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2014 Supreme(Bom) 2402

IN THE HIGH COURT OF BOMBAY AT NAGPUR BENCH
M.L. Tahaliyani, J.
TVS Motor Company Limited - Appellant
Vs.
The State of Maharashtra - Respondent
Criminal Application (APL) No. 437 of 2013
Decided On: 28.10.2014

Advocates:
Advocate Appeared:
For the Appellant: Sunil Manohar, A.A. Naik
For the Respondent: M.J. Khan, Addl. Public Prosecutor

Headnote:Legal Metrology Act, 2009 - Sections 36, 49(1)(9)(11) and 49(2) - Liability of Directors of Company. - Mentioning of names of Directors or Members of Board of Directors not sufficient to make them liable or responsible under Section 49(1)(9)(11) of Act. - In the present case, admittedly, the company has not nominated or authorised any person under sub-section (2) of Section 49 of the Legal Metrology Act, 2009. It may be noted that even if none of the Directors is appointed under sub-section (2) of Section 49 of the Act, the fact remains that the person can be made liable or responsible under Section 49(1)(a)(ii) of the Act only when it is shown that he at the time the offence was committed was incharge of, and was responsible to, the company for the conduct of the business of the company. All Directors cannot be made accused only because a person/Director has not been appointed or nominated under sub-section (2) of Section 49 of the Legal Metrology Act, 2009.

JUDGMENT :

M.L. Tahaliyani, J.

1. This application under Section 482 of the Criminal Procedure Code is filed by the applicants, who are accused in Summary Criminal Case No. 109 of 2013 pending on the file of learned Judicial Magistrate First Class, Mohadi. Accused No. 1 is a Company known as M/s TVS Motor Company Limited. The applicants are facing trial for the offence punishable under Section 36(1) of the Legal Metrology Act, 2009.

2. The contention of the applicants is that they cannot be made vicariously liable for the alleged offence only because they are members of the Board of Directors of the Company. It is submitted by learned Senior Counsel Shri Sunil Manohar that there are no allegations of any nature against either of the applicants and it is contended that the prosecution against them is nothing but sort of abuse of process.

3. Learned Senior Counsel Shri Sunil Manohar has submitted that in fact the 'chain kit' on which mandatory declaration "inclusive of all taxes" is not mentioned has not been manufactured by applicant No. 1. It was a spurious article sold in market manufactured by some other manufacturer. Learned Senior Counsel Shri Sunil Manohar has further submitted that in any event, that issue will have to be raised during the course of trial and for the time being the applicants are seeking relief in the nature of quashing of proceedings against applicant Nos.2 to 9 only on the ground that there are no allegations of any nature against them as to how they were responsible for the alleged lapse.

4. At this stage, it may be noted here that no relief is pressed for applicant No. 1 i.e. Company. Admittedly, applicant No. 2 is Chairman and Managing Director of the Company. Learned Additional Public Prosecutor Shri M.J. Khan for the non-applicant has submitted that applicant No. 2 by virtue of his position in the Company was in-charge of day-to-day affairs of the Company and was responsible for conduct of business of the Company.

5. Attention of learned Senior Counsel Shri Sunil Manohar was drawn to the judgment of the Hon'ble Supreme Court in the case of National Small Industries Corporation Limited vs. Harmeet Singh Paintal and another reported at (2010) 3 SCC 330, where the Hon'ble Supreme Court while dealing with the issue of vicarious liability has held as under :-

"39. From the above discussion, the following principles emerge :

(i) ------------

(ii) ------------

(iii) ----------

(iv) ---------

(v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.

(vi) ----------

(vii) ----------.

6. Learned Senior Counsel Shri Sunil Manohar, however, has relied upon the judgment of Hon'ble Supreme Court in the case of GHCL Employees Stock Option Trust vs. Kranti Sinha reported at (2013)4 SCC 505 and has submitted that there is a slight change in the view of the Hon'ble Supreme Court with regard to vicarious liability of the Managing Director and Joint Managing Director. In the said case, the Company along with its Directors including Managing Director were prosecuted for the offences punishable under Sections 120-B, 415 and 409 r/w Section 34 of the Indian Penal Code. A process was issued by the learned Metropolitan Magistrate against all the accused including the Managing Director. The Managing Director and Directors filed a petition before the High Court of Delhi challenging the issuance of summons against the Company, the Managing Director of the Company, Company Secretary and Directors of the Company. The High Court of Delhi quashed the process issued against the Managing Director, Company Secretary and Directors of the Company and upheld the order of process issued against the Company. The matter was carried to the Supreme Court by the complainant. The Supreme Court while disposing of the appeal had made following observations in paragraph 19 of the said judgment.

"19. In the order










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