SUSHMA MEHROTRA Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an application under section 482 Cr. P.C. for quashing the criminal proceedings launched against the applicant Shrimati Sushma Mehrotra in pursuance of a complaint filed by opposite party no. 1, on the ground that the applicant was Director of a Company incorporated under the Indian Companies Act known as Messra Tractor Auto Industries private limited and that she had evaded payment of excise duty under the excise Act. It has been alleged in the complaint that she being a manufacturer under rule 225 of the Rules framed under the Excise Act, she was liable for prosecution along with other Directors of the company.

(2.) I have heard the learned counsel for the applicant who has argued that Shrimati Sushma Mehrotra was neither the Managing Director of the company nor was responsible for payment of excise duty and thus she could not be prosecuted for nonpayment of excise duty as alleged in the complaint. It was also urged that she could not be held to be a manufacturer under Rule 227 of the Rules framed under the Excise Act as Messrs Tractor Auto incorporated under the Indian companies Act is a juriselic person, it is this Company which alone would be deemed to be manufacturer of the goods produced by it.

(3.) Learned counsel for the respondents Sri Ashok Mohiley has, however, urged that in view of the provisions of Rule 221 and Rule 226 of the Rules framed under the Excise Act, Shrimati Sushma Mehrotra being one of the Directors of the Company was liable for prosecution and has rightly been named as an accused in the complaint. Reliance has been placed on a decision given by the Bombay High Court in the case of Garda Chemicals Private Limited and 3 others v. Sri. R. Parthasarthy, Assistant Collector Central Excise and another. Having heard the arguments of the learned counsel at some length and also having looked into the various documents filed in this application, I am of the opinion that even if the averments made in the complaint are taken to be true. The criminal proceedings launched against the applicant Shrimati Sushma Mehrotra are mis-conceived as she can neither be termed to be a manufacturer nor a person who is liable for payment of the excise duty. It may also be mentioned that there is no averment in the complaint that she was the person who was responsible for either the affairs of the company or that the excisable goods were being removed through her. Statement of the husband of the applicant Shrimati Sushma Mehrotra has been recorded and has been filed. A perusal of the aforesaid statement clearly shows that it is R.C. Mehrotra and B.C. Mehrotra, who are, in fact, carrying on the activity of manufacturing the containers. The statement even shows that they have formed a partnership which is manufacturing the main parts of the containers. Without impressing any opinion on the merits of the case, from the averments made in the complaint and also from the other material existing on the record it can not be said that Shrimati Sushma Mehrotra could either be termed as manufacturer or a person liable to pay excise duty being in-charge of the company. The case relied upon by the learned counsel appearing for the Union of India in the case of Garda Chemicals Private Limited (supra), in my opinion, instead of helping the opposite party goes against him. In the aforesaid case the charges against the other persons were quashed on the ground that they were not responsible for the payment of excise duty and were not in-charge of the affairs of the Company. Only the Managing Director of the Company was held liable to be criminally prosecuted on the ground that he was in-charge of the affairs of the company and was also liable to pay excise duty. On the same partly in this case also there is absolutely no averment in the complaint or there is not even an iota of evidence to suggest that Shrimati Sushma Mehrotra was either in-charge of the affairs of the company or was liable to pay excise duty.