Managing Director M/s. Castrol India Limited v. State of Karnataka, (SC)
BS879123
SUPREME COURT OF INDIA
Before:-Ranjan Gogoi and Navin Sinha, JJ.
Criminal Appeal Nos. 1062 of 2017 (Arising Out of SLP (Crl.) No. 7929 of 2012). D/d.
7.7.2017.
Managing Director M/s. Castrol India Limited - Appellants
Versus
State of Karnataka - Respondents
For the Appellants :- C.U. Singh, Sr. Adv., Ashok Mathur, R. Sudhinder, Ms. Amrit Sarkar, Advocates.
For the Respondent :- V.N. Raghupathy, Advocate.
Standards of Weights and Measures Act, 1976 Sections 74 and 39 Standards of Weights and Measures (Packaged Commodities) Rules, 1977, Rules 4, 6, 8 and 23(1) - Offence by Company - Appellant sought to be made vicariously liable merely because at the relevant point of time he was Managing Director of the Company - No averment or statement that the appellant as the Managing Director of the Company was responsible or incharge of the conduct of the business of the Company in respect of which the offence in question - Proceedings against the accused-appellant liable to be quashed.
[Paras 8 and 9]
ORDER
Leave granted.
2. We have heard learned counsels for the parties.
3. The challenge in this appeal is against the order of the High Court of Karnataka dated 11.06.2012 by which the petition filed under Section 482 Cr.P.C. by the appellant for quashing of the criminal proceedings instituted against him has been dismissed by the High Court.
4. The appellant is the Managing Director of M/s. Castrol India Limited and is facing a prosecution under Section 39 of the Standards of Weights and Measures Act, 1976 (for short `the Act') read with Rule 4, 6, 8 and 23(1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.
5. We have perused the complaint petition on the basis of which the proceedings have been instituted against the appellant and we have considered the submissions advanced at the Bar on behalf of the appellant as well as the respondent.
6. A reading of the complaint petition in question does not disclose that any specific act of the appellant resulted in commission of the offences alleged. In the compounding notice issued by the Inspector of Legal Metrology it has been mentioned that the allegedly offending goods (Castrol Plus) were manufactured plus packed by M/s. Castrol India Limited. The offence, therefore, has been committed by the Company and the appellant has been sought to be made vicariously liable merely because at the relevant point of time he was holding the office of Managing Director of Castrol India Limited.
7. Section 74 of the Standards of Weights and Measures Act, 1976 which is in the following terms engrafts the principle of vicarious liability for offences committed by a Company.
"74. Offences by companies and power of court to publish name, place of business, etc. of companies convicted - (1) If an offence under this Act is committed by a company, every person who, at the time the offence was committed was in charge of, and was 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 and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence."
8. In the present complaint petition, there is no averment or statement whatsoever that the appellant as the Managing Director of the Company was responsible or incharge of the conduct of the business of the Company in respect of which the offence in question has been alleged to have been committed. Neither there is any averment to the effect that the appellant is otherwise connected or responsible for commission of any of the acts on the basis of which the offence(s) is alleged to have been committed.
9. It will not be necessary to burden this order by a detailed reference to numerous pronouncements of this Court interpreting similar provisions of other statutes holding that a clear and categorical statement to the above effect is required to be made in the complaint petition to proceed against an officer of the Company so as to determine his vicarious liability for the offence committed by the company. In the present case the Company is not even arrayed as an accused.
10. Taking into account the provisions of Section 74 of the Act, the views expressed by this Court on pari materia provisions contained in different statutes and the absence of any specific averments in the complaint petition, as indicated above, we are of the view that the proceedings against the accused-appellant are liable to be quashed. We order accordingly.
11. The order of the High Court is set aside and the appeal is allowed.
.