w w w . L a w y e r S e r v i c e s . i n



Karnataka State Pollution Control Board, Rep. by its Regional Officer, Gopalakrishna B. Sannatangi, Now M.N. Yoganand Karwar v/s K.L. Chandak, Executive Director, M/s. The West Coast Paper Mills Limited, Dandeli

    Criminal Appeal No. 100246 of 2015

    Decided On, 16 January 2021

    At, High Court of Karnataka Circuit Bench At Dharwad

    By, THE HONOURABLE MR. JUSTICE RAVI V. HOSMANI

    For the Appellant: I. Gurudev, Gachchinamath, Advocate. For the Respondent: Prashant T. Areguli, Advocate.



Judgment Text

(Prayer: This criminal appeal is filed u/sec.378 of Cr.P.C., praying to set aside the impugned judgment dtd.30.7.2015 made in C.C. No.651/2004 passed by the Civil Judge and JMFC, Dandeli and punish the accused as prayed for in the compliant for offence u/s. 24, 25 P/U/S 43, 44 of Water (Prevention & Control of Pollution) Act, 1974.)

1. Challenging the judgment dated 30.07.2015, passed by the Civil Judge and JMFC, Dandeli in CC No. 651/2004 acquitting the accused for the offences punishable under Sections 43 and 44 of the Water (Prevention and Control Pollution) Act, 1974 (hereinafter referred to as ‘the Act’ for short), the complainant Karnataka State Pollution Control Board (hereinafter referred to as ‘the Board’ for short) is in appeal.

2. Brief facts leading to this appeal are a private compliant under Section 200 of Code of Criminal Procedure, 1973 (hereinafter referred to as ‘the Cr.P.C.’ for short) was filed by the Regional Officer – Deputy Environmental Officer, Karwar on 04.08.2004 stating that the complainant is a statutory board constituted under Section 4 of the Act to exercise the powers and perform the functions conferred on it under the Act, through out the State of Karnataka.

3. The accused is the Executive Director of M/s. West Coast Paper Mills Ltd., located at Bangur Nagar, Dandeli. The said Industry is manufacturing paper and duplex board with a capacity of 85500 MTPA. The Industry was permitted for discharge of trade effluents of 64800 KLD, under a consent issued by the Board. The consent expired on 30.06.2003. Even the consent for establishment (CFE) dated 06.04.2002 for modernization and expansion of production capacity from 85500 MTPA to 163750 MTPA contained a condition against increase in pollution load. The industry was also issued with CFE to upgrade its existing Effluent Treatment Plant (ETP) vide order dated 20.12.2002. But when the industry was inspected on 27.04.2003, and samples of discharge collected were tested, analysis report indicated discharge of effluents exceeding standards stipulated by the Board. The biological oxygen demands (BOD) was higher than prescribed, The Central Pollution Control Board, Bengaluru also conducted in-depth monitoring of Industry from 20.01.2003 to 21.01.2003 and submitted a report. The said report revealed effluent discharge exceeding prescribed standards. A show cause notice was issued on 05.05.2003 for personal hearing. After personal hearing on 12.05.2003, time limit was extended upto end of September 2003 to complete commissioning of upgraded ETP. But, the analysis report of samples collected on 18.06.2003 again revealed discharge of effluents in excess of prescribed standards. One more show cause notice was given. The industry had not completed construction and commissioning of ETP even as on date of subsequent inspection on 06.10.2003. The analysis report of the samples collected on 06.10.2003 indicated suspended solids exceeding standards stipulated by the Board. This showed that the industry had failed to keep its commitment of completing and commissioning the ETP by 30.09.2003.

4. That the industry was inspected again on 25.05.2004 and 14.06.2004 in presence of Shri K.L. Chandak, Executive Director by serving notice of intention to inspect. The analysis of grab samples collected in his presence indicated discharge of effluents into Halamaddi Nala leading to Kali river even after expiry of CFE and communication of order refusing its extension. This act of accused was offence under Sections 24, 25 read with Sections 43 and 44 of the Act. Therefore, the complaint was filed with the following prayer;

a) The accused being Executive Director/s of the West Coast Paper Mills Ltd., located at Bangur Nagar, Dandeli-584 325, Haliyal taluka, U.K. District had committed offences under Sections 24, 25 and Punishable under Sections 43, 44 of Water (Preventions and Control of Pollution) Act, 1974 and hence the accused be summoned for the trial and accordingly for the above said offences, in the interest of justice.

5. After recording sworn statement of complainant and taking cognizance summons was issued to accused. Upon appearance, accused denied the charges and sought trial. To prove the charges, four witnesses were examined on behalf of complainant as PW1 to PW4 and Exhibits P1 to P57 were marked. Thereafter, the criminating material was explained to accused which he denied and did not offer any explanation. His statement was recorded under Section 313 of Cr.P.C. No defence evidence was led.

6. Based on above, trial Court framed following points for its consideration:

“1. Whether the Complainant has proved beyond all reasonable doubt that M/s. West Coast Paper Mills Ltd., Dandeli was discharging the trade effluent in enormous quantity that consented quantity into river Kali without adequate treatment polluting the river water which is violation of Section 24 of the Water (Prevention and Control Pollution) Act, 1974 and thereby the accused has committed the offence punishable under Section 44 of the Water (Prevention and Control Pollution) Act, 1974?

2. Whether the Complainant has proved beyond all reasonable doubt that M/s. West Coast Paper Mills Ltd., Dandeli was discharging the trade effluent into river Kali without previous consent of the Board which is violation of Section 25 of the Water (Prevention and Control Pollution) Act, 1974 and thereby the accused has committed the offence under Section 45 of the Water (Prevention and Control Pollution) Act, 1974?

3. What order or sentence?

7. After answering point Nos.1and 2 in the negative, the trial Court proceeded to acquit accused of all offences alleged against him. Challenging acquittal, complainant is in appeal.

8. Shri Gurudev I. Gachchinamath learned counsel for appellant submitted that the Board had established ingredients of offences alleged against accused by examining witnesses and producing documentary evidence. The same established that industry was operating and releasing trade effluents even after expiry of CFE, in excess of standards prescribed by Board and failed to comply with its directions to upgrade and commission ETP.

9. Learned counsel further submitted that Ex.P1 is the mahazar drawn after inspecting the industry on 27.04.2003. The mahazar is written and signed by PW.1. Likewise Ex.P4 mahazar was drawn on 18.06.2003; Ex.P5 on 16.10.2003; Ex.P6 on 25.05.2004; Ex.P7 on 14.06.2004 and Ex.P8 on 15.06.2004 respectively. Ex.P9 is the CFE dated 20.12.2002 containing directions for upgrading ETP. The annexure to CFE contains the standards prescribed by the Board regarding trade effluents.

10. Learned counsel submitted that the analysis report at Ex.P21 indicated BOD level at 51 and COD 451 which was far in excess of standards prescribed, and same was communicated to accused in Ex.P22, cautioning penal action in case of continued violation. Learned counsel further drew attention of this Court to Exs.P29 and P30, wherein accused acknowledged receipt of notice of intention to insect and collect sample. The accused singed as Executive Director of the Company. Thus, complainant established commission of offences by accused.

11. On the other hand, Shri Padhmanabha V.Mahale, learned senior counsel for Shri. Prashant T.Aregull, Advocate for respondent submitted that entire allegations in the complaint were against the company. But the accused, who is one of the Executive Directors of the Company, has been arraigned as accused without impleading the Company. Hence, complaint was not maintainable under Section 47(1) of the Act.

12. It was further submitted that complainant has failed to produce notice of intention to collect the sample mandated under sub-sections (3), (4) and (5) of Section 21 of the Act. Without there being any compliance with above provisions, the result of analysis of samples would not be admissible in evidence in any legal proceedings in view of Section 21(2). This was a fatal flaw in the prosecution case.

13. Learned senior counsel further submitted that the analysis reports showing suspension of solids in excess of prescribed standards pertain to samples collected during rainy season when rain water would naturally contain increased amount of suspended soil contents. This was one of the circumstances that created doubt about the prosecution case.

14. With regard to accusation that industry was being run without valid consent, it was submitted that the company and filed an application for consent on 07.04.2003 for the period 2003-2004. Section 25(7) of the Act provides in case no order is communicated on the application, within a period of four months, the consent sought for is deemed to have been granted. In the case on hand, complainant has stated order of rejection of application was passed on 13.07.2004, which is after period of four months. Therefore, consent was deemed to have been granted, hence, no offence was committed.

15. Referring to date of cause of action mentioned in complaint as 15.06.2004 and 24.06.2004, learned counsel submitted that no samples were collected on the said dates, no lab reports were received and no mahazars conducted. Therefore, cause of action for filling complaint was imaginary and complaint did not merit consideration.

16. In support of his submissions, learned senior counsel relied upon following decisions:

(i) Managing Director, Castrol India Ltd., vs. State of Karnataka, reported in 2017 (18) SCC 275;

(ii) K.K. Ahuja vs. V.K. Vora and another, reported in 2009 (10) SCC 48;

(iii) Sushil Sethi and another vs. State of Arunachal Pradesh and others reported in 2020 (3) SCC 240; and

(iv) Ramesh Babulal Doshi vs. State of Gujarat, reported in 1996 (9) SCC 225.

17. From the above, it is seen that the fact that the company is running an industrial unit which discharges trade effluents into river Kali is not in dispute. It is further not in dispute that it had obtained CFE from the board and was carrying on manufacturing activities. It is not in dispute that complainant is having powers to inspect industrial plants, collect samples and issue directions to abate pollution. It is not in dispute that failure to comply with provisions of the Act and directions issued would constitute offences under the Act. The dispute is regarding acceptability of analysis reports of grab samples without proof or compliance with Sections 21(3), (4) and (5) of the Act and maintainability of complaint without arraigning company as an accused and also non-compliance of directions issued by the Board.

18. Since there is dispute with regard to maintability of complaint without arranging the company as an accused, a reference to the relevant provision is necessary. Section 47 of the Act deals with offences by companies. It reads as follows:

“47. Offences by companies.—

(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company, as well as 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 proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence and it is proved that the offence has 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, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.— For the purpose of this Section,--

(a) ”Company” means any body corporate, and includes a firm or other association of individuals; and

(b) “Director” in relation to a firm means a partner in the firm.”

19. Learned senior counsel relied upon decision of Supreme Court in Managing Director Castrol India Limited (supra) wherein referring to Section 74 of Standards of Weights and Measures Act, 1976, Hon’ble Supreme Court held that without specific averment in complaint about responsibility of Managing Director or his being in-charge of business of company and his connection to commission of any acts constituting an offence and without arraying company as accused, complaint was maintainable and quashed same. Further in Sunil Sethi and another, examining initiation of criminal proceedings against Managing Director or any officer of a company it was held that it was essential to make requisite allegations against such Director or Officer to constitute vicarious liability. And where main allegations are against company failure to make it a party would be fatal and had quashed proceedings. Further in K.K. Ahuja case (supra) the Hon’ble Supreme Court, though was dealing with a complaint for an offence under Section 141 of the Negotiable Instruments Act, 1881, examining the provisions of several other enactments containing pari material provisions held as follows:

“16. ……. To put it differently, to be vicariously liable under sub-section (1) of Section 141, a person should fulfill the ‘legal requirement’ of being a person in law (under the statute governing companies) responsible to the company for the conduct of the business of the company and also fulfill the ‘factual requirement’ of being a person in charge of business of the company.

17. Therefore, the averment in a complaint that an accused is a director and that he is in charge of and is responsible to the company for the conduct of the business of the company, duly affirmed in the sworn statement, may be sufficient for the purpose of issuing summons to him. But if the accused is not one o the persons who falls under the category of ‘persons who are responsible to the company, for the conduct of the business of the company’ (listed in para 14 above), then merely by stating that ‘he was in charge of the business of the company’ or by stating that ‘he was in charge of the day to day management of the company’ or by stating that he was in charge of, and was responsible to the company for the conduct of the business of the company, ‘he cannot be made vicariously liable under Section 141 (1) of the Act.

18. It should, however, be kept in view that even an officer who has not in charge of and was responsible to the company for the conduct of the business of the company can be made liable under sub-section (2) of Section 141. For making a person liable under Section 141(2), the mechanical repetition of the requirements under Section 141(1) will be of no assistance, but there should be necessary averments in the complaint as to how and in what manner the accused was guilty of consent and connivance or negligence and therefore, responsible under sub-section (2) of section 141 of the Act.”

20. In addition to the above requirement, the complaint in the instant case suffers from another fatal flaw, namely non-arraigning of the Company. The three Judge Bench of Hon’ble Supreme Court in the case of Aneeta Hada vs M/s Godfather Travels & Tours reported in (2012) 5 SCC 661 held as follows:

“58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words “as well as the company” appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicated.” In similar terms, the Court further held:

“59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative.”

21. The law laid down in the above decision is also re-iterated in a recent decision in Himanshu v. B. Shivamurthy, reported in (2019) 3 SCC 797. Interestingly the provision is pari-materia with Section 47 of Act in this case. As there is failure on the part of the complainant to arraign the Company as an accused in the Complaint filed by it, the same has to be held to be not maintainable. Consequently, for the twin reasons namely failure to make specific averments regarding specific acts of the accused constituting offense under the Act and failure to arraign the Company as accused, the instant Complaint filed by Appellant is liable to be held as not maintainable.

22. Apart from the above, the Complainant has also submitted that the accused is guilty of discharging trade effluents in excess of standards prescribed by the Board. In order to establish the same, the Complainant is relying upon the Spot Mahazars and analysis reports of samples collected at that time. The provision that governs collection of samples is Section 21 of the Act. It reads as under:

“Section 21. Power to take samples of effluents and procedure to be followed in connection therewith. (1) A State Board or any officer empowered by it in this behalf shall have power to take for the purpose of analysis samples of water from any stream or well or samples of any sewage or trade effluent which is passing from any plant or vessel or from or over any place into any such stream or well.

(2) The result of any analysis of a sample of any sewage or trade effluent taken under sub-section(1) shall not be admissible in evidence in any legal proceeding unless the provisions of sub-sections (3), (4) and (5) are complied with.

(3) Subject to the provisions of sub-sections (4) and (5), when a sample (composite or otherwise as may be warranted by the process used) of any sewage or trade effluent is taken for analysis under sub-section (1), the person taking the sample shall—

(a) serve on the person in charge of, or having control over, the plant or vessel or in occupation of the place (which person is hereinafter referred to as the occupier) or any agent of such occupier, a notice, then and there in such form as may be prescribed of his intention to have it so analyzed;

(b) in the presence of the occupier or his agent, divide the sample into two parts;

(c) cause each part to be placed in a container which shall be marked and sealed and shall also be signed both by the person taking the sample and the occupier or his agent;

(d) send one container forthwith,--

(i) in a case where such sample is taken from any area situated in a Union territory, to the laboratory established or recognized by the Central Board under section 16; and

(ii) in any other case, to the laboratory established or recognized by the State Board under section 17;

(e) on the request of the occupier or his agent send the second container,--

(i) in a case where such sample is taken from any area situated in a Union territory, to the laboratory established or specified under sub-section 1 of section 51; and

(ii) in any other case, to the laboratory established or specified under sub-section 1 of section 52.

[(4) When a sample of any sewage or trade affluent is taken for analysis under sub-section (1) and the person taking the sample serves on the occupier or his agent, a notice under clause (a) of sub-section (3) and the occupier or his agent willfully absents himself, then,--

(a) the sample so taken shall be placed in a container which shall be marked and sealed and shall also be signed by the person taking the sample and the same shall be sent forthwith by such person for analysis to the laboratory referred to in sub-clause (i) or sub-clause (ii), as the case may be, of clause (e) of sub-section (3) and such person shall inform the Government analyst appointed under sub-section (1) or sub-section (2), as the case may be, of section 53, in writing about the willful absence of the occupier or his agent; and

(b) by cost incurred in getting such sample analyzed shall be payable by the occupier r his agent and in case of default of such payment, the same shall be recoverable from the occupier or his agent, as the case may be, as an arrear of land revenue or of public demand;

Provided that no such recovery shall be made unless the occupier or, as the case may be, his agent has been given a reasonable opportunity of being heard in the matter

(5) When a sample of any sewage or trade effluent is taken for analysis under sub-section is taken for analysis under sub-section (1) and the person taking the sample serves on the occupier or his agent a notice under clause (a) of sub-section (3) and the occupier or his agent who is present at the time of taking the sample does not make a request for dividing the sample into two parts as provided in clause (b) of section (3), then, the sample so taken shall be placed in a container which shall be marked and sealed and shall also be signed by t

Please Login To View The Full Judgment!

he person taking the sample and the same shall be sent forthwith by such person for analysis to the laboratory referred to in sub-clause (i) or sub-clause (ii),as the case may be, of clause (d) of sub-section (3).” (emphasis supplied) 23. In view of the mandate under sub-section 2 of section 21, without establishing compliance with provisions of sub-sections (3), (4) and (5) of Section 21 of the Act, the report of any analysis of sample collected would not be admissible in any legal proceedings. Form an examination of the exhibits, it is seen that except Ex.P29, no other notice has been issued and acknowledged by the accused. Ex.P29 is issued notifying intention to collect samples on 14.06.2004. The corresponding analysis report is not produced. However result of such analysis which is referred in the letter dated 13.07.2004 is marked as - Ex.P31. The quantity of suspended solids is higher than prescribed limit. But, it has been contended by respondents that sample is collected during rainy season and possibility of presence of solid suspensions in the sample due to rain by season cannot be ruled out. There is no effort on the part of complainant to rule out this possibility. In fact, PW.3 the Analyst examined by complainant admitted such a possibility which is taken not of by trial Court. Hence grant of benefit of doubt in favour of accused on this count cannot be held perverse or suffering from material irregularity. 24. The complainant has also alleged that accused was discharging trade effluents without valid consent. It is not in dispute that the Industry was issued with a CFE on 6.04.2002, which was valid till 30.06.2003. A perusal of Ex.P32 reveals that an application for extension was made by the Industry on 18.09.2003. The same is refused vide order dated 13.07.2004 marked as Ex.P32. In view of sub-section (7) of Section 25, in case of failure to communicate either grant or refusal of an application for Consent, it shall be deemed to have been granted unconditionally. In any case, the refusal order is dated 13.07.2004, which is not stated to be the cause of action for compliant. In the result, the impugned judgment passed by trial court acquitting the accused for failure on the part of complainant to establish the commission of offences by accused beyond reasonable doubt cannot be found fault with. There is no merit in the Appeal. Consequently, it is dismissed.
O R