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Smart Summary

Factual and Procedural Background

The complaint was filed by C.D. Hanumanthappa, Inspector of Food and Civil Supplies, Deputy Commissioner's Office, Belgaum, alleging that Mirji Brothers Oil Mill, Chikodi (a dealer in groundnuts and oil expeller) had not obtained the licence required under the Karnataka Edible Oil Seeds Dealers Licensing Order, 1977. The firm was said to be constituted by partners Shantappa, Abhayakumar, Yeshwant, Udaya and Subas. The complainant inspected the firm on 11-1-1978 and again on 10-3-1978, and recorded in the Stock Register a groundnut stock of 18,301.5 kgs while noting the absence of the requisite licence. A criminal case (C.C. No. 796 of 1978) was instituted against the five partners (arrayed as accused 1 to 5), but the firm itself was not made an accused in the original complaint.

During the pendency of the trial, the public prosecutor filed an application under Section 319 Cr.P.C. seeking to implead Mirji Brothers Oil Mill as an accused, on the ground that the firm had also committed the offence and that service could be effected through its partners. The Judicial Magistrate, First Class, Chikodi, allowed the application by order dated 24-9-1979: the order impleaded Mirji Brothers Oil Mill (represented by its partners) as an accused and directed that Mirji Brothers be numbered as Accused No. 1 and partner Abhayakumar be numbered as Accused No. 2, while discharging the remaining four accused. The discharged accused challenged the legality of that order by filing the present revision petition.

Legal Issues Presented

  1. Whether the trial court had jurisdiction to implead a firm (Mirji Brothers Oil Mill) as an accused under Section 319 Cr.P.C. during the course of trial where the original complaint named only individual partners.
  2. Whether impleading the firm after discharging some partners would amount to an impermissible substitution of accused or otherwise be legally unsustainable.
  3. Whether Section 319 Cr.P.C. may be used to cure lacunae in the prosecution's original pleadings by adding a person or entity (here, the firm) not originally made an accused.
  4. Whether a firm (or non-juridical entity) can be treated as a person capable of being proceeded against under the combined scheme of Section 319 Cr.P.C. and Section 10 of the Essential Commodities Act.

Arguments of the Parties

Petitioners' (Accused) Arguments — as advanced by Sri J.S. Gunjal

  • The impugned order is unsustainable in law and fact because it discharges some accused while impleading the firm, effectively substituting one case (against particular persons) for another (against the firm and different accused), which the counsel argued is impermissible.
  • The court below lacked jurisdiction under Section 319 Cr.P.C. to allow the application because the application did not fall within the scope of that provision.
  • The Magistrate should not have used Section 319 Cr.P.C. to fill lacunae in the prosecution's case; if the original prosecution was not maintainable, Section 319 could not be used to cure that defect.
  • Section 319 Cr.P.C. applies to a "person" and not to a "firm" (which counsel argued is not a juridical person), so the court erred in impleading the firm as an accused.

Respondent / Prosecution Arguments — as advanced by Sri Farooq, High Court Government Pleader

  • Section 319 Cr.P.C. authorises the court to proceed against any other person who, on the evidence, appears also to be guilty of the offence; thus the Magistrate legitimately exercised power to implead the firm.
  • Reference was made to Sections 10 and 11 of the Essential Commodities Act: where the contravention of an order under Section 3 is committed by a company, every person who at the time was in charge of and responsible for the conduct of the company's business is deemed guilty and liable to be proceeded against. By analogy or application, the firm and responsible persons may be proceeded against.
  • Although a firm may be a juridical entity for the purposes of proceeding, the learned Pleader did not fully endorse the Magistrate's view that all partners other than A-2 could be proceeded against; he accepted that the court has ample power to proceed against other persons (including a firm) if materials on record indicate their guilt.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court began by identifying the statutory text of Section 319 Cr.P.C.: where during enquiry or trial it appears from evidence that any person not being an accused has committed an offence triable together with the accused, the court may proceed against such person. The court then examined the factual matrix and the prosecution material.

Key factual findings cited by the court:

  • The complaint itself indicated that the offence related to the firm.
  • Only A-2 (Abhayakumar) was present at the inspection on 10-3-1978 and was the person who produced documents and showed the stock to the complainant; other partners were not present at the relevant time.
  • Documentary exhibits and A-2's statement under Section 313 Cr.P.C. admitted that he alone managed and conducted the business of the oil mill and that he was in charge of and responsible for the conduct of the firm, assisted by clerks for day-to-day affairs.

The court considered Section 10 of the Essential Commodities Act, which provides that when the person contravening an order made under Section 3 is a company, every person who at the relevant time was in charge of and responsible for the conduct of the company's business, as well as the company itself, shall be deemed guilty of the contravention and liable to be proceeded against. Applying Section 10, the court reasoned that the firm was a necessary party to the prosecution because the offence alleged was against the firm under an order made under Section 3 of the Act.

On the question of whether a firm (or its juridical status) prevents the court from impleading it under Section 319, the court held that the question of juridical personality does not preclude the court from arraigning the firm as an accused where Section 10 of the Essential Commodities Act contemplates proceeding against the company and the persons in charge of it. Thus, impleading the firm was permissible under Section 319 read with Section 10 of the Essential Commodities Act.

The court then addressed whether all other partners (accused Nos. 1A–1E) should also be arraigned. Noting that only A-2 was in charge and present at the material time, and that Section 10 only deems those who at the time were in charge and responsible to be guilty, the court concluded there was no basis in the complaint or the evidential material to proceed against the other partners. To do so would be an abuse of process. Accordingly, the discharge of those other partners by the Magistrate was held to be correct.

In summary, the court's analytical steps were:

  1. Identify statutory power under Section 319 Cr.P.C. to implead other persons appearing to be guilty.
  2. Examine factual record and admissions (notably A-2's Section 313 statement) to determine who was in charge at the relevant time.
  3. Apply Section 10 of the Essential Commodities Act to determine that a firm and the person in charge can properly be proceeded against for contravention of an order under Section 3.
  4. Determine that impleading the firm was appropriate, but proceeding against partners not in charge (and not shown to be present) would be improper; therefore confirm discharge of those partners.

Holding and Implications

PARTLY ALLOWED.

Holding (direct effect on the orders and parties):

  • The High Court confirmed the Magistrate's discharge of the partners who were not in charge or present at the relevant time — specifically, the order discharging Accused 1A, 1B, 1C, 1D and 1E is affirmed.
  • The High Court upheld the Magistrate's impleading of Mirji Brothers Oil Mill, Chikodi as Accused No. 1 and Abhayakumar (A-2) as Accused No. 2.

Implications:

  • The decision permits the prosecution to proceed against the firm (Mirji Brothers Oil Mill) as a necessary party for an alleged contravention of an order made under Section 3 of the Essential Commodities Act, applying Section 10 of that Act together with the power in Section 319 Cr.P.C.
  • The decision restricts prosecution of partners to those persons who at the relevant time were in charge of and responsible for the firm's business; partners not shown to have been in charge or present at the material time were correctly discharged. This means the prosecution may continue against the firm and the partner shown to have been in charge (A-2), while the others remain discharged.
  • No broader or novel precedent was expressly declared by the court beyond applying Section 319 Cr.P.C. in conjunction with Section 10 of the Essential Commodities Act to the facts of this case; the opinion confines itself to the direct effect on the parties and the correctness of the Magistrate's order in the circumstances.

    M/S. Mirji Brothers And Others Accused/ v. The State By The P.S.I, Chikodi Complainant/.

    Nagappa, J.:— This petition is directed against the order dated 24-9-1979 passed by the Judicial Magistrate, First. Class, Chikodi, in C.C No. 796 of 1978, allowing the application filed by the complainant under Section 319 Cr. P.C

    2. One C.D Hanumanthappa—the complainant, Inspector of Food, and Civil Supplies, Deputy Commissioner's Office, Belgaum, filed a complaint before the Police Sub-Inspector, Chikodi, alleging as follows:

    3. That Mirji Brothers Oil Mill, Chikodi, is a dealer in groundnuts and is also expelling oil; that Shantappa, Abhayakumar, Yeshwant, Udaya and Subas are the partners who constituted the firm; and that on 11-1-1978 the complainant visited the firm and noticed that the licence as required under the Karnataka Edible Oil Seeds Dealers Licensing Order, 1977 (which will hereinafter be called the Order) was not taken by the firm. He mad a note in the Stock Register—Ext. P. 3 directing the firm to comply with the said provisions. Again he visited the firm on 10-3-1978. On that day, A-2 Abahayakumar was present and during the inspection he produced the documents inculding the Stock Register and took the complainant to their god own and showed the groundnut stock of 18,301. 5 Kgs. Though it is said that the said stock of grounnut tallied with the entry for the day shown in the Stock Register no licence was taken as required under the said order. The complainant after noticing the violation of the order drafted a complaint-Ext. P-1 and submitted the same to the Police Sub-Inspector, Chikodi, for taking necessary action. The complaint commences with the subject “The Karnataka Edible Seeds Dealers Licensing Order, 1977 in contravention of the provisions of the order by Mirji Brothers Oil. Mill M.P.C No. 2527 Chikodi”. It is therefore clear from the first information report that it was the firm that contravened the provisions of the said order. During the pendency of the criminal case on 25-6-1979 the learned A.P.P submitted an application under Section 319 Cr. P.C to implead Mirji Brothers Oil Mill as an accused on the ground that it was revealed that the firm has also committed the offence and that summons for the firm be served through its partners arrayed as accused in the said case. At this stage, it is pertinent to note that the said criminal case was instituted against the said, five partners of the firm only who were arrayed as accused 1 to 5 and the said Mirji firm of which the accused were partners was not made the accused.

    4. The learned Magistrate after hearing both the parties allowed the said application filed by the prosecution and passed the impugned order, the operative portion of which reads thus:

    “Mirji Brothers Oil Mill, Chikodi represented by its partners (a) Shantappa Yeshwant Mirji, (B) Abahayakumar Vasudev Mirji, (C) Yeshwant Shantappa Mirji, (D) Udaya Abahayakumar Mirji (E) Subas Abhaya Kumar Mirji be tried as accused along with accused No. 2 Abahayakumar Vasudev Mirji for the offence punishable under Section 3 r/w. 7 of the Essential Commodites Act.

    The remaining four accused are hereby discharged. I further direct that Mirji Brothers Oil Mill by its partners (A) Shantappa Yeshwant, Mirji (B) Abhayakumar Vesudev Mirji (C) Yeshwant Shantappa Mirji, (D) Udaya Abhayakumar Mirji (E) Subas Abhayckumar Mirji be numbered as Accused No. 1 and partner Abhayakmmar Vasudev Mirji be numbered as accused No. 2.”

    The legality and correctness of this order is being challenged by the petitioners accused in this revision petition.

    5. Sri J.S Gunjal, learned Counsel appearing for the petitioners, contended that the impugned order is not sustainable, either on facts or in law, as some of the accused are discharged and the firm in question is impleaded. If that is so, he submitted that this would amount to virtually substituting one case for another and against different accused, which is not at all permissible in law. He further contended that the court below has no jurisdiction to entertain the application as the same did not fall within the ambit of Section 319 Cr. P.C He also contended that the court having found that the prosecution case as originally filed being not maintainable, should not have allowed the application under Section 319 Cr. P.C as the effect of which is to fill up the lacuna in the prosecution case. He lastly contended that Section 319 Cr. P.C refers to a ‘person’ and not a ‘firm’ which is not a juridical persons in which case the court below was not right in alowing the application.

    6. On the other hand, Sri Farooq, learned High Court Government Pleader, contended that the impugned order is in conformity with the provisions of Section 319 Cr. P.C inasmuch as the court has got power to proceed against other person also if it found that they are also guilty of the offence. He also sought to refer Sections 10 and 11 of the Essential Cammodities Act wherein if the person contravening an order make 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. But he, however, did not subscribe to the view of the learned Magistrate that apart from A-2 Abhayakumar, the others could also be proceeded in the said case. With regard to the application of Section 319 Cr. P.C to the facts of the case what he submitted was that though the firm is a juridical person it does not take away from the purview of Section 319 Or. P.C If that is so, he submitted that the court has always got ample power to proceed against other persons, even if it is a firm, if it appears on the materials placed on record by the prosecution that it is also guilty of the offences with which it was charged.

    7. Section 319 Cr. P.C contemplates that where in the course of any enquiry into, or trial of, an offence, it appears from the evidence that any person not bring the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed.

    8. In the instant case, the admitted facts are that the offence is alleged against the firm. But, however, the firm is not at all arrayed as accused and only the partners of the firm viz., accused 1 to 5 who are the petitioners herein are made accused. It is also in the complaint that it was A-2 who was the person present at the time when the complainant visited the firm and made necessary check in respect of the stock found in the firm to find out whether there was any contravention of the order. The other accused persons apart from A-2, were, not present at that relevant point of time. Apart from the exhibits which reveal that A-2 was responsible for the management of the firm at the relevant time, A-2 has also admitted in his statement under Section 313 Cr. P.C that he atone manages and conducts the business of the oil mill and that he alone was in charge of and responsible to the conduct of the firm and further this is what he has stated in para 2 of his statement.

    “I am one of the partners of the firm Mirji Brothers Oil Mill. I alone manage and conducting the business of that oil mill and I alone was in charge of and responsible to the firm for the business of that oil mill which I managed with the help of clerks who actually looked to the day to day affairs of the oil mill.”

    Therefore, one thing as could be made out from the prosecution papers is that, A-2 Abhayakumar was the person who was actually-managing the affairs of the firm during the relevant period. Section 10 of the Essential Commodities Act contemplates that 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 liable to be proceeded against and punished accordingly. Therefore, now it is to be found out whether there is sufficient compliance with the provisions of Section 10 of the Essential Commodities Act. The order is one purported to have been passed under Section 3 of the Essential Commodities Act and therefore, it was necessary for the complainant to have made the firm as also a party along with otter persons who at the time of the contravention was committed were in charge of and were responsible to company for the conduct of the business of the company. In the instant case, as already stated above, the complainant has made only the partners of the firm as accused and has left out the firm and has not made the same as one of the accused. The prayer of the prosecution in short was that the firm is a necessary party as contemplated under Section 10 of the Essential Commodities Act and if that is so, the question of substituting one accused for another would not arise at all as contended for the accused. Further it has to be seen that merely because, the firm is not made an accused in the original complaint would not disentitle the court to proceed against other persons appearing to be guilty of the offence. Therefore, what is sought to be made out by the prosecution through the application under Section 319 Cr. P.C is, that the firm which should have been made as one of the-accused in the case along with others, be impleaded as the accused. The questions as to whether the firm is a juridical person, does not mean preventing the court from arraying the firm as one of the accused as contemplated under Section 10 of the Essential Commodities Act which postulates every person at the time of the contravention was committed was in charge of, and was responsible to the company for the conduct of the busies of the company as well as the company shall be deemed to be guilty of such contravention. Therefore, the prayer of the prosecution for impleading the firm as one of the accused is justified and it is inconsonance with the provisions of Section 319 Cr. P.C as also Section 10 of the Essential Commodities Act.

    9. Now, the next point for consideration is whether all the other accused, viz., accused No 1A to 1E should also be arrayed and tried for the alleged offence. In the complaint it is made clear that it was only A-2 who was the person in charge of the firm at the time when the complainant visited the firm and found the alleged offence said to have been committed by the firm. Nowhere in the complaint the complainant has stated that apart from A-2 Abhayakumar the other partners of the firm were either present or in charge of the firm when the alleged offence was committed. In addition to this, Section 10 of the Essential Commodities Act also makes it clear that every person who at the time of contravention was committed and who was in charge of, and was also responsible to the company for the conduct of the business of the company would be deemed to be guilty of such contravention and shall be liable to be proceeded against and punished accordingly. If that is so, applying the aforesaid principle, it is only A-2 Abhayakumar who was present and has committed the alleged contravention of the order in which case he would be the person against whom prosecution has to be launched. It would be the abuse of the process of the court if the prosecution is permitted to proceed against the other accused, namely, accused Nos. 1 A, 1 B, 1 C, 1 D, and 1 E. If that is so, the order of the learned Magistrate discharging them is correct and cannot be interfered with. What follows from the aforesaid discussion in that the firm Mirji Brothers Oil Mill, Chikodi would be a necessary party and it shall be styled as A-1. Further Accused-2 Abhayakumar who was in charge of the firm at the relevant point of time could be arrayed as A-2.

    10. In the result, for the reasons stated above, this petition is partly allowed and the order of discharge of Accused 1 A, 1 B, 1 C, 1 D and 1 E, is confirmed. The order impleading A-1 Mirji Brothers Oil Mill, Chikodi as the first accused and Abhayakumar as accused No. 2 is up held.

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    M/S. Mirji Brothers And Others Accused/ v. The State By The P.S.I, Chikodi Complainant/.
    (Jan 16, 1980)