TaxTMI 
TaxTMI 
1970 (8) TMI 87
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....us imprisonment for two months. The firm was sentenced to pay a fine of Rs. 2,000/-. It does not appear that any special leave was obtained on behalf of the firm. In order to appreciate the contentions made before us it is ncessary to state the relevant facts. On October 25, 1958, Customs Preventive Officer B. Roy examined a parcel (wooden case) which purported to contain Rasogolla, Achar, papar and dried vegetable, booked for Hongkong, to be taken by the Swiss Air of which the Indian Airlines Corporation was the ,cargo handling agent. The articles had been declared to be worth Rs. 20/- but the freight which had been paid came to Rs. 127.73 nP. This excited the suspicion of the Customs Preventive Officer, B. Roy, and on opening the parcel and breaking down the case, five hundred ten currency notes of the denomination of hundred rupees each, valuing Rs. 51,0001-, were found. The name of the consignor was Ramghawan Singh at Karnani Mansion, Park Street, Calcutta, but on enquiry no trace could be found of this Ramghawan Singh at Karnani Mansion. In the course of further investigation suspicion fell ,on M/s. Agarwala Trading Corporation of which the appellants Girdharilal Gupta and Fu....
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....otes in Hindi in his presence and he remembered having seen this appellant writing a postcard on the adjoining table while he was preparing the consignment notes. He further stated that his immediate superior officer, P. K. Chatterjee, was also present at the time this consignment was being booked. Apparently this is not the first time that hiss appellant had gone to the Indian Airlines Corporation because P.W. 4 says that seven days ahead of October 24, 1958, this appellant had called on him with another shipment although that consignment was booked by P. K. Chatterji. Some days after October 25, 1958, this witness P.W. 4was taken by the Customs Officer to some place to find the man who is alleged to have booked the Parcel. Two or three months thereafter he was again taken by the Customs Officers to another place in Burrabazar area, which was the place of Agarwal Trading Corporation, and he said that he Pointed out the appellant, Bhagwandeo Tiwari, as the one who had taken the Parcel to him on October 24, 1958. He was cross- examined in order to show that he could not remember customers. He admitted that it was not always possible for him to remember all the men who came in contac....
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....mentions loose sheets in 'a sealed parcel. It has been urged that there is no evidence to show when the seal was opened. It is suggested that these slips have been fabricated and planted. No such question was put to the witnesses and we are unable 'to presume that the investigating officer would go about fabricating account slips in order to rope in the appellants. The prosecution produced two witnesses who had signed the recovery list. The evidence of Radheshyam Gupta, P.W. 7, must be discarded because although he was examined before the Chief Presidency Magistrate he was not made available for cross-examination. The learned counsel, Mr. Bhattacharya, suggested that if this witness had been produced for cross-examination he would have deposed against the prosecution. We are unable to draw any such presumption. The other witness was Lalit C. L. Parekh, P.W. 8. He had signed the search list but on cross-examination he stated that "Basu had taken slips of paper from the 'Agal Bagal' of the guddy, by which I mean from underneath the Takia on the bed". He further said that "bits of paper Basu found from a wooden case as well." He further stated as follows "You are rig....
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....-/151- for coming and going to I.A.C. Rs.223/8/. 4/51- 127/73-HongkongShanghai (torn & illegible)" The High Court had to translate it again and the last line was translated into "Hongkong Lagaya" in, place of "Hongkong Shanghai". In the account books of M/s. Agarwala Trading Corporation (Exts. 21 and 21/1) under the entries dated October 24, 1958, on which date the booking is alleged by the prosecution to have been done, on entry appears as follows: "Rs. 415/- Through Bhagwan Deo /8/- Colli (Janka) 115/-Rickshaw fare 2/ 14/-Cart Charge Rs. 1/8/- Through Ghanshyam & Pandey /4/- Bus fair 1/4/- Bus fair 1/4-Bus Tarm" It will be noticed that the same items appear in Ext. 9(2). The breakup in Ex. 9(2) is slightly different but in the account book the four annas and two annas entries have been added to Rs. 2/8/to make Rs. 2/14/- as cart charge. Again the entries in Ext. 9/1 are as follows "/1/- But hire for going home. 1/4/- Caine from home to Thai (?) Taxi /12/- Riksha-hire from Thai /1/- Coolie -/4/- Thai Office Colie ______________________ 2/6/- Rs. 147/10/- In Cash" The corresponding entry in the account books are as follows "Rs. 2/6/- (Bus fare /1/Taxi fare Rs. 1/4/- Ricks....
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....money which was spent and he being an active partner is clearly liable under s. 23C(1) of the Act which reads : "23C(1) If the person committing a contravention is a company, every person who, at the time the contravention was committed, was in-charge of, and, was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly; Provided that nothing contained in this sub- section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to pre- vent such contravention." This sub-section deems the appellant Girdhari Lal Gupta guilty. The question is : Has he proved that the contravention took place without his knowledge and he exercised due diligence to prevent such contravention ? What he said in his statement under s. 342, Cr-P.C., was that he alone looks after the affairs of the firm. There is also no evidence to show that the contravention took place without his knowledge or that he exercised due diligence to prevent such cont....
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....e proves that the contravention took place, without his knowledge or that he exercised all due diligence to prevent such contravention. 23C. (2) Notwithstanding anything contained in sub-section (1), where a contravention under this Act has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section,- (a) " company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm. Mr. Daphtary contends that there is no evidence to show that the appellant was in charge of the conduct of the business of the firm at the relevant time and therefore, s. 23C(1) does not apply. He further says that as the appellant was abroad, the contravention took place without his knowledge. We may mention, however, that the de....
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....neglect." In R. K. Khandelwal v. State ([1964] 62 A.L.J. 625) D. S. Mathur, J., in construing s. 27 of the Drugs Act, 1940, a provision similar to the one we are concerned with, observed : "There can in directors who merely lay down the policy and are not concerned with the day to day working of the Company. Consequently, the mere fact that the accused person is a partner or director of the Company, shall not make him criminally liable for the offences committed by the Company unless the other ingredients are established which make him criminally liable." In The Public Prosecutor v. R. Karuppian(A.I.R. [1958] Mad. 183.), Somasundaram J., while dealing with a case arising under the Prevention of Food Adulteration Act, 1954 (s. 17(1)) observed that the Secretary of the Co-operative Milk Society, on the facts of the case, could not be held to be a person in charge of the Society. On the facts of that case the business of selling milk was done by the clerk of the Society and the Secretary was only an honorary Secretary and was not coming to. the Society daily. The only evidence led by the prosecution on this part of the case was of one Sohan Lal Gupta who is a broker. He stated in ....