STATE (GOVT. OF NCT OF DELHI) versus D. A. M. PRABHU AND ANR.

Citation: [2009] 3 S.C.R. 165 · Decided: 11-02-2009 · Supreme Court of India · Bench: ARIJIT PASAYAT, A.K. GANGULY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2009] 3 S.C.R. 165 
STATE (GOVT. OF NCT OF DELHI) 
II. 
D.A.M. PRABHU AND ANR. 
(Criminal Appeal No. 266 of 2009) 
FEBRUARY 11, 2009 
[DR. ARIJIT PASAYAT AND ASOK KUMAR 
GANGUL Y, JJ.] 
Essential Commodities Act, 1955: 
s. 10 - Scope and ambit of - Discussed. 
s.10 - Contravention of order made under s.3 by a 
A 
B 
c 
company - Prosecution of Managing Director, General 
Manager, Executive Director and Supervisors - Held: Each 
D 
~ or any of them may be separately prosecuted or along with 
the company - There is no statutory compulsion that the 
person-in-charge or an officer of the company cannot be 
prosecuted unless they are ranged alongside the company 
itself - On facts, High Court was not justified in quashing the 
proceedings against them - Textile (Control) Order, 1986 -
E 
Clause 17 - Code of Criminal Procedure, 1973 - s.482. 
" 
Prosecution case was that SB Mills was declaring 
• and stamping wrong fibre composition for the cloth and 
thereby was contravening Clause 17 of Textile (Control) 
F 
Order, 1986. This rendered it liable for penal action for 
violation of order made under s.3 of the Essential 
Commodities Act, 1955. Charge sheet was filed against 
one person, who was summoned and released on bail. 
A supplementary chargesheet was filed wherein names G 
'\ of respondents who were Managing Director, General 
Manager, Executive Director and Supervisor were 
mentioned. The trial court found them liable for the said 
offence and summoned them. 
165 
H 
166 
SUPREME COURT REPORTS 
[2009] 3 S.C.R. 
........ 
A 
High Court quashed the proceedin!~S against the 
,,,. 
respondents holding that SB Mills was nothing but a unit 
of a body corporate and cannot be called an association 
of individuals. 
B 
In appeal to this Court, appellant-State contended 
that the true scope and ambit of Explanation appended 
to s.10 of the Act was not kept in view. 
Respondent contended that the infraction as alleged 
~ 
was of a very minor nature and therefore continuation of 
c the proceedings would not be appropriate. 
Allowing the appeal, the Court 
HELD: 1. Section 10 of the Essential Commodities 
D Act, 1955 is plain. If the contravention of the order made 
under Section 3 is by a company, the persons who may 
be held guilty and punished are (1) the company itself, 
(2) every person who, at the time the contravention was 
committed, was in charge of, and was responsible to, the 
E 
company for the conduct of the business of the company 
as the person-in-charge of the company, and (3) any 
director, manager, secretary or other officer of the 
company with whose consent or connivance or because 
of neglect attributable to whom the offence has been 
.. 
committed as an officer of the company. Any one or more 
F or all of them may be prosecuted and punished. The 
company alone may be prosecuted. Tlhe person-in-
charge only may be prosecuted. The conniving officer 
may individually be prosecuted. One, some or all may be 
prosecuted. There is no statutory compulsion that the 
G person-in-charge or an officer of the company may not 
be prosecuted unless he be ranged alongside the 
/ 
company itself. Section 10 indicates the persons who 
may be prosecuted where the contravention is made by 
the company. It does not lay down any condition that the 
H person-in-charge or an officer of the company may not 
STATE (GOVT. OF NCT OF DELHI) v. D.A.M. PRABHU 
167 
ANDANR. 
be separately prosecuted if the company itself is not A 
prosecuted. Each or any of them may be separately 
prosecuted or along with the company. Section 10 lists 
the person who may be h~ld guilty and punished when 
it is a company that contravenes an order made under 
Section 3 of the Essential Commodities Act. Naturally, 
B 
before the person in-charge or an officer of the company 
is held guilty in that capacity it must be established that 
there has been a contravention of the order by the 
company. [Para 8) [171-E; 172-A] 
2. The stand taken by the respondent was essentially 
C 
the defence which is to be considered at the time of trial. 
[Para 1 OJ [172-E] 
Dulichand Laxminarayan v. Commissioner of Income 
Tax, Nagpur (1956) SCR 154; Sheoratan Agarwal and Anr. 
D 
v. State of Madhya Pradesh (1984) 4 sec 352 and State of 
Punjab v. Kasturi Lal and Ors. (2004) 12 sec 195, relied on. 
Case Law Reference: 
(1956) SCR 154 
(1984) 4 sec 352 
(2004) 12 sec 195 
relied on 
relied on 
relied on 
Para 7 
Para 9 
Para 9 
E 
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
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