MAHENDRA BHUSHAN SHARMA,J. - (1.) I have gone through the proposed judgment of learned brother Farooq Hasan, J. with whom brother Kasliwal, J. has agreed. The learned Single Judge has made a reference to the larger Bench as in his opinion there are two different views of two Judges sitting singly in Avinashi Lal and Anr. v. State of Rajasthan 1930 Cr. LR. page 515 and Prakash Chandra Ajmera v. State of Rajasthan 1984 R L R 842 on the interpretation of Section 10 of the Essential Commodities Act, 1955 (No. X of 1955) (for short, the Act). As in the proposed judgment of my brother Judges agreement has been recorded with the view taken in Prakash Chandra Ajmera's case (supra) with the reasoning of which I am unable to persuade myself I will like to express on the controversy involved in this case.
(2.) UNDER Section 7 of the Act any person who contravenes any order made under Section 3 of the Act is punishable. The word 'person' is of wide connotation. The term includes an individual, corporation, regarded as having rights and duties under law, a company. Under Section 7 of the Act any person who actually contravenes any order made under Section 3 of the Act will be punishable. As a general rule in criminal law the master is not liable for the acts of his servants, agents But in many cases the law imposes upon the owner of the property the obligation of managing it, so that it shall not injuriously affect any one -else in the public, or requires or forbids the dealing with it in some particular way. In such cases where the breach of obligation is punishable criminally the owner cannot free himself from liability by delegating the management to some one -else on his behalf. This liability of the owner is based on the rule of vicarious liability which has been expressed in many cases arising under the special enactments. Thus Section 10 of the Act deals with vicarious liability of a person other than one who has actually contravened any order made under Section 3 of the Act. The Supreme Court in Hari Prasad Rao v. State : 1951CriLJ768 , while dealing with a case under the Motor Spirit Rationing Order, 1941, Clause 27A (an order made under the Defence of India Rules) has adverted to this aspect of vicarious liability of master for the acts of his servants. Clause 27 A of the aforesaid Order reads as under: When motor spirit is furnished against the surrender of one or more coupons, the supplier shall immediately endorse, or cause to be endorsed on each coupon so surrendered the registration or other identifying marks of the vehicle to which the motor spirit is furnished. Under rule 81 of the Defence of India Rules a penalty was provided and if any person contravened any order made under this rule, he shall be punishable with imprisonment for a term which may extend to three years or with fine or both. An argument was advanced before their Lordships that the appellant cannot be held guilty under rule 81(4) of the Defence of India Rules for contravening Clause 27A of the Order. Their Lordships held that: having regard to the language of the Clause 27 A however this contention cannot be accepted. Clause 27A, as we have already seen throws the responsibility for making the necessary endorsement on the supplier. The definition of the word 'supplier' in the Act has already been quoted and there can be no doubt that if Clause 27A is contravened, a person who comes within the definition Of the word 'supplier' must be held guilty of the contravention. The object of this clause clearly is that the supplier of petrol should set up a complete machinery to ensure that the necessary endorsements are made on the coupons against which petrol is supplied. It is conceivable that in many cases the default will be committed by the servants of the supplier, who are incharge of the petrol pump but that fact by itself will not exonerate the supplier from liability. In the aforesaid case of Hari Prasad Rao (supra) their Lordships of the Supreme Court quoted the observations of Viscount Reading, C.J. and Atkin J. in Mousell Bros. v. L and N.W. Rly. Co. (1917)2 KB 836 at p. 84. Prima facie, then, a master is not to be made criminally responsible for the acts of his servant to which the master is not a party. But it may be intention of the Legislature, in. order to guard against the happening of the forbidden thing to impose a liability upon a principal even though he does not know of & is not party to the forbidden act done by his servant. Many statutes are passed with this object. Acts done by the servants of the licensed holder of licensed premises render the licensed holder in some instances liable even though the act was done by his servant without the knowledge of the master. Under the Food & Drugs Act there are again instances well known in these Cls. where the master is made responsible, even though he knows nothing of the act done by his servant, & he may be fined or rendered amen -; able to the penalty enjoined by the law. In those cases the Legislature absolutely forbid the act & makes the principal liable without a mens rea. I think that the authorities cited by my Lord make it plain that while prima facie a principal is not to be made criminally responsible for the acts of his servants yet the Legislature may prohibit an act or enforce a duty in such words as to make the prohibition or the duty absolute; in which case the principal is liable if the act is in fact done by his servants. To ascertain whether a particular Act of Parliament has that effect or not regard must be had to the duty laid down, the person upon whom it is imposed, the person upon whom the penalty is imposed. If authority for this is necessary it will be found in the judgment of Bowen L.J. In Reg. v. Tyler & International Commercial Co. Ltd. (1981)2 Q B at P. 592 (61 LJM C. 38) Section 10 of the Act may be extracted at this stage. It reads as under : Section 10 - -Offences by companies; (1) If the person contravening an order made under Section 3 is a company, every person who, at the time of contravention was committed, was incharge 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 contravention 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 any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention; (2) Not with standing anything contained in sub -section(1) 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 shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation - -For the purposes of this section: (a) 'Company' means any body corporate, and includes a firm or other association of individuals; and (b) 'Director' in relation to a firm means a partner in the firm. It will be seen from the above extracted section that if contravention of any order made under Section 3 of the Act, is either by a company, which term as per explanation (a) includes a firm or other association of individuals, then not only the company but every person, who at the time of contravention is 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 contravention and shall be liable to be proceeded against and punished accordingly. Such a person shall not be rendered liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. Before such a person can be punished for contravention of any order made under Section 3 of the Act under Clause (1) of Section 10 of the Act, it will be necessary for the prosecution to prove that at the time of contravention such person was incharge of and was responsible to the company for the conduct of the business of the company. For the purposes of Section 10, 'director in relation to a firm means a partner in the firm. Once the prosecution so proves, the burden will shift on such a person and he will then have to prove that the contravention which is alleged to have taken place, took place without his knowledge, or that he exercised all due diligence to prevent such contravention. Clause 2 of Section 10 of the Act starts with non -obstante clause and where an offence under the 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, 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. It will, therefore, be clear that clauses (1) and (2) of Section 10 of the Act provides for different situations and even if the case may not fall under Clause (1) of Section 10, if it falls under Clause (2) of Section 10 of the Act, such a person can be proceeded against and punished for the contravention of any order made under Section 3 of the Act. While Clause (1) deals with such a person who is incharge of or responsible to the company for the conduct of the business of the company, Clause (2) deals with any Director, Manager, Secretary or other Officer of the company who may not be incharge of or responsible to the company but with whose connivance or consent the offence has been committed, or is attributable to any neglect on the part of such person. In my opinion, therefore, any person who has himself contravened any order made under Section 3 of the Act is liable to be proceeded against and punished accordingly. But in case the person contravening an order made under Section 3 of the Act is a company then any person who may not be present at the time of contravention is vicariously liable if the case falls under any of the clauses (1) or (2) of Section 10 of the Act. Such a person as mentioned therein is liable to be proceeded and punished accordingly, because he was connected with the company and can be said to have the nexus with the offence with which the company is charged. Thus, under Clause (I) of Section 10 of the Act every person, who is absent at the time when contravention is committed by the company and was incharge of and responsible to the company for the conduct of the business of the company shall be deemed to be vicariously guilty, unless he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. The prosecution in such a case will have to allege and prove that such a person is being held vicariously liable because at the time the contravention was made, he was incharge of and responsible for the company for the conduct of its business. Without any such allegation and proof a person cannot be held to be vicariously liable. Section 10, Clause (1) and (2) of the Act are pari -materia with the Prevention of Food Adulteration Act, 1954 (for short, the PFA Act) as that section stood before its substitution by Section 14 of the Prevention of Food Adulteration (Amendment) Act, 4 of 1976. They are also pari -materia with Sub -sections (1) and (4) of the present Section 17 of the PFA Act. Sub -section (1) of Section 17 of the PAA Act came up for consideration before their Lordships of the Supreme Court in Smt. Mani Bai and Anr v. The State of Maharastra : 1974CriLJ451 . It was held therein: Even if it may be assumed that the business was owned by a firm or an association of individuals and Manibai was a partner of that firm or member of that association of individuals. Manibai would be liable under Section 17(1) of the Act for the sale which was made by her son Pranjivan only if it was shown that she was in charge of and was responsible for the conduct of the business which was carried on at the shop. There is no evidence to that effect on the record. In the absence of such evidence, no criminal liability for the sale of coconut oil by Pranjivan can be fastened on Manibai under the provisions of the Act.
(3.) IT will be seen that before a partner of a firm or member of association of individuals can be held vicariously liable under Clause (1)of Section 10 of the Act for contravention by the firm or association of individuals of any order made under Section 3 of the Act, such a partner or member must be proved to be incharge of and responsible to the firm or other association of individuals for the conduct of its business. The mere fact of his being a partner or member aforesaid will not make him liable. In the case of Prakash Chandra, Ajmer (supra) it has been observed; Section 10 and specially Clause (ii) of Section 10 provides that if one is negligent in the discharge of his duties towards the business of the firm and if it results in the commission of the offence then the person who is negligent and whom the negligence is attributed is equally liable, this section has been inserted to protect the interest of the society. It is very difficult in partnership firm to prove the active commission of any offence by any partner and if the narrower interpretation is given to Section 10 then every partner will shift their burden on the other partners and thus it will be very difficult to prove who has committed the offence under the Act. With due respect so far as the last lines of the above extracted para are concerned they are against the view taken by the Supreme Court in the case of Smt. Manibai (supra). Even under Clause (ii) of Section 10 of the Act in case the offence is committed by the company and liability is sought to be fastened on its director, manager, secretary or other officer the prosecution has to aver and prove that the offence was committed with the consent or connivance of or is attributable to any neglect on the part of and director etc. as aforesaid. The use of the words 'it is proved' in Clause (ii) of Section 10 of the Act is not without significance, Thus the mere fact of a person being a Director etc. of the company will not make him vicariously liable unless in case of contravention of any order made under Section 3 of the Act a proof against the Director etc. as aforesaid is forth coming or unless in the commission of the offence by the company neglect on the part of director etc can be attributed. A reading of Section 10 of the Act will make it obvious that the Legislature has taken care to provide that natural persons made vicariously liable for the offence committed by a company or anyone of its employees are to be punished only when it is established that they had some nexus with the crime either because of their connivance with it or due to their negligence which had resulted in its commission. A co -operative society is covered under the term 'Company' for purposes of Section 10 by virtue of its explanation (a) and under Section 10(1) or (2) the liability of the co -operative society is absolute one, but before any of its office bearer can be punished under any of the two clauses of Section 10 of the Act it will be necessary to aver and prove that such an office bearer or officer other than who himself committed the offence, connived in the commission of the offence or the offence was committed due to neglect on his part or that he was responsible to the company for the conduct of its business or was in charge of it. In the case of Avinashilal (supra), I took a similar view and in para 5, it was held that: It can be said that in case contravention of order made under Section 3 of the Act is alleged to be by the 'company' a term which includes the firm also as per explanation (a) to Section 10 of the Act, then it must be alleged in the complaint or the charge, as the case may be that the persons who have been prosecuted for such contravention, were in charge of and were responsible to the company in the conduct of the business. Unless the company is arrayed as an accused and it prosecuted, persons alone cannot be prosecuted. ;