as in this case are dealt with so leniently, similar companies may find it convenient to contravene the provisions of law with impunity and get away with an insignificant punishment of a nominal fine which would ultimately result into the mockery of law. The learned Public Prosecutor has urged that by not producing the controlled cloth the Mill-Company has averted what they consider to be a loss of over nine lakhs of Rupees. According to him the reasonable and adequate punishment would be to impose a fine of at least Rupees 25,000/-. Mr. D. K. Shah, the learned Counsel for the Mill-Company has urged that the company was not able to produce controlled cloth due to its weak financial position and in fact, it had incurred such heavy losses that the unit had ultimately to be passed on to a new management. In the circumstances of the case, Mr. Shah urged that the imposition of the fine of Rs. 3,000/- may be treated as adequate. Taking an overall view of the matter it appears that the fine imposed by the trial Court is inadequate. The same is, therefore, enhanced to Rs. 10,000/- (ten thousand). The State's appeal is allowed. The balance amount of fine is to be paid in the Court on or before 31-1-1983.


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