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HIGH COURT OF MADHYA PRADESH, JABALPUR
BENCH INDORE
( Single Bench )
( Hon'ble Shri Justice Jarat Kumar Jain )
M.Cr.C. No.10100 of 2015
Sanjeev Jain
VERSUS
M.P.Pollution Control Board and 3 others
*****
M.Cr.C. No.10104 of 2015
Mahesh Mittal
VERSUS
M.P.Pollution Control Board and 3 others
&
M.Cr.C. No.10106 of 2015
Shobhna Mittal
VERSUS
M.P.Pollution Control Board and 4 others
*****
Shri Vivek Dalal, learned counsel for the applicants.
Mrs. Preeti Waghmare, learned counsel for the Non-applicant
No.1.
*****
O R D E R
( Passed on this th day of January, 2017 ) THIS order shall govern the disposal of M.Cr.C. No.10100/2015, M.Cr.C. No.10104/2015 and M.Cr.C. No.10106/2015.
[2] Applicants have filed these petitions under Section 482 of Cr.P.C. for quashment of the order dated 05.01.2015 passed by the Chief Judicial Magistrate, Dewas in Criminal Case No.168/2015 on 05.01.2015, whereby took cognizance against the applicants under Sections 44 and 47 of the Water (Prevention and Control of Pollution) Act, 1974 [in brief "the Act"]. [3] Brief facts of this case are that non-applicant No.1 filed a private complaint under Sections 44 and 47 the Act stating that as per the report by the State Board Analyst the company has caused water pollution on account of the fact that treated factory effluent at outlet of effluent treatment plant before reuse in plantation was found to be contaminated. Thus, Company and its Directors have committed offence under Section 44 and 47 of the Act, 1974. On this basis learned Chief Judicial Magistrate, Dewas vide order dated 05.01.2015 took cognizance against the company and its Directors including the applicants. The applicants have filed these petitions on the ground that there is no averment in the complaint as to how the applicants are connected with the offence. No specific role has been assigned to the applicants except a bald statement that the applicants are the Director of the company, hence, the order of taking cognizance against the applicants for the aforesaid offence be set aside.
[4] Non-applicant No.1 has filed the reply of these applications stating that non-applicant No.2 company has applied for a valid consent under Sections 25 & 26 of the Act, 1974. Consent for one year to the non-applicant No.2 company has been granted on 29.06.2009 with general and special conditions, thereafter it was renewed for three years with some additional conditions. Non-applicant No.1 sent notice dated 05.03.2012 to the Directors through non-applicant No.2 for violating consent conditions. The consent was again renewed on 27.09.2013. Non-applicant No.2 has not complied the consent conditions, hence, a show cause notice dated 15.07.2014 was issued to the applicants for filing their reply. However, they have not filed any reply. As per the analyst's report dated 10.11.2014 it was found that the trade effluent was not in the prescribed limit. The applicants are the Directors of the company and have not filed any reply to the show cause notice issued by the non-applicant No.1, therefore, they are equally liable to the conduct of the non-applicant No.2 company. Thus, these petitions be dismissed.
[5] I have heard learned Counsel for the parties and perused the record.
[6] The question for consideration is that at the time of commission of alleged offence whether the applicants were incharge of and were responsible to the company for conduct of the business of the company. [7] For this purpose it is useful to refer the judgment of Hon'ble Apex Court in the case of Sunil Bharti Mittal V/s. CBI., [(2015) 4 SCC 609] in which Hon'ble Apex Court held as under [See page 637 - Para 40 to
44) :-
40. It is abundantly clear from the above that the principle which is laid down is to the effect that the criminal intent of the "alter ego" of the company, that is the personal group of persons that guide the business of the company, would be imputed to the company/corporation. The legal proposition that is laid down in the aforesaid judgment in Iridium India case is that if the person or group of persons who control the affairs of the company commit an offence with a criminal intent, their criminality can be imputed to the company as well as they are "alter ego" of the company.
41. In the present case, however, this principle is applied in an exactly reverse scenario. Here, company is the accused person and the learned Special Magistrate has observed in the impugned order that since the appellants represent the directing mind and will of each company, their state of mind is the state of mind of the company and, therefore, on this premise, acts of the company are attributed and imputed to the appellants. It is difficult to accept it as the correct principle of law. As demonstrated hereinafter, this proposition would run contrary to the principle of vicarious liability detailing the circumstances under which a Director of a company can be held liable.
(iii) Circumstances when Director /person in charge of the affairs of the company can also be prosecuted, when the company is an accused person.
42. No doubt, a corporate entity is an artificial person which acts through its officers, Directors, Managing Director, Chairman, etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so.
43. Thus, an individual who has perpetrated the commission the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision.
44. When the company is the offender, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect. One such example is Section 141 of the Negotiable Instruments Act, 1881. In Aneeta Hada, the Court noted that if a group of persons that guide the business of the company have the criminal intent, that would be imputed to the body corporate and it is in this backdrop, Section 141 of the Negotiable Instruments Act has to be understood. Such a position is, therefore, because of statutory intendment making it a deeming fiction. Here also, the principle of "alter ego", was applied only in one direction, namely, where a group of persons that guide the business had criminal intent, that is to be imputed to the body corporate and not the vice versa. Otherwise, there has to be a specific act attributed to the Director or any other person allegedly in control and management of the company, to the effect that such a person was responsible for the acts committed by or on behalf of the company. [8] Keeping in view the aforesaid principle, I have examined the facts of this case. Relevant paragraphs of the complaint are as under :-
^^7-3 ;g fd vfHk;qDr dz-01 vkS|ksfxd bdkbZ gksdj vU; vfHk;qDrx.k dz-02 yxk;r 05 mldk lapkyu djrs gSa A 7-4 ;g fd vfHk;qDr dz-1
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7-5 ;g fd mijksDr ty ds
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----------------------------------------------------------------------------------- 7-6 ;g fd] vkjksih dz-01 daiuht ,DV 1956 ds varxZr fof/k ds lkekU; vuqdze esa xfBr ,d vkS|ksfxd fudk; gksdj bldk izca/ku iz'kklu ,oa fu;a=.k vkjksih dz-02 yxk;r 0-5 }kjk daiuh ds Mk;jsDVj dh gSfl;r ls izkIr vf/kdkjksa ds vuqdze esa fd;k tkrk gS ,oa vkjksih dz-02 yxk;r 05 daiuh ds Mk;jsDVjx.k gksdj vkidk daiuh ds leLr fdz;kdykiksa ij izR;{k fu;a=.k gksus ls vki dz-02 yxk;r 05 daiuh esa gksus okys leLr dk;ksZa ,oa laO;ogkjksa ds fy;s fof/kd :Ik ls nkf;Rok/khu gS ,oa daiuh ds lapkyu ls mRiUu gksus okys nwf"kr ty ds fu/kkZfjr ekudksa rd mipkj rFkk mipkj la;a= ds lqpk: lapkyu ds fy, ftEesnkj gS A vkjksih dzekad 02 ls 08 rd dk lh/kk fu;a=.k gksus ls ty ¼iznw"k.k fuokj.k rFkk fu;a=.k½ vf/kfu;e] 1974 dh /kkjk 44 o 47 ds rgr~ lHkh vijk/k ds fy, nks"kh gS A** 7-7 ;g fd mijksDr ty dk
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--------------------------------------------------------------------------- 7-8 ;g fd vkjksih dz-01 yxk;r 05 }kjk Water (Prevention and Control of Pollution) Act, 1974 ds vUrxZr naMuh; vijk/k gS A vfHk;qDrx.kksa }kjk mijksDr of.kZr /kkjkvksa dk mYya?ku djus ds dkj.k vijk/k fd;k gksus ls os ltk ds ik= gSa ,oa vfHk;qDrx.kksa }kjk vijk/k fujarj fd;k tk jgk gS A ,slh fLFkfr esa laLFkku dks izfrcaf/kr fd;k tkuk vko';d gS A 7-9 ;g fd ifjoknh vius ifjokn
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-------------------------------------------------------------------** [9] The impugned order of taking cognizance reads as under:-
^^ifjoknh Jh vkj-,u-ns'kokyh] oSKkfud] {ks=h; iz;ksx'kkyk] e-iz- iznw"k.k fu;a=.k cksMZ 17] Hkjriqjh] mTtSu e-iz- }kjk Lo;a lfgr Jh lat; nqcs] vf/koDrk us mifLFkr gksdj ;g ifjokj i= es- isaVkxu ysc fy-] nsokl ,oa vU; ds fo:) ty iznq"k.k fuokj.k rFkk fu;a=.k vf/kfu;e 1974 dh /kkjk 44 ,oa 47 ds varxZr naMuh; vijk/k dk laKku fy;s tkus gsrq izLrqr fd;k A ifjokn i= rFkk mlds lkFk layXu nLrkostkas dk voyksdu fd;k x;k A nLrkostksa ds voyksdu ls ;g Li"V gksrk gS fd es- isaVkxu] nsokl ds fo:) e-iz- iznq"k.k fu;a=.k cksMZ } kjk ty iznq"k.k fuokj.k ,oa fu;a=.k vf/kfu;e] 1974 dh /kkjk 44 o 47 ds varxZr okn nk;j djus dh vuqefr nh xbZ gS rFkk nLrkostksa ds voyksdu ls ;g Hkh Li"V gksrk gS fd vkj-,u- ns'kokyh oSKkfud] {ksf=; iz;ksx'kkyk] e-iz-
iznq"k.k fu;a=.k cksMZ] nsokl dks ifjokj nk;j djus gsrq vf/kd`r fd;k x;k gS A ifjokn i= ds lkFk layXu nLrkostksa ds voyksdu ds Ik'pkr~ ekeys dk laKku fy;k tkrk gS A izdj.k dsUnzh; vkijkf/kd iath esa ntZ gks A** [10] With the aforesaid, it is apparent that in the complaint no role attributed to the applicants except the bald statement that the applicants are the Directors of the company, hence, the affairs of the company are under their direct control and they are liable for conduct and transactions of the company. Even there is no averment in the documents annexed with the complaint as to how the applicants are responsible for the conduct of the business of the company. In the impugned order of taking cognizance CJM while issuing process under Section 204 of Cr.P.C. against the applicants without ascribing any incriminating role to them, solely on the basis that their company is accused and they have the "alter ego" were vicariously liable. Hon'ble Apex Court held that when a company is accused its Director can be roped in only if there is sufficient incriminating evidence against them coupled with criminal intent or the statutory regime attracts the doctrine of vicarious liability.
[11] In the present case learned CJM did not ascribe any incriminating role of the applicants or any statutory regime which attracts vicarious liability, therefore, the order of CJM issuing process against the applicants is liable to be set aside, hence, it is set aside. However, it is made clear that it will be open to the CJM to undertake the exercise of going through the material on record and on that basis if he satisfied that there is enough incriminating material on record to proceed against the applicants, he may pass appropriate orders in this behalf. Even if at this stage, no such prima facie material is found but during the trial sufficient incriminating material against these applicants surfaces in form of evidence the CJM shall be at liberty to exercise his powers under Section 319 of Cr.P.C. to rope in the applicants by passing appropriate orders in accordance with law at that stage. [12] The impugned order dated 05.01.2015 passed against the applicants are hereby set aside with the aforesaid liberty.
Thus, the petitions are disposed of as indicated above.
[ Jarat Kumar Jain ] JUDGE ns