- 1 - NC: 2025:KHC:3075 WP No. 24550 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.24550 OF 2024 (GM-RES) BETWEEN: 1. MITHUN H S/O H M RAO, AGED ABOUT 39 YEARS, R/AT S-43 E-3, PANCHAMI, DURGANAGARA, BAILOOR, 76, BADAGUBETTU, UDUPI (CMC) DAKSHINA KANNADA DISTRICT – 576 101 WORKING AS RESPONSIBLE PERSON AT HYLYNE AGENCIES, NO.10-1-127J, MARUTHI VEETHIKA ROAD, UDUPI – 576 101. 2. PAVAN KUMAR UPPALAPATI, S/O UPPALPATI HANUMANTHA RAJU, AGED ABOUT 36 YEARS, R/AT 7-78, D.N.COLONY, MUTHANGI, BEHIND SHARADHA HIGH SCHOOL, ISNAPUR, MEDAK, TELANGANA – 502 307 RESPONSIBLE OFFICER AT ARIES AGRO LTD., ARIES HOUSE, PLOT NO.24, DEONAR, GOVANDI (E) MUMBAI – 400 043, MAHARASHTRA …PETITIONERS (BY SRI. NITIN RAMESH, ADVOCATE) AND: STATE OF KARNATAKA REPRESENTED BY MOHAN RAJ, FERTILIZER INSPECTOR AND ASSISTANT, AGRICULTURE OFFICER, UDUPI TALUK – 576 103. …RESPONDENT (BY SMT. RASHMI JADHAV, ADDL. SPP) Digitally signed by LEELAVATHI S R Location: High Court of Karnataka - 2 - NC: 2025:KHC:3075 WP No. 24550 of 2024 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA R/W SECTION 482 OF CR.P.C. PRAYING TO QUASH THE ENTIRE PROCEEDINGS AGAINST THE ACCUSED / PETITIONERS IN CC NO. 447/2024 ARISING OUT OF PCR NO. 19/2024 PENDING ON THE FILE OF HON’BLE PRINCIPAL SENIOR CIVIL JUDGE AND CJM, UDUPI FOR VIOLATION OF SECTION 2(h), 7, 19(c) R/W 21(a) OF FERTILIZER CONTROL ORDER, 1985 WHICH IS PUNISHABLE U/S 7 OF THE ESSENTIAL COMMODITIES ACT, 1955 AT ANNXURES – A AND B. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER This petition by the accused persons in C.C.No.447/2024 arising out of PCR No.19/2024 on the file of Prl. Senior Civil Judge & CJM, Udupi, seeking quashing of the proceedings filed by the respondent against the petitioners for alleged violation of Sections 2(h), 7, 19(c) r/w 21(a) of Fertilizers (Inorganic, organic or mixed) (Control) Order, 1985. 2. Heard learned counsel for the petitioners and learned Addl. SPP for the respondent and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioners invited my attention to the impugned complaint in order to point out that the petitioner No.1 working as - 3 - NC: 2025:KHC:3075 WP No. 24550 of 2024 responsible person at Hylyne Agencies and petitioner No.2 working as responsible officer at Aries Agro Ltd., it was incumbent upon the respondent – complainant to arraign the aforesaid proprietary firm and partnership firm as parties to the proceedings in terms of Section 10 of the Essential Commodities Act, 1955 (for short, the ‘EC Act’). It is submitted that non-arraignment of the aforesaid firms as parties in terms of Section 10 of the EC Act would vitiate the entire proceedings, which deserves to be quashed as held by the Co-ordinate Bench of this Court in the case of Shri Mahesh Naik Vs. The State of Karnataka – Crl.P.No.100296/2023 dated 07.02.2023. 4. Per contra, learned Addl. SPP submits that there is no merit in the petition and that the same is liable to be dismissed. 5. As rightly contended by learned counsel for the petitioners, Section 10 of the EC Act mandates that in a proceedings in relation to offence under Section 7 of the EC Act, r/w Section 19(A)(B) of the Fertilizer Control Order, 1985, it was incumbent upon the respondent – complainant to arraign the proprietary firm and partnership firm as parties along with the petitioners to the proceedings in the absence of which the entire - 4 - NC: 2025:KHC:3075 WP No. 24550 of 2024 proceedings would be vitiated as held by this Court in Mahesh Naik’s case supra, wherein it was held as under: “Learned High Court Government Pleader takes notice for respondent / State. 2. 2. The question involved in this petition since being by a decision of this Court rendered in Crl.P.No.102651/2022 dated 14.09.2022, with the consent of both the learned counsel, petition is taken up for disposal. 3. The petitioner has sought to quash the proceedings in C.C.No.573/2021 pending on the file of the Court of Prl. Civil Judge and JMFC, Mudhol. 4. A private complaint is filed by the Fertilizer Inspector-cum-Assistant Director of Agriculture, (HQ), O/o Joint Director of Agriculture, Bagalkote, against the petitioner and another alleging that they have committed an offence under Clause 19 of the Fertilizer (Control) Order, 1985 ('FCO, 1985' for short) read with Sections 3 and 7 of the Essential Commodities Act, for having manufactured and sold the non- standard fertilizer. 5. Accused No.1 is said to be the owner / proprietor of the firm M/s. Mahantesh Enterprises, doing business as a retailer in fertilizers and the petitioner/accused No.2 is said to be the Compliance Officer of one ZUARI AGRO CHEMICAL LTD. It is alleged that he is responsible officer for 19-19-19 complex fertilizer of Zuari Agro Chemical Ltd., as per Clause 24 of the FCO, 1985 and the said company has manufactured the non-standard fertilizers in question and - 5 - NC: 2025:KHC:3075 WP No. 24550 of 2024 supplied to the retailers and thereby committed the afore- mentioned offence. 6. The charges leveled against the petitioner is that he has violated Clause 19 of the FCO, 1985 read with Sections 3 and 7 of the Essential Commodities Act. Admittedly, the company is not arraigned as an accused in the complaint. In similar circumstances, a co-ordinate bench of this Court in the above referred petition has held as under: "8. Section 10 of the Essential Commodities Act, 1955, deals with the offence by Companies and it reads as follows: 10. Offences by companies. (1) If the person contravening an order made under section 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention 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 if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub- section (1), where en 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, 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. 9. Perusal of Section 10 of the Essential Commodities Act, 1955 makes it evident that wherever contravention is by a Company, then every person who, at the time the contravention was committed, was in charge of, and was responsible to, the compa`ny for - 6 - NC: 2025:KHC:3075 WP No. 24550 of 2024 the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. Therefore, petitioner is being made liable on account of he being an employee of Company in question and therefore, until and unless the company is arraigned as accused, the petitioner cannot be held responsible. 10. In fact, the Hon'ble Apex Court in Aneeta Hada Vs. Godfather Travels and Tours Private Limited while considering the offence committed by the company has held as follows: "53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant. 56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the company. The learned counsel for the respondents have vehemently urged that the use of the term "as well as" in the section is of immense significance and, in its tentacle, it brings in the company as well as the Director and/or other officers who are responsible for the acts of the company and, therefore, a prosecution against the Directors or other officers is tenable even if the company is not arraigned as an accused. The words "as well as" have to be understood in the context. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the - 7 - NC: 2025:KHC:3075 WP No. 24550 of 2024 prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag- net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491: 1971 SCC (Cri) 97) which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352: 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [(2000) 1 SCC 1: 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC 684: 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove." 7. In the light of the above decision, proceedings against the petitioner is not sustainable in law. 8. Hence, the following: ORDER i) Petition is allowed, ii) The proceedings against the petitioner / accused No.1 in C.C.No.573/2021 on the file of the Court of Prl. Civil Judge and JMFC, Mudhol, is quashed. IA-1/2023 is disposed of.” 6. In the instant case, it is an undisputed fact as is clear from the impugned complaint, which is filed only against the petitioners and the firms i.e., M/s. Hylyne Agencies and M/s. Aries Agro Limited, have not been arraigned as accused persons along - 8 - NC: 2025:KHC:3075 WP No. 24550 of 2024 with the petitioners and consequently, the impugned proceedings clearly contravenes to Section 10 of the EC Act and the same are not maintainable and deserve to be quashed. 7. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned proceedings in C.C.No.447/2024 arising out of PCR No.19/2024 on the file of Prl. Senior Civil Judge & CJM, Udupi, insofar as petitioners are concerned, are hereby quashed. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV List No.: 2 Sl No.: 3