Valor Estate Ltd. & Ors. vs The State Of Maharashtra & Anr.

By the present Petition, under Section 482 of Code of Criminal Procedure, 1973, (now Section 528 of BNSS) the Applicants seek to quash and set aside the C.C. No. 2034/SS/15 instituted by the Respondent No.2 before the Chief Metropolitan Magistrate, Borivali, against the Applicants under the provisions of the Legal Metrology Act, 2009.

Heard Mr. Subodh Desai, learned Senior Advocate for the Petitioners, Mr. R. M. Pethe, A.P.P for Respondent-State. Perused the entire record.

Certain relevant facts are as under:

3.1) The Applicants are engaged in the business of construction. Respondent No.2 conducted a surprise inspection on 5^th January 2015 at the office of the Joint Sub-Registrar, Borivali No.4, Mumbai. It is alleged that, in the agreement of the Applicant, Respondent No.2 noticed some irregularities.

3.2) That, in the Agreement of Sale bearing No. 8626 of 2014 dated 14^th November 2014 in respect of Flat No. 3705 in C-Wing on the 37^th floor of the DB Woods Building, Gokuldham Road, Goregaon (East), Mumbai 400 063, and in Agreement of Sale No. 8975 of 2014 dated 25^th November 2014 in respect of flat No. 1403 in B Wing, 14^th Floor, DB Woods Building, Gokuldham Road, Goregaon (East) Mumbai 400 063, the Applicants were called upon to produce measuring instruments being used for measurement of area, height, etc along with the Certificate of Verification and Stamping of the instrument. This was done by notice dated 15/20^th June 2015 issued by Respondent No.2. In the said notice, Respondent No.2 has inter alia alleged that, the Applicants have prima facie contravened Section 24(1) of the Legal Metrology Act, 2009, punishable under Section 33 of the said Act. The Applicants were called upon to submit an explanation/reply in writing within a period of five days from the receipt of the said notice. The Applicants were further informed that, if the reply is not received within a stipulated period, further action would be initiated.

3.3) Respondent No.2 issued another notice dated 15/20^th of June 2015 stating that, since the Applicants had violated and contravened Section 24(1) of the Legal Metrology Act, 2009, punishable under Section 33 of the said Act, and as no reply had been received to the earlier notice, the Applicants were informed that, the criminal prosecution would be instituted before the Metropolitan Magistrate Court No. 67, Borivali (West), on 29^th June 2015.

3.4) The Applicant replied vide notice dated 26^th June 2015 wherein, the Applicants specifically raised the contention that even before the Applicant could have an opportunity to reply to the said notice, the Respondent had already decided to lodge the criminal prosecution. The Applicants specifically pointed out that, under Section 3(2)(i) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 ("MOFA"), a promoter is required to mention the extent of the carpet area of the flat in the agreements for sale. It was further pointed out that, the carpet area of the flat mentioned in the Agreement of Sale is on the basis of plans that are prepared by Architects using computer software. That, plans prepared by the Architects, are submitted to the Municipal Corporation for Verification and Assessment. Upon being approved by the Municipal Corporation as per the Provisions of the Development Control Regulations, the Building Proposal Manual, and the Maharashtra Regional Town Planning Act, 1966, the same are implemented and construction is commenced. It was further specifically pointed out that, at the stage of entering into an Agreement of Sale, the construction of the building need not have reached a stage where the typical floors of the flat have been completed and physical measurement is possible. That, the Agreement of Sale can be executed and registered even before actually constructing the subject flat under the Agreement. It was specifically pointed out that, under Section 3(2) (ii) of the MOFA Act, it is provided that only the building plans have to be sanctioned before entering into an Agreement of Sale and not the actual construction of the said flat. That, based on the plans as prepared by the Architects and approved by the Municipal Corporation, a contractor is provided with “goods for construction” drawings. That, all such drawings are prepared on the computers using computer software. Hence, it was submitted that the areas mentioned in the agreements of sale under reference had not been physically measured before they are so mentioned in the agreement for sale, for the simple reason that they are incapable of any physical measurement at the relevant time. The Respondent No.2 was also informed that, the Applicants would provide and arrange for inspection of the computers and computer software being used by the Architects and the Municipal Architect for preparation of the plan.

3.5) The complaint dated 25^th June 2015 being filed, summons were issued vide Order dated 11^th September 2015. The said order reads as under;

3.6) This complaint is under challenge before this Court.

Mr. Subodh Desai, learned Senior counsel appearing for the Applicants submitted that:

4.1) The complaint has been filed in a clear violation of the principles of natural justice in as much as no real opportunity of hearing was granted by the Respondents. That, both the letters bearing outward No. 318 and outward No. 319 are dated 15/20^th June 2015. By the letter bearing outward No. 318, the Applicants were called upon to submit their say in writing within five days from the date of the receipt of this letter and even before the said time of 5 days had expired, the Respondent No.2 vide letter bearing outward No. 319, had already concluded that, the Applicants had contravened Section 24(1) of the Legal Metrology Act, 2009 and therefore, a complaint would be lodged before Metropolitan Magistrate Court No. 67, Borivali, (West), on 29^th June 2015. That in this background, the complaint is not maintainable and is ought to be quashed and set aside.

4.2) The agreements for sale are executed under the provisions of Section 4 of the MOFA Act, wherein the carpet area of the flats is disclosed. The carpet area mentioned in the agreements is calculated on the basis of the plans prepared by the Architects using the computers and computer software. That, on many occasions, when the agreements for sale are executed, the construction at the site has not commenced and, therefore, at that point of time, there would be no measuring instrument as such which could have been submitted to the Department. That, while replying to the notice bearing outward No. 318, the Applicants had offered inspection of the computers and computer software, which Respondent No.2 failed to take. That, the order of taking cognizance is without any reasons.

4.3) The order would indicate that, the learned Metropolitan Magistrate has not applied his mind to the facts of the case. That, the complaint does not refer to any specific allegations against the Applicant Nos. 2 to 4. The proceedings are wrongly instituted against the Applicant Nos. 2 to 4, who were directors of the Applicant No.1 company and were not involved in the process of measurement.

4.4) A mere statement that, Applicant Nos.2 to 4 are directors, without reference to or setting out the precise role played by them at the time of commission of the alleged offence, is not sufficient to attract and attach criminal liability upon the directors.

Mr. R. M. Pethe, learned counsel appearing for the Respondents submitted that:-

5.1) The Applicants have an alternative remedy of filing a revision application, which they have not preferred only to overcome the issue of limitation.

5.2) The action has been taken pursuant to the directions of the Controller of Legal Metrology Department, whereby the concerned officers were directed to take legal action as per the provisions of the Legal Metrology Act in order to avoid consumers being cheated.

5.3) As per the provisions of the Legal Metrology Act, the person using measuring tape for the purpose of measurement is required to verify and reverify the same. That, in the present case the measuring tapes have not been verified. That, the Applicant did not reply to the notice dated 15/20^th June 2015 and, therefore, the complaint came to be filed.

5.4) The very fact that, the Applicants do not have a verified and stamped measuring tape, clearly the offence against the Applicants is made out.

5.5) The Applicants have admitted that, they are not using any physical measurement which clearly establishes that they have violated the provisions of the Legal Metrology Act, 2009. The Legal Metrology Act, 2009 does not prescribe the use of computer software for physical measurement.

5.6) In their reply dated 25^th June 2015, the Applicants have failed to state as who has been nominated by the company to be in charge of and responsible to, the company for the conduct of its business. In the absence of such information, the provisions of Section 49(1)(a)(2) will come into play, thereby making Applicant Nos.2 to 4 liable.

The Legal Metrology Act, 2009 has been enacted with an object to establish and enforce standards of weights and measures, regulate trade and commerce in weights, measures and other goods which are sold or distributed by weight, measure or number and for the matters connected therewith or incidental thereto. Before the enactment of the Legal Metrology Act, 2009, The Standards of Weights and Measures Act, 1976 was in force, which provided for establishment of standards of weights and measures and regulation of inter-state trade or commerce in weights and measures and other goods which were sold by weight, measure or number. In the year 1985, the Standards of Weights and Measures (Enforcement) Act, 1985 (said Act) was enacted. With the advancements of technology, a necessity arose to review the above mentioned enactment to make it simpler, eliminate obsolete regulations, ensure accountability, and bring transparency. It was, therefore, considered necessary and imperative to consolidate the provisions of the aforesaid two Acts and get rid of the anomalies and make the provisions simple. With this object, the Legal Metrology Act, 2009 (the Act) has been enacted. The primary object of the said act is to protect the interests of the consumers and to ensure that standard metric units are uniformly used/applied and implemented across the country, which would provide an assurance to the society/general public and consumers regarding the exact quantity in terms of weight, measure, or area in terms of metric system.

6.1) The term Legal Metrology is defined under Section 2(g) of the Act. Section 2(g) reads as under:-

6.2) The term “pre-packaged commodity” is defined under Section 2(l), which reads as under:-

6.3) Section 4 provides for Units of weights and measures to be based on the metric system. Every unit of weight or measure shall be in accordance with the metric system based on the International System of Units. Section 5 provides for the base unit of weights and measures. Chapter VI, provides for verification and stamping of weights and measures. Section 24(1) provides that, every person having any weight or measure in his possession, custody or control, in circumstances indicating that such weight or measure is being, or is intended or is likely to be, used by him in any transaction or for protection, shall, before putting such weight or measure into such use, have such weight or measure verified at such place and during such hours as the Controller may, by general or special order, specify in this behalf, on payment of such fees as may be prescribed.

6.4) Section 33 of the said Act provides for a penalty for using unverified weight or measure and provides that whoever, sells, distributes, delivers or otherwise transfers or uses any unverified weight or measure shall be punished with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees and, for the second or subsequent offence, with imprisonment for a term which may extend to one year and also with fine.

In the present Application, the Applicants have been prosecuted for contravention of Section 24(1) of the said Act. The prosecution proceeds on the basis that the Applicants failed to produce the measuring instruments which were being used for measuring the area, height, etc. of the flats along with the Certificate of Verification and Stamping. It is pertinent to note that, the present prosecution has been launched on the basis of an Agreement for Sale in respect of flats situated at Goregaon, Mumbai. A notice dated 15/20^th June 2015 was issued to the Applicants by Respondent No.2, calling upon them to submit a reply within a period of five days. The Applicants, in their reply, specifically pointed out to Respondent No.2 that, the Agreement for Sale are executed even before the construction at the site commences and are based on plans which are prepared by the Architects and approved by the Municipal Corporation in accordance with the Development Control Regulations, the Building Proposal Manual and the Maharashtra Regional Town Planning Act. In this background, it was specifically pointed out to the Respondent No.2 that the areas which are mentioned in the Agreement for Sale were incapable of any physical measurement till time such flats were actually constructed. The Applicants also informed the Respondent No.2 that, the flats are constructed as per the measurements contained in the sanctioned plans, which are initially prepared by the Architect and sanctioned by the Municipal Corporation. The measurements contained in the said plans are prepared using a computer and the computer software. The Applicants further clarified that, the height of the flats i.e. from the ground level to ceiling level, has not been mentioned in the said Agreement for Sale. An offer was made to arrange for an inspection of the computers and computer software which were being used by the Architect in preparation of said plans.

I have noted that, in the present case simultaneously with the issuance of the notice dated 15/20^th June 2015 bearing outward No. 318, an intimation of the even date bearing Outward No. 319 was also issued, wherein it was stated that, the Applicants having contravened Section 24(1) of the Legal Metrology Act, committed an offence punishable under Section 36 of the said Act, and therefore, the criminal prosecution would be launched against the Applicants Notices on 29^th June 2015. Perusal of both the notices bearing Outward No. 318 and 319 would prima facie indicate that, even before the Applicant could utilize the opportunity to reply to the notice bearing outward No. 318, the Respondent No.2 had already made up its mind and concluded to prosecute the Applicants. For this reason it appears that, the notice bearing Outward No. 318 was issued as a mere formality and there was no real intention of verifying the measuring instrument for the Certificate of Verification and Stamping. The facts and sequence of events make it clear that the notice No. 318 was a clear eyewash and a pretendance to comply with laws and rules. Action of this nature is unknown to the law nor is in accordance with the law.

It would be further pertinent to note that, it cannot be the case of the Respondent that, the area mentioned in the Agreement for Sale was less than, or did not match, the constructed area which was provided to the consumers. This is because at the said relevant time, it appears from the reply of the Applicants that the construction of the building had not commenced. It appears that, the authority here proceeded on a misconception.

Perusal of the complaint would indicate that, the same is filed in the format of Appendix-1 and proceeds on the basis that the Applicants had failed to produce the instruments being used for measurement along with Certificate of Verification and Stamping. A presumption is drawn that they were using a non-standard instruments for business purposes and for transactions, which according to the Respondent No.2, was in violation of Section 24(1) of the Legal Metrology Act and punishable under Section 29 and 33 of the Legal Metrology Act. Perusal of the complaint would further indicate that, the complaint does not refer to or make any reference to the notice dated 15/20^th June 2025. There is also no reference made to the reply of the Applicants received by Respondent No.2 on 26^th June 2015. If the said reply is to be considered prima facie it appears that, it cannot be said that, the Applicants failed to produce an instrument which was used for the measurement. In the said reply, the Applicant had specifically and categorically stated that, no measuring tape was used for the measurements. The Applicants have specifically stated that, at the stage when the Agreement for Sale is executed for the purposes of measurement and stating the area of the flats in the said Agreement for Sale, the Applicants rely upon the plans prepared by the Architect using a computer and computer software and approved and verified by the Municipal Corporation as per the provisions of the Development Control Regulations, the Building Proposal Manual and Maharashtra Town Planning Act 1966. If this aspect is considered, then, in my opinion, no prima facie case is made out against the Applicants. It would be pertinent to note here that, the Legal Metrology Act was enacted with a view to combine the provisions of then existing two Acts namely the Standards of Weights and Measures Act, 1976 and the Standards of Weight and Measurement (Enforcement) Act, 1985, to get rid of the anomalies and to make the provisions simple. The other cause which necessitated the review of the said two Acts was the advancement of technology and the need to make the procedures simple, eliminate obsolete regulations and ensure accountability and transparency. The question whether, computers and computer programmes used for measurement, would be included and would come within the purview of the Legal Metrology Act is an issue which is required to be considered by the concerned authorities. The authorities are required to take appropriate steps in that regard.

Having an alternate remedy is not an absolute bar, and in special circumstances or for good reasons, the Petition can be entertained in exceptional circumstances. The rule of exhausting the alternate statutory remedy is a rule of self restraint, policy, convenience and discretion. As regards, the argument that an alternative remedy was available to the Applicants by filing a Revision Application, it would be necessary to note here that, the said objection is raised at the time of hearing and after the period of 10 years of filing of this Application. Record would indicate that, the Application is of the year 2016 and Ad-interim reliefs had been granted by this Court by its Order dated 21^st November 2017. The Respondents had not taken any steps to either vacate the relief or to point out the said objection.

A useful reference is required to be made to the Judgment of the Hon’ble Supreme Court in the case of Dhariwal Tobacco Products Ltd. v. State of Maharashtra, reported in (2009) 2 SCC 370 has observed that:

In view of the above facts, I am of the considered opinion that the facts of the present case warrant the exercise of the inherent powers of this Court under Section 482 of the Code of Criminal Procedure, 1973 (now Section 528 BNSS). A prima facie case of quashing has been made out. It is necessary that the power under Section 482 of the CrPC are exercised to prevent abuse of the process of law and to ensure that the machinery of the criminal justice system is not misused. In the present case, the Applicants have been prosecuted on the basis that they failed to produce the measuring instruments allegedly used for measurement, despite the Applicants specifically explaining that the measurements mentioned in the Agreement for Sale were based on sanctioned plans prepared by the Architects using computer software. Allowing the complaint to continue in the present form and on the basis of the present allegations would amount to an abuse of the process of law. In my considered view, it would be in the interest of justice and to secure the ends of justice that the present criminal proceedings are quashed.

Considering the above facts and circumstances, I am inclined to quash the present proceedings. In view thereof, Application is allowed in terms of prayer clause(a).