The Karnataka High Court quashed criminal proceedings against a General Manager (Legal) of a company where the company was not arrayed as an accused and the complaint contained no averment that the officer was nominated or in charge of the company’s business, holding that such prosecution amounts to an abuse of process under Section 49 of the Legal Metrology Act, 2009.
Background & Facts
The Dispute
The petitioner, Mr. Prashant Kumar Joshi, General Manager (Legal) of Dorling Kindersley (India) Pvt. Ltd., was arrayed as accused No.2 in a complaint filed by the State of Karnataka under Section 200 of the Code of Criminal Procedure for alleged violations of the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011 concerning a pre-packaged Engineering Drawing Textbook found without mandatory declarations.
Key Facts
- On 27 January 2012 at 03:00 p.m., an Inspector of Legal Metrology, accompanied by panch witnesses, inspected the premises of M/s. Surya Infotainment Products Pvt. Ltd. and found Mr. K.M. Paniraj, Business Head, in possession of a pre-packaged package of Pearson published Engineering Drawing Textbook lacking the manufacturer’s name and full address, maximum retail price, manufactured or packed month and year, net contents, consumer care telephone number and e-mail address.
- The complaint (Annexure-A) and the impugned order (Annexure-B) were both dated 26 July 2012.
- The complaint alleged that the petitioner, as General Manager (Legal), was responsible for the conduct of the business of Dorling Kindersley and thus liable under Section 18 of the Act read with Rule 18(1) of the Rules and punishable under Section 36 of the Act.
- The petitioner contended that he was neither a Managing Director nor a Director of Dorling Kindersley, held no post involving day-to-day affairs, and was not nominated under Section 49(3) of the Act.
- The company, M/s. Surya Infotainment Products Pvt. Ltd., had already approached the High Court and obtained an order dated 10 July 2019 quashing proceedings against it (Crl.P.No.1931/2015) on the ground that it was not in charge of the business as on the date of the alleged offence.
- The petitioner relied on judgments of the Supreme Court in ANEETA HADA v. M/S GODFATHER TRAVELS AND TOURS PVT.LTD., (2012) 5 SCC 661 and PEPSI FOODS LTD. v. SPECIAL JUDICIAL MAGISTRATE, (1998) 5 SCC 749, which held that proceedings cannot be maintained without arraying the company as a party when interpreting provisions akin to Section 141 of the Negotiable Instruments Act, 1881.
Procedural History
- 27.01.2012: Inspection leading to the alleged offence.
- 26.07.2012: Complaint filed (Annexure-A) and impugned order passed (Annexure-B) by the VIII Additional Chief Metropolitan Magistrate, Bengaluru, taking cognizance against the petitioner and another.
- 10.07.2019: High Court quashed proceedings against accused No.1 (M/s. Surya Infotainment Products Pvt. Ltd.) in Crl.P.No.1931/2015.
- 14.03.2019: Judgment in Crl.R.P.No.2319/2013 discussing the proviso of Section 49 of the Act.
- 09.09.2026: Matter reserved for orders after hearing.
- 11.09.2026: Judgment pronounced.
Relief Sought
The petitioner sought quashing of the impugned order dated 26.07.2012 and the complaint dated 26.07.2012, and to put an end to the criminal proceedings initiated against him.
The Legal Issue
The central question was whether, under Section 49 of the Legal Metrology Act, 2009, a person can be held liable for an offence committed by a company when the company is not arrayed as an accused and the complaint contains no averment that the person was nominated or was in charge of the company’s business, thereby rendering the prosecution an abuse of process.
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that the company, M/s. Surya Infotainment Products Pvt. Ltd., was not made a party to the proceedings, which violates the mandatory requirement of Section 49 of the Legal Metrology Act, 2009 that the company be proceeded against when an offence is committed by it. Relying on ANEETA HADA v. M/S GODFATHER TRAVELS AND TOURS PVT.LTD. and PEPSI FOODS LTD. v. SPECIAL JUDICIAL MAGISTRATE, it was contended that proceedings cannot be maintained without arraying the company as a party. Furthermore, the complaint lacked any averment that the petitioner was nominated under Section 49(2) or was in charge of the business of Dorling Kindersley; his designation as General Manager (Legal) did not establish such responsibility. The petitioner also pointed out that the High Court had already quashed the case against the company on similar grounds, and that continuing the prosecution against him amounted to an abuse of process and a miscarriage of justice, justifying invocation of Section 482 of the Cr.P.C..
For the Respondent
The State’s counsel maintained that the complaint clearly showed a violation of the Legal Metrology Rules because the pre-packaged textbook lacked the mandatory declarations, and that the Business Head, Mr. K.M. Paniraj, was found in possession of the package, establishing an offence under Section 18 of the Act read with Rule 18(1) of the Rules and punishable under Section 36 of the Act. The respondent argued that the petitioner’s role as General Manager (Legal) sufficed to attribute liability, and that the absence of the company as an accused did not defeat the prosecution since the complaint sufficiently implicated the petitioner.
The Court's Analysis
The Court began by noting that the complaint was filed under Section 200 of the Cr.P.C. and that the alleged offence related to missing declarations on a pre-packaged commodity under Section 18 of the Legal Metrology Act, 2009 read with Rule 18(1) of the Rules, punishable under Section 36 of the Act. It then turned to the pivotal provision, Section 49 of the Act.
"Where an offence under this Act has been committed by a company, - (a) (i) the person, if any, who has been nominated under sub-section (2) to be in charge of, and responsible to, the company for the conduct of the business of the company … or (ii) where no person has been nominated, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company; and (b) the company, shall be deemed to be guilty of the offence 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 provided in this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence."
The Court observed that the legislative scheme makes the company a necessary party to any prosecution; liability of an individual attaches only if he is either nominated or, in the absence of nomination, shown to be in charge of the company’s business. In the present case, the complaint contained no averment that the petitioner was nominated under Section 49(2) or that he was in charge of the day-to-day affairs of Dorling Kindersley. His designation as General Manager (Legal) was insufficient to establish such responsibility, especially where the petitioner expressly denied any managerial role and the record showed no material linking him to the conduct of business.
The Court further noted that the High Court had already quashed the proceedings against the company (M/s. Surya Infotainment Products Pvt. Ltd.) on the ground that it was not in charge of the business as on the date of the alleged offence (order dated 10.07.2019 in Crl.P.No.1931/2015). Drawing an analogy with the Supreme Court’s interpretation of Section 141 of the Negotiable Instruments Act, 1881 in ANEETA HADA and PEPSI FOODS, the Court held that proceedings cannot be maintained without arraying the company as a party when the statute expressly deems the company guilty. To proceed against an individual while omitting the company constitutes an abuse of process and amounts to a miscarriage of justice.
Having considered the material on record, the Court found that the essential ingredients of Section 49 were not satisfied: the company was not arrayed, no nomination was shown, and no evidence placed the petitioner in charge of the business. Consequently, the initiation of criminal proceedings against the petitioner was without legal authority and amounted to an abuse of process. The Court therefore exercised its inherent power under Section 482 of the Cr.P.C. to quash the impugned order and the complaint, thereby ending the prosecution.
The Verdict
The petition was allowed. The Court quashed the proceedings initiated against the petitioner in C.C.No.17160/2012 taking cognizance, and set aside the impugned order dated 26 July 2012 and the complaint dated 26 July 2012. No monetary relief or costs were awarded; the operative direction was solely to terminate the criminal prosecution.
What This Means For Similar Cases
Company Must Be Arrayed as Accused
The judgment makes clear that where a statute deems a company guilty of an offence, the company must be arrayed as an accused; proceedings against individuals alone are unsustainable. Practitioners should verify that the corporate entity is impleaded before advancing any liability against officers or employees.
Nomination or Charge-of-Business Essential for Individual Liability
Under Section 49 of the Legal Metrology Act, 2009, an individual can be held liable only if he is either nominated under sub-section (2) or shown to be in charge of, and responsible to, the company for the conduct of its business. Mere designation without proof of actual responsibility does not attract liability.
Abuse of Process Doctrine Invoked via Section 482 Cr.P.C.
Where the statutory prerequisites for prosecution are missing, the High Court may intervene under Section 482 of the Code of Criminal Procedure to quash the proceedings, thereby preventing a miscarriage of justice. This reinforces the availability of inherent powers to curb abusive prosecutions.
