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1986 Supreme(Pat) 151

PATNA HIGH COURT
S.S.Sandhawalia, P.S.Sahay and S.Shamsul Hasan JJ.
Madan Mohan Upadhya
Versus
State Of Bihar
Criminal Miscellaneous No. 2383 of 1979 ;
Decided On : APRIL 30, 1986

The complaint must contain specific facts indicating the accused's responsibility for the firm's affairs, and distinguish between vicarious and direct liability under the Essential Commodities Act.

Headnote:

Essential Commodities Act - Interpretation of Sec.10(1) and Sec.10(2) - [Sec.10 (1), Sec.10 (2)] - The court discussed the interpretation of Sec.10(1) and Sec.10(2) of the Essential Commodities Act, highlighting the vicarious liability of persons in charge of and responsible to the firm for the conduct of its business, and the requirement of allegations of consent, connivance, or neglect in the complaint itself. The court emphasized the need for specific facts in the complaint to indicate how an accused individual is in charge of and responsible to the affairs of the company, and the distinction between vicarious and direct liability under the two subsections.

Fact of the Case:

The petitioners, partners of a firm, sought quashing of criminal proceedings against them, arguing that the complaint did not expressly plead their responsibility for the conduct of the firm's business or the alleged contravention of the Essential Commodities Act.

Finding of the Court:

The court held that the absence of specific words in the complaint did not justify quashing the prosecution, but emphasized the need for the complaint to contain facts indicating the accused's responsibility for the firm's affairs. The court distinguished between vicarious and direct liability under Sec.10(1) and Sec.10(2) and emphasized the requirement of specific facts in the complaint to establish vicarious liability.

Issues: Interpretation of Sec.10(1) and Sec.10(2) of the Essential Commodities Act, sufficiency of allegations in the complaint to establish vicarious liability, distinction between vicarious and direct liability under the Act.

Ratio Decidendi: The complaint must contain specific facts indicating how an accused individual is in charge of and responsible to the affairs of the company, and distinguish between vicarious and direct liability under Sec.10(1) and Sec.10(2) of the Essential Commodities Act.

Final Decision: The court quashed the prosecution against the petitioners, emphasizing the need for specific facts in the complaint to establish vicarious liability and distinguishing between vicarious and direct liability under the Essential Commodities Act.

Judgment

S.S.Sandhawalia, J.

1. The two significant questions which fall for determination in this reference to the Full Bench may be precisely formulated in the following terms:

(i) Whether Sec.10 (1) of the Essential Commodities Act inflexibly requires the incorporation of the words "was in charge of and was responsible to the firm for the conduct of the business of the firm"-in all complaints a partner of the firm for offences in contravention of the said Act ?

(ii) Whether Sec.10 (2) of the Act aforesaid necessarily mandates the incorporation of the allegation that the offence was committed with the consent or connivance or was attributable to the neglect on the part of the partner of the firm in the complaint itself ?

2. The facts may be noticed with the stricktest brevity in so far as they are relevant to the two pristinely legal questions aforesaid. The four petitioners are admittedly partners of the firm named and styled as M/s. Nalanda Trading Stores, Bakhtiarpur carrying on the business of a cement selling agency thereat. On the basis of a complaint (Annexure-1) made by Shri Basistha Narayan Singh, General Secretary of the District Janta Party alleging serious irregularities against the petitioners and their firm an inquiry was apparently made and a report dated 28th of September, 1978 of the Assistant District Supply Officer, Barh, (Annexure-2) was rendered. Pursuant thereto, Shri Devendra Kumar, Supply Inspector, Bakhtiarpur, presented a complaint (Annexure-3) in the court of the Additional Chief Judicial Magistrate, Barh. Therein it was expressly averred that the petitioners are the partners of M/s. Nalanda Trading Stores and they are interested in the loss and profit of the business of the cement selling agency. In terms the allegation that the aforesaid business is under the direct control and supervision of the petitioners was made. Numerous allegations coming within the ambit of the offences Under Sections 7, 9 and 10 of the Essential Commodities Act (hereinafter referred to as the Act) were enumerated in paragraphs 2 to 9 of complaint and a prayer was made that cognizance Under Sections 7, 9 and 10 of the Act may be taken against all the four petitioners.

3. On the 20th of March, 1979 the learned Additional Chief Judicial Magistrate, Barh, by his order of even date took cognizance against the petitioners and transferred it to the file of Shri K. P. Verma, Sub-divisional Judicial Magistrate, for trial.

4. Aggrieved by the aforesaid cognizance the present criminal miscellaneous petition has been preferred seeking the quashing of the proceeding at the very threshold. The primal grounds urged herein are that in the petition of complaint itself it has not been expressly pleaded that the petitioners or any of them was in charge of or was responsible to the firm for the conduct of its business. Further stand is that there is no allegation in the complaint that the alleged contravention of the Essential Commodities Act has been committed with the consent, connivance or negligence on the part of the petitioners or any of them so as to attract the application of Sub-section (2) of Sec.10 of the Act.

5. This criminal miscellaneous petition originally came up before a learned Single Judge, who after hearing, apparently found the issues involved to be of some significance and, therefore, referred the matter to a Division Bench. Before the Division Bench reliance was placed on a series of judgments of this Court taking the view that unless specific allegations are made in the petition of complaint itself in terms pari meteria whit the language of Sub-sections (1) and (2) of Sec.10 of the Act, the proceeding would virtually stand vitiated. Noticing some conflict of precedents and raising some doubt about the correctness of the earlier view the matter was referred to a Full Bench on 27th of March, 1985 and that is how it is before us.

6. It will appear that subsequent to the date of the reference the gordian knot of the somew















































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