High Court cannot quash complaint u/s 482 CrPC accepting factual defence which are disputed one.

Ordinarily, a defence of an accused although appears to be plausible should not be taken into consideration for exercise of the said jurisdiction. Yet again, the High Court at that stage would not ordinarily enter into a disputed question of fact. It, however, does not mean that documents of  unimpeachable character should not be taken into consideration at any cost for the purpose of  finding out as to whether continuance of the criminal proceedings would amount to an abuse of  process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable.’

                                                                                                    (Para 11)

Reportable

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 471 OF 2015

(Arising out of SLP (Crl) No. 5295 OF 2014)

HMT Watches Ltd.                                                                                 ... Appellant

Versus

M.A. Abida & Anr.                                                                            … Respondents

WITH

CRIMINAL APPEAL NO. 472 OF 2015

(Arising out of SLP(Crl) No. 5800 OF 2014)

J U D G M E N T: PRAFULLA C. PANT, J.

1.     These appeals are directed against judgment and order dated 25.2.2014 passed by the High Court of Kerala in Criminal M.C. No 2366 of 2008 and Criminal M.C. No. 2367 of 2008, whereby the said Court has allowed the petitions and quashed the proceedings of criminal complaint case Nos. 1790, 1791, 1792, 1793, 1794, 1795, 1796, 1824, 1825, 1826, 1827, 1828, 1829, 1830 and 1831 of 2007 pending in the Court of Judicial First Class Magistrate (Court No. IV), Kochi; and C.C. Nos. 1208, 1209, 1210,1211 and 1212 of 2007, pending in the Court of Judicial First Class Magistrate (Court No. III), Kochi. All these criminal complaint cases were pertaining to offence punishable under Section 138 of  the Negotiable  instruments Act, 1881 (hereinafter referred to as “the N.I. Act”).

2.      We have heard learned counsel for the parties and perused the papers on record.

3.      Succinctly stated, the appellant filed criminal complaint cases against respondent – M.A. Abida stating that as many as 57 cheques dated 28.09.2006 were issued by her in discharge of outstanding liability towards the complainant/appellant (HMT Watches Ltd.). When the cheques were presented for collection the same were received back, dishonored by bankers with the endorsement – “payment stopped by the drawer”. Notice of demand dated 9.10.2006 was issued by the complainant to the respondent no.1 but she failed to make the payment of  the amount mentioned in the cheques, i.e., total Rs.1,79,86,357/-. Instead, she sent reply to the notice disputing liability to pay. On this, complainant filed twenty criminal complaints mentioned above, against the respondent no.1 with regard to the offence punishable under Section 138 of the N.I. Act.

4.      The accused – M.A. Abida filed Criminal M.C. No. 2366 of 2008 and Criminal M.C. No. 2367 of 2008 challenging the proceedings initiated by the complainant on the ground that she was Re-Distribution Stockist (RD) of watches manufactured by the appellant. The business with the appellant was done till September, 2003 on “cash and carry” basis. The accused further pleaded in the petitions filed before the High Court under Section 482 of the Code of  Criminal Procedure, that after 2003 the appellant company used to collect cheques towards the amount covered by distinct invoices with respect to various consignments for securing payment of amount covered by the invoices.

5.      The High Court accepted the plea of the accused (respondent no.1) and quashed the criminal complaint cases. Hence, these appeals through special leave.

6.      On behalf of the appellant, it is argued before us that the High Court committed a grave error of law in quashing the proceedings of the criminal complaint cases on the factual pleas taken by the respondent no.1. On the other hand, learned counsel for the respondent no.1 contended that since the cheques were given as security, as such there was no liability to make the payment, and the ingredients of  the offence punishable under Section 138 of the N.I Act were not made out.

7.      Section 138 of the Negotiable Instruments Act, 1881 reads as under:

“138. Dishonour of cheque for insufficiency, etc., of funds in the accounts. - Where any cheque drawn by a person on an account maintained by him with a banker for payment of  any amount of money to another person from out  of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of  money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for “a term which may extend to two year”, or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless-

(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

(b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, “within thirty days” of the receipt of  information by him from the bank regarding the return of the cheques as unpaid, and

(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation: For the purpose of this section, “debt or other liability” means a legally enforceable debt or other liability.”

8.      Section 139 of the Negotiable Instruments Act, 1881provides that there shall be a presumption in favor of holder of a cheque as to the debt or liability. It reads as under:

“139. Presumption in favour of holder. - It shall be presumed, unless the Contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, or any debt or other liability.”

9.      Section 140 of the Negotiable Instruments Act, 1881 prohibits what cannot be a defence in a prosecution in respect of offence punishable under Section 138 of the N.I. Act. It reads as under:

“140. Defence which may not be allowed in any prosecution under section 138. – Defence which may not be allowed in any prosecution under section 138 It shall not be a defence in a prosecution of an offence under section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section.”

10.              Having heard learned counsel for the parties, we are of  the view that the accused (respondent no.1) challenged the proceedings of criminal complaint cases before the High Court, taking factual defences. Whether the cheques were given as security or not, or whether there was outstanding liability or not is a question of fact which could have been determined only by the trial court after recording evidence of the parties. In our opinion, the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of N.I. Act stood un complied, even though the respondent no.1 (accused) had admitted that he replied the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorized by the complainant company or not, could not have been examined by the High Court in its jurisdiction under Section 482 of the Code of Criminal Procedure when such plea was controverted by the complainant before it.

11.              In Suryalakshmi Cotton Mills Limited v. Rajvir Industries Limited and others  (2008) 13 SCC 678  , this Court has made following observations explaining the parameters of  jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure: -

“17. The parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure is now well settled. Although it is of wide amplitude, a great deal of caution is also required in its exercise. What is required is application of the well-known legal principles involved in the matter.

xxx                                xxx                                                  xxx

22. Ordinarily, a defence of an accused although appears to be plausible should not be taken into consideration for exercise of the said jurisdiction. Yet again, the High Court at that stage would not ordinarily enter into a disputed question of fact. It, however, does not mean that documents of  unimpeachable character should not be taken into consideration at any cost for the purpose of  finding out as to whether continuance of the criminal proceedings would amount to an abuse of  process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable.’

12.               In Rallis India Limited v. Poduru Vidya Bhushan and others (2011) 13 SCC 88 , this Court expressed its views on this point as under:-

“12. At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High Court could not have discharged the respondents of the said liability at the threshold. Unless the parties are given opportunity to lead evidence, it is not possible to come to a definite conclusion as to what was the date when the earlier partnership was dissolved and since what date the respondents ceased to be the partners of the firm.”

In view of the law laid down by this Court as above, in the present case High Court exceeded its jurisdiction by giving its opinion on disputed questions of fact, before the trial court.

13.               Lastly, it is contended on behalf of the respondent no.1 that it was not a case of insufficiency of fund, as such, ingredients of offence punishable under Section 138 of the N.I. Act are not made out. We are not inclined to accept the contention of learned counsel for respondent no.1. In this connection, it is sufficient to mention that in the case of  Pulsive Technologies P. Ltd. vs. State of Gujarat (2014) 9 SCALE 437 , this Court has already held that instruction of “stop payment” issued to the banker could be sufficient to make the accused liable for an offence punishable under Section 138 of the N.I. Act. Earlier also in Modi Cements Ltd. vs. Kuchil Kumar Nandi (1998) 3 SCC 249 , this Court has clarified that if a cheque is dishonoured because of stop payment instruction even then offence punishable under Section 138 of N.I. Act gets attracted.

14.                 For the reasons as discussed above, we find that the High Court has committed grave error of law in quashing the criminal complaints filed by the appellant in respect of  offence punishable under Section 138 of the N.I. Act, in exercise of powers under Section 482 of the Code of Criminal Procedure by accepting factual defences of the accused which were disputed ones. Such defences, if taken before trial court, after recording of the evidence, can be better appreciated.

15.                Therefore, for the reasons, as discussed above, these appeals deserve to be allowed. Accordingly, the appeals are allowed. The impugned order dated 25.2.2004 passed by High Court of Kerala in Criminal M.C. Nos. 2366 of 2008 and  2367 of 2008 is hereby quashed. The trial court shall proceed with the trial in the criminal complaint cases. It is clarified that we have not expressed our opinion as to correctness of the defence pleas taken by the respondent no.1. No order as to costs.

………………….....…………J.

[Dipak Misra]

.………………….……………J.

[Prafulla C. Pant]

New Delhi;

March 19, 2015

Sec.482 Cr.P.C. - making adverse comments in the absence of a party - not valid

Head Note:  For considering the petition under Section 482 of the Code, it is necessary to consider as to whether the allegations in the complaint prima facie make out a case or not and the Court is not to scrutinize the allegations for the purpose of deciding whether such allegations are likely to be upheld in trial. Though the High Court possesses inherent powers under Section 482 of the Code, these powers are meant to do real and substantial justice, for the administration of which alone it exists or to prevent abuse of the process of the court. This Court, time and again, has observed that extraordinary power should be exercised sparingly and with great care and caution. The High Court would be justified in exercising the said power when it is imperative to exercise the same in order to prevent injustice.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 687 OF 2014

(Arising out of S.L.P. (Crl.) No. 2634 of 2013)

Homi Rajvansh                                                           .... Appellant(s)

Versus

State of Maharashtra & Ors.                                     .... Respondent(s)

J U D G M E N T: P.Sathasivam, CJI.

1)   Leave granted.

2)   The above appeal is filed against the final impugned judgment and order dated 29.06.2012 passed by the High Court of Judicature at Bombay in Criminal Writ Petition No. 220 of 2010 wherein the High Court quashed the criminal proceedings against Alok Ranjan-Respondent No.3 herein (writ petitioner in the High Court) in C.C. No. 1036/CPW/2008 pending before the Metropolitan Magistrate, 19th Court, Esplanade, Mumbai.

3)    Brief facts:

(a) The appellant, an Indian Revenue Service Officer, joined National Agricultural Co-operative Marketing Federation ofIndia Ltd. (NAFED), on deputation on 15.07.2003 as anExecutive Director.

(b) On 01.10.2003, Respondent No.3 herein–Alok Ranjan took over the charge as the new Managing Director of NAFED and he approved the 1st Non-agricultural tie-up of NAFED on 13.10.2003 in order to diversify NAFED’s business activities to cope up from severe financial crunch so that income from other businesses can compensate the losses being made on trading of agricultural items. Respondent No. 3 participated in all the meetings and approved all the transactions entered into with M/s Swarup Group of Industries (SGI) for the above said purpose.

(c)  On 20.04.2004, when the Respondent No. 3 was scheduled to go for an international tour to Beijing, the appellant was made the officiating Managing Director for  21.04.2004 to 27.04.2004 in order to attend all urgent matters.

(d)  In January 2006, a public interest litigation was filed against NAFED before the Delhi High Court on the allegations of misappropriation of funds by its officials in nonagricultural business. The Government of India, in its reply, stated that CBI enquiry will be conducted. In the affidavit filed by NAFED, it was again reiterated that all the transactions were bona fide.

(e)  Anticipating pressure of CBI, Respondent No. 3 directed Mr. M.V. Haridas, Manager (Vigilance and Personnel) to lodge a complaint against SGI and, accordingly, a complaint was lodged before the CBI Economic Offences Wing (EOW), Mumbai.

(f)   The CBI filed a charge-sheet dated 15.12.2008 against the appellant herein and Respondent No.3 along with other accused for committing offence under Section 120B read with Sections 409, 411,420, 467, 468 and 471 of the Indian Penal Code, 1860 (in short ‘the IPC’).

(g)  At this stage, Respondent No.3 preferred a petition being Criminal Writ Petition No. 220 of 2010 for discharge before the High Court under Section 482 of the Code of Criminal Procedure, 1973 (in short “the Code”) read with Article 226/227 of the Constitution of India.

(h)  By impugned order dated 29.06.2012, the High Court accepted the case of Respondent No.3 herein and allowed his petition.

(i)    Being aggrieved by the impugned judgment of the High Court, the appellant moved before this Court. Since the appellant herein was not a party before the High Court, this Court, by order dated 19.03.2013, granted him permission to file special leave petition.

4)    Heard Mr. Shekhar Naphade, learned senior counsel for the appellant, Mr. P.P. Malhotra, learned Additional Solicitor General for Respondent No.2-CBI, Mr. Kailash Vasdev, learned senior counsel for the contesting Respondent No.3 and Ms. Asha Gopalan Nair, learned counsel for the State of Maharashtra.

Contentions:

5)    Mr. Shekhar Naphade, learned senior counsel for the appellant, after taking us through the charge sheet dated 15.12.2008 filed before the Special Judge, CBI, bye-laws of NAFED and impugned order of the High Court, submitted as under:

(i)   the High Court erred in quashing the complaint against Respondent No.3 without hearing the appellant herein, who is a co-accused in the case;

(ii)   the High Court had over exercised its jurisdiction by holding a summary trial on facts, which is contrary to the law laid down by this Court in catena of judgments;

(iii) the High Court committed an error in coming to a finding against the appellant without the appellant being a party in the writ petition filed by respondent No.3 herein before it;

(iv)                 the High Court committed an error in agreeing with the submissions of Respondent No.3 herein without affording an opportunity of being heard to the appellant; and

(v)  the adverse findings against the appellant in the impugned judgment would affect the trial, and hence prayed for quashing of the same.

6)    On the other hand, Mr. Kailash Vasdev, learned senior counsel for Respondent No.3 submitted that in the absence of specific material in the charge-sheet about the role of respondent No.3, the High Court is fully justified in quashing the criminal case and discharging him. He further submitted that there is no categorical finding against the appellant and the High Court has merely reproduced what is stated in the charge sheet and nothing more.

7)    We have carefully considered the rival submissions and perused the relevant materials.

Discussion:

8)    In view of our proposed decision and the ultimate direction which we are going to issue at the end, there is no need to traverse all the factual details. We have already noted the role of the appellant, Respondent No.3 and Respondent No.4. A careful consideration of the bye-laws of the NAFED also makes clear the separate role of the accused. It is not in dispute that in the writ petition filed by Respondent No.3 before the High Court for quashing the criminal proceedings, the appellant herein was not shown or impleaded as one of the parties. On the other hand, the role of the appellant herein was specifically contended before the High Court at several places and, in categorical terms, in paragraph 10 of the impugned order, which is as under:

“………..According to the learned counsel, the loss that has been caused, is attributable to the subsequent MOU dated 24.4.2004, entered into between NAFED and M/s Swarup Group of Industries, which was signed by the accused No.2 – Homi Rajvansh, who was the then Divisional Head of Finance and Accounts and tie up business in NAFED. It is submitted that it is the case of the investigating agency itself, that the said MOU was signed by the accused No.2 – Homi Rajvansh, without the approval of the petitioner or without his knowledge. The said MOU neither has any quantitative nor any value restrictions. It is submitted that the collateral security which had been provided in the earlier MOU, was totally missing in this MOU. Not only that, but various relevant clauses appearing in earlier MOU protecting and securing the interest of NAFED were either deleted or modified without information to the petitioner. It is submitted that though the allegation in the charge sheet is that the accused No.2 – Homi Rajvansh made such huge disbursement of funds worth Rs.235 crores, without taking approval of the Managing Director, i.e., the petitioner, strangely, the Managing Director, i.e., the petitioner has been held responsible for such disbursement and has been made an accused in the case.”

9)    Apart from the above contentions, the charges leveled by the investigating agency against the accused persons in the police report were also highlighted.

10)        The High Court, after adverting to the above contentions, arrived at the following conclusion:

“There is great substance in the contention advanced by the learned counsel for the petitioner. The allegation that the accused No.2 – Homi Rajvansh, committed the acts in question without the approval of the Managing Director, i.e., the petitioner and without informing him and the allegation that the Managing Director, i.e., the petitioner is responsible for the said acts, cannot go hand in hand together. Surely, if the case is that Homi Rajvansh committed these illegalities without informing the Managing Director, as was required and without his permission, as was necessary, then the responsibility of such acts (which were done without the permission of and the information to the petitioner), cannot be fastened on the petitioner. This is so obvious, that it does not need any further elaboration.”

11)        Again in paragraph 17, in categorical terms, the High Court has concluded as under:

“…….Significantly, so far as the accused No.2—Homi Rajvansh is concerned, the investigation could establish that he had acquired huge properties from the ill-gotten wealth……”

12)        In paragraph 22, the High Court arrived at a specific conclusion against the appellant herein which reads as under:

   “Further, the allegations leveled against the petitioner about he being in collusion with the accused No.2-Homi Rajvansh, are in conflict with the allegations that have been levelled against the accused No.2. It has already been seen that the allegations that the said accused No.2, Homi Rajvansh, did certain wrongs without the permission of the petitioner and behind his back, and that the said Homi Rajvansh and the petitioner had conspired to commit the said wrongs, cannot go hand in hand together. Indeed, the allegations against the co-accused Homi Rajvansh are supported by material in the charge sheet, but the very absence of such material, so far as the petitioner is concerned, renders the theory of the petitioner being a party to the alleged conspiracy, unacceptable.”

13)        The perusal of the contentions of Respondent No.3 herein-the writ petitioner in the High Court and the categorical findings followed by conclusion not only exonerated Respondent No.3 herein from the criminal prosecution but also reinforce the allegations leveled against the appellant herein, who was admittedly not a party before the High Court.

14)        It is settled law that for considering the petition under Section 482 of the Code, it is necessary to consider as to whether the allegations in the complaint prima facie make out a case or not and the Court is not to scrutinize the allegations for the purpose of deciding whether such allegations are likely to be upheld in trial.

15)        The High Court committed an error in quashing the complaint against Respondent No.3 without hearing the appellant herein who is a co-accused in the case as their alleged roles are interconnected. The High Court committed an error in coming to a finding against the appellant without the appellant being a party in the writ petition filed by Respondent No.3. In fact, the perusal of the impugned order clearly shows that the High Court simply agreed with the submissions of Respondent No.3 against the appellant herein without giving him an opportunity of being heard.

16)        We are satisfied that the High Court, in the impugned order, over exercised its jurisdiction which is complete violation of principles of natural justice since the appellant, who is a co-accused, was not heard on the allegations levelled against him by Respondent No.3 herein.

17)        Though the High Court possesses inherent powers under Section 482 of the Code, these powers are meant to do real and substantial justice, for the administration of which alone it exists or to prevent abuse of the process of the court. This Court, time and again, has observed that extraordinary power should be exercised sparingly and with great care and caution. The High Court would be justified in exercising the said power when it is imperative to exercise the same in order to prevent injustice.

18)        Inasmuch as admittedly the appellant was not impleaded/shown as one of the parties before the High Court, the specific finding against his alleged role, based on the submissions of Respondent No.3 herein without giving an opportunity of being heard, cannot be sustained.

19)        In the light of what is stated above, the impugned judgment dated 29.06.2012 in Criminal Writ Petition No. 220 of 2010 is set aside and the matter is remitted to the High Court for fresh disposal.

20)        In view of our conclusion, the appellant herein – Homi Rajvansh be impleaded as Respondent No. 4 in Criminal Writ Petition No. 220 of 2010 and we request the High Court to hear the matter afresh after affording opportunity to all the parties including the newly impleaded party, and dispose of the same as expeditiously as possible preferably within a period of six months from the date of receipt of copy of this judgment.

21)        The appeal is allowed on the above terms.

………….…………………………CJI.

(P. SATHASIVAM)

.………….……………………………J.

(RANJAN GOGOI)

.………….……………………………J.

 (N.V. RAMANA)

NEW DELHI;

MARCH 27, 2014.

Whether food Articles stored as NOT FOR SALE can attract Provision of P.F. Act and should be quashed by High Court u/s 482 Cr.P.C.

Head Note:

In the present case, according to the prosecution, the appellant, a Superintendent of Jail, had stored Rice and Haldi and, therefore, his act comes within the mischief of Section 7 and 16 of the Act. In view of the aforesaid, what needs to be decided is as to whether the expression ‘store’ as used in Section 7 and Section 16 of the Act would mean storage simplicitor or storage for sale. We have referred to the provisions of Section 7, Section 10 and Section 16 of the Act and from their conjoint reading, it will appear that the Act is intended to prohibit and penalise the sale of any adulterated article of food. In our opinion, the term ‘store’ shall take colour from the context and the collocation in which it occurs in Section 7 and 16 of the Act. Applying the aforesaid principle, we are of the opinion, that ‘storage’ of an adulterated article of food other than for sale does not come within the mischief of Section 16 of the Act.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS. 541-542 OF 2014

RUPAK KUMAR                                                                             …APPELLANT

VERSUS

STATE OF BIHAR & ANR.                                                      …RESPONDENTS

JUDGMENT: CHANDRAMAULI KR. PRASAD,J.

         The petitioner is aggrieved by the order whereby his prayer for quashing the order taking cognizance under Section 16(1)(a) of the Prevention of Food Adulteration Act and issuing process has been declined.

          Short facts giving rise to the present special leave petitions are that when the petitioner was posted as the Superintendent of District Jail, Bihar Sharif, the Food Inspector visited the jail premises and collected samples of various materials including Haldi and Rice. Those articles were stored for consumption of the prisoners. The samples so collected were sent for examination and analysis and, according to the report of the Public Analyst, Haldi and Rice were not found in conformity with the prescribed standard and, therefore, held to be adulterated. Accordingly, two separate prosecution reports were submitted alleging commission of an offence under Section 16 of the Prevention of Food Adulteration Act, 1954 (hereinafter referred to as ‘the Act’). The learned Chief Judicial Magistrate took cognizance of the offence under Section 16(1)(a) of the Act and by order dated 18th of March, 2006 directed for issuance of process in both the cases. The petitioner assailed both the orders in separate revision applications filed before the Sessions Judge; but both were dismissed. Thereafter, the petitioner preferred two separate applications, being Criminal Miscellaneous No. 15527 of 2010 and Criminal Miscellaneous No. 15471 of 2010 under Section 482 of the Code of Criminal Procedure before the High Court. The High Court, by the orders impugned in the present special leave petitions, has dismissed both the criminal miscellaneous applications. It is in these circumstances the petitioner has filed the present

special leave petitions.

            Leave granted.

           Mr. Nagendra Rai, senior counsel appearing on behalf of the appellant raises a very short point. He submits that the appellant at the relevant time was the Superintendent of Jail and food items which have been found to be adulterated were not stored for sale but were meant for consumption of the inmates. He submits that according to the prosecution report, these food items were not stored for sale and, therefore, the allegations made do not come within the mischief of Section 16(1)(a) of the Act.

             We have bestowed our consideration to the submission advanced and we find substance in the same. Section 7 of the Act, inter alia, prohibits manufacture and sale of certain articles of food, the same reads as follows:

“Section 7. Prohibitions of manufacture, sale, etc. of certain articles of food. – No person shall himself or by any person on his behalf manufacture for sale, or store, sell or distribute-

                                                                   i.             any adulterated food;

                                                                 ii.             any misbranded food;

                                                              iii.            any article of food for the sale of which a licence is prescribed, except in accordance with the conditions of the licence;

                                                               iv.             any article of food the sale of which is for the time being prohibited by the Food (Health) Authority in the interest of public health;

                                                                 v.             any article of food in contravention of any other provision of this Act or of any rule made thereunder; or

                                                               vi.             any adulterant.

Explanation-For the purposes of this section, a person shall be deemed to store any adulterated food or misbranded food or any article of food referred to in clause (iii) or clause (iv) or clause (v) if he stores such food for the manufacture therefrom of any article of food for sale.”

             From a plain reading of the aforesaid provision, it is evident that Section 7 prohibits a person to ‘manufacture for sale’ or ‘store’ or ‘sell’ or ‘distribute’, inter alia, any adulterated food. Contravention of Section 7 by any person is punishable under Section 16 of the Act. Section 10 of the Act talks about the power of Food Inspector and under this Section, he is empowered to take sample of any article of food from any person selling such article. It is apt to reproduce Section 10(1) and 10(2), which read as follows:

“Section 10. Powers of food inspectors. - (1) A Food Inspector shall have power-

a)     to take samples of any article of food from-

a)

(i)                            any person selling such article;

(i)

(ii)                           any person who is in the course of conveying, delivering or preparing to deliver such article to a purchaser or consignee;

(iii)                         a consignee after delivery of any such article to him; and

b)     to send such sample for analysis to the public analyst for the local area within which such sample has been taken;

c)      with the previous approval of the Local (Health) Authority having jurisdiction in the local area concerned, or with the previous approval of the Food (Health) Authority, to prohibit the sale of any article of food in the interest of public health.

Explanation-For the purposes of sub-clause (iii) of clause (a), “consignee” does not include a person who purchases or receives any article of food for his own consumption.

(2) Any food inspector may enter and inspect any place where any article of food is manufactured, or stored for sale, or stored for the manufacture of any other article of food for sale, or exposed or exhibited for sale or where any adulterant is manufactured or kept, and take samples of such article of food or adulterant for analysis: Provided that no sample of any article of food, being primary food, shall be taken under this sub-section if it is not intended for sale as such food.”

                A conjoint reading of the aforesaid provisions makes it clear that the Food Inspector has the power to take sample of any article of food from any person selling such article under sub-section (1) whereas sub-section (2) confers on him the power to enter and inspect any place where any article of food is manufactured, stored or exposed for sale and take samples of such articles of food for analysis. Section 16 provides for penalties. Section 16(1)(a)(i) and 16(1)(a)(ii), which are relevant for the purpose read as follows:

“Section 16. Penalties. -(1) Subject to the provisions of sub-section (IA) if any person-

(a) whether by himself or by any other person on his behalf, imports into India or manufactures for sale or stores, sells or distributes any article of food—

(i)    which is adulterated within the meaning of sub-clause (m) of clause (ia) of section 2 or misbranded within the meaning of clause (ix) of that section or the sale of which is prohibited under any provision of this Act or any rule made thereunder or by an order of the Food (Health) Authority;

(ii)  other than an article of food referred to in sub-clause (i), in contravention of any of the provisions of this Act or of any rule made thereunder ; or

xxx                          xxx                                xxx”

                 According to this section any person, who by himself or by any other person on his behalf, manufactures for sale or stores or sells any adulterated article is liable to be punished.

                  In the present case, according to the prosecution, the appellant, a Superintendent of Jail, had stored Rice and Haldi and, therefore, his act comes within the mischief of Section 7 and 16 of the Act. In view of the aforesaid, what needs to be decided is as to whether the expression ‘store’ as used in Section 7 and Section 16 of the Act would mean storage simplicitor or storage for sale. We have referred to the provisions of Section 7, Section 10 and Section 16 of the Act and from their conjoint reading, it will appear that the Act is intended to prohibit and penalise the sale of any adulterated article of food. In our opinion, the term ‘store’ shall take colour from the context and the collocation in which it occurs in Section 7 and 16 of the Act. Applying the aforesaid principle, we are of the opinion, that ‘storage’ of an adulterated article of food other than for sale does not come within the mischief of Section 16 of the Act. In view of the authoritative pronouncement of this Court in the case of Municipal Corporation of Delhi v. Laxmi Narain Tandon, (1976) 1 SCC 546, this submission does not need further elaboration. In the said case it has been held as follows:

“14. From a conjoint reading of the above referred provisions, it will be clear that the broad scheme of the Act is to prohibit and penalize the sale, or import, manufacture, storage or distribution for sale of any adulterated article of food. The terms “store” and “distribute” take their colour from the context and the collocation of words in which they occur in Sections 7 and 16. “Storage” or “distribution” of an adulterated article of food for a purpose other than for sale does not fall within the mischief of this section…………………”

              In the case in hand, it is not the allegation that the appellant had stored Haldi and Rice for sale. Therefore, in our opinion, the allegations made do not constitute any offence and, hence, the prosecution of the appellant for an offence under Section 16(1)(a) of the Act shall be an abuse of the process of the Court.

             In the result we allow these appeals, set aside the impugned orders and quash the appellant’s prosecution in both the cases.

………………………………………………………………J

(CHANDRAMAULI KR. PRASAD)

………………………………………………………………J

(PINAKI CHANDRA GHOSE)

NEW DELHI,

MARCH 04, 2014.