04 Aug 2121

There is no rationale or justification for prosecuting the Managing Director on the vague and expansive argument that he was the Managing Director of the Company at the relevant time when providing such undertaking fixing the duty for product quality control - Supreme Court of India

Case : M/s. Cheminova India Limited & Anr. v. State of Punjab & Ors. Criminal Appeal No. 750 of 2021 (Arising out of SLP (Crl.) No. 4144 of 2020)

Court : Supreme Court of India

Bench : Justice Navin Sinha and Justice R. Subhash Reddy

Decided on : 04 Aug 2121

The Relevant Statutes

Section 3(k)(i), 17, 18, 33, 29, 24, 24(4), 33(1) of the Insecticides Act, 1968 

Section 202, 200, 293, 482 of Code of Criminal Procedure, 1973

Section 138 of the Negotiable Instrument Act, 1881

Brief Facts & Procedural History

1. The first appellant is a company that manufactures pesticides and has its headquarters in Mumbai. The company's Ex-Managing Director was the second appellant. In the presence of its single proprietor, Shri Nishan Singh, Quality Control Inspector, Bhikhiwind, District Tarn Taran, Punjab, examined the premises of M/s. Dhillon Kheti Store. Nishan Singh was the 1st Appellant – Company's authorised dealer for the sale of its pesticides. During the examination, the inspecting officer discovered six boxes containing 25 packets each of Piroxofop Propanyl (Clodinafop Propargyl 15 per cent WP) stored in the premises, each packet weighing 160 grams. Samples were taken from the above-mentioned stock, and one of the samples was forwarded to the Senior Analyst, Insecticide Testing Laboratory, Amritsar.

2. When the report was obtained, the active component of Piroxofop Propanyl was only determined to be 11.72 per cent, despite the labelled claim of 15%. A copy of the report, as well as a Show Cause Notice, was given to the Amritsar dealer. Show Cause Notices were also issued to the 1st Appellant – Company, which has its manufacturing unit in Bharuch, Gujarat, and other responsible officers of the Company after the dealer produced a copy of the invoice indicating that he had purchased the insecticides in question from the 1st Appellant – Company.

3. On receipt of the report, the 2nd Appellant herein, on behalf of the Company, sent a letter requesting that another sample be sent to the Central Insecticide Testing Laboratory in Faridabad, and after paying the necessary fees, another sample was sent to the Central Insecticide Testing Laboratory, which reported that the sample was misbranded because it contained 10.09 per cent actinomycetes. A complaint was filed before the Judicial Magistrate to prosecute the appellants and other accused of violations under Sections 3(k)(i), 17, 18, and 33, punishable under Section 29 of Insecticides Act, 1968, after receiving required approval from the relevant authorities.

4. The appellants and other defendants petitioned the High Court to have the lawsuit dismissed on different grounds. The petition was denied by the High Court in so far as the appellants were concerned, but the motion for the Godown Watchman was accepted by the impugned order.

5. They appealed to the Honourable Supreme Court of India, claiming they were aggrieved by the impugned order.

The Issue(s) of the Case

Whether the Order dated 12 May 2020, dismissing quashing of Complaint No. 313 dated 19 August 2015?

The Observations of the Court

1. Honourable Supreme Court of India agree with observed that permitting the prosecution of 2nd Appellant – Managing Director amounts to an abuse of the legal process. At the same time, there is no basis to quash the actions against the 1st Appellant - Company at this moment.

2. Honourable Supreme Court of India also observed that by adopting the appellants' claim that the procedure envisioned under Section 24 (4) of Insecticides Act, 1968 and Section 202 of the Code of Criminal Procedure, 1973 is not followed, no cause is made out to quash the proceedings at this point. The Honourable Supreme Court of India is satisfied that after the 1st Appellant – Company deposited the necessary Demand Draft for sending the 2nd sample to the Central Insecticide Testing Laboratory, steps were taken promptly, and the Central Insecticide Testing Laboratory also sent the report within the prescribed period of 30 days.

3. Honourable Supreme Court of India also observed that the learned Counsel's arguments that the proceedings should be invalidated only because the Magistrate took cognizance without conducting an inquiry or ordering an investigation are without merit. There is no basis to quash the proceedings in exercise of authority under Section 482 of the Code of Criminal Procedure, 1973 since no prejudice has been shown to the appellant at this point.

4. Honourable Supreme Court of India also observed that there is insufficient evidence to prosecute the 2nd Appellant – Managing Director for the claimed offences.

The Decision Held by the Court

Honourable Supreme Court of India held that the impugned Order of the High Court dated 12.05.2020, passed by the High Court of Punjab and Haryana at Chandigarh in CRMM-12082-2016 (O & M), is set aside in part, so far as the Appellant No.2 – Managing Director is concerned. As a result, Complaint No. 313 dated 19.08.2015, filed by the 2nd Respondent – Quality Control Inspector, Bhikhiwind District Tarn Taran, Punjab, and pending before the learned Judicial Magistrate First Class, Patti, is quashed qua the Appellant No. 2 / Accused No.4. It is also made clear that the observations and findings recorded in this order are made solely to dispose of this Appeal arising out of the quash petition, and that the Trial Court is free to record its findings, based on the evidence on record, and to take any other steps necessary to comply with the law.

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