1985 (2) TMI 306 - HC - Indian Laws

Companies can only be fined, not imprisoned under Section 16 of Food Adulteration Act. Legal clarification on corporate liability.

Oswal Vanaspati and Allied Industries Versus State of U.P.

Oswal Vanaspati and Allied Industries Versus State of U.P. - TMI Issues:Interpretation of Section 16 of the Prevention of Food Adulteration Act regarding prosecution of a company for offenses under the Act.Analysis:The case involved two applications filed by a company and its Works Manager to quash a complaint under the Prevention of Food Adulteration Act. The main contention was whether a company, being a juristic person, could be prosecuted for an offense under Section 16 of the Act, which includes both imprisonment and fine as punishments. The defense argued that a company cannot be sentenced to imprisonment, and therefore, only a fine could be imposed. The State contended that a company could be prosecuted under Section 16 and cited a Full Bench decision of the Delhi High Court. The Single Judge referred two questions to a Full Bench for determination.The Full Bench analyzed the provisions of Section 16 and 17 of the Act. It was noted that the word 'person' in Section 16 includes a company, and the punishment prescribed includes both imprisonment and fine. The Bench clarified that while a company cannot be sentenced to imprisonment, it can be fined. The Bench emphasized that the legal sentence must follow conviction, and if both imprisonment and fine are prescribed, both must be awarded to a natural person. However, for a company, only the part of the sentence that can be imposed (i.e., fine) should be awarded, as a company cannot suffer imprisonment. The Bench concluded that awarding a fine only to a company under Section 16 is not illegal.The Full Bench disagreed with the observations made in a previous case regarding the interpretation of imprisonment and fine provisions under the Act. It clarified that the Supreme Court decision cited in the previous case was not applicable to the present scenario involving a juristic person. Additionally, a Supreme Court case involving reduction of sentence for a natural person under a different statute was distinguished from the current case involving a company under the Prevention of Food Adulteration Act.Ultimately, the Full Bench answered the referred questions, stating that a company could be awarded a fine only under Section 16 of the Act. The opinion was to be placed before the appropriate Bench for further action.