2020 (8) TMI 694 - HC - Central Excise

Court dismisses Criminal Original Petition, orders company rep summons, sets 6-month trial completion

S.A. Khan Ex-partner M/s. Printwraps Versus Union of India rep. by The Assistant Commissioner of Central Excise, Prosecution Unit, Chennai-34.

The court dismissed the Criminal Original Petition, directing the trial court to issue summons to Ms. Saradha Subbash as the company's representative ... Prosecution of accused - separate identity of Company/Firm and its owner - contention of the petitioner is that as per Section 9AA of the Central Excise Act, it is mandatory requirement to implead the company/firm as an accused - evasion of excise duty - HELD THAT:- A1 firm had been represented by A2, who was the Managing partner, till his death. After his death, the entire confusion arouse. Though this petitioner is no way affected by summoning Ms. Saradha Subhas to be a representative for M/s. Print Wraps firm/A1, the petitioner opposed the petition in Crl.M.P.No.2158/2011 and the trial Court dismissed the same by order dated 20.06.2013. This Court, by order dated 29.09.2011 in CRL.R.C.No.1256/2003 observed that there is no impediment in proceeding further in the trial under Section 305(3) Cr.P.C. As per Section 63 of Cr.P.C., how summons to be served on corporate bodies and societies are stated. On service of summons under Section 63 of Cr.P.C, the company/Firm will nominate the representative to represent the firm. No doubt, it is for the company/Firm to decide who is to represent them in the proceedings. The right of choosing the representative rests solely with the company. Section 305 Sub-clause(ii) authorize the company/Firm to appoint its own representative for the purpose of enquiry or trial and such appointment need not be under the seal of the corporation - In this case, after the demise of A2, who was the Managing Partner of A1 firm, the summons must be sent to A1 firm for representing them. It is admitted that Ms. Saradha Subbash, the partner of M/s. Print Wraps is presently conducting the business and affairs of the firm. Thus, from the reading of Section 63 and 305 of Cr.P.C, it is seen that after the summons are served in the manner prescribed under Section 63 of Cr.P.C, the Corporation may appoint a representative as per Section 305 of Cr.P.C., for the purpose of inquiry or trial. Thus, it is evident that when the accused is a corporate body, it is not for the Court to decide who shall represent corporate body. The Court can issue the summon in the manner prescribed under Section 63 of Cr.P.C, and the representative could be appointed by the Corporate Body for the purpose of representing the firm during trial. This Court directs the Trial Court to issue summons as per Section 63 of Cr.P.C to A1 firm to the present Principal Officer Ms. Saradha Subbash and thereafter, proceeds under Section 305 of Cr.P.C. If it is found that there is any deceit and evasion in receiving and complying the summons, the trial Court is directed to take coercive steps in this regard - Petition dismissed. Issues Involved:1. Prosecution of individuals without the company being arrayed as an accused.2. Representation of the company after the death of the managing partner.3. Applicability of Section 63 and Section 305 of the Criminal Procedure Code (Cr.P.C.).Issue-wise Detailed Analysis:1. Prosecution of individuals without the company being arrayed as an accused:The petitioner contended that as per Section 9AA of the Central Excise Act, it is mandatory to implead the company/firm as an accused. The petitioner argued that prosecution against individuals (partners) without arraying the company/firm as an accused is not permissible. The court noted that M/s. Printwraps was indeed arrayed as A1 in the complaint. The petitioner’s claim that he cannot be prosecuted without the company being represented was not sustainable. The court referred to the decision in ANEETA HADA vs. GODFATHER TRAVELS & TOURS (P) LTD. and S. BALASUBRAMANIAN vs. THE STATE OF TAMIL NADU to support the contention that the company must be arrayed as an accused for prosecution to proceed.2. Representation of the company after the death of the managing partner:The second accused, who was the managing partner of the first accused firm, passed away during the pendency of the petition. The prosecution sought to direct the petitioner (A3) to represent the firm, but the petitioner resisted, stating he had retired from the partnership firm in 1994. The trial court dismissed the prosecution’s petition, and the Principal Sessions Judge’s revision order was set aside by the High Court, confirming that the petitioner cannot be compelled to represent the firm. The court observed that the confusion arose after the death of A2 and noted that the petitioner opposed the impleading of Ms. Saradha Subbash (another partner) to represent the firm, leading to the trial court’s dismissal of the petition.3. Applicability of Section 63 and Section 305 of the Criminal Procedure Code (Cr.P.C.):The court discussed the provisions of Section 63 and Section 305 of Cr.P.C. Section 63 outlines the procedure for serving summons on corporate bodies, while Section 305 allows a corporation to appoint a representative for the purpose of inquiry or trial. The court emphasized that it is the company’s right to appoint its representative, and the court cannot decide who should represent the corporate body. The court directed the trial court to issue summons to the present principal officer, Ms. Saradha Subbash, and proceed under Section 305 of Cr.P.C. If there is any deceit or evasion in receiving and complying with the summons, the trial court is directed to take coercive steps.Conclusion:The court dismissed the Criminal Original Petition and directed the trial court to issue summons as per Section 63 of Cr.P.C. to Ms. Saradha Subbash and proceed under Section 305 of Cr.P.C. The trial court was instructed to complete the trial within six months from the date of lifting the lockdown and commencement of normal functioning of the court. The court concluded that the petitioner’s contention that he cannot be prosecuted without the company being represented was not sustainable, and the trial should proceed with the proper representation of the company.