{"id":313399,"date":"2024-02-08T13:00:46","date_gmt":"2024-02-08T07:30:46","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=313399"},"modified":"2024-02-12T17:50:50","modified_gmt":"2024-02-12T12:20:50","slug":"cal-hc-quashes-prosecution-report-and-related-proceedings-due-to-violation-of-section-46b-of-the-bengal-excise-act-scc-blog","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/02\/08\/cal-hc-quashes-prosecution-report-and-related-proceedings-due-to-violation-of-section-46b-of-the-bengal-excise-act-scc-blog\/","title":{"rendered":"\u2018Director\u2019s liability without company\u2019s inclusion is unlawful\u2019; Calcutta High Court quashes criminal proceedings due to violation of Section 46B of the Bengal Excise Act, 1909"},"content":{"rendered":"
\n

Calcutta High Court:<\/span> In a revision application seeking quashment of prosecution report and criminal proceedings arising out of raid on the petitioner’s company’s marketing office resulted in the seizure of 292 bottles of foreign liquor due to alleged non-payment of duty on overseas foreign liquor, a single-judge bench comprising of Shampa Dutt (Paul),* J.<\/span>, held that the company must be made an accused for the director to be held criminally liable under Section 46-B<\/a> of the Bengal Excise Act, 1909<\/a>. The Court quashed the prosecution report arising out criminal proceedings and orders connected thereto pending for adjudication before the Chief Judicial Magistrate.<\/p>\n

Factual Matrix<\/p>\n

In the instant matter, the petitioner, a retired Army Officer, established Duomo Distribution Private Limited in 2017 to import foreign liquor brands to the Indian market. The company is the sole importer and marketing entity for renowned liquor brands owned by Polini Group Italia SRL, Italy. The petitioner, serving as an executive director, was responsible for marketing the imported products. On 31-10-2018, a raid by the Bidhannagar Excise Department at the company’s marketing office led to the seizure of 292 bottles of foreign liquor allegedly unregistered and non-duty paid. The petitioner was arrested on the same day but was later granted bail.<\/p>\n

The petitioner preferred the present revisional application seeking to quash the prosecution report dated 26.04.2019 arising out case registered under Sections 10<\/a>, 12<\/a>, 16<\/a> and 18(1)<\/a> of the Bengal Excise Act, 1909<\/a> read with Rule 118 of West Bengal (Foreign Liquor) Rules, 1998 and punishable under Sections 46A(c)(e)<\/a> and 52<\/a> of the Bengal Excise Act, 1909<\/a>, the criminal proceedings and orders connected thereto, pending for adjudication before the Chief Judicial Magistrate. The petitioner contended that the seized liquor was intended for marketing and sales promotion, not for sale, supported by documentation.<\/p>\n

Moot Point<\/p>\n

    \n
  1. \n

    Whether the petitioner, a director of Duomo Distribution Private Limited, be held criminally liable for the alleged offenses under the Bengal Excise Act, 1909<\/a>, in the absence of the company being made an accused?<\/p>\n<\/li>\n

  2. \n

    Whether the prosecution report and proceedings against the petitioner in Complaint Case, including the seizure of foreign liquor bottles, be quashed?<\/p>\n<\/li>\n<\/ol>\n

    Parties’ Contentions<\/p>\n

    The petitioner argued that the prosecution violated regulations and that there is no vicarious liability for individuals unless the company is a party to the proceedings. The petitioner asserted that the seized liquor was not for sale, as confirmed by declarations from Polini, and, therefore, should not be subject to registration. The petitioner claimed bias in investigation and challenged the legality of the prosecution report.<\/p>\n

    The State argued that the petitioner, as a director, can be held criminally liable even if the company is not made an accused. The prosecution argued that the seized items were unlawfully introduced into the market, posing a threat to government revenue.<\/p>\n

    Court’s Assessment<\/p>\n

    The Court referred to Dayle De’souza<\/span> v. Govt. of India<\/span>, 2021 SCC OnLine SC 1012<\/a>, emphasising that a company must be accused when an offense is committed by the company. The court noted that “in the absence of the company being arraigned as an accused, a complaint against the petitioner is not maintainable.”<\/span> The Court stated that Section 46B of the Bengal Excise Act imposes liability on the company and its officers, requiring the company’s inclusion in the proceedings. The Court held that the in the present case the company was not made an accused, but the petitioner, a director of the company was made an accused, which is in “clear violation of Section 46-B<\/a> of the Bengal Excise Act, 1909<\/a>.”<\/span><\/p>\n

    Court’s Decision<\/p>\n

    The Court held that the absence of the company as an accused is a violation of the law and an abuse of the legal process. The Court allowed the revisional application and quashed the prosecution report and proceedings against the petitioner. The interim order, if any, stands vacated.<\/p>\n

    [Raj Sahai<\/span> v. State of W.B.<\/span>, 2024 SCC OnLine Cal 941<\/a>, order dated 02-02-2024<\/span>]<\/p>\n

    *Judgment by Justice Shampa Dutt (Paul)<\/span><\/strong><\/p>\n\n

    Advocates who appeared in this case :<\/p>\n

    Mr. Sabyasachi Banerjee, Mr. Nigam Ashish Chakraborty, Mr. Agniva Banerjee, Counsel for the Petitioner<\/p>\n

    Mr. Sanjay Bardhan, Ms. Rita Dutta, Counsel for the Opposite Parties\/State<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Calcutta High Court deemed the criminal proceedings an abuse of the process of law and allowed the revisional application.<\/p>\n","protected":false},"author":67514,"featured_media":290502,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[2689,58955,39334,59921,3752,13001,65174,31012],"class_list":["post-313399","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-Calcutta_High_Court","tag-directors-liability","tag-excise","tag-justice-shampa-dutt-paul","tag-liquor","tag-quashment","tag-section-46b-of-the-bengal-excise-act","tag-seizure"],"yoast_head":"\nCalcutta High Court quashes prosecution report and related proceedings due to violation of Section 46B of the Bengal Excise Act, 1909 | SCC Blog<\/title>\n<meta name=\"description\" content=\"Calcutta High 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