The main legal point established in the judgment is the requirement for prima facie evidence to establish vicarious liability under Section 9-AA of the Central Excises and Salt Act. The court emphasized that the complaint need not specifically state that the accused were in charge of and responsible to the company for the conduct of the business at the relevant time, as long as the complaint as a whole indicates this fact.

( 1 ) THIS petition is filed by accused 1 and 2 in C. C. 72/88 before the special court for economic offence for quashing those proceedings initiated on a complaint filed by the respondent for offences punishable under Sections 9 (1) (a), 9 (1) (b) and 9 (1) (bb) of the Central Excises and Salt Act. ('the Act' for short ).

( 2 ) THE respondent has filed a complaint in the lower court against M/s. Tonesta Electronics, which is a registered firm, represented by its managing partner, the second accused and A-3 and A-4 are the partners of the first accused firm for above offences. It is alleged that central excise duty is payable for the products manufactured and cleaned under T. I. 68 in respect of T. V. cabinets, that on inspection of the factory of the first accused revealed that the first accused was manufacturing T. V. cabinets and supplying the same to M/s. Relectronics Pvt. Ltd. without either obtaining a licence as required under Section 6, of the Act, that the accused had removed/cleared T. V. cabinets liable to payment of excise duty without making such payment and without issue of gate pass and that the accused had also not maintained daily stock account and current account with the collector of central excise.

( 3 ) THE Magistrate has taken cognizance of the offences and has issued process to the accused persons including the present petitioners.

( 4 ) THE learned Counsel for the petitioners has sought for quashing of the proceedings on various grounds. The first ground urged by him in that that under Section 9 of the Act it is only the person who commits the offence who is liable to be punished, as Section 9 (1) begins with the words "whoever commits any of the following offences. " that under Section 9 (1) there cannot be vicarious liability for the offence committed by the another and that in the present case admittedly the offence is committed by the company and that unless the complaint discloses that the other accused persons are vicariously liable under Section 9-AA, they, cannot be prosected for the offence committed by the company. He pointed out that there is no reference to Sec. 9-AA in the complaint and that there is also no averment in the complaint to indicate that accused-2 to 4 were in-charge of and responsible to the conduct of the business to the company. He has cited some authorities in support of his contention that where the offence is committed by a company or a firm unless there are averments in the complaint to show that the other accused persons were incharge of and responsible to the conduct of the business to the company or the firm they cannot be prosecuted.

( 5 ) SECTION 9 AA of the Act reads as hereunder :"offences by companies.- (1) where an offence under this Act has been committed by a company, every person who at the time the offence 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 offence 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 any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in Sub-Section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed 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 assoc