STATE OF PUNJAB versus KASTURI LAL AND ORS.

Citation: [2004] SUPP. 3 S.C.R. 158 · Decided: 28-07-2004 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Leave Granted & Allowed

Judgment (excerpt)

A 
STATE OF PUNJAB 
.... 
v. 
KASTURI LAL AND ORS. 
JULY 28, 2004 
B 
(S.N. VARIAVA AND ARIJIT PASAYAT, JJ.] 
Essential Commodities Act, 1955-Sections 3 and JO-Vegetable Oil 
Products Control Order, 194 7-Charges framed against the Directors and 
the Production Manager of the Company for infringement of 194 7 Order-
c 
High Court held that the Production Manager would face trial and charge, 
and quashed charges against the Directors-Correctness of-Held: High 
Court not justified in quashing charges framed against the Directors since 
evidence was yet to led by the parties whether or not the Directors were 
responsible for the conduct of the company-Also scope of interference 
with an order framing charge is limited-Code of Criminal Procedure, 
D 1973-Section 482. 
Respondents are the Directors and P is the Production Manager 
of Company producing vegetable oil product. The Special Judge 
framed charges against the respondents and P for the alleged violation 
E 
of the provisions contained in section 7(1)(a)(ii) of the Essential 
Commodities Act, 1955. Respondents opposed the framing of charges 
since P was nominated by the Company to be in charge and responsible 
to the Company for conduct of the business, no one else could be 
arrayed as accused. Accused person filed petition questioning the 
F 
correctness of the order of Special Judge. High Court held that only 
P was to face the trial and charge and quashed the charges with regard 
to the respondents as there was no definite material to show that they 
were in charge of running of business and/or responsible therefor. 
Appellant-State contended that at the stage of framing charge it 
G was required to be found out whether there was any material to 
proceed against the accused persons and the High Court ought not to 
have threadbare examined whether the complainant established that 
the respondents were connected with and responsible for running of 
the business. 
"' 
H 
Respondents contended that there was no material to show that 
158 
STATE OF PUNJAB v. KASTURI LAL 
159 
~ 
any of them was in charge of and responsible to the company or its A 
conduct. 
Allowing the appeal, the Court 
HELD : I. When the evidence was yet to be led by the parties, 
the High Court could not on an assumption of facts come to a finding B 
of fact that the respondents-directors of the company are not respon-
sible for the conduct of the business. Therefore, the High Court was 
not justified in quashing the charge framed with regard to the 
respondents. Trial Court would consider the evidence and materials to 
be placed by the parties in the proper perspective and in accordance c 
with law. (166-E-G; 166-D-EJ 
2.1. Under section 10 of the Essential Commodities Act, 1947 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 commit- D 
ted, was in charge of, and was responsible to the Company for the 
conduct of the business of the company and could be described as 
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 E 
been committed. Anyone or someone or all them may be prosecuted 
_.... 
and punished. Section IO does not lay down any condition that the 
person-in-charge or an officer of the Company may not be separately 
prosecuted if the Company itself is not prosecuted. Each or any of them 
may be separately prosecuted, or along with the Company. Before the 
person-in-charge or an Officer of the Company is held guilty in that F 
capacity it must be established that there has been a contravention of 
the order by the Company. (162-F-H; 163-A-C) 
Sheoratan Agarwal and Anr. v. State of Madhya Pradesh, [1984] 4 
sec 353, referred to. 
G 
L2. Inherent jurisdiction under the Section 482 of Cr. P.C., 1973 
though wide has to be exercised sparingly, carefully and with caution 
and only when such exercise is justified by the tests specifically laid 
down in the section itself. It is to be exercised ex debito justitiae to do 
• 
real and substantial justice for the administration of which alone H 
160 
SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R. 
A courts exist and if any attempt is made to abuse that authority so as 
.. 
to produce injustice, the Court has power to prevent such abuse. In 
exerci

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