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1991 Supreme(All) 272
IN THE HIGH COURT OF ALLAHABAD
J. K. MATHUR
TRANS ASIA CARPETS LTD. - Appellant
Versus
STATE OF UTTAR PRADESH - Respondents
CRI. MISC. 77 Of 1991
Decided On : 03/11/1991
J.BHALLA, N.K.AGRAWAL
Directors of a company can be prosecuted for offences under the Water (Prevention and Control of Pollution) Act, 1974, unless they prove that the offence was committed without their knowledge or that they exercised due diligence to prevent it.
Headnote:
WATER (PREVENTION AND CONTROL OF POLLUTION) ACT, 1974 - SECTION 44, 47 - OFFENCES BY COMPANIES - DIRECTORS' LIABILITY - PROTECTION UNDER SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 - SECTION 22 - SCOPE - CRIMINAL PROCEDURE CODE, 1973 - SECTION 482 - QUASHING OF PROCEEDINGS - JURISDICTION.
Fact of the Case:
The petitioners, directors of a company facing prosecution for discharging trade effluent into a stream without obtaining consent from the Pollution Control Board, challenged the complaint on various grounds, including lack of consent, non-applicability of the Water (Prevention and Control of Pollution) Act, 1974 to the drain in question, protection under the Sick Industrial Companies (Special Provisions) Act, 1985, and lack of connection between the directors and the alleged breach.
Finding of the Court:
The court held that the complaint was not bad for want of specific allegations against the directors, as it contained an allegation that they were in charge of and responsible for the company's business. The court also held that protection under the Sick Industrial Companies (Special Provisions) Act, 1985 did not extend to prosecution for an offence, and that the question of extent of pollution and discharge of effluent into a stream or well were matters to be determined by the Magistrate in the first instance.
Issues: 1. Whether the complaint against the directors was bad for want of specific allegations? 2. Whether protection under the Sick Industrial Companies (Special Provisions) Act, 1985 extended to prosecution for an offence? 3. Whether the question of extent of pollution and discharge of effluent into a stream or well could be determined by the High Court under Section 482 Cr.P.C?
Ratio Decidendi: 1. Section 47 of the Water (Prevention and Control of Pollution) Act, 1974 specifically provides for offences by companies and deems the persons in charge of and responsible for the company's business to be guilty of the offence, unless they prove that it was committed without their knowledge or that they exercised due diligence to prevent it. 2. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 only protects against winding up, execution, or appointment of a Receiver, and does not extend to prosecution for an offence. 3. Section 482 Cr.P.C. does not permit running of parallel criminal proceedings and consideration of facts that can be considered by the Magistrate seized of the proceedings. The court cannot entertain questions relating to the merit of the case under the cloak of Section 482 Cr.P.C.
Final Decision: The application to quash the proceedings against the directors was dismissed, as the court held that the complaint was not bad for want of specific allegations, that protection under the Sick Industrial Companies (Special Provisions) Act, 1985 did not extend to prosecution for an offence, and that the question of extent of pollution and discharge of effluent into a stream or well were matters to be determined by the Magistrate in the first instance.
( 1 ) THE petitioners seek quashing of proceedings in Criminal Misc. Case No. 2153 of 1989 pending in the court of Special Judicial Magistrate (Pollution Control), Lucknow by this application u/s. 482 Cr. P. C.
( 2 ) ACCORDING to the petitioners the petitioner No. 1 is a public limited company. It has entered into a technical collaboration with M/s. Besmer Tephic Fabric Martens K. G. , a German Company for manufacture of carpets. It became sick in December, 1990 and applied to the Board of Industrial and Financial Reconstruction. The trade affluence from the petitioners manufacturing unit is being scientifically treated to make it free from pollution and a part of it is used by the land owners and cultivators for agricultural purposes. The Water (Prevention and Control of Pollution) Act, 1974 prohibits discharge of trade affluence in the stream. The river Karve is connected only through a U. P. S. I. D. C. drain which also (sic) toxic materials from other neighbouring units. A complaint has, however, been filed by the U. P. Pollution Control Board (hereinafter referred to as the board for short) against the applicants in the court of Chief Judicial Magistrate, Bulandshahar which was subsequently transferred to the court of the Special Judicial Magistrate at Lucknow. This complaint is based on a sample taken on 6-1-1986 the inspection report, copy of which is Annexure 1 stating that the affluence is discharged in U. P. S. I. D. C. drain which reaches river Karve through Nizampur drain. According to the petitioner, the drain is not a stream under the aforesaid Act. The applicants themselves got a sample taken on 3-3-1986. It was examined by Shri Ram Institute for Industrial Research, Delhi as specified by U. P. Pollution Control Board. The BOD found to be 22, within the limits prescribed. The applicants were not supplied its report by the Board. The complaint was filed against all the Directors. The applicants 7 and 8 are Directors only because of collaboration. The complaint does not show that there was any connection of the directors with the alleged breach. The President and the Executive Vice-President are the other persons responsible for the affairs of the company and not all the Directors. The Board of Directors has delegated their powers. The applicants have also started treating the affluence and have also started using it for eucalyptus plantation. Non-bailable warrants has been issued against the applicants. The applicant No. 2 has already died in a plane crash in February, 1990.
( 3 ) THE complaint copy of which is Annexure 4 to the application, has been challenged firstly on the ground that no complaint could be filed against the Directors under the provisions of law, secondly on the ground that the petitioner having applied for protection under the Sick Industrial Companies (Special Provisions) Act, 1985, no legal proceedings can be instituted. It was also urged that the analysis got done by the authorised laboratory shows the BOD within the prescribed limits and, therefore, there was no pollution being caused and lastly on the ground that in any view of the matter the affluence was not being discharged in any stream.
( 4 ) AN offence under Section 44 of the Water (Prevention and Control of Pollution) Act, 1974 is committed when the provisions of Section 25 or 26 are violated.
( 5 ) SECTION 25 of the said Act provides for the consent of the State Board to be obtained before bringing into use any new or altered outlet for the discharge of sewage or trade affluent into a stream or well. Section 26 is violated when such consent is not obtained by a person who was discharging any sewage or trade affluence into a stream or well immediately before commencement of this Act, to discharge such affluence.
( 6 ) THE petitioners are alleged not to have obtained the consent of the Board for discharge of the trade affluence into a stream.
( 7 ) SECTION 47 of this Act specifically refers to the offences by the co
