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PETITIONER: M/S V.B.C. EXPORTS PVT. LTD & ANR.

       Vs.

RESPONDENT: COMMANDER S.D. BAIJAL & ORS.

DATE OF JUDGMENT:       01/08/1996

BENCH: MUKHERJEE M.K. (J) BENCH: MUKHERJEE M.K. (J) KURDUKAR S.P. (J)

CITATION:  JT 1996 (7)   528        1996 SCALE  (5)520

ACT:

HEADNOTE:

JUDGMENT: With Crl. A. No. 567-68/87, 569-570/87, 571-572/87                       J U D G M E N T M.K. MUKHERJEE. J.      These appeal  have been  heard together as they involve common question  of fact  and law  and  this  judgment  will dispose of  all of  them. Facts relevant for disposal of the appeal as under:      In the  month of  July 1984,  Coast Guard Shio ’Vikram’ intercepted  and   seized  a   number  of   foreign  vessels (trawlers), which  were operating  on permits  granted under Section 5  of the  Maritme Zones  of  India  (Regulation  of Fishing by  Foreign Vessels)  Act, 1981 (’Act’ for Short) to fish in  the maritime zones of India, on the allegation that they were  fishing in  a depth  of less  than 40  fathoms of water in  contravention  of  the  terms  and  condition  the Companies  which   owned  the  vessels  and  their  Managing Director as  well the companies which had chartered them and their  Managing   Director  were   prosecuted   before   the Additional  Chief   Metropolitan   Magistrate,   Bombay   on complaints filed by S.D. Baijal ( the respondent No.1 in all these appeals),  the Commander of "Vikram". The prosecutions added in  conviction of  the owners of the vessels and their Managing  Directors   and  acquittal   of  the  Charterer  - Companies and  their Managing Directors. Besides, in some of those cases the vessels were also ordered to be confiscated.      Against   their   convictions   and   the   orders   of confiscation of  the vessels  the owners  and their Managing Directors filed  separate appeals; and the Respondent No. 1, in his  turn, filed appeals challenging the acquittal of the Charterer-Companies and  their Managing  Directors. The High Court dismissed the appeals preferred at the instance of the owners of  the vessels but allowed the appeals of Respondent No. 1  and convicted  and sentenced  the Charterer-Companies and their Managing Directors. The above orders of conviction and  sentence   recorded  by  the  High  Court  against  the Charterers and  their Managing  Director under  challenge in

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these appeals.      Mr Adhyaru,  the learned counsel appearing on behalf of the appellants, did not assail the concurrent finding of the learned Courts  below that the vessels were fishing in depth of less  than 40  fathoms of  water in  contravention of the terms and  conditions of  the permit. He, however strenously arguec that  having regard  to the  admitted fact  that  the appellants had  given clear  instructions to  the masters of the ship,  in accordance  with Section  5 (6) of the Act, to ensure compliance  with the provisions of the Act, the Rules framed thereunder  and the  conditions of  the permits,  the High Court  was  not  at  all  justified  in  upsetting  the judgment of  the trial  Court so  far as the appellants were concerned. He  contended that  when the vessels were on high sea it  was imposible  for the  charterers to  control their movements and,  therefore,  if  the  masters  of  the  ships violated their express command not to fish in the prohibited depth, only  the owners of the ships would be liable for the contravention and  not the  appellants,  as  Charterers.  To buttress  his   contention  he   pressed  into  service  the following findings  recorded by the learned Magistrate while acquitting the appellants:      "Shri Baijlal  P.W. 1 No. 1 in para      36 of  the  evidence  has  admitted      that there  is no  way  to  prevent      contravention of  rule or condition      of the  permit. In  para 37  of the      evidence  he   has  admitted   that      charterers have no physical control      over the  trawlers when they are on      the High  Sea.  The  Charterer  had      asked the masters not to commit any      breach of  rule or condition of the      permit. Beyond this charterer could      do nothing."      To appreciate  the above  contention of  Mr. Adhyaru it will be necessary to refer to the relevant provisions of the Act, Rules and the conditions of the permit. Sub-section (1) of Section  5 of  the Act  provides that any Indian citizen, who intends  to use any foreign vessel for fishin within the maritime zone  of India,  is required to obtain a permit for the purpose  and sub-section (6) thereof casts an obligation upon the  permit holder to ensure that every person employed by him  complies in  the course  of his employment, with the provisions  of   the  Act,  or  any  Rules  or  Orders  made thereunder and  the conditions  of such  permit. Section  12 lays down  the extent  of penalty  that can  be imposed  for contravention of  the provisions of the permit granted under Section 5  of the  Act. The  other Section which is relevant for our  purpose is  Section 17(1)  of the  Act which  reads thus:-      "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      liable to  be proceeded against and      punished accordingly:           Provided     that      nothing      contained in this sub-section shall      render any  such person  liable  to      any  such  punishment  provided  in

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    this Act  if  he  proves  that  the      offence was  committed without  his      knowledge or  that he had exercised      all due  diligence to  prevent  the      commission of such offence".      Coming now  to the  Rule framed  under the  Act we find that Rule  8(1), in  its different  clauses, lays  down  the terms and  conditions to  which a  permit shall be subjected to, Rule  8(1)(d), with  which we  are mainly  concerned  in these appeals, prohibits the Charterer form fishing within a depth of 40 fathoms in the maritime zone of India. Rule 8(2) expressly states that the Charterer shall be bound by all or any of  the terms  and conditions mentioned in sub-rule (1). Rule is  speaks  of  the  contravention  of  the  terms  and conditions of  permits and  Rules and  it provides  that any contravention of  the  provisions  of  the  Rules  shall  be punishable with  fine wihch  may  extend  to  Rs.  50,000/-, without prejudice  to the  penalities which  may be  awarded under the Act.      From the  compined reading  of the  above provisions of the Act  and the  Rules it  is manifest that for the offence with which we are concerned in these appeals, the Charterers have been  specifically made liable to be convicted not only under Rule  16 but also under Section 12 of the Act. In view of the  plain language  of Rule  8(1)(d), Rule 8(2) and Rule 16, Section 5(6) of the Act to which reference has been made by Mr. Ahdyaru has no manner of application whatsoever. Even if we  proceed on  the assumption that the Charterers had no knowledge as  to  what  was  going  on  in  the  High  Seas, Knowledge mus  be attributable  to them  for  every  foreign vessel (trawler)  is supposed  to be  equipped with wireless equipment for communication in terms of its requirements and it is  expected that the Charterer will be in touch with the trawlers  wherever   they  are   and  for  that  matter  get assistance from  the coast  guard for any communication with the trawlers.  If Mr.  Adhyaru’s contention, that once it is proved that  strict  instructions  had  been  given  by  the Charterer to  the master  of the  vessel not  to commit  any breach the  former would  be absolved  of the  liability for such breach,  is to be accepted then, under no circumstances can a Charterer be successfully prosecuted even if a case of flagrant violation of the terms and conditions of the permit like those  of clause  8(1)(d), which expressly say that the Charterer  (emphasis  suplied  shall  not  fish  within  the prohibited zone and depth, is conclusively made out.      It was  next contened  by Mr.  Adhyaru that even if the Charterer-Companies were  liable for  the  offence  alleged. Their Managing  Directors  could  not  be  prosecuted.  This contention is also devoid of any merit. Section 17(1) of the Act, which  has been  quoted earlier,  clearly say that when the offence  is committed  by a Company, persons responsible to the  Company for  the day-to-day  business  wil  be  also liable allong  with the  Company for  the offence  committed unless of  course, they  can  prove  that  the  offence  was committed with  our their  Knowledge or  they  exercise  due diligence to  prevent its commission. The evidence on record unmistakably to  their respective  companies for the conduct of their  business and  they (  The Managing Directors ) did bring on  record any material to avail of the proviso of the above  sub-section   and,  for   that  matter  to  exonerate themselves from the offences committed by their Companies,      For the  foregoing discussion  we do not find any merit in these appeals which are dismissed.

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