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Judgment
By this writ petition, the petitioner (Municipal Corporation of City of Amravati) has challenged order dated 24/02/2010 passed by the Chief Judicial
Magistrate, Amravati, whereby original accused Nos.4 to 9, being Directors of respondent No.9 herein (M/s.Dhariwal Tobacco Products Limited),
were discharged. The subsequent judgment and order dated 16/06/2010 passed by the Sessions Court, Amravati dismissing the revision petition filed
by the petitioner herein, is also challenged in this writ petition.
The facts in brief leading to filing of this writ petition are that Food Inspector of the petitionerÂCorporation filed a complaint under various
provisions of Prevention of Food Adulteration Act, 1954 against the respondents wherein Regular Criminal Case No.52 of 2000 was registered before
the Court of Chief Judicial Magistrate, Amravati on the ground that when a visit was made by the complainant Food Inspector to the shop of accused
No.1 selling pan materials including Gutkha, it was found that the samples collected were adulterated within the meaning of sections 2(ia) and 7(i) of
the aforesaid Act read with Rule 62 of the Rules framed there under. In the said complaint, the vendor, the proprietor of the vendor and directors of
respondent No.9 were arrayed as accused. Evidence before charge was recorded.Â
Thereafter, by impugned order dated 24/02/2010, charge was framed only against accused Nos.1 to 3, while the directors of respondent No.9 were
discharged and respondent No.9ÂCompany was also discharged, on the ground that there were documents on record showing that nomination had
been made by respondent No.9ÂCompany in the name of one Ramnath Dayama and that Local (Health) Authority had been intimated about the
same thereby satisfying requirements of the Act and the Rules framed thereunder. It was held that when such valid nomination was made, the
respondentÂDirectors and the Company could not be arrayed as accused.
Aggrieved by the discharge of respondent No.9Â Company and its directors, the petitioner filed Criminal Revision No.32 of 2010, before the
Sessions Court at Amravati pointing out that the nomination letter at ExhibitÂ94, dated 25/08/1997 purportedly nominating the said Mr. Dayama, could
not have been relied upon because it was issued on 25/08/1997 while the incident in the present case i.e. visit by the Food Inspector of the petitioner
and collection of samples was already done on 31/07/1997. It was also contended that the said nomination had not been sent to the Local (Health)
Authority of Amravati and in the absence of such intimation with proper acknowledgment from the Authority, the said letter at ExhibitÂ95 could not
become the basis for discharge of the respondents herein. But, the Sessions Court rejected the said contentions of the petitioner and by relying upon
the nomination letter dated 25/08/1997 ExhibitÂ95 issued in favour of Mr. Dayama, the revision petition was dismissed.
Mr. J.B.Kasat, learned counsel appearing on behalf of the petitionerÂCorporation, submitted that the Magistrate as well as the Sessions Court
failed to appreciate the scope of section 17 of the said Act, particularly subÂsection (2) thereof read with Rule 12ÂB of the Rules framed
thereunder. It was submitted that the nomination letter dated 25/08/1997 along with FormÂVIII specified under the said Rules could not have been
relied upon by the respondents firstly, because the collection of samples had already taken place on 31/07/1997 and secondly, because the said
nomination letter had been sent to the Local (Health) Authority at Pune and that the Local (Health) Authority, Amravati was never informed about
such nomination. It was submitted that on a proper reading of the aforesaid provisions of the said Act and Rules, it was obvious that the Courts
below had committed a grave error and that since there was no valid nomination in the present case, the respondents had been correctly arrayed as
accused in the complaint filed by the petitioner.
On the other hand, Mr. Rajnish Vyas, learned counsel appearing on behalf of the respondents, submitted that the aforesaid nomination letter dated
25/08/1997 was sufficient in the present case because the Local (Health) Authority at Pune was informed about the same and that there was
acknowledgment from the said Authority. Reliance was placed on Notification dated 15/04/1983 issued by the Government of Maharashtra,
whereby Local (Health) Authority had been nominated for various districts. According to the learned counsel, when the Local (Health) Authority at
Pune, where the manufacturing unit of respondent No.9ÂCompany was situated, had been informed about the nomination, the requirement of the
aforesaid Act and Rules had been satisfied. On this basis, it was contended that the Courts below had not committed any error in the present case.
It was further submitted that under section 17(4) of the Act, the petitionerÂCorporation was required to plead and demonstrate in its complaint that
the respondentsÂdirectors were responsible for the functioning and manufacturing activities of respondent No.9Company at the relevant time, when
the samples were collected by the Food Inspector of petitionerÂCorporation. It was submitted that only a bald statement was made in the
complaint, which would not suffice to array the respondents herein as accused before the Magistrate.
Heard counsel for the parties. In order to appreciate the contentions raised on behalf of the rival parties, it would be appropriate that the relevant
provisions of the aforesaid Act and Rules are reproduced. Section 17 of the said Act reads as follows:
 “17. Offences by companies. â€" (1) Where an offence under this Act has been committed by a companyâ€
(a)(i) the person, if any, who has been nominated under subÂsection (2) to be in charge of, and responsible to, the company for the conduct of the
business of the company (hereafter in this section referred to as the person responsible), or
(ii) Where no person has been so nominated, 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; and
(b) 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 subÂsection shall render any such person liable to any punishment provided in this Act if he
proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.
(2) Any company may, by order in writing,authorise any of its directors or managers (such manager being employed mainly in a managerial or
supervisory capacity) to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the
company of any offence under this Act and may give notice to the Local (Health) Authority, in such form and in such manner as may be prescribed,
that it has nominated such director or manager as the person responsible, alongwith the written consent of such director or manager for being so
nominated.
     Explanation.â€" Where a company has different establishments or branches or different units in any establishment or branch, different
persons may be nominated under this subÂsection in relation to different establishments or branches or units and the person nominated in relation to
any establishment, branch or unit shall be deemed to be the person responsible in respect of such establishment, branch or unit.
(3) The person nominated under subÂsection(2) shall, untilâ€
(i) further notice cancelling such nomination isreceived from the company by the Local (Health) Authority; or
(ii) he ceases to be a director or, as the casemay be, manager of the company; or
(iii) he makes a request in writing to the Local(Health) Authority, under intimation to the company, to cancel the nomination [which request shall be
complied with by the Local (Health) Authority], whichever is the earliest, continue to be the person responsible:
       Provided that where such person ceases to be a director or, as the case may be, manager of the company, he shall intimate the fact
of such cesser to the Local (Health) Authority;
    Provided further that where such person makes a request under clause (iii), the Local (Health) Authority shall not cancel such nomination
with effect from a date earlier than the date on which the request is made.
(4) Notwithstanding anything contained in the foregoing subÂsections, where an offence under this Act has been committed by a company and it is
proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager,
secretary or other officer of the company [not being a person nominated under subÂsection (2)] such director, manager, secretary or other officer
shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
      Explanation.â€" For the purposes of this sectionâ€
(a) “companyâ€, means any body corporate andincludes a firm or other association of individuals;
(b) “directorâ€, in relation to a firm, means apartner in the firm; and Â
(c) “managerâ€, in relation to a companyengaged in hotel industry, includes the person in charge of the catering department of any hotel managed
or run by it.]
Rule 12ÂB of the Rules framed under the said Act reads as follows:
“12ÂB. Form of nomination of Director or Manager and his consent under section 17.â€" (1) A company may inform the Local (Health) Authority
of the concerned local area, by notice in duplicate, in Form VIII containing the name and address of the Director or Manager, who has been
nominated by it under subÂsection (2) of section 17 of the Act to be in charge of, and responsible to, the company for the conduct of the business of
the company or any establishment, branch or unit thereof:Â Â Â Â Â Â Provided that no such nomination shall be valid unless the Director or
Manager who has been so nominated, gives his consent in writing and has affixed his signature, in Form VIII in duplicate in token of such consent.
(2) The Local (Health) Authority shall sign and return on copy of the notice in Form VIII of the company to signify the receipt of the nomination and
retain the second copy in his office for record.â€
A perusal of the aforesaid provisions shows that definition of “Local (Health) Authority†also becomes relevant in the present case. It is
defined under section 2(viiia) of the said Act as follows:
“2(viiia) 'Local (Health) Authorityâ€, in relation to a local area, means the officer appointed by the Central Government or the State Government,
by notification in the Official Gazette, to be in charge of Health administration in such area with such designation as may be specified therein.â€Â Â
A conjoint reading of the aforesaid provisions shows that when a company nominates one of its directors or managers in terms of section 17 of the
said Act to be in charge of, and responsible to, the company for the conduct of the business, such nomination is required to be intimated to the
“Local (Health) Authority†as defined under the said Act and an acknowledgment from the said Authority is required to be obtained. Once
these steps are undertaken, a valid nomination comes into existence. Section 17(1)(a)(ii) provides that where no person has been so nominated, every
person who is inÂcharge and responsible for the conduct of business of the company at the time of the offence shall be deemed to have committed
the offence along with the company. In any case, either the person nominated or when no person is nominated then all such persons, who are
responsible for the conduct of the business of the company, along with the company shall be deemed to be guilty of the offence, under the said
provisions.
The interpretation of the said provisions of the Act and the Rules came up for consideration before this Court in the case of Azim H. Premji v.
State of Maharashtra, reported in 2002 (1) Mh.L.J. 668. In the said case also a similar argument had been advanced on behalf of directors of the
company. It was contended that when nomination form as prescribed under Rule 12ÂB of the said Rules had been filed with Chief Officer of a
particular municipal council in the State of Maharashtra within the jurisdiction of which the manufacturing unit of the company was situated, it was
sufficient for the purpose of whole of Maharashtra and there was no need or necessity to file nomination with any other Local (Health Authority in
Maharashtra. After analyzing the aforesaid provisions of the said Act and Rules, the said contention was repelled by this Court. The relevant
portion of the said judgment, reads as follows:
“19. Therefore, in my opinion, it follows that a nomination is required to be sent to the Local (Health) Authority of the area in which the godown
from which the offending goods are recovered is situated. Since the material on record was not sufficient in the case before the Apex Court, the
matter was remanded to the trial Magistrate to enquire into the question whether the nomination forms nominating H. Dayani and Dr. Nirmal Sen
were received and acknowledged by the Local (Health) Authority competent to receive and acknowledged the same (emphasis added). It was
further observed that this question shall be decided as a preliminary question and if Magistrate comes to the conclusion that the nomination had been
acknowledged by the competent Local (Health) Authority, the proceedings will be dropped against the Directors of the company. If it is found that
the prescribed form had been acknowledged by the person other than the competent Local (Health) Authority, the Magistrate shall proceed against all
persons including Directors, nominated persons and company.
Rule 12ÂB provides for form of nomination of Director or Manager and his consent under section 17 and reads as under :â€" Â
“12ÂB. Form of nomination of Director or Manager and his consent under section 17.â€" (1) A company may inform the Local (Health) Authority
of the concerned local area, by notice in duplicate, in Form VIII containing the name and address of the Director or Manager, who has been
nominated by it under subÂsection (2) of section 17 of the Act to be inÂcharge of and responsible to the company for the conduct of the business of
the company or any establishment, branch or unit thereof:Â Â Â Â Â Â Provided that no such nomination shall be valid unless the Director or
Manager who has been so nominated, gives his consent in writing and has affixed his signature, in Form VIII in duplicate in token of such consent.
(2) The Local (Health) Authority shall sign and return on copy of the notice in Form VIII of the company to signify the receipt of the nomination and
retain the second copy in his office for record.â€
Under Rule 12ÂB, the company is required to inform the Local (Health) Authority of the concerned local area by notice in duplicate in Form VIII the
nominee to be appointed under subÂsection (2) of section 17. Section 17(2) of the Act also provides for notice to the Local (Health) Authority.
Section 17(3) of the Act also emphasises the role of the Local (Health) Authority. Rule 2 of Rule 12ÂB of the Rules provides that the Local
(Health) Authority shall sign and return a copy of the notice in FormÂVIII to the company to signify receipt of nomination and retain a second copy in
his office for record.
From the above provisions, it is clear that nomination is required to be filed with the Local (Health) Authority having jurisdiction over the area
where manufacture for sale, storage for sale, sale or distribution for sale is being carried out. Therefore, the contention of the learned Advocate for
the applicants that the nomination filed at Amalner with the Local (Health) Authority of the said area is sufficient for the purpose of whole of State of
Maharashtra is without any merit. In Criminal Applications No.765 of 2000; 579 of 2001; and 584 of 2001, the samples have been taken by the
Food Inspector from the godown of the company at Wadi where the article of food in question was stored for sale which has been found to be
adulterated. In Criminal Application Nos.580/2001 and 582/2001 invoice INA 1018 dated 20Â09Â1997 shows that the Vanaspati in question of which
samples were taken had been sold from the godown at Wadi, Nagpur. The filing of the nomination at Amalner would not, therefore, absolve the
directors namely, the applicants of their prosecution in these cases, unless there is a valid nomination filed with the Local (Health) Authority having
jurisdiction at Wadi.â€Â
Applying the said position of law to the present case, it becomes clear that the impugned order passed by the Courts below cannot be sustained.Â
In the present case, the document on which reliance is placed on behalf of the respondents is letter dated 25/08/1997 (ExhibitÂ95), whereby the said
Mr.Dayama was nominated on behalf of respondent No.9ÂCompany. It was the case of the respondents that when the said letter along with
FormVIII prescribed under Rule 12ÂB of the said Rules was submitted
before the Local (Health) Authority at Pune and an acknowledgment was received, it satisfied the requirement of the said Act and Rules and that
therefore, the respondents being directors of the company could not be arrayed as accused before the Magistrate. The visit by the Food Inspector of
the petitionerCorporation in the present case took place within the jurisdiction of the Municipal Corporation, Amravati. It is an admitted position that
intimation of such nomination was not submitted to the “Local (Health) Authority†at Amravati. The intimation of nomination submitted to the
Local (Health) Authority at Pune would obviously not suffice, looking at the definition of “Local (Health) Authority†under the said Act and the
law laid down by this Court in the case of Azim Premji v. State of Maharashtra (supra). Even otherwise, the said nomination letter was dated
25/08/1997, while the incident in question in the present case had already taken place on 31/07/1997. On this ground also, the said nomination letter
would be of no assistance to the respondents.
A perusal of the impugned orders show that the Courts below have erroneously relied upon the said document at ExhibitÂ95 to hold that the
respondents were entitled for discharge in the present case. The findings rendered by the Courts below are obviously in the teeth of the position of
law and hence they are not sustainable.     Â
As regards to the contention raised on behalf of the respondents that under section 17(4) of the said Act the petitionerÂCorporation (complainant)
ought to have said something more in the complaint to show that the respondents were indeed responsible for the conduct of the business and/or were
inÂcharge of respondent No.9ÂCompany at the time when the offence was said to have been committed, a perusal of the complaint filed on behalf of
the petitionerÂCorporation shows that basic and fundamental averments necessary to proceed against the respondents were made in the complaint
and that therefore, on this ground also no grievance can be raised by the respondents.
Another glaring error committed by the Courts below was that while erroneously discharging the directors of respondent No.9ÂCompany, even
the Company stood discharged by the impugned orders. A perusal of section 17(1) shows that in either case i.e. even if there is a valid nomination
on behalf of the Company, the Company itself would be guilty of the offence and it would be liable to be proceeded against. The Courts below
completely failed to appreciate this aspect of the matter while passing the impugned orders and discharging respondent No.9Company along with its
directors.Â
In the light of the above, it is held that the Courts below could not have discharged the respondents on the basis that a valid nomination had been
made in the present case. Accordingly, this petition is allowed, the impugned orders are quashed and set aside. The Magistrate shall now proceed
against the respondents along with the other accused. Since the complaint is of the year 2000, it would be in the interest of justice that the
proceedings before the Magistrate are expedited. Accordingly, it is directed that the Court of Chief Judicial Magistrate, Amravati shall proceed to
decide R.C.C. No.52 of 2000 within a period of one year from the date when a copy of this order is produced before it.
The record of the present case was received in this case as Rule was granted in this writ petition. Hence, the record shall be transferred back
to the Court of Chief Judicial Magistrate, Amravati at the earliest and in any case, within a period of two weeks from today.Â
It is pointed out by the learned counsel for the respondents that some of the respondents are senior citizens and that it would be difficult for them
to attend dayÂtoÂday proceedings at Amravati, since they are residents of Pune and Mumbai. Hence, the respondents shall be entitled to apply for
grant of exemption from personal appearance, which the Court of Chief Judicial Magistrate, Amravati, shall consider in accordance with
law.        Â