Vicarious liability under the Essential Commodities Act requires company contravention and proof of knowledge or participation, not suspicion alone.

Vicarious liability under Section 10 of the Essential Commodities Act, 1955 arises only where the company itself has committed the contravention; absent such a finding, persons in charge cannot be fastened with liability merely because they managed the business. A conviction for conspiracy or for breach of a control order also requires proof of knowledge, participation, or agreement in the unlawful sale, not suspicion from de facto control alone. On the stated facts, the evidence showed only managerial involvement and did not establish that the respondents knew of, negotiated, or participated in the sale of pig iron at an excess price, so liability was not made out.

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Issues: (i) Whether the respondents could be convicted for conspiracy and contravention of the control order on the evidence of knowledge, participation, or agreement in the sale of pig iron at an excess price; (ii) Whether Section 10 of the Essential Commodities Act, 1955 could fasten liability on the respondents in the absence of a finding that the company itself had committed the contravention.

Issue (i): Whether the respondents could be convicted for conspiracy and contravention of the control order on the evidence of knowledge, participation, or agreement in the sale of pig iron at an excess price.

Analysis: The material showed that the goods were received and later sold by persons other than the respondents, and that the respondents were in de facto management of the company and firm. That circumstance created suspicion, but there was no evidence that they knew of the disposal of the goods, took part in the negotiations, or participated in the sale. A conviction for conspiracy or substantive contravention required proof of knowledge and participation, not mere inference from managerial control.

Conclusion: The respondents could not be convicted on the evidence adduced.

Issue (ii): Whether Section 10 of the Essential Commodities Act, 1955 could fasten liability on the respondents in the absence of a finding that the company itself had committed the contravention.

Analysis: Section 10 applies only where the person contravening an order made under Section 3 of the Essential Commodities Act, 1955 is a company. Only then do persons in charge of and responsible for the conduct of its business become liable. Here there was no finding that the company itself had contravened the control order, and the company had not even been charged. The actual contravention, if any, was by the individuals who carried out the sale, and that could not by itself attract vicarious liability under Section 10.

Conclusion: Section 10 did not apply to the respondents.

Final Conclusion: The conviction of the respondents was unsupported by proof of participation or by the statutory conditions for vicarious liability, and the acquittal was sustained.

Ratio Decidendi: Vicarious liability under Section 10 of the Essential Commodities Act, 1955 arises only when the contravention is committed by the company itself, and a conviction for conspiracy or contravention cannot rest on suspicion or managerial position alone without proof of knowledge or participation.

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