HIGH COURT OF KARNATAKA
K.N. KESHAVANARAYANA, J.
Renuka Mukesh W. Jagathia Director & Others
Versus
State of Karnataka represented by Inspector of Legal Metrology Mangalore & Another
Criminal Petition Nos. 3504 of 2013 to 3516 of 2013
Decided on : 16.07.2013
Legal Metrology Act - Prosecution of Directors - Section 49(2) - Summary of Acts and Sections: The judgment discusses the provisions of Section 49 of the Legal Metrology Act, 2009, which deals with the liability of company directors for offences committed by the company. It highlights the requirement of nomination of a person responsible and the circumstances under which directors can be prosecuted. The court's decision is based on the interpretation of these provisions and the acknowledgment of the nomination of the Managing Director as 'person responsible' well before the alleged date of the offence.
Fact of the Case:
The petitioners, who were directors of a company, sought to quash the prosecution initiated against them for violations of the Legal Metrology Act, 2009. They argued that the Managing Director had been nominated as the 'person responsible' under Section 49(2) of the Act, and therefore, the prosecution should only be against the Managing Director and the company.
Finding of the Court:
The court found that the nomination of the Managing Director as 'person responsible' had been acknowledged and accepted by the department well before the alleged date of the offence. As per Section 49(1)(a)(i) of the Act, only the person nominated as 'person responsible' can be prosecuted in addition to the company. The prosecution against the other directors was held to be without jurisdiction and was quashed.
Issues: The main issue was whether the prosecution of the directors, apart from the Managing Director, was valid under the Legal Metrology Act, 2009.
Ratio Decidendi: The court relied on the provisions of Section 49(2) of the Act, which stipulates that if a director is nominated as the 'person responsible', only that person can be prosecuted for offences in addition to the company. The court also emphasized that the circumstances enumerated in Section 49(4) were not present in the case to prosecute the other directors.
Final Decision: The court allowed the petitions and quashed the prosecution launched against the directors, except for the Managing Director nominated as 'person responsible' and the company.
1. Though these petitions are listed today for admission, having regard to the short point of law involved in these matters, with consent of both sides, matters were heard for final disposal.
2. As the parties to these petitions are common and common questions of fact and law arises for consideration, these petitions were heard together and are being disposed of by this common order.
3. The common petitioners 1 to 5 in all these petitions have been arrayed as accused 2 to 6 in C.C.Nos.667/13, 670/13, 660/2013, 668/13, 661/2013, 662/13, 663/13, 669/13, 671/13, 664/13, 665/13, 672/13, 666/13 on the file of JMFC-II Court, Mangalore, Dakshina Kannada District. In addition to this, petitioners 1 to 4 have also been arrayed as accused 8 to 11 in C.C.No.660/13.
4. The inspector of Legal Metrology, Mangalore, Sub-Division, initiated prosecution in the aforesaid cases against these petitioners and others for the violation of various provisions of The Legal Metrology Act, 2009 (for short the Act) and the rules framed therein, which are punishable under Section 36 (1) of the Act. These petitioners have been arrayed as accused in the capacity as Directors and Store Manager of M/s Max Hyper Market India Pvt. Ltd. Accused No.1 arrayed in the case is the Managing Director of the said company. Quashing of the prosecution in the aforesaid cases have been sought by these petitioners on the legal ground that though accused No.1 as Managing Director of the Company, has been nominated under Section 49(2) of the Act, as a person responsible and such nomination has been intimated to the department well before the alleged date of offence, the prosecution have been launched against the petitioners, though under the Act they are not liable to be prosecuted for any of the offences.
5. I have heard the learned counsel appearing on both the sides.
6. There is no dispute that these petitioners have been sought to be prosecuted as the Directors of the Company, which is the principal offender.
7. Section 49 of the Legal Metrology Act, 2009 reads as under:-
"Offences by companies and power of court to publish name, place of business, etc., for companies convicted.
(1) Where an offence under this Act has been committed by a company:-
(a) (i) The person, if any, who has been nominate under Sub-Section(2) to be in charge of, and responsible to, the company for the conduct of the business of the company (hereinafter in this section referred to as a person responsible); or
(ii) Where no person has been nominated, 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; and
(b) 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 and that he exercised all due diligence to prevent the commission of such offence.
(2) Any company may, by order in writing, authorize any of its directors to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the company of any offence under this Act and may give notice to the Director or the concerned Controller or any legal metrology officer authorized in this behalf by such Controller (hereinafter in this section referred to as the authorised officer) in such form and in such manner as may be prescribed, that it has nominated such director as the person responsible, along with the written consent of such director for being so nominated.
Explanation-Where a company has different establishments or branches or different units in any establishment or branch, different persons may be nominated under this sub-section in relation to different establishments or branches or units and the person nominated in
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