J 2013 SCC OnLine Bom 2245 2013 4 AIR Bom R 75 2013

SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 1 Saturday, May 11, 2024

Printed For: Trilegal Deepti Sharma
SCC Online Web Edition: http://www.scconline.com
© 2024 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
2013 SCC OnLine Bom 2245 : (2013) 4 AIR Bom R 75 : (2013) 3

Bom CR (Cri) 359
In the High Court of Bombay

(BEFORE S.C. DHARMADHIKARI, J.)
Pishu Mulchand Mahtani and Others

Versus
State of Maharashtra and Another
Criminal Writ Petition No. 152 of 2013
Decided on May 6, 2013
ORDER
Rule.
1. The Respondents waive service.
2. By consent, Rule made returnable forthwith. By this Writ Petition
under Article 227 of the Constitution of India r/w Section 482 of the Cr
PC, 1973, the petitioners are challenging the order dated 14.12.2012
passed by the learned Metropolitan Magistrate, 41st Court, Shindewadi,
Dadar (East), Mumbai-14 in Case No. 4100087/SW/2012 whereby he
issued the process for the offences punishable under Sections 3(1), 3
(3), 3(4) r/w 36 of the Maharashtra Fire Prevention and Life Safety
Measures Act, 2006 (for short “the said Act”). This process was issued
on a complaint which was lodged by the respondent No. 2/Municipal
Corporation for
Page: 76
Greater Mumbai.
3. The complaint alleges that on 02.12.2012 at about 3 : 33 a.m.,

the officer concerned of Watch Room of Colaba Fire Station received a
message from the Control Room to attend the Fire Call at Jolly Maker-I
Co-operative Housing Society as fire broke out therein. The officer
concerned had attended the call and found that the flat on 19th floor
being Flat No. 191-B of the building caught fire. The teams from Colaba
and Nariman Point Fire Stations were preparing to fight the fire and at
that time, the officer concerned was told that the fire equipment
system was not in operative condi tion. The officer concerned came to
know that the said system was not in usable condition. The officer,
thereafter, prepared the fire in vestigation report to find out the cause
-----------------------------------------------------------------------------------------------------------------------------------------------------------
of fire, which was defective electric circuit. The fire could not be
controlled because of non-maintenance of the fire fighting measures
provided in the building. The accused have failed to pro duce the
certificates from the licenced agency for maintenance of the fire
fighting equipments in good condition to the Chief Fire Officer in
January and July, 2012. The manual call points and fire alarms were
removed by the accused without information to the authority. These
observations are mentioned in the investigation report dated
06.12.2012 which was placed before the senior officers. Accordingly, a
no tice was issued on 06.12.2012 to all the ac cused and served on
them. The petitioners/accused are identified as owners of the build ing
and office bearers of the society. That notice and reply thereto is part
and parcel of the complaint. The reply being unsatisfactory, it was
alleged that the offence punishable under the above provisions has
been committed. It has been pointed out that the accused Nos. 2 and 3
were removed from their posts by the Sub Registrar and that was
intimated to them and equally the accused No. 8 gave resignation three
months back.
4. Upon such a complaint filed on 14.12.2012, the learned
Metropolitan Magistrate perused the documents and found that there is
sufficient material to proceed further. Hence, the learned Magistrate
issued the pro cess returnable on 17th January, 2013.
5. It is this order which is under challenge in this Writ Petition.
6. Mr. Ponda, learned counsel appearing for the petitioners, has
submitted that the impugned order is ex facie erroneous and illegal. It
is vitiated by total non-application of mind. The learned Magistrate has
merely endorsed his approval on the allegations made in the com plaint
without independent application of mind. The issuance of process is a
serious matter. This is a criminal case. It concerns the life and liberty of
the petitioners, some of whom are senior citizens. In these
circumstances the learned Magistrate was obliged to carefully scrutinize
and verify the allegations in the com plaint so as to find out whether
any offence is committed by the petitioners herein. The learned
Magistrate has failed to discharge that duty in law.
7. It is next contended by Mr. Ponda that the complaint, read as a
whole, does not dis close commission of any offence by the peti tioners.
He submits that the complaint shows the accused No. 1 as Jolly Maker-
I Co-opera tive Housing Society, the accused No. 2 is Chairman, the
accused No. 3 is described as ex-Vice-Chairman, the accused No. 4 is
de scribed as ex-Secretary whereas the accused No. 5 is the Joint
Secretary. A lady, namely, accused No. 6 is aged 81 years and was a
Treasurer and equally the accused No. 7 was the Joint-Treasurer
whereas the accused No. 8 is arraigned as accused in his capacity as ex
-Joint Treasurer. Mr. Ponda submits that the complaint alleges
-----------------------------------------------------------------------------------------------------------------------------------------------------------
commission of offences under Sections 3(1), 3(3), 3(4) r/w 36 of the

said Act. The complaint alleges that Section 36 of the said Act deals
with the offences and penalties. Mr. Ponda submits that by way of sub-
section (1) of Section 36 Clause (a), contravention of any provisions of
Sections 3(1) and 3(4) is an offence. The contravention of Section 3(3)
is not an offence punishable un der the said Act. Therefore, an omission
to submit a certificate in terms of Section 3(3) has not been made
punishable offence and therefore, the complaint could not have been
filed alleging the same. Mr. Ponda refers to sub-section (1) of Section
38 and submits that the principle as to whenever a person who was in-
charge of and was responsible to the Company for the conduct of
business of the
Page: 77
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, would mean general principles of vicarious liability will
have to be read and imported in this provision. In other words, the
word “company” is defined in explanation below Section 38(2) to mean
a body corporate and includes a firm or other association of individuals
and that would envisage a co-operative society as well, then, unless
essential ingredients of the offence are established and proved and if
the Company is held to be guilty only then the person who was in-
charge of and responsible to the Company for the conduct of its
business can be deemed to be guilty of the offence.
8. In this regard, Mr. Ponda invites my attention to the definition of

the term “owner” appearing in Section 2(11) and equally section 2(10)
which defines the term “occupier”. Assuming that the definition of the
term “owner” is inclusive and therefore, a registered co-operative
housing society is also a owner, still it cannot be that every member of
the co-operative housing society or apartment owner can be proceeded
against for the offence. If a registered co-operative society functions
and works only through its General Body and all powers vest in the
General Body, then, the Managing Committee or persons in the
management of the society cannot be singled out and proceeded
against in criminal law. That would mean that the General Body is
absolved in all cases of this nature. That would mean all the Managing
Committee members are per se liable irrespective of particular function
or duty they discharge. Then there is no scope for inquiring as to
whether day to day decisions or management is carried out by any
person employed or appointed by the Managing Committee or
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Managing Committee as a whole. That would be a construction contrary

to Section 38(1) of the said Act.
9. Mr. Ponda was at great pains to submit that there cannot be any
vicarious liability other than under Section 38 of the said Act. There is
absolutely no allegation in the complaint to even prima facie indicate
vicarious liability. All the Managing Committee members by their
designation have been arraigned as accused. This is dangerous trend
because that dispenses with the requirement as to who amongst them
is in-charge and was responsible to the Society for the conduct of its
business. There is a presumption which is raised that every one of them
is in-charge of and responsible to the Society for the conduct of its
business. The complaint must contain a statement or allegation and
qua each accused, particularly in the backdrop of the language of
Section 38(1) of the said Act. Mr. Ponda then submits that the element
of charge, responsibility would, therefore, require the Complainant to
aver and allege as above. If there is no such specific allegation, then,
everybody would be deemed to be in control of the affairs of the
Society. If the offence is committed by the Society and not by
individuals, then, there is no basis for summoning the accused. For all
these reasons, Mr. Ponda submits that this is a fit case for quashing the
complaint.
10. Mr. Ponda tried to draw support from the provisions of the said
Act and equally the provisions contained in Section 141 of the
Negotiable Instruments Act, 1881 to urge that in case of a company
merely alleging that other accused are directors and responsible for the
conduct of business of the Company is not enough. If primary liability
is that of the owner and in this case when there are 184 flats, then, it
would be impossible for the General Body to meet and therefore, the
management and administration of day to day affairs may be vested in
the Managing Committee. However, even the Managing Committee
members meet in terms of the bye-laws periodically and not daily. The
day to day functions are delegated to the Secretary or appointed
employee such as Manager. In these circumstances if on all complaints
of the present nature, the process has to be issued, then, it would be
not possible to manage the affairs of the co-operative housing society
or small units. Then every act or omission, minor or petty it may be,
would lead to an inference that the concerned persons/accused have
failed to discharge their duty envisaged by Section 3(1) of the said Act
and therefore, have committed an offence within the meaning of sub-
section (1) of Section 36 of the said Act. For all these reasons, the
order under challenge issuing the process
Page: 78
-----------------------------------------------------------------------------------------------------------------------------------------------------------
be set aside.
11. In support of the above contentions, Mr. Ponda has relied upon
the following decisions:—
(1) (1989) 4 SCC 630 : AIR 1989 SC 1982 (Sha??? Sundar v. State
of Haryana).
(2) Criminal Appeal No. 488/2013 (GHCL Employees Stock Option
Trust v. India Infoline Limited) decided on 22.03.2013 by the
Honourable Supreme Court ((2013) 4 SCC 505 : AIR 2013 SC
1433).
(3) (1971) 3 SCC 189 : AIR 1971 SC 2162 (Girdhari Lal Gupta v.
D.N. Mehta).
(4) 2002 Cri LJ 4155 (Madras High Court) S.N. Bangur v. Klen &
Marshalls Mrfs. and Exporters Pvt. Ltd.
(5) (1983) 1 SCC 1 : AIR 1983 SC 67 (Municipal Corporation of
Delhi v. Ram Kishan Rohtagi).
(6) (2008) 5 SCC 668 (Maksud Saiyed v. State of Gujarat).
(7) 1998 Cri LJ 1 : ((1998) 5 SCC 749 : AIR 1998 SC 128), Pepsi
Foods Ltd. v. Special Judicial Magistrate.
(8) (2010) 3 SCC 330 : (AIR 2010 Supp SC 569), National Small
Industries Corporation limited v. Harmeet Singh Paintal.
(9) (2009) 10 SCC 48 : (AIR 2011 SC (Cri) 2259), K.K. Ahuja v.
V.K. Vora.
(10) (2002) 7 SCC 655, Katta Sujatha v. Fertilizers & Chemicals
Travancore Ltd.
(11) (2006) 10 SCC 581 : (AIR 2006 SC 3086), Sabitha
Ramamurthy v. R.B.S. Channabasavaradhya.
12. On the other hand, Mr. Naik, learned counsel appearing for the
Respondent No. 2, submitted that the order under challenge is merely
issuance of process. Such an order does not decide any issue or the
controversy conclusively. It is not as if the defences raised are
foreclosed. The order issuing process is based on reading of the
complaint and sup porting materials. There is clearly a case made out
for issuing the process. The learned Mag istrate has passed an order
issuing process on perusal of the complaint and accompanying
documents. He has indicated that there being sufficient material to
proceed further, the process has been issued for the offences that have
been alleged. This is just a prima facie conclusion. Once it is in
consonance with the material produced at that stage, then, this Court
cannot reappreciate and reappraise the same and interfere in its writ
jurisdiction and particularly under Article 227 of the Constitution of
India. It cannot also interfere in its inherent jurisdiction.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
13. Mr. Naik submits that on 02.12.2012 at about 3 : 33 a.m., a

message was received to attend a fire call. The matter was indeed
serious because on inspection it was revealed that the fire could not be
controlled and spread because of non-maintenance of fire fighting
measures provided in the building. The accused failed to produce a
certificate from the licenced agency of maintenance of fire fighting
equipments in good repair condition. There was notice issued based on
the contents of the fire investigation report. The accused gave reply to
the notice and that was not satisfactory. In these circumstances the
Municipal Corporation performed its public duty and filed a criminal
complaint. It is not as if the complaint has been filed in criminal Court
hastily or without application of mind. The officers in the Fire
Department are senior enough and equally matured to understand and
appreciate difficulties faced by a co-operative housing society.
Therefore, it is not as if the complaints are or would be filed recklessly
and as a matter of routine. It is not as if there is any vengeance or
ulterior motive in filing the complaint. It is in terms of the information
which was made available and about constitution of the Managing
Committee that the petitioners have been arraigned as accused. This is
not a case where Section 38 of the said Act can be said to be applicable
straightway. That would not apply to a co-operative society. Once the
accused are Managing Committee members of the co-operative housing
society, then, their position is peculiar and would be governed by the
Maharashtra Co-operative Societies Act, 1960 and particularly position
of the Managing Committee and General Body envisaged in Sections 72
and 73 thereof. Mr. Naik submits that these provisions have, been
relied upon and to establish that it is not because of the fire that the
complaint has been filed. It is failwe
Page: 79
to take measures so as to prevent such fire that the offence is

committed and that is why the complaint is filed. The Cooperative
society is owner and the Managing Committee is in management and
administration of its affairs. For all these reasons, the judgments cited
by Mr. Ponda are completely inapplicable and at this prima facie stage.
Mr. Naik submits that at the stage of issuance of process, the learned
Magistrate is required to apply his independent mind, but the law does
not require him to pass a judgment. Once brief reasons are recorded
indicating prima facie satisfaction and due application of mind, then,
the order does not suffer from any illegality or perversity requiring
interference in writ jurisdiction. The Writ petition be, therefore,
dismissed.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
14. For properly appreciating the rival contentions, a reference to the

said Act is necessary. The said Act has been enacted to make more
effective provisions for the fire prevention and life safety measures in
various types of buildings in different areas in the State of Maharashtra.
15. Section 1 entitled “Short title, extent and commencement”.
Section 2 contains definitions and the definitions of terms “occupier”
and “owner” are relevant, which read thus:—
“Section 2(10) “Occupier” includes:—
(a) any person who for the time being is paying or is liable to pay
to the owner the rent or any portion of the rent for the land or
building or any part thereof in respect of which such rent is
paid or is payable;
(b) an owner in occupation of or otherwise using land or building
or part thereof;
(c) a rent-free tenant of any land or building or part thereof;
(d) a licensee in occupation of any land or building or part
thereof;
(e) a member of a co-operative housing society or an apartment
owner; and
(f) any person who, or an association, corporation (whether
incorporated or not) or an organisation which is liable to pay to
the owner damages for the use and occupation of any land or
building or part thereof.
Section 2(11) “owner” includes a person who for the time being
is receiving or is entitled to receive, the rent of any land or
building or part thereof whether on his account or oh account of
himself and others or as an agent, a registered cooperative
housing society, trustee, guardian or receiver or any other person
who should so receive the rent or be entitled to receive it if the
land or building or part thereof were let to a tenant, or a builder,
developer or promoter who constructs flats or apartment for sale
under the provisions of the Maharashtra Ownership Flats
(Regulation of the promotion of construction, sale, management
and transfer) Act, 1963, or, as the case may be, the Maharashtra
Apartment Ownership Act, 1970.”
16. Then comes Chapter-II of the said Act which contains the
provisions relating to fire prevention and life safety measures. In that
chapter, Sections 3 and 4 are relevant and read as under:——
“3. Owners or occupiers' liability to provide for fire prevention and
life safety measures.
(1) Without prejudice to the provisions of any law or the rules,
regulations or bye-laws made thereunder or the National
Building Code of India, 2005, relating to fire prevention and life
-----------------------------------------------------------------------------------------------------------------------------------------------------------
safety measures and in operation in the State for the time

being in force, the owner or where the owner is not traceable,
the occupier, of a building as classified in the Schedule-I or
part of any such building shall provide fire prevention and life
safety measures in such building or part thereof, minimum fire
fighting installations as specified against such building in the
said Schedule; and the owner or, as the case may be, the
occupier shall maintain the fire prevention and life safety
measures in good repair and efficient condition at all times, in
accordance with the provisions of this Act or the rules:
Provided that, in the case of such building or part thereof the
construction of which has been completed immediately before the
date of commencement of this Act, the occupier, and subject to
the provisions of sub-section (2), in the case of such building or
part thereof which is under construction on such date, the owner,
shall undertake and carry out such
Page: 80
additional fire prevention and life safety measures, as are specified in

the notice served on him under section 6.
Explanation.— The classification of buildings as mentioned in

the Schedule-I under this section and that in Schedule-II
under section 11, conforms to the classification of buildings
made under the provisions of the National Building Code of
India, 2005.
(2) Notwithstanding anything contained in any law for the time
being in force, no authority empowered to sanction the
construction plan of any building or part of a building and to
issue certificate of completion thereof, shall issue any
certificate of completion or part completion thereof, unless it is
satisfied that the owner has complied with the requirements
specified in Schedule-I, or as the case may be, in the notice so
served on him as aforesaid.
(3) The owner or occupier, as the case may be, shall furnish to the
Chief Fire Officer or the nominated officer, a certificate in the
prescribed form issued by a Licensed Agency regarding the
compliance of the fire prevention and life safety measures in
his such building or part thereof, as required by or under the
provisions of this Act, and shall also furnish to the Chief Fire
Officer or a nominated officer, a certificate in the prescribed
form, twice a year in the months of January and July regarding
-----------------------------------------------------------------------------------------------------------------------------------------------------------
the maintenance of fire prevention and life safety measures in

good repair and efficient condition as specified in sub-section
(1).
(4) No person shall tamper with, alter, remove or cause any injury
or damage to any fire prevention and life safety equipment
installed in any such building or part thereof or instigate any
other person to do so.
4. Preventive measure:
(1) The State Government may, by notification in the Official
Gazette, require owner or occupier of premises in any area or of
any class of premises used, which in its opinion, are likely to
cause risk of fire, to take such precautions as may be specified
in such notification.
(2) Where such notification has been issued, it shall be lawful for
the Director or Chief Fire Officer of local authority or planning
authority or any fire officer authorized either by the Director or
Chief Fire Officer to direct the removal of objects or goods likely
to cause the risk of fire, to a place of safety and on failure by
the owner or occupier to do so, the Director or any Chief Fire
Officer or fire officer may, after giving the owner or occupier a
reasonable opportunity of making the representation, seize,
detain or remove such objects or goods.
(3) The Director or the Chief Fire Officer or any other fire officer
while performing his duties in Fire Fighting operations or any
other duties of seizure, detention or removal of any goods
involving risk of fire may require the assistance of a police
officer or members of the police force as an aid in performance
of such duties and it will be the duty of police officer of all the
ranks or such members to aid the Director or such fire officer in
the execution of their duties under this Act.”
17. Section 5 confers power of inspection on the Director or the Chief
Fire Officer or the nominated officer. Section 6 provides for notice
regarding fire prevention and life safety measures. Section 7 enlists the
steps to be taken in the event of non-compliance of notice issued under
Section 6. Section 8 confers power to seal the building.
18. Then comes Chapter-III which is entitled “Licensed Agency”. In
that, Sections 9 and 10 have been inserted so that a Licensed Agency
can act under the licence for the purpose of this Act and it shall carry
out the work of fire prevention and life safety measures or perform such
other activities required to be carried out any place or building or part
thereof.
19. Chapter-IV contains provisions relating to levy, collection and
recovery of fire service fees. Sections 11 to 17 in that enable the State
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Government to levy, collect and recover the fire service fees.

20. Chapter-V provides for the Director of Fire Services, his
appointment : and other officers and staff to assist him. Section 19
provides for his powers, duties and functions. Section 20 gives him
power to enforce performance of duties.
Page: 81
21. Chapter-VI contains provisions regarding fire officers and fire

personnel. That contains Sections 21 to 24. Section 25 falls in Chapter-
VII and it provides for constitution of special fund. Chapter-VIII is
entitled “supplemental and miscellaneous” and contains Section 26
onwards so as to enable the requisitioning of fire fighting property,
powers of officers on occasion of fire and contains other provisions.
Then comes Sections 36 to 39, which read as under:—
“36. Offences and Penalties.
(1) Whoever contravenes any provision of any of the following
sections, namely:—
(a) under Section 3,—
(i) sub-section (1), failure of the owner or, as the case may be,
the occupier to provide and maintain the fire prevention and
life safety equipment in good repair and efficient condition;
(ii) sub-section (4), tampering with, altering, removing or causing
any injury or damage to any fire prevention and life safety
equipment installed in a building or instigating any other
person to do so;
(b) under Section 4, sub-section (2), failure to remove objects
or goods likely to cause the risk of fire;
(c) under Section 5, sub-section (3), obstructing the entry by a
person or molesting such person after such entry for
inspection;
(d) under Section 6, failure to comply with the notice, directing
the owner or occupier to undertake measures regarding fire
prevention and life safety;
(e) under Section 8,—
(i) sub-section (2), failure to comply with the direction
issued by the Director or the Chief Fire Officer, as the
case may be,
(ii) sub-section (4), removing the seal of the building
without written order made by the Director or the Chief
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Fire Officer;
(f) under Section 10, sub-section (1),—
(i) carrying out the work of providing fire prevention and life
safety measures, or performing such other related
activities by a person other than the Licensed Agency;
(ii) giving a certificate under sub-section (3) of Section 3
without there being actual compliance or maintenance of
fire prevention and life safety measures and equipment;
(g) under Section 14, sub-sections (1) and (2), construction of
a building without applying for permission of the Authority
or without such permission and thereby avoiding to apply for
assessment of fee payable under this Act; shall, without
prejudice to any other action taken or which may be taken
under any of the provisions of this Act, be punished with
rigorous imprisonment for a term which shall not be less
than six months but which may extend to three years and
with fine which shall not be less than Rupees 20,000 but
which may extend to Rupees 50,000; and where the offence
is continuing one with a further fine which may extend to
Rupees 3000 for every day during which such offence
continues after the conviction for the first such offence:
Provided that, in the absence of any special and adequate
reasons to the contrary to be mentioned in the judgment of
the Court, such punishment shall not be less than three
months and such fine shall not be less than ten thousand
rupees or such daily fine shall not be less than one thousand
rupees per day for a continuing offence.
Explanation. — The expressions used in Clauses (a) to (g)
are not intended as the definitions of offences described in
the sections mentioned in each of these Clauses or even as
abstracts of those sections but are mentioned merely as
references to the subject-matter of the offences under those
sections.
(2) Whoever—
(a) willingly attempts, in any manner whatsoever, to
evade any fee leviable under this Act, or
(b) willingly attempts, in any manner whatsoever, any
payment of any fee or interest or both under this Act,
or
(c) contravenes any of the provisions of this Act or the
rules for which no specific penalty has been provided
by this Act, or
(d) fails to comply with the requirements of any order or
-----------------------------------------------------------------------------------------------------------------------------------------------------------
any notice or any directions issued under any of the

provisions of this Act or the rules by the Director or any
Authority or the Chief Fire Officer of such Authority or
Page: 82
any other officer authorised by any of them, for which no specific

penalty has been provided by this Act,
shall, on conviction, be punished,—

(i) in case where the amount of fees or interest or both
involved exceeds Rupees 50,000 during the period of a
year, with rigorous imprisonment for a term which
shall not be less than six months but which may
extend to three years and with fine;
(ii) in case where such amount is less than Rupees
50,000 during a year, with rigorous imprisonment for a
term which shall not be less than three months but
which may extend to one year and with fine;
(iii) in case of contravention of any provision of this Act or
the rules made thereunder or failure to comply with
the requirements of any order or notice as aforesaid,
with rigorous imprisonment for a term which shall not
be less than six months but which may extend to three
years and with fine:
Provided that, in the absence of any special and
adequate reasons to the contrary to be mentioned in the
judgment of the Court, punishment under any of these
paragraphs shall not be less than one month and such
fine shall not be less than two thousand rupees.
(3) Whoever aids or abets any person in commission of any
offence specified in subsections (1) or (2) shall, if the act
is committed in consequence of the abetment, and no
express provision is made by this Act for the punishment
of such abetment, be punished with the punishment
provided for the offence.
Explanation — An act or offence is said to be committed
in consequence of abetment, when it is committed in
consequence of the instigation, or in pursuance of the
conspiracy, or with the aid which constitutes the abetment.
37. Cognizable and non-bailable offences.
Offences under sub-section (4) of Section 3 and of removal of seal
without an order under sub-section (4) of Section 8 shall be
-----------------------------------------------------------------------------------------------------------------------------------------------------------
cognizable and non-bailable.

38. 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 for the conduct of the business of 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 subsection shall render
any such person liable to any punishment if he proves that the
offence was committed without his knowledge or that he had
exercised all due diligence to prevent the commission of such
offence.
(2) Notwithstanding anything contained in sub-section (1), where
any 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, 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 purposes of this section,—
(a) “company” means a 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,
and in relation to any association of persons or body of
individuals, means any member controlling the affairs
thereof.
39. Compounding or withdrawal of proceedings.
(1) The Director or Chief Executive Officer of the Authority, by
whatever designation called, or any person authorised in this
behalf by any of them by general or special order may either
before or after the institution of the proceedings, compound
any offence, excluding those referred to in Section 37, made
punishable by or under this Act or the rules or withdraw from
such proceedings.
(2) When an offence has been compounded, the offender, if in
custody, shall be discharged, and no further proceedings shall
be taken against him in respect of the offence compounded.”
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Page: 83
22. Sections 40 to 48 are to be found in Chapter-VIII and enable

carrying into effect the object and purpose of the Act by providing for
prosecution and giving overriding effect to the Act in terms of Section
44, which reads as under:—
“44. Act to have overriding effect, but shall be in addition to
existing laws.
(1) The provisions of this Act and the rules shall have effect
notwithstanding anything inconsistent therewith contained in
any other law for the time being in force or in any instrument
having effect by virtue of any other law.
(2) Subject to the provisions of sub-section (1), the provisions of
this Act shall be in addition to, and not, save as expressly
provided hereinabove, be in derogation of the provisions of any
relevant municipal law or any other law for the time being in
force in any area in which this Act has come into force.”
23. The appointment of the Fire Officer or Fire Supervisor in certain
buildings is provided by Section 45. Section 46 deals with effect of
other laws and reads as under:—
“46. Effect of other laws.
Notwithstanding anything contained in any other law for the time
being in force, when anything in relation to the fire prevention and
life safety measures is required to be done or approved under this
Act, any such thing shall not be deemed to have been lawfully done
or approved by reason only of the fact that permission, approval or
sanction required under such other law therefor has been obtained.”
24. Sections 47 and 48 enable delegation of powers and power to
call for report, return or information.
25. Chapter IX contains Rules. Section 49 appearing therein confers
power on the State Government to make rules for carrying out the
purposes of this Act. Section 50 confers power to remove difficulty.
26. Thus, the said Act can be termed as a comprehensive and
complete legislation providing for fire prevention and life safety
measures. Its object and purpose is to make more effective provisions
for fire prevention and life safety measures in various types of buildings
in different areas in the State of Maharashtra. One need not over
emphasize the importance of such legislation and particularly to take
care of fire in high rise and tall buildings in urban areas. It is common
ground that the increase in population in urban areas has resulted in
construction of multi-storeyed buildings and thereby posing immense
challenge regarding safety of the structures and occupants therein. It is
-----------------------------------------------------------------------------------------------------------------------------------------------------------
important to enact measures so as to prevent calamities such as a fire.

The concern of the legislature is, therefore, that not only care should be
taken to prevent the fire, but life safety measures should be put in
place. It is in order to take precautionary and safety measures to meet
such calamities or contingencies that the Legislature steps in. It is,
thus, a legislation which contains provisions relating to fire prevention
and life safety measures and equally confers powers on the authorities
thereunder to insist on undertaking and implementing such fire
prevention and life safety measures as are deemed fit and necessary.
The Act has been given an overriding effect, but not in absolute terms.
Equally, the Act does not undermine the importance of compliance with
other laws. By Section 3 and other provisions, all powers that are
conferred on the authorities are coupled with a duty.
27. When such legislation contains provisions for taking cognizance
of offences and imposition of penalties and the powers are conferred in
existing Criminal Courts, but cognizance shall be taken only on a
complaint or upon information received from the Director or Chief Fire
Officer, then, one cannot ignore me legislative mandate. Even a
criminal statute and penal provision do not rule out placing an
interpretation having regard to the subject-matter of the offence and
the object of law seeks to achieve. A penal statute can be interpreted in
this manner. In “Principles of Statutory Interpretation” (13th Edition
2012) by Honourable Justice G.P. Singh, what is observed by the
learned Author is pertinent enough:—
“LORD REED in the context of the rule of construction applicable
to penal statutes said:“We are always trying to find the intention of
the Legislature. Where taking into account the surrounding
circumstances and the likely consequences of the various possible
constructions
Page: 84
there can be at all any doubt about the intention, we must, where
penalties are involved, require that the intention shall clearly appear
from the words of the enactment construed in the light of those
matters. But if we can say that those matters show that a particular
result must certainly have been intended, we would, I think, be
stultifying the underlying principle if we required more than that the
statutory provisions are reasonably capable of an interpretation carrying
out that intention.” In an earlier case, LORD REID explained that the
rule of restrictive interpretation of penal provisions “only applies where
after full enquiry and consideration one is left in real doubt. It is not
enough that the provision is ambiguous in the sense that it is capable
-----------------------------------------------------------------------------------------------------------------------------------------------------------
of having two meanings”, for the imprecision of language is such that it

is difficult to draft any provision which is not ambiguous in that sense.
Difference of judicial opinion as to the meaning of the provision may
also be not enough for applying the rule, and a Judge while dealing
with a question of construction of the provision must himself be in real
doubt before he can call in aid the rule.
STORY, J. in agreeing to the rule in its “true and sober sense”

stated the same as follows:“Penal statutes are not to be enlarged by
implication or extended to cases not obviously within their words and
purport. But where the words are general, and include various
classes of persons, I know of no authority, which would justify the
Court in restricting them to one class, or in giving them the
narrowest interpretation, where the mischief to be redressed by the
statute is equally applicable to all of them. And where a word is used
in a statute, which has various known significations, I know of no
rule, that requires the Court to adopt one in preference to another,
simply because it is more restrained, if the objects of the statute
equally apply to the largest and broadest sense of the word.”
Penal statutes have also to be interpreted “having regard to the
subject-matter of the offence and the object of the law it seeks to
achieve. The purpose of law is not to allow the offender to sneak out
of the meshes of law. Criminal jurisprudence does not say so.”
Considerations of public policy are not foreign in interpreting and
applying a criminal statute.”
(See pages 919 and 929)
“So in interpreting and applying a penal statute, it has to be
borne in mind that respect for human rights of the accused is not the
only value at stake. “The purpose of the criminal law is to permit
everyone to go about their daily lives without fear of harm to person
or property. And it is in the interest of everyone that serious crime
should be effectively investigated and prosecuted. There must be
fairness to all sides. In a criminal case this requires the Court to
consider triangulation of interests. It involves taking into
consideration the position of the accused, the victim and his or her
family, and the public.”
(See page 923)
28. In J.K. Industries Ltd. v. Chief Inspector of Factories and Boilers,
reported in (1996) 6 SCC 665, the Honourable Supreme Court was
considering the constitutional validity of proviso (ii) to Section 2 of the
Factories Act, 1948 as amended by Act 20 of 1987. The argument was
that this proviso violates the mandate of Articles 14, 19(1)(g) and 21 of
the Constitution of India. In considering that challenge, the Honourable
Supreme Court has adverted to the principles of Interpretation of
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Statutes and in paragraphs 3, 40, 42, 43. 46 held as under:—

“3. The basic question which requires our consideration is whether
in the case of a company which owns or runs the factory, is it only a
director of the company who can be notified as the occupier of the
factory within the meaning of proviso (ii) to Section 2(n) of the Act,
or whether the company can nominate any other employee to be the
occupier by passing a resolution to the effect mat the said employee
shall have “ultimate control over the affairs of the factory”. If the
answer to the question is that in the case of a company, only a
director can be notified as an occupier under the Act, the next
question which would require our consideration is about the
constitutional validity of proviso (ii) to Section 2(n) of the Act as
introduced by the Amending Act of 1987. The answer to these
questions would depend upon the interpretation of amended Section
2(n) of the Act. It would, therefore,
Page: 85
be appropriate to first notice the provisions of Section 2(n) as it cited

prior to the amendment and as it stands today. Section 2(n) as it stood
prior to Amendment of 1987.
“2(n) “occupier” of a factory means the person who has ultimate

control over the affairs of the factory, and where the said affairs are
entrusted to a managing agent, such agent shall be deemed to be
the occupier of the factory;
Section 2(n) as it is after Amendment of 1987.
“2(n) “Occupier” of a factory means the person, who has ultimate
control over the affairs of the factory:
Provided that
(i) in the case of a firm or other association of individuals any
one of the individual partners or members thereof shall be
deemed to be the occupier;
(ii) in the case of a company, any one of the directors shall be
deemed to be occupier;
(iii) in the case of a factory owned or controlled by the Central
Government or any State Government of any local authority,
the person or persons appointed to mange the affairs of the
factory by the Central Government, the State Government or
the local authority, as the case may be, shall be deemed to
be the occupier;
40. In keeping with the aim and object of the Act which is
-----------------------------------------------------------------------------------------------------------------------------------------------------------
essentially to safeguard the interests of workers, stop their

exploitation, and take care of their safety, hygiene and welfare at
their place of work, numerous restrictions have been enacted in
public interest in the Act. Providing restrictions in a statute would be
a meaningless formality unless the statute also contains a provision
for penalty for the breach of the same. No restriction can be effective
unless there is some sanction compelling its observance and a
provision for imposition of penalty for breach of the obligations under
the Act or the rules made thereunder is a concomitant and necessary
incidence of the restrictions. Such a provision is contained in Section
92 of the Act, which contains a general provision for penalties for
offences under the Act for which no express provision has been made
elsewhere and seeks to lay down uniform penalty for all or any of the
offences committed under the Act. The offences under the Act
consist of contravention of (1) any provision of the Act; (2) any rules
framed thereunder; and (3) any order in writing made thereunder. It
comprises both acts of omission and commission…………
42. The offences under the Act are not a part of general penal law
but arise from the breach of a duty provided in a special beneficial
social defence legislation, which creates absolute or strict liability
without proof of any mens rea. The offences are strict statutory
offences for which establishment of mens rea is not an essential
ingredient. The omission or commission of the statutory breach is
itself the offence…………..
43. What is made punishable under the Act is the ‘blameworthy’
conduct of the occupier which resulted in the commission of the
statutory offence and not his criminal intent to commit that offence.
The rule of strict liability is attracted to the offences committed
under the Act and the occupier is held vicariously liable along with
the Manager and the actual offender, as the case may be. Penalty
follows actus reus, mens rea being irrelevant.
46. The object of the Act would stand defeated if for the
commission of strict offences, the identified director, as the deemed
occupier of the factory, is not held vicariously liable. An argument
similar to the one raised before us regarding the harshness of the
provision insofar as an “innocent” director is concerned, was also
canvassed in M.C. Mehtas case. We may excerpt that portion which
formulates the question and furnishes the answer:
“So far as the undertaking to be obtained from the Chairman
and Managing Director of Shriram is concerned it was pointed out
by Shriram that Delhi Cloth Mills Ltd. which is the owner of
Shriram has several units manufacturing different products and
each of these units is headed and managed by competent and
professionally qualified persons who are responsible for the day to
-----------------------------------------------------------------------------------------------------------------------------------------------------------
day management of its affairs and the Chairman and Managing

Director is not concerned with day to day functioning of the units
and it would not therefore be fair and just to require the Chairman
Page: 86
and Managing Director to give an undertaking that in case of death or

injury resulting on ac count of escape of chlorine gas, the Chairman and
Managing Director would be personally liable to pay compensation. We
find it difficult to accept this contention urged on behalf of Shriram. We
do not see any reason why the Chairman and/or Managing Director
should not be required to give an undertaking to be personally liable for
payment of compensation in case of death or injury resulting on
account of escape of chlorine gas………”
29. This view has been followed in the case of Chairman, SEBI v.
Shriram Mutual Fund reported in (2006) 5 SCC 361 : (AIR 2006 SC
2287). In paragraphs 33 and 35 of this decision, the Honourable
Supreme Court refers to the same principles and holds as under:—
“33. This Court in a catena of decisions have held that mens rea is
not an essential element for imposing penalty for breach of civil
obligations:
(a) Director of Enforcement v. MCTM Corpn. (P) Ltd., (1996) 2
SCC 471 : (AIR 1996 SC 1100) : (SCC pp. 478 & 480-81,
paras 8 and 12-13) (pp. 1104 and 1105-1106, paras 8 and 12-
13 of AIR).
8. It is thus the breach of a “civil obligation” which attracts
“penalty” under Section 23(1)(a), FERA, 1947 and a finding that the
delinquent has contravened the provisions of Section 10, FERA, 1947
that would immediately attract the levy of “penalty” under Section
23, irrespective of the fact whether the contravention was made by
the defaulter with any “guilty intention” or not. Therefore, unlike in a
criminal case, where it is essential for the ‘prosecution’ to establish
that the ‘accused’ had the necessary guilty intention or in other
words the requisite ‘mens rea’ to commit the alleged offence with
which he is charged before recording his conviction, the obligation on
the part of the Directorate of Enforcement, in cases of contravention
of the provisions of Section 10 of FERA, would be discharged where
it is shown that the “blameworthy conduct” of the delinquent had
been established by wilful contravention by him of the provisions of
Section 10, FERA 1947. It is the delinquency of the defaulter itself
which establishes his ‘blameworthy’ conduct, attracting the
provisions of Section 23(1)(a) of FERA, 1947, without any further
-----------------------------------------------------------------------------------------------------------------------------------------------------------
proof of the existence of “mens rea”. Even after an adjudication by

the authorities and levy of penalty under Section 23(1)(a) of FERA,
1947, the defaulter can still be tried and punished for the
commission of an offence under the penal law,….
12. “In Corpus Juris Secundrum. Vol. 85 at page 580, para 1023,
it is stated thus:
“A penalty imposed for a tax delinquency is a civil obligation,
remedial and coercive in its nature, and is far different from the
penalty for a crime or a fine or forfeiture provided as punishment
for the violation of criminal or penal laws.”
13. We are in agreement with the aforesaid view and in our
opinion what applies to “tax delinquency” equally holds good for the
‘blameworthy’ conduct for contravention of the provisions of FERA,
1947. We, therefore, hold that mens area (as is understood in
criminal law) is not an essential ingredient for hold ing a delinquent
liable to pay penalty under Section 23(1)(a) of FERA, 1947 for contra
vention of the provisions of Section 10 of FERA, 1947 and that
penalty is attracted un der Section 23(1)(a) as soon as contravention
of the statutory obligation contemplated by Section 10(1)(a) is
established. The High Court apparently fell in error in treating the
“blame worthy conduct” under the Act as equivalent to the
commission of a “criminal offence”, overlooking the position that the
“blameworthy conduct” in the adjudicatory proceedings is
established by proof only of the breach of a civil obligation under the
Act, for which the defaulter is obliged to make amends by pay ment
of the penalty imposed under Section 23(1)(a) of the Act
irrespective of the fact whether he committed the breach, with or
without any guilty intention.”
(b) J.K. Industries Ltd. v. Chief Inspector of Factories and Boilers,
(1996) 6 SCC 665.
42. The offences under the Act are not a part of general penal
law but arise from the breach of a duty provided in a special
beneficial social defence legislation, which creates
Page: 87
absolute or strict liability without proof of any mens rea. The offences
are strict statutory offences for which establishment of mens rea is not
an essential ingredient. The omission or commission of the statutory
breach is itself the offence. Similar type of offences based on the
principle of strict liability, which means liability without fault or mens
rea, exist in many statutes relating to economic crimes as well as in
laws concerning the industry, food adulteration, prevention of pollution
-----------------------------------------------------------------------------------------------------------------------------------------------------------
etc. in India and abroad. “Absolute offences” are not criminal offences
in any real sense but acts which are prohibited in the interest of welfare
of the public and the prohibition is backed by sanction of penalty.
(c) R.S. Joshi Sales Tax Officer, Gujarat v. Ajit Mills Ltd., (1977) 4
SCC 98 : (AIR 1977 SC 2279).
Even here we may reject the notion that a penalty or a
punishment cannot be cast in the form of an absolute or nofault
liability but must be preceded by mens rea. The classical view
that ‘no mens rea, no crime’ has long ago been eroded and
several laws in India and abroad, especially regarding economic
crimes and departmental penalties, have created severe
punishments even where the offences have been defined to
exclude mens rea. Therefore, the contention that Section 37(1)
fastens a heavy liability regardless of fault has no force in
depriving the forfeiture of the character of penalty.”
(d) Gujarat Travancore Agency v. CIT, (1989) 3 SCC 52 : (AIR
1989 SC 1671).
It is sufficient for us to refer to Section 271(1)(a), which
provides that a penalty may be imposed if the Income-tax Officer
is satisfied that any person has without reasonable cause failed to
furnish the return of total income, and to Section 276-C which
provides that if a person wilfully fails to furnish in due time the
return of income required under Section 139(1), he shall be
punishable with rigorous imprisonment for a term which may
extend to one year or with fine. It is clear that in the former case
what is intended is a civil obligation while in the later what is
imposed is a criminal sentence. There can be no dispute that
having regard to the provisions of Section 276-C, which speaks of
wilful failure on the part of the defaulter and taking into
consideration the nature of the penalty, which is punitive, no
sentence can be imposed under that provision unless the element
of mens rea is established. In most cases of criminal liability, the
intention of the legislature is that the penalty should serve as a
deterrent. The creation of an offence by statute proceeds on the
assumption that society suffers injury by the act or omission of
the defaulter and that a deterrent must be imposed to discourage
the repetition of the, offence. In the case of a proceeding under
Section 271(1)(a), however, it seems that the intention of the
legislature is to emphasise the fact of loss of revenue and to
provide a remedy for such loss, although no doubt an element of
coercion is present in the penalty. In this connection, the terms in
which the penalty falls to be measured is significant. Unless there
is something in the language of the statute indicating the need to
-----------------------------------------------------------------------------------------------------------------------------------------------------------
establish the element of mens rea it is generally sufficient to

prove that a default in complying with the statute has occurred.
In our opinion, there is nothing in Section 271(1)(a) which
requires that mens rea must be proved before penalty can be
levied under that provision.”
(e) Swedish Match AB v. SEBI, (2004) 11 SCC 641 : (AIR 2004
SC 4219). The provisions of Section 15-H of the Act mandate
that a penalty of Rupees twenty five crores may be imposed.
The Board does not have any discretion in the matter and, thus
the adjudication proceeding is a mere formality. Imposition of
penalty upon the appellant would, thus, be a forgone
conclusion. Only in the criminal proceedings initiated against
the appellants, existence of mens rea on the part of the
appellants will come up for consideration.”
(f) SEBI v. Cabot International Capital Corporation : (2005) 123
Comp Cas 841 (Bom) : (2004 CLC 814 (Bom)
47. Thus, the following extracted principles are summarized:
(A) Mens rea is an essential or sine qua non for criminal offence.
(B) Strait jacket formula of mens rea can-not be blindly followed
in each and every case. Scheme of particular statute may be
diluted in
Page: 88
a given case.
(C) If, from the scheme, object and words used in the statute, it
appeals that the proceedings for imposition of the penalty are
adjudicatory in nature, in contra-distinction to criminal or quasi
criminal proceedings, the determination is of the breach of the
civil obligation by the offender. The word “penalty” by itself will
not be determinative to conclude the nature of proceedings
being criminal or quasi criminal. The relevant considerations
being the nature of the functions being discharged by the
authority and the determination of the liability of the
contravenor and the delinquency.
(D) Mens rea is not essential element for imposing penalty for
breach of civil obligations or liabilities.
(E) There can be two distinct liabilities, civil and criminal under
the same Act.
52. The SEBI Act and the Regulations are intended to regulate the
Security Market and related aspects, the imposition of penalty, in the
given facts and circumstances of the case, cannot be tested on the
-----------------------------------------------------------------------------------------------------------------------------------------------------------
ground of “no mens rea no penalty”. For breaches of provisions of

SEBI Act and Regulations, according to us, which are civil in nature,
mens rea is not essential. On particular facts and circumstances of
the case, proper exercise or judicial discretion is a must, but not on a
foundation that mens rea is an essential to impose penalty in each
and every breach of provisions of the SEBI Act.
54. However, we are not in agreement with the appellate
authority in respect of the reasoning given in regard to the necessity
of mens rea being essential for imposing the penalty. According to
us, mens rea is not essential for imposing civil penalties under the
SEBI Act and Regulations.”
35. In our considered opinion, penalty is attracted as soon as the
contravention of the statutory obligation as contemplated by the Act
and the Regulation is established and hence the intention of the
parties committing such violation becomes wholly irrelevant. A
breach of civil obligation which attracts penalty in the nature of fine
under the provisions of the Act and the Regulations would
immediately attract the levy of penalty irrespective of the fact
whether contravention must made by the defaulter with guilty
intention or not. We also further held that unless the language of the
statute indicates the need to establish the presence of mens rea, it is
wholly unnecessary to ascertain whether such a violation was
intentional or not. On a careful perusal of Section 15(D)(b) and
Section 15E of the Act, there is nothing which requires that mens rea
must be proved before penalty can be imposed under these
provisions. Hence once the contravention is established then the
penalty is to follow.”
30. In the case of Union of India v. Dharmendra Textile Processors
reported in (2008) 13 SCC 369 : (AIR 2008 Supp SC 668), the earlier
judgments were referred to and followed in arriving at the conclusion
that in interpreting the penal provisions and statutes, considerations of
public policy and public interest are not out of place.
31. In the present case, what one finds is that the complaint alleges
that the petitioners have failed to maintain fire fighting measures
provided in the building. The petitioners have failed to produce a
certificate from the Licensed Agency for maintenance of fire fighting
equipments in good repair and condition to the Chief Fire Officer in
June-July, 2012. The manual points and fire alarms were removed by
them without information to the authority. All these findings are
mentioned in the Investigation Report dated 06.12.2012. A notice was
given to the petitioners based on the contents of the report and reply
thereto being not satisfactory that the petitioners have been charged
with the offences punishable under Sections 3(1), 3(3), 3(4) r/w 36 of
the said Act.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
32. To my mind, contravention of any provisions enumerated in

Section 36(1) of the said Act is an offence, then, it cannot be held as a
matter of absolute principle that the complainant must make specific
allegations as urged by Mr. Ponda. In this context, Section 36(1),
Clause (a) refers to Section 3(1). Failure of the owner or as the case
may be, the occupier to provide and maintain the fire prevention and
life safety equipment in good repair and efficient condition is an offence
and punishable
Page: 89
with imprisonment and fine. The explanation below sub-section (1) is

also important and cannot be ignored. Then, Section 38(1) which has
been referred to by Mr. Ponda clarifies that when an offence under the
Act has been committed by the Company, every person, who at the
time when the offence was committed was incharge or was responsible
for the conduct of business of the Company as well as the Company,
shall be deemed to be guilty. The argument of Mr. Ponda is, therefore,
that both provisions together with definitions of the terms “occupier”
and “owner” require the complainant to specifically aver and allege as
to how besides the Company or Society in this case, every officer or
office bearer or employee is responsible for its affairs, rather day to day
management and hence liable.
33. In this context, Mr. Ponda relies upon the Maharashtra Co-
operative Societies Act, 1960 (for short MCS Act) and submits that the
same will be the applicable law to the owner in this case. The accused
No. 1 is a registered co-operative society under the MCS Act. The term
“officer” is defined in Section 2(20) of the MCS Act. Then it is
submitted that Section 72 of the MCS Act appearing in Chapter-VII,
says in unequivocal terms that the final authority of every society shall
vest in General Body of members in General Meeting summoned in
such manner as may be specified in bye-laws. True it is that this is
subject to the provisions in the MCS Act and Rules, but Mr. Ponda
submits that if the final authority vests in general body of members,
then, picking and choosing only those elected by the General Body as
representatives, namely, Chairman, Secretary, Treasurer, etc. is
impermissible in law. Mr. Ponda submits that the Managing Committee
cannot be hauled up for any dereliction of duty or act of omission and
commission.
34. Mr. Ponda's argument overlooks the distinction between the final
authority of every society and management of every society. Section 73
(1) of the MCS Act in clearest terms states that the management of
-----------------------------------------------------------------------------------------------------------------------------------------------------------
every society shall vest in Committee constituted in accordance with

the MCS Act, Rules and Bye-laws, which shall exercise such powers and
perform such duties as may be conferred or imposed respectively by
the MCS Act, Rules and Bye-laws. The distinction between vesting of
final authority and vesting of management of every society in a
Committee is fine but substantial and must be borne in mind. Once the
Managing Committee consists and comprises of elected members and
elections are held in terms of the applicable rules and bye-laws and at
which members of General Body of every society are electors or voters,
then, it would be improper not to bear in mind this distinction. It would
be impossible otherwise to pin point the default or blameworthy
conduct. Section 73(1AB) of the MCS Act reads as under:—
“73(1AB) The members of the committee shall be jointly and
severally responsible for all the decisions taken by the committee
during its term relating to the business of the society. The members
of the committee shall be jointly and severally responsible for all the
acts and omissions detrimental to the interest of the society.
Every such member,
(i) in case of housing societies, within forty five days of his
assuming the office; and
(ii) in case of other societies, within fifteen days of his assuming
the office;
shall execute a bond to that effect, in the form as specified by
the State Government by general or special order.
The member who fails to execute such bond within the
specified period shall be demand to have vacated his office as a
member of the committee:
Provided that, before fixing any responsibility mentioned
above, the Registrar shall inspect the records of the society and
decide as to whether the losses incurred by the society are on
account of acts or omissions on the part of the members of the
committee or on account of any natural calamities, accident or
any circumstances beyond the control of such members:
Provided further that, any member of the committee, who
does not agree with any of the resolution or decision of the
committee, may express his dissenting opinion which shall
be recorded in the proceedings of the meeting and such
member shall not be held responsible
Page: 90
for the decision embodied in the said resolution or such acts or

-----------------------------------------------------------------------------------------------------------------------------------------------------------
omissions committed by the committee of that society as per the said

resolution. Such dissenting member, if he so desires, may also
communicate in writing his dissenting note to the Registrar within
seven days from the date of the said resolution or decision. Any
member, who is not present for the meeting in which the business of
the society is transacted, and who has not subsequently confirmed the
proceedings of that meeting, such member shall also not be held
responsible for any of the business transacted in that meeting of the
society.”
35. While it is true that the requirement of execution of bond may

have been dispensed with, yet the fact remains that the Managing
Committee, in whom the management of the society vests, is
responsible for the conduct of day to day affairs and particularly for the
acts and omissions detrimental to the interest of the society. Mr.
Ponda's argument overlooks the basic aspect that the law does not
contemplate the General Body of members to be concerned with day to
day administration and Management of affairs of the society. That is
why the term “committee” defined in Section 2(7) of the MCS Act
means a Committee of management, Board of Directors or Directing
Body by whatever name called in which the management of affairs of
the Society is vested under Section 73. The term “officer” is defined to
mean a person elected or appointed by the Society to any office of such
society according to its bye-laws and includes Chairman, Vice
Chairman, etc..
36. Therefore, it is futile to urge that a society is not covered by
definition of the term “owner” as appearing in the said Act of 2006. In
fact that extreme position cannot be taken once the owner is an
inclusive concept and therefore, must bring within its fold a registered
co-operative housing society. Equally, the distinction between the
terms “occupier” and “owner” is of great significance. It is owner's or
occupier's liability to provide for fire prevention and life safety
measures. It is clear by sub-section (1) of Section 3 of the said Act that
when owner is not traceable, the occupier is the person envisaged and
held liable for complying with the mandate of law. In these
circumstances it is not possible to agree with Mr. Ponda that the
complaint contains omnibus and general allegations. It is his
submission that the complaint must contain specific statement and
allegation and in terms of subsection (1) of Section 38 of the said Act.
He reads Section 38(1) in a manner as would bring a co-operative
housing society, accused in this case, on par with a company.
Therefore, every person who was incharge and was responsible to the
Company or the conduct of business of the Company as well as the
Company shall be deemed to be guilty of the offence and shall be liable
to be prosecuted against and punished accordingly, is something which
-----------------------------------------------------------------------------------------------------------------------------------------------------------
presupposes such specific allegation and statement.

37. To my mind, the contention that Section 38 is not applicable to a
co-operative society cannot be accepted and for obvious reasons.
38. The definition of the term “company” is to be found in
explanation below Section 38(2). It is elastic in nature. It means a
body corporate and includes a firm or association of individuals.
Therefore, it cannot be confined or restricted to a company as defined
in the Indian Companies Act, 1956 or analogous legislation. If it is an
inclusive term, then, in the context of a co-operative housing society it
would be necessary for the Court to satisfy itself as to how all those
who are arraigned as accused were in charge and responsible for the
conduct of business of the society. They together with the society have
to be, therefore, convicted and held guilty of the offences. That duty
and obligation of the Court is in no way dispensed with. Therefore, the
complainant will have to specify as to how all the Managing Committee
members are incharge and responsible to the society for the conduct of
business of the society. The complainant will have to ascertain the basic
position regarding the constitution of the Managing Committee, the
officers of the Society in whom the powers are delegated and
particularly about policy matters and day to day affairs. It will not be
permissible to arraign or implead the Managing Committee members or
officers by mere nomenclature. The complainant must state as to how
he has termed them as accused and
Page: 91
with reference to the information derived from the records of the

Society including its bye-laws. There is thus, no scope for the
apprehension that the BMC's Fire Department or Unit will file
complaints with general allegations and description, without verifying
the factual position. If such complaints are filed, the Magistrates are
not bound to issue summons or process.
39. In the present case, the complaint refers to an incident of fire

and then visit of Mr. K.F. D' Souza and his team from the Nariman Fire
Station. The inspection carried out and findings in the report of
Inspection Team are referred. The Report enlists contributory factors for
spread of fire and finally contains recommendations at paragraph 17.
Based on the report of the Inspection Team, a notice was sent to the
Chairman of the Society which is called a show-cause notice for non-
maintenance of fire fighting equipments and life safety measures. The
attention of the Chairman was invited to the incident of fire and
violations. The notice called upon the Chairman to show cause as to
-----------------------------------------------------------------------------------------------------------------------------------------------------------
why the prosecution should not be launched against him. Such notice
was issued to the Vice Chairman, Secretary, Treasurer, Joint Treasurer
and then the replies thereto have been referred to. Based on all this
that the complaint containing the above allegations has been filed. In
the complaint itself it has been stated that the accused Nos. 2 and 3
were removed from their posts by the Registrar and by intimation to
them on 27.11.2012. The accused No. 8 had given resignation few
months back as per the inquiry with the Society office bearers. This
means that the complaint contains relevant material and it may be the
stand of accused that some of them have resigned or were no longer
committee members. However, as has been rightly pointed out by Mr.
Naik, the complaint is not filed alleging offences punishable under the
said Act because of the incident of fire, but the complaint takes that
into account and alleges that it was because of non-compliance with
Sections 3(1), 3(3) and 3(4) of the said Act which is an offence, that
the fire occurred. Thus, fire prevention and life safety measures were
not provided and they were not maintained in good and effective
condition at all times as required by the statute. That obligation and
duty has to be performed at all times and it may be that a given office
bearer was not holding office on the date of such incident or calamity,
but his liability is absolute and he must then, as a part of defence,
substantiate and prove that there was no failure to provide and
maintain fire prevention and life safety equipments in good repair and
condition. Apart therefrom, the person who is arraigned as an accused
can prove that the offence was committed without his knowledge or
that he has exercised due diligence to prevent such offence. In these
circumstances to urge that the complaint does not disclose commission
of any offence by the petitioner Nos. 1 to 7 is not proper to say the
least. Reliance placed on the model bye-laws, at this stage, will not
carry the case any further. Once it is understood that the offence under
the said Act is contravention of and non-compliance with the provisions
enumerated in Section 36, then, coupled with the legislative intent it
will have to be held that any technical pleas of the nature raised cannot
be entertained at this stage. The distinction in law has to be borne in
mind. The Law makes default in compliance and contravention of the
provision obliging maintenance of fire and life safety measures, an
offence and enables imposing penalty therefor. That is a public duty.
40. In India as well abroad, as has been emphasized by me
hereinabove, a distinction has been made as to what would amount to
commission of offence or infact punishment for commission of an
offence. If the blameworthy conduct is the foundation or premise upon
which the provision has been made, then, it is not permissible to ignore
it. Even decisions of the Courts abroad and particularly of the House of
Lords in Tesco Supermarkets Limited and Nattrass decided on February
-----------------------------------------------------------------------------------------------------------------------------------------------------------
3, 4, 8 and 9 and March 31, 1971 reported in [1972] App. Cas. 153
(HL), recognizes the above distinction. The lack of due diligence, lack of
care, are the principles on which the criminal liability is based. Then,
bearing in mind the object and purpose sought to be achieved and in
larger public interest, an interpretation will have to be placed on the
provision which would advance that purpose and suppress the mischief.
But, that it would be difficult and in
Page: 92
some cases, impossible to proceed in criminal law. In Balram Kumawat

v. Union of India, reported in (2003) 7 SCC 628 : AIR 2003 SC 3268,
the Honourable Supreme Court held as under:—
“19. Contextual reading is a well-known proposition of

interpretation of statute. The Clauses of a statute should be
construed with reference to the context vis-a-vis the other provisions
so as to make a consistent enactment of the whole statute relating
to the subject-matter. The rule of ‘exvisceribus actus’ should be
resorted to in a situation of this nature.
20. In State of West Bengal v. Union of India (AIR 1963 SC 1241
at p. 1255), the learned Chief Justice stated that law thus:
“The Court must ascertain the intention of the Legislature by
directing its attention not merely to the Clauses to be construed
but to the entire statute; it must compare the Clause with the
other parts of the law, and the setting in which the Clause to be
interpreted occurs.”
21. The said principle has been reiterated in R.S. Raghunath v.
State of Karnataka ((1992) 1 SCC 335 : AIR 1992 SC 81 at p. 89).
22. Furthermore, even in relation to a penal statute any narrow
and pedantic, literal and lexical construction may not always be
given effect to. The law would have to be interpreted having regard
to the subject-matter of the offence and the object of the law it
seeks to achieve. The purpose of the law is not to allow the offender
to sneak out of the meshes of law. Criminal jurisprudence does not
say so.”
41. The judgment in Tesco Supermarkets Limited (supra) has been
referred to by the Honourable Justice G.P. Singh in his work “Principles
of Statutory Interpretation” at pages 964 and 965, where the nature of
activity makes the premises where it is carried on a major hazard site,
then appropriate dues are imposed upon employer. Equally, the
licensing act and other acts in the field of consumer protection and
public health provide that the offence is quasi criminal. The nature of
-----------------------------------------------------------------------------------------------------------------------------------------------------------
the act which the legislature is dealing with has to be referred to. In
this context, the learned Author has referred to the leading judgments
of the English Courts and held that the contravention must be seen in
the context of the nature of duty. If the nature of duty is such that
public safety and public health is at stake, then, even default in
complying with the provisions enshrining that duty would be an offence
and that is made punishable. If that is made punishable, then, the
provision cannot be ignored. Thus, one goes back to the settled
principle that in construing criminal statute, the principle of strict
construction is capable of being relaxed. That is relaxed bearing in mind
the provision in each statute. As has been emphasized by the very
learned Author and relying on several judgments, the guiding principle
is that the penal statutes have also to be interpreted having regard to
the subject-matter of the offence and the object of the law it seeks to
achieve. The purpose of law is not to allow the offender to sneak out of
the meshes of law. As has been enshrined above, the considerations of
public policy are not foreign in interpreting and applying a criminal
statute.
42. For the above reasons, it is not possible to agree with Mr. Ponda
that the order issuing process is bad in law or perverse.
43. True it is, as emphasized by Mr. Ponda, that being summoned
upon to answer a criminal charge is a serious matter. The learned
Magistrate should not act mechanically while issuing the process, but
should apply his mind. If the criminal proceedings are serious matters,
then, it is expected, as rightly emphasized by Mr. Ponda, that the
learned Magistrate must apply its mind to the allegations in each
individual complaint and find out as to whether essential ingredients
are satisfied or not. It is not possible to lay down an abstract or general
principle as has been requested by Mr. Ponda in this case. Ultimately,
the principles which have been applied in interpreting Sections 138,
141 and 142 of the Negotiable Instruments Act, 1881 cannot be
straightway applied, read and imported in the said Act. Mr. Ponda
submits that in this case the petitioners are held to be vicariously liable
and that is impermissible. That it is not so is clear from what has been
held by me hereinabove. Now the argument based on the provisions of
the Negotiable Instruments Act, 1881 is that there is no essential
pleading. To my mind, the criminal law cannot be set in motion as a
matter of
Page: 93
course. The Magistrate is obliged to examine the nature of allegations

made in the complaint and then summon the accused. He should not,
-----------------------------------------------------------------------------------------------------------------------------------------------------------
as emphasized by the Honourable Supreme Court, act as a silent

spectator. However, in the facts of this case, to my mind, the learned
Magistrate has scrutinized the complaint allegations carefully and by
taking them into account and equally the documents referred to
therein, that he has decided to proceed and issue a process and called
upon the petitioners to appear before him. It may be that in a given
case the process will not be issued on general and vague statements
and merely because a person happens to be an officer or managing
committee member or director. It all depends upon the facts and
circumstances in each case as to whether the occupier is to be
proceeded against or owner himself. If the owner is an artificial person,
then, as specified in Section 38(1) of the said Act, the learned
Magistrate will insist at least the primary averments and essential
allegations being made and scrutinize the relevant material at the
prima facie stage to find out as to whether each and every officer or
director should be proceeded or that the process be restricted to few of
them who were directly incharge of or in control of the affairs as
submitted by Mr. Ponda. It is not possible for the learned Magistrate to
express any final opinion at the initial stage about such contested and
debated matters. A prima facie satisfaction is all that is necessary.
However, even that should not be vitiated as emphasized in the
Supreme Court decisions. But, care should be taken that each and
every person connected with the Company or Society or body of
individuals is not roped in. Ultimately, the Company means a body
corporate and includes a firm and association of individuals. The
learned Magistrate, therefore, cannot be oblivious of this concept and
the definition and equally explanation below Section 38(2) of the said
Act. While issuing the process, however, he is not expected to render
and give any final opinion. A limited scrutiny and verification to
ascertain the role of persons sought to be proceeded against, will
definitely be required to be undertaken so that protection is given to
those who have no role to play in day to day management and affairs.
In these, circumstances the apprehension of Mr. Ponda can be taken
care of by clarifying that all ingredients as would require the Court to
be satisfied in relation to a company incorporated and registered under
the Indian Companies Act, 1956, may have to be satisfied in the case
of a co-operative housing society, but the distinction as pointed out by
me hereinabove, namely, vesting of final authority in the General Body
of members and vesting of management in the Managing Committee or
office bearers, will guide the learned Magistrate at the stage of issuing
the process as well. Therefore, if the Managing Committee in a given
case has delegated some of its powers to others within them or has,
with the concurrence or consent of General Body, appointed a third
party or agent to undertake and complete some of its tasks and jobs
-----------------------------------------------------------------------------------------------------------------------------------------------------------
including duties to provide fire prevention and life safety measures,

then, the learned Magistrate will take into account such instances as
are brought before him and substantiated with appropriate material. If
the allegations in the complaint themselves are such that each and
every officer and managing committee member need not be summoned
to answer the charge, then, the learned Magistrate may limit and
restrict the issuance to a few or in a given case, issue a process if he is
satisfied from the allegations and statements in the complaint that
those termed as managing committee members were directly
responsible for taking measures envisaged by the said Act. Thus, the
apprehension that merely because the complaint terms somebody as
Chairman, Vice Chairman, Secretary, Treasurer, etc. that summons or
process will be issued straightway is baseless.
44. Once the above view is taken, then, it is not necessary to refer to
each of the judgments relied upon by Mr. Ponda.
45. However, in the facts and circumstances of the present case, the
learned Magistrate has not exceeded his limits or powers in summoning
the petitioners and merely because they are senior citizens, they cannot
escape the criminal liability. I have no doubt in mind that the learned
Magistrate will not insist on their attendance in person on every day on
which the trial is being held by him. He will
Page: 94
give them appropriate concessions and exemp tions. Equally, merely

because he has summoned them does not mean that he is obliged to
convict them and more so because the order issuing the process is
confirmed by this Court.
46. I am satisfied that the order issuing the process does not suffer
from any illegality or perversity warranting interference in writ
jurisdiction. In such circumstances I proceed to dismiss the Writ
Petition. Rule is discharged. The Writ Petition is dismissed. However, all
contentions of both sides on merits are kept open. This order will not
prevent the petitioners from raising appropriate pleas and equally
requesting the learned Magistrate that the charge may not be framed
against them or any one of them and contentions in that behalf are also
kept open.
47. Petition dismissed.
———
Disclaimer: While every effort is made to avoid any mistake or omission, this casenote/ headnote/ judgment/ act/ rule/
regulation/ circular/ notification is being circulated on the condition and understanding that the publisher would not be
liable in any manner by reason of any mistake or omission or for any action taken or omitted to be taken or advice
rendered or accepted on the basis of this casenote/ headnote/ judgment/ act/ rule/ regulation/ circular/ notification. All
-----------------------------------------------------------------------------------------------------------------------------------------------------------
disputes will be subject exclusively to jurisdiction of courts, tribunals and forums at Lucknow only. The authenticity of
this text must be verified from the original source.

J 2013 SCC OnLine Bom 2245 2013 4 AIR Bom R 75 2013

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

J 2013 SCC OnLine Bom 2245 2013 4 AIR Bom R 75 2013

Uploaded by

Copyright:

Available Formats

SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.

Page 1 Saturday, May 11, 2024

2013 SCC OnLine Bom 2245 : (2013) 4 AIR Bom R 75 : (2013) 3

In the High Court of Bombay

Pishu Mulchand Mahtani and Others

3. The complaint alleges that on 02.12.2012 at about 3 : 33 a.m.,

commission of offences under Sections 3(1), 3(3), 3(4) r/w 36 of the

Company as well as the Company shall be deemed to be guilty of the

8. In this regard, Mr. Ponda invites my attention to the definition of

Managing Committee as a whole. That would be a construction contrary

13. Mr. Naik submits that on 02.12.2012 at about 3 : 33 a.m., a

to take measures so as to prevent such fire that the offence is

14. For properly appreciating the rival contentions, a reference to the

safety measures and in operation in the State for the time

additional fire prevention and life safety measures, as are specified in

Explanation.— The classification of buildings as mentioned in

the maintenance of fire prevention and life safety measures in

Government to levy, collect and recover the fire service fees.

21. Chapter-VI contains provisions regarding fire officers and fire

any notice or any directions issued under any of the

any other officer authorised by any of them, for which no specific

shall, on conviction, be punished,—

cognizable and non-bailable.

22. Sections 40 to 48 are to be found in Chapter-VIII and enable

important to enact measures so as to prevent calamities such as a fire.

of having two meanings”, for the imprecision of language is such that it

STORY, J. in agreeing to the rule in its “true and sober sense”

Statutes and in paragraphs 3, 40, 42, 43. 46 held as under:—

be appropriate to first notice the provisions of Section 2(n) as it cited

“2(n) “occupier” of a factory means the person who has ultimate

essentially to safeguard the interests of workers, stop their

day management of its affairs and the Chairman and Managing

and Managing Director to give an undertaking that in case of death or

proof of the existence of “mens rea”. Even after an adjudication by

establish the element of mens rea it is generally sufficient to

ground of “no mens rea no penalty”. For breaches of provisions of

32. To my mind, contravention of any provisions enumerated in

with imprisonment and fine. The explanation below sub-section (1) is

every society shall vest in Committee constituted in accordance with

for the decision embodied in the said resolution or such acts or

omissions committed by the committee of that society as per the said

35. While it is true that the requirement of execution of bond may

presupposes such specific allegation and statement.

with reference to the information derived from the records of the

39. In the present case, the complaint refers to an incident of fire

some cases, impossible to proceed in criminal law. In Balram Kumawat

“19. Contextual reading is a well-known proposition of

course. The Magistrate is obliged to examine the nature of allegations

as emphasized by the Honourable Supreme Court, act as a silent

including duties to provide fire prevention and life safety measures,

give them appropriate concessions and exemp tions. Equally, merely

You might also like