Oswal Vanaspati and Allied Industries vs State of U.P.

B.N. Katju, J.—M/s. Oswal Vanaspati and Allied Industries, Ludhiana (Punjab) has filed Criminal Misc. Application No. 6825 of 1982 u/s 482 Code of Criminal Procedure to quash the complaint filed against it by the Food Inspector Nagar Palika Shamli, district Muzaffarnagar under Sections 7(i), 5, 16(1)(a)(ii) and 16(c) of the Prevention of Food Adulteration Act (hereinafter referred to as the Act) and the proceedings instituted on its basis in the Court of Special Judicial Magistrate (Economic Offences) Kairana Muzaffarnagar.

M/s. Oswal Vanaspati and Allied Industries and Hairish Kumar, Works Manager of M/s. Oswal Vanaspati and Allied Industries have filed Criminal Misc Application No. 6826 of 1982 to quash the complaint filed by the Food Inspector Nagar Palika Shamli u/s 7/16 of the Act and the proceedings instituted on its basis in the Court of the Spatial Judicial Magistrate (Economic Offences) Kairana district Muzaffarnagar.

It was contended by the learned Counsel for the applicants before the learned Single Judge at the time of hearing of the two applications that M/s. Oswal Vanaspati and Allied Industries being a company (juristic person) cannot be prosecuted for an offence u/s 16 of the Act as the sentence of imprisonment provided under that section after its amendment by Prevention of Food Adulteration (Amendment) Act No. 34 of 1976 which is mandatory cannot be awarded to it. The learned Counsel for the applicants in support of his contention placed reliance on the case of State of Maharshtra v. Jagmander Lal 1966 AWR 386 and the Division Bench case of this Court Modi Industries Ltd. v. B.C. Goel 1981 AWC 350 . The learned Counsel for the State, on the other hand, contended that M/s. Oswal Vanaspati and Allied Industries being a juristic person could not be awarded the sentence of imprisonment provided u/s 16 of the Act but could be awarded a sentence of fine provided under that section. It could thus be prosecuted u/s 16 of the Act. In support of his contention he relied on a Full Bench decision of Delhi High Court in the case of Municipal Corporation of Delhi Vs. J.B. Bottling Company Private Limited, .

The learned Single Judge was not in agreement with the observations of the Division Bench of this Court in the case of Modi Industries Ltd v. B.C. Goel (supra) that the Full Bench decision of the Delhi High Court in the case of Municipal Corporation of Delhi v. J.B. Bottling Co. Pvt. Ltd. (supra) ran counter to the decision of the Supreme Court in the case of State of Maharashtra v. Jugmander Lal (supra). He, therefore, referred the under mentioned questions to a Full Bench:

(i) Whether in view of the substantive sentence provided u/s 16 of the Prevention of Food Adulteration Act, while the Company is a juristic person cannot suffer substantive sentence, Section 17(i)(b) is rendered nullified and Company cannot be prosecuted under the Food Adulteration Act?

(ii) Whether under the rules of interpretation of statute the express provisions of Section 17(1)(b) of the Prevention of Food Adulteration Act, providing for prosecution of the Company, can be reconciled with Section 16 of the Prevention of Food Adulteration Act, which provides for imposition of fine besides substantive sentence, by imposing fine, when the Company as a juristic person cannot suffer imprisonment and it can be held by way of reconciliation of the two provisions that substantive sentence is to be imposed only where it can be so imposed and admits of execution, hence imposition of fine alone would be permissible?

We are required to answer the above mentioned two questions.

It appears from a plain reading of Section 17(1) of the Act that when an offence under the Act has been committed by a Company the persons mentioned therein and also the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished. The word ''person'' in Section 16 of the Act includes a Company in view of the definition of person given in Section 3(42) of the General Clauses Act. Section 16 of the Act thus applied to companies as well as to natural persons. The punishment for offences provided u/s 16 of the Act is both of imprisonment and fine. Both these sentences are mandatory. A company being a juristic person cannot obviously be sentenced to imprisonment as it cannot suffer imprisonment. The question that requires determination is whether a sentence of fine alone can be imposed on it u/s 16 of the Act or whether such a sentence would be illegal and hence cannot be awarded to it. It is settled law that sentence or punishment must follow conviction and if only corporal punishment is prescribed a Company which is a juristic person cannot be prosecuted as it cannot be punished. If, however, both sentence of imprisonment and fine is prescribed for natural persons and juristic persons jointly then though the sentence of imprisonment cannot be awarded to a Company the sentence of fine can be imposed on it. Thus it cannot be held that in such a case the entire sentence prescribed cannot be awarded to a Company as part of sentence, namely, that of fine can be awarded to it. Legal sentence is the sentence prescribed by law. A sentence which is in excess of the sentence prescribed is always illegal but a sentence which is less than the sentence prescribed may not in all cases be illegal. It would depend on whether the entire sentence prescribed can be awarded to the convicted person or only a part of the prescribed sentence can be awarded to him. If the entire prescribed sentence can be awarded to a convicted person then awarding only a part of the prescribed sentence is illegal. But if only a part of the prescribed sentence can be imposed on a convicted person and not the entire sentence prescribed then imposition of that part of sentence cannot be held to be illegal. Thus if the prescribed sentence is of imprisonment and fine then both these sentences must be awarded to a natural person as he can suffer both. If part of such a sentence is awarded to a natural person it would be illegal. In the case of Company, however, awarding only a part of such a prescribed sentence, namely, fine cannot be held to be illegal as a Company cannot suffer imprisonment. We are, therefore, of the opinion that awarding a sentence of fine only to a Company u/s 16 of the Act wherein both sentence of imprisonment and fine is jointly prescribed for offences committed by a natural person as well as a Company is not illegal.

It was observed in the case of Modi Industries Ltd. v. B.C. Goel (supra):

Learned Counsel for the Respondents invited our attention to the decision of a Full Bench of Delhi High Court in Municipal Corporation of Delhi Vs. J.B. Bottling Company Private Limited, . In that case, under the relevant provisions of the Prevention of Food Adulteration Act, a punishment of imprisonment and with fine could be imposed. By a process of interpretation and reading down, the Full Bench held that if a punishment of imprisonment could not possibly be imposed upon a juristic person it was permissible to award the punishment of fine only. Such a situation does not arise in our case. In our case, only imprisonment was awardable. This decision seems to run counter to the view of the Supreme Court in State of Maharashtra v. Jugmander Lal 1966 AWR 386 where it was held that the expression ''shall be punishable with imprisonment and also with fine'' means that the court is bound to pass sentence consisting both of Imprisonment and fine.

With respect we are not in agreement with the observation made in the above mentioned case that the decision of the Full Bench of Delhi High Court in Municipal Corporation of Delhi v. J.B. Bottling Co. (Pvt.) Ltd. (supra) runs counter to the view of the Supreme Court in the case of State of Maharashtra v. Jugmander Lal (supra). In the case of State of Maharashtra v. Jugmander Lal (supra) the Supreme Court was considering the case of a natural person convicted u/s 3(1) of the Suppression of Immoral Traffic in Women and Girls Act, 1956 under which a sentence of imprisonment and fine was provided. It was not considering the case of a juristic person. It was, therefore, held in that case that the Court was bound to award the sentence of imprisonment and fine provided u/s 3(1) of the said Ad; to the accused. The case of State of Maharashtra v. Jugmander Lal (supra) thus is not an authority for the proposition that if a mandatory sentence of imprisonment and fine is prescribed jointly for natural persons and juristic persons then the sentence of fine only cannot be awarded to a company. The said case, therefore, does not run counter to the Full Bench decision of the Delhi High Court in the case of Municipal Corporation of Delhi v. J.B. Bottling Co. Pvt. Ltd. (supra).

It was observed in the case of State of Andhra Pradesh Vs. S.R. Rangadamappa,

We are unable to understand why the High Court reduced the sentence. The statute prescribes a minimum sentence. It does not provide for any exception and does not vest the Court with any discretion to award a sentence below the prescribed minimum under any special circumstances. The learned Judge has himself noticed that the sentence imposed is the statutory minimum. Having noticed that the statute prescribes a minimum sentence for the offence, the High Court has understandably reduced the sentence of imprisonment to less than the minimum permissible. The High Court was clearly in error in doing so.

In that case the accused was convicted by the Magistrate u/s 34-A of the Andhra Pradesh Excise Act and sentenced to two years R.I. which was the minimum sentence provided under that section but the High Court reduced it to the period already undergone. In that case the accused was also a natural person and not a juristic person. That case is also clearly distinguishable.

We are thus in respectful agreement with the view taken by the Delhi High Court in the case of Municipal Corporation of Delhi v. J.B. Bottling Co. Pvt. Ltd. (supra) that a sentence of fine only can be awarded to a company u/s 16 of the Act.

For the reasons given above our answer to the first question is in the negative and to the second question is in the affirmative,

Let our opinion be placed before the appropriate Bench.