2017 (2) TMI 1510 - HC - Indian Laws

Court quashes proceedings against applicant, highlights vicarious liability for company's offenses.

Managing Director Versus State of M.P.

Managing Director Versus State of M.P. - TMI Issues Involved:1. Quashing of the complaint under Section 482 of Cr.P.C.2. Vicarious liability under the Prevention of Food Adulteration Act.3. Prosecution of an individual in an official capacity without arraigning the company as an accused.Issue-wise Detailed Analysis:1. Quashing of the Complaint under Section 482 of Cr.P.C.:The applicant filed a petition under Section 482 of Cr.P.C. to quash the complaint against him for offences under Sections 2(ia)(e), 7(i), and 16(1)(a) of the Prevention of Food Adulteration Act. The complaint alleged that the applicant, as Managing Director cum Incharge of Marico Industries Limited, was responsible for the adulterated sample of Parachute Coconut Oil taken by the complainant, a Sanitary Inspector with powers of a Food Inspector. The applicant contended that he was arraigned merely due to his official position without any personal allegations against him, and the company itself was not made an accused, making the prosecution against him unsustainable.2. Vicarious Liability under the Prevention of Food Adulteration Act:The court examined Section 17 of the Prevention of Food Adulteration Act, which deals with offences by companies. It states that when an offence is committed by a company, the person in charge and the company itself are deemed guilty. The court emphasized that vicarious liability is attracted only if the company is arraigned as an accused. The applicant argued that without the company being prosecuted, he could not be held vicariously liable. The court noted that the prosecution did not address this specific ground raised by the applicant.3. Prosecution of an Individual in an Official Capacity without Arraigning the Company as an Accused:The court referred to several Supreme Court judgments, including Aneeta Hada Vs. Godfather Tours and Travels (P) Ltd., which held that for maintaining prosecution under Section 141 of the Negotiable Instruments Act, arraigning the company as an accused is imperative. The court concluded that the same principle applies to the Prevention of Food Adulteration Act. Since Marico Industries Limited was not made an accused, the prosecution of the applicant in his official capacity was not permissible. The court highlighted the necessity of strict interpretation of penal laws and the requirement of fulfilling the condition precedent of arraigning the company to attract vicarious liability.Conclusion:The court allowed the petition and quashed the further proceedings against the applicant in the criminal case pending before the Court of ACJM, Gwalior. The judgment underscored the importance of prosecuting the company itself to hold its office bearers vicariously liable for offences committed by the company.