# S.P. Mathur Revisionist v. Sri R.P. Sharma & Anr

- **Citation:** (2021) 8 ILRA 557
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-07-30
- **Case number:** Criminal Revision No. 916 of 1988
- **Bench:** Neeraj Tiwari
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/s-p-mathur-revisionist-v-sri-r-p-sharma-anr-47274
- **Pages:** 13

## Headnote

(A) Criminal Law - The Code of criminal
procedure, 1973 - Section 245 (2) -
Revision
-
Prevention
of
Food
Adulteration Act,1954 - Section 7/16,
17, 17(1) (a) and (b), 17(2) - for
maintaining the Complaint under Section
7/16 of the Act, 1954, "Company" is
necessary party and no Complaint is
maintainable until "Company" is made
party - pure question of law or legal
issue based on undisputed or proven
facts can be raised at any stage even
before the Court of last resort.(Para -
23,28)

Complaint was filed against the revisionist -
Company is manufacturer of rath vanaspati -
revisionist was accused in the capacity of
sales manager D.C.M. Chemicals Firm - "
Company" is not arrayed as accused - order
passed for framing charges against revisionist
- revisionist filed discharge application -
ground - provision of section 17 of the Act
1954 has not been complied with - as
company was not made the accused -
discharge application rejected by the court
below - hence the present revision .

HELD:- Non compliance of Section 17(1)(b)
of the Act, 1954 is pure legal issue going to
the root of the case based on undisputed and
proven facts and can be raised at any stage
of legal proceeding. In light of Section
17(1)(b) of the Act, 1954, "Company" is
necessary party and no Complaint under
Section 7/16 of the Act, 1954 can be
maintained or order can be passed against
the
revisionist
without
impleading
the
"Company" as accused. Therefore, Complaint
dated 22.08.1984 filed under Section 7/16 of
the Act, 1954 as well as impugned order
dated 16.05.1988 is not sustainable. (Para -
28,31)

Discharge
application
&
Criminal
Revision allowed. (E-6)

List of Cases cited:-

## Text

_Characters 0–39,973 of 43,360. This is a partial read: ask again with offset=39973 for what follows._

8 All. S.P. Mathur Vs. Sri R.P. Sharma & Anr.
557
Though his siblings appear to be better
educated, but the typical circumstances in
which the revisionist is placed could
make him a possible victim of known
criminals to hire at the dawn of youth. In
these circumstances, if the revisionist
were enlarged on bail, the possibility that
he would come into contact or resume
contact with known criminals cannot be
ruled out.

14. Considering the entirety of
circumstances, this Court is of opinion
that no inference with the orders made by
the Courts below is required.

15. In the result, this Revision fails
and stands dismissed.
----------
(2021)08ILR A557
REVISIONAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 30.07.2021

BEFORE

THE HON'BLE NEERAJ TIWARI, J.

Criminal Revision No. 916 of 1988

S.P. Mathur ...Revisionist
Versus
Sri R.P. Sharma & Anr. ...Opposite Parties

Counsel for the Revisionist:
Sri R.P. Sharma, Sri Harish Chandra Mishra,
Sri S.G. Vinod Sinha, Sri Samit Gopal, Sri
V.Saran, Sri Vinod Sinha, Sri Virendra
Saran,
Sri
G.S.
Chaturvedi,
Sri
V.P.
Srivastava

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

(A) Criminal Law - The Code of criminal
procedure, 1973 - Section 245 (2) -
Revision
-
Prevention
of
Food
Adulteration Act,1954 - Section 7/16,
17, 17(1) (a) and (b), 17(2) - for
maintaining the Complaint under Section
7/16 of the Act, 1954, "Company" is
necessary party and no Complaint is
maintainable until "Company" is made
party - pure question of law or legal
issue based on undisputed or proven
facts can be raised at any stage even
before the Court of last resort.(Para -
23,28)

Complaint was filed against the revisionist -
Company is manufacturer of rath vanaspati -
revisionist was accused in the capacity of
sales manager D.C.M. Chemicals Firm - "
Company" is not arrayed as accused - order
passed for framing charges against revisionist
- revisionist filed discharge application -
ground - provision of section 17 of the Act
1954 has not been complied with - as
company was not made the accused -
discharge application rejected by the court
below - hence the present revision .

HELD:- Non compliance of Section 17(1)(b)
of the Act, 1954 is pure legal issue going to
the root of the case based on undisputed and
proven facts and can be raised at any stage
of legal proceeding. In light of Section
17(1)(b) of the Act, 1954, "Company" is
necessary party and no Complaint under
Section 7/16 of the Act, 1954 can be
maintained or order can be passed against
the
revisionist
without
impleading
the
"Company" as accused. Therefore, Complaint
dated 22.08.1984 filed under Section 7/16 of
the Act, 1954 as well as impugned order
dated 16.05.1988 is not sustainable. (Para -
28,31)

Discharge
application
&
Criminal
Revision allowed. (E-6)

List of Cases cited:-

1. B.K. Varma Vs Corp. of Madras, 1971 CRI.
L.J. 60 (Vol. 77 C. N.15)

2. N.N. Mukerjee & ors. Vs The St. of U.P. &
anr., Criminal Reference No. 645 of 1974

3. The St. Vs R. P. Mehta, 1982 CRI. L. J. NOC
159 (ALL.)
558 INDIAN LAW REPORTS ALLAHABAD SERIES
4. Sharad Kumar Sanghi Vs Sangita Rane, 2015
0 Supreme (SC) 177

5. Sushil Sethi & anr. Vs The St. of A.P. & ors.,
2020 0 Supreme (SC) 100

6. Hindustan Unilever Ltd. Vs The St. of M. P.,
2021 (218) AIC 246

7. Gurucharan Singh Vs Kamla Singh & ors.,
1977 AIR, 5

8. G.M. Contractor Vs Gujarat Electricity Board,
1972 AIR (SC) 792

9. Rajendra Shankar Shukla & ors. Vs St. of
Chhatisgarh & ors., (2015) 10 SCC 400

(Delivered by Hon'ble Neeraj Tiwari, J.)

1. Heard Sri V.P. Srivastava, learned
Senior Counsel, assisted by Sri Harish
Chandra Mishra, learned counsel for the
revisionist and Sri Sanjay Sharma and Ajay
Kumar Pathak, learned A.G.A. for the
State.

2. Present revision has been filed
against the order dated 16.05.1988 passed
by
Munsif
Magistrate
(Economic
Offences), Bijnor in Criminal Case No.
1578 of 1986 directing for framing of
charges against revisionist under Section
7/16 of Prevention of Food Adulteration
Act,1954 (hereinafter referred to as the Act,
1954).

3. Brief facts of the case is that
revisionist was working as Deputy Sales
Manager
D.C.M.
Chemical
Works,
Najafgarh Road, New Delhi-10005, (Later
on known as Shri Ram Foods and Fertilizer
Industries, Shivaji Marg, New Delhi),
Branch Delhi Cloth Mills Ltd. (hereinafter
referred to as the "Company"). A raid was
conducted by Food Inspector at the shop of
Babu Singh. He has purchased Rath
vegetable oil weighing 1500 grams/1.5
kilograms after payment of Rs. 27/- by
adopting due procedure of law. Rath
Vegetable
oil
was
manufactured
by
"Company". He has sent Rath vegetable oil
to Public Analyst U.P., Lucknow for
chemical examination and as per report no.
2588 dated 24.02.1984, same was found
adulterated. Thereafter, he has lodged
Complaint before the Special Judicial
Magistrate (Crime), Bijnor under the
provisions of the Act, 1954. Order dated
16.05.1988 was passed for framing charges
against revisionist and revisionist filed
discharge application under Section 245(2)
Cr.P.C. dated 19.01.1988. Apart from many
other grounds, he has also taken ground
that provisions of Section 17 of the Act,
1954 has not been complied with as
"Company" was not made the accused. The
said discharge application was rejected by
the
Court
below
vide
order
dated
16.05.2018, hence the present revision.

4. Sri V.P. Srivastava, learned Senior
Counsel for the revisionist submitted that
present revision has been filed on many
grounds, but he is pressing only ground no.
5 i.e. while filing the Complaint, Section 17
of the Act, 1954 has been violated as the
"Company" has not been made an accused
and mandatory provision under Section 17
(1) (b) of the Act, 1954 has been violated.
Section 17(1)(a) of the Act, 1954 provides
for nomination of a person and Section
17(1)(b) provides liability upon Company,
therefore, Section 17(1) (a) and (b) of the
Act, 1954 requires that the nominated
person and the Company must be made an
accused. It is further submitted that Section
17(1) (a) of the Act, 1954 provides that
there should have been nomination of
person for the conduct of the business of
the Company and when no person is
nominated, every person who at the time
8 All. S.P. Mathur Vs. Sri R.P. Sharma & Anr.
559
the offence was committed was in charge
of, be responsible for the conduct of
business of the Company. Further Section
17(1)(b)
provides
that
the
Company
responsible for offence and further made
clear that in case of offence persons
referred in Section 17(1) (a), they shall be
liable to be guilty. It is next submitted that
Section 17 (2) provides that any Company
may, by order in writing, authorize any of
its directors or managers (such manager
being employed mainly in a managerial or
supervisory capacity) to exercise all such
powers and take all such steps as may be
necessary or expedient to prevent the
commission of offence by Company by this
Act and may give notice to the Local
(Health) Authority, in such form and in
such manner as may be prescribed, that it
has nominated such director or manager as
the person responsible, alongwith the
written consent of such director or manager
for being so nominated.

5. In the present case, revisionist
was never nominated in terms of Section
17(1) and (2) of the Act, 1954 and
"Company" has also not been made
accused, therefore, Complaint is bad and
impugned order is liable to be set aside.

6. It is next submitted that while
rejecting the discharge application dated
19.01.1988,
learned
Judge
has
not
returned proper finding and stated that
the said provision is directory, which
according to Section 17 of the Act, 1954
is incorrect as it is mandatory. Therefore,
it
is
necessarily
required
for
the
Complainant to make "Company" as
accused and also mention this fact in the
Complaint
filed
before
the
Special
Judicial
Magistrate
(Crime),
Bijnor,
which is missing and not considered by
the Court below.

7. In support of his contention,
learned Senior Counsel for the revisionist
has placed reliance upon the judgments of
Apex Court and this Court in the cases of
B.K. Varma Vs. Corporation of Madras,
1971 CRI. L.J. 60 (Vol. 77 C. N.15), N.N.
Mukerjee and others Vs. The State of U.P.
and
another,
passed
in
Criminal
Reference No. 645 of 1974 decided on
16.2.1979, The State Vs. R. P. Mehta,
1982 CRI. L. J. NOC 159 (ALL.), Sharad
Kumar Sanghi Vs. Sangita Rane, 2015 0
Supreme (SC) 177, Sushil Sethi and
another Vs. The State of Arunachal
Pradesh and others, 2020 0 Supreme (SC)
100 and Hindustan Unilever Limited Vs.
The State of Madhya Pradesh, 2021 (218)
AIC
246
and
submitted
that
once
"Company" has not been made accused,
impugned order is bad and liable to be set
aside.

8. Sri Sanjay Sharma, learned A.G.A.
opposed the submissions made by learned
Senior Counsel for the revisionist and
submitted that in discharge application
revisionist has never taken this ground that
revisionist is not the nominee as provided
in Section 17(1) and (2) of the Act, 1954,
but in the present revision, he accepted this
fact that he is nominee of the "Company"
and revision has been filed by him as S.P.
Mathur, nominee, D.C.M. Chemical Works
Nazaf Road, New Delhi, later on known as
Shri Ram Food and Fertilizers Industry ,
Shiva Ji Marg, New Delhi. Not only this,
even in the impugned order in the first line,
he was shown as nominee of the
"Company", which is not disputed by
learned counsel for the revisionist even
before this Court. It is further submitted
that Section 17(1) of the Act, 1954 clearly
provides that in case there is nominee, by
making him accused, proceeding may be
initiated and learned Judge, while rejecting
560 INDIAN LAW REPORTS ALLAHABAD SERIES
the
discharge
application,
has
given
specific finding that as provided in Section
17 of the Act, 1954 for prosecution,
"Company" or his nominee can be made
accused. It is not required to implead
"Company" also as accused. He further
submitted that in case not impleading
"Company" as accused of offence, there
would be no effect upon trial of the
prosecution case. So far as the word used
directory is concerned, once the finding is
given by the court that revisionist is
nominee that would have no effect as the
learned
Judge
has
not
ignored
the
provisions of Section 17 of the Act, 1954.

9. It is next submitted that new legal
submissions made by learned Senior
Counsel for the revisionist is not applicable
in the case of the revisionist as first of all,
he should dispute his nomination for
"Company", but he never raised objection
before the Court below or even before the
High Court. In contrary to that, he accepted
this fact that he is nominee of the
"Company". It is also submitted that once
the revisionist has accepted that he is
nominee of the "Company", Section 17 of
the Act, 1954 has been complied with.
Further, he has never pressed or argued this
ground that Section 17(1)(b) has not been
complied with. Therefore, in the impugned
order there is no illegality or perversity and
the revision is liable to be dismissed.

10. Sri V.P. Srivastava, learned
Senior Counsel in rejoinder argument
submitted that though revisionist has not
taken ground that he is not the nominee of
the "Company", but he has taken specific
ground in paragraph 3 of the discharge
application dated 19.01.1988 moved under
Section 245 (2) Cr.P.C. that Sri Ram Food
and Fertilizer Industry is "Company" and
provisions of Section 17 of the Act, 1954 is
applicable in the present case. Perusal of
Section 17(a)(b) of the Act would show
that in case of prosecution, "Company" is
pre-requisite condition and if "Company" is
not arrayed as accused, prosecution of the
"Company" is bad in law. He further
submitted that in case it is admitted by the
revisionist that he is nominee of the
"Company", even though it is statutory
requirement on the part of Complainant to
make "Company" accused. Even in case, if
this plea has not been taken in discharge
application, its a legal plea can be taken at
any stage of legal proceeding and there is
no bar under the law.

11. In support of his contention,
learned Senior Counsel for the revisionist
has placed reliance upon the judgments of
Apex Court in the cases of Gurucharan
Singh Vs. Kamla Singh and others, 1977
AIR, 5, G.M. Contractor Vs. Gujarat
Electricity Board, 1972 AIR (SC) 792 and
Rajendra Shankar Shukla and others Vs.
State of Chhatisgarh and others, (2015) 10
Supreme Court Cases 400.

12. I have considered the rival
submissions made by learned counsel for
the parties and perused the paper book and
other relevant documents as well as
judgments relied upon by learned counsel
for the parties.

13. From perusal of the record, there
is no dispute that Complaint was filed
against the revisionist under Section 7/16
of the Act, 1954 and also "Company" is
manufacturer
of
Rath
Vanaspati.
Revisionist was made accused in the
capacity
of
Sales
Manager
D.C.M.
Chemicals Firm, Najafgarh Road, New
Delhi. Once proceeding has been initiated
under Section 7/16 and Section 17 of the
Act, 1954 revisionist in the capacity of
8 All. S.P. Mathur Vs. Sri R.P. Sharma & Anr.
561
Sales Manager of the "Company" has been
made accused, there is no occasion for the
Complainant to done away with other
provisions of Section 17 of the Act, 1954
including accusation of "Company".

14. Section 17 of the Act, 1954 deals
with the offence of the Company which is
quoted below:-

"[17. Offences by companies.--(1)
Where an offence under this Act has been
committed by a company -

(a) (i) the person, if any, who has
been nominated under sub-section (2) to be
in charge of, and responsible to, the
company for the conduct of the business of
the company (hereafter in this section
referred to as the person responsible), or

(ii) where no person has been so
nominated, every person who at the time
the offence was committed was in charge
of, and was responsible to, the company for
the conduct of the business of the company;
and (b) 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
provided in this Act if he proves that the
offence
was
committed
without
his
knowledge and that he exercised all due
diligence to prevent the commission of such
offence.

(2) Any company may, by order
in writing, authorise any of its directors or
managers (such manager being employed
mainly in a managerial or supervisory
capacity) to exercise all such powers and
take all such steps as may be necessary or
expedient to prevent the commission by the
company of any offence under this Act and
may give notice to the Local (Health)
Authority, in such form and in such manner
as may be prescribed, that it has nominated
such director or manager as the person
responsible, along with the written consent
of such director or manager for being so
nominated.
Explanation.--Where
a
company has different establishments or
branches
or
different
units
in
any
establishment or branch, different persons
may be nominated under this sub-section in
relation to different establishments or
branches
or
units
and
the
person
nominated in relation to any establishment,
branch or unit shall be deemed to be the
person responsible in respect of such
establishment, branch or unit.

(3) The person nominated under
sub-section (2) shall, until-

(i) further notice cancelling such
nomination is received from the company
by the Local (Health) Authority; or

(ii) he ceases to be a director or,
as the case may be, manager of the
company; or

(iii) he makes a request in writing
to the Local (Health) Authority, under
intimation to the company, to cancel the
nomination
[which
request
shall
be
complied with by the Local (Health)
Authority], whichever is the earliest,
continue to be the person responsible:
Provided that where such person ceases to
be a director or, as the case may be,
manager of the company, he shall intimate
the fact of such cesser to the Local (Health)
Authority: Provided further that where
such person makes a request under clause
(iii), the Local (Health) Authority shall not
cancel such nomination with effect from a
562 INDIAN LAW REPORTS ALLAHABAD SERIES
date earlier than the date on which the
request is made.

(4)
Notwithstanding
anything
contained in the foregoing sub-sections,
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 [not being a person
nominated under sub-section (2)] 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
purposes of this section-

(a) "Company" means any body
corporate and includes a firm or other
association of individuals;

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

(c) "manager", in relation to a
company
engaged
in
hotel
industry,
includes the person in charge of the
catering department of any hotel managed
or run by it.]"

15. Section 17(1)(b) clearly provides
that the "Company", shall be deemed to be
guilty of the offence and shall be liable to
be
proceeded
against
and
punished
accordingly. Therefore, in case, it is
admitted by revisionist that he is nominee
of the "Company" under the provisions of
Section 17(1)(a) of the Act, 1954, even
though it is required on the part of the
Complainant to make "Company" accused
as provided under Section 17(1)(b) of the
Act, 1954. Therefore in light of provisions
of Section 17 (1)(b) of the Act, "Company"
is necessary party and no Complaint can be
maintained without impleading "Company"
as accused.

16. This issue was considered by the
Apex Court and this High Court in different
cases.

17. In the matter of B.K. Varma
(supra), very similar matter came up before
the Court and the Court has held that
Complaint must have been filed against the
"Company" and then against the person
against whom they could proceed under
Section 17 (1) and (2) of the Act, 1954.
Finally Court allowed the revision in
favour of the revisionist. Paragraph 4 of the
said judgment is quoted below:-

"4. It is, therefore, clear from Sec.
17, that under clause (1) if the offence was
committed by the Company, the Company as
well as the person who at the time the offence
was committed was in charge of, and was
responsible to, the company for the conduct
of the business of the Company, and under
clause (2) if the offence was committed with
the consent or connivance of, or was
attributable to any neglect on the part of, any
director, manager, secretary or other officer
of the Company, such persons mentioned
therein shall be liable to be proceeded
against and punished. The prosecution,
therefore, must have filed a complaint,
against the Company first and then against
the persons against whom they could proceed
under Section 17(1) and (2) of the Act. It is,
therefore, clear from the complaint itself that
the revision petitioner has been prosecuted
not in his individual capacity as a vendor but
in the capacity of a person employed by the
firm as the Plant Superintendent.

"There is nothing on record to
show, as suggested by the learned counsel
8 All. S.P. Mathur Vs. Sri R.P. Sharma & Anr.
563
for
the
petitioner,
that
the
Plant
Superintendent was a person responsible or
in charge of or responsible to the
manufacture or sale of Coca-Cola. In this
statement under Section 342, Crl. P. C. the
petitioner
stated
that
he
was
only
responsible for the bottling of the liquid
and for nothing else. In this circumstance,
it
is
doubtful
whether
the
revision
petitioner was in charge of the firm in
respect of the manufacture or sale of CocaCola. He will however, be entitled to the
benefit of doubt. Apart from this, I am of
the view that this is a case where Section
95 I.P.C., can be applied, taking into
consideration
nature
of
the
offence
committed Sec. 95 I.P.C. reads thus:

"Nothing is an offence by reason
that it cause or that it is intended to cause
or that it is known to be likely to cause, any
harm, if that harm, is so slight that no
person of ordinary sense and temper would
complain of such a harm.''

18. In the case of N.N. Mukerjee
(supra), the Court has held that Company
is required to be impleaded. Paragraph 3 of
the said judgment is quoted below:-

"3. I have carefully perused the
complaint, which was filed as for back as 8th
November, 73. I do not find any allegation
herein whether the accused apart from Shri
Prem Chandra Jaiswal were persons, who
were incharge of or responsible for the
conduct of the business of the Company, or
whether the offence in question was
committed with the consent or connivance of
these officers. I also find that the Company
has not been impleaded as a party. The
Sessions Judge, Allahabad has in fact
recommended the removal of the infirmities
in the complaint after quashing the order of
the Magistrate issuing process. I do not think
such an action would be justified in the
interest of justice, particularly when a long
period of six years has already elapsed, since
the offence is alleged to have Been
committed. The order passed by the
Magistrate taking cognizance was an illegal
order. The failure of the complainant to
implead the company is the vital defect. The
allegations against the other co-accused are
wanting requisite particulars. In these
circumstances, I consider that while the
recommendation of the Sessions Judge for
quashing the order of the Magistrate should
be accepted, the entire proceedings under
section 7/16 of the Prevention of Food
Adulteration Act should be quashed."

19. Lucknow Bench of this Court in the
case of The State Vs. R.P. Mehta (supra) has
given clear cut finding that the prosecution of
the Company is a pre-condition. The relevant
paragraph of the said judgment is quoted
below:-

"Where a sample of ice candy
found to be adulterated by prohibited
saccharin was taken for inspection from the
manufacturing firm before it reached the
sale-section the prosecution of the partner in
charge before whom the sample was taken,
without making the firm a party, was illegal.
A partnership firm is included in the
definition of a company as per explanation
attached to Sec. 17 (4) of the Act. The
prosecution of the company is a precondition before the partner also could be
convicted irrespective of whether he is in
charge of the company firm or not, especially
where the produce, when the sample was
taken, was not on sale thus ruling out the
prosecution of the partner as its "vendor".

20. The Apex Court in the case of
Sharad Kumar Sanghi (supra) after
considering the matter given specific
564 INDIAN LAW REPORTS ALLAHABAD SERIES
finding that if the Company has not been
arrayed as accused, no order could have
been passed. Paragraphs 13 and 14 of the
said judgment are quoted below:-

"13. When the company has not
been arraigned as an accused, such an
order could not have been passed. We have
said so for the sake of completeness. In the
ultimate analysis, we are of the considered
opinion that the High Court should have
been well advised to quash the criminal
proceedings initiated against the appellant
and that having not been done, the order is
sensitively vulnerable and accordingly we
set aside the same and quash the criminal
proceedings initiated by the respondent
against the appellant.

14. The appeal stands allowed
accordingly."

21. The Apex Court in the case of
Sushil Sethi and another (supra) was of
the opinion that main allegation can be said
to be against the Company, but Company
has not been made party. In that case
impugned
criminal
proceedings
are
required to be quashed. Paragraph 8.2 of
the said judgment is quoted below:-

"8.2. It is also required to be
noted that the main allegations can be said
to be against the company. The company
has not been made a party. The allegations
are restricted to the Managing Director
and
the
Director
of
the
company
respectively.
There
are
no
specific
allegations against the Managing Director
or even the Director. There are no
allegations to constitute the vicarious
liability. In the case of Maksun Saiyed v.
State of Gujarat (2008) 5 SCC 668, it is
observed and held by this Court that the
penal code does not contain any provision
for attaching vicarious liability on the part
of the Managing Director or the Directors
of the company when the accused is the
company. It is further observed and held
that the vicarious liability of the Managing
Director
and
Director
would
arise
provided any provision exists in that behalf
in the statute. It is further observed that
statute indisputably must contain provision
fixing such vicarious liabilities. It is further
observed that even for the said purpose, it
is obligatory on the part of the complainant
to make requisite allegations which would
attract the provisions constituting vicarious
liability. In the present case, there are no
such specific allegations against the
appellants being Managing Director or the
Director of the company respectively.
Under
the
circumstances
also,
the
impugned
criminal
proceedings
are
required to be quashed and set aside".

22. Similar issue again came up
before the Apex Court in the case of
Hindustan
Unilever
Limited
(supra).
Paragraph 22 of the said judgment is
quoted below:-

"22. Clause (a) of Sub-Section (1)
of Section 17 of the Act makes the person
nominated to be in charge of and
responsible to the company for the conduct
of business and the company shall be guilty
of the offences under clause (b) of SubSection (1) of Section 17 of the Act.
Therefore, there is no material distinction
between Section 141 of the NI Act and
Section 17 of the Act which makes the
Company as well as the Nominated Person
to be held guilty of the offences and/or
liable to be proceeded and punished
accordingly. Clauses (a) and (b) are not in
the alternative but conjoint. Therefore, in
the
absence
of
the
Company,
the
Nominated Person cannot be convicted or
8 All. S.P. Mathur Vs. Sri R.P. Sharma & Anr.
565
vice versa. Since the Company was not
convicted by the trial court, we find that the
finding of the High Court to revisit the
judgment
will
be
unfair
to
the
appellant/Nominated Person who has been
facing trial for more than last 30 years.
Therefore, the order of remand to the trial
court to fill up the lacuna is not a fair
option exercised by the High Court as the
failure of the trial court to convict the
Company renders the entire conviction of
the Nominated Person as unsustainable".

23. From the perusal of the aforesaid
judgments, it is crystal clear that for
maintaining the Complaint under Section
7/16 of the Act, 1954, "Company" is
necessary party and no Complaint is
maintainable until "Company" is made
party.

24. So far as second issue with regard
to raising new legal plea at this stage is
concerned, this issue has came up before
the Apex Court in a catena of decisions.

25. Apex Court in the case of
Gurucharan Singh (supra) has held that a
pure question of law going to the root of
the case and based on undisputed or proven
facts could be raised even before the Court
of last resort. Paragraphs 8 and 9 of the said
judgment are quoted below:-

"8. Before we examine this
quintessential aspect presented before us
will complex scholarship by Shri S. C.
Misra we Had better make. short shrift of
certain other questions raised by him. He
has desired ` us, by way of preliminary
objection, not to give quarter to the plea,
founded on s. 6 of the Act, to non-suit his
client, since it was a point raised be nova
at Letters Patent state. The High Court
have thought to this objection but overruled
it, if we may say so rightly. The Court
narrated the twists and turns of factual and
legal circumstances which served lo
extenuate the omission to urge the point
earlier but hit the nail on the head when it
held that it was well-settled that a pure
question of law going to the root of the case
and based on undisputed or proven facts
could be raised even before the Court of
last resort, provided the opposite side was
not taken by surprise or otherwise unfairly
prejudiced. Lord Watson, in Connecticut
Fire Insurance Company v. Kavanach,(1)
stated the law thus:

"9. When a question of law is
raised for the first time in a Court of last
resort upon the construction of a document
or upon facts either admitted or proved
beyond
controversy,
it
is
not
only
competent but expedient in the interest of
justice
to
entertain
the
plea.
The
expediency of adopting that course may be
doubted when the plea cannot be disposed
of without deciding nice questions of fact in
considering which the Court of ultimate
review
is
placed
in
a
much
less
advantageous position than the courts
below. But their Lordships have no
hesitation in holding that the course ought
not any case to be followed unless the
Court is satisfied that the evidence upon
which they are asked to decide establishes
beyond doubt that the facts if fully
investigated would have supported the new
plea." (1) [1892] A. C. 473, 480.

17-L925SupCI /75 We agree with
the High Court that the new plea springs
from the common case of the parties, and
nothing which may work injustice by
allowance of this contention at the late
stage of the Letters Patent Appeal has been
made out to our satisfaction. Therefore, we
proceed to consider the impact and
566 INDIAN LAW REPORTS ALLAHABAD SERIES
applicability of s.6 of the Act to the
circumstances of the present case."

26. In the case of G.M. Contractor
(supra), Apex Court has taken the same
view. Paragraph 2 of the said judgment is
quoted below:-

"It is stated that this ground goes
to the very root of the matter but was not
raised
before
the
High Court.
The
appellants objected to this fresh ground
being allowed to be taken up, but we
consider that as this ground goes to very
root of the matter it should be allowed after
the appellants are compensated by costs."

27. In the case of Rajendra Shankar
Shukla and others (supra), this issue was
again came before Apex Court and after
considering the judgments of the Privy
Council as well as Apex Court, the Court
has taken the same view that legal plea can
be raised at any stage of proceeding even
before the Court of last resort. Paragraphs
28, 29, 30, and 31 of the said judgment are
quoted below:-

"28. We are not able to agree
with the contention of the respondent that a
ground raised before this Court for the first
time is not maintainable because it has
been raised before us for the first time and
has not been raised before the courts
below. Though the said legal plea is raised
for the first time in these proceedings, the
learned senior counsel on behalf of the
appellants
placed
reliance
upon
the
judgment
of
the
Privy
Council
In
Connecticut
Fire
Insurance
Co.
v.
Kavanagh wherein, Lord Watson has
observed as under: (AC p.480)

"....when a question of law is
raised for the first time in a court of last
resort,
upon
the
construction
of
a
document, or upon facts either admitted or
proved beyond controversy, it is not only
competent but expedient, in the interests of
justice, to entertain the plea."

The aforesaid views of the Court
of Appeal have been relied upon by this
Court in Gurcharan Singh v. Kamla Singh.

29. The above mentioned aspect
of Article 243ZD, although is being raised
before this Court for the first time, we are
of the view that the same is based on
admitted facts. The legal submission made
on behalf of the appellants under Article
243ZD of the Constitution has to be
accepted by this Court in view of the
similar view that a new ground raising a
pure question of law can be raised at any
stage before this Court as laid down by this
Court in V.L.S. Finance Limited v. Union of
India & Ors. which reads thus :- (SCC p.
281 para 7)

"7. Mr Shankaranarayanan has
taken an extreme stand before this Court
and contends that the Company Law Board
has no jurisdiction to compound an offence
punishable under Section 211(7) of the Act
as
the
punishment
provided
is
imprisonment also. Mr Bhushan, however,
submits that imprisonment is not a
mandatory
punishment
under
Section
211(7) of the Act and, hence, the Company
Law Board has the authority to compound
the same. He also points out that this
submission was not at all advanced before
the Company Law Board and, therefore,
the appellant cannot be permitted to raise
this question for the first time before this
Court. We are not in agreement with Mr
Bhushan in regard to his plea that this
question cannot be gone into by this Court
at the first instance. In our opinion, in a
8 All. S.P. Mathur Vs. Sri R.P. Sharma & Anr.
567
case in which the facts pleaded give rise to
a pure question of law going to the root of
the matter, this Court possesses discretion
to go into that. The position would have
been different had the appellant for the first
time
prayed
before
this
Court
for
adjudication on an issue of fact and then to
apply the law and hold that the Company
Law
Board
had
no
jurisdiction
to
compound the offence."

30 Further, this Court in Greater
Mohali Area Development Authority &
Ors. v. Manju Jain & Ors held as under :-
(SCC pp. 164-65, paras 26-27)

"26. Respondent 1 raised the plea
of non-receipt of the letter of allotment first
time before the High Court. Even if it is
assumed that it is correct, the question does
arise as to whether such a new plea on facts
could be agitated before the writ court. It is
settled legal proposition that pure question of
law can be raised at any time of the
proceedings but a question of fact which
requires investigation and inquiry, and for
which no factual foundation has been laid by
a party before the court or tribunal below,
cannot be allowed to be agitated in the writ
petition. If the writ court for some compelling
circumstances desires to entertain a new
factual plea the court must give due
opportunity
to
the opposite
party
to
controvert the same and adduce the evidence
to substantiate its pleadings. Thus, it is not
permissible for the High Court to consider a
new case on facts or mixed question of fact
and law which was not the case of the parties
before the court or tribunal below. [Vide
State of U.P. v. Dr. Anupam Gupta, Ram
Kumar Agarwal v. Thawar Das, Vasantha
Viswanathan v. V.K. Elayalwar, Anup Kumar
Kundu v. Sudip Charan Chakraborty,
Tirupati Jute Industris (P) Ltd. v. State of
W.B. and Sanghvi Reconditioners (P) Ltd. v.
Union of India.]

27. In the instant case, as the new
plea on fact has been raised first time
before the High Court it could not have
been entertained, particularly in the
manner the High Court has dealt with as
no opportunity of controverting the same
had been given to the appellants. More so,
the High Court, instead of examining the
case in the correct perspective, proceeded
in
haste,
which
itself
amounts
to
arbitrariness. (Vide Fuljit Kaur v. State of
Punjab.)"

31.
In
National
Textile
Corporation
Ltd.
v.
Naresh
Kumar
Badrikumar Jugad, it was held as under:-
(SCCp.706, para 19)

"19. There is no quarrel with the
settled legal proposition that a new plea
cannot be taken in respect of any factual
controversy whatsoever, however, a new
ground raising a pure legal issue for which
no inquiry/proof is required can be
permitted to be raised by the court at any
stage of the proceedings. [See Sanghvi
Reconditioners (P) Ltd. v. Union of India
and Greater Mohali Area Development
Authority v. Manju Jain.]"

28. In light of judgments of Apex Court
discussed hereinabove, answer of the second
issue is that non compliance of Section
17(1)(b) of the Act, 1954 is pure legal issue
going to the root of the case based on
undisputed and proven facts and can be raised
at any stage of legal proceeding. It is further
held that pure question of law or legal issue
based on undisputed or proven facts can be
raised at any stage even before the Court of
last resort.
568 INDIAN LAW REPORTS ALLAHABAD SERIES

29. I have perused the Complaint
dated
19.01.1988.
In
the
Complaint
revisionist has been made accused only for
the reason that he was Sales Manager of the
"Company" and there is no allegation
against him which clearly shows that he
was made party only following the
provisions of Section 17(1) of the Act,
1954, therefore, it is also required for the
Complainant to make "Company" accused
following
the
provisions
of
Section
17(1)(b) of the Act, 1954. In paragraph 3 of
the discharge application, revisionist had
taken specific ground that prosecution of
the "Company" is the prerequisite condition
and if the "Company" is not arrayed as an
accused, the prosecution would be bad in
law and vitiates the entire trial. In discharge
application, there is also reference of cases
1979 FACI 251 (All), 1971 Cr.L.J. 60
(Madras) and 1982 Cr.L.J. 159 (N.O.C.)
supporting the case of revisionist.

30.

In
discharge
application,
undisputedly this ground as well as
judgments
were
referred,
but
not
considered by the Magistrate only for the
reason that this ground has not been argued
and no written submission has been filed,
which is bad in practice as it goes to the
root of the case. In fact, Magistrate was
required to consider this ground taken i.e.
compliance of Section 17(1)(b) of the Act,
1954 as well as judgments referred before
deciding the discharge application, even if
it has not been argued before him. It was
very fundamental issue and Complaint may
be rejected alone on the ground for non
compliance of Section 17(1)(b) of the Act,
1954, but the learned Magistrate is done
away with his duty and rejected the
discharge application.

31. In light of the discussions made
hereinabove as well as judgments relied
upon, it is held that in light of Section
17(1)(b) of the Act, 1954, "Company" is
necessary party and no Complaint under
Section 7/16 of the Act, 1954 can be
maintained or order can be passed against
the revisionist without impleading the
"Company"
as
accused.
Therefore,
Complaint dated 22.08.1984 filed under
Section 7/16 of the Act, 1954 as well as
impugned order dated 16.05.1988 is not
sustainable.

32. In usual course after allowing the
revision, it is required that matter be
remanded for fresh decision, but in the
present case Complaint was filed on
22.08.1984, discharge application was filed
on 19.01.1988 and impugned order was
passed on 16.05.1988. The revision was
filed in the year 1988, now more than 33
years have been passed and at the time of
filing of revision, age of the revisionist was
50 years (As per record his date of birth is
01.01.1934). Now as on date, age of the
revisionist would be about 87 years.

33. Similar issue was also raised
before the Supreme Court in the matter of
Sushil Sethi and another (supra) and the
Court has held as follows:-

"8.3. At this stage, it is required
to be noted that though the FIR was filed in
the year 2000 and the charge sheet was
submitted/filed as far back as on 28.5.2004,
the appellants were served with the
summons only in the year 2017, i.e., after a
period of approximately 13 years from the
date of filing the charge sheet. Under the
circumstances,
the
High
Court
has
committed a grave error in not quashing
and setting aside the impugned criminal
proceedings
and
has
erred
in
not
exercising the jurisdiction vested in it
under
Section
482
Cr.P.C."
8 All. Jagdish Yadav Vs. State of U.P. & Ors.
569

34.