ORDER
A. Pasayat, J.
1.Prayer to be representative in terms of Section 305 of the Code of Criminal Procedure, 1973 (in short, the ‘Code’) as made by one Muralilal Agarwala having been accepted by learned Judicial Magistrate, first class, Cuttack (in short, ‘JMFC’), this application has been filed.
2. Background facts filtering out unnecessary details are as follows:
In a proceeding under the Prevention of Food Adulteration Act, 1954(in short, the ‘Act’) opposite party – company through its Manager is arrayed as accused No. 2. After service of notice, the accused-company filed a petition styled as one under Section 305 of the Code stating that after all said Muralilal will be its representative in terms of Section 305 of the Code. The prayer was opposed by the present petitioner on the ground that in the absence of any undertaking by the said Muralilal, that he was a person responsible to the company for commission of offence and was in charge of the company and was to be deemed to be guilty of offence and liable to be proceeded against and punished, the prayer in terms of Section 305 of the Code cannot be accepted. The plea did not find acceptable by the learned JMFC, who held that the prayer of Muralilal was to be accepted.
3. Main plank of petitioner’s argument is that the liability fixed under Section 17 on a person who is in charge of, and responsible to the company for the conduct of the business was intended to get over resort to Section 305 of the Code, which permitted a person to be representative of a company in a case. It is stated that there must be an undertaking filed by Muralilal that in case the accused-company is found guilty, he shall be liable for punishment in terms of Section 17. The stand of the accused-company on the other hand is that Section 305 of the Code and Section 17 of the Act operate in two different fields, and the controversy now raised is not germane to the question whether the prayer in terms of Section 305 of the Code is acceptable.
4. For resolution of the controversy, reference is necessary to Section 305 of the Code, Section 17 of the Act and Section 63 of the Code, which have some relevance. They said as follows:
“Section 305. Cr. P. C.
Procedure when corporation or registered society is an accused.
(1) In this section, “corporation” means an incorporated company or other body corporate, and includes a society registered under the Societies Registration Act, 1860 (21 of 1860).
(2) Where a corporation is the accused person or one of the accused persons in an inquiry or trial, it may appoint a representative for the purpose of the inquiry or trial and such appointment need not be under the seal of the corporation.
(3) Where a representative of a corporation appears, any requirement of this Code that anything shall be done in the presence of the accused or shall be read or stated or explained to the accused, shall be construed as a requirement that that thing shall be done in the presence of the representative that the accused shall be examined shall be construed as a requirement that the representative shall be examined.
(4) Where a representative of a corporation does not appear, any such requirement as is referred to in Sub-section (3) shall not apply.
(5) Where a statement in writing purporting to be signed by the managing director of the corporation or by any person (by whatever name called) having, or being one of the persons having the management of the affairs of the corporation to the effect that the person named in the statement has been appointed as the representative of the corporation for the purpose of this section, is filed, the Court shall, unless the contrary is proved, presume that such person has been so appointed.
(6) If a question arises as to whether any person, appearing as the representative of a corporation in an inquiry or trial before a Court is or is not such representative, the question shall be determined by the Court.”
“Section 17 of the Act.
Offences by companies. (1) 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 (hereafter in this section referred to as the person responsible), or
(ii) Where no person has been so 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 subsection 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.
(2) Any company, may, by order in writing, authorise any of its directors or managers (such manager being employed mainly in a managerial or supervisory capacity) to exercise all such powers and take all such steps as may be necessary or expedient to prevent the commission by the company of any offence under this Act and may give notice to the Local (Health) Authority, in such form and in such manner as may be prescribed, that it has nominated such director or manager as the person responsible, along with the written consent of such director or manager for being so nominated.
Explanation:- Where a company has different establishments or branches or different units in any establishment or branch, different persons may be nominated under this Sub-section in relation to different establishments or branches or units and the person nominated in relation to any establishment, branch or unit shall be deemed to be the, person resposible in respect of such establishment, branch or unit.
(3) The person nominated under Sub-section (2) shall until-
(i) further notice cancelling such nomination is received from the company by the Local (Health) Authority; or
(ii) he ceases to be a director or, as the case may be, manager of the company; or
(iii) he makes a request in writing to the Local (Health) Authority, under intimation to the company, to cancel the nomination which request shall be complied with by the Local (Health) Authority;
whichever is the earliest, continue to be the person responsible;
Provided that where such person ceases to be a director or, as the case may be manager of the company, he shall intimate the fact of such cesser to the Local (Health) Authority;
Provided further that where such person makes a request under Clause (iii), the Local (Health) Authority shall not cancel such nomination with effect from a date earlier than the date on which the request is made.
(4) Notwithstanding anything contained in the foregoing Sub-sections, where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or conivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company not being a person nominated under Sub-section (2) 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.
Explanation :- For the purposes of this section-
(a) ‘company’ means any body corporate and includes a firm or other association of individuals;
(b) .’director’ in relation to a firm, means a partner in the firm; and
(c) ‘manager’ in relation to a company engaged in hotel industry, includes the person in charge of the catering department of any hotel managed or run by it.
“Section 63. Cr. P. C.
Service of summons on corporate bodies and societies.
Service of a summons on a corporation may be effected by serving it on the secretary, local manager or other principal officer of the corporation, or by letter sent by registered post, addressed to the chief officer of the corporation in India, in which case the service shall be deemed to have been effected when the letter would arrive in ordinary course of post.
Explanation: In this section, ‘corporation’ means an incorporated company or other body corporate and includes a society registered under the Societies Registration Act, 1860 (21 of 1860).”
5. I shall first deal with Sections 63 and 305 of the Code. Section 63 provides the mode of service of summons on a company or other body corporate. Any incorporated company is a legal entity. There is nothing to prevent the issue of summons against the company itself. Section 63 provides for the service of such summons. In the case at hand, there is no dispute regarding service of summons on the accused-company. Otherwise question of nominating some person to be its representative would not have arisen. Section 305 of the Code deals with the procedure when corporation or registered society is an accused. Sub-section (1) thereof stipulated that the expression ‘corporation’ for the purpose of Section 305, means an incorporated company or other body corporate, and includes a society registered under the Societies Registration Act, 1860 (in short, the ‘Act’). The Explanation to Section 63 of the Code provides for similar meaning to the expression ‘Corporation’. Section 305 provides that where an incorporated company or other body corporate, or a society registered under the Act is an accused person or is one of the accused persons in an inquiry or trial, it may appoint its representative for the purposes of the inquiry or trial. A representative so appointed will represent the accused for all purposes of the Code. The Court is empowered to decide the question whether any person is representative or not. The provision is a new one, and there was no corresponding provision in the Code of Criminal Procedure, 1898 (referred to as ‘Old Code’). This makes clear provision for proper representation of a corporation or registered society which cannot be physically present in respect of prosecution for an offence. By enacting Section 305 of the Code, the Legislature has filled in a lacuna in the Old Code which did not provide for any representation when societies and other body corporate were accused in criminal cases. The intention seems to be that a corporate body which has no physical presence or mind of its own has to get a fair deal in an inquiry or trial and for that purpose a living individual is necessary to be present. That is why Sub-section (2) of Section 305 provides that when a corporation is accused person or one of the accused persons in an inquiry or trial, it may appoint a representative for the purpose of the inquiry or trial. This section makes it clear as to the scope of representation. Sub-section (3) provides that where a representative of a corporation appears, any requirement of the Code that anything shall be done in the presence of the accused, or shall be read or stated or explained to the accused shall be construed as a requirement that that thing shall be done in the presence of the representative or read or stated or explained to the representative, and any requirement that the accused shall be examined shall be construed as a requirement that the representative shall be examined.
A presumption arises under Section 305 that a person has been appointed as representative of the corporation where a statement in writing is made by the managing director of the corporation, or by any person (by whatever name called) having, or being one of the persons having the management of the affairs of the corporation, to the effect that the person named in the statement has been appointed as the representative of the corporation, unless contrary is proved. In case there is dispute whether a person is representative, the question shall be determined in terms of Sub-section (6) of Section 305 of the Code.
6. In the petition filed on 13-8-1993 before the learned JMFC, it was clearly indicated that the authorisation given by the company duly signed by the Managing Director was being enclosed. The same is on record. Authenticity of this authorization is not disputed. The inevitable conclusion, therefore, is that Muralilal Agarwal was factually appointed as representative of the accused-company.
7. The petitioner’s stand is that such authorisation falls short of the requirements of law as there is a further necessity to accept and confirm that the representative appointed in terms of Section 305 of the Code, is the person who is liable for the offence committed by the company, as. required under Section 17 of the Act. The said section relates to offences by companies. It provides that where an offence under the Act is committed by a company, every person who at the time the offence was committed was in charge of, or was responsible to, the company for the conduct of its business, can also be prosecuted for the same offence and shall be deemed to be guilty of the offence along with the company and shall be punished accordingly, provided it is established that the offence in question was committed with the consent and connivnce of the director, manager, secretary or other officer in charge of or responsible to the company for the conduct of its affairs, or when it is proved that the offence is attributable to any neglect on the part of such director, manager, secretary or other officer of the company. The explanation to the section makes it clear that the expression ‘director’ includes a partner of a firm who is in charge of the affairs of the firm. The way in which Section 17 is worded makes legislative intent clear that every person who, at the time of the offence, was in charge of or 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 offence. The words are comprenensive enough to cover all persons who may be really responsible for the offence although it may be somewhat difficult to apportion blame on any particular individual. If any offence under the Act is committed by the company, the consequence is that the director, manager, secretary or other officers of the company become prima facie guilty of the offence, unless they prove to the satisfaction of the Court-
(a) that the offence was committed without their knowledge; and
(b) that they used due diligence to prevent the offence.
If the offence against the company is proved to have been committed, it is incumbent upon its officers to give strict proof of circumstances exonerating themselves. The burden is entirely on them. A reading of the section makes it clear that the Legislature has taken care to provide that natural persons made vicariously liable for the offence committed by a company or any one of its employees arc to be punished only when it is established that they had some nexus with the crime either because of their connivance with it or due to their criminal negligence which had resulted in its commission. To make a person liable, therefore, for the offence committed by the company or any one of its employees, it must be proved that the offence was committed with his connivance.
8. A company, as defined in explanation (a) of Sub-section (4) of Section 17 of the Act, together with its officer-in-charge at the time the offence is committed, can both be proceeded against under Section 17. In State (Delhi Administration) v. D. K. Nangia, , it was held that the explanation to Section 17(2), although in terms permissive, imposes a duty upon such a company to nominate a person in relation to different establishments or branches or units. This implies the performance of a public duty, as otherwise the scheme undelying the section would be unworkable. The Explanation lays down the mode in which the requirements of Section 17(2) should be complied with. Normally, the word ‘may’ implies what is optional, but it should in the context in which it appears, mean ‘must’. There is an element of compulsion. It is a power coupled with a duty.
9. Before a partner or director can be said to be liable to be prosecuted with the help of Section 17 of the Act, it is the duty of the prosecution to prove that the partner or the director in question was in charge of and responsible to the company for the conduct of its business at the time the offence was committed. Sub-section (1) of Section 17 is a deeming provision which provides that where an offence under the Act is committed by a company, the person in charge and responsible to it also is to be held guilty, and to be liable should be proceeded against with a view to fix culpability, where the offence is committed by a company. Sub-section (2) provides for a nomination so that there is no difficulty in fixing responsibility. Where, however, no person has been nominated, liability is extended to any person who was in charge of or responsible to the company in the conduct of business. The prosecutor has the duty to find out whether any person has been nominated in terms of Sub-section (2) of Section 17, and if a person has been nominated, to proceed against him so that he can be punished if the company is found guilty. There has to be a determination that the company is guilty, whereafter the question of punishing the person of any of the categories indicated in Clause (e) of Sub-section (1) arise. However, the reverse is not necessary to be established. The section does not require that the person in charge of the company should be found guilty before the company is held liable. Merely because a person is not nominated, the liability does not vanish, and along with the company the person who was in charge of or responsible to the company in the conduct of business is rendered liable. Sub-section (1) of Section 17 makes all the persons in charge of or responsible to the company in the conduct of business liable to the procedure and process in case there is no indication in terms of Sub-section (2) where a person is nominated that person alone is made liable in terms of Clause (a) (i) of Sub-section (1). However, the scope is wider where there is no nomination, and the person who was in charge of or responsible to the company in the conduct of business is liable subject of course to the proviso which casts onus on the person who claims that the offence was committed without his knowledge and he exercised all due diligence to prevent commission of such offence. A bare reading of the proviso one of Section 305 of the Code, and Section 17 of the Act makes it clear that they operate in different fields. The former relates to representation of company during inquiry or trial while the latter relates to liability in case an offence is committed by the company.
10. Mr. N. Panda, learned counsel for petitioner submitted that it is not always possible for the prosecutor to know whether the case is one where any person has been nominated. In such a case the prosecution cannot be placed in a disadvantageous position. The company has to aid the Court in that regard as to on whom liability is to be fixed. This plea needs careful consideration. Sub-section (4) of Section 17 of the Act is relevant. Even where there is a nomination, and it is yet proved that the offence has been committed with the consent or neglect on the part of any director manager, secretary or other officer of the company, not being a person nominated under Sub-section (2), 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. The object seems to punish every body who is responsible for the commission of offence. Unless foundations are laid in terms of the proviso to Sub-section (1), a person claiming immunity has to prove that offence was committed. Mere fact that it was committed would not be sufficient. It has also to be established that the offence was committed, notwithstanding exercise of due diligence to avoid commission of offence. It is always open to the prosecutor to request the Court to direct the company to aid it in coming to a conclusion as to on whom liability is to be fixed in case the company is found guilty. Acceptance of the prayer of Muralilal to represent the company in terms of Section 305, Cr. P.C. is not contrary to law, and is maintained. It is made clear that if the prosecutor moves the Court, it can direct the accused company to indicate the details of persons who is or are liable to be proceeded against and punished in case the company is found guilty. On the details being furnished. Court is to adjudicate existence of circumstances as indicated in the proviso to Sub-section (1) of Section 17 of the Act. The order passed by learned JMFC does not warrant interference. However, he shall keep in view the observations made above.
The revision application is disposed of accordingly.