[Food Adulteration] In the absence of the Company, the Nominated Person cannot be convicted: SC

The SC on November 5, 2020 {HINDUSTAN UNILEVER LIMITED vs. THE STATE OF MADHYA PRADESH } held that in the absence of the Company, the Nominated Person cannot be convicted or vice versa. It was held that since the Company was not convicted by the trial court, it finds that the finding of the High Court to revisit the judgment will be unfair to the appellant/Nominated Person who has been facing trial for more than last 30 years. 

It was held by the Bench, comprising of Justice L. NAGESWARA RAO, Justice HEMANT GUPTA & Justice AJAY RASTOGI that there is no material distinction between Section 141 of the NI Act and Section 17 of the Prevention of Food Adulteration Act, 1954 which makes the Company as well as the Nominated Person to be held guilty of the offences and/or liable to be proceeded and punished accordingly. The SC held for maintaining the prosecution in case of vicarious liability, arraigning of a company as an accused is imperative, and if the company is acquitted, the director/ nominated person cannot be held liable.

The SC held that in view of Section 97 of the Food Safety and Standards Act, 2006, as also under Section 6 of the General Clauses Act, 1897, the proceedings would continue under the Act. No benefit can be taken under the 2006 Act as the prosecution and punishment under the Act is protected. The SC negated and rejected the argument by the appellant that pursuant to the repeal of the Act, only punishment of fine has been contemplated under the 2006 Act, thus, since the provisions of the 2006 Act are beneficial to the accused, the accused is entitled to such benefits provided by the 2006 Act. 

Finally, the SC held that the order of remand to the trial court to fill up the lacuna is not a fair option exercised by the High Court as the failure of the trial court to convict the Company renders the entire conviction of the Nominated Person as unsustainable. The appeals were allowed and the order passed by the High Court was set aside. Resultantly the complaint was dismissed.