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CASE NO.: Appeal (crl.)  743 of 2004

PETITIONER: State of Punjab

RESPONDENT: Kasturi Lal and Ors.

DATE OF JUDGMENT: 28/07/2004

BENCH: S.N. VARIAVA & ARIJIT PASAYAT

JUDGMENT: J U D G M E N T

(Arising out of SLP(Crl.) No.4360/2003)

ARIJIT PASAYAT, J

       Leave granted.

       The State of Punjab questions legality of the judgment rendered by a  learned Single Judge of the Punjab and Haryana High Court in Criminal  Revision No.326 of 1998. A petition was filed under Section 401/482 of the  Code of Criminal Procedure , 1973  (in short the ’Code’) questioning  correctness of the order passed by  learned Special Judge, Sangrur framing  charges against the present respondents and one Prem Mohan Tiwari for  alleged violation of the provisions contained in Section 7 (1) (a) (ii) of the  Essential Commodities Act, 1955 (in short the ’Act’).

       Charge was framed by learned Special Judge by order dated 16.9.1997  holding that there was infringement of the provisions of Vegetable Oil  Products Control Order, 1947 (in short the ’Control Order’) as amended  under Section 3(1) of the Act. Samples of the vegetable oil product were  drawn from the premises of M/s Sangrur Vanaspati Mills Ltd. on 29.4.1992  and on analysis the sample was found to contain 78% of solvent mustard oil  as against the permitted limit of 20%. A challan under Section 173 of the  Code was filed in the Court of Special Judge, Sangrur and the present  respondents and aforesaid Prem  Mohan Tiwari were arrayed as accused  persons. While the accused Prem Mohan Tiwari was the Production  Manager of the company, others were Directors of the company. Before the  Special Judge, the accused persons opposed framing of charge on various  grounds. Their main plank of the argument was that since Prem Mohan  Tiwari was nominated by the company to be in charge and responsible to the  company for conduct of the business, no one else could be arrayed as  accused. The plea did not find acceptance and the learned Special Judge  framed the charge against the accused persons in terms of Section 7(1)(a)(ii)  of the Act.  The accused persons filed the Criminal Revision and Criminal  Misc. No. 16907-M of 1998  was also filed to quash the challan under  Section 173 of the Code which was taken up along with the Criminal  Revision.  As noted above, by the judgment which is impugned in the  present appeal the High Court came to hold that it was only Prem Mohan  Tiwari who was to face trial and charge so far as the others are concerned to  be quashed.   It was held that there was no definite material to show that they  were in charge of running of business and/or responsible therefor.

       According to the learned counsel for the State of Punjab the view

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taken by the High Court is erroneous. At the stage of framing charge all that  was required to be found out was whether there was any material to proceed  against the accused persons. That being the position, the High Court ought  not to have threadbare examined as to whether the complainant established  about the present respondents being connected with and responsible for  running of business for contravention of the statutory provisions.

       In response, learned counsel for the respondents submitted that there  was no material to show that any of them was in charge of and/or  responsible to the company for the conduct of the business. That being so,  the High Court was justified in its view.  

       To appreciate rival submissions it would be necessary to take note of  Section 10 of the Act. The said provision reads as follows:

       "(1) If the person contravening an order made  under Section 3 is a company, every person who, at the  time the contravention was committed, was in charge of,  and was responsible to, the company, shall be deemed to  be guilty of the contravention 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 if  he proves that the contravention took place without his  knowledge or that he exercised all due diligence to  prevent such contravention.

(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.

Explanation \026 For the purpose of this section,-

(a)     "company" means any 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 section appears to our mind to be plain enough.  If the  contravention of the order made under Section 3 is by a company, the  persons who may be held guilty and punished are (1) the company itself, (2)  every person who, at the time the contravention was committed, was in  charge of, and was responsible to, the company for the conduct of the  business of the company whom for short we shall describe as the person-in- charge of the company, and (3) any director, manager, secretary or other  officer of the company with whose consent or connivance or because of  neglect attributable to whom the offence has been committed, whom for  short we shall describe as an officer of the company.  Any one or more or all  of them may be prosecuted and punished.  The company alone may be  prosecuted.  The person-in-charge only may be prosecuted.  The conniving  officer may individually be prosecuted.  One, some or all may be prosecuted.   There is no statutory compulsion that the person-in-charge or an officer  of  the company may not be prosecuted unless he be ranged alongside the  company itself.  Section 10 indicates the persons who may be prosecuted  where the contravention is made by the company.  It does not lay down any  condition that the person-in-charge or an officer of the company may not be  separately prosecuted if the company itself is not prosecuted.  Each or any of

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them may be separately prosecuted or along with the company.  Section 10  lists the person who may be held guilty and punished when it is a company  that contravenes an order made under Section 3 of the Essential  Commodities Act.  Naturally, before the person in\026charge or an officer of  the company is held guilty in that capacity it must be established that there  has been a contravention of the order by the company.                    

       The above position was highlighted in Sheoratan Agarwal and Anr. V.  State of Madhya Pradesh  (1984 (4) SCC 352).  

       The scope for interference with an order  framing charge in terms of  Section 482 of the Code is extremely limited.  

Exercise of power under Section 482 of the Code in a case of this  nature is the exception and not the rule.  The section does not confer any  new powers on the High Court.  It only saves the inherent power which the  Court possessed before the enactment of the Code.  It envisages three  circumstances under which the inherent jurisdiction may be exercised,  namely, (i) to give effect to an order under the Code, (ii) to prevent abuse of  the process of court, and (iii) to otherwise secure the ends of justice.  It is  neither possible nor desirable to lay down any inflexible rule which would  govern the exercise of inherent jurisdiction.  No legislative enactment  dealing with procedure can provide for all cases that may possibly arise.   Courts, therefore, have inherent powers apart from express provisions of law  which are necessary for proper discharge of functions and duties imposed  upon them by law.  That is the doctrine which finds expression in the  Section which merely recognizes and preserves inherent powers of the High  Courts.  All courts, whether civil or criminal possess, in the absence of any  express provision, as inherent in their constitution, all such powers as are  necessary to do the right and to undo a wrong in course of administration of  justice.  While exercising powers under the Section, the Court does not  function as a court of appeal or revision. Inherent jurisdiction under the  Section though wide has to be exercised sparingly, carefully and with  caution and only when such exercise is justified by the tests specifically laid  down in the Section itself.  It is to be exercised ex debito justitiae to do real  and substantial justice for the administration of which alone courts exist.   Authority of the court exists for advancement of justice and if any attempt is  made to abuse that authority so as to produce injustice, the court has power  to prevent such abuse.  It would be an abuse of process of the court to allow  any action which would result in injustice and prevent promotion of justice.   In exercise of the powers court would be justified to quash any proceeding if  it finds that initiation/continuance of it amounts to abuse of the process of  court or quashing of these proceedings would otherwise serve the ends of  justice.  When no offence is disclosed by the complainant, the court may  examine the question of fact.  When a complaint is sought to be quashed, it  is permissible to look into the materials to assess what the complainant has  alleged and whether any offence is made out even if the allegations are  accepted in toto.

In R.P. Kapur v. State of Punjab (AIR 1960 SC 866), this Court  summarized some categories of cases where inherent power can and should  be exercised to quash the proceedings.

(i)     where it manifestly appears that there is a legal bar  against the institution or continuance e.g. want of  sanction;

(ii)    where the allegations in the first information report  or complaint taken at its face value and accepted in  their entirety do not constitute the offence alleged;

(iii)   where the allegations constitute an offence, but  there is no legal evidence adduced or the evidence

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adduced clearly or manifestly fails to prove the  charge.          In State of Haryana v. Bhajan Lal  (1992 Supp (1) SCC 335) the  categories were enumerated  as follows:  "(1)    Where the allegations made in the first information  report or the complaint, even if they are taken at  their face value and accepted in their entirety do not  prima facie constitute any offence or make out a  case against the accused.

(2)     Where the allegations in the first information report  and other materials, if any, accompanying the FIR  do not disclose a cognizable offence, justifying an  investigation by police officers under Section  156(1) of the Code except under an order of a  Magistrate within the purview of Section 155(2) of  the Code. (3)     Where the uncontroverted allegations made in the  F.I.R. or complaint and the evidence collected in  support of the same do not disclose the commission  of any offence and make out a case against the  accused.  (4)  Where the allegations in the F.I.R. do not constitute a  cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by  a Police Officer without an order of a Magistrate as  contemplated under S. 155(2) of the Code.  (5)     Where the allegations made in the FIR or complaint  are so absurd and inherently improbable on the basis  of which no prudent person can ever reach a just  conclusion that there is sufficient ground for  proceeding against the accused.  (6)     Where there is an express legal bar engrafted in any  of the provisions of the Code or the concerned Act  (under which a criminal proceeding is instituted) to  the institution and continuance of the proceedings  and/or where there is a specific provision in the Code  or the concerned Act, providing efficacious redress  for the grievance of the aggrieved party.  (7)    Where a criminal proceeding is manifestly attended  with mala fide and/or where the proceeding is  maliciously instituted with an ulterior motive for  wreaking vengeance on the accused and with a view  to spite him due to private and personal grudge."                            Somewhat similar provision is contained in Section 141 of Negotiable  Instruments Act, 1881 (in short N.I. Act).  The scope and ambit of the said  provision has been examined by this Court in several cases.  A three Judge  Bench in Rajlakshmi Mills v. Shakti Bhakoo (2002) 8 SCC 236  held as  follows:-         "The appellant had filed a criminal complaint  against the respondent as well as her brother-in-law Anoop  Bhakoo under Section 138 of the Negotiable Instruments  Act because of dishonour of a cheque which had been  issued by M/s Sutlez Knitwears of which Anoop Bhakoo  and the respondent were partners.  Against the summoning  order passed by the Magistrate, the respondent filed a  petition under Section 482 Cr.P.C. after the respondent’s  application for discharge was unsuccessful.         The High Court invoked the provisions of Section  141 of the Negotiation Instruments Act and came to the  conclusion that as the respondent was not in charge or  responsible for the conduct of the business, therefore the  order summoning her was bad in law.

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       We are of the opinion that at the stage of  summoning when evidence was yet to be led by the  parties, the High Court could not on an assumption of facts  come to a finding of fact that the respondent was not  responsible for the conduct of the business.  On this  ground alone, these appeals are allowed and the impugned  decision of the High Court is set aside."

       Above being the position, we are of the view that the High Court was  not justified in quashing the charge framed so far as the present respondents  are concerned. We make it clear that we are not expressing any opinion on  the merits of the case. It goes without saying that the trial Court shall  consider the evidence and materials to be placed by the parties in the proper  perspective and in accordance with law. The appeal is allowed to the extent  indicated above.