1. Firm Pursottam Das Ganpati Rai Vs. Gulab Khan2. Hardeep Singh and Ors. Vs. Food Inspector, Department of PFA

and Ors.3. Rajesh S. Adani, Managing Director, Adani Wilmar Ltd. Vs.

M. Chandrasegara Sastri, Senior Food Inspector4. Andhra Pradesh Grain and Seed Merchants Association etc. etc.

Vs. Union of India (UOI) and Anr.5. The Board of Trustees of the Port of Calcutta Vs. Bengal

Corporation Pvt. Ltd.6.

idrish

IN THE HIGH COURT OF PATNA

A.F.O.D. No. 228 of 1956

Decided On: 14.03.1961

Firm Pursottam Das Ganpati Rai

Vs.

Gulab Khan

Hon'ble Judges/Coram:

S.C. Mishra and G.N. Prasad, JJ.

Counsels: 

For Appellant/Petitioner/Plaintiff: Lalnarayan Sinha and Hari Lal Agrawal, Advs.

For Respondents/Defendant: A.B.N. Sinha and N.P. Agarwala, Advs.

Subject: Commercial

Subject: Limitation

Catch Words

Mentioned IN

Acts/Rules/Orders: 

Limitation Act, 1908 - Section 14; Code of Civil Procedure (CPC) - Order 7 Rule

10; Indian Evidence Act, 1872 - Section 114; Contract Act, 1872 - Section 128,Contract

Act, 1872 - Section 182

Cases Referred: 

Maqbul Ahmad v. Onkar Pratap Narain Singh, 62 Ind App 80, AIR 1935 PC 85; East

India Co. v. Uditchurn Paul, 5 Moo Ind App 43; Firm Jiwan Ram Ramchandra v.

Jagernath Sahu, AIR 1937 Pat 495; Narendrabhooshan Lahiri v. Berahampur Oil Mills

Ltd., ILR 60 Cal 1122; Sinnakaruppan v. R.M.P.S. Muthiah Chettiar, 92 Ind Cas 373, AIR

1926 Mad 178; In Re: Nevill, (1871) 6 Ch A 397; Supdt. of Stamps, Bombay v. Broul

and Co., AIR 1944 Bom 325

Disposition: 

Appeal Dismissed

Case Note:

Point 10

Commercial - Liability to reimburse - Section 128 of Contract Act, 1872 -

Whether suit by Plaintiff was barred by limitation as having been filed

beyond time mentioned - Whether Defendant Appellant entered into a

contract with Plaintiff for supply of 352 tins of mustard oil on its own account

as vendor of Defendant undertook to supply same only as a commission

agent and did not hold out any guarantee for purity of stuff to be supplied

and it was interested only in its commission - Held, delay of four days

thereafter, in considering diligence with which suit was prosecuted, could

not be regarded as anything but part of due diligence exercised by Plaintiff,

and Plaintiff was entitled to exclusion of this period of four days - In a case

where plaint is ordered to be returned proceedings terminate not on date of

order directing plaint to be returned but on date of actual return with

endorsement on plaint in accordance with provisions of Order VII, Rule 10, of

CPC - Court below was right in holding that suit was not barred by limitation

- It was the Defendant who was vendor of oil in question to Plaintiff - Even if

Defendant was interested only in charging commission, Defendant certainly

undertook to supply mustard oil of pure quality and Defendant must be held

to be guarantor of quality - Defendant must be answerable for quality of oil

and right of Plaintiff against Defendant in accordance with Section 128 of

Contract Act would be co-extensive with liability of manufacturer - Defendant

must be held liable also as a guarantor under Section 128 of Contract Act

and must be responsible for bad quality of oil which led to its forfeiture by

Sub-divisional Officer - Court below had not allowed Plaintiff any damages,

but only price paid by him - A presumption, therefore, that Plaintiff should

have sold oil or taken some step to diminish his loss did not arise as entire

quantity, according to judgment of Criminal Court, was beyond his control

and had become property of Government - Appeal dismissed with costs.

JUDGMENT

Misra, J.

1. The plaintiff-respondent, Gulab Khan, instituted the suit for recovery of a sum of Rs.

16, 979/- together with costs, interest pendente lite and future interest, on the

allegation that he placed an order with the defendant for supply of 352 tins of mustard

oil, weighing 154 maunds, to be despatched from Kanpur to Motihari. The oil to be

supplied, however, was stipulated to be of pure and unadulterated quality. On the 16th

of June, 1950, the defendant sent the goods ordered for from Kanpur, not to Motihari,

but to Bettiah railway station. The plaintiff had to incur some costs in bringing the oil

from Bettiah to Motihari. The plaintiff took delivery of the railway receipt from the

Central Bank of India, Bettiah Branch, on payment of a sum of Rs. 13,720/-. He went to

the railway station to take delivery, but he was informed by the Goods Clerk that he

could be given delivery only when the railway receipt was signed by the Sub-divisional

Officer, Bettiah. The plaintiff approached the Sub-divisional , Officer, Bettiah, who

directed a Government doctor to examine the oil first, and it was only when the doctor

reported that the oil was pure and unadulterated that permission could be granted for

delivery. The doctor went to the railway godown, took small quantities ot oil from

several tins, and reported that the oil contained in the tins was not pure. He also sent

samples of the oil to the Government Chemist at Patna for examination. The latter also

found the oil to be adulterated, and reported to that effect. The Sub-divisional Officer,

accordingly, got the entire consignment kept in the godown of the plaintiff and had it

locked and sealed by a Deputy Magistrate, and the key of the godown was kept in

charge of the Sub-divisional Officer.

2. A criminal case was started thereafter against the plaintiff and the defendant. They

were both convicted and fined Rs. 500/- each. They preferred appeals against their

conviction and sentence. The appellate Court, however, upheld the conviction and

sentence of the defendant, but acquitted the plaintiff. It seems, however, that the

defendant also came up in revision to this Court, and his conviction was also set aside.

The plaintiff addressed, thereafter, several letters to the defendant for payment of the

price of the oil, with damages and interest, railway freight, cartage and other incidental

expenses. The defendant, however, did not pay any heed to the notices, and,

accordingly, the present suit had to be instituted on the allegation that it was the

defendant who dishonestly supplied adulterated mustard oil. On these allegations, as

stated above, the present suit was instituted, and the plaintiff claimed the aforesaid

amount, which comprised the price of the 352 tins of mustard oil as also the other

incidental expenses incurred by him in connection with the consignment despatched to

him.

3. The defendant denied the right of the plaintiff to the amount claimed. It was

admitted, no doubt, that the firm of the plaintiff placed an order with the defendant at

Kanpur to purchase 352 tins of mustard oil and despatch it to Bettiah. It was denied

that the order for supply of oil was placed by the plaintiff at Motihari. It was stated

further that the defendant acted as commission agent on behalf of the plaintiff in

executing the order placed and purchased 352 tins of mustard oil from the Ganges Oil

Mills at Kanpur (which was defendant No. 2 to the suit then) and instructed the Ganges

Oil Mills to despatch the oil to Bettiah. The defendant obtained the railway receipt from

the Ganges Oil Mills against payment. The railway receipt was "self", which meant that

the consignor and the consignee were the Ganges Oil Mills. The necessary documents

were sent to the plaintiff by the defendant through the Central Bank of India, Bettiah

Branch, for payment. The goods in question were purchased at first by Messrs.

Shrikrishna Ram of Narkatiyaganj from the Ganges Oil Mills. The defendant had no

occasion to see the goods. The Ganges Oil Mills certified that the oil purchased was

free from argemone oil. The certificate issued by the manufacturer, along with the

sample, was forwarded to the plaintiff. If was denied that the defendant had

undertaken-to supply pure mustard oil fit for human consumption. The plaintiff had not

divulged for what purpose the oil in dispute was required. According to the defendant,

the goods were despatched to Bettiah according to the instruction of the plaintiff, and

it was wrong to suggest that the plaintiff ordered the goods to be supplied to him at

Motihari. The defendant was not aware of the real quality of the mustard oil supplied,

and it was the Ganges Oil Mills (defendant No. 2) which was responsible for the quality

of the oil. It was the Ganges Oil Mills which guaranteed the quality of the oil as pure,

and this defendant had no reason to suspect the bona fides of defendant No. 2. If,

therefore, on chemical examination of the oil, it was discovered that it was not of pure

quality, the liability for it would fall on the shoulders of the Ganges Oil Mills, and not on

the defendant No. 1. This in substance, is the tenor of the written statement filed on

behalf of the defendant.

4. The plaintiff instituted a suit for recovery of the aforesaid amount at Motihari in the

court of the Subordinate Judge on the 8th of November, 1951. The Subordinate Judge,

by his judgment dated the 25th of April, 1953, held that he had no jurisdiction to try

the suit as defendant No. 2, the Ganges Oil Mills could not be amenable to the

jurisdiction of that court inasmuch as it had no place of business within the jurisdiction

of that court. It appears that, on the 27th April, 1953, the plaintiff put in applications

for withdrawal of the suit with permission to institute a fresh suit or to dismiss it as

against defendant No. 2 or to delete its name and proceed with the trial. On the 28th

of April, 1953, the court ordered the name of defendant No. 2 to be expunged from the

plaint. The defendant No. 1 came up in revision to this Court, which was numbered as

Civil Revision No. 596 of 1953. A Division Bench of this Court, by judgment dated the

5th of November, 1951, allowed the application in revision and set aside the order of

the court below in so far as it directed the name of defendant No. 2 to be expunged

and the suit to proceed as against defendant No. 1. This Court held that the learned

Subordinate Judge became functus officio in regard to this matter after the order was

passed on the 25th of April, 1953 that the court had no jurisdiction as against

defendant No. 2 and that the plaint was to be returned to the plaintiff for presentation

in the proper Court. The plaintiff filed the present suit, thereafter, on the 14th of

December, 1954. According to the date of the cause of action mentioned in the plaint,

the last due date for filing the suit was the 16th of June, 1953.

5. The court below, on a consideration of the evidence led on behalf of the parties,

cams to the conclusion that the defendant appellant was liable for reimbursing the

plaintiff to the extent of the amount of price of the oil paid by him for obtaining the

railway receipt and that the plaintiff could not be entitled to any other amount. The

finding of the Court below rests on the ground that the defendant appellant was the

real vendor of the plaintiff and that this defendant purchased the oil from the Ganges

Oil Mills and supplied the same to the plaintiff, and, as such, the defendant appellant

must be answerable for the quality of the oil. It was held that the case of the plaintiff

that the appellant undertook to supply the mustard on of pure quality fit for human

consumption was true and that the case of the defendant that there was no such

agreement between the parties was false. The court below, however, has not passed a

decree in favour of the plaintiff for other items of the claim set out in the plaint.

6. In this appeal before us by the defendant, two questions have been raised by the

learned Counsel for the parties. The first question is as to whether the present suit by

the plaintiff is barred by limitation as having been filed beyond the time mentioned

above, being the 16th of June, 1953; and, secondly, whether the defendant appellant

entered into a contract with the plaintiff for supply of 352 tins of mustard oil on its own

account as the vendor of the defendant undertook to supply the same only as a

commission agent and did not hold out any guarantee for the purity of the stuff to be

supplied and it was interested only in its commission, and, as such, could not be

answerable for any adulteration of the oil which was detected later on chemical

analysis under the direction of the Sub-divisional Officer, Betiah.

7. On the first question, the court below has held in favour of the plaintiff, relying on

Section 14 of the Limitation Act. It is not denied that, if Section 14 of the Limitation Act

cannot be invoked in support of the plaintiff's case, the suit must be held to have been

filed beyond time. The only question is whether the period from the 8th of November,

1951, when the suit was instituted, to the date of the endorsement by the court below

ordering the return of the plaint, which was on the 10th of December, 1954, and four

days thereafter, when the suit was actually instituted, being the 14th of December,

1954, can be excluded in computing the period of limitation in terms of Section 14 of

the Limitation Act. Learned Counsel for the appellant contends that, although the suit

must be held to have been prosecuted with due diligence in a wrong court from the

date of the institution, namely, the 8th of November, 1951 to the 25th of April, 1953,

when the learned Subordinate Judge held that he had no -jurisdiction to try the suit as

against defendant No. 2, yet the period thereafter cannot be taken into account for

extending the period for the institution of the suit in the proper forum thereafter. On

the other hand, learned Counsel for the respondent contends that, after the order

passed by the learned Subordinate Judge on the 25th of April, 1953, a bona fide

application was put in by the plaintiff for withdrawal of the suit with liberty to institute

a fresh one or to dismiss it as against defendant No. 2 and another for deleting the

name of defendant No. 2 from the plaint. The two applications were filed on the 27th of

April, 1953, and the court, in fact, entertained the application and ordered expunction

of the name of defendant No. 2. This is no reason not to consider this period also as a

part of the bona fide prosecution of the suit. When defendant No. 1 came up in revision

to this Court, and this Court allowed the application pronouncing an opinion that the

order passed by the trial court on the application of the plaintiff dated the 27th of April,

1953 was beyond jurisdiction, this also must be considered as a part of the proceeding

of a definitely bona fide character inasmuch as it was the defendant No. 1 who came

up in revision to this Court aggrieved by the order passed by the learned Subordinate

Judge. The judgment of this Court, as already stated, in Civil Revision No. 596 of 1953

was delivered on the 5th of November, 1954. The plaintiff respondent filed an

application for return of the plaint on the 29th of November, 1954, and the court

passed an order for return of the plaint on the 10th of December, 1954 with an

endorsement that "the plaint be returned to the plaintiff's pleader for re-filing to the

proper Court''. This being a necessary part of the duty of the Court in returning the

plaint, there is no reason why this also should not be considered as bona fide

prosecution of suit. Within four days of that endorsement, the present suit was

instituted which cannot be regarded as unreasonable in the circumstances of the case.

8. Mr. Lal Narayan Sinha, for the appellant, has referred to the cases of Maqbul Ahmad

v. Onkar Pratap Narain Singh (MANU/PR/0025/1935  : 62 Ind App 80 at p. 88 : AIR

1935 PC 85 at p. 88) and East India Co. v. Uditchurn Paul 5 Moo Ind App 43 at p. 68

(PC); and Mr. Harilal Agarwal, who has followed Mr. Lalnarayan Sinha, has referred to

the case of Firm Jiwan Ram Ramchandra v. Jagernath Sahu MANU/BH/0317/1937  :

AIR 1937 Pat 495, in support of the contention that the plaintiff could not be entitled to

the exclusion of the period claimed by him in terms of Section 14 of the Limitation Act.

In the case reported inMANU/PR/0025/1935  , the real point for consideration was that

where the period of limitation expired on a date when the Court was closed that period

would be available only when such an application had to be filed in the proper Court,

and not in a court which had no jurisdiction. In my opinion, therefore, the point which

arises for consideration in the present case did not call for consideration in that case,

and, accordingly, that decision is of no assistance in deciding the point in controversy.

The case of 5 Moo Ind App 43 (PC), however, does not seem to be relevant so far as

the construction to be placed upon Section 14 of the Limitation Act is concerned, and it

is not necessary to deal with it. The case of MANU/BH/0317/1937  : AIR 1937 Pat 495

is a case where the plaintiff filed a suit on the last date of limitation available to it, and

the Court found that it had no jurisdiction to pass an order to the prejudice of one of

the parties. The plaintiff who filed a suit on the last date could not be considered to be

a person who was diligent in pursuing his right. When the Court, therefore, fixed a date

on which to present the plaint in the proper Court, it was proceeding in a manner

which was not authorised under Order VII, Rule 10, of the Code of Civil Procedure. The

only period therefore, in the circumstances, which a plaintiff, would be entitled to in

computing the period of limitation was the period during which the plaint was pending

in the Court returning the plaint. Considerable stress has been laid on this case by Mr.

Harilal Agarwal on behalf of the appellant. This case, however, is distinguishable on

more than one ground. In the first place, the plaintiff in this case filed its suit on the

last date of limitation which was construed by this Court as a lack of diligence on its

part which disentitled it to the relief which it might in equity be open to it if it had been

proceeding in a bona fide way. The plaintiff was, accordingly, restricted to the right

open to it in law under Section 14 of the Limitation Act which could be the pendency of

the suit in a Court having no jurisdiction in the narrow sense, and this Court did not

approve of the order passed by the trial Court fixing a date for presentation of the

plaint in the, proper Court, thus extending the period which would be available to the

plaintiff for presentation of the plaint. In the present case, however, this consideration

does not arise. The suit was filed by the plaintiff much before the last date of

limitation, which, as mentioned above, was the 16th of June, 1953, whereas the suit

was instituted against both the defendants n the 8th of November, 1951. In the

circumstances, it cannot be said that it showed any lack of bona fides or diligence on

the part of the plaintiff. In the second place, the learned Subordinate Judge ordering

the return of the plaint had not fixed a date for presentation of the plaint which would

exempt the plaintiff from bona fide prosecution of the suit or presenting the plaint in a

proper Court with due diligence; but, on the contrary, the order was passed by the

Court returning the plaint on the 10th of December, 1954, and within four days thereof

the suit was instituted in the proper Court. None of the considerations which weighed

there with the learned Judges in this case really arise in the present contest. Mr. A.B.N.

Sinha, for the respondent, has drawn our attention to the case of Narendrabhooshan

Lahiri v. Berahampur Oil Mills Ltd. (MANU/WB/0161/1933  : ILR 60 Cal 1122 at p. 1131

: AIR 1933 Cal 914 at p. 918) wherein a Division Bench of the Calcutta High Court laid

down a proposition which supports the contention of learned Counsel. The observation

of Mukherji, J., on this point runs as follows:

"This being the state of authorities on the subject the correct view, in my judgment, to take of the matter is that the proceedings cannot be regarded as

having ended until the Court, in whom the duty lies of conforming to the provisions of Order VII, Rule 10, Civil Procedure Code, is in a position to carry out the order of return of the plaint. Till that point of time, no question can possibly arise as regards the plaintiff not being entitled to exclusion of time under Section 14. When that point of time is reached, the question whether the plaintiff would or would not be entitled to a further deduction of time thereafter would depend upon various factors. Ordinarily no further tune would be excluded. But it is not inconceivable that in exceptional circumstances, even subsequent to such point of time, the proceedings may have to be regarded aa still continuing. And, in determining whether they should be so regarded or not, the question, of the plaintiff's diligence or otherwise may have to be considered."

In my opinion, therefore, the delay of four days thereafter, in considering diligence

with which the suit was prosecuted, cannot be regarded as anything but part of due

diligence exercised by the plaintiff, and the plaintiff is entitled to the exclusion of this

period of four days as well, and the same view has been laid down in the case of

Sinnakaruppan v. R.M.P.S. Muthiah Chettiar (MANU/TN/0320/1925  : 92 Ind Cas 373 :

AIR 1926 Mad 178) wherein it has been held by a learned Single Judge of the Madras

High Court that in a case where the plaint is ordered to be returned the proceedings

terminate not on the date of the order directing the plaint to be returned but on the

date of the actual return with the endorsement on the plaint in accordance with the

provisions of Order VII, Rule 10, of the Code of Civil Procedure. There is nothing

inconsistent between the propositions of law laid down in the above two cases relied

on by learned Counsel for the respondent, and in my opinion, the Court below was

right in holding that the suit was not barred by limitation.

9. The second point with regard to the relationship between the plaintiff and the

defendant is as to whether the defendant was a mere commission agent of the plaintiff

and, as such, could not be held liable for the bad quality of the oil supplied by the

Ganges Oil Mills or was to be regarded as the vendor. The Court below, as I have

mentioned above, on a consideration of the various circumstances in the case, has

found that the defendants must be treated as the vendor of the plaintiff, and not

merely as a commission agent for supplying the commodity. The learned Subordinate

Judge has rested his conclusion on the ground that, although the defendant pleaded

that the contract was entered into between the parties on the strength of a letter sent

by the plaintiff to the defendant at Kanpur, no such letter was produced, nor was any

register of accounts produced by the defendant which would show in what terms the

order was placed by the plaintiff for supply of the goods concerned. The defendant

appears to be a firm carrying on considerable business, and it is difficult to imagine

that the letter sent by the plaintiff, if one were sent, would not be preserved, nor that

the fact would not be noted in some Bahi of the defendant. If the defendant did not

produce the relevant documents, that would only lead to an inference against the

defendant and in favour of the plaintiff. In my opinion, the inference drawn by the

Court below against the defendant cannot be held to be unreasonable in the

circumstances. Mr. Harilal Agarwal, for the appellant, however, contended that,

although the inference of the Court below may be considered as well grounded, as it

stands, yet a reference to the plaint itself shows that the plaintiff was aware all the

time that the" defendant was merely a commission agent. The defendant was a

supplier and was interested only in the commission charge. There is force, no doubt, in

this contention because the plaint, read in a plain manner, seems to proceed on the

footing that the defendant was acting as a commission agent and, as such, could not

be regarded as a person responsible for the quality of the stuff supplied. Mr. A.B.N.

Sinha, for the respondent, has referred to the cases of Ex parte White In re

Nevill (1871) 6 Ch A 397 and Supdt. of Stamps, Bombay v. Broul and

Co. MANU/MH/0015/1944  : AIR 1944 Bom 325 (SB) at p. 329 in support of his

contention that, although the word used is "commission agent" yet that in itself would

not be conclusive to determine the correct relationship between the parties. It has

been held in the above cases that, even where the word "agent" is used, the

relationship between the parties may be still of two principals contracting with each

other. The actual status of the parties must be determined with reference to all the

circumstances, and not merely with reference to the word used. In my opinion, there is

substance in this contention. The Court below also has proceeded to examine all the

circumstances, and has found the defendant to be the vendor, and not merely a

commission agent, in the first place, as I have said, for non-production of the relevant

documents and, in the second place, on the circumstance that it was the defendant

who paid the price to the Ganges Oil Mills, the manufacturer of the mustard oil, and it

was the defendant who received the price of the goods under the railway receipt which

was delivered to the plaintiff by the Bettiah Branch of the Central Bank of India after

having received the amount chargeable for the railway receipt. It was, therefore, the

defendant which was substantially moving in the matter. No nexus was established

between the Ganges Oil Mills and the plaintiff. The entire dealing, therefore, makes out

the defendant to be the supplier of the goods and, as such, in the circumstances of the

present case, the defendant must be treated as the principal vis-a-vis the plaintiff, and

not merely a commission agent. The reference in the invoice to the amount of

commission could not alter the hard fact that nowhere the defendant referred to the

Ganges Oil Mills being the supplier of the goods to the plaintiff unless, of course, it was

in course of the criminal case itself that the proprietor of the defendant firm found

himself in difficulty in regard to the quality of the oil supplied. A reference to Exhibits 5,

5(a) and 5(b) also leads to the same conclusion inasmuch as in exhibit 5, which is a

post card from the defendant to the plaintiff, dated the 12th of June, 1950 the following

passage occurs: -

"In accordance with the letter of Babu Sukhdeo Prasad we have purchased one wagon of mustard oil 352 tins (weight 154 mds.) at Rs. 84/- per maund bilti cut, ready and sent a telegram to Bettiah gadi asked for advance of Rs. 1000/- only to be sent by T.T. which must be sent."

In exhibit 5 (a), which is another post card written by the defendant to the plaintiff,

dated the 14th of August, 1950, the following occurs:-

"We had purchased ready goods of 352 tins of Ganga brand mustard oil, we have sent to your Bettiah Gadi Railway receipt with hundi for Rs. 13,720/-."

In exhibit 5 (b) which is a letter from the plaintiff to the defendant, dated the 25th of

August, 1950, the following occurs:-

"I am to inform you that 352 tins of mustard oil, which I have purchased from you, has not been passed by the Government."

In my opinion, all these three documents also lead to the conclusion that it was the

defendant who was the vendor of the oil in question to the plaintiff. His original status

was that of a commission agent, but in the present transaction the defendant held

itself out as the vendor and the deal was complete on that footing. The Court below,

therefore, came to the correct conclusion in holding that the defendant must be held

responsible for the quality of the oil supplied, and, if there was any adulteration, the

defendant must suffer for that and must be answerable to the plaintiff on that account.

10. There is another aspect of the question, which, although canvassed in the Court

below, so far as facts are concerned, was not brought out in proper perspective. It is

that, even if the defendant were merely a commission agent, the plaint states that the

defendant undertook to supply mustard oil of pure quality. If the defendant, as is

stated, had not undertaken to do so, relevant documents should have been put before

the Court to show on what terms the contract was entered into. In the absence of the

relevant documents, as I have stated above, it must be held that, even if the

defendant was interested only in charging commission, the defendant certainly

undertook to supply the mustard oil of pure quality and the defendant must be held to

be the guarantor of the quality. If that be so, the defendant must be answerable for the

quality of the oil and the right of the plaintiff against the defendant in accordance with

Section 128   of the Contract Act would be co-extensive with the liability of the

manufacturer. If the defendant's case were established that no such liability were

undertaken, the position would certainly be different. In view of a different conclusion,

however, on this point, the defendant must be held liable also as a guarantor under

Section 128 of the Contract Act and must be responsible for the bad quality of the oil

which led to its forfeiture by the Sub-divisional Officer as a result of the judgment in

the case under the Bihar Prevention of Food Adulteration Act, 1947.

11. Learned Counsel has endeavoured to make small point that, in any case, the

plaintiff could only look to the Ganges Oil Mills, the manufacturer, and, if the defendant

in a bona fide manner accepted the goods, which were meant for despatch to another

customer, the defendant cannot be liable. In my opinion, this point is covered by the

discussion about the liability mentioned above.

12. Learned Counsel has also endeavoured to make a point in regard to the amount

decreed in favour of the plaintiff by the Court below. He has contended that the oil was

still lying with the plaintiff in his godown and it was his duty to diminish the loss in a

reasonable manner. He has given no evidence as to what he has done in regard to

that, and, in that view, he could not be held entitled to the sum decreed. I have

already stated that the Court below has not allowed the plaintiff any damages, but only

the price paid by him. It appears on an examination of the judgment of the High Court

in revision filed against the conviction of the defendant that all the tins were forfeited

to Government. It is, no doubt, true that the plaintiff obtained an order from the Sub

divisional Officer not to have them destroyed until the decision of the civil suit. That,

however, does not alter the position that the oil was forfeited to the Government, and

the plaintiff has no manner of right to deal with that commodity. A presumption,

therefore, that the plaintiff should have sold the oil or taken some step to diminish his

loss does not arise inasmuch as the entire quantity, according to the judgment of the

Criminal Court, was beyond his control and has become the property of the

Government.

13. In the result, therefore, the appeal must be dismissed with costs.

G.N. Prasad, J.

14. I agree.

Hardeep Singh and Ors.

Vs.

Food Inspector, Department of PFA and Ors.

Hon'ble Judges/Coram:

Pradeep Nandrajog, J.

Counsels: 

For Appellant/Petitioner/plaintiff: Dinesh Mathur, Sr. Adv., Sushil Bajaj, H.S.

Chandhoke and Shiv Sapra, Advs

For Respondents/Defendant: Pawan Sharma, Adv.

Subject: Food Adulteration

Catch Words

Mentioned IN

Acts/Rules/Orders: 

Prevention of Food Adulteration Act, 1954 - Section 2, Prevention of Food Adulteration

Act, 1954 - Section 7, Prevention of Food Adulteration Act, 1954 - Section

16, Prevention of Food Adulteration Act, 1954 - Section 17, Prevention of Food

Adulteration Act, 1954 - Section 17(1), Prevention of Food Adulteration Act, 1954 -

Section 17(2); United Towns Electrical Company Act, 1902 - Section 30; Drugs and

Cosmetics Act, 1940 - Section 18; Code of Criminal Procedure (CrPC) - Section

482; Prevention of Food Adulteration Rules - Rules 32, Prevention of Food Adulteration

Rules - Rules 37D

Cases Referred: 

Grasim Industries Ltd. v. Collector of Customs, Bombay AIR 2002 SC 1706; Allen v.

Emmerson (1944) KB 362; Hood-Barrs v. IRC (1946) 2 All ER 768; United Towns Electric

Co. Ltd. v. Att. General for Newfoundland (1939) 1 All ER 423; Tillmans and Co. v. S.S.

Knutsford (1908) 2 KB 385; Attorney General v. Leicester Corporation (1910) 2 Ch.

359; N.A.L.G.O. v. Bolton Corporation (1943) AC 166; Municipal Corporation of Delhi v.

Ram Kishan Rohtagi AIR 1983 SC 67; Drugs Inspector, Palace Road, Bangalore v. Dr.

B.K. Krishnaiah and Anr. AIR 1981 SC 1164

Authorities Referred: 

Craies on Statute Law, 7th edition pg 181

Disposition: 

Petition Dismissed

Case Note:

Point 17

Criminal - Quashing of Complaint - Sections 2(ix)(e)(g), 7, 16 of the

Prevention of Food Adulteration Act, 1954 - Rule 37-D of PFA Rules -

Misbranding - Petitioners into selling of Refined Soya bean Vegetable Oil a

food article, were in charge of and responsible for the conduct of the

business - Sample bore statements “Is good for heart”; “Helps to lower risks

of heart disease and may prevent cancer” - Public analyst opined that the

statements were exaggeration of the quality of product and the sample in

question was misbranded - It was alleged that since the sample in question

was misbranded the Petitioners violated the provisions of Section 2(ix)(e)(g)

of the Act read with Rule 37D thus, liable for conviction under Section 7 read

with Section 16 of the Act - Hence, present petition - Petitioners contended

that complaint has to be quashed as they were not vicariously liable as they

were not the manufacturers - Held, no ground for quashing the present

complaint and summoning order made out - Petitioners though were not

manufacturers but marketers of the sampled commodity, were granted

exemption from personally appearance before the Metropolitan Magistrate

provided Petitioners enter appearance through Counsel - Petition dismissed

JUDGMENT

Pradeep Nandrajog, J.

1. Petitioners, Directors of the company M/s. Cargill India Ltd., impleaded as accused

Nos. 4, 5 and 6 in a complaint filed by the respondent No. 1 under Section 7read with

Section 16 of the Prevention of Food Adulteration Act 1954 seek quashing of the

complaint as also the summoning order dated 27.8.2003.

2. The brief facts of the case are as follows:

A. On 15.2.2002 at about 6.30 P.M. the complainant, a food inspector visited the premises of 'M/s. Sharma Shud Ghee Bhandar' sole proprietary firm of Sh. Kaushal Kumar Sharma. He purchased a sample of 'Refined Soyabean Vegetable Oil', a food article. 'M/s. Sharma Shud Ghee Bhandar' was found stocking and exhibiting for sale the said food article.

B. The sample consisted of 3 x 1 ltr. of 'Refined Soyabean Vegetable Oil'. The sample was divided into 3 equal portions and each separate portion was independently packed, fastened and sealed as per the PFA Act and Rules in the presence of Kaushal Kumar Sharma and a witness Ranjit Singh.

C. One of the sealed portion of sample along with the copy of Form VII was sent separately to public analyst on 18.2.2002. The remaining two sealed portions and copies of Form VII were sent to the local health authority, Delhi on the same day as per the relevant provisions of the PFA Act and Rules.

D. The report of the public analyst dated 6.3.2002 revealed that sample bears statements like 'Is good to your heart'; 'Helps to lower risks of heart decease and may even prevent cancer'. The public analyst opined that the said statements are exaggeration of the quality of the product and thus the sample in question is misbranded. He, however, opined that the oil conformed to the standard.

E. Investigations revealed that vendor 'M/s. Sharma Shud Ghee Bhandar' had purchased the sampled commodity from M/s. Goyal Brothers which was a proprietorship concern of Sh. Vinod Goyal. That M/s. Goyal Brothers had purchased the sampled commodity from the company M/s. Cargill India Ltd. and that the said company was marketer of the sampled commodity. That M/s. Cargill India Ltd. had purchased the sampled commodity from the company Malwa Vanaspati and Chemical Co. Ltd. which was the manufacturer of the sampled commodity.

F. Since the PFA Act fastens criminal liability on the vendor, supplier, distributor/marketer and manufacturer, the food inspector i.e. respondent No. 1 herein filed a complaint under Section 7 read with Section 16 of the PFA Act against under noted persons:---------------------------------------------------------------------------------- S. Name Designation Description Description No. in the complaint in the petition ---------------------------------------------------------------------------------- 1. Kaushal Kumar Sharma Proprietor of M/s. Sharma Accused No. 1 Respondent No. 2 Shud Ghee Bhandar/Vendor 2. Vinod Goyal Proprietor of M/s Goyal Accused No. 2 Respondent No. 3 Brothers/Supplier 3. M/s. Cargill India Marketing Firm Accused No. 3 Respondent No. 4 Ltd. 4. Hardeep Singh Director of Accused No. 3 Accused No. 4 Petitioner No. 1 5. Sidhant Khosla Director of Accused No. 3 Accused No. 5 Petitioner No. 2 6. Amitabh Gupta Director of Accused No. 3 Accused No. 6 Petitioner No. 3 7. M/s. Malwa Vanaspati Accused No. 7 Respondent No. 5 and Chemical Co. Ltd. Mfg. Co. 8. Radhey Shyam Sharma Nominee of Accused No. 7 Accused No. 8 Respondent No. 6 ----------------------------------------------------------------------------------

3. It was inter-alia alleged in the complaint that since the sample in question was

misbranded, the accused persons have violated the provisions of Section 2(ix)(e)(g) of

the PFA Act read with Rule 37-D of the PFA Rules and Therefore were liable to be

convicted under Section 7 read with Section 16 of the PFA Act.

4. Factual allegations made in the complaint against the petitioners are in para 3 of the

complaint which reads as under: ' The vendor has purchased the sampled commodity

from M/s Goyal Brothers, N-61 A, Laxmi Nagar, Delhi-92. M/s Goyal Brothers, is a

proprietorship concern and Sh. Vinod Goyal s/o Sh. Girdhari Lal is the proprietor of the

said firm. M/s Goyal Brothers has purchased the sampled commodity from M/s Cargill

India Ltd., A-53, Okhla Industrial Area, Phase-II New Delhi-20. M/s Cargill India Ltd. are

the Marketer of the sampled commodity and is Limited Company consisting of three

directors namely Sh Hardeep Singh s/o late Sh. Brig Ajit Singh (2) Sh. Sidhant Khosla

s/o Sh. Maharaj Krishan Khosla and (3) Sh. Amitabh Gupta s/o Sh. K.C. Gupta. No

nominee has been appointed by the company hence all the three directors as well as

the firm are liable.'

5. On a prima facie consideration of the complaint and documents filed along with the

complaint, the learned Metropolitan Magistrate summoned the accused persons to face

trial for an offence under Section 7 read with Section 16 of the PFA Act.

6. During hearing of the instant petition, the learned Counsel for the petitioners

submitted that the report of the public analyst do not show as to how the public

analyst had come to the conclusion that the sampled commodity was misbranded.

7. The statements on the label of the sampled commodity are as under:

(i) Is good to your heart.

(ii) Helps to lower risks of heart disease and may even prevent cancer.

8. The report of the public analyst records that the afore-noted statements are

vocative of provisions of Section 2(ix)(e)(g) of PFA Act and Rule 37-D of PFA Rules.

9. To appreciate the contention advanced by the learned Counsel for the petitioners, it

is necessary to analyze afore-noted statements in the light of Section 2(ix)(e)(g) and

Rule 37-D.

10. Section 2(ix)(e) and (g) reads as under:(ix) 'misbranded'- an article of food shall be deemed to be misbranded:

x x x x x

(e) if false claims are made for it upon the label or otherwise.'

x x x x x

(g) if package containing it, or the label on the package bears any statement, design or device regarding the ingredients or the substances containing therein, which is false or misleading in any material particular; or if the package is otherwise deceptive with respect to its contents;

11. Rule 37-D of the PFA Rules reads as under:

Labelling of edible oils and fats ' The package, label or the advertisement of edible oils and fats shall not use the expressions 'Super-Refined', 'Extra- Refined'' 'Micro-Refined', 'Double-Refined', 'Ultra-Refined', 'Anti- Cholesterol', 'Cholesterol Fighter', 'Soothing to Heart', 'Cholesterol Friendly', 'Saturated Fat Free' or such other expressions which are an exaggeration of the quality of the Product.

12. What is meant by expression ' such other expressions which are an exaggeration of

the quality of the Product'?

13. In the decision reported as Grasim Industries Ltd. v. Collector of Customs, Bombay

MANU/SC/0256/2002  : 2002(141)ELT593(SC) , the doctrine of 'esjudem generis' was

explained as under:11. In the background of what has been urged by the assessed it has to be further seen whether the principles of ejusdem generis have application. The rule is applicable when particular words pertaining to a class, category or genus are followed by general words. In such a case the general words are construed as limited to things of the same kind as those specified. The rule reflects an attempt to reconcile incompatibility between the specific and general words in view of the other rules of interpretation that all words in a statute are given effect if possible, that a statute is to be construed as a whole and that no words in a statute are presumed to be superfluous. The rule applies only when (1) the statute enumerates the specific words, (2) the subjects of enumeration constitute a class or category, (3) that class or category is not exhausted by the enumeration, (4) the general terms follow the enumeration and (5) there is no indication of a different legislative intent. If the subjects of enumeration belong to a broad based genus, as also to a narrower genus there is no principle that the general words should be confined to the narrower genus. In interpreting Section 30 of the United Towns Electrical Company Act, 1902 which reads: ``the

company shall be liable for water rates on all lands and buildings, owned by it in the aforesaid town, but otherwise shall be exempted from taxation'`, the Privy Council rejected the contention that the word ``taxation'` should be considered ejusdem generis with ``water rate'`. It was held that there is no room for application of the principle in the absence of any mention of a genus, since the mention of a single species for example of water rates does not constitute a genus. [See: United Towns Electric Co. Ltd. v. A.G. for Newfoundland 1939 (1) ALL ER 423]. The rule cannot be applied unless there is genus constituted or a category disclosed. If the preceding words do not constitute mere specifications of a genus but constitute description of a complete genus, the rule has no application. The rule has to be applied with care and caution. This is not an inviolable rule of law, but it is only permissible inference, in the absence of any indication to the contrary. Where the context and the object and mischief of the enactment do not require restricted meaning to be attached to words of general import it becomes the duty of the Courts to give those words their plain and ordinary meaning. Following enunciation in Craies on Statute Law (Seventh Edition) at page 181 succinctly states the principle.

The modern tendency of the law, it was said, [by Asquith J in Allen v. Emmerson (1944) KB 362] is `` to attenuate the application of the rule of ejusdem generis.'` To invoke the application of the ejusdem generis rule there must be a distinct genus category. The specific words must apply not to different objects of a widely differing character but to something which can be called a class or kind of objects. Where this is lacking, the rule cannot apply, (Hood-Barrs v. IRC (1946) 2 All ER 768) but the mention of a single species does not constitute a genus. (Per Lord Thankerton in United Towns Electric Co. Ltd. v. Att. General for Newfoundland (1939) 1 All ER 423). ``Unless you can find a category,'` said Farwell L.J., (in Tillmans and Co. v. S.S. Knutsford (1908) 2 KB 385) ``there is no room for the application of the ejusdem generis doctrine,'` and where the words are clearly wide in their meaning they ought not to be qualified on the ground of their association with other words. For instance, where a local Act required that ``theatres and other places of public entertainment'` should be licensed, the question arose whether a ``fun-fair'` for which no fee was charged for admission was within the Act. It was held to be so, and that the ejusdem generis rule did not apply to confine the words ``other places'` to places of the same kind as theatres. So the insertion of such words as `` or things of whatever description'` would exclude the rule. (Attorney General v. Leicester Corporation (1910) 2 Ch. 359). In N.A.L.G.O. v. Bolton Corporation(1943) AC 166) Lord Simon L.C. referred to a definition of ``workman'` as any person who has entered into a works under a contract with an employer whether the contract be by way of manual labour, clerical work ``or otherwise'` and said: ``The use of the words 'or otherwise' does not bring into play the ejusdem generis principle: for 'manual labour' and 'clerical work' do not belong to a single limited genus'` and Lord Wright in the same case said: ``The ejusdem generis rule is often useful or convenient, but it is merely a rule of construction, not a rule of law. In

the present case it is entirely inapt. It presupposes a 'genus' but here the only 'genus' is a contract with an employer.

14. Thus, the expression ' such other expressions which are an exaggeration of the

quality of the product' must take it's meaning and color from the preceding words

occurring in Rule 37-D.

15. It is medically known that cholesterol has a direct link to the health of the heart.

Excessive cholesterol block the arteries of the heart. Thus expressions which relate to

the product and links the same to the health of the heart would prima facie come

within the mischief of Rule 37-D.

16. It was then urged by the learned Counsel for the petitioners with reference to the

Rule 32 of the PFA Rules that the packing and labelling of food article is the

responsibility of manufacturer of food article and Therefore no offence can be alleged

against present petitioners who are the directors of the company which markets the

sampled commodity.

17. PFA Act fastens criminal liability on the vendor, distributor/marketer and

manufacturer of a food article. Being directors of the company which markets the

sample commodity, the petitioners are prima facie liable. However, the statute

recognizes a defense available to an accused other than manufacturer to show that

said accused purchased the commodity from a manufacturer. On proof thereof, said

accused would earn an acquittal. The petitioners would thus have to establish at the

trial that they purchased the sampled commodity from the accused No. 7 company.

18. It was lastly urged by the learned Counsel for the petitioners that it is settled law

that the vicarious liability of a person for being prosecuted for an offence committed by

the company arises only when there are specific and clear allegations/averments in the

complaint that at the material time, such person was in-charge of and responsible to

the company for conduct of business of the company or that the offence was

committed with the consent or connivance of such person or attributable to neglect on

his part. Learned Counsel submitted that the complaint is totally silent in this regard

and in the absence of such averments in the complaint and without adding or

subtracting anything in the complaint, no offence is made out against the petitioners.

Learned Counsel further submitted that the Magistrate failed to appreciate that the

petitioners are made accused solely because they happened to be the directors of the

company at the relevant time. Counsel relied upon the under-noted judgments in

support of his contention.

------------------------------------------------------------------------------------- S. Judgment Citation Statute No. ------------------------------------------------------------------------------------- 1. SMS Pharmaceuticals Ltd. v. Neeta Bhalla and Anr. MANU/SC/0622/2005  : 2005CriLJ4140 NI Act 2. KPG Nair v. Jindal Manthole India Ltd. MANU/SC/2327/2000  : (2001)10SCC218 NI Act 3. MCD v. Ramkrishan Rohtagi MANU/SC/0094/1982  : 1983CriLJ159 PFA Act 4. MCD v. Purshottam Dass Jhunjhunwala and Ors. MANU/SC/0093/1982  : 1983CriLJ172 PFA Act 5. Smt. Manibai and Anr. v. State of Maharashtra MANU/SC/0172/1973  : 1974CriLJ451 PFA Act 6. State of Karnataka v. Pratap Chandra and Ors. MANU/SC/0237/1981  : 1981CriLJ595 DC Act 7. R. Banerjee and Ors. v. had Dubey and Ors. MANU/SC/0218/1992

 : 1992CriLJ1523 PFA Act 8. State of Haryana v. Brij Lal Mittal MANU/SC/0336/1998  : 1998CriLJ3287 C Act 9. Panna Lal Sunder Lal Choksi v.State of Maharashtra

MANU/MH/0040/2001  : (2001)1BOMLR349 PFA Act 10. Managing Director, IPC Agrotech v. Sh. 2002 (1) OLR 285 PFA Act Purnachandra Mishra and Anr. DC Act 11. Umesh Sharma v. S.G. Bhagta MANU/MH/0417/2002  DC Act 12. Iqbal v. State of Maharashtra 2002 (1) FAC 321 PFA Act 13. Govinda Rao v.Food Inspector MANU/KE/0073/2002  PFA Act 14. Mukesh Aggarwal v. State and Anr. MANU/DE/1093/2001  : 94(2001)DLT374 NI Act 15. Preeti Bhoj Nagarwala v.State of Gujarat and Anr. MANU/GJ/0481/2001  : (2002)1GLR293 NI Act -------------------------------------------------------------------------------------

19. Learned Counsel for the State contended that not only the complaint, but material

made available along with the complaint have also to be taken into consideration to

find out whether prima facie case is made out against the persons arrayed as accused

in the complaint. He further contended that when the documents accompanying the

complaint show that the persons named as directors of a company are responsible for

the business of the company and are in charge of the affairs of a company it is

sufficient material for the magistrate to take cognizance of the offence against said

persons.

20. Relevant part of Section 17 of the PFA Act reads as under: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 sub-section shall render any such person liable to any punishment provided in this Act if he prove 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.

x x x x

(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 connivance 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.

x x x x

21. Under the scheme of Section 17 of the PFA Act, there are three categories of

individuals, who can be proceeded against and punished for an offence committed by

the company. They are:(i) persons nominated by the company.

(ii) persons in-charge of and responsible to the company for conduct of business of company.

(iii) any director or other official of the company.

22. Section 17(1)(a)(i) is a deeming provision which stipulates that when the offence is

committed by the company, the person who is nominated under Sub Section 2 of

Section 17 shall be deemed to be a person in-charge of and responsible to the

company for conduct of business of the company and can be proceeded against and

punished accordingly.

23. However, in the absence of any nomination by the company, every person, who at

the time of commission of offence was in-charge and was responsible to the company

for conduct of business of the company can be proceeded against and punished

accordingly for an offence committed by the company. [Section 17(1)(a)(ii)]

24. Even when there is a nomination, and it is yet proved that the offence has been

committed with the consent, connivance or neglect on the part of any director,

manager, secretary or other official of the company, such director, manager, secretary

or other official shall also be deemed to be guilty of that offence and shall be liable to

be proceeded against and punished. [Section 17(4)]

25. In the decision reported as Municipal Corporation of Delhi v. Ram Kishan Rohtagi

MANU/SC/0094/1982  : 1983CriLJ159 the Supreme Court was considering a complaint

filed against the persons who were Manager and Directors of the company under

Sections 7 and 16 of the PFA Act. It was observed:It is, Therefore, manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is

that taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under Section 482 of the present Code.

26. In the light of the decision of the Supreme Court in Ram Kishan's case (supra), the

order summoning the accused has to be tested in the light of the material before the

learned Metropolitan Magistrate when he summoned the petitioners. I may note that

the company has not made any nomination under Section 17.

27. The Memorandum and Articles of Association of accused No. 3 company was filed

along with the complaint. Clause 19 and 20 thereof read as under:

19. The business of the Company shall be managed by the Directors who may pay all expenses incurred in setting up and registering the Company and may exercise all such powers of the Company as are not restricted by the act or any statutory modification thereof for the time being in force or by these Articles required to be exercised by the Company in general meeting subject nevertheless, to any regulations of these Articles, to the provisions of the Act, and to such regulations being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in general meeting. Noting shall validate any prior act of the Directors, which would have been valid, if that regulation had not been made.'

'20. The following persons are the Directors of the Company on the date of adoption of these Articles:

1. Mr. Hardeep Singh2. Mr. Amitabh Gupta

3. Mr. Sidhant Khosla

28. The afore-noted clauses clearly shows that the petitioners were in-charge of and

responsible for the conduct of business of accused No. 3 company.

29. In the decision reported as Drugs Inspector, Palace Road, Bangalore v. Dr. B.K.

Krishnaiah and Anr. MANU/SC/0136/1981  : 1981CriLJ627 a complaint was filed

against the respondent who were partners of a firm for prosecution for offences under

Section 18(a)(vi) of the Drugs and Cosmetics Act, 1940. The High Court quashed the

complaint on the ground that there were no allegations in the complaint that the

'respondents were, in any manner, in-charge of and responsible to the firm for conduct

of the business of the firm.' Noting that a partnership deed showing the constitution of

the firm was filed along with the complaint, the Supreme Court reversed the decision

of the High Court observing as under:6. The only question for consideration for the High Court in this case was whether the accused or any of them were liable. In paragraph 17 of the complaint petition the complainant quoted the provisions of the Act. In addition, he cited the names of witnesses, submitted a list of documents including a copy of the partnership deed at item No. 13 of the list of the documents. The learned

Magistrate perused the partnership deed and prima facie found that the respondents as well as the deceased accused were liable for the offence and proceeded for trial. The learned High Court committed an error in holding that there was no allegation that the respondents were not responsible for the management and conduct of the firm The extent of their liability would be established by evidence during trial. In our opinion the judgment of the learned High Court is erroneous and is liable to be set aside.

30. In view of above discussion, no ground for quashing the present complaint and

summoning order dated 27.8.03 is made out.

31. Keeping in view the fact that the petitioners are not manufacturers but marketers

of the sampled commodity, they are granted exemption from personally appearing

before the learned Metropolitan Magistrate provided petitioners enter appearance

through a counsel. However, the learned Metropolitan Magistrate shall be within his

right to enforce the attendance of the petitioners on a particular date when deemed

necessary.

32. The petition is dismissed.

33. No costs.

Rajesh S. Adani, Managing Director, Adani Wilmar Ltd.

Vs.

M. Chandrasegara Sastri, Senior Food Inspector

Hon'ble Judges/Coram:

K.N. Basha, J.

Counsels: 

For Appellant/Petitioner/Plaintiff: A. Remesh, Adv. for Ram and Ram, Advs.

For Respondents/Defendant: M.R. Thangavelu, Public Prosecutor

Subject: Food Adulteration

Catch Words

Mentioned IN

Acts/Rules/Orders: 

Prevention of Food Adulteration Act - Section 2(1), Prevention of Food Adulteration

Act - Section 7(1), Prevention of Food Adulteration Act - Section 13(1),Prevention

of Food Adulteration Act - Section 13(3), Prevention of Food Adulteration Act - Section

13(2B), Prevention of Food Adulteration Act - Section 16(1),Prevention

of Food Adulteration Act - Section 16A, Prevention of Food Adulteration Act - Section

20, Prevention of Food Adulteration Act - Section 20A; Prevention

of Food Adulteration Rules, 1955 ;Code of Criminal Procedure, 1973 (CrPC) - Section

2, Code of Criminal Procedure, 1973 (CrPC) - Section 251, Code of Criminal Procedure,

1973 (CrPC) - Section 254(1), Code of Criminal Procedure, 1973 (CrPC) - Section

261, Code of Criminal Procedure, 1973 (CrPC) - Section 262, Code of Criminal

Procedure, 1973 (CrPC) - Section 319, Code of Criminal Procedure, 1973 (CrPC) -

Section 319(3)

Cases Referred: 

Bhagwan Das Jagdish Chandar v. Delhi Administration 1975 SCC (Crl.) 410; Chetumal

v. State of M.P. 1981 SCC (Cri.) 632; Delhi Cloth and General Mills Co. Ltd. v. State

of M.P. (1995) 6 SCC 62; Municipal Corporation of Delhi v. R. Sahai (1979) 2 SCC

387; Onparkash Shivprakash v. K.I. Kuriakose and Ors. 2000 SCC (Cri.)1; Bhagsan Das

Jagdish Chander v. Delhi Adam. (1975) 1 SCC 866

Case Note: 

Ratio Decideni

Criminal - Quashing of Proceeding - Section 7, 13 and 16 of Prevention

of Food Adulteration Act, 1954 - Judicial Magistrate initiated proceedings

against Petitioner for offence of adulteration of samples of Purita Vanaspathi

- Hence, this Petition - Whether, proceedings initiated against Petitioner was

liable to be quashed - Held, manufacturer could be prosecuted, when there

was prima facie material to show link between manufacturer and vendor or

dealer - However, there was not any material available on record to show

connecting links between Petitioner who has been arrayed as A-3,

manufacturer and vendor/A-1 and A-2/dealer - Further, sample analyzed by

Central Food Laboratory itself was not tallied with sample analyzed by Public

Analyst - Moreover, in view of specific provision under Section 13(3) of Act to

effect that Analyst Report of Central Food Laboratory had to be superseded

Public Analyst Report - Therefore, in view of inherent infirmities contained in

Analyst report of Central Food Laboratory, proceedings initiated against

Petitioner had quashed - Petition disposed of.

Ratio Decidendi: 

"Manufacturer can be prosecuted even before commencement of trial, when

there is prima facie material to show link between manufacturer and vendor

or dealer."

Industry: FMCG

ORDER

K.N. Basha, J.

1. The petitioner, who has been arrayed as A-3, has come forward with this petition

seeking for the relief of quashing the proceedings initiated against him by the

respondent/complainant in C.C. No. 739 of 2005 on the file of the learned Judicial

Magistrate No. 1, Pondicherry, for the offence punishable under Section 16(1)(a)(i) of

the Prevention of Food Adulteration Act (hereinafter referred to as "the Act") for the

alleged contravention of Section 7(1) r/w 2(1a) (m) of the Act.

2. Mr. A. Ramesh, learned Counsel appearing for the petitioner, has contended that

there are certain contravention of mandatory provisions contemplated under the Act

and Rules and therefore, the entire proceedings is liable to be quashed as the ,same is

vitiated by the non compliance of the mandatory provisions contemplated under the

Act.

3. It is submitted by the learned Counsel for the petitioner that the respondent,

viz., Senior Food Inspector inspected the premises of A-l, viz., "Sakthi Ganapathi

Super Market" at No. 151, Kamarajar Street, Veeman Nagar, Pondicherry, on

10.05.2005 at 12.35 noon and taken samples of "Purita Vanaspathi" paying a sura of

Rs. 28.50. It is submitted that the Senior Food Inspector claimed to have followed

the procedure contemplated under the Act for taking the sample and sending the

same to the Public Analyst of Pondicherry. It is further submitted that it is seen from

the Public Analyst's report that the said sample contains more free fatty acids than the

permissible limit, as per Clause A.19 of the Appendix B to Prevention

of Food Adulteration Rules, 1955 (hereinafter referred to as "the Rules" and the Public

Analyst opined that the said sample is adulterated. On the basis of such analyst report,

the present complaint is filed against A-1/the vendor, A-2/the dealer and A-3/the

petitioner, who is the manufacturer of "Purita Vanaspathi".

4. The learned Counsel for the petitioner raised the following grounds for quashing the

proceedings in this case:

(i) There is absolutely no connection between the petitioner/A-3, (manufacturer) with the vendor or even the dealer as both the vendor and dealer are not found in possession of the warranty with a view to fasten the liability of the manufacturer, the petitioner/A-3 herein in this case.

(ii) As per the report of the Public Analyst, Pondicherry, there is a mention about the quantity of the sample, batch number, date of manufacturing and the name of the manufacturer etc. The said details were also found in the complaint, but on the application of the petitioner

herein, while the sample was sent to Central Food Laboratory, Ghaziabad, for analysis, the Director, Central FoodLaboratory, had mentioned that neither the batch number nor the date of manufacture were available on the label and he has also further stated only 200 ml i.e. 179.4 gms were available for analysis and as such the sealed packets of the samples which have been sent do not tally with the samples lifted by the Food Inspector. Consequently, the opinion given by the Director of Central FoodLaboratory does not pertain to the samples lifted. It is also pointed, out by the learned Counsel for the petitioner that once the sample sent to the Central Food Laboratory and analysed and thereafter, the Central Food Laboratory gives a report, such report supersedes the report of the Public Analyst by virtue of Section 13(3) of the Act. Therefore, this serious infirmity vitiates the entire trial. The learned Counsel for the petitioner placed reliance on the decision of the Hon'ble Supreme Court in Chetumal v. State of M.P. inMANU/SC/0130/1981  : 1981 SCC (Cri.) 632 in support of his contention.(iii) In view of Section 20A of the Act, the manufacturer could be implicated only after the commencement of trial and after taking the evidence which discloses the involvement of the manufacturer, and before that implicating the manufacturer as one of the accused is a pre-mature one and even on this ground the complaint is liable to be quashed. The learned Counsel for the petitioner placed reliance on the decisions of the Hon'ble Supreme Court in support of his contention in Omparkash Shivprakash v. K.I. Kuriakose in 2000 SCC (Cri.) 1 and in Bhagwan Das Jagdish Chander v. Delhi Administration in 1975 SCC (Cri.) 410.

5. Per contra, learned Public Prosecutor (Puducherry) contended that there is no

infirmity or illegality in the initiation of the proceedings against the petitioner herein

who is the manufacturer of the sample seized from the vendor, viz., A-1. It is submitted

by the learned Public Prosecutor that the grounds raised by the learned Counsel for the

petitioner could be considered only at the time of full-fledged trial and those grounds

should not be considered at the threshold of the complaint as the respondent should

have opportunity to adduce sufficient evidence to explain any defect much less the

defect alleged by the petitioner in respect of the samples sent for analysis to the

Central Food Laboratory. It is further submitted that the petitioner, being the

manufacture, has been implicated in this case only on the basis of the label found at

the time of seizure of the sample as such Section 20A of the Act is not applicable to

the present case.

6. I have, carefully considered the rival contentions put forward by either side, and also

perused, the entire materials available on record including the impugned complaint.

7. A perusal of the complaint discloses that the petitioner has been implicated as A-3 in

this case on the ground that the petitioner is the manufacturer of the sample taken

from the premises of A-1, viz., the vendor who was running a supermarket under the

name and style as "Sakthi Ganapathi Super Market". Though it is claimed by the

complainant that at the time of taking sample of "Purita Vanaspathi" he has found the

label of the manufacture containing the name of the manufacture as that of the

petitioner, the undisputed fact remains on the basis of the prima facie materials

available on record that there is a serious defect in respect of sending sample to the

Central Food Laboratory for analysis to the effect that the sample found by

the Director, Central Food Laboratory, is not tallied with the sample which was

subjected for analysis by the Public Analyst, Pondicherry. It is also rightly pointed out

by the learned Counsel that even the Director of the Central, Food Laboratory has

categorically stated in his report to the effect that neither the batch number nor the

date of manufacture were available on the label. Further it is also found- mentioned

that the sample is valid for consumption only for a period of nine months. It is relevant

to note that the sample was packed in the month of November 2004, as stated in the

complaint and in the Memorandum of Public Analyst under Form VII, and the same was

analysed by the Central Food Laboratory oh 05.12.2005 and as such it is clear that the

analysis of the said sample itself was done beyond the period of nine months and at

that time the sample itself is unfit for human consumption and as such prescribed

standard could not be expected in the sample. ' Therefore, the analysis of the said

sample Itself is a futile exercise in view of the expiry date of the said sample is itself

only for a period of nine months, as already stated.

8. Yet another defect found on the basis of the perusal of the report of the

Central Food Laboratory is that even the quantity is also not tallied between the report

of the Central Food Laboratory and the report of the Public Analyst, Pondicherry, as

the Central Food Laboratory report mentioning the quantity as 200 ml i.e., 179.4 gms

at 45°C, while the quantity of the sample mentioned in the report of the Public Analyst,

Pondicherry, is 200 qms. Therefore, this Court is of the considered view that no value

could be attached to the Public Analyst report and the report of the

Central Food Laboratory in this case in view of the above said inherent improbabilities

and infirmities and in view of the fact that admittedly as per Section 13(3) of the Act

the report of the Direct or of Central FoodLaboratory supersede the report of the

Public Analyst.

9. Section 13(3) of the Act reads hereunder:(3) The Certificate issued by the Director of Central Food Laboratory under Sub-section 2(B) shall supersede the report given by the Public Analyst under Sub-section (1).

10. The Hon'ble Apex Court has categorically held in Chetumal V. State

of M.P. in MANU/SC/0130/1981  : 1981 SCC (Cri.) 632 as follows:Under Section 13(3) of the Prevention of Food Adulteration Act, the report of the Public Analyst stood superseded by the certificate issued by the Director of the Central Food Laboratory. Having been so superseded, the report of the Public Analyst could not, therefore, be relied upon to base a conviction. The certificate of the Director of the Central Food Laboratory having been excluded from consideration because of the tampering of the seals, there was really no evidence before the court on the basis of which the appellant could be convicted. The court could not fall back on the report of the Public Analyst? as it had been superseded. The only method of challenging the 1 report of the Public Analyst was by having the sample tested by the Director of the Central Food Laboratory. In the present case the appellant was deprived of the opportunity to which he was entitled for no fault of his. It was not, therefore,

open to the court to fall back upon the report of the Public Analyst to convict the appellant.

The above principle of law laid down by the Hon'ble Apex Court is squarely applicable

to the facts of the instant case as in this case also the sample found by theDirector,

Central Food Laboratory is not tallied with the sample which was subjected for

analysis by the Public Analyst, Pondicherry as, as already stated, the batch number

and the date of manufacture were also not available on the label and added to that,

the sample is valid for consumption for a period of nine months and the sample was

packed in the month of November 2004 and the same was analysed by the

Central Food Laboratory only on 05.12.2005 and as such the said analysis of sample

itself is futile exercise. As this report of the Central Food Laboratory supersedes earlier

report of the Public Analyst, Pondicherry, the prosecution is left with no other evidence

at all to allege that the sample is adulterated one.

11. Apart from the above said serious infirmity and illegality, it is also to be borne in

mind, as pointed out by the learned Counsel for the petitioner, that there is absolutely

not an iota of material available on record to connect the petitioner herein with the

other accused, viz., A-1/vendor and A-2/dealer as both of them were not possessed

with any warranty issued by the manufacturer, the petitioner herein. Therefore, by no

stretch of imagination it could be stated that the sample which was said to have been

seized from the premises of the vendor, viz., A-1 is manufacture4d and sold by A-3.

12. A three Judge Bench of the Hon'ble Apex Court has held in Bhagwan Das Jagdish

Chandar v. Delhi Administration in 1 1975 SCC (Crl.) 410 as follows:24. ...in a suitable case, a vendor, a distributor, and a manufacturer could be tried together provided the allegations made before the Court show that there are connecting links between their activities so as to constitute the same transaction. The connecting links, in a case such as the one before us, could be provided by firstly, the fact that a sale at an anterior stage could be viewed as the cause of the subsequent sale; secondly, the allegation that each of the accused parted with the article of food when it was in an adulterated state, and, thirdly, by the common object of the manufacturer the distributor, and the vendor, that the article should reach the consumer to be used as food. The third and last mentioned link seems decisive and must tilt the balance in favour of legality of a joint trial of the parties concerned. But, we are also conscious of the fact that courts cannot ignore broader requirements of justice.

The above said principle of law laid down by the Hon'ble Apex Court is squarely

applicable to the facts of the instant case.

13. This Court also lastly constrained to state that even assuming that the petitioner

Who has been arrayed as A-3 is the manufacturer of the alleged sample taken from the

premises of the vendor A-1, the procedure contemplated under Section 20A of the Act

alone has to be followed. Section 20A of the Act reads hereunder:Section 20A. Power of Court to implead manufacturer, etc.Where at any time during the trial of any offence under this Act alleged to have been committed by any person, not being the manufacturer, distributor or dealer of any article of food, the court is satisfied, on the evidence adduced before it, that such manufacturer, distributor or

dealer is also concerned with that offence, then, the court may, notwithstanding anything contained in Sub-section 3 of Section 319 of the Code of Criminal Procedure, 1973 (2 of 1974) or in Section 20 proceed against him as though a prosecution had been instituted against him under Section 20.

A reading of the above said provision makes it crystal clear that the manufacturer is

liable to be implicated or prosecuted only after the commencement of the trial and

only after taking the evidence which discloses the identity or involvement of the

manufacturer.

14. In yet another decision in Omparkash Shivprakash v. K.I. Kuriakose and

Ors. in 2000 SCC (Cri.) 1 the Hon'ble Apex Court has held as follows:One of the differences between Section 319 CrPC and Section 20A of the Prevention of Food Adulteration Act is that while in the former even if it appears to the court from the evidence (either during inquiry or trial of the offence), that another parson is to be tried along with the already arraigned accused, then the court can proceed against that other person, while in the latter the satisfaction of the court that such manufacturer (distributor or dealer) is also concerned with that offence must be gathered from "the evidence adduced before it during the trial". In other words, the power under Section 20A cannot be invoked until the trial begins and after the trial ends....

The word "trial" is "not defined either in the Act or in CrPC. However CrPC has distinguished the trial from inquiry as could be noted from Section 2 (g) CrPC wherein the word "inquiry" is defined. The term "trial" cannot be given a fixed meaning to be applied in all cases uniformly. The connotation of that word changes with the difference in the context in which the term is employed in a particular provision of any statute....

The scrutiny of Section 16A of the Act and Section 262 (Ch. XXI), 251 and 254(1) (Ch. XX) CrPC reveals that the trial of offences under the Act begins when the Magistrate asks the accused whether he pleads guilty or not as envisaged in Section 251 CrPC, if the Magistrates opts to hold summary trial. Hence, evidence in a trial under the Act can be adduced only after recording the plea of the accused as envisaged in the said section. Thus, it is clear that a Magistrate can implead any person under Section 20A of the PFA Act only after reaching the stage envisaged in Section 254(1) CrPC....

Bhagsan Das Jagdish Chander v. Delhi Adam.   MANU/SC/0092/1975  : 1975CriLJ1091 clarifiedDelhi Cloth and General Mills Co. Ltd. v. State

of   M.P. MANU/SC/0076/1996  : 1996CriLJ424 distinguished Municipal

Corporation of Delhi v. R. Sahai   MANU/SC/0185/1979  : 1979CriLJ969 followed.Therefore, Section 20A cannot be invoked before the stage of adducing evidence in the trial, nor can it be invoked after the conclusion of the trial. In the present case, the Magistrates has chosen to exercise the power prematurely and hence the action is without jurisdiction.

The above principle of law laid down by the three Judge Bench of the Hon'ble Apex

Court clearly shows that a manufacturer could be prosecuted even before the

commencement of trial provided there is prima facie material to show the link between

the manufacturer and the vendor or dealer and as far as the instant case is concerned,

as already pointed, there is not an iota of material available on record to show the

connecting links between the petitioner who has been arrayed as A-3, manufacturer

and the vendor/A-1. Therefore, even on this ground the proceedings initiated against

the petitioner is liable to be quashed.

In view of the above said reasons, this Court is constrained to quash the proceedings

pending against the petitioner.

15. It is also pertinent to note that in view of the findings of this Court that the very

sample analysed by the Central Food Laboratory itself is not tallied with the sample

analysed by the Public Analyst, Pondicherry, and more particularly in view of the

specific provision contained under Section 13(3) of the Act to the effect that the

Analyst Report of the Central Food Laboratory has to be superseded the Public Analyst

Report of the Pondicherry and in view of the above said inherent infirmities contained

in the Analyst report of the Central Food Laboratory and this Court held that the

proceedings against the petitioner is liable to be quashed and the same ground is also

available in respect of the other accused, who have been arrayed as A-1 and A-2 in

this case and as this Court already held that the proceedings initiated against the

petitioner is liable to be quashed, as stated above, though the other accused, A-1 and

A-2 have not preferred any petition for quashing the proceedings, this Court is

constrained to extend the same benefit to them. Accordingly, the entire proceedings

initiated against the accused, viz., A-1to A-3 in C.C.No.739 of 2005 on the file of the

learned Judicial Magistrate No. I, Pondicherry, is hereby quashed.

IN THE SUPREME COURT OF INDIA

Writ Petition Nos. 468, 469, 489 and 490 of 1969

Decided On: 31.03.1970

Andhra Pradesh Grain and Seed Merchants Association etc. etc.

Vs.

Union of India (UOI) and Anr.

Hon'ble Judges/Coram:

A.N. Grover, J.C. Shah and K.S. Hegde, JJ.

Counsels: 

For Appellant/Petitioner/Plaintiff: D. Sudhakara Rao, S.V. Gupte and B. Parthasarathy,

Advs. in W.P. No. 468 of 1969 and B. Parthasarathy, Adv. in W.P. Nos. 469,489 and 490

of 1969 and

For Respondents/Defendant: Niren De Attorney-General, B.D. Sharma and S.P. Nayar,

Advs. for Respondent No. 1 and P. Ram Reddy and G.S. Rama Rao, Advs. for

Respondent No. 2

Subject: Criminal

Subject: Food Adulteration

Catch Words

Mentioned IN

Acts/Rules/Orders: 

Prevention of Food Adulteration Act, 1954 - Section 7, Prevention of Food Adulteration

Act, 1954 - Section 13, Prevention of Food Adulteration Act, 1954 - Section

16, Prevention of Food Adulteration Act, 1954 - Section 19 Constitution of India - Article

20(3)

Authorities Referred: 

Halsbury's Laws of England, Vol. 10 3rd Edn.

Prior History: 

Petitions Under Article 32 of the Constitution of India for enforcement of fundamental

rights.

Case Note:

Para 8

Criminal - validity of section - Sections 7, 13, 16 and 19 of Prevention of Food

Adulteration Act, 1954 and Articles 20 (3) and 32 of Constitution of India -

petition challenged provisions of Act of 1954 as infringing fundamental

rights guaranteed under Articles 14,19 (1) (g) and 20 (3) - Act of 1954 deals

with regulation of class of traders - stringent provisions have been made to

control malpractices - plea of ignorance of vendor on prosecution for offence

for sale of adulterated food not acceptable - person accused shall not be

compelled to witness against himself - various stringent rules were made

after consultation with committee for food standard - provisions of Act of

1954 do not consequently infringe fundamental rights conferred by

Constitution - restriction of right of tader is in interest of general public by

fixing absolute liability.

JUDGMENT

J.C. Shah, J.

1. The petitioners who are traders in foodgrains, edible oils, and other articles of food,

challenge the validity of Section 7 read with Section 2(v) and 2(ix), and Section 19,

Section 2(i) and Section 10 read with Section 13 of the Prevention of Food Adulteration

Act 37 of 1954 and the rules framed thereunder. They claim that by the Act and the

rules the fundamental rights guaranteed under Article 14, 19(1)(g) and 20(3) of the

Constitution are infringed.

2. The Parliament, with a view to control adulteration and misbranding of articles of

food, enacted the Prevention of Food Adulteration Act, 1954. The petitioners concede

that they do not claim a fundamental right to carry on business in adulterated or

misbranded foodstuffs : they claim that they are honest traders, and do not resort to

any malpractice, still in carrying on their business in foodstuffs they are, by the Act,

subjected to restrictions which are not reasonable. They contend that the Act

presumes every trader charged with an offence under Section 16(1)(a) to be guilty and

imposes upon him the burden of proving that he is not guilty of the offence charged,

by establishing facts which are not within his knowledge, or which without great

expense wholly incommensurate with his means and the facility available to him, he

cannot establish. They also claim that by the Act they are denied the equal protection

of the laws and the guarantee of Article 20(3) of the Constitution is infringed.

3. The relevant provisions of the Act may first be noticed. Section 7 of the Act provides:

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; or

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

By Section 10 a food inspector appointed under Section 9(1) of the Act is authorised to

take samples of any articles of food from any person selling such article, or from any

person who is in the course of conveying, delivering or preparing to deliver such article

to a purchaser or consignee, or from a consignee after delivery of any such article to

him, and to send such sample for analysis to the public analyst, and with the previous

approval of the health officer 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. Sub-section (5) of Section 13 provides :

Any document purporting to be a report signed by a public analyst, unless it has been superseded under Sub-section (3), or any document purporting to be a certificate signed by the Director of the Central Food Laboratory, may be used as evidence of the facts stated therein in any proceeding under this Act or under Sections 272 - 276 of the Indian Penal Code :

Provided that any document purporting to be a certificate signed by the Director of the Central Food Laboratory shall be final and conclusive evidence of the facts stated therein.

Section 16(1) prescribes the penalties : cls. (a) & (f) which are relevant provide :

(1) 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 or misbranded or the sale of which is prohibited by the Food (Health) authority in the interest of public health;

(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

(f) whether by himself or by any other person on his behalf gives to the vendor a false warranty in writing in respect of any article of food sold by him, he shall in addition to the penalty to which he may be liable under the provisions of Section 6, be punishable with imprisonment for a term which shall not be less than six months but which may extend to six years, and with fine which shall not be less than one thousand rupees :

Provided that--

...

Section 19 deals with the defences which may, and which may not, he allowed in

prosecutions under the Act. It provides:

(1) It shall be no defence in a prosecution for an offence pertaining to the sale of any adulterated or misbranded article of food to allege merely that the vendor was ignorant of the nature, substance or quality of the food sold by him or that the purchaser having purchased any article for analysis was not prejudiced by the sale.

(2) A vendor shall not be deemed to have committed an offence pertaining to the sale of any adulterated or misbranded article of food if he proves--

(a) that he purchased the article of food--

(i) in a case where a licence is prescribed for the sale thereof, from a duly licensed manufacturer, distributor or dealer;

(ii) in any other case, from any manufacturer, distributor or dealer with a written warranty in the prescribed form; and

(b) that the article of food while in his possession was properly stored and that he sold it in the same state as he purchased it.

(3) Any person by whom a warranty as is referred to in Section 14 is alleged to have been given shall be entitled to appear at the hearing and give evidence.

"Food" is defined in Section 2(v) as meaning "any article used as food or drink for

human consumption other than drugs and water and includes--(a) any article which

ordinarily enters into, or is used in the composition or preparation of human food, and

(b) any flavoring matter or condiments.

Clauses (i) and (ix) of Section 2 define the expressions "adulterated" and

"misbranded".

4. According to counsel for the petitioners the Act imposes unreasonable restrictions,

because it creates absolute liability by Section 16(1) (a) and imposes severe penalties

for storage and sale or distribution of articles of food found to be adulterated or

misbranded, or prohibited by law; it prescribes standards which are technical and

absolute, and for the slightest departure therefrom the trader is liable to be prosecuted

and punished. Counsel submitted that it is impossible for an ordinary trader without

the assistance of an expert technician to ascertain whether the articles of food

purchased by him comply with the prescribed standards, and that in prescribing the

standards of quality the imperceptible changes which take place in foodstuffs by

passage of time, are not taken into account.

5. In our judgment, the restrictions imposed upon the conduct of business by traders in

foodstuffs cannot be deemed unreasonable. By Section 16(1) provision is made for

imposing penalties, among other acts, for storage, sale or distribution of articles of

food which are adulterated or misbranded, or sale of which is prohibited by the Food

(Health) authority in the interest of the public health, or is in contravention of the Act

or the rules. The Act, it is true does not make some blame-worthy mental condition

constituted by knowledge or intention relating to the nature of the article stored, sold

or distributed, an ingredient of the offence. Unless the case falls within Sub-section (2)

of Section 19, if sale, storage or distribution is established, intention to sell articles or

knowledge that the articles are adulterated, misbranded, or prohibited need not be

proved by the prosecutor to bring home the charge. Sub-section (1) of

Section 19 provides that it is no defence in a charge for an offence pertaining to the

sale of any adulterated or misbranded article of food to allege merely that the vendor

was ignorant of the nature, substance or quality of the food sold by him, or that the

purchaser having purchased any article for analysis was not prejudiced by the sale. By

that clause a bare plea of ignorance by a trader about the nature, substance or quality

of the food sold by him is not a defence in a prosecution for the offence pertaining to

the sale of any adulterated food, nor that the article was purchased for analysis.

6. But in considering whether creation of absolute liability amounts to imposing

unreasonable restrictions, the Court has to strike a balance between the individual

right and public weal. The Courts will not strike down an Act as imposing unreasonable

restrictions merely because it creates an absolute liability for infringement of the law

which involves grave danger to public health. The Courts will undoubtedly consider

whether without imposing absolute liability the object of the statute could be

reasonably secured. For that purpose the Court will consider the object of the Act,

apprehended danger to the public interest, arising out of the activity if not controlled

and the possibility of achieving the intended results by less stringent provisions. The

nature of the trade in foodstuffs, the channels of supply and the movement of goods

from trader to trader and fertile sources of adulteration and misbranding make it

extremely difficult in a large majority of cases to establish affirmatively that storage or

sale of adulterated or misbranded foodstuff was with a guilty mind. Provisions in the

statute book creating absolute liability for sale of adulterated food are fairly common.

Section 3(1) of the English "Foods & Drugs Act", 1938, imposes absolute duty on a

dealer in foodstuff regardless of negligence: Lindley v. George W. Homer & Co.

Ltd. [1950] 1 All. E.R. 234; and Lamb v. Sunderland and District Creamery Ltd. [1951]

All. E.R. 923 The same provision is repeated in Section 2 of the "Food and Drugs Act",

1955. In Halsbury's Laws of England, Vol. 10 (3rd Edn.) at p. 273, Article 508, it is

stated :--

A statutory crime may or may not contain an express definition of the necessary state of mind. A statute may require a specific intention, malice, knowledge, willfulness, or recklessness. On the other hand, it may be silent as to any requirement of mens rea, and in such a case in order to determine whether or not mens rea is an essential element of the offence, it is necessary to look at the objects and terms of the statute. In some cases, the courts have concluded that despite the absence of express language the intention of the legislature was that mens rea was a necessary ingredient of the offence. In others, the statute has been interpreted as creating a strict liability irrespective of mens rea. Instances of this strict liability have arisen on the legislation concerning food and drugs, liquor licensing, and many other matters.

In Mousell Brothers v. London and North Western Rail Co. [1917] 2 K.B. 845 Atkin, J.,

observed :

...yet the legislature may prohibit an act or enforce a duty in such words to make the prohibitions or the duty absolute: ...To ascertain whether a particular Act of Parliament has that effect or not, regard must be had to the object of the statute, the words used, the nature of the duty laid down, the person whom it is imposed, the person by whom it would in ordinary circumstances be performed, and the person upon whom the penalty is imposed.

In Quality Dairies (York) Ltd. v. Pedley [1952] 1 All. E.R. 380 the Court of Appeal held

that Regulation 26(1) of the Mill and Dairies Regulation, 1949, requiring a distributor to

ensure that every vessel used as a container for milk shall be in a state of thorough

cleanliness, imposed an absolute liability

7. It is true that for the protection of the liberty of the citizen, in the definition of

offences, blameworthy mental condition is ordinarily an ingredient either by express

enactment or clear implication : but in Acts enacted to deal with a grave social evil, or

for ensuring public welfare, especially in offences against public health, e.g., statutes

regulating storage or sale of articles of food and drink, sale of drugs, sale of controlled

or scare commodities, it is often found necessary in the larger public interest to

provide for imposition of liability without proof of a guilty mind.

8. If from the scheme of the Act it appears that compliance with the regulatory

provisions will be promoted by imposing an absolute liability, and that it cannot

otherwise be reasonably ensured, the Court will be justified in holding that the

restriction on the right of the trader is in the interest of the general public. Adulteration

and misbranding of foodstuffs is a rampant evil and a statute calculated to control that

evil is indisputably in the interest of the general public: The statute imposing

restrictions upon traders will not be deemed unreasonable merely because it makes a

departure from the normal structure of statutes enunciating offences and prescribing

punishments. By Sub-section (2) of Section 19, even in respect of the absolute offence,

the Parliament has enacted that on proof of certain facts, criminal liability will be

excluded. Thereby a vendor is not deemed to have committed an offence pertaining to

the sale of any adulterated or misbranded article of food if he proves that the

purchased the article of food from a duly licensed manufacturer, distributor or dealer in

a case where a licence is prescribed for the sale thereof, and in any other case from

any manufacturer, distributor or dealer with a written warranty in the prescribed form,

provided the article of food while in his possession was properly stored and that he

sold it in the same state as the purchased it. The argument of counsel for the

petitioners that the provision that a retail seller who opens a container of a branded

article of food loses even the limited protection under Section 19(2) is without

substance. Clause (b) of Sub-section (2) of Section 19 does not provide, nor does it

imply, that if the container of a branded article is opened, the article of food ceases to

be in the same state in which the vendor purchased it. If the article of food is sold in

the same condition in which it was purchased from a licensed manufacturer or dealer,

or was purchased with a warranty, the vendor will not lose the protection of Sub-

section (2) of Section 19 merely because he opened the container. If the vendor has

obtained the article from a licensed manufacturer, distributor or dealer or from a

manufacturer, distributor or dealer with a warranty, he is protected, provided he has

properly stored the article and sells it in the same state as he purchased the article,

even if it turns out that the article was adulterated or misbranded. The Act does not

dispense with proof that the article of food is adulterated, misbranded or that its sale is

prohibited: it enacts that a vendor selling articles of food adulterated or misbranded

cannot plead merely that he was ignorant of the nature, substance or quality of the

goods. A statute enacted by the Parliament in the interest of public health (which is

generally made in similar statutes elsewhere) imposing liability for an offence without

proof of a guilty mind does not per se impose restrictions on the freedom to carry on

trade which are unreasonable.

9. It is true that stringent penalties are provided under Section 16(1)(a). A vendor of

adulterated, misbranded or prohibited articles of food is punishable with imprisonment

for a term which shall not, in the absence of adequate and special reasons, be less

than six months, and which may extend to six years, and with fine which shall not be

less than one thousand rupees. But for the protection of the public by ensuring the

purity of articles of food supplied to the people and preventing malpractices by the

traders in articles of food, severity of the penalties is not so disproportionate to the

gravity of the offence that it may be deemed unreasonable.

10. We are again unable to accept the argument that under the Act even when an

article is purchased not as an article of food, but for use otherwise, the vendor will be

deemed guilty if the article does not conform to the prescribed standards, or is as an

article of food adulterate or misbranded. Counsel said that coconut oil is used in the

State of Kerala as a cooking medium, and sale of adulterated coconut oil may in Kerala

be an offence under Section 16, but in other parts of the country where coconut oil is

not used as a cooking medium and is used as a component of hair oil or for other

purposes, it amounts to imposing an unreasonable restriction to penalise the vendor

who sells coconut oil knowing that the purchaser is not buying it as a cooking medium.

But there are no articles which are used as food only in one part, and are not at all

used as food in another part of the country. Even coconut oil is used as a cooking

medium by certain sections of the people in parts of India other than Kerala. In any

event it is always open to a person selling an article capable of being used as an article

of food as well as for other purpose to inform the purchaser by clear notice that the

article sold or supplied is not intended to be used as an article of food. What is

penalised by Section 16(1) is importation manufacture for sale, or storage, sale or

distribution of any article of food. If what is imported manufactured or stored, sold or

distributed is not an article of food, evidently Section 16 can have no application.

11. The various items in the Schedule setting out standards of quality use technical

expressions with which an ordinary retail dealer may not be familiar, and also set out

percentages of components which the dealer with the means at his command cannot

verify. But by Section 3, the Central Government has to set up the Central Committee

for Food Standards to advise the Central and the State Governments on matters

arising out of the administration of the Act. The Committee consists of experts and

representatives of the Central Government and of the State Governments and the

Director General of Health Services is its Chairman. Under Section 23(1)(b) the Central

Government makes rules prescribing the standards of quality and the limits of

variability permissible in any article of food. The rules are made after consultation with

the Committee for Food Standards. The standards set out in the Appendix to the Rules

are prescribed after consultation with the Committee for Food Standards. It has not

been even urged that the standards have been fixed arbitrarily. Apart from a general

argument that small retail dealers may not be in a position to ascertain whether goods

purchased by them or in their possession are according to the standards, no specific

argument was advanced that the standards, are not normal, or that the variations in

quality during the course of storage are unreasonably restricted.

12. This Court in State of Uttar Pradesh v. Kartar Singh MANU/SC/0060/1964  :

1964CriLJ229 in which in dealing with an argument of invalidity of the rule setting out

standards under the Prevention of Food Adulteration Act observed:

The standards themselves, it would be noticed, have been prescribed by the Central Government on the advice of a Committee which included in its composition persons considered experts in the field of food technology and food analysis. In the circumstances, if the rule has to be struck down as imposing unreasonable or discriminatory standards, it could not be done merely on any a priori reasoning but only as a result of materials placed before the Court by way of scientific analysis. ...That where a party seeks to impeach the validity of a rule made by a competent authority...the burden is on him to plead arid prove the infirmity is too well established to need elaboration. If, therefore, the respondent desired to challenge the validity of the rule on the ground either of its unreasonableness or its discriminatory nature, he had to lay

a foundation for it by setting out the facts necessary to sustain such a plea and adduce cogent and convincing evidence to make out his case, for there is a presumption that every factor which is relevant or material has been taken into account in formulating the classification of the zones and the prescription of the minimum standards to each zone, and where we have a rule framed with the assistance of a Committee containing experts such as the one constituted under Section 3 of the Act, that presumption is strong, if not overwhelming.

13. In the petitions a plea was raised that by the Act and the Rules, the guarantee of

Article 14 was infringed, but no argument was presented before us independently of

the argument relating to infringement of the guarantee under Article 19(1)(g), in

support of the contention that the Act infringed the guarantee of equality before the

law or equal protection of the laws. The Act deals with the regulation of a class of

traders, and in view of the widespread malpractices, and the practical difficulties of

controlling those malpractices, stringent provisions have been made by the Act. The

classification is founded on an intelligible differentia and the differentia has a rational

relation to the object sought to be achieved. The provisions of the Act again do not

invest arbitrary authority upon those who are to administer the Act. nor can it be said

that the standards prescribed are arbitrary.

14. The Act does not infringe the guarantee of Article 20(3) of the Constitution. By that

clause no person accused of any offence shall be compelled to be a witness against

himself. But by enacting that a plea by the vendor in a prosecution for an offence

pertaining to sale of adulterated or misbranded article of food, that he was ignorant of

the nature, substance or quality will not be a defence, the guarantee under

Article 20(3) is not infringed. The vendor when charged with an offence is not thereby

compelled to be a witness against himself. Nor can it be said that by making the report

of the Director of Central Food Laboratory conclusive evidence of the facts stated

therein, any such infringement is intended. The provision has been made with a view

to secure formal evidence of facts without requiring the Director to remain present,

and in the interest of effective administration of the Act, the certificate signed by the

Director of the Central Food Laboratory is made final and conclusive evidence of the

facts stated therein. The Director is a highly placed official, an expert in determining

the nature, substance and quality of food, and is wholly disinterested in the result of

any case coming before the Courts. It is difficult to appreciate how conclusiveness

attributed to the certificate of the Director compels the vendor charged with an offence

under the Act to be a witness against himself.

15. The petitions fail and are dismissed with costs. One hearing fee.

IN THE HIGH COURT OF CALCUTTA

A.F.O.D. No. 102 of 1971

Decided On: 31.07.1978

The Board of Trustees of the Port of Calcutta

Vs.

Bengal Corporation Pvt. Ltd.

Hon'ble Judges/Coram:

R.M. Datta and Salil Kr. Hazra, JJ.

Subject: Commercial

Catch Words

Mentioned IN

Acts/Rules/Orders: 

Sale of Goods Act, 1930 - Section 16, Sale of Goods Act, 1930 - Section 16(1), Sale of

Goods Act, 1930 - Section 16(2), Sale of Goods Act, 1930 - Section 59

Cases Referred: 

Ashington Piggeries v. Hill (Christopher) (H.L. (E)), (1971) 2 WLR 1051; Nagubai Ammal

v. B. Shama Rao, AIR 1956 SC 593; Bhagwati Prasad v. Chandramaul, AIR 1966 SC

735; R.T. Grant v. Australian Knitting Mills Ltd., AIR 1936 PC 34, 1936 AC

85; Manchester Liners Ltd. v. Rea Ltd., (1922) 2 AC 74; Mash & Murrell Ltd. v. Joseph I,

Emanuel Ltd., (1961) 1 WLR 862; Hardwick Game Farm v. S.A.P.P.A. (H.L. (E)), (1969) 2

AC 31, (1968) 3 WLR 110; Cammell Laird, (1934) AC 402, 403; Rabindrasingh

Shankarsingh Thakur v. Hindusthan General Electric Corporation Ltd., AIR 1971 Bom

97; Bristol Tramways & Carriage Co. Ltd. v. Fiat Motors Ltd., (1910) 2 KB 831; G.

Mckenzie & Co. (1919) Ltd. v. Nagendra Nath Mahalanabish, (1946) 50 Cal WN 213

(2); Randall v. Newson, (1876-77) 2 QBD 102; A.V. Joseph v. R. Shew Bux, 23 Cal WN

601, AIR 1918 PC 149; Maneckji Pestonji Bharucha v. Wadilal Sarabhai and Co., AIR

1926 PC 38; Gambhirmull Mahabir Prasad v. The Indian Bank Ltd., AIR 1963 Cal

163; Pravudayal Agarwala v. Ramkumar Agarwala, AIR 1956 Cal 41

Case Note:

Commercial - merchantable quality - Section 16 of Sale of Goods Act, 1930 -

question of implied terms as to quality or fitness of goods under Section 16

raised - contended that Proviso to Section 16 (2) did not apply - correctness

of test certificates had not been proved - in any event defective nature of

goods was not apparent on ordinary examination and cannot be detected

before user - implied condition was that goods should be of merchantable

quality - but goods supplied were not so - held, Section 16 (2) can also be

invoked by buyer.

Industry: Cooperative Societies

JUDGMENT

Hazra, J.

1. This is an appeal against the decree of the learned trial Judge dated June 20, 1971

for rupees 10,447.64 being the balance price of goods sold and delivered and the

balance of security deposit.

2. At the hearing of the appeal before us the respondent, decree-holder, the plaintiff in

the suit did not appear. The Advocate on record of the respondent stated that he did

not receive any instructions to appear and wanted leave to retire. We gave him such

leave, and he retired.

3. In this appeal the question of implied terms as to quality or fitness of the goods

under Section 16 of the Sale of Goods Act, 1930 has been raised. To appreciate the

points which arise for our consideration I will first state briefly the facts and

circumstances under which the suit was filed by Bengal Corporation Private Ltd.,

shortly Bengal Corporation against the Commissioners for the Port of Calcutta, Shortly

Port Commissioners.

4. In response to invitation by the Port Commissioners for tenders for supply of wire

ropes conforming to British Standard Specification, Bengal Corporation offered to

supply goods of Japanese origin. The terms of the offer of the Bengal Corporation

included (a) Bengal Corporation would supply with each consignment manufacturer's

and Lloyds Test Certificates; (b) The goods would conform to B. S. S. 302/621 of 1957;

(c) The Port Commissioners at their own costs would be entitled to have independent

inspection of the goods before shipment. The offer of Bengal Corporation was accepted

by the Port Commissioners and several orders were placed from time to time for

supply of wire ropes.

5. The suit relates to two orders, both dated March 14, 1963 viz., Order No. 2113/50 for

one reel of 5600 ft. and order No. 2114/50 for another reel of 4000 ft. On February 7,

1964. Bengal Corporation sent to Port Commissioners (a) Lloyds, Test Certificate; (b)

Manufacturer's Test Certificate and fc) Test Certificate of the Indian Dock Labourers

Regulation 1948. On March 3, and 4, 1964 the above two reels were supplied by the

Bengal Corporation to the Port Commissioners. The goods were kept in the store of

Port Commissioners and parts were taken out as required for use in crane. While in use

the goods were found to be defective. On June 19, 1964, the Engineer-in-Charge of the

Dockyard reported to the Inspecting Engineer "1707 meter of wire rope collected from

C/Store and about 593 meter of wire rope used in different cranes as noted below : On

19 P.P. Cr. at 1 GRJ the hoist wire rope replaced thrice (i.e. 30-3-1964; 7-5-1964) and

on 24 SPCr at 4 GRJ hoist wire rope replaced twice (i.e. on 15-5-1964 and 7-6-1964)

due to forming birds cage on the rope."

6. On Aug. 17, 1964, Port Commissioners reported to Bengal Corporation that the wire

ropes failed within two weeks on an average. The average life of the wire ropes used in

cranes were stated to be between 2 and 2 1/2 years. It was stated on behalf of Port

Commissioners that the entire length of the wire rope has been used up on account of

frequent failure of this wire rope on cranes due to formation of bird's cage (inner

strands coming out of the outer strands). The fault was ascribed due to defective

winding of the strands during manufacture.

7. It appears that Bengal Corporation wrote to Japanese manufacturers regarding the

defect in the wire ropes. On Sept. 29, 1964 Bengal Corporation wrote to Port

Commissioners that the manufacturers were of opinion that "perhaps the cause of

deformation is due to careless handling."

8. There are several correspondence between the parties. It is not necessary to state

the same in detail. The suit was filed on April 22, 1966 by Bengal Corporation claiming

Rs. 9,477.64 as balance price of goods sold and delivered and for Rs. 1000 as balance

of security deposit. Interest was also claimed on the balance of the goods sold and

delivered and also on security deposit.

9. In the written statement, Port Commissioners, said that the plaintiff, at the time of

the orders and making of the contract well knew that the defendant required two reels

"for use in cranes." It was also stated that there was an implied condition of the

agreement that the said two reels should be free from any defect rendering them unfit

for use in cranes. The case of the defendant was that in breach of the express or

implied condition or warranty, the plaintiff supplied two reels of wire ropes which did

not correspond with the agreement and condition or warranty as to quality and fitness.

The two reels failed while in use on the cranes due to formation of bird's cage (inner

strands coming out of the outer strands). The defendant was compelled to use the said

two reels of the defective wire ropes to unload food-grains as quickly as possible to

relieve the food scarcity. The defendant claimed that they were entitled to set up the

breaches of condition which they were compelled to treat as breaches of warranty

against the plaintiff in diminution or extinction of the price of Rs. 9477.33 claimed for

the two reels of wire ropes.

10. Several issues were raised at the trial. On the question whether the plaintiff knew

at the time of placing of the orders that the defendant required the said wire ropes for

use on the cranes, the learned Judge observed :

"The plaintiff must be held to have been imputed with the knowledge that these wire ropes were required for use on cranes in the facts and circumstances of the case."

11. The learned Judge referred to Regulation 30 (1) (b) of the Dock Regulations which

deals with the testing of wire ropes before 'hoisting or lowering' and observed :

"Hoisting or lowering can only be in connection with the use on cranes."

12. The learned Judge held:--

"Since the plaintiff knew that the manufacturers had to provide a certificate in compliance with this Regulation 30 (1) (b) of the Dock Regulations and such a certificate was in fact supplied, the plaintiff must be held to have the knowledge that these wire ropes were needed for use on cranes."

The learned Judge, however, held that on the pleading and evidence, the defendant is

not entitled to invoke the provisions of Section 16(1) of the Sale of Goods Act. The

learned Judge further held that the defendant is not entitled to invoke the implied

condition of "merchantable quality" under Section 16(2) of the Act. On behalf of the

appellant, the Port Commissioners later on (substituted in the appeal as The Board of

Trustees of the Port of Calcutta), Mr. R.L. Sinha appearing with Mrs. Chauchoria has

challenged this finding of the learned Judge, According to the learned counsel the

implied condition as to quality or fitness under S, 16 is applicable in the facts of this

case. In any event, he contends that Section 16(1) is attracted; if not, Section 16(2).

He also contends that for breach of warranty the appellant is entitled to diminution of

price.

13. In view of the argument of the learned counsel for the appellant the question is

whether Section 16 of the Sale of Goods Act, 1930 applies under the facts of this case.

This section corresponds to Section 14 of the English Sale of Goods Act, 1893, (56 and

57 Vic. c. 71).

14. Section 16 deals with implied condition as to quality or fitness. I will first read

relevant portion of Section 16.

"Section 16 : Subject to the provisions of this Act and of any other law for the time being in force, there Is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows :--

(1) Where the buyer, expressly or by implication makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose; Provided.....

(2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the

manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality :--

Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed ....."

Under Sub-section (1), the requirements which must be satisfied to import a condition

that the floods shall be reasonably fit for any particular purpose are that the buyer

must make known to the seller the particular purpose for which the goods are

required, in the circumstances showing, the seller realised or ought to have realised

that the buyer was relying on the seller's skill or judgment and the goods shall be of a

description which it is in the course of the seller's business to supply. In such a case,

there is an implied condition that the goods shall be reasonably fit for such purpose.

15. Sub-section (2) relates to all sales by description. Under this Sub-section to import

a condition that the goods are of merchantable quality, the goods must be bought by

description and seller must deal in goods of that description. The goods of that

description implies goods of the same kind as those bought, The words "that

description" refer to and mean the actual description by which the goods which are the

subject matter of the contract were bought. (See Ashington Piggeries v. Hill

(Christopher) (H. L. (E)) (1971) 2 WLR 1051per Lord Diplock).

16. The word "merchantable" can only mean "commercially saleable", If the

description is a familiar one it may be that in practice only one qua-lity of goods

answers that description then, that quality and only that quality ia merchantable

quality (See Hard-wick Game Farm Case (1969) 2 A.C 31 at p. 75, per Lord Reid).

17. Bearing in mind the meaning and effect of 9-16 as stated above, I will now consider

whether Section 16 applies under the facts of this case. Is the learned Judge correct in

his view that Section 16 does not apply in the instant case?

18. On the facts of this case, the learned Judge found that the wire ropes supplied by

the sellers were of non-rotating type and buyer made known to the seller the purpose

for which the wire ropes were required, The purpose was for use in cranes. There is no

doubt that this was the particular purpose for which the ropes were required. The

learned Judge also accepted that this was so, but held that the buyer did not rely on

seller's skill or judgment, The learned Judge observed :--

"There is no pleading that the buyer made known to the seller the purpose for which the goods were required so as to show that the buyer relied on the seller's skill or judgment. There is no pleading thai the goods are of a description which it is In the course of the seller's duty to supply."

The learned Judge also held that there is no oral or documentary evidence that the

buyer relied on seller's skill or judgment or that the goods were of a description which

it was in the course of plaintiff's business to supply.

19. With regard to this finding of the learned Judge, Mr. R.L. Sinha has contended that

absence of pleading that buyer relied on seller's skill or judgment is not fatal. In any

event, substance of the matter and not the form should be looked at. Section 16 of the

Sale of Goods Act was in issue; and evidence was laid.

20. Mr. Sinha has relied on the decisions of the Supreme Court in Nagubai Ammal v. B.

Shama Rao, MANU/SC/0089/1956  : [1956]1SCR451 and Bhagwati Prasad

v. Chandramaul, MANU/SC/0335/1965  : [1966]2SCR286 . It seems to me that the

above submissions of Mr. Sinha should be accepted under the facts and circumstances

of this case.

21. There is no doubt that the question of applicability of Section 16 was raised on

behalf of the Port Commissioners at the trial. It appears that several questions were

put to the plaintiff's witness Paban Guha in cross-examination on the point that the

buyer depended on the skill and judgment of the seller. I will set out some of the

questions and answers in this regard.

"Q. 152: You find from your letter dated 10th December, 1962 that you are selecting Japanese wire ropes and offering the goods?/yes.

Q. 153 : And you also recommended these goods, you find in that document by saying 'above wire ropes offered by us are manufactured by the leading manufacturer in the line in Japan, Messrs. Teikoku Sangyo Co. Ltd., Osaka whom we represent in India as sole agent'?/Yes.

Q. 155 : And you are recommending those manufactured rope in fulfilment of this tender?/ Yes.

Q. 156: And on the basis of your selection the defendant accepted your offer by their letter at p. 7 of the admitted brief of documents /Yes, the defendant accepted the offer made by us." Question was also put to the plaintiffs witness whether the defendant required the wire ropes of the specification mentioned according to British Standard Specification 302/621 of 1957 and the answer was "Yes." (Paban Guha Q. 149).

The same witness was asked whether the plaintiff was a dealer in wire ropes. He

answered in the affirmative and said : "We are the agents" (Q. 141). From the evidence

tendered it appears that the buyer accepted the recommendation of the plaintiff that

the goods manufactured by the Japanese manufacturer would conform to British

Standard Specification for use in cranes and on the basis of buyer's selection of goods

the seller accepted the offer. It has also been proved that the plaintiff company is the

dealer of the wire ropes and agent of the Japanese manufacturers. Therefore, in my

opinion, the learned Judge was not correct in his view that there is no evidence that

the buyer relied on the seller's skill and judgment, or that the goods were of

description which it was in the course of plaintiff's business to supply. Both the parties

went to trial with full knowledge that question of applicability of Section 16 was in

issue. They had ample opportunity to adduce their evidence thereon and had fully

availed themselves of the same. In the circumstances, the absence of a specific

pleading that the buyer made known to the seller the purpose for which the goods

were required so as to show that the buyer relied on the seller's skill or judgment or

that the goods were of description which it was in the course of seller's business to

supply was a mere irregularity which resulted in no prejudice to the parties. (See

Nagubai Ammal v. B. Shama Rao. MANU/SC/0089/1956  : [1956]1SCR451 .

22. The observation of the Supreme Court in Bhagwali Prasad v. Chandramaul,

MANU/SC/0335/1965  : [1966]2SCR286 may also be quoted here :--

"If a plea is not specifically made not yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence."

I will now turn to the legal aspect of the matter.

23. With regard to the law on the point, the learned Judge has referred to the decision

of the Judicial Committee in R. T. Grant v. Australian Knitting Mills

Ltd.MANU/PR/0089/1935

1936 AC 85 and has quoted the observation of Lord Wright :--

"It is clear that the reliance must be brought home to the mind of the seller, expressly or by implication. The reliance will seldom be express, it will usually arise by implication from the circumstances."

I think I should quote in this connection the speech of Lord Buckmaster in Manchester

Liners Ltd. v. Rea Ltd. (1922) 2 AC 74 :--

"If goods are ordered for a special purpose, and that purpose is disclosed to the vendor, so that in accepting the contract he undertakes to supply goods which are suitable for the object required, such a contract is, in my opinion, sufficient to establish that the buyer has shown that he relies on the seller's skill and judgment." The words "so as to show" in Section 16 mean "in the circumstances showing". (See Halsbury's Laws of England, Third Edition, Vol. 34, Article 77 page 51, footnote (e)).

23-A. I will quote here the observation of Lord Sumner in the decision of the House of

Lords in Manchester Liners, Ltd. v. Rea Ltd, (1922) 2 AC 74 at p. 90 :--

"The words of Section 14(i) are 'so as to show,' not 'and also shows.' They are satisfied, if the reliance is a matter of reasonable inference to the seller and to the Court."

24. Mr. Sinha has Invited our attention to the decision in Mash & Murrell Ltd. v. Joseph

I, Emanuel Ltd. (1961) 1 WLR 862where Dip-lock, J. has followed the decision in (1922)

2 AC 74, According to the learned Judge, the well known case of Manchester Liners Ltd.

v. Rea Ltd. (1922) 2 AC 74 establishes the proposition that if the particular purpose is

made known by the buyer to the seller, then unless there is something in effect to

rebut the presumption, that in itself is sufficient to raise the presumption that he relies

upon the skill and judgment of the seller. (See (1961) 1 WLR 862).

25. I will note in this connection that Lord Reid in the latest decision of the House of

Lords on the point in Hardwick Game Farm v. S. A. P. P. A. (H. L. (E)) : (1969 2 AC 31 p.

81 : (1968) 3 WLR 110 explained the statement of law enunciated by Lord Wright in

Cammell Laird (1934 AC 402, (referred to in Grant's caseMANU/PR/0089/1935  in the

way as hereunder :--

"Lord Wright might appear to be going further when he said in Cammell Laird (1934) AC 402 : 'Such a reliance must be affirmatively shown : the buyer must bring home to the mind of the seller that he is relying on him in such a way that the seller can be taken to have contracted on that footing. The reliance is to be the basis of a contractual obligation.'

But I do not think that he meant more than that in the whole circumstances a reasonable man in the shoes of the seller would have realised that he was being relied on."

26. Mr. Sinha has referred to a decision of the Bombay High Court in Rabindrasingh

Shankarsingh Thakur v. Hindusthan General Electric Corporation Ltd.,

MANU/MH/0017/1971  : AIR1971Bom97 . In that case it was also held that

communication of the particular purpose from the buyer to the seller may be inferred

from the description of the goods given by the buyer to the seller or from the

circumstances of the case. The buyer, however, must rely on seller's skill or judgment.

27. Having regard to the law on the point as laid down in the above mentioned cases,

it seems to me that not only it has been proved, in the instant case, that the wire ropes

were required for use in cranes, but also all essential facts exist showing that the

defendant buyer relied on plaintiff seller's skill or judgment for supply of such goods

and that the goods were of description which it was seller's duty to supply as agent of

the Japanese manufacturers. In this respect, I have taken into consideration the

relevant facts, evidence and circumstances of the case and also the legitimate

inferences from the facts admitted or proved. In this case, the wire ropes were sold for

the particular purpose, namely, for use in cranes and as such the plaintiff seller must

have undertaken that wire ropes should be fit for that purpose. At the time of purchase

of goods for a particular purpose, very seldom the purchaser tells the seller "Look. I am

relying on your judgment and skill that the goods would be fit for the particular

purpose for which the same are required". I am inclined to think that if the seller was

told that the goods were required for a particular purpose such statement suffices to

show that the buyer relied on seller's skill or judgment without any further evidence on

this point. In any event, n the instant case, there was ample evidence on behalf of the

defendant Port Commissioner that reliance was made on the skill and judgment of the

plaintiff seller and the plaintiff chose the Japanese manufacturers as their principal for

manufacture of the particular type of wire ropes according to British Standard

Specification for use in cranes and the defendant buyer relied on the choice of the

plaintiff in this respect. This being so, there was an implied condition that the wire

ropes should be reasonably fit for the declared purpose. (See Bristol Tramways &

Carriage Co. Ltd. v. Fiat Motors, Ltd. (1910) 2 KB 831 ).

28. For the above reasons, in my view, Section 16(1) of the Sale of Goods Act applies

under the facts of this case and, I am unable to share the same view as taken by the

learned trial Judge on this point.

29. On the facts of this case, it appears that two reels of wire ropes were admittedly

defective. The learned Judge has found "that the wire ropes supplied did reveal a

defect at certain point of time after it has been used". The learned Judge said that

there was "a tacit recognition on the part of the plaintiff that there was some defect on

the wire ropes supplied". The evidence on behalf of the defendant is that the wire

ropes last normally about two to three years. (Sankar Das Mitra Q. 52). But in the two

reels of wire ropes, which were the subject matter of the suit, the inner strand came

out from the outer strand and "bird's cage" formed within short time of its use, on an

average within two weeks' time. There is no reason to disbelieve this part of the case

of the defendant which has been proved both by oral and documentary evidence. The

learned trial Judge has also accepted this case of the defendant. What follows then? It

follows that the defendant wanted to buy wire ropes which could be used in the

defendant's cranes and the life of such wire ropes should be two three years on an

average. Paban Guha the witness called on behalf of the plaintiff also admitted that it

is impossible to imagine that the wire ropes will fail within weeks' time. I will set out

hereunder two questions with answers of Paban Guha in cross-examination,

"Q. 190: I suggest that the wire ropes of 2.1/8" x 2.1/4" circumference, the subject matter of dispute, failed in course of use on cranes within two weeks, on an average, due to formation of bird-cage, that is, inner strand coming out of the outer strand and for unwinding of strands?/ That is impossible.

Q. 191 : That is impossible?/ It is impossible to imagine that wire-rope will fail within 2 weeks' time". But this impossible event has happened in this case. This has been proved by the defendant Port Commissioners.

30. Question here arises who caused the defect? Was it manufacturing defect? Or, was

the defect caused due to mishandling by the defendant?

31. On this aspect Mr. R.L. Sinha contends that in cross-examination of the defendant's

only witness Sankar Das Mitra. there was no suggestion that the wire ropes were not

defective There was no suggestion that bird's cage formed due to mishandling by the

defendant. There was no suggestion that the cranes were defective, There was no

suggestion that grooves in the drum were defective or pulleys were defective. Only

suggestion to the witness with his answer thereto was as follows :

"Q. 320: I am suggesting to you that the proper functioning of a crane or formation of bird's cage or inner strands coming out of the outer strands depends upon the proper handling of the crane or proper handling of the wire ropes?/ I do not agree with you."

32. On the question of defects, the case of the plaintiff was that "the manufacturers

are of opinion that perhaps the cause of deformation is due to careless handling." The

word "perhaps" in the context means that the plaintiff was merely guessing. The

plaintiff could not produce any report from the Japanese manufacturers as to the cause

of such defects. The plaintiff was allowed to inspect and to take photograph of the

damaged wire ropes lying in the yard of the Port Commissioners. This will appear from

the letter dated October 28, 1964 by the defendant to the plaintiff. It also appears that

samples of damaged goods were sent to Japan by the plaintiff and reply was received

from the Japanese manufacturers. This will be evidence from the question and answer

of Paban Guha, the plaintiff's witness, set out he re under:

"Q. 220 : Can you suggest any reason why you did not receive any report from your manufacturers?/ They wrote back to us that the samples were very small in size and hence those could not be tested. They wanted much bigger size for facilitating testing.

Q. 221 : Where is that letter from your manufacturer?/ That letter is in the file. That has not been produced in court."

Thus, the plaintiff has withheld from Court the letter received by them from the

manufacturers.

33. Mr. Sinha has argued that when the wire ropes were defective it is not for the

buyer to prove how the defect occurred. I think the contentions made by Mr. Sinha

have great force and I am inclined to accept the same. I am inclined to take the view

that the defect was not caused due to mishandling of the goods. It seems to me that

the wire ropes were defective at the time of the delivery of the same to the defendant.

34. For the reasons stated above Section 16(1) of the Sale of Goods Act apply in the

facts of this case.

35. Now, on question of applicability of Section 16(2) I am also unable to share the

same view with the learned trial Judge that Section 16(2) does not apply. In my view it

does. The goods supplied by the seller were not of merchantable quality. It is true that

merchantable quality has not been denned in the Sale of Goods Act. No exhaustive

definition has been laid down in any judicial decisions. But, following the definition

given by Farewell, L. J in Bristol Tramways Co.'s case :(1910) 2 KB 831 at pp. 839-840,

this Court in G. Mckenzie & Co. (1919) Ltd v Nagendra Nath Mahalanabish : 50 Cal WN

213 said :

"When an article is sold by description, it may be regarded as a sale of an article of that description, which is free from any latent defect which, if known at the time, will make it unmerchantable."

36. I will quote here the tests laid down in Randall v. Newson; (1876 2 QBD 102 :

"If a man sells an article he thereby warrants that it is merchantable,--that it is fit for some purpose. If he sells it for that particular purpose, he thereby warrants it for that purpose." In Bristol Tramways, etc. Carriage Co. Ltd. v. Fiat Motors Ltd. (1910) KB 831 , Farwell, LJ gave another explanation of the phrase 'merchantable quality' which I would like to quote here:

"The phrase in Section 14(2) is, in my opinion, used as meaning that the article is of such quality and in such condition that a reasonable man acting reasonably would after a full examination accept it under the circumstances of the case in performance of has offer to buy that article whether he buys for his own use or to sell again."

In Grant's case: 1936 AC 85 at p. 99-100 : MANU/PR/0089/1935 Lord Wright observed

:

"Whatever else merchantable may mean, it does mean that the article sold, if only meant for one particular use in ordinary course, is fit for that use; merchantable does not mean that the thing is saleable in the market simply because it looks all right; it is not merchantable in that event if it has defects unfitting it for its only proper use but not apparent on ordinary examination: that is clear from the proviso, which shows that the implied condition only applies to defects not reasonably discoverable to the buyer on such examination as he made or could make." In view of the law quoted above, it seems to me that the goods supplied by the seller were not of merchantable quality as the same were not suitable for the purpose for which the same were required. The goods were bought by description and the seller should have supplied the same reasonably fit for use in cranes.

37. According to the letter of the defendant dated August 17, 1964, the average life of

such ropes should have been two to two-half years; but, in fact, the same could be

used for much less period. The proviso to Section 16(2) also does not apply; because,

Section 16(2) deals with defects which ought to have been revealed upon examination.

In this case, the defects were latent defects which could not be detected on apparent

examination of the goods in Japan, The defect in the wire ropes could only be detected

after their user in cranes,

38. With regard to manufacturer's test certificate and Lloyds Test Certificate Mr. Sinha

contends that although, the learned Judge admitted the same as exhibits in spite of

objection and held against the appellant but the contents of the certificates ought to

have been proved. According to him, the proviso to Section 16(2)does not apply;

because, there is no evidence of examination of such goods before delivery. The

person who gave the Llyods Test Certificate has not been called to prove the contents

of the certificate. It seems to me that Mr. Sinha is justified in his comments in this

respect, The correctness of the test certificates or the Lloyds report has not been

proved. In any event, as the defective nature of the goods was not apparent on

ordinary examination, and could not be detected before user in cranes, the proviso to

Section 16(2) is not attracted. Therefore, there was implied condition that the goods

should be of merchantable quality, but the two reels supplied by the seller were not so.

In the above view of the matter Section 16(2) can also be invoked by the defendant

buyer.

39. The only other point which remains is the question of remedy for breach of

warranty by the seller under Section 59 of the Sale of Goods Act. Such breach gives

rise to the claims of damages on the part of the buyer. The case in the written

statement is that the defendant was compelled to use the said two reels of defective

wire ropes to unload food-grains as quickly as possible to relieve food scarcity.

40. On behalf of the appellant Mr. Sinha submits that the appellant is entitled to

diminution of price. It is a clear case of breach of warranty or breach of condition as to

quality or fitness of two reels of wire ropes supplied and it has given rise to a claim for

damages on the part of the defendant buyer. Exact measurement of the amount of

damage is not possible in this case. Mr. Sinha, however, has prepared a chart from

exhibit 3-A which is the stock-ledger of the wire ropes of the Calcutta Port

Commissioners and submits that although the defendant is entitled to much more than

50% of reduction of price, he will claim at least 50% of the reduction of price. He has

referred to the decisions of the Privy Council in A. V. Joseph v., R. Shew Bux 23 CWN

601 : AIR 1918 PC 149, Maneckji Pestonji Bharucha v. Wadilal Sarabhai and Co., AIR

1926 PC 38 and the decision of this Court in Gambhirmull Mahabir Prasad v. The Indian

Bank Ltd., MANU/WB/0036/1963  : AIR1963Cal163 and contends that at least 50% of

reduction of price should be allowed to the defendant on the basis of the replacement

of wire ropes. There is no doubt that the defendant-appellant has suffered damage by

reason of supply of defective wire ropes and as such the defendant buyer is entitled to

claim damages. It also seems to me that it is difficult to come to a definite figure as to

exact measurement of damages. It seems to me, however that the fact that the

damages are difficult to estimate and cannot be assessed with certainty or precision

does not relieve the plaintiff-respondent of the necessity of paying damages for the

breach. The amount of the claim is small in this case. The chart prepared from exhibit

3-A, the stock-ledger of wire ropes of the Calcutta Port Commissioners, throws

considerable light on the question of damages. It seems to me to be acceptable. The

assessment of damages, however, cannot be made with any mathematical accuracy.

On the principles laid down in the above Privy Council decisions and on the law stated

in Halsbury's Laws of England, Third Edition, Vol. 11, Article 394, page 226 referred to

in the judgment of Sankar Prasad Mitra, J. (as he then was) in Gambhirmull's

case MANU/WB/0036/1963  : AIR1963Cal163 , I think, I should allow the appellant the

benefit of every reasonable presumption as to loss suffered and I will allow diminution

of the price of the goods to the extent of 50%.

41. In this respect I will also follow the principle laid down in the Bench decision of this

Court in Pravudayal Agarwala v. Ramkumar Agar-wala, MANU/WB/0013/1956  :

AIR1956Cal41 where it was held that even in a case where nominal damage is

awarded this does not connote that trifling amount is to be assessed. What is to be the

amount of nominal damage depends on the facts of each particular case. On the facts

of this case, in my view, 50% of diminution of price would not be unreasonable or

excessive,

42. In this view of the matter, the appeal is allowed in part. The decree passed by the

learned trial Judge is varied to the following extent.

With regard to the balance price of the goods sold and delivered the respondent will be

entitled to one-half of Rs. 9447.64 i.e. Rs. 4738.82. The respondent, however, will be

entitled to entire amount of security deposit, viz., Rs. 1,000/-. Thus, the total amount of

the decree in favour of the plaintiff-respondent is reduced from Rupees 10,477.64 to

Rs. 5,738.82. The respondent will be entitled to interest on the sum of Rs. 5,738 at 6%

per annum from the date of the filing of the suit, viz.. April 22, 1966 till payment and

the decree is modified accordingly. The recorded Advocate on behalf of the appellant

will hold the amount lying in his hands pursuant to the order dated August 7, 1971

until the decretal amount with cost in favour of the plaintiff respondent is satisfied and,

thereafter, he would be at liberty to return the balance amount to the Board of

Trustees of the Port of Calcutta.

With regard to the cost, the plaintiff-respondent will be entitled to one-half of the costs

of the suit. The defendant appellant will be entitled to one half of the cost of the

appeal.

Certified for two counsel throughout.

Ramendra Mohan Datta, J.

43. I agree.