1


       HIGH COURT OF MADHYA PRADESH, JABALPUR

                      M.Cr.C. No.5675/2011

Rajendra Kumar Wadhwan................................................Petitioner
Versus
M. P. Pollution Control Board, Bhopal..............................Respondent


                      M.Cr.C. No.5752/2011

M/s. Daawat Foods Limited..............................................Petitioner
Versus
M. P. Pollution Control Board, Bhopal.............................Respondent



For the petitioners : Mr. Ajay Mishra, learned senior counsel, with
                     Mr. Laven Arora, learned counsel.


For the respondent: Mr. V. S. Shroti, learned senior counsel, with
                     Mr. Vikram Johri, learned counsel.

                               ORDER

(15.2.2018) The petitions under judgement have been filed by the company M/s. Dawat Foods Limited (hereinafter referred to as "the Company") and the petitioner Rajendra Kumar Wadhwan is a Director of the Company. The petitions have been filed invoking the powers of this court under section 482 Cr.P.C. for the quashment of the proceedings in Case No.223/2011, prosecuting the petitioners for the offences punishable under sections 43, 44 read with 47 of the Water (Prevention and Control of Pollution) Act, 1974 (hereinafter referred to as "the Water Act").The case was registered on the basis of a complaint filed by the respondent which is pending in the Court of the learned Chief Judicial Magistrate, Raisen. The petitioner in 2 M.Cr.C. No.5675/2011 is a Director in the Company. The Company is the petitioner in M.Cr.C. No.5752/2011.

2. The Company has a rice processing plant situated at Plot No.7, Satlapur Growth Centre, Phase II, Industrial Area, Mandideep, District Raisen. The petitioner Rajendra Kumar Wadhwan is stated to be mainly responsible for the works/assignments in the company, purchase of raw materials and marketing of the finished products and other aspects. The license under the Factories Act 1948 and rules thereunder of the year 1962, have been granted. Annexure P1 to the petitioner is the certificate of incorporation of the Company. Annexure P2 is the licence to work a factory issued under Rule 5 of the M. P. Factories Rules 1962 dated 26.10.2010. Annexure P3 is a letter addressed to the Chief Inspector of Factories dated 29.6.2010 by which Form 4-A was submitted, reflecting a change in the person nominated to represent the company. The outgoing manager was Mr. Vikram Patel and the newly nominated person was the new Manager Mr. Rajesh Jaiswal.

3. Before commencement of operations, the Company had sought a consent letter from the respondent, which was granted vide letter dated 13.6.2008, which is Annexure P4 to the petition. The consent was subject to the compliance by the Company to the general and special conditions relating to the treatment of effluents. The conditions were annexed along with the letter of consent. Thereafter, vide letter dated 28.4.2007, which is marked and annexed to the petition as Annexure P6, the respondent renewed 3 the consent for a period of three years commencing from 1.1.2009 to 31.12.2011.

4. A notice dated 10.12.2010, was issued to the Company by the respondent, wherein paragraph 5, the petitioners were informed that the scientist from the Central Laboratory of the Board, Dr. Alok Saxena had carried out package monitoring on 9.12.2010 of the Industrial Area in Mandideep upon which he detected that the polluted water from the processing unit of the Petitioner Company was being drained from the permanent pipelines into the storm water drain of AKVN. The sample taken was analysed and the same was found to be non-compliant of the standards.

5. The Company replied to the said notice vide letter dated 13.12.2010. The Company replied that it has been operating a food processing plant for the past two years and that it is fully complying with the water and the air pollution laws. The Company further stated that it had installed an effluent treatment plant with a capacity of 50 kilolitres and that there is no chemical processing involved at the Company's plant. With regard to the finding of effluents in the sample collected, the Company clarified that when their plant was set up in the year 2008 there was a permanent pipe line that was built for the removal of rain water from the premises. This pipe was in close proximity to the collection tank where the polluted water accumulated before treatment. The use of that pipeline was only during the monsoon season for draining rain water. It further clarified that the pipeline leading to the collection 4 tank, which brought the contaminated water to the collection tank, is under ground. There was a leakage in the pipeline bringing the untreated water to the collection tank due to which the untreated water drained into the pipeline which was laid down for the removal of rain water and through the pipeline, it entered the storm water drain. It further clarified that the rain water drain pipe has been dismantled and that the tank was sealed with cement. It further stated that the pipeline, through which the untreated water went into the collection tank, was now running over the land rather than underground. The photographs of the work done were annexed along with the reply to the notice given by the Company. As regards the finding of the respondent, communicated to the Company in the notice, that the processing unit was allowing the untreated water to flow over the land and were covering up the same with plantation, the Company has stated that 55 acres of land has been converted into a garden. Due to water shortage, the waste water was being used after treatment in the ETP. In the reply, the Company has also clarified that due to the contamination from the collection tank, the test which was done was of untreated water and the same not complying with the standards was natural. Thereafter, the Company has given the assurance that the water that is being used even in the plantation is the water that passes through the effluent treatment plant.

6. Upon receiving the said clarification, the respondent vide letter dated 4.1.2011, which is Annexure P11 to the petition, has observed that having received the reply of the Company the 5 officials of the respondent carried out an on-the-spot inspection on 23rd and 27th of December 2010 after which consent was granted to the Company by the Respondent, to recommence operations. All infrastructural requirements of the establishment were restored. Thereafter, a complaint dated 15.3.2011 was filed in the Court of the learned Chief Judicial Magistrate Raisen, by the Respondent. The complaint is Annexure P8 to the petition. It seeks to prosecute the petitioners for offences punishable under sections 43 and 44 of the Water Act. Upon summons being issued by the learned court below, the petitioners have preferred the petitions seeking the quashment of the said case.

7. Heard the learned counsels for the parties and perused the documents filed along with the petitions. The learned senior counsel for the petitioners has first of all submitted that the filing of the complaint case after finding the explanation given by the Company to be reasonable and thereafter carrying out the on-the- spot inspection on 23rd and 27th of December 2010 and having satisfied itself that the factory was now compliant of the standards under the Water Act and thereafter restoring all infrastructural requirements for the recommencement of operations, was an admission on the part of the respondent that it was satisfied by the answer given by the petitioners. According to the Ld. Counsel for the Petitioners, the flow of effluents through the storm water drain was on account of the leakage in the inlet pipeline leading to the collection tank, which flowed into the pipeline meant to drain the rain water out of the premises of the Company.

8. Thereafter he has drawn the attention of this court to Annexure P8 which is the complaint. This court has gone through the complaint and finds that there is no specific averment against the accused no.2, who is the petitioner in M.Cr.C. No.5675/2011, in relation to the manner in which he is responsible for the affairs of the Company. This, the learned senior counsel for the petitioners has submitted, is a fatal flaw which goes to the root of the case. He has referred to the judgment of Hon'ble the Supreme Court passed in S. M. S. Pharmaceuticals Limited Vs. Neeta Bhalla and another (2005) 8 SCC 89. In this case, Hon'ble the Supreme Court had examined the ambit and scope of section 141 of the Negotiable Instruments Act, 1881 (for short, "the Act 1881") and held in paragraph 19 that it is necessary to specifically aver in the complaint 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, the Supreme Court held, is an essential and has to be made in a complaint and that the absence of such an averment in the complaint would be deficient of the requirements of section 141 of the Act of 1881. It further held, that merely being a director of a company is not sufficient to make a person liable under section 141 of the Act of 1881 and that a director cannot be deemed to be in charge of and responsible to the company for the conduct of its business. It held that such an allegation had to be averred as a fact as there is no deemed liability of a director. In order to rationalize the reference to this judgment, the learned counsel for the petitioners has referred to 7 section 47 of the Water Act, which provides for offences by companies. Section 47 is largely in pari materia with section 141 of the Act of 1881. The provision in a special statute for the prosecution of the directors or such persons who were in charge of and responsible to the company for the conduct of its business, carves out vicarious liability of such persons, where the company is the principal offender. In the present case also, learned senior counsel for the petitioners has submitted, it is the company which is the principal offender and that the same is undisputed. Thus, he submits that, the continuation of the prosecution against the petitioners in this case in the absence of such a specific averment in the complaint renders his prosecution vexatious.

9. The second argument put forth by the learned senior counsel for the petitioners is that the offences for which the prosecution is sought is an act which requires mens rea of knowledge. Section 43 of the Water Act provides for the prosecution of a person who violates section 24 of the Water Act. Section 43 provides for imprisonment for a term which shall not be less than one year and six months but which may extend to six years and with fine. Section 24 prohibits the use of a stream or well for the disposal of polluting matter. The said section provides that no person shall knowingly cause or permit any poisonous, noxious or polluting matter to enter directly or indirectly into any stream, well, sewer or land. It also provides that no person shall knowingly cause or permit to enter into any stream or any other matter, which has the propensity to directly or in combination with other similar matters, 8 to affect the proper flow of the water of the stream leading to or likely to lead to a substantial aggravation of pollution due to its consequences. According to the learned counsel for the petitioners, it is clear from the above that the legislative intent reflects that the mens rea of knowledge must be associated with the Act forbidden by section 24. He has further stated that violation section 24 is not an offence of strict liability whereby the mere act which is prohibited would constitute the offence in the absence of knowledge on the part of the doer that his actions were proscribed by section 24. As regards section 44, which provides for the punishment of imprisonment which shall not be less than one year and six months, but which may extend to six years and with fine, for the violation of sections 25 and 26 of the Act. Learned senior counsel for the petitioners has submitted that the complaint when read in its entirety does not spell out any violation by the petitioners of the provisions of sections 25 and 26 of the Act in order to constitute an offence under section 44 of the Act.

10. Thirdly, the learned senior counsel for the petitioners has referred to Annexure P12 which is a letter issued by the Member-Secretary of the respondent-Board to the Regional Officer at the Regional Office at Bhopal, asking him to register a case against the Company for an offence under section 44 of the Water Act. Learned senior counsel for the petitioners has referred to section 49 of the Water Act which provides for the cognizance of the offences under the Water Act. The said section commences with a negative provision that no court shall take cognizance of any 9 offence under the Act, except on a complaint made by a Board or any officer authorized by such Board on its behalf. Learned senior counsel for the petitioners has stated that the Board had only delegated this function by the letter dated 7.2.2011, which is a specific order, delegating its power to the Regional Officer to register the complaint. Thereafter he has referred to Annexure P13 which is a letter dated 15.3.2011 by which the Regional Officer is stated to have redelegated this power to Mr. H. K. Tiwari, who is the Assistant Engineer with the Board and who has filed the complaint in question. Learned senior counsel for the petitioners has submitted that this act was unlawful as section 49 does not provide for re-delegation. He has further submitted that Annexure P12 categorically asked the Regional Officer only to register a case against the Company. It gave no permission to prosecute the petitioner Rajendra Kumar Wadhwan. On these grounds, the learned senior counsel for the petitioners has submitted that the case against the petitioners is liable to be quashed.

11. Per contra, learned counsel for the respondent has drawn the attention of this court to the application for vacating stay filed by the respondent in M.Cr.C. No.5752/2011. He has firstly drawn the attention of this court to Annexure R-1 to the said application, which is an office order dated 20.9.2007 issued by the respondent- Board and refers to a Board's resolution dated 4.6.2007 by which the Board had delegated the powers of initiating cases on behalf of the Board, to Class II employees of the Board, after taking the consent of the Regional Officer. Learned counsel for the 10 respondent, on the basis of the said document, has argued that the office order reflects that the power to file cases was delegated in the year 2007 itself to the Class II employees of the Board and that the Assistant Engineer, who has filed the complaint against the petitioners herein, falls under that category. As regards the re- delegation by the Regional Officer vide letter dated 15.3.2011, which is Annexure P13, filed in M.Cr.C. No.5675/2011, the learned counsel for the respondent has submitted that the said letter was in line with the office order dated 20.9.2007 passed by the Board as this was only a consent given by the Regional Officer to the Assistant Engineer H. K. Tiwari. The other documents that have been filed by the respondent are the same documents which have been filed by the petitioners herein in M.Cr.C. No.5675/2011 about which the reference has already been given to by this court.

12. As regards the offences under sections 43 and 44 and the registration of the complaint notwithstanding the letter issued by the respondent to the complainant-Company dated 4.1.2011 granting them permission to re-commence operations, the learned counsel for the respondent has stated that both operate on different levels. He has argued that the complaint is maintainable because an offence was committed. The letter dated 4.1.2011 has only permitted the Company to re-commence operations as the anomalies pointed out by the Board vide its notice dated 10.12.2010 were rectified and removed by the petitioners herein. 11

13. The learned counsel for the respondent has also referred to the provisions of section 24 of the Water Act and has submitted that the very act of the petitioners of discharging effluents not meeting the standards resulted in the violation of section 24. Thus, he states that the offence under section 43 is clearly constituted. As regards section 25, the learned counsel for the respondent has submitted that section 25 prohibits new outlets and new discharges. He further submits that the very fact that the effluent before treatment escaped into the drain pipe meant to evacuate the rain water from the premises, itself constitutes an offence under section 25.

14. Learned counsel for the respondent has thereafter submitted the even though the order of the Board to the Regional Officer does not make out a requirement for the prosecution of the Director of the Company, the same was essential as offences under sections 43 and 44 have a mandatory term of imprisonment. He has argued that the Company being an incorporeal entity cannot be made to suffer imprisonment and, therefore, it was essential to make the petitioner Rajendra Kumar Wadhwan as the second accused in this case. The respondent has referred to the judgment of the Hon'ble Supreme Court passed in R. Kalyani Vs. Janak C Mehta and others (2009) 1 SCC 516 and has drawn the attention of this court to paragraph no.15, in which Hon'ble the Supreme Court has held that the inherent jurisdiction to quash a criminal proceeding ought not to be exercised ordinarily and, in particular, where a first information report is sought to be quashed unless the allegations 12 contained therein, even if given face value and taken to be correct in its entirety, disclose no cognizable offence. Hon'ble the Supreme Court further held that except in very exceptional circumstances the court exercising jurisdiction under section 482 Cr.P.C. would not look into any document relied upon by the defence. It is also laid down that inherent power should be exercised very sparingly and where the allegations made in the first information report disclose commission of an offence, the court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus. The learned counsel for the respondent has emphasized much upon this judgment in order to nullify the arguments of the learned senior counsel for the petitioners, that the existence of knowledge or its absence cannot be gone into, in the exercise of inherent powers. However, it would be relevant to point out here that in para 16 of the judgment Hon'ble the Supreme Court has also observed that no hard and fast rule can be laid down and that each case has to be considered on its own merits. The next judgment that has been referred to by the learned counsel for the respondent is Monica Kumar (Dr.) and another Vs. State of Uttar Pradesh and others (2008) 8 SCC 781. Learned counsel for the respondent has referred to paragraph 34 of the judgment that inherent power can and should be exercised to quash the proceedings only where it manifestly appears that there is a legal bar against the institution and continuance of a case like want of sanction or, where the allegations in the first information report or the complaint taken at their face value and 13 accepted in their entirety do not constitute the offence alleged and lastly, where the allegations constitute an offence but there is no legal evidence adduced clearly or manifestly fails to prove the charge.

15. Having heard the contesting views and having gone through the records of this case, this court is of the opinion that the petitions deserve to be allowed for the following reasons.

16. Firstly, the undisputed facts on record go to show that the incident which has been related to was an accident and something that was beyond the control of the Company. The facts go to reveal that when the operations commenced in the year 2008, the pipeline that was laid down by the Company for the evacuation of the rain water into the storm water drain of the AKVN, passed in close proximity to the collection tank where the effluent accumulated before treatment. The pipeline bringing the contaminated effluents into the container tank, which was underground, suffered a fracture on account of which the untreated effluent water through seepage entered the pipeline meant to drain out the rain water as a result of which the effluent drained out into the storm water drain of the AKVN from where the samples were collected. Upon the same being brought to the notice of the Company by the respondent, corrective measures were employed and the problem was set right. The pipeline bringing the untreated effluent to the collection tank, which initially was underground, was brought on the surface thereby ensuring that the contamination of the 14 untreated water does not take place through seepage into the rain water drain pipe. The reply given by the Company to the respondent that the water that was used for the purpose of gardening was water that passed out from the effluent treatment plant after purification and that the same was used as there was a shortage of water to maintain the garden sprawled over fifty acres of land, was acceptable to the respondent. Satisfied with the reply given by the Company, the respondent permitted the recommencement of operations and also directed for all infrastructural support to be restored so that the Company may function. Thus, this court is of the view that a mere accident, which was way beyond the control of the petitioners to have noticed on their own, which when brought to the notice of the Company, was promptly rectified, should not have been subjected to prosecution for the offences under sections 43 and 44.

17. Secondly, as regards the offence under section 43, which made a violation of the provisions of section 24 of the Water Act an offence, the very wordings of the section make it apparent that the mens rea of knowledge had to be manifest in the person violating the said provision. The complaint case does not reflect or have any allegation that the Company had the requisite knowledge of the contamination that was taking place. The undisputed facts would also go to show that the pipeline bringing the contaminated water to the collection tank was passing underground and, therefore, a rupture in that pipeline was not something that was detectable easily. By way of rectification, the complainant-Company has 15 brought the said pipeline to the surface to ensure that any future leak is readily visible and can be rectified. Under the circumstances, the requisite knowledge for the violation of section 24 itself is absent from the material on record and, therefore, the offence under section 43 of the Water Act is not prima facie constituted.

18. As regards the offence under section 44, which the learned counsel for the respondent has stated was punishable because section 25 of the Water Act was violated as there was a restriction placed upon the Company of establishing any new outlets or new discharges and the fact that untreated effluent was being drained into the storm water drain of AKVN, prima facie proved that the provision of section 25 was violated and, therefore, the petitioners were amenable to be proceeded and punished under section 44 of the Water Act. The facts on record go to show that no new outlets or discharges were put in place by the petitioners and, as already stated hereinabove, the drainage of the untreated effluent into the storm water drain happened on account of a technical fault which was subsequently rectified and the same cannot be understood as a new outlet or a new discharged being put in place by the Company.

19. Thirdly, the delegation to the Regional Officer by the Member-

Secretary of the Board to institute a case punishable under section 44 of the Water Act, the said letter specifically states that it is only the Company which is to be prosecuted and not anyone else. However, the complaint has gone beyond the mandate of the letter 16 dated 7.2.2011 and the Director of the Company also has been made an accused. There is no allegation against the petitioner in M.Cr.C. No. 5675/2011 in the entire complaint. The judgment of Hon'ble the Supreme Court in S. M. S. Pharmaceuticals Limited Vs. Neeta Bhalla and another referred to hereinabove squarely applies for a prosecution of a director under the provisions of the Water Act as section 47, providing for vicarious liability of the directors and their prosecution for offences committed by companies is in perimetria with section 141 of the Act 1881 in which Hon'ble the Supreme Court has held that there must be a specific averment that the director was a person in charge of and responsible for the conduct of the business of the Company. Under the circumstances, in the absence of the specific averment and the fact that section 47 of the Water Act is in pari materia with section 141 of the Act of 1881, the said ratio would be squarely applicable in this case and, therefore, the petitioner in M.Cr.C. No.5675/2011 cannot be proceeded against.

20. Fourthly, the contention of the learned counsel for the respondent that it was necessary to make the Director of the Company as an accused in this case and that the Company could not have been prosecuted in absence of the Director as offences under sections 43 and 44 have a mandatory jail term, is untenable. Whether, the prosecution of a director is essential in an offence for which a mandatory jail term along with fine is provided for is no longer res integra, the same having been considered and settled by a Constitution Bench of the Supreme Court in Standard Chartered 17 Bank and others Vs. Directorate of Enforcement and others (2005) 4 SCC 530. In paragraph 29 of the judgment, it was argued before Hon'ble the Supreme Court that when an offence punishable with imprisonment and fine is alleged against the company, the court is not left with any discretion to enforce any one of them and consequently the company being a juristic person cannot be prosecuted for the offence for which custodial sentence is a mandatory punishment, was negated by Hon'ble the Supreme Court and it held that if custodial sentence is the only punishment prescribed for the offence then a company cannot be prosecuted. But, where custodial sentence and fine are prescribed modes of punishment, the court can impose the sentence of fine on a company which is found guilty, as the sentence of imprisonment is impossible to be carried out. Hon'ble the Supreme Court placed its reliance upon the rule of law enunciated in the legal maxim lex non cogit ad impossiblia or that the law shall not expect the performance of the impossible. Therefore, the contention of the learned counsel for the respondent fails.

21. The learned counsel for the respondent has also argued that the petitioners have come up only against a process having been issued and nothing further having been done, their defences can be looked into by the trial court itself. As regards the said contention, Hon'ble the Supreme Court in the case of Pepsi Foods Limited Vs. Special Judicial Magistrate (1998) 5 SCC 749 has held in paragraph 28 that "summoning of an accused in a criminal case is a serious matter. Criminal law cannot be 18 set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have a criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto". In paragraph 29, while dealing with the contention that the grounds taken by the petitioner in that case for quashment under section 482 Cr.P.C, can well be looked into by the trial court at the stage of framing charges was negated by Hon'ble the Supreme Court which held "no doubt the Magistrate can discharge the accused at any stage of the trial if he considers the charge to be groundless, but that does not mean that the accused cannot approach the High Court under section 482 Cr.P.C. or Article 227 of the Constitution to have the proceedings quashed against him when the complaint does not make out any case against him and still he must undergo the agony of a criminal trial". In this case, the learned court below failed to appreciate that the genesis of the case itself was an inadvertent accident which was beyond the control of the petitioner-company. It also failed to appreciate that when the said problem was brought to the notice of the petitioner-company, it promptly rectified the same and the respondent satisfied itself by an on-the-spot inspection on 23rd and 27th of December 2010 and only thereafter gave it the green signal to recommence operations. In such a situation, the filing of the complaint case against the 19 petitioners was completely uncalled for. The same, though not intentional, but has in effect resulted in an abuse of process.

22. Learned counsel for the respondent has also referred to sub-

section (2) of section 47 which provided for that notwithstanding anything contained in sub-section (1) of section 47 where an offence under the Water Act was 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, they shall be deemed guilty of that offence. Under the circumstances, learned counsel for the respondent has submitted that even the element of negligence was sufficient enough to constitute the offence under section 43. However, as section 24 of the Water Act specifically provides for the knowledge by the offender of his actions, which is a conscious inclusion by the legislature, intending that a person who does not have the requisite knowledge about his action or the consequences could not be deemed to have contravened the provisions of section 24 of the Water Act. Thus, a negligent act would not result in the contravention of section 24 of the Water Act. Besides, the rupture of the underground pipeline was not an act of negligence. It was an act which was impossible for the petitioners herein to have prevented despite having taken the greatest care. Nowhere in the complaint is it mentioned that the rupture of the pipeline, which passed underground, happened on account of the negligence of the petitioner-company. Under the circumstances, the said contention is rejected.

23. Under the circumstances, on the basis of what has been argued and what has been considered hereinabove, the petitions are allowed and the proceedings against the petitioners in Sessions Trial No.223/2011 pending in the Court of the learned Chief Judicial Magistrate Raisen is quashed.

(Atul Sreedharan) Judge ps Digitally signed by PRASHANT SHRIVASTAVA Date: 2018.02.19 11:21:11 +05'30'