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Section 6 : Quashes Case Against , Company Not Accused
The has quashed criminal proceedings against hotel and its Vice President of Finance, M.S. Reddy, over an unauthorized hoarding on the hotel's premises. Justice H.P. Sandesh held that while the hoarding was subject to regulation even on private land, the prosecution was vitiated because the company was not arraigned as an accused, as required under ().
The Hoarding Dispute
The case arose from a hoarding erected on the property of at Sankey Road, Bengaluru, without permission from the ). In and , issued demand notices for hoarding and billboard taxes totaling over ₹8 lakh. The hotel challenged these demands in a , and the High Court granted an subject to the deposit of 50% of the amount, which was complied with.
Despite the interim order, continued to press for removal of the hoarding, and on , lodged an FIR under . A was later filed naming only M.S. Reddy, the Vice President (Finance) and Company Secretary, as the sole accused.
Petitioners' Arguments: Private Property and Interim Order
The petitioners sought quashing of the FIR, complaint, and under . They argued that the hoarding was erected on their own private property and not on a public place, thereby falling outside the purview of . They also contended that the criminal prosecution was an , given the in the . Crucially, they invoked Section 6 of the , which mandates that when an offence is committed by a company, both the company and the person in charge of its business must be . Since the company—'s owner, —was not made a party, the proceedings against the individual employee were not maintainable.
Respondent's Stand: Public Visibility and Regulatory Framework
The , represented by respondent No.2 , countered that the hoarding was visible from public roads and thus attracted the provisions of the . The respondent argued that whether the hoarding was inside or outside the premises was a matter of trial, and that the interim order in the related only to the tax demand notices, not to the removal of the hoarding or the criminal prosecution.
Court's Analysis: Private Hoardings Not Exempt from Licensing
Justice Sandesh examined the scope of Section 3 and its proviso, particularly , which exempts advertisements relating to trade or business carried on within the land or building. Relying on the judgments in and , the court observed:
"Hoardings erected on private places also require to be licensed and regulated as they generally abut on and are visible on public roads and public places. Hoardings erected on a private building may obstruct public roads... It is, therefore, not correct that hoardings on private places do not require to be regulated by licensing provisions."
The court thus rejected the petitioners' contention that the hoarding on private property automatically fell outside the regulatory framework.
The Turning Point: Section 6
However, the court found decisive merit in the argument under Section 6 of the
. The section reads that if an offence under the Act is committed by a company,
"every person who, at the time when the offence was committed, was in charge of; and responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence."
The court noted that the complaint and
named only M.S. Reddy as the accused, without arraigning the company. Justice Sandesh held:
"Having perused the also, the case is registered in his individual capacity by showing his name and not registered the case against the company. While investigating the case also, the Investigating Officer failed to make the company as accused. Hence, it is a fit case to exercise the power under Section 482 of Cr.P.C., otherwise it amounts to , in view of ."
Final Decision: Proceedings Quashed
The court allowed both criminal petitions and quashed the entire proceedings in C.C.No.32777/2018, including the FIR, complaint, and . The decision underscores that while unauthorised hoardings on private property remain subject to licensing and penal provisions, the mandatory requirement under Section 6 to prosecute the company alongside its officers cannot be ignored. Failure to do so renders the criminal proceedings an .
The ruling provides clarity on the interplay between regulatory control over hoardings and the for , ensuring that companies cannot escape prosecution by having individual employees face the brunt alone.
