R BANERJEE Vs. H D DOBEY

JUDGEMENT

(1.) -special leave granted.

(2.) The short question which arises for determination in these appeals is whether it was permissible to launch a prosecution under sub-section (1) of section 17 of the Prevention of Food Adulteration Act, 1954 (hereinafter called the 'the Act') against the Directors and Managers of public limited companies, namely, M/s Lipton India Limited and M/s Hindustan Lever limited, for the commission of the alleged offence punishable under the aforesaid provision notwithstanding the nomination made by the said companies as required by sub-section (2) of Section 17 of the act. In order to appreciate the contention raised on behalf of the appellants it is necessary to notice a few provisions of the Act. Section 7 of the Act inter alia provides that no person shall himself or by any person on his behalf manufacture for sale, or store, sell or distribute any adulterated food or any mis-branded food or any atticle of food in contravention of the provisions of the Act and the rules made thereunder. Section 16 prescribes penalties for contravention of various provisions of the Act. It lays down that if any person whether by himself or by any person on his behalf, manufactures for sale, or stores, sells or distributes any article of food which is adulterated or misbranded or the sale of which is prohibited under any provision of the Act or any rule made thereunder or by an order of the Food (Health) Authority, he shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years, and with fine which shall not be less than one thousand rupees. Then comes section 17, the relevant part whereof may be reproduced :"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 (hereinafter in this lection 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 effence 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,"sub-section (4) which begins with a non-obstante clause next provides that 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.

(3.) Section 23 of the Act empowers the Central Government to make rules. In exercise of the said power the Central Government hag framed rules Known as the Prevention of Food Adulteration Rules, 1955 (hereinafter called 'the Rules'). Rule 12-B with which we are concerned reads as under :"12-B. Form of nomination of Director or Manager and his consent, under Section 17.- (1) A company may inform the Local (Health) Authority of the concerned local area, by notice in duplicate, in form VIII, containing the name and address of the Director or manager, who has been nominated by it under sub-section (2) of section 17 of the Act to be in charge of, and responsible to, the company for the conduct of the business of the company or any establishment, branch or unit thereof: provided that no such nomination shall be valid unless the Director or Manager who has been so nominated, gives his consent in writing and has affixed his signature, in Form VIII, in duplicate in token of such consent. (2) The Local (Health) Authority shall sign and return one copy of the notice in Form VIII, to the company to signify the receipt of the nomination and retain the second copy in his office for record. "form VIII, is in three parts. The first part is in the nature of a notice that the company has by a resolution passed at its meeting nominated its named director/manager to be in charge of, and responsible to, the company for the conduct of the business of the said company or establishment/branch/ unit thereof. A certified copy of the resolution has to be sent along with the form. This part must be signed by the Managing Director/secretary of the company. The second part relates to the acceptance of the nomination and must be signed by the nominated Director/manager. The third part has to be signed by the Local (Health) Authority acknowledging the receipt of the nomination.