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1987 Supreme(HP) 49
High Court Of Himachal Pradesh
A.P.SEN,S.NATARAJAN
U.P.POLLUTION CONTROL BOARD - Appellant
Versus
MESSRS.MODI DISTILLERY - Respondent
Criminal Appeal No. 415 of 1986
Decided On : 08/06/1987
Company officers, including the Chairman, Vice-Chairman, Managing Director, and Board of Directors, can be held liable for offences committed by the company under the Water (Prevention and Control of Pollution) Act, 1974, even in the absence of a prosecution against the company itself.
Headnote:
WATER (PREVENTION AND CONTROL OF POLLUTION) ACT, 1974 - SECTION 47 - Liability of Company and its Officers for Offences - Interpretation - Scope and Applicability.
Fact of the Case:
Modi Distillery, an industrial unit of Modi Industries Limited, was discharging polluted trade effluents into a stream without obtaining consent from the Pollution Control Board, in violation of sections 25(1) and 26 of the Water (Prevention and Control of Pollution) Act, 1974. A complaint was filed against the industrial unit and its Chairman, Vice-Chairman, Managing Director, and Board of Directors under section 44 of the Act. The High Court quashed the proceedings, holding that there could be no vicarious liability of the company's officers without a prosecution of the company itself.
Finding of the Court:
The Supreme Court held that the Chairman, Vice-Chairman, Managing Director, and Board of Directors of Modi Industries Limited could be prosecuted under section 47 of the Act, even in the absence of a prosecution against the company, as they were in charge of and responsible for the conduct of the business of the industrial unit. The Court interpreted section 47 to impose strict liability on company officers for offences committed by the company, with the burden of proof lying on the officers to show that they exercised due diligence to prevent the offence.
Issues: 1. Whether the Chairman, Vice-Chairman, Managing Director, and Board of Directors of a company can be held liable for offences committed by the company under the Water (Prevention and Control of Pollution) Act, 1974, without a prosecution of the company itself. 2. Interpretation of section 47 of the Act, particularly the scope of vicarious liability of company officers.
Ratio Decidendi: 1. Section 47 of the Water (Prevention and Control of Pollution) Act, 1974 imposes strict liability on company officers for offences committed by the company, including the discharge of polluted trade effluents without consent. 2. The burden of proof lies on the company officers to show that they exercised all due diligence to prevent the commission of the offence. 3. The liability of company officers under section 47 is not dependent on a prosecution of the company itself. 4. The Court emphasized the importance of environmental protection and the need for strict enforcement of pollution control laws.
Final Decision: The Supreme Court allowed the appeal, set aside the High Court's order, and restored the order of the Chief Judicial Magistrate directing the issuance of process against the respondents. The Court directed the Magistrate to proceed with the trial expeditiously.
Sen, J,— This appeal by special leave is directed against the judgment and order of the High Court of Allahabad dated May 16, 1984 setting aside in its revisional jurisdiction an order of the Chief Judicial Magistrate, Ghaziabad dated November 3, 1983 directing the issue of process against the respondents on a complaint filed by the appellant under section 44 of the Water (Prevention and Control of Pollution) Act, 1974. The issue involved is whether the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors of Messrs. Modi Industries Limited, the Company owning the industrial unit called Messrs. Modi Distillery could be proceeded against on a complaint against the said industrial unit. A learned Single Judge (K. C. Agarwal, J.) following the decision of this Court in State {Delhi Admn.) v. I. K. Nangia and another, (1980) 1 SCC 258, interpreting a similar provision contained in sub-section (4) of section 17 of the Prevention of Food Adulteration Act, 1954 has held that there was no sufficient ground against the respondents inasmuch as the allegations made in the complaint do not constitute an offence punishable under section 44 for the admitted contravention of sections 25 (1) and 26 read with section 47 of the Act. The question essentially turns upon the rule of construction to be adopted in section 47.
2. The facts of the case are these, Messrs. Modi Industries Limited is an existing company under the Companies Act, 1956. It is a large business organisation having diversified business activities. Prior to the commencement of the Act it had established an industrial unit called Messrs. Modi Distillery at Modi Nagar, Ghaziabad engaged in the business of Manufacture and sale of industrial alcohol. During the process of manufacture of such industrial alcohol, the said industrial unit discharges its highly noxious and polluted trade effluents into the Kali River through the Kadrabad Drain which is a stream within the meaning of section 2 (j) of the Act and thereby causes continuous pollution of the said stream without the consent of the Board and therefore it falls within the purview of section 26. Under the provisions of section 26, as amended, it has been made mandatory for every existing industry to obtain the consent of the Board for discharging its trade effluent into a stream or well or sewer or on land The last date for submission of such application seeking the consent of the Board by an existing industry had been extended upto December 31, 1981. In accordance with the procedure laid down under sections 25 (1) and 26 of the Act, the Company was required to submit an application for consent of the Board in the prescribed form along with the prescribed consent fee and the particulars. Instead of the Company its industrial unit, namely, Messrs. Modi Distillery on March 27, 1981 applied to the Board for grant of consent to discharge its trade effluents into the stream. The ^aforesaid application was scrutinised by the Board and found incomplete in many respects. The Board accordingly by its letter dated April 29, 1^81 informed the said, industrial unit with regard to the discrepancies and the particulars wanting. There was no response from the respondent nor did they rectify the discrepancies pointed out or furnish the particulars required. The Board accordingly by its letter dated July 30,1981 refused to grant the consent prayed for in the public interest since the application was found incomplete in many respects and also because the said industrial unit did not have proper arrangements for treatment of its highly polluted trade effluents Thereafter, the Board by its letter dated June 30, 1982 issued a notice under" section 20 of the Act directing the Company to furnish certain information regarding the particulars and names of the Managing Director, Directs and other persons responsible for the conduct of the Company, but the respondents did not furnish the information called for. This was
