Sh. Chetan Shah vs State of Punjab - 2023 Supreme(P&H) 2654

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(P&H) 2654

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
DEEPAK GUPTA, J.
Sh. Chetan Shah – Petitioner
Versus
State of Punjab – Respondent
CRM-M-9538 of 2022
Decided On : 27-04-2023

Advocates Appeared:
Mr. R.S. Rai, Sr. Advocate with Mr. Ashim Aggarwal and Ms. Sushma Aggarwal, Advocates; For the Petitioner
For the Respondent: Mr. Gurpreet Singh Shergill, AAG, Punjab.

Headnote:(A) Insecticides Act, 1968 - Sections 3(k)(i), 17, 18, 29 & 33 - Petition filed under Section 482 of Code of Criminal Procedure to quash complaint and summoning order against the Managing Director for misbranding product - Liability of Managing Director questioned based on prior nominations of responsibility - Court held that vague allegations do not suffice for prosecution - Established that only individuals responsible for day-to-day affairs can be held liable - Proceedings quashed. (Paras 4, 9, 10, 12, 15)

(B) Legal Principle - Criminal liability concerning corporate officers under the Insecticides Act necessitates specific allegations of responsibility. (Paras 10, 15)

Facts of the case:
Complaint initiated against a company and its Managing Director due to misbranded insecticide; sampling and testing protocols followed, leading to claims of liability based solely on position.

Findings of Court:
Court determined that the petitioner had designated others to maintain quality control, thereby not warranting personal prosecution under the Act.

Issues: Whether liability can be imposed on a Managing Director without specific allegations of responsibility in the complaint.

Ratio Decidendi: Under Section 33 of the Insecticides Act, only those individuals who are shown to be in charge of the daily conduct of a business at the time of the offence can be held guilty; mere titular responsibility does not suffice.

Result: Petition accepted; proceedings quashed.

Table of Content
1. factual background of the case. (Para 1 , 2 , 3)
2. arguments against the liability of the petitioner. (Para 4 , 5 , 6)
3. court observations on company liability. (Para 7 , 8 , 9 , 10 , 11 , 12)
4. precedent case law related to corporate liability. (Para 13 , 14)
5. conclusion quashing the complaint against the petitioner. (Para 15)

JUDGMENT

Deepak Gupta, J.

By way of this petition filed under Section 482 of the Code of Criminal Procedure, prayer is made to quash Complaint bearing No. COMA/39956/2013 dated 16.08.2013 titled as "State of Punjab through Insecticide Inspector, Bathinda v. M/s Kheti Sewa Centre Bathinda and others" under Sections 3(k)(i), 17, 18, 29 & 33 of the INSECTICIDES ACT , 1968 (hereinafter referred as 'the Act'), pending in the Court of learned Chief Judicial Magistrate, Bathinda; and also the summoning order dated 02.09.2013 (Annexure P-9) and all the consequential proceedings arising therefrom qua the petitioner.

2. It emerges on perusal of paper book that on 27.07.2011, Insecticide Inspector, Bathinda inspected the shop premises of M/s Kheti Sewa Centre, Bathinda. After making necessary statutory compliances, he drew 3 samples each of one liter of Imidacloprid 17.8% bearing Batch No.NCL-27, Manufacturing date 17.02.2011, Expiry date 16.02.2013, supplied by M/s. New Chemi Industries Ltd., Ludhiana, displayed at the premises for sale. Out of three samples collected by the Insecticide Inspector, one of them was sent to the Senior Analyst, Insecticide Testing Laboratory, Amritsar and vide report received on 05.08.2011, the sample was declared as mis-branded. Complaint (Annexure P-8) was filed to prosecute the dealer M/s Kheti Sewa Centre, Bathinda and its proprietor Rajinder Kumar Jindal; and manufacturer M/s New Chemi Industries Ltd., its Managing Director Chetan Shah (petitioner), Dharmesh D. Patel, Quality Control Chemist; and Satinder Singh Saini, the Regional Manager and Godown In-charge, so as to prosecute them under Sections 3(k)(i), 17, 18, 29 & 33 of the Act.

3. Learned Chief Judicial Magistrate, Bathinda vide order dated 02.09.2013 (Annexure P-9) ordered summoning of all the accused including the petitioner by observing that there are sufficient grounds to proceed against the accused under Section 3(k)(i), 17, 18, 29 & 33 of the Act read with Rule 27(5) of the INSECTICIDES RULES , 1971.

4. Challenging the complaint as well as the summoning order, it is contended by learned counsel for the petitioner that the petitioner had furnished an undertaking nominating and fixing responsibility of quality control on senior officials of the company, who have also been arraigned as accused in the present complaint. Said officials had also furnished affidavits stating that they shall be responsible for all acts of M/s New Chemi Industries Ltd. i.e., manufacturing company and therefore, in view of the judgment of the Hon'ble Supreme Court in case of "M/s Cheminova India Ltd. & Anr. v. State of Punjab and Anr.", reported as (2021) SCC 573, present proceedings against the petitioner ought to be quashed as simply because he is the Managing Director of M/s New Chemi Industries Ltd., he cannot be fastened with any liability.

5. Learned senior Advocate for the petitioner has drawn attention towards the complaint (Annexure P-8) in order to contend that there is no averment as to how and in what manner the petitioner was responsible for the conduct and affairs of the company and that as per settled law, only the persons, who are responsible and in-charge for day-to-day affairs of the company can be made liable, if there are necessary pleadings to that effect in the complaint. Without complying the said mandatory requirements and ignoring the settled position of law, the impugned summoning order has been passed.

6. Learned State counsel appearing for the respondents opposed the petition by drawing attention towards the reply of Shri Jaskaran Singh, Insecticide Inspector, Bathinda, as per which petitioner b