2018 (3) TMI 1947 - HC - Indian Laws

Court Rules Applicant Not Liable Without Company Accused

The court held that the applicant cannot be prosecuted without the company being made an accused. It emphasized that for vicarious liability to apply, the ... Sanction for prosecution to file a complaint - principles of vicarious liability - it is submitted by the State counsel that the applicant is the nominee of the Company and, therefore, he can be prosecuted even in absence of the Company - Section 66 of the Food and Safety and Standards Act, 2006 - HELD THAT:- It would be clear that Satya Sai Agroils Private Limited is the manufacturer of soya products, however, the Company has not been made an accused and the applicant is being prosecuted in the capacity of nominee of the Company. The applicant cannot be held vicariously liable for offence committed by the Company in absence of prosecution of Company. Therefore, this Court is of the considered view that as the Company which is the manufacturer of soya products, has not been arraigned as an accused, the applicant cannot be held vicariously liable. There is no allegation against the applicant in his personal capacity. Therefore, the prosecution of the applicant, is bad in law. Application allowed. Issues Involved:1. Whether the applicant can be prosecuted without the company being made an accused.2. Interpretation of Section 66 of the Food Safety and Standards Act, 2006.3. Applicability of the principle of vicarious liability.4. Relevance of precedents set by the Supreme Court in similar cases.Issue-wise Detailed Analysis:1. Whether the applicant can be prosecuted without the company being made an accused:The applicant challenged the order taking cognizance on the ground that he cannot be prosecuted as the nominee of the company without the company itself being made an accused. The counsel for the applicant argued that the principal accused is Satya Sai Agroils Private Limited, and without impleading the company, the applicant cannot be held vicariously liable. The court agreed with this argument, stating that the applicant can only be held vicariously liable if the company is also arraigned as an accused.2. Interpretation of Section 66 of the Food Safety and Standards Act, 2006:Section 66 of the Act specifies that when an offence is committed by a company, every person responsible for the conduct of the business, as well as the company, shall be deemed guilty. However, the court emphasized that this section requires the company to be made an accused for vicarious liability to be imposed on its nominees or directors. The court referred to the statutory language and interpretation principles to conclude that without the company being prosecuted, the nominee cannot be held liable.3. Applicability of the principle of vicarious liability:The court discussed the principle of vicarious liability, which holds that a person can be held liable for the actions of another if they are in a position of responsibility. The court cited the Supreme Court's judgment in Aneeta Hada Vs. Godfather Tours and Travels (P) Ltd., which held that for vicarious liability to apply, the company must be arraigned as an accused. The court reiterated that the applicant, being a nominee, cannot be prosecuted independently of the company.4. Relevance of precedents set by the Supreme Court in similar cases:The court referenced several Supreme Court cases, including Aneeta Hada Vs. Godfather Tours and Travels (P) Ltd. and Sharad Kumar Sanghi Vs. Sangita Rane, to support its decision. These cases established that a company must be made a party for its directors or nominees to be prosecuted under the principle of vicarious liability. The court also referred to its own previous judgment in M.Cr.C. No. 1301 of 2011, where it was held that prosecution of a managing director is not permissible without the company being an accused.Conclusion:The court concluded that the prosecution of the applicant is not permissible in the absence of the company being arraigned as an accused. The court allowed the application, quashing the order dated 29/12/2014 by the Judicial Magistrate First Class, Vidisha, in Criminal Case No. 3171/2014. The court emphasized that there were no allegations against the applicant in his personal capacity, and therefore, the prosecution was bad in law.