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PETITIONER: T.J. STEPHEN & ORS.

       Vs.

RESPONDENT: PARLE BOTTLING CO.(P) LTD. & ORS.

DATE OF JUDGMENT22/03/1988

BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH DUTT, M.M. (J)

CITATION:  1988 AIR  994            1988 SCR  (3) 296  1988 SCC  Supl.  458     JT 1988 (1)   606  1988 SCALE  (1)562  CITATOR INFO :  E          1992 SC1701  (38)

ACT:      lmports and  Exports (Control)  Act, 1947:  Section  5- Prosecution of Company and its Managing Director-Examination of complainant,  the Deputy  Chief Controller of Imports and Exports-Whether necessary-Whether  complaint can  be quashed by referring to records of investigation.      Criminal Procedure  Code, 1973: Section 200 Prosecution of Company  and its Managing Director under section 5 of the Imports  and  Exports  (Control)  Act,  1947-Examination  of complainant-Whether necessary and relevant.

HEADNOTE: %      A  complaint   filed  in   the  court   of  the   Chief Metropolitan Magistrate  by the  appellant, Chief Controller of Imports  and Exports, against respondents Nos. 1 and 2, a private limited  company and  its Managing  Director for the alleged commission  of an  offence under s. 5 of the Imports and Exports (Control) Act, 1947 was subsequently transferred to another  court and  cognizance of the offence alleged was taken without  examining the  appellant as proviso (a) of s. 200 of the Code of Criminal Procedure was applicable to this complaint.      An application  filed by the accused persons for recall of summons  and dismissal  of complaint was dismissed by the trial Magistrate.  An appeal against the aforesaid order was dismissed by  the High  Court. A  special leave  application filed against  the High  Court’s order  was dismissed by the Supreme Court.      An  application   made  at  the  trial  stage  for  the discharge of  respondent No. 2, the Managing Director on the plea that there was no allegation of any criminal misconduct against him and the Company-respondent No. 1 was prepared to admit its  guilt and  may be  appropriately  penalised,  was dismissed by the trial court.      On appeal,  the High  Court quashed  the process issued against respondent  No. 2  on the  ground that  the order of issuance of process 297

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was clearly  as a  result of  non-application of mind by the trial Judge  because when the process was issued against the petitioners, the Department and the State had merely filed a complaint case  along with  list of witnesses and documents, and none  of  the  statements  of  witnesses  or  copies  of documents was  produced before  the trial  Judge,  and  that respondent No.  2 could  not be prosecuted under s. 5 of the Act, as  the prosecution intended to charge him as principal offender alongwith  respondent No.  1 the  Company and there were no  allegations in  the complaint that respondent No. 2 either aided  or abetted in the contravention of the licence conditions by respondent No. 1 Company.      Allowing the Department’s appeal, ^      HELD: 1.1  The High  Court had  not cared  to look into procedural law  applicable to  the factual  situation before it. If a reference had been made to section 200, Proviso (a) of Code  of  Criminal  Procedure,  the  proceedings  against respondent No. 2 could not have been quashed. [299G-H]      1.2 Records  of investigation  are not  evidence in the instant case,  and a  complaint  could  not  be  quashed  by referring to  the investigation  records, particularly  when the petition of the complainant did allege facts which prima facie show commission of an offence. [300B]      The  High   Court  overlooked  the  fact  that  similar objections raised  earlier were  rejected by  the same  High Court, and  this decision  was upheld  by the Supreme Court, and drew a distinction between the two situations, by saying that records  of investigation  were not  available  on  the earlier occasion. [300A-B]      1.3 The  licensee was a company and a company by itself could not  act, and  has to act through someone. Since there was  clear   allegation  that   the  Managing  Director  had committed the  offence, acting  on behalf  of the  licensee, there was  no justification  for  quashing  the  proceedings against respondent No. 2. [300C]      Order of  the High Court is vacated. However, since the offence was  committed 20 years back, it would not be in the interest of  justice to allow a prosecution to start and the trial to be proceeded with at this belated stage even though respondent No.  2 has  no equity in his favour and the delay has been  mostly on account of his mala fide move. Hence the case against  respondent No.  2 is  directed  to  be  closed forthwith. [300E,G]

JUDGMENT:      CRIMINAL APPELLATE  JURISDICTION: Criminal  Appeal  No. 175 of 1988. 298      From the  Judgment and  order dated 10.2.86 in the High Court of Bombay in Crl. Writ Petition No. 295 of 1986.      Kuldeep Singh,  Solicitor General,  Ms. A.  Subhashini, Mrs. Sushma Suri and B. Parthasarthy for the Appellants.       C.L. Sareen, O.K. Khuller, R.C. Kohli and Mrs. H. Wahi for the Respondents.       The following order of the Court was delivered:                          O R D E R      Special leave granted.      This appeal  is by  special leave. The appellant who is Deputy Chief  Controller of  Imports  and  Exports  filed  a complaint in  the Court  of Chief  Metropolitan  Magistrate, Bombay alleging commission of offence under Section 5 of the Imports and Exports (Control) Act, 1947 by the respondents 1

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and 2.  The said  case got  transferred to  the Court of the Additional  Chief   Metropolitan  Magistrate,   38th  Court, Ballard Estate, Bombay and was numbered as 82/S of 1983. The respondent No.  1 is  a private  limited  company  with  its registered office  at Bombay and the respondent No. 2 is its Managing Director.  To this complaint proviso (a) of Section 200 of  the  Code  of  Criminal  Procedure  was  applicable. Therefore, cognizance  was  taken  of  the  offence  alleged without  examining   the   appellant.   On   17.1.1983,   an application was  filed on  behalf of the two accused persons for recall  of the summonses and dismissal of the complaint. On 12th  of May  1983, the  learned Magistrate dismissed the petition. The  order of  the learned magistrate was assailed before the  High Court  and  on  2.9.1983,  the  High  Court dismissed it.  Then the  matter was brought to this Court by filing an  application for special leave on 12.12.1983, this Court dismissed the leave application. The case set down for trial after  charges were framed. An application was made to the trial  court at  this stage  to discharge  the  Managing Director, Respondent No. 2 in exercise of inherent powers by contending that  the company was prepared to admit its guilt and may be appropriately penalised and the Managing Director against whom there was no allegation of any criminal conduct should be  discharged. The  learned Magistrate by a reasoned order dated  17th February,  1986, dismissed the application and directed  that the  trial should  proceed against  both. That order was assailed by the respondents before the Bombay High Court by filing a criminal writ 299 petition. The High Court by its order dated 10th July, 1986, which is impugned in this appeal, held:           "On perusal  of the  averments it  is seen that at           the time  the learned Trial Judge issued/processed           against the  petitioners accused,  the  Department           and the  State had  merely filed  a complaint case           along with  list of  witnesses and documents. None           of  the  statements  of  witnesses  or  copies  of           documents were  produced before  the Trial  Judge.           The complainant’s  verification statement  is also           not recorded.  As such  the order  of issuance  of           process is  clearly a result of non-application of           mind by  the trial  Judge. Such  order would  mean           that merely  on filing  a  complaint  the  process           could be issued. It would be unjust to the accused           if process is issued against him by the Magistrate           without first  satisfying himself about the nature           of the  case and  whether there  exists sufficient           grounds for  proceeding with  the case. Since this           is not  done, then in the instant case the process           issued  against   petitioner   No.   2   (Managing           Director) is  liable to  be quashed on this ground           alone. Without  short circuiting the other grounds           it  must  be  pointed  out  that  perusal  of  the           complaint  and   in  particular  page  23  of  the           complaint shows  that the  prosecution intends  to           charge petitioner  No. 2 as the principal offender           along with  the petitioner  No. 1-company. That is           not possible  for the  simple reason  that offence           under  Section   5  of  the  Imports  and  Exports           (Control) Act  is done Principally by the licencee           (Company in  this case)  and/or by  the abetter to           the offence.  There  are  no  allegations  in  the           complaint that  the petitioner  No. 2 either aided           or  abetted   in  the   contravention  of  licence           conditions by  the petitioner  No.  1-Company.  As

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         such  on  this  ground  also  the  process  issued           against petitioner  No. 2  is liable  to be and is           quashed and set aside." The criticism  advanced by  the learned  Judge  against  the trying  Magistrate   is  wholly  untenable  and  is  perhaps applicable to  the learned Judge. If reference had been made to  Section   200  Proviso  (a)  of  the  Code  of  Criminal Procedure, what  has been  advanced as  the most  impressive ground for  quashing the  proceedings against the respondent No. 2 could not at all have been accepted. The learned Judge obviously has  not cared  to look  into the  procedural  law applicable to  the factual situation before him. The learned Judge also  lost sight  of the  fact that similar objections had once been raised and his High 300 Court had refused to entertain the same and the order of the High Court  had been  upheld here  by dismissing the special leave petition. The portion we have extracted from the order of the High Court suggested that the learned Judge wanted to draw a  distinction between  then and now by saying that the records  of  investigation  had  not  then  been  available. Records of investigation are not evidence in this case and a complaint  could   not  be   quashed  by  referring  to  the investigation records  particularly when the petition of the complainant  did   allege  facts   which  prima  facie  show commission of  an offence.  The learned  Judge did  note the fact that  the licencee  was a company but lost sight of the fact that  a company  by itself could not act. Obviously the Company has  to act through some one. In the petition of the complainant there  was clear  allegation that  the  Managing Director had  committed the  offence acting on behalf of the licencee. If  the complainant’s  petition had  been properly scrutinized the second ground advanced in the impugned order for quashing  the proceedings  against the Managing Director could not have been utilised in the impugned order. Both the grounds are  wholly untenable  and, therefore,  the order of the High  Court has  got to be reversed. We allow the appeal and vacate the order of the High Court.      Once the  order of  the High Court is vacated the order of the  learned Magistrate  would revive and the prosecution as directed  by the  learned Magistrate has now to continue. The petition of the complainant at page 21 of the paper-book shows that  the offence  was committed between 1967 and 1969 which is  some 20  years back. While we have no sympathy for the respondent  No. 2 and we are clearly of the opinion that he has  no equity  in his  favour and  the delay  after  the complaint had  been filed  has been mostly on account of his mala fide  move, we do not think it would be in the interest of justice  to allow  a prosecution  to start 20 years after the offence  has been  committed. If  we could  convict  the respondent No.  2 in accordance with law, we would have been prepared to  do so  taking the facts of the case and conduct of the  respondent into  consideration but that would not be possible within  the framework  of the law of procedure. We, therefore, do not propose to allow the learned Magistrate to proceed with the trial of the case at this belated stage.      We accordingly  direct the  case to  be closed  against respondent No.  2 without  further delay.  Ordinarily, in  a criminal case  of this  type there  would have been no order for costs.  But keeping  in view the background of the case, the manner in which the respondent No. 2 has behaved and the fact that he is squarely responsible for delaying the 301 proceedings by  reiterating the  same contention twice over. We are  of A  the definite opinion that the respondent No. 2

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should be  made to  suffer exemplary  costs. We  accordingly direct that  he shall  be called  upon to  pay a  sum of Rs. 10,000 by  way of  costs  and  the  said  amount  is  to  be deposited in  the trial court within one month hence failing which the  trial court shall have a direction to recover the same  as  fine  and  pay  the  amount  to  the  complainant. Compliance shall be reported to the Registry of this Court. N.P.V. 302