# Managing Director M/S Indofil Chemical Company v. State of U.P.& Anr

- **Citation:** (2019) 4 ILRA 54
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-08
- **Case number:** Crl. Misc. Application (U/S 482 Cr. P.C.) No. 899 of 2005
- **Bench:** Sudhir Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/managing-director-m-s-indofil-chemical-company-v-state-of-u-p-anr-45013
- **Pages:** 6

## Headnote

A. Criminal Law - Insecticide Act, 1968 -
Section 29 (1)(a) & Section 33
-
Vicarious liability - Offence by company
- Officers of the company who may be
said to be responsible to the company for
conduct of its business or were in charge
thereof.

Held :- would arise only when an offence
has been committed by a company. If
company is not made an accused,
alleging vicarious liability only against
Managing Director, complaint cannot be
maintained-Managing
Director
of
Company
can
be
responsible
for
vicarious liability only when there are
specific allegations as to how he is
responsible vicariously for the offence in
question. (Para 7,10,11,12,13,19 & 20)

Application u/s 482 Cr.P.C allowed. (E-3)

List of cases cited: -

## Text

54 INDIAN LAW REPORTS ALLAHABAD SERIES
remedial action and corrective measures
are taken.

5. The writ petition stands disposed
of accordingly.

6. Let a copy of this order be
transmitted forthwith by the learned
Registrar General to the Chief Medical
Superintendent, Prayagraj, as well as the
Principal Secretary, Health, Government
of Uttar Pradesh, Lucknow.
----------

(2019)12 ILR A54

ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 08.07.2019

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.

Crl. Misc. Application (U/S 482 Cr. P.C.) No.
899 of 2005

Managing Director M/S Indofil Chemical
Company ...Applicant
Versus
State of U.P.& Anr. ...Opposite Parties

Counsel for the Applicant:
Sri Nitin Gupta, Sri G.S. Chaturvedi

Counsel for the Opposite Parties:
A.G.A.

A. Criminal Law - Insecticide Act, 1968 -
Section 29 (1)(a) & Section 33
-
Vicarious liability - Offence by company
- Officers of the company who may be
said to be responsible to the company for
conduct of its business or were in charge
thereof.

Held :- would arise only when an offence
has been committed by a company. If
company is not made an accused,
alleging vicarious liability only against
Managing Director, complaint cannot be
maintained-Managing
Director
of
Company
can
be
responsible
for
vicarious liability only when there are
specific allegations as to how he is
responsible vicariously for the offence in
question. (Para 7,10,11,12,13,19 & 20)

Application u/s 482 Cr.P.C allowed. (E-3)

List of cases cited: -

1. Aneeta Hada & Ors. Vs Godfather Travels &
Tours Private Ltd. & Ors. (2012) 5 SCC 661

2. Himanshu Vs. B. Shivamurthy & Ors. (2019)
3 SCC 797

3. Maksud Saiyed Vs St. of Gujarat & Ors.
(2008) 5 SCC 668

4. Sharad Kumar Sanghi Vs Sangita Rane
(2015) 12 SCC 781

5. S.M.S. Pharmaceuticals Ltd. Vs Neeta Bhalla
& Anr. (2005) 8 SCC 89

6. Mah. St. Electricity Distribution Co. Ltd. &
Ors. Vs Datar Switchgear Ltd. & Others (2010)
10 SCC 479

7. GHCL Employees Stock Option Trust Vs.
India Infoline Ltd. (2013) 4 SCC 505.

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. Heard Sri G.S. Chaturvedi,
learned Senior Advocate assisted by Sri
Nitin Verma, learned counsel for applicant
and learned AGA for State of U.P.

2. This application under Section
482 Cr.P.C. has been filed praying for
quashing of proceedings in Complaint
Case No. 8976 of 2004 under Sections 29
(1)(a) of Insecticide Act, 1968 (hereinafter
referred to as "Act, 1968"), Police Station-
Kavi
Nagar,
District-
Ghaziabad.
4 All. Managing Director M/S Indofil Chemical Company Vs. State of U.P. & Anr.
55

3. It is submitted that Managing
Director
of
M/s
Indofil
Chemical
Company was made an accused in a
complaint filed under Section 29 (1)(a) of
Act, 1968 on the ground that Insecticide
seized at the sale premises of accused-1
Rishipal Singh, was sub-standard and,
therefore, Company was indulged in
manufacturing of sub-standard insecticide
and has committed an offence under
Section
29(1)(a)
of
Act,
1968.
Complainant
has
not
impleaded
'Company' at all and only Managing
Director has been implicated though
manufacturer is the Company and if no
offence is said to have been committed by
Company, vicarious liability cannot be
fastened upon Managing Director of the
Company, hence, prosecution of only
Managing Director of Company is not
maintainable. Reliance is placed on a
Supreme Court's judgement in Sharad
Kumar Sanghi vs. Sangita Rane (2015)
12 SCC 781.

4. Learned AGA on the contrary,
submitted that insecticides having been
found sub-standard i.e. spurious, amounts
to sale of mis-branded insecticides and an
offence under Section 29(1)(a) read with
Section 3(k)(viii) of Act, 1968 has been
committed, hence, prosecution has rightly
been instituted against seller as well as
manufacturer. Referring to Section 33, he
said that where an offence is committed
by a Company, every person who was in
charge of, or responsible for Company for
conduct of its business is deemed to be
guilty of an offence and such person is
equally responsible for prosecution of
said offence.

5. It is not in dispute that accused-1
was the seller and accused-2 is Managing
Director of the Company who said to
have manufactured alleged misbranded
insecticides.

6. When an offence is committed by
a Company, it is governed by Section 33
of Act, 1968 which reads as under:-

"33. Offences by companies.--
(1) Whenever an offence under this Act
has been committed by a company, every
person who at the time the offence was
committed, was in charge of, or 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 offence 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 under
this Act if he proves that the offence was
committed without his knowledge or that
he exercised all due diligence to prevent
the commission of such offence.

(2) Notwithstanding 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 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.

Explanation.--For the purpose
of this section,--

(a) "company" means any body
corporate and includes a firm or other
association of individuals; and
56 INDIAN LAW REPORTS ALLAHABAD SERIES

(b) "director", in relation to a
firm, means a partner in the firm."

(emphasis added)

7. Having gone through aforesaid
submissions and relevant provisions of
Act, 1968, I find that vicarious liability of
officers of the Company who may be said
to be responsible to the Company for
conduct of his business or was in-charge
thereof would arise only when an offence
has been committed by a Company. If no
offence has been committed by a
Company and the Company is not one of
the accused, question of vicarious liability
of its officials will not arise.

8. Construing a similar provisions
contained in Section 141 of Negotiable
Instruments Act, 1881 (hereinafter referred
to as "Act, 1881"). Court in Aneeta Hada
and Others Vs. Godfather Travels and
Tours Private Limited and Others (2012)
5 SCC 661, said that commission of offence
by Company is an express condition
precedent to attract the vicarious liability of
others. Court said, when a Company can be
prosecuted then only persons mentioned in
other categories could be vicariously liable
for the offence subject to the averments in
the petition and proof thereof. Court further
said:

"we arrive at the irresistible
conclusion that for maintaining the
prosecution under Section 141 of the Act,
arraigning of a company as an Accused
is imperative."
 (emphasis added)

9. Following the above dictum in
Himanshu Vs. B. Shivamurthy and
Others (2019) 3 SCC 797, Court said :

"In the absence of the company
being arraigned as an accused, a
complaint against the appellant was
therefore not maintainable".

10. In the present case, Company
itself has not been impleaded at all. Once
Company is not made an accused,
alleging vicarious liability only against
Managing Director, complaint cannot be
maintained.

11. Section 33 of Act, 1968 also
make it clear that in absence of Company
as an accused, complaint only against
Managing Director is not maintainable.
The
offence
when
committed
by
Company,
the
further
question
of
vicarious liability of others will arise.

12. There is another aspect in the
matter. In the entire complaint filed by
Insecticide Inspector/ District Agricultural
Protection Officer, Ghaziabad, I do not
find
any
allegations
made
against
applicant as to how he was vicariously
liable for offence under Section 29(1)(a)
of Act, 1968. The entire complaint reads
as under:-

^^dhVuk'kh vf/kfu;e 1968 dh /kkjk
29 1⁄411⁄2 ,0ch0lh0 ds rgr mDr okn fuEu
fcUnqvksa ij vk/kkfjr gS&

1- vfHk;qDr la[;k ,d v/kksekud
dhVuk'kd jlk;u dk Hk.Mkj.k drkZ ,oa fodzsrk
gSA

2- vfHk;qDr la[;k nks v/kksekud
dhVuk'kd jlk;u dh mRiknu bdkbZ ds
eSusftax Mk;jsDVj gSaA

3- fnukad 28-1-04 dh izkr% yxHkx 9
cts ftykf/kdkjh egksn;] xkft;kckn }kjk
nwjHkk"k ij v/kksgLrk{kjh dks ;g lwfpr djrs gq,
fd ,d udyh dhVuk'kd jlks;uksa dks QSDV~h
idM+h x;h gSA ftldk leLr Hk.Mkj iqfyl
rRdky dfouxj Fkkuk igqapdj ,df=r
dhVuk'kd jlk;uksa ds Hk.Mkj dk fof/kor
4 All. Managing Director M/S Indofil Chemical Company Vs. State of U.P. & Anr.
57
fujh{k.k djds vko';d dk;Zokgh dhVuk'kh
vf/kfu;e ds vUrxZr djuk lqfuf'pr djsaA

ftykf/kdkjh }kjk nwjHkk"k ij fn;s
x;s funsZ'kksa ds ifjikyu esa v/kksgLrk{kjh rRdky
Fkkuk dfouxj igqaps ,oa iqfyl }kjk ,df=r
fd;s x;s dhVuk'kd jlk;uksa dh fLFkfr dk
fujh{k.k fd;kA Fkkus esa miyC/k leLr
dhVuk'kd jlk;uksa dk Hk.Mkj tks Fkkus dh QnZ
ds vuqlkj Jh _f"kiky flag] bZ&71 cqyUn'kgj
jksM] vkS|ksfxd {ks= xkft;kckn dk lanfHkZr gSA
Jh _f"kiky flag bl irs ij fcuk dhVuk'kh
fodz; ykbZlsal izkIr fd;s dhVuk'kd jlk;uksa
dk O;kikj dj jgs gSaA Jh _f"kiky flag dk
LFkkbZ
irk
,l0ch0&81]
'kkL=huxj
1⁄4xkft;kcknA1⁄2

4- dhVuk'kh vf/kfu;e 1968 dh /kkjk
20 ds vUrxZr ftyk d`f"k j{kk vf/kdkjh
xkft;kckn dks dhVuk'kh fujh{kd ds vf/kdkj
izkIr gS ftlds vUrxZr fnukad 28-1-2004 dks
dfouxj Fkkuk ifjlj esa ,df=r fofHkuu
dhVuk'kd jlk;uksa esa ls eSUdkstsc 75 izfr'kr
Mcyw0 ih0 cSp la[;k&Vh0 709 ftldh
mRiknu frfFk 3@03 ,oa vfUre iz;ksx frfFk
2@05 tks eSllZ b.MksfQy dSfedYl dEiuh]
fujykSu gkml iksLV ckDl ua0&9112 eqEcbZ
}kjk fufeZr Fkh] dk uewuk fof/kor gkvfjr dj
lhy eksgj fd;k x;kA mlh le; QkeZ 20rS;kj
fd;k x;kA pwafd Jh _f"kiky flag iq= Jh
cyjke flag iqfyl vfHkj{kk 1⁄4dLVMh1⁄2 esa Fks]
blfy, uewus dh ,d lhycUn FkSyh ,oa
QkeZ&20 dh ,d izfr Fkkuk dfouxj
1⁄4xkft;kckn1⁄2 esa izkIr djk nh x;hA Jh gfj'pan
dkSf'kd d`f"k j{kk i;Zos{kd ,oa Jh bUnziky flag
ofj"B lgk;d dk;kZy; ftyk d`f"k j{kk
vf/kdkjh] xkft;kckn esjs lkFk ekStwn FksA

5- uewus dh ,d lhycUn FkSyh ftl
ij dksM la[;k&,0 173 vafdr dj fof/kor
:ii=&21 i=kad 1506 fnukad 20-1-04 ds lkFk
dk;kZy; ds i=kad&1509 fnukad 29-1-04 ds
}kjk la;qDr funs'kd 1⁄4d`0j01⁄2 m0iz0] d`f"k Hkou
y[kuÅ ds ;gka fo'ys"k.k djkus gsrq Hksth x;hA

6- la;qDr funs'kd d`f"k j{kk m0iz0]
d`f"k Hkou y[kuÅ us vius i=kad 30 fnukad
05-04-04 ds }kjk uewus dh fo'ys"k.k fjiksVZ
dhVuk'kh fo'ys"kd moZjd ,oa dhVuk'kh xq.k
fu;a=.k iz;ksx'kkyk okjk.klh ds i=kad ih0vkj0
545 fnukad 29-3-04 Hksth gSA ftlesa eSUdkstsc
75 izfr'kr Mcyw0 ih0 cSp la[;k&Vh0 709
1⁄4dksM la[;k&,001731⁄2 ds mDr uewus dks
feLczk.MsM 1⁄4v/kksekud1⁄2 ?kksf"kr fd;k gSA

7- uewuk feLczkUMsM 1⁄4v/kksekud1⁄2 gksus
dh lwpuk dk;kZy; ds iathd`r i=kad 233
fnukad 29-4-04 ds }kjk Jh _f"kiky flag iq=
Jh cyjke flag ,l0ch0&81] 'kkL=huxj
1⁄4xkft;kckn1⁄2 ,oa fuekZrk dEiuh dks Hkst nh
x;h gSA

8- vfHk;qDr la[;k ,d us fcuk
dhVuk'kh fodz; ykbZlsal ds dhVuk'kd jlk;uksa
dk Hk.Mkj.k] mRiknu ,oa fodz; vkfn dj
dhVuk'kh vf/kfu;e 1968 dh /kkjk 1⁄411⁄2
,0ch0lh0] ,oa vfHk;qDr la[;k nks us dhVuk'kh
vf/kfu;e 1968 dh /kkjk 29 1⁄411⁄2 ,0 ds vUrxZr
n.Muh; vijk/k fd;k gSA

9- U;k;ky; esa vfHk;kstu nk;j djus
gsrq dhVuk'kh vf/kfu;e 1968 dh /kkjk 31 1⁄411⁄2
ds vUrxZr ftykf/kdkjh xkft;kckn us fnukad
21-8-04 dks viuh Lohd`fr iznku dj nh gSA

vr% vkils vuqjks/k gS fd vfHk;qDr
la[;k 1] ,oa 2 dks ryc Qjekdj n.Muh;
dk;Zokgh djus dk d"V djsaA**

"The aforesaid suit u/s 29(1)
(a)(b)(c) of the Insecticides Act, 1968, is
based on the following points: -

1. The accused 1 is a storer and
seller of the misbranded insecticides.

2. The accused
2
is
the
Managing Director of the manufacturing
unit of the misbranded insecticides.

3. Giving information to the
undersigned at around 9:00 a.m. on
28.01.2004,
the
District
Magistrate,
Ghaziabad, while informing that an
illegal factory manufacturing insecticides
has been unearthed, instructed that the
undersigned should immediately reach the
Kavinagar Police Station and ensure to
take
necessary
action
under
the
58 INDIAN LAW REPORTS ALLAHABAD SERIES
Insecticide Act after examining the
chemicals kept there.

In
compliance
with
the
directives of the District Magistrate, the
undersigned immediately reached the
Kavinagar Police Station and examined
the insecticides kept by the police there.
As per the memo of the police station, the
store of insecticides is of Shri Rishipal
Singh,
E-71,
Bulandshahr
Road,
Industrial area, Ghaziabad, and he trades
in insecticides from this address without
obtaining any licence. The permanent
address of Shri Rishipal Singh is SB - 81,
Shastri Nagar (Ghaziabad).

4. District Agricultural Defense
Officer (Krishi Raksha Adhikari) has been
vested with the power of the Insecticide
Inspector u/s 20 of the Insecticides Act,
1968, under which out of the insecticides
collected on the campus of the Police
Station - Kavi Nagar, the Mancozeb was
75 percent with WP Batch No. - T. 709,
the manufacturing date of which is 3/03
and expiry date is 02/05; it was
manufactured by M/s Indofil Chemicals
Company, Nirlaun House, Post Box No.
9112, Mumbai and its samples were
sealed after being signed properly. At that
very time, Form 20 was prepared. Since
Sri Rishipal Singh s/o Sri Balram Singh
was in police custody, a sealed pouch of
sample and a copy of Form 20 were made
available to P.S. Kavinagar (Ghaziabad).
Sri Harishchand Kaushik, Krishi Raksha
Paryavekshak and Sri Indrapal Singh,
Senior Assistant, Office of the Zila Krishi
Raksha Adhikari, Ghaziabad were present
with me.

5. A sealed pouch of sample
with Code No A-173, alongwith duly filled
Form 21 no 1506 dated 20.1.04 were sent
to the Joint Director ( Kri.Ra.) U.P.,
Krishi Bhawan, Lucknow for analysis.

6. The Joint Director, Krishi
Raksha, U.P., Krishi Bhawan, Lucknow
vide letter 30 dated 05.04.04 has sent
analysis report of the sample vide letter
no P.R. 545 dated 29.3.04 of the Fertiliser
Analyst and Fertiliser Quality Control
Laboratory,
Varanasi,
wherein
the
aforesaid sample of Mancojeb 75 percent
W.P. Batch no T-709 (Code No A00173)
has been declared to be misbranded.

7. Information regarding the
sample
being
misbranded
has
vide
registered office letter no 233 dated
29.4.04 been sent to Sri Rishipal Singh s/o
Sri Balram Singh, S.B.-81, Shastri Nagar
(Ghaziabad) and to the manufacturing
company.

8. Without possessing licence
for sale of insecticides, accused no 1 has
by
involving
himself
in
storage,
production, sale, etc, of insecticides,
committed an offence punishable under
section 1(a)(b)(c) and so did accused no 2
u/s 29 (1) (a) of the Insecticides Act.

9. The District Magistrate on
21.8.04 granted permission u/s 31 (1) of
the Insecticides Act, 1968 for bringing
prosecution.

Hence, accused nos 1 and 2 may
please be summoned and punishment
proceedings be taken."

 (emphasis added)

(English Translation by Court)

13. Managing Director of Company
can be responsible for vicarious liability
only when there are specific allegations as
to how he is responsible vicariously for
the offence in question. Nothing has been
said in the entire complaint in respect of
role of the applicant to make him
vicariously liable for the offence under
Section
29(1)(a)
of
Act,
1968.
4 All. Mr. R.P. Goenka & Ors. Vs. State of U.P. & Anr.
59

14. In Maksud Saiyed Vs. State of
Gujarat and Others (2008) 5 SCC 668,
Court said :

"it is obligatory on the part of
the
complainant
to
make
requisite
allegations which would attract the
provisions
constituting
vicarious
liability".

 (emphasis added)

15. In Sharad Kumar Sanghi Vs.
Sangita Rane (2015) 12 SCC 781, Court
said:

"When a complainant intends
to
proceed
against
the
Managing
Director or any officer of a company, it is
essential to make requisite allegation to
constitute the vicarious liability."

 (emphasis
added)

16. In S.M.S. Pharmaceuticals
Ltd. Vs. Neeta Bhalla and Another
(2005) 8 SCC 89, while dealing with an
offence under Section 138 of Act, 1881,
Court said:

"It is necessary to specifically
aver in a complaint under Section 141
that at the time the offence was
committed, the person accused was in
charge of, and responsible for the conduct
of business of the company. This averment
is an essential requirement of Section
141 and has to be made in a complaint.
Without this averment being made in a
complaint, the requirements of Section
141 cannot be said to be satisfied."
(emphasis added)

17. The same principle has been
reiterated
in
Maharashtra
State
Electricity Distribution Co. Ltd. and
Others Vs. Datar Switchgear Ltd. and
Others (2010) 10 SCC 479 and GHCL
Employees Stock Option Trust Vs.
India Infoline Ltd. (2013) 4 SCC 505.

18. In Sharad Kumar Sanghi
(supra) Court also said:

"When a company has not
been arrayed as a party, no proceeding
can be initiated against it even where
vicarious liability is fastened on certain
issues."

(emphasis added)

19. In view of above discussion,
proceedings initiated against applicant for
committing
offence
under
Section
29(1)(a) of Act, 1968 cannot be sustained.

20. Application is accordingly
allowed. Proceedings initiated against
applicant in Complaint Case No. 8976 of
2004 under Sections 29 (1)(a) of Act,
1968, Police Station Kavi Nagar, District
Ghaziabad, are hereby quashed.
----------

(2019)12 ILR A59

ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 22.10.2019

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Crl. Misc. Application (U/S 482 Cr. P.C.) No.
960 of 1997 connected with

 Crl. Misc. Application (U/S 482 Cr. P.C.) No.
1910 of 1997

Mr. R.P. Goenka & Ors. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicants: