1. Firm Pursottam Das Ganpati Rai Vs.

Gulab Khan
2. Hardeep Singh and Ors. Vs. Food Inspector, Department of PFA
and Ors.
3. Rajesh S. Adani, Managing Director, Adani Wilmar Ltd.
Vs.
M. Chandrasegara Sastri, Senior Food Inspector
4. Andhra Pradesh Grain and Seed Merchants Association etc. etc.
Vs. Union of India (UOI) and Anr.
5. The Board of Trustees of the Port of Calcutta Vs. Bengal
Corporation Pvt. Ltd.
6.

idrish

IN THE HIGH COURT OF PATNA

A.F.O.D. No. 228 of 1956
Decided On: 14.03.1961
Firm Pursottam Das Ganpati Rai
Vs.
Gulab Khan
Hon'ble
S.C. Mishra and G.N. Prasad, JJ.

Judges/Coram:

Counsels:
For Appellant/Petitioner/Plaintiff: Lalnarayan Sinha and Hari Lal Agrawal, Advs.
For Respondents/Defendant: A.B.N. Sinha and N.P. Agarwala, Advs.
Subject: Commercial
Subject: Limitation
Catch Words
Mentioned IN
Acts/Rules/Orders:
Limitation Act, 1908 - Section 14; Code of Civil Procedure (CPC) - Order 7 Rule
10; Indian Evidence Act, 1872 - Section 114; Contract Act, 1872 - Section
128,Contract Act, 1872 - Section 182
Cases
Referred:
Maqbul Ahmad v. Onkar Pratap Narain Singh, 62 Ind App 80, AIR 1935 PC 85; East
India Co. v. Uditchurn Paul, 5 Moo Ind App 43; Firm Jiwan Ram Ramchandra v.
Jagernath Sahu, AIR 1937 Pat 495; Narendrabhooshan Lahiri v. Berahampur Oil Mills
Ltd., ILR 60 Cal 1122; Sinnakaruppan v. R.M.P.S. Muthiah Chettiar, 92 Ind Cas 373,
AIR 1926 Mad 178; In Re: Nevill, (1871) 6 Ch A 397; Supdt. of Stamps, Bombay v.
Broul and Co., AIR 1944 Bom 325
Disposition:
Appeal Dismissed
Case Note:
Point 10

Commercial - Liability to reimburse - Section 128 of Contract Act, 1872 Whether suit by Plaintiff was barred by limitation as having been filed beyond
time mentioned - Whether Defendant Appellant entered into a contract with
Plaintiff for supply of 352 tins of mustard oil on its own account as vendor of
Defendant undertook to supply same only as a commission agent and did not
hold out any guarantee for purity of stuff to be supplied and it was interested
only in its commission - Held, delay of four days thereafter, in considering
diligence with which suit was prosecuted, could not be regarded as anything
but part of due diligence exercised by Plaintiff, and Plaintiff was entitled to
exclusion of this period of four days - In a case where plaint is ordered to be
returned proceedings terminate not on date of order directing plaint to be
returned but on date of actual return with endorsement on plaint in
accordance with provisions of Order VII, Rule 10, of CPC - Court below was
right in holding that suit was not barred by limitation - It was the Defendant
who was vendor of oil in question to Plaintiff - Even if Defendant was
interested only in charging commission, Defendant certainly undertook to
supply mustard oil of pure quality and Defendant must be held to be
guarantor of quality - Defendant must be answerable for quality of oil and
right of Plaintiff against Defendant in accordance with Section 128 of
Contract Act would be co-extensive with liability of manufacturer - Defendant
must be held liable also as a guarantor under Section 128 of Contract Act and
must be responsible for bad quality of oil which led to its forfeiture by Subdivisional Officer - Court below had not allowed Plaintiff any damages, but
only price paid by him - A presumption, therefore, that Plaintiff should have
sold oil or taken some step to diminish his loss did not arise as entire
quantity, according to judgment of Criminal Court, was beyond his control
and had become property of Government - Appeal dismissed with costs.
JUDGMENT
Misra, J.
1. The plaintiff-respondent, Gulab Khan, instituted the suit for recovery of a sum of Rs.
16, 979/- together with costs, interest pendente lite and future interest, on the
allegation that he placed an order with the defendant for supply of 352 tins of mustard
oil, weighing 154 maunds, to be despatched from Kanpur to Motihari. The oil to be
supplied, however, was stipulated to be of pure and unadulterated quality. On the 16th
of June, 1950, the defendant sent the goods ordered for from Kanpur, not to Motihari,
but to Bettiah railway station. The plaintiff had to incur some costs in bringing the oil
from Bettiah to Motihari. The plaintiff took delivery of the railway receipt from the
Central Bank of India, Bettiah Branch, on payment of a sum of Rs. 13,720/-. He went
to the railway station to take delivery, but he was informed by the Goods Clerk that he
could be given delivery only when the railway receipt was signed by the Sub-divisional
Officer, Bettiah. The plaintiff approached the Sub-divisional , Officer, Bettiah, who
directed a Government doctor to examine the oil first, and it was only when the doctor
reported that the oil was pure and unadulterated that permission could be granted for
delivery. The doctor went to the railway godown, took small quantities ot oil from

several tins, and reported that the oil contained in the tins was not pure. He also sent
samples of the oil to the Government Chemist at Patna for examination. The latter also
found the oil to be adulterated, and reported to that effect. The Sub-divisional Officer,
accordingly, got the entire consignment kept in the godown of the plaintiff and had it
locked and sealed by a Deputy Magistrate, and the key of the godown was kept in
charge of the Sub-divisional Officer.
2. A criminal case was started thereafter against the plaintiff and the defendant. They
were both convicted and fined Rs. 500/- each. They preferred appeals against their
conviction and sentence. The appellate Court, however, upheld the conviction and
sentence of the defendant, but acquitted the plaintiff. It seems, however, that the
defendant also came up in revision to this Court, and his conviction was also set aside.
The plaintiff addressed, thereafter, several letters to the defendant for payment of the
price of the oil, with damages and interest, railway freight, cartage and other
incidental expenses. The defendant, however, did not pay any heed to the notices,
and, accordingly, the present suit had to be instituted on the allegation that it was the
defendant who dishonestly supplied adulterated mustard oil. On these allegations, as
stated above, the present suit was instituted, and the plaintiff claimed the aforesaid
amount, which comprised the price of the 352 tins of mustard oil as also the other
incidental expenses incurred by him in connection with the consignment despatched to
him.
3. The defendant denied the right of the plaintiff to the amount claimed. It was
admitted, no doubt, that the firm of the plaintiff placed an order with the defendant at
Kanpur to purchase 352 tins of mustard oil and despatch it to Bettiah. It was denied
that the order for supply of oil was placed by the plaintiff at Motihari. It was stated
further that the defendant acted as commission agent on behalf of the plaintiff in
executing the order placed and purchased 352 tins of mustard oil from the Ganges Oil
Mills at Kanpur (which was defendant No. 2 to the suit then) and instructed the
Ganges Oil Mills to despatch the oil to Bettiah. The defendant obtained the railway
receipt from the Ganges Oil Mills against payment. The railway receipt was "self",
which meant that the consignor and the consignee were the Ganges Oil Mills. The
necessary documents were sent to the plaintiff by the defendant through the Central
Bank of India, Bettiah Branch, for payment. The goods in question were purchased at
first by Messrs. Shrikrishna Ram of Narkatiyaganj from the Ganges Oil Mills. The
defendant had no occasion to see the goods. The Ganges Oil Mills certified that the oil
purchased was free from argemone oil. The certificate issued by the manufacturer,
along with the sample, was forwarded to the plaintiff. If was denied that the defendant
had undertaken-to supply pure mustard oil fit for human consumption. The plaintiff
had not divulged for what purpose the oil in dispute was required. According to the
defendant, the goods were despatched to Bettiah according to the instruction of the
plaintiff, and it was wrong to suggest that the plaintiff ordered the goods to be
supplied to him at Motihari. The defendant was not aware of the real quality of the
mustard oil supplied, and it was the Ganges Oil Mills (defendant No. 2) which was
responsible for the quality of the oil. It was the Ganges Oil Mills which guaranteed the
quality of the oil as pure, and this defendant had no reason to suspect the bona fides
of defendant No. 2. If, therefore, on chemical examination of the oil, it was discovered

that it was not of pure quality, the liability for it would fall on the shoulders of the
Ganges Oil Mills, and not on the defendant No. 1. This in substance, is the tenor of the
written statement filed on behalf of the defendant.
4. The plaintiff instituted a suit for recovery of the aforesaid amount at Motihari in the
court of the Subordinate Judge on the 8th of November, 1951. The Subordinate Judge,
by his judgment dated the 25th of April, 1953, held that he had no jurisdiction to try
the suit as defendant No. 2, the Ganges Oil Mills could not be amenable to the
jurisdiction of that court inasmuch as it had no place of business within the jurisdiction
of that court. It appears that, on the 27th April, 1953, the plaintiff put in applications
for withdrawal of the suit with permission to institute a fresh suit or to dismiss it as
against defendant No. 2 or to delete its name and proceed with the trial. On the 28th
of April, 1953, the court ordered the name of defendant No. 2 to be expunged from
the plaint. The defendant No. 1 came up in revision to this Court, which was numbered
as Civil Revision No. 596 of 1953. A Division Bench of this Court, by judgment dated
the 5th of November, 1951, allowed the application in revision and set aside the order
of the court below in so far as it directed the name of defendant No. 2 to be expunged
and the suit to proceed as against defendant No. 1. This Court held that the learned
Subordinate Judge became functus officio in regard to this matter after the order was
passed on the 25th of April, 1953 that the court had no jurisdiction as against
defendant No. 2 and that the plaint was to be returned to the plaintiff for presentation
in the proper Court. The plaintiff filed the present suit, thereafter, on the 14th of
December, 1954. According to the date of the cause of action mentioned in the plaint,
the last due date for filing the suit was the 16th of June, 1953.
5. The court below, on a consideration of the evidence led on behalf of the parties,
cams to the conclusion that the defendant appellant was liable for reimbursing the
plaintiff to the extent of the amount of price of the oil paid by him for obtaining the
railway receipt and that the plaintiff could not be entitled to any other amount. The
finding of the Court below rests on the ground that the defendant appellant was the
real vendor of the plaintiff and that this defendant purchased the oil from the Ganges
Oil Mills and supplied the same to the plaintiff, and, as such, the defendant appellant
must be answerable for the quality of the oil. It was held that the case of the plaintiff
that the appellant undertook to supply the mustard on of pure quality fit for human
consumption was true and that the case of the defendant that there was no such
agreement between the parties was false. The court below, however, has not passed a
decree in favour of the plaintiff for other items of the claim set out in the plaint.
6. In this appeal before us by the defendant, two questions have been raised by the
learned Counsel for the parties. The first question is as to whether the present suit by
the plaintiff is barred by limitation as having been filed beyond the time mentioned
above, being the 16th of June, 1953; and, secondly, whether the defendant appellant
entered into a contract with the plaintiff for supply of 352 tins of mustard oil on its
own account as the vendor of the defendant undertook to supply the same only as a
commission agent and did not hold out any guarantee for the purity of the stuff to be
supplied and it was interested only in its commission, and, as such, could not be

answerable for any adulteration of the oil which was detected later on chemical
analysis under the direction of the Sub-divisional Officer, Betiah.
7. On the first question, the court below has held in favour of the plaintiff, relying on
Section 14 of the Limitation Act. It is not denied that, if Section 14 of the Limitation
Act cannot be invoked in support of the plaintiff's case, the suit must be held to have
been filed beyond time. The only question is whether the period from the 8th of
November, 1951, when the suit was instituted, to the date of the endorsement by the
court below ordering the return of the plaint, which was on the 10th of December,
1954, and four days thereafter, when the suit was actually instituted, being the 14th of
December, 1954, can be excluded in computing the period of limitation in terms of
Section 14 of the Limitation Act. Learned Counsel for the appellant contends that,
although the suit must be held to have been prosecuted with due diligence in a wrong
court from the date of the institution, namely, the 8th of November, 1951 to the 25th
of April, 1953, when the learned Subordinate Judge held that he had no -jurisdiction to
try the suit as against defendant No. 2, yet the period thereafter cannot be taken into
account for extending the period for the institution of the suit in the proper forum
thereafter. On the other hand, learned Counsel for the respondent contends that, after
the order passed by the learned Subordinate Judge on the 25th of April, 1953, a bona
fide application was put in by the plaintiff for withdrawal of the suit with liberty to
institute a fresh one or to dismiss it as against defendant No. 2 and another for
deleting the name of defendant No. 2 from the plaint. The two applications were filed
on the 27th of April, 1953, and the court, in fact, entertained the application and
ordered expunction of the name of defendant No. 2. This is no reason not to consider
this period also as a part of the bona fide prosecution of the suit. When defendant No.
1 came up in revision to this Court, and this Court allowed the application pronouncing
an opinion that the order passed by the trial court on the application of the plaintiff
dated the 27th of April, 1953 was beyond jurisdiction, this also must be considered as
a part of the proceeding of a definitely bona fide character inasmuch as it was the
defendant No. 1 who came up in revision to this Court aggrieved by the order passed
by the learned Subordinate Judge. The judgment of this Court, as already stated, in
Civil Revision No. 596 of 1953 was delivered on the 5th of November, 1954. The
plaintiff respondent filed an application for return of the plaint on the 29th of
November, 1954, and the court passed an order for return of the plaint on the 10th of
December, 1954 with an endorsement that "the plaint be returned to the plaintiff's
pleader for re-filing to the proper Court''. This being a necessary part of the duty of
the Court in returning the plaint, there is no reason why this also should not be
considered as bona fide prosecution of suit. Within four days of that endorsement, the
present suit was instituted which cannot be regarded as unreasonable in the
circumstances of the case.
8. Mr. Lal Narayan Sinha, for the appellant, has referred to the cases of Maqbul Ahmad
v. Onkar Pratap Narain Singh (MANU/PR/0025/1935 : 62 Ind App 80 at p. 88 : AIR
1935 PC 85 at p. 88) and East India Co. v. Uditchurn Paul 5 Moo Ind App 43 at p. 68
(PC); and Mr. Harilal Agarwal, who has followed Mr. Lalnarayan Sinha, has referred to
the case of Firm Jiwan Ram Ramchandra v. Jagernath Sahu MANU/BH/0317/1937 :
AIR 1937 Pat 495, in support of the contention that the plaintiff could not be entitled

to the exclusion of the period claimed by him in terms of Section 14 of the Limitation
Act. In the case reported inMANU/PR/0025/1935 , the real point for consideration
was that where the period of limitation expired on a date when the Court was closed
that period would be available only when such an application had to be filed in the
proper Court, and not in a court which had no jurisdiction. In my opinion, therefore,
the point which arises for consideration in the present case did not call for
consideration in that case, and, accordingly, that decision is of no assistance in
deciding the point in controversy. The case of 5 Moo Ind App 43 (PC), however, does
not seem to be relevant so far as the construction to be placed upon Section 14 of the
Limitation Act is concerned, and it is not necessary to deal with it. The case
of MANU/BH/0317/1937 : AIR 1937 Pat 495 is a case where the plaintiff filed a suit
on the last date of limitation available to it, and the Court found that it had no
jurisdiction to pass an order to the prejudice of one of the parties. The plaintiff who
filed a suit on the last date could not be considered to be a person who was diligent in
pursuing his right. When the Court, therefore, fixed a date on which to present the
plaint in the proper Court, it was proceeding in a manner which was not authorised
under Order VII, Rule 10, of the Code of Civil Procedure. The only period therefore, in
the circumstances, which a plaintiff, would be entitled to in computing the period of
limitation was the period during which the plaint was pending in the Court returning
the plaint. Considerable stress has been laid on this case by Mr. Harilal Agarwal on
behalf of the appellant. This case, however, is distinguishable on more than one
ground. In the first place, the plaintiff in this case filed its suit on the last date of
limitation which was construed by this Court as a lack of diligence on its part which
disentitled it to the relief which it might in equity be open to it if it had been
proceeding in a bona fide way. The plaintiff was, accordingly, restricted to the right
open to it in law under Section 14 of the Limitation Act which could be the pendency of
the suit in a Court having no jurisdiction in the narrow sense, and this Court did not
approve of the order passed by the trial Court fixing a date for presentation of the
plaint in the, proper Court, thus extending the period which would be available to the
plaintiff for presentation of the plaint. In the present case, however, this consideration
does not arise. The suit was filed by the plaintiff much before the last date of
limitation, which, as mentioned above, was the 16th of June, 1953, whereas the suit
was instituted against both the defendants n the 8th of November, 1951. In the
circumstances, it cannot be said that it showed any lack of bona fides or diligence on
the part of the plaintiff. In the second place, the learned Subordinate Judge ordering
the return of the plaint had not fixed a date for presentation of the plaint which would
exempt the plaintiff from bona fide prosecution of the suit or presenting the plaint in a
proper Court with due diligence; but, on the contrary, the order was passed by the
Court returning the plaint on the 10th of December, 1954, and within four days thereof
the suit was instituted in the proper Court. None of the considerations which weighed
there with the learned Judges in this case really arise in the present contest. Mr.
A.B.N. Sinha, for the respondent, has drawn our attention to the case of
Narendrabhooshan Lahiri v. Berahampur Oil Mills Ltd. (MANU/WB/0161/1933 : ILR
60 Cal 1122 at p. 1131 : AIR 1933 Cal 914 at p. 918) wherein a Division Bench of the
Calcutta High Court laid down a proposition which supports the contention of learned
Counsel. The observation of Mukherji, J., on this point runs as follows:

"This being the state of authorities on the subject the correct view, in my
judgment, to take of the matter is that the proceedings cannot be regarded as
having ended until the Court, in whom the duty lies of conforming to the
provisions of Order VII, Rule 10, Civil Procedure Code, is in a position to carry
out the order of return of the plaint. Till that point of time, no question can
possibly arise as regards the plaintiff not being entitled to exclusion of time
under Section 14. When that point of time is reached, the question whether the
plaintiff would or would not be entitled to a further deduction of time thereafter
would depend upon various factors. Ordinarily no further tune would be
excluded. But it is not inconceivable that in exceptional circumstances, even
subsequent to such point of time, the proceedings may have to be regarded aa
still continuing. And, in determining whether they should be so regarded or not,
the question, of the plaintiff's diligence or otherwise may have to be considered."
In my opinion, therefore, the delay of four days thereafter, in considering diligence
with which the suit was prosecuted, cannot be regarded as anything but part of due
diligence exercised by the plaintiff, and the plaintiff is entitled to the exclusion of this
period of four days as well, and the same view has been laid down in the case of
Sinnakaruppan v. R.M.P.S. Muthiah Chettiar (MANU/TN/0320/1925 : 92 Ind Cas
373 : AIR 1926 Mad 178) wherein it has been held by a learned Single Judge of the
Madras High Court that in a case where the plaint is ordered to be returned the
proceedings terminate not on the date of the order directing the plaint to be returned
but on the date of the actual return with the endorsement on the plaint in accordance
with the provisions of Order VII, Rule 10, of the Code of Civil Procedure. There is
nothing inconsistent between the propositions of law laid down in the above two cases
relied on by learned Counsel for the respondent, and in my opinion, the Court below
was right in holding that the suit was not barred by limitation.
9. The second point with regard to the relationship between the plaintiff and the
defendant is as to whether the defendant was a mere commission agent of the plaintiff
and, as such, could not be held liable for the bad quality of the oil supplied by the
Ganges Oil Mills or was to be regarded as the vendor. The Court below, as I have
mentioned above, on a consideration of the various circumstances in the case, has
found that the defendants must be treated as the vendor of the plaintiff, and not
merely as a commission agent for supplying the commodity. The learned Subordinate
Judge has rested his conclusion on the ground that, although the defendant pleaded
that the contract was entered into between the parties on the strength of a letter sent
by the plaintiff to the defendant at Kanpur, no such letter was produced, nor was any
register of accounts produced by the defendant which would show in what terms the
order was placed by the plaintiff for supply of the goods concerned. The defendant
appears to be a firm carrying on considerable business, and it is difficult to imagine
that the letter sent by the plaintiff, if one were sent, would not be preserved, nor that
the fact would not be noted in some Bahi of the defendant. If the defendant did not
produce the relevant documents, that would only lead to an inference against the
defendant and in favour of the plaintiff. In my opinion, the inference drawn by the
Court below against the defendant cannot be held to be unreasonable in the
circumstances. Mr. Harilal Agarwal, for the appellant, however, contended that,

although the inference of the Court below may be considered as well grounded, as it
stands, yet a reference to the plaint itself shows that the plaintiff was aware all the
time that the" defendant was merely a commission agent. The defendant was a
supplier and was interested only in the commission charge. There is force, no doubt, in
this contention because the plaint, read in a plain manner, seems to proceed on the
footing that the defendant was acting as a commission agent and, as such, could not
be regarded as a person responsible for the quality of the stuff supplied. Mr. A.B.N.
Sinha, for the respondent, has referred to the cases of Ex parte White In re
Nevill (1871) 6 Ch A 397 and Supdt. of Stamps, Bombay v. Broul and
Co. MANU/MH/0015/1944 : AIR 1944 Bom 325 (SB) at p. 329 in support of his
contention that, although the word used is "commission agent" yet that in itself would
not be conclusive to determine the correct relationship between the parties. It has
been held in the above cases that, even where the word "agent" is used, the
relationship between the parties may be still of two principals contracting with each
other. The actual status of the parties must be determined with reference to all the
circumstances, and not merely with reference to the word used. In my opinion, there
is substance in this contention. The Court below also has proceeded to examine all the
circumstances, and has found the defendant to be the vendor, and not merely a
commission agent, in the first place, as I have said, for non-production of the relevant
documents and, in the second place, on the circumstance that it was the defendant
who paid the price to the Ganges Oil Mills, the manufacturer of the mustard oil, and it
was the defendant who received the price of the goods under the railway receipt which
was delivered to the plaintiff by the Bettiah Branch of the Central Bank of India after
having received the amount chargeable for the railway receipt. It was, therefore, the
defendant which was substantially moving in the matter. No nexus was established
between the Ganges Oil Mills and the plaintiff. The entire dealing, therefore, makes out
the defendant to be the supplier of the goods and, as such, in the circumstances of the
present case, the defendant must be treated as the principal vis-a-vis the plaintiff, and
not merely a commission agent. The reference in the invoice to the amount of
commission could not alter the hard fact that nowhere the defendant referred to the
Ganges Oil Mills being the supplier of the goods to the plaintiff unless, of course, it was
in course of the criminal case itself that the proprietor of the defendant firm found
himself in difficulty in regard to the quality of the oil supplied. A reference to Exhibits
5, 5(a) and 5(b) also leads to the same conclusion inasmuch as in exhibit 5, which is a
post card from the defendant to the plaintiff, dated the 12th of June, 1950 the
following passage occurs: -

"In accordance with the letter of Babu Sukhdeo Prasad we have purchased one
wagon of mustard oil 352 tins (weight 154 mds.) at Rs. 84/- per maund bilti cut,
ready and sent a telegram to Bettiah gadi asked for advance of Rs. 1000/- only
to be sent by T.T. which must be sent."
In exhibit 5 (a), which is another post card written by the defendant to the plaintiff,
dated the 14th of August, 1950, the following occurs:-

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

In exhibit 5 (b) which is a letter from the plaintiff to the defendant, dated the 25th of
August, 1950, the following occurs:-

"I am to inform you that 352 tins of mustard oil, which I have purchased from
you, has not been passed by the Government."
In my opinion, all these three documents also lead to the conclusion that it was the
defendant who was the vendor of the oil in question to the plaintiff. His original status
was that of a commission agent, but in the present transaction the defendant held
itself out as the vendor and the deal was complete on that footing. The Court below,
therefore, came to the correct conclusion in holding that the defendant must be held
responsible for the quality of the oil supplied, and, if there was any adulteration, the
defendant must suffer for that and must be answerable to the plaintiff on that account.
10. There is another aspect of the question, which, although canvassed in the Court
below, so far as facts are concerned, was not brought out in proper perspective. It is
that, even if the defendant were merely a commission agent, the plaint states that the
defendant undertook to supply mustard oil of pure quality. If the defendant, as is
stated, had not undertaken to do so, relevant documents should have been put before
the Court to show on what terms the contract was entered into. In the absence of the
relevant documents, as I have stated above, it must be held that, even if the
defendant was interested only in charging commission, the defendant certainly
undertook to supply the mustard oil of pure quality and the defendant must be held to
be the guarantor of the quality. If that be so, the defendant must be answerable for
the quality of the oil and the right of the plaintiff against the defendant in accordance
with Section128 of the Contract Act would be co-extensive with the liability of the
manufacturer. If the defendant's case were established that no such liability were
undertaken, the position would certainly be different. In view of a different conclusion,
however, on this point, the defendant must be held liable also as a guarantor under
Section 128 of the Contract Act and must be responsible for the bad quality of the oil
which led to its forfeiture by the Sub-divisional Officer as a result of the judgment in
the case under the Bihar Prevention of Food Adulteration Act, 1947.
11. Learned Counsel has endeavoured to make small point that, in any case, the
plaintiff could only look to the Ganges Oil Mills, the manufacturer, and, if the defendant
in a bona fide manner accepted the goods, which were meant for despatch to another
customer, the defendant cannot be liable. In my opinion, this point is covered by the
discussion about the liability mentioned above.
12. Learned Counsel has also endeavoured to make a point in regard to the amount
decreed in favour of the plaintiff by the Court below. He has contended that the oil was
still lying with the plaintiff in his godown and it was his duty to diminish the loss in a
reasonable manner. He has given no evidence as to what he has done in regard to
that, and, in that view, he could not be held entitled to the sum decreed. I have
already stated that the Court below has not allowed the plaintiff any damages, but
only the price paid by him. It appears on an examination of the judgment of the High
Court in revision filed against the conviction of the defendant that all the tins were

forfeited to Government. It is, no doubt, true that the plaintiff obtained an order from
the Sub divisional Officer not to have them destroyed until the decision of the civil suit.
That, however, does not alter the position that the oil was forfeited to the Government,
and the plaintiff has no manner of right to deal with that commodity. A presumption,
therefore, that the plaintiff should have sold the oil or taken some step to diminish his
loss does not arise inasmuch as the entire quantity, according to the judgment of the
Criminal Court, was beyond his control and has become the property of the
Government.
13. In the result, therefore, the appeal must be dismissed with costs.
G.N. Prasad, J.
14. I agree.

Hardeep Singh and Ors.

Vs.
Food Inspector, Department of PFA and Ors.
Hon'ble
Judges/Coram:
Pradeep Nandrajog, J.
Counsels:
For
Appellant/Petitioner/plaintiff: Dinesh
Mathur,
Sr. Adv., Sushil
Bajaj, H.S.
Chandhoke and Shiv Sapra, Advs
For Respondents/Defendant: Pawan Sharma, Adv.
Subject: Food Adulteration
Catch Words
Mentioned IN
Acts/Rules/Orders:
Prevention of Food Adulteration Act, 1954 - Section 2, Prevention of Food Adulteration
Act, 1954 - Section 7, Prevention of Food Adulteration Act, 1954 - Section
16, Prevention of Food Adulteration Act, 1954 - Section 17, Prevention of Food
Adulteration Act, 1954 - Section 17(1), Prevention of Food Adulteration Act, 1954 Section 17(2); United Towns Electrical Company Act, 1902 - Section 30; Drugs and
Cosmetics Act, 1940 - Section 18; Code of Criminal Procedure (CrPC) - Section
482; Prevention of Food Adulteration Rules - Rules 32, Prevention of Food Adulteration
Rules - Rules 37D
Cases
Referred:
Grasim Industries Ltd. v. Collector of Customs, Bombay AIR 2002 SC 1706; Allen v.
Emmerson (1944) KB 362; Hood-Barrs v. IRC (1946) 2 All ER 768; United Towns
Electric Co. Ltd. v. Att. General for Newfoundland (1939) 1 All ER 423; Tillmans and
Co. v. S.S. Knutsford (1908) 2 KB 385; Attorney General v. Leicester Corporation
(1910) 2 Ch. 359; N.A.L.G.O. v. Bolton Corporation (1943) AC 166; Municipal
Corporation of Delhi v. Ram Kishan Rohtagi AIR 1983 SC 67; Drugs Inspector, Palace
Road, Bangalore v. Dr. B.K. Krishnaiah and Anr. AIR 1981 SC 1164
Authorities
Referred:
Craies on Statute Law, 7th edition pg 181
Disposition:
Petition Dismissed
Case Note:
Point 17
Criminal - Quashing of Complaint - Sections 2(ix)(e)(g), 7, 16 of the
Prevention of Food Adulteration Act, 1954 - Rule 37-D of PFA Rules Misbranding - Petitioners into selling of Refined Soya bean Vegetable Oil a
food article, were in charge of and responsible for the conduct of the business
- Sample bore statements Is good for heart; Helps to lower risks of heart
disease and may prevent cancer - Public analyst opined that the statements
were exaggeration of the quality of product and the sample in question was
misbranded - It was alleged that since the sample in question was
misbranded the Petitioners violated the provisions of Section 2(ix)(e)(g) of
the Act read with Rule 37D thus, liable for conviction under Section 7 read
with Section 16 of the Act - Hence, present petition - Petitioners contended
that complaint has to be quashed as they were not vicariously liable as they

were not the manufacturers - Held, no ground for quashing the present
complaint and summoning order made out - Petitioners though were not
manufacturers but marketers of the sampled commodity, were granted
exemption from personally appearance before the Metropolitan Magistrate
provided Petitioners enter appearance through Counsel - Petition dismissed
JUDGMENT
Pradeep Nandrajog, J.
1. Petitioners, Directors of the company M/s. Cargill India Ltd., impleaded as accused
Nos. 4, 5 and 6 in a complaint filed by the respondent No. 1 under Section 7read with
Section 16 of the Prevention of Food Adulteration Act 1954 seek quashing of the
complaint as also the summoning order dated 27.8.2003.
2. The brief facts of the case are as follows:

A. On 15.2.2002 at about 6.30 P.M. the complainant, a food inspector

visited the premises of 'M/s. Sharma Shud Ghee Bhandar' sole
proprietary firm of Sh. Kaushal Kumar Sharma. He purchased a sample
of 'Refined Soyabean Vegetable Oil', a food article. 'M/s. Sharma Shud
Ghee Bhandar' was found stocking and exhibiting for sale the said food
article.
B. The sample consisted of 3 x 1 ltr. of 'Refined Soyabean Vegetable
Oil'. The sample was divided into 3 equal portions and each separate
portion was independently packed, fastened and sealed as per the PFA
Act and Rules in the presence of Kaushal Kumar Sharma and a witness
Ranjit Singh.
C. One of the sealed portion of sample along with the copy of Form VII
was sent separately to public analyst on 18.2.2002. The remaining two
sealed portions and copies of Form VII were sent to the local health
authority, Delhi on the same day as per the relevant provisions of the
PFA Act and Rules.
D. The report of the public analyst dated 6.3.2002 revealed that sample
bears statements like 'Is good to your heart'; 'Helps to lower risks of
heart decease and may even prevent cancer'. The public analyst opined
that the said statements are exaggeration of the quality of the product
and thus the sample in question is misbranded. He, however, opined
that the oil conformed to the standard.
E. Investigations revealed that vendor 'M/s. Sharma Shud Ghee
Bhandar' had purchased the sampled commodity from M/s. Goyal
Brothers which was a proprietorship concern of Sh. Vinod Goyal. That
M/s. Goyal Brothers had purchased the sampled commodity from the
company M/s. Cargill India Ltd. and that the said company was
marketer of the sampled commodity. That M/s. Cargill India Ltd. had
purchased the sampled commodity from the company Malwa Vanaspati
and Chemical Co. Ltd. which was the manufacturer of the sampled
commodity.

F. Since the PFA Act fastens criminal liability on the vendor, supplier,
distributor/marketer and manufacturer, the food inspector i.e.
respondent No. 1 herein filed a complaint under Section 7 read with
Section 16 of the PFA Act against under noted persons:
---------------------------------------------------------------------------------S.
Name Designation Description Description No. in the complaint in the petition
---------------------------------------------------------------------------------1.
Kaushal Kumar Sharma Proprietor of M/s. Sharma Accused No. 1 Respondent
No. 2 Shud Ghee Bhandar/Vendor 2. Vinod Goyal Proprietor of M/s Goyal
Accused No. 2 Respondent No. 3 Brothers/Supplier 3. M/s. Cargill India
Marketing Firm Accused No. 3 Respondent No. 4 Ltd. 4. Hardeep Singh Director
of Accused No. 3 Accused No. 4 Petitioner No. 1 5. Sidhant Khosla Director of
Accused No. 3 Accused No. 5 Petitioner No. 2 6. Amitabh Gupta Director of
Accused No. 3 Accused No. 6 Petitioner No. 3 7. M/s. Malwa Vanaspati Accused
No. 7 Respondent No. 5 and Chemical Co. Ltd. Mfg. Co. 8. Radhey Shyam
Sharma Nominee of Accused No. 7 Accused No. 8 Respondent No. 6
---------------------------------------------------------------------------------3. It was inter-alia alleged in the complaint that since the sample in question was
misbranded, the accused persons have violated the provisions of Section 2(ix)(e)(g) of
the PFA Act read with Rule 37-D of the PFA Rules and Therefore were liable to be
convicted under Section 7 read with Section 16 of the PFA Act.
4. Factual allegations made in the complaint against the petitioners are in para 3 of the
complaint which reads as under: ' The vendor has purchased the sampled commodity
from M/s Goyal Brothers, N-61 A, Laxmi Nagar, Delhi-92. M/s Goyal Brothers, is a
proprietorship concern and Sh. Vinod Goyal s/o Sh. Girdhari Lal is the proprietor of the
said firm. M/s Goyal Brothers has purchased the sampled commodity from M/s Cargill
India Ltd., A-53, Okhla Industrial Area, Phase-II New Delhi-20. M/s Cargill India Ltd.
are the Marketer of the sampled commodity and is Limited Company consisting of
three directors namely Sh Hardeep Singh s/o late Sh. Brig Ajit Singh (2) Sh. Sidhant
Khosla s/o Sh. Maharaj Krishan Khosla and (3) Sh. Amitabh Gupta s/o Sh. K.C. Gupta.
No nominee has been appointed by the company hence all the three directors as well
as the firm are liable.'
5. On a prima facie consideration of the complaint and documents filed along with the
complaint, the learned Metropolitan Magistrate summoned the accused persons to face
trial for an offence under Section 7 read with Section 16 of the PFA Act.
6. During hearing of the instant petition, the learned Counsel for the petitioners
submitted that the report of the public analyst do not show as to how the public
analyst had come to the conclusion that the sampled commodity was misbranded.
7. The statements on the label of the sampled commodity are as under:

(i) Is good to your heart.

(ii) Helps to lower risks of heart disease and may even prevent cancer.
8. The report of the public analyst records that the afore-noted statements are
vocative of provisions of Section 2(ix)(e)(g) of PFA Act and Rule 37-D of PFA Rules.

9. To appreciate the contention advanced by the learned Counsel for the petitioners, it
is necessary to analyze afore-noted statements in the light of Section 2(ix)(e)(g) and
Rule 37-D.
10. Section 2(ix)(e) and (g) reads as under:

(ix) 'misbranded'- an article of food shall be deemed to be misbranded:

xxxxx
(e) if false claims are made for it upon the label or otherwise.'
xxxxx
(g) if package containing it, or the label on the package bears any
statement, design or device regarding the ingredients or the substances
containing therein, which is false or misleading in any material
particular; or if the package is otherwise deceptive with respect to its
contents;
11. Rule 37-D of the PFA Rules reads as under:

Labelling of edible oils and fats ' The package, label or the advertisement of
edible oils and fats shall not use the expressions 'Super-Refined', 'ExtraRefined'' 'Micro-Refined', 'Double-Refined', 'Ultra-Refined', 'Anti- Cholesterol',
'Cholesterol Fighter', 'Soothing to Heart', 'Cholesterol Friendly', 'Saturated Fat
Free' or such other expressions which are an exaggeration of the quality of the
Product.
12. What is meant by expression ' such other expressions which are an exaggeration
of the quality of the Product'?
13. In the decision reported as Grasim Industries Ltd. v. Collector of Customs, Bombay
MANU/SC/0256/2002 : 2002(141)ELT593(SC) , the doctrine of 'esjudem generis'
was explained as under:

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

the United Towns Electrical Company Act, 1902 which reads: ``the
company shall be liable for water rates on all lands and buildings,
owned by it in the aforesaid town, but otherwise shall be exempted
from taxation'`, the Privy Council rejected the contention that the word
``taxation'` should be considered ejusdem generis with ``water rate'`.
It was held that there is no room for application of the principle in the
absence of any mention of a genus, since the mention of a single
species for example of water rates does not constitute a genus. [See:
United Towns Electric Co. Ltd. v. A.G. for Newfoundland 1939 (1) ALL ER
423]. The rule cannot be applied unless there is genus constituted or a
category disclosed. If the preceding words do not constitute mere
specifications of a genus but constitute description of a complete genus,
the rule has no application. The rule has to be applied with care and
caution. This is not an inviolable rule of law, but it is only permissible
inference, in the absence of any indication to the contrary. Where the
context and the object and mischief of the enactment do not require
restricted meaning to be attached to words of general import it
becomes the duty of the Courts to give those words their plain and
ordinary meaning. Following enunciation in Craies on Statute Law
(Seventh Edition) at page 181 succinctly states the principle.
The modern tendency of the law, it was said, [by Asquith J in Allen v.
Emmerson (1944) KB 362] is `` to attenuate the application of the rule of
ejusdem generis.'` To invoke the application of the ejusdem generis rule there
must be a distinct genus category. The specific words must apply not to different
objects of a widely differing character but to something which can be called a
class or kind of objects. Where this is lacking, the rule cannot apply, (Hood-Barrs
v. IRC (1946) 2 All ER 768) but the mention of a single species does not
constitute a genus. (Per Lord Thankerton in United Towns Electric Co. Ltd. v. Att.
General for Newfoundland (1939) 1 All ER 423). ``Unless you can find a
category,'` said Farwell L.J., (in Tillmans and Co. v. S.S. Knutsford (1908) 2 KB
385) ``there is no room for the application of the ejusdem generis doctrine,'`
and where the words are clearly wide in their meaning they ought not to be
qualified on the ground of their association with other words. For instance,
where a local Act required that ``theatres and other places of public
entertainment'` should be licensed, the question arose whether a ``fun-fair'`
for which no fee was charged for admission was within the Act. It was held to be
so, and that the ejusdem generis rule did not apply to confine the words ``other
places'` to places of the same kind as theatres. So the insertion of such words
as `` or things of whatever description'` would exclude the rule. (Attorney
General v. Leicester Corporation (1910) 2 Ch. 359). In N.A.L.G.O. v. Bolton
Corporation(1943) AC 166) Lord Simon L.C. referred to a definition of
``workman'` as any person who has entered into a works under a contract with
an employer whether the contract be by way of manual labour, clerical work ``or
otherwise'` and said: ``The use of the words 'or otherwise' does not bring into
play the ejusdem generis principle: for 'manual labour' and 'clerical work' do not
belong to a single limited genus'` and Lord Wright in the same case said: ``The

ejusdem generis rule is often useful or convenient, but it is merely a rule of

construction, not a rule of law. In the present case it is entirely inapt. It
presupposes a 'genus' but here the only 'genus' is a contract with an employer.
14. Thus, the expression ' such other expressions which are an exaggeration of the
quality of the product' must take it's meaning and color from the preceding words
occurring in Rule 37-D.
15. It is medically known that cholesterol has a direct link to the health of the heart.
Excessive cholesterol block the arteries of the heart. Thus expressions which relate to
the product and links the same to the health of the heart would prima facie come
within the mischief of Rule 37-D.
16. It was then urged by the learned Counsel for the petitioners with reference to the
Rule 32 of the PFA Rules that the packing and labelling of food article is the
responsibility of manufacturer of food article and Therefore no offence can be alleged
against present petitioners who are the directors of the company which markets the
sampled commodity.
17. PFA Act fastens criminal liability on the vendor, distributor/marketer and
manufacturer of a food article. Being directors of the company which markets the
sample commodity, the petitioners are prima facie liable. However, the statute
recognizes a defense available to an accused other than manufacturer to show that
said accused purchased the commodity from a manufacturer. On proof thereof, said
accused would earn an acquittal. The petitioners would thus have to establish at the
trial that they purchased the sampled commodity from the accused No. 7 company.
18. It was lastly urged by the learned Counsel for the petitioners that it is settled law
that the vicarious liability of a person for being prosecuted for an offence committed
by the company arises only when there are specific and clear allegations/averments in
the complaint that at the material time, such person was in-charge of and responsible
to the company for conduct of business of the company or that the offence was
committed with the consent or connivance of such person or attributable to neglect on
his part. Learned Counsel submitted that the complaint is totally silent in this regard
and in the absence of such averments in the complaint and without adding or
subtracting anything in the complaint, no offence is made out against the petitioners.
Learned Counsel further submitted that the Magistrate failed to appreciate that the
petitioners are made accused solely because they happened to be the directors of the
company at the relevant time. Counsel relied upon the under-noted judgments in
support of his contention.
------------------------------------------------------------------------------------- S.
Judgment Citation Statute No.
------------------------------------------------------------------------------------- 1. SMS
Pharmaceuticals Ltd. v. Neeta Bhalla and Anr. MANU/SC/0622/2005 : 2005CriLJ4140
NI Act 2. KPG Nair v. Jindal Manthole India Ltd. MANU/SC/2327/2000 :
(2001)10SCC218 NI Act 3. MCD v. Ramkrishan Rohtagi MANU/SC/0094/1982 :
1983CriLJ159 PFA Act 4. MCD v. Purshottam Dass Jhunjhunwala and Ors.
MANU/SC/0093/1982 : 1983CriLJ172 PFA Act 5. Smt. Manibai and Anr. v. State of
Maharashtra MANU/SC/0172/1973 : 1974CriLJ451 PFA Act 6. State of Karnataka
v. Pratap Chandra and Ors. MANU/SC/0237/1981 : 1981CriLJ595 DC Act 7. R.

Banerjee and Ors. v. had Dubey and Ors. MANU/SC/0218/1992 : 1992CriLJ1523 PFA
Act 8. State of Haryana v. Brij Lal Mittal MANU/SC/0336/1998 : 1998CriLJ3287 C Act
9. Panna Lal Sunder Lal Choksi v.State of Maharashtra MANU/MH/0040/2001 :
(2001)1BOMLR349 PFA Act 10. Managing Director, IPC Agrotech v. Sh. 2002 (1) OLR
285 PFA Act Purnachandra Mishra and Anr. DC Act 11. Umesh Sharma v. S.G. Bhagta
MANU/MH/0417/2002 DC Act 12. Iqbal v. State of Maharashtra 2002 (1) FAC 321 PFA
Act 13. Govinda Rao v.Food Inspector MANU/KE/0073/2002 PFA Act 14. Mukesh
Aggarwal v. State and Anr. MANU/DE/1093/2001 : 94(2001)DLT374 NI Act 15. Preeti
Bhoj Nagarwala v.State of Gujarat and Anr. MANU/GJ/0481/2001 : (2002)1GLR293 NI
Act ------------------------------------------------------------------------------------19. Learned Counsel for the State contended that not only the complaint, but material
made available along with the complaint have also to be taken into consideration to
find out whether prima facie case is made out against the persons arrayed as accused
in the complaint. He further contended that when the documents accompanying the
complaint show that the persons named as directors of a company are responsible for
the business of the company and are in charge of the affairs of a company it is
sufficient material for the magistrate to take cognizance of the offence against said
persons.
20. Relevant part of Section 17 of the PFA Act reads as under:

Offences by companies:
(1) Where an offence under this Act has been committed by a
company:
(a) (i) the person, if any, who has been nominated under
Sub-section (2) to be in charge of, and responsible to, the
company for the conduct of the business of the company
(hereafter in this section referred to as the person
responsible), or
(ii) where no person has been so nominated, every person
who at the time the offence was committed was in charge
of, and was responsible to, the company for the conduct of
the business of the company; and
(b) the company, shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and
punished accordingly: Provided that nothing contained in
this sub-section shall render any such person liable to any
punishment provided in this Act if he prove that the
offence was committed without his knowledge and that he
exercised all due diligence to prevent the commission of
such offence.
(2) Any company may, by order in writing, authorise any of its
directors or managers (such manager being employed mainly in
a managerial or supervisory capacity) to exercise all such powers
and take all such steps as may be necessary or expedient to
prevent the commission by the company of any offence under

this Act and may give notice to the Local (Health) Authority, in
such form and in such manner as may be prescribed, that it has
nominated such director or manager as the person responsible,
along with the written consent of such director or manager for
being so nominated.
xxxx
(4) Notwithstanding anything contained in the foregoing subsections, where an offence under this Act has been committed by
a company and it is proved that the offence has been committed
with the consent or connivance of, or is attributable to, any
neglect on the part of, any director, manager, secretary or other
officer of the company [not being a person nominated under
Sub-section (2) such director, manager, secretary or other officer
shall also be deemed to be guilty of that offence and shall be
liable to be proceeded against and punished accordingly.
xxxx
21. Under the scheme of Section 17 of the PFA Act, there are three categories of
individuals, who can be proceeded against and punished for an offence committed by
the company. They are:

(i) persons nominated by the company.

(ii) persons in-charge of and responsible to the company for conduct of
business of company.
(iii) any director or other official of the company.
22. Section 17(1)(a)(i) is a deeming provision which stipulates that when the offence
is committed by the company, the person who is nominated under Sub Section 2 of
Section 17 shall be deemed to be a person in-charge of and responsible to the
company for conduct of business of the company and can be proceeded against and
punished accordingly.
23. However, in the absence of any nomination by the company, every person, who at
the time of commission of offence was in-charge and was responsible to the company
for conduct of business of the company can be proceeded against and punished
accordingly for an offence committed by the company. [Section 17(1)(a)(ii)]
24. Even when there is a nomination, and it is yet proved that the offence has been
committed with the consent, connivance or neglect on the part of any director,
manager, secretary or other official of the company, such director, manager, secretary
or other official shall also be deemed to be guilty of that offence and shall be liable to
be proceeded against and punished. [Section 17(4)]
25. In the decision reported as Municipal Corporation of Delhi v. Ram Kishan Rohtagi
MANU/SC/0094/1982 : 1983CriLJ159 the Supreme Court was considering a
complaint filed against the persons who were Manager and Directors of the company
under Sections 7 and 16 of the PFA Act. It was observed:

It is, Therefore, manifestly clear that proceedings against an accused in the

initial stages can be quashed only if on the face of the complaint or the papers
accompanying the same, no offence is constituted. In other words, the test is
that taking the allegations and the complaint as they are, without adding or
subtracting anything, if no offence is made out then the High Court will be
justified in quashing the proceedings in exercise of its powers under
Section 482 of the present Code.
26. In the light of the decision of the Supreme Court in Ram Kishan's case (supra), the
order summoning the accused has to be tested in the light of the material before the
learned Metropolitan Magistrate when he summoned the petitioners. I may note that
the company has not made any nomination under Section 17.
27. The Memorandum and Articles of Association of accused No. 3 company was filed
along with the complaint. Clause 19 and 20 thereof read as under:

19. The business of the Company shall be managed by the Directors

who may pay all expenses incurred in setting up and registering the
Company and may exercise all such powers of the Company as are not
restricted by the act or any statutory modification thereof for the time
being in force or by these Articles required to be exercised by the
Company in general meeting subject nevertheless, to any regulations of
these Articles, to the provisions of the Act, and to such regulations
being not inconsistent with the aforesaid regulations or provisions as
may be prescribed by the Company in general meeting. Noting shall
validate any prior act of the Directors, which would have been valid, if
that regulation had not been made.'
'20. The following persons are the Directors of the Company on the date
of adoption of these Articles:
1. Mr. Hardeep Singh
2. Mr. Amitabh Gupta
3. Mr. Sidhant Khosla
28. The afore-noted clauses clearly shows that the petitioners were in-charge of and
responsible for the conduct of business of accused No. 3 company.
29. In the decision reported as Drugs Inspector, Palace Road, Bangalore v. Dr. B.K.
Krishnaiah and Anr. MANU/SC/0136/1981 : 1981CriLJ627 a complaint was filed
against the respondent who were partners of a firm for prosecution for offences under
Section 18(a)(vi) of the Drugs and Cosmetics Act, 1940. The High Court quashed the
complaint on the ground that there were no allegations in the complaint that the
'respondents were, in any manner, in-charge of and responsible to the firm for conduct
of the business of the firm.' Noting that a partnership deed showing the constitution of
the firm was filed along with the complaint, the Supreme Court reversed the decision
of the High Court observing as under:

6. The only question for consideration for the High Court in this case was
whether the accused or any of them were liable. In paragraph 17 of the

complaint petition the complainant quoted the provisions of the Act. In addition,
he cited the names of witnesses, submitted a list of documents including a copy
of the partnership deed at item No. 13 of the list of the documents. The learned
Magistrate perused the partnership deed and prima facie found that the
respondents as well as the deceased accused were liable for the offence and
proceeded for trial. The learned High Court committed an error in holding that
there was no allegation that the respondents were not responsible for the
management and conduct of the firm The extent of their liability would be
established by evidence during trial. In our opinion the judgment of the learned
High Court is erroneous and is liable to be set aside.
30. In view of above discussion, no ground for quashing the present complaint and
summoning order dated 27.8.03 is made out.
31. Keeping in view the fact that the petitioners are not manufacturers but marketers
of the sampled commodity, they are granted exemption from personally appearing
before the learned Metropolitan Magistrate provided petitioners enter appearance
through a counsel. However, the learned Metropolitan Magistrate shall be within his
right to enforce the attendance of the petitioners on a particular date when deemed
necessary.
32. The petition is dismissed.
33. No costs.

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

Vs.
M. Chandrasegara Sastri, Senior Food Inspector
Hon'ble
Judges/Coram:
K.N. Basha, J.
Counsels:
For Appellant/Petitioner/Plaintiff: A. Remesh, Adv. for Ram and Ram, Advs.
For Respondents/Defendant: M.R. Thangavelu, Public Prosecutor
Subject: Food Adulteration
Catch Words
Mentioned IN
Acts/Rules/Orders:
Prevention of Food Adulteration Act - Section 2(1), Prevention of Food Adulteration
Act - Section 7(1), Prevention of Food Adulteration Act - Section 13(1),Prevention
of Food Adulteration Act - Section 13(3), Prevention of Food Adulteration Act Section 13(2B), Prevention of Food Adulteration Act - Section 16(1),Prevention
of Food Adulteration Act - Section 16A, Prevention of Food Adulteration Act - Section
20, Prevention
of Food Adulteration
Act
Section
20A; Prevention
of Food Adulteration Rules, 1955 ;Code of Criminal Procedure, 1973 (CrPC) - Section
2, Code of Criminal Procedure, 1973 (CrPC) - Section 251, Code of Criminal Procedure,
1973 (CrPC) - Section 254(1), Code of Criminal Procedure, 1973 (CrPC) - Section
261, Code of Criminal Procedure, 1973 (CrPC) - Section 262, Code of Criminal
Procedure, 1973 (CrPC) - Section 319, Code of Criminal Procedure, 1973 (CrPC) Section 319(3)
Cases
Referred:
Bhagwan Das Jagdish Chandar v. Delhi Administration 1975 SCC (Crl.) 410; Chetumal
v. State of M.P. 1981 SCC (Cri.) 632; Delhi Cloth and General Mills Co. Ltd. v. State
of M.P. (1995) 6 SCC 62; Municipal Corporation of Delhi v. R. Sahai (1979) 2 SCC
387; Onparkash Shivprakash v. K.I. Kuriakose and Ors. 2000 SCC (Cri.)1; Bhagsan
Das Jagdish Chander v. Delhi Adam. (1975) 1 SCC 866
Case Note:
Ratio Decideni
Criminal - Quashing of Proceeding - Section 7, 13 and 16 of Prevention
of Food Adulteration Act, 1954 - Judicial Magistrate initiated proceedings
against Petitioner for offence of adulteration of samples of Purita Vanaspathi
- Hence, this Petition - Whether, proceedings initiated against Petitioner was
liable to be quashed - Held, manufacturer could be prosecuted, when there
was prima facie material to show link between manufacturer and vendor or
dealer - However, there was not any material available on record to show
connecting links between Petitioner who has been arrayed as A-3,
manufacturer and vendor/A-1 and A-2/dealer - Further, sample analyzed by
Central Food Laboratory itself was not tallied with sample analyzed by Public
Analyst - Moreover, in view of specific provision under Section 13(3) of Act to
effect that Analyst Report of Central Food Laboratory had to be superseded
Public Analyst Report - Therefore, in view of inherent infirmities contained in
Analyst report of Central Food Laboratory, proceedings initiated against
Petitioner had quashed - Petition disposed of.

Ratio Decidendi:
"Manufacturer can be prosecuted even before commencement of trial, when
there is prima facie material to show link between manufacturer and vendor
or dealer."
Industry: FMCG
ORDER
K.N. Basha, J.
1. The petitioner, who has been arrayed as A-3, has come forward with this petition
seeking for the relief of quashing the proceedings initiated against him by the
respondent/complainant in C.C. No. 739 of 2005 on the file of the learned Judicial
Magistrate No. 1, Pondicherry, for the offence punishable under Section 16(1)(a)(i) of
the Prevention of Food Adulteration Act (hereinafter referred to as "the Act") for the
alleged contravention of Section 7(1) r/w 2(1a) (m) of the Act.
2. Mr. A. Ramesh, learned Counsel appearing for the petitioner, has contended that
there are certain contravention of mandatory provisions contemplated under the Act
and Rules and therefore, the entire proceedings is liable to be quashed as the ,same is
vitiated by the non compliance of the mandatory provisions contemplated under the
Act.
3. It is submitted by the learned Counsel for the petitioner that the respondent,
viz., Senior Food Inspector inspected the premises of A-l, viz., "Sakthi Ganapathi
Super Market" at No. 151, Kamarajar Street, Veeman Nagar, Pondicherry, on
10.05.2005 at 12.35 noon and taken samples of "Purita Vanaspathi" paying a sura of
Rs. 28.50. It is submitted that the Senior Food Inspector claimed to have followed
the procedure contemplated under the Act for taking the sample and sending the same
to the Public Analyst of Pondicherry. It is further submitted that it is seen from the
Public Analyst's report that the said sample contains more free fatty acids than the
permissible limit, as per Clause A.19 of the Appendix B to Prevention
of Food Adulteration Rules, 1955 (hereinafter referred to as "the Rules" and the Public
Analyst opined that the said sample is adulterated. On the basis of such analyst
report, the present complaint is filed against A-1/the vendor, A-2/the dealer and A3/the petitioner, who is the manufacturer of "Purita Vanaspathi".
4. The learned Counsel for the petitioner raised the following grounds for quashing the
proceedings in this case:

(i) There is absolutely no connection between the petitioner/A-3,

(manufacturer) with the vendor or even the dealer as both the vendor
and dealer are not found in possession of the warranty with a view to
fasten the liability of the manufacturer, the petitioner/A-3 herein in this
case.
(ii) As per the report of the Public Analyst, Pondicherry, there is a
mention about the quantity of the sample, batch number, date of
manufacturing and the name of the manufacturer etc. The said details
were also found in the complaint, but on the application of the

petitioner
herein,
while
the
sample
was
sent
to
Central Food Laboratory, Ghaziabad, for analysis, the Director,
Central FoodLaboratory, had mentioned that neither the batch number
nor the date of manufacture were available on the label and he has also
further stated only 200 ml i.e. 179.4 gms were available for analysis
and as such the sealed packets of the samples which have been sent do
not tally with the samples lifted by the Food Inspector. Consequently,
the opinion given by the Director of Central FoodLaboratory does not
pertain to the samples lifted. It is also pointed, out by the learned
Counsel for the petitioner that once the sample sent to the
Central Food Laboratory
and
analysed
and
thereafter,
the
Central Food Laboratory gives a report, such report supersedes the
report of the Public Analyst by virtue of Section 13(3) of the Act.
Therefore, this serious infirmity vitiates the entire trial. The learned
Counsel for the petitioner placed reliance on the decision of the Hon'ble
Supreme Court in Chetumal v. State of M.P. inMANU/SC/0130/1981 :
1981 SCC (Cri.) 632 in support of his contention.
(iii) In view of Section 20A of the Act, the manufacturer could be
implicated only after the commencement of trial and after taking the
evidence which discloses the involvement of the manufacturer, and
before that implicating the manufacturer as one of the accused is a premature one and even on this ground the complaint is liable to be
quashed. The learned Counsel for the petitioner placed reliance on the
decisions of the Hon'ble Supreme Court in support of his contention
in Omparkash Shivprakash v. K.I. Kuriakose in 2000 SCC
(Cri.) 1 and
in Bhagwan
Das
Jagdish
Chander
v.
Delhi
Administration in 1975 SCC (Cri.) 410.
5. Per contra, learned Public Prosecutor (Puducherry) contended that there is no
infirmity or illegality in the initiation of the proceedings against the petitioner herein
who is the manufacturer of the sample seized from the vendor, viz., A-1. It is
submitted by the learned Public Prosecutor that the grounds raised by the learned
Counsel for the petitioner could be considered only at the time of full-fledged trial and
those grounds should not be considered at the threshold of the complaint as the
respondent should have opportunity to adduce sufficient evidence to explain any
defect much less the defect alleged by the petitioner in respect of the samples sent for
analysis to the Central Food Laboratory. It is further submitted that the petitioner,
being the manufacture, has been implicated in this case only on the basis of the label
found at the time of seizure of the sample as such Section 20A of the Act is not
applicable to the present case.
6. I have, carefully considered the rival contentions put forward by either side, and
also perused, the entire materials available on record including the impugned
complaint.
7. A perusal of the complaint discloses that the petitioner has been implicated as A-3
in this case on the ground that the petitioner is the manufacturer of the sample taken
from the premises of A-1, viz., the vendor who was running a supermarket under the
name and style as "Sakthi Ganapathi Super Market". Though it is claimed by the

complainant that at the time of taking sample of "Purita Vanaspathi" he has found the
label of the manufacture containing the name of the manufacture as that of the
petitioner, the undisputed fact remains on the basis of the prima facie materials
available on record that there is a serious defect in respect of sending sample to the
Central Food Laboratory for analysis to the effect that the sample found by
the Director, Central Food Laboratory, is not tallied with the sample which was
subjected for analysis by the Public Analyst, Pondicherry. It is also rightly pointed out
by the learned Counsel that even the Director of the Central, Food Laboratory has
categorically stated in his report to the effect that neither the batch number nor the
date of manufacture were available on the label. Further it is also found- mentioned
that the sample is valid for consumption only for a period of nine months. It is relevant
to note that the sample was packed in the month of November 2004, as stated in the
complaint and in the Memorandum of Public Analyst under Form VII, and the same
was analysed by the Central Food Laboratory oh 05.12.2005 and as such it is clear
that the analysis of the said sample itself was done beyond the period of nine months
and at that time the sample itself is unfit for human consumption and as such
prescribed standard could not be expected in the sample. ' Therefore, the analysis of
the said sample Itself is a futile exercise in view of the expiry date of the said sample
is itself only for a period of nine months, as already stated.
8. Yet another defect found on the basis of the perusal of the report of the
Central Food Laboratory is that even the quantity is also not tallied between the
report of the Central Food Laboratory and the report of the Public Analyst,
Pondicherry, as the Central Food Laboratory report mentioning the quantity as 200 ml
i.e., 179.4 gms at 45C, while the quantity of the sample mentioned in the report of
the Public Analyst, Pondicherry, is 200 qms. Therefore, this Court is of the considered
view that no value could be attached to the Public Analyst report and the report of the
Central Food Laboratory in this case in view of the above said inherent improbabilities
and infirmities and in view of the fact that admittedly as per Section 13(3) of the Act
the report of the Direct or of Central FoodLaboratory supersede the report of the
Public Analyst.
9. Section 13(3) of the Act reads hereunder:

(3) The Certificate issued by the Director of Central Food Laboratory under
Sub-section 2(B) shall supersede the report given by the Public Analyst under
Sub-section (1).
10. The Hon'ble Apex Court has categorically held in Chetumal V. State
of M.P. in MANU/SC/0130/1981 : 1981 SCC (Cri.) 632 as follows:
Under Section 13(3) of the Prevention of Food Adulteration Act, the report of the

Public Analyst stood superseded by the certificate issued by the Director of the
Central Food Laboratory. Having been so superseded, the report of the Public
Analyst could not, therefore, be relied upon to base a conviction. The certificate
of the Director of the Central Food Laboratory having been excluded from
consideration because of the tampering of the seals, there was really no
evidence before the court on the basis of which the appellant could be convicted.
The court could not fall back on the report of the Public Analyst? as it had been
superseded. The only method of challenging the 1 report of the Public Analyst
was
by
having
the
sample
tested
by
the Director of
the
Central Food Laboratory. In the present case the appellant was deprived of the

opportunity to which he was entitled for no fault of his. It was not, therefore,
open to the court to fall back upon the report of the Public Analyst to convict the
appellant.
The above principle of law laid down by the Hon'ble Apex Court is squarely applicable
to the facts of the instant case as in this case also the sample found by theDirector,
Central Food Laboratory is not tallied with the sample which was subjected for
analysis by the Public Analyst, Pondicherry as, as already stated, the batch number
and the date of manufacture were also not available on the label and added to that,
the sample is valid for consumption for a period of nine months and the sample was
packed in the month of November 2004 and the same was analysed by the
Central Food Laboratory only on 05.12.2005 and as such the said analysis of sample
itself is futile exercise. As this report of the Central Food Laboratory supersedes
earlier report of the Public Analyst, Pondicherry, the prosecution is left with no other
evidence at all to allege that the sample is adulterated one.
11. Apart from the above said serious infirmity and illegality, it is also to be borne in
mind, as pointed out by the learned Counsel for the petitioner, that there is absolutely
not an iota of material available on record to connect the petitioner herein with the
other accused, viz., A-1/vendor and A-2/dealer as both of them were not possessed
with any warranty issued by the manufacturer, the petitioner herein. Therefore, by no
stretch of imagination it could be stated that the sample which was said to have been
seized from the premises of the vendor, viz., A-1 is manufacture4d and sold by A-3.
12. A three Judge Bench of the Hon'ble Apex Court has held in Bhagwan Das
Jagdish Chandar v. Delhi Administration in 1 1975 SCC (Crl.) 410 as follows:

24. ...in a suitable case, a vendor, a distributor, and a manufacturer could be

tried together provided the allegations made before the Court show that there
are connecting links between their activities so as to constitute the same
transaction. The connecting links, in a case such as the one before us, could be
provided by firstly, the fact that a sale at an anterior stage could be viewed as
the cause of the subsequent sale; secondly, the allegation that each of the
accused parted with the article of food when it was in an adulterated state, and,
thirdly, by the common object of the manufacturer the distributor, and the
vendor, that the article should reach the consumer to be used as food. The third
and last mentioned link seems decisive and must tilt the balance in favour of
legality of a joint trial of the parties concerned. But, we are also conscious of the
fact that courts cannot ignore broader requirements of justice.
The above said principle of law laid down by the Hon'ble Apex Court is squarely
applicable to the facts of the instant case.
13. This Court also lastly constrained to state that even assuming that the petitioner
Who has been arrayed as A-3 is the manufacturer of the alleged sample taken from
the premises of the vendor A-1, the procedure contemplated under Section 20A of the
Act alone has to be followed. Section 20A of the Act reads hereunder:
Section 20A. Power of Court to implead manufacturer, etc.

Where at any time during the trial of any offence under this Act alleged
to have been committed by any person, not being the manufacturer,
distributor or dealer of any article of food, the court is satisfied, on the

evidence adduced before it, that such manufacturer, distributor or

dealer is also concerned with that offence, then, the court may,
notwithstanding anything contained in Sub-section 3 of Section 319 of
the Code of Criminal Procedure, 1973 (2 of 1974) or in
Section 20 proceed against him as though a prosecution had been
instituted against him under Section 20.
A reading of the above said provision makes it crystal clear that the manufacturer is
liable to be implicated or prosecuted only after the commencement of the trial and
only after taking the evidence which discloses the identity or involvement of the
manufacturer.
14. In yet another decision in Omparkash Shivprakash v. K.I. Kuriakose and
Ors. in 2000 SCC (Cri.) 1 the Hon'ble Apex Court has held as follows:
One of the differences between Section 319 CrPC and Section 20A of the

Prevention of Food Adulteration Act is that while in the former even if it

appears to the court from the evidence (either during inquiry or trial of
the offence), that another parson is to be tried along with the already
arraigned accused, then the court can proceed against that other
person, while in the latter the satisfaction of the court that such
manufacturer (distributor or dealer) is also concerned with that offence
must be gathered from "the evidence adduced before it during the
trial". In other words, the power under Section 20A cannot be invoked
until the trial begins and after the trial ends.
...
The word "trial" is "not defined either in the Act or in CrPC. However
CrPC has distinguished the trial from inquiry as could be noted from
Section 2 (g) CrPC wherein the word "inquiry" is defined. The term
"trial" cannot be given a fixed meaning to be applied in all cases
uniformly. The connotation of that word changes with the difference in
the context in which the term is employed in a particular provision of
any statute.
...
The scrutiny of Section 16A of the Act and Section 262 (Ch.
XXI), 251 and 254(1) (Ch. XX) CrPC reveals that the trial of offences
under the Act begins when the Magistrate asks the accused whether he
pleads guilty or not as envisaged in Section 251 CrPC, if the Magistrates
opts to hold summary trial. Hence, evidence in a trial under the Act can
be adduced only after recording the plea of the accused as envisaged in
the said section. Thus, it is clear that a Magistrate can implead any
person under Section 20A of the PFA Act only after reaching the stage
envisaged in Section 254(1) CrPC.
...
Bhagsan Das Jagdish Chander v. Delhi Adam. MANU/SC/0092/1975
: 1975CriLJ1091 clarified

Delhi
Cloth
and
General
Mills
Co. Ltd.
v. State
of M.P. MANU/SC/0076/1996 :
1996CriLJ424
distinguished Municipal
Corporation
of
Delhi
v. R.
Sahai MANU/SC/0185/1979 : 1979CriLJ969 followed.
Therefore, Section 20A cannot be invoked before the stage of adducing
evidence in the trial, nor can it be invoked after the conclusion of the
trial. In the present case, the Magistrates has chosen to exercise the
power prematurely and hence the action is without jurisdiction.
The above principle of law laid down by the three Judge Bench of the Hon'ble Apex
Court clearly shows that a manufacturer could be prosecuted even before the
commencement of trial provided there is prima facie material to show the link between
the manufacturer and the vendor or dealer and as far as the instant case is concerned,
as already pointed, there is not an iota of material available on record to show the
connecting links between the petitioner who has been arrayed as A-3, manufacturer
and the vendor/A-1. Therefore, even on this ground the proceedings initiated against
the petitioner is liable to be quashed.
In view of the above said reasons, this Court is constrained to quash the proceedings
pending against the petitioner.
15. It is also pertinent to note that in view of the findings of this Court that the very
sample analysed by the Central Food Laboratory itself is not tallied with the sample
analysed by the Public Analyst, Pondicherry, and more particularly in view of the
specific provision contained under Section 13(3) of the Act to the effect that the
Analyst Report of the Central Food Laboratory has to be superseded the Public Analyst
Report of the Pondicherry and in view of the above said inherent infirmities contained
in the Analyst report of the Central Food Laboratory and this Court held that the
proceedings against the petitioner is liable to be quashed and the same ground is also
available in respect of the other accused, who have been arrayed as A-1 and A-2 in
this case and as this Court already held that the proceedings initiated against the
petitioner is liable to be quashed, as stated above, though the other accused, A-1 and
A-2 have not preferred any petition for quashing the proceedings, this Court is
constrained to extend the same benefit to them. Accordingly, the entire proceedings
initiated against the accused, viz., A-1to A-3 in C.C.No.739 of 2005 on the file of the
learned Judicial Magistrate No. I, Pondicherry, is hereby quashed.

IN THE SUPREME COURT OF INDIA

Writ Petition Nos. 468, 469, 489 and 490 of 1969
Decided On: 31.03.1970
Andhra Pradesh Grain and Seed Merchants Association etc. etc.
Vs.
Union of India (UOI) and Anr.
Hon'ble
A.N. Grover, J.C. Shah and K.S. Hegde, JJ.

Judges/Coram:

Counsels:
For Appellant/Petitioner/Plaintiff: D. Sudhakara Rao, S.V. Gupte and B. Parthasarathy,
Advs. in W.P. No. 468 of 1969 and B. Parthasarathy, Adv. in W.P. Nos. 469,489 and 490
of 1969 and
For Respondents/Defendant: Niren De Attorney-General, B.D. Sharma and S.P. Nayar,
Advs. for Respondent No. 1 and P. Ram Reddy and G.S. Rama Rao, Advs. for
Respondent No. 2
Subject: Criminal
Subject: Food Adulteration
Catch Words
Mentioned IN
Acts/Rules/Orders:
Prevention of Food Adulteration Act, 1954 - Section 7, Prevention of Food Adulteration
Act, 1954 - Section 13, Prevention of Food Adulteration Act, 1954 - Section
16, Prevention of Food Adulteration Act, 1954 - Section 19 Constitution of India Article 20(3)
Authorities
Halsbury's Laws of England, Vol. 10 3rd Edn.

Referred:

Prior
History:
Petitions Under Article 32 of the Constitution of India for enforcement of fundamental
rights.
Case Note:
Para 8

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

Adulteration Act, 1954 and Articles 20 (3) and 32 of Constitution of India petition challenged provisions of Act of 1954 as infringing fundamental rights
guaranteed under Articles 14,19 (1) (g) and 20 (3) - Act of 1954 deals with
regulation of class of traders - stringent provisions have been made to
control malpractices - plea of ignorance of vendor on prosecution for offence
for sale of adulterated food not acceptable - person accused shall not be
compelled to witness against himself - various stringent rules were made
after consultation with committee for food standard - provisions of Act of
1954 do not consequently infringe fundamental rights conferred by
Constitution - restriction of right of tader is in interest of general public by
fixing absolute liability.

JUDGMENT
J.C. Shah, J.
1. The petitioners who are traders in foodgrains, edible oils, and other articles of food,
challenge the validity of Section 7 read with Section 2(v) and 2(ix), and Section 19,
Section 2(i) and Section 10 read with Section 13 of the Prevention of Food Adulteration
Act 37 of 1954 and the rules framed thereunder. They claim that by the Act and the
rules the fundamental rights guaranteed under Article 14, 19(1)(g) and 20(3) of the
Constitution are infringed.
2. The Parliament, with a view to control adulteration and misbranding of articles of
food, enacted the Prevention of Food Adulteration Act, 1954. The petitioners concede
that they do not claim a fundamental right to carry on business in adulterated or
misbranded foodstuffs : they claim that they are honest traders, and do not resort to
any malpractice, still in carrying on their business in foodstuffs they are, by the Act,
subjected to restrictions which are not reasonable. They contend that the Act
presumes every trader charged with an offence under Section 16(1)(a) to be guilty
and imposes upon him the burden of proving that he is not guilty of the offence
charged, by establishing facts which are not within his knowledge, or which without
great expense wholly incommensurate with his means and the facility available to him,
he cannot establish. They also claim that by the Act they are denied the equal
protection of the laws and the guarantee of Article 20(3) of the Constitution is
infringed.
3. The relevant provisions of the Act may first be noticed. Section 7 of the Act
provides:

No person shall himself or by any person on his behalf manufacture for

sale, or store, sell or distribute-(i) any adulterated food;

(ii) any misbranded food;

(iii) any article of food for the sale of which a licence is
prescribed, except in accordance with the conditions of the
licence;
(iv) any article of food the sale of which is for the time being
prohibited by the Food (Health) Authority in the interest of public
health; or
(v) any article of food in contravention of any other provision of
this Act or of any rule made thereunder.
By Section 10 a food inspector appointed under Section 9(1) of the Act is authorised to
take samples of any articles of food from any person selling such article, or from any
person who is in the course of conveying, delivering or preparing to deliver such article
to a purchaser or consignee, or from a consignee after delivery of any such article to
him, and to send such sample for analysis to the public analyst, and with the previous
approval of the health officer having jurisdiction in the local area concerned, or with
the previous approval of the Food (Health) Authority to prohibit the sale of any article
of food in the interest of public health. Sub-section (5) of Section 13 provides :

Any document purporting to be a report signed by a public analyst,

unless it has been superseded under Sub-section (3), or any document
purporting to be a certificate signed by the Director of the Central Food
Laboratory, may be used as evidence of the facts stated therein in any
proceeding under this Act or under Sections 272 - 276 of the Indian
Penal Code :
Provided that any document purporting to be a certificate signed by the
Director of the Central Food Laboratory shall be final and conclusive
evidence of the facts stated therein.
Section 16(1) prescribes the penalties : cls. (a) & (f) which are relevant provide :

(1) If any person-(a) whether by himself or by any other person on his behalf
imports into India or manufactures for sale, or stores, sells or
distributes any article of food-(i) which is adulterated or misbranded or the sale of which
is prohibited by the Food (Health) authority in the interest
of public health;
(ii) other than an article of food referred to in Sub-clause
(i), in contravention of any of the provisions of this Act or
of any rule made thereunder; or

(f) whether by himself or by any other person on his

behalf gives to the vendor a false warranty in writing in
respect of any article of food sold by him, he shall in
addition to the penalty to which he may be liable under
the provisions of Section 6, be punishable with
imprisonment for a term which shall not be less than six
months but which may extend to six years, and with fine
which shall not be less than one thousand rupees :
Provided that-...
Section 19 deals with the defences which may, and which may not, he allowed in
prosecutions under the Act. It provides:

(1) It shall be no defence in a prosecution for an offence pertaining to

the sale of any adulterated or misbranded article of food to allege
merely that the vendor was ignorant of the nature, substance or quality
of the food sold by him or that the purchaser having purchased any
article for analysis was not prejudiced by the sale.
(2) A vendor shall not be deemed to have committed an offence
pertaining to the sale of any adulterated or misbranded article of food if
he proves-(a) that he purchased the article of food-(i) in a case where a licence is prescribed for the sale
thereof, from a duly licensed manufacturer, distributor or
dealer;
(ii) in any other case, from any manufacturer, distributor
or dealer with a written warranty in the prescribed form;
and
(b) that the article of food while in his possession was properly
stored and that he sold it in the same state as he purchased it.
(3) Any person by whom a warranty as is referred to in Section 14 is
alleged to have been given shall be entitled to appear at the hearing
and give evidence.
"Food" is defined in Section 2(v) as meaning "any article used as food or drink for
human consumption other than drugs and water and includes--(a) any article which
ordinarily enters into, or is used in the composition or preparation of human food, and
(b) any flavoring matter or condiments.

Clauses (i) and

"misbranded".

(ix)

of

Section 2 define

the

expressions

"adulterated"

and

4. According to counsel for the petitioners the Act imposes unreasonable restrictions,
because it creates absolute liability by Section 16(1) (a) and imposes severe penalties
for storage and sale or distribution of articles of food found to be adulterated or
misbranded, or prohibited by law; it prescribes standards which are technical and
absolute, and for the slightest departure therefrom the trader is liable to be
prosecuted and punished. Counsel submitted that it is impossible for an ordinary
trader without the assistance of an expert technician to ascertain whether the articles
of food purchased by him comply with the prescribed standards, and that in
prescribing the standards of quality the imperceptible changes which take place in
foodstuffs by passage of time, are not taken into account.
5. In our judgment, the restrictions imposed upon the conduct of business by traders
in foodstuffs cannot be deemed unreasonable. By Section 16(1) provision is made for
imposing penalties, among other acts, for storage, sale or distribution of articles of
food which are adulterated or misbranded, or sale of which is prohibited by the Food
(Health) authority in the interest of the public health, or is in contravention of the Act
or the rules. The Act, it is true does not make some blame-worthy mental condition
constituted by knowledge or intention relating to the nature of the article stored, sold
or distributed, an ingredient of the offence. Unless the case falls within Sub-section (2)
of Section 19, if sale, storage or distribution is established, intention to sell articles or
knowledge that the articles are adulterated, misbranded, or prohibited need not be
proved by the prosecutor to bring home the charge. Sub-section (1) of
Section 19 provides that it is no defence in a charge for an offence pertaining to the
sale of any adulterated or misbranded article of food to allege merely that the vendor
was ignorant of the nature, substance or quality of the food sold by him, or that the
purchaser having purchased any article for analysis was not prejudiced by the sale. By
that clause a bare plea of ignorance by a trader about the nature, substance or quality
of the food sold by him is not a defence in a prosecution for the offence pertaining to
the sale of any adulterated food, nor that the article was purchased for analysis.
6. But in considering whether creation of absolute liability amounts to imposing
unreasonable restrictions, the Court has to strike a balance between the individual
right and public weal. The Courts will not strike down an Act as imposing unreasonable
restrictions merely because it creates an absolute liability for infringement of the law
which involves grave danger to public health. The Courts will undoubtedly consider
whether without imposing absolute liability the object of the statute could be
reasonably secured. For that purpose the Court will consider the object of the Act,
apprehended danger to the public interest, arising out of the activity if not controlled
and the possibility of achieving the intended results by less stringent provisions. The
nature of the trade in foodstuffs, the channels of supply and the movement of goods
from trader to trader and fertile sources of adulteration and misbranding make it
extremely difficult in a large majority of cases to establish affirmatively that storage or
sale of adulterated or misbranded foodstuff was with a guilty mind. Provisions in the
statute book creating absolute liability for sale of adulterated food are fairly common.

Section 3(1) of the English "Foods & Drugs Act", 1938, imposes absolute duty on a
dealer in foodstuff regardless of negligence: Lindley v. George W. Homer & Co.
Ltd. [1950] 1 All. E.R. 234; and Lamb v. Sunderland and District Creamery Ltd. [1951]
All. E.R. 923 The same provision is repeated in Section 2 of the "Food and Drugs Act",
1955. In Halsbury's Laws of England, Vol. 10 (3rd Edn.) at p. 273, Article 508, it is
stated :--

A statutory crime may or may not contain an express definition of the necessary
state of mind. A statute may require a specific intention, malice, knowledge,
willfulness, or recklessness. On the other hand, it may be silent as to any
requirement of mens rea, and in such a case in order to determine whether or
not mens rea is an essential element of the offence, it is necessary to look at the
objects and terms of the statute. In some cases, the courts have concluded that
despite the absence of express language the intention of the legislature was that
mens rea was a necessary ingredient of the offence. In others, the statute has
been interpreted as creating a strict liability irrespective of mens rea. Instances
of this strict liability have arisen on the legislation concerning food and drugs,
liquor licensing, and many other matters.
In Mousell Brothers v. London and North Western Rail Co. [1917] 2 K.B. 845 Atkin, J.,
observed :

...yet the legislature may prohibit an act or enforce a duty in such words to
make the prohibitions or the duty absolute: ...To ascertain whether a particular
Act of Parliament has that effect or not, regard must be had to the object of the
statute, the words used, the nature of the duty laid down, the person whom it is
imposed, the person by whom it would in ordinary circumstances be performed,
and the person upon whom the penalty is imposed.
In Quality Dairies (York) Ltd. v. Pedley [1952] 1 All. E.R. 380 the Court of Appeal held
that Regulation 26(1) of the Mill and Dairies Regulation, 1949, requiring a distributor
to ensure that every vessel used as a container for milk shall be in a state of thorough
cleanliness, imposed an absolute liability
7. It is true that for the protection of the liberty of the citizen, in the definition of
offences, blameworthy mental condition is ordinarily an ingredient either by express
enactment or clear implication : but in Acts enacted to deal with a grave social evil, or
for ensuring public welfare, especially in offences against public health, e.g., statutes
regulating storage or sale of articles of food and drink, sale of drugs, sale of controlled
or scare commodities, it is often found necessary in the larger public interest to
provide for imposition of liability without proof of a guilty mind.
8. If from the scheme of the Act it appears that compliance with the regulatory
provisions will be promoted by imposing an absolute liability, and that it cannot
otherwise be reasonably ensured, the Court will be justified in holding that the
restriction on the right of the trader is in the interest of the general public.
Adulteration and misbranding of foodstuffs is a rampant evil and a statute calculated

to control that evil is indisputably in the interest of the general public: The statute
imposing restrictions upon traders will not be deemed unreasonable merely because it
makes a departure from the normal structure of statutes enunciating offences and
prescribing punishments. By Sub-section (2) of Section 19, even in respect of the
absolute offence, the Parliament has enacted that on proof of certain facts, criminal
liability will be excluded. Thereby a vendor is not deemed to have committed an
offence pertaining to the sale of any adulterated or misbranded article of food if he
proves that the purchased the article of food from a duly licensed manufacturer,
distributor or dealer in a case where a licence is prescribed for the sale thereof, and in
any other case from any manufacturer, distributor or dealer with a written warranty in
the prescribed form, provided the article of food while in his possession was properly
stored and that he sold it in the same state as the purchased it. The argument of
counsel for the petitioners that the provision that a retail seller who opens a container
of a branded article of food loses even the limited protection under Section 19(2) is
without substance. Clause (b) of Sub-section (2) of Section 19 does not provide, nor
does it imply, that if the container of a branded article is opened, the article of food
ceases to be in the same state in which the vendor purchased it. If the article of food
is sold in the same condition in which it was purchased from a licensed manufacturer
or dealer, or was purchased with a warranty, the vendor will not lose the protection of
Sub-section (2) of Section 19 merely because he opened the container. If the vendor
has obtained the article from a licensed manufacturer, distributor or dealer or from a
manufacturer, distributor or dealer with a warranty, he is protected, provided he has
properly stored the article and sells it in the same state as he purchased the article,
even if it turns out that the article was adulterated or misbranded. The Act does not
dispense with proof that the article of food is adulterated, misbranded or that its sale
is prohibited: it enacts that a vendor selling articles of food adulterated or misbranded
cannot plead merely that he was ignorant of the nature, substance or quality of the
goods. A statute enacted by the Parliament in the interest of public health (which is
generally made in similar statutes elsewhere) imposing liability for an offence without
proof of a guilty mind does not per se impose restrictions on the freedom to carry on
trade which are unreasonable.
9. It is true that stringent penalties are provided under Section 16(1)(a). A vendor of
adulterated, misbranded or prohibited articles of food is punishable with imprisonment
for a term which shall not, in the absence of adequate and special reasons, be less
than six months, and which may extend to six years, and with fine which shall not be
less than one thousand rupees. But for the protection of the public by ensuring the
purity of articles of food supplied to the people and preventing malpractices by the
traders in articles of food, severity of the penalties is not so disproportionate to the
gravity of the offence that it may be deemed unreasonable.
10. We are again unable to accept the argument that under the Act even when an
article is purchased not as an article of food, but for use otherwise, the vendor will be
deemed guilty if the article does not conform to the prescribed standards, or is as an
article of food adulterate or misbranded. Counsel said that coconut oil is used in the
State of Kerala as a cooking medium, and sale of adulterated coconut oil may in Kerala
be an offence under Section 16, but in other parts of the country where coconut oil is

not used as a cooking medium and is used as a component of hair oil or for other
purposes, it amounts to imposing an unreasonable restriction to penalise the vendor
who sells coconut oil knowing that the purchaser is not buying it as a cooking medium.
But there are no articles which are used as food only in one part, and are not at all
used as food in another part of the country. Even coconut oil is used as a cooking
medium by certain sections of the people in parts of India other than Kerala. In any
event it is always open to a person selling an article capable of being used as an article
of food as well as for other purpose to inform the purchaser by clear notice that the
article sold or supplied is not intended to be used as an article of food. What is
penalised by Section 16(1) is importation manufacture for sale, or storage, sale or
distribution of any article of food. If what is imported manufactured or stored, sold or
distributed is not an article of food, evidently Section 16 can have no application.
11. The various items in the Schedule setting out standards of quality use technical
expressions with which an ordinary retail dealer may not be familiar, and also set out
percentages of components which the dealer with the means at his command cannot
verify. But by Section 3, the Central Government has to set up the Central Committee
for Food Standards to advise the Central and the State Governments on matters
arising out of the administration of the Act. The Committee consists of experts and
representatives of the Central Government and of the State Governments and the
Director General of Health Services is its Chairman. Under Section 23(1)(b) the Central
Government makes rules prescribing the standards of quality and the limits of
variability permissible in any article of food. The rules are made after consultation with
the Committee for Food Standards. The standards set out in the Appendix to the Rules
are prescribed after consultation with the Committee for Food Standards. It has not
been even urged that the standards have been fixed arbitrarily. Apart from a general
argument that small retail dealers may not be in a position to ascertain whether goods
purchased by them or in their possession are according to the standards, no specific
argument was advanced that the standards, are not normal, or that the variations in
quality during the course of storage are unreasonably restricted.
12. This Court in State of Uttar Pradesh v. Kartar Singh MANU/SC/0060/1964 :
1964CriLJ229 in which in dealing with an argument of invalidity of the rule setting out
standards under the Prevention of Food Adulteration Act observed:

The standards themselves, it would be noticed, have been prescribed by

the Central Government on the advice of a Committee which included in
its composition persons considered experts in the field of food
technology and food analysis. In the circumstances, if the rule has to be
struck down as imposing unreasonable or discriminatory standards, it
could not be done merely on any a priori reasoning but only as a result
of materials placed before the Court by way of scientific analysis. ...That
where a party seeks to impeach the validity of a rule made by a
competent authority...the burden is on him to plead arid prove the
infirmity is too well established to need elaboration. If, therefore, the
respondent desired to challenge the validity of the rule on the ground
either of its unreasonableness or its discriminatory nature, he had to lay

a foundation for it by setting out the facts necessary to sustain such a

plea and adduce cogent and convincing evidence to make out his case,
for there is a presumption that every factor which is relevant or
material has been taken into account in formulating the classification of
the zones and the prescription of the minimum standards to each zone,
and where we have a rule framed with the assistance of a Committee
containing experts such as the one constituted under Section 3 of the
Act, that presumption is strong, if not overwhelming.
13. In the petitions a plea was raised that by the Act and the Rules, the guarantee of
Article 14 was infringed, but no argument was presented before us independently of
the argument relating to infringement of the guarantee under Article 19(1)(g), in
support of the contention that the Act infringed the guarantee of equality before the
law or equal protection of the laws. The Act deals with the regulation of a class of
traders, and in view of the widespread malpractices, and the practical difficulties of
controlling those malpractices, stringent provisions have been made by the Act. The
classification is founded on an intelligible differentia and the differentia has a rational
relation to the object sought to be achieved. The provisions of the Act again do not
invest arbitrary authority upon those who are to administer the Act. nor can it be said
that the standards prescribed are arbitrary.
14. The Act does not infringe the guarantee of Article 20(3) of the Constitution. By
that clause no person accused of any offence shall be compelled to be a witness
against himself. But by enacting that a plea by the vendor in a prosecution for an
offence pertaining to sale of adulterated or misbranded article of food, that he was
ignorant of the nature, substance or quality will not be a defence, the guarantee under
Article 20(3) is not infringed. The vendor when charged with an offence is not thereby
compelled to be a witness against himself. Nor can it be said that by making the report
of the Director of Central Food Laboratory conclusive evidence of the facts stated
therein, any such infringement is intended. The provision has been made with a view
to secure formal evidence of facts without requiring the Director to remain present,
and in the interest of effective administration of the Act, the certificate signed by the
Director of the Central Food Laboratory is made final and conclusive evidence of the
facts stated therein. The Director is a highly placed official, an expert in determining
the nature, substance and quality of food, and is wholly disinterested in the result of
any case coming before the Courts. It is difficult to appreciate how conclusiveness
attributed to the certificate of the Director compels the vendor charged with an offence
under the Act to be a witness against himself.
15. The petitions fail and are dismissed with costs. One hearing fee.

IN THE HIGH COURT OF CALCUTTA

A.F.O.D. No. 102 of 1971
Decided On: 31.07.1978
The Board of Trustees of the Port of Calcutta
Vs.
Bengal Corporation Pvt. Ltd.
Hon'ble
R.M. Datta and Salil Kr. Hazra, JJ.

Judges/Coram:

Subject: Commercial
Catch Words
Mentioned IN
Acts/Rules/Orders:
Sale of Goods Act, 1930 - Section 16, Sale of Goods Act, 1930 - Section 16(1), Sale of
Goods Act, 1930 - Section 16(2), Sale of Goods Act, 1930 - Section 59
Cases
Referred:
Ashington Piggeries v. Hill (Christopher) (H.L. (E)), (1971) 2 WLR 1051; Nagubai
Ammal v. B. Shama Rao, AIR 1956 SC 593; Bhagwati Prasad v. Chandramaul, AIR
1966 SC 735; R.T. Grant v. Australian Knitting Mills Ltd., AIR 1936 PC 34, 1936 AC
85; Manchester Liners Ltd. v. Rea Ltd., (1922) 2 AC 74; Mash & Murrell Ltd. v. Joseph
I, Emanuel Ltd., (1961) 1 WLR 862; Hardwick Game Farm v. S.A.P.P.A. (H.L. (E)),
(1969) 2 AC 31, (1968) 3 WLR 110; Cammell Laird, (1934) AC 402,
403; Rabindrasingh Shankarsingh Thakur v. Hindusthan General Electric Corporation
Ltd., AIR 1971 Bom 97; Bristol Tramways & Carriage Co. Ltd. v. Fiat Motors Ltd.,
(1910) 2 KB 831; G. Mckenzie & Co. (1919) Ltd. v. Nagendra Nath Mahalanabish,
(1946) 50 Cal WN 213 (2); Randall v. Newson, (1876-77) 2 QBD 102; A.V. Joseph v.
R. Shew Bux, 23 Cal WN 601, AIR 1918 PC 149; Maneckji Pestonji Bharucha v. Wadilal
Sarabhai and Co., AIR 1926 PC 38; Gambhirmull Mahabir Prasad v. The Indian Bank
Ltd., AIR 1963 Cal 163; Pravudayal Agarwala v. Ramkumar Agarwala, AIR 1956 Cal 41
Case

Note:

Commercial - merchantable quality - Section 16 of Sale of Goods Act, 1930 question of implied terms as to quality or fitness of goods under Section 16
raised - contended that Proviso to Section 16 (2) did not apply - correctness
of test certificates had not been proved - in any event defective nature of
goods was not apparent on ordinary examination and cannot be detected

before user - implied condition was that goods should be of merchantable

quality - but goods supplied were not so - held, Section 16 (2) can also be
invoked by buyer.

Industry: Cooperative Societies

JUDGMENT
Hazra, J.
1. This is an appeal against the decree of the learned trial Judge dated June 20, 1971
for rupees 10,447.64 being the balance price of goods sold and delivered and the
balance of security deposit.
2. At the hearing of the appeal before us the respondent, decree-holder, the plaintiff in
the suit did not appear. The Advocate on record of the respondent stated that he did
not receive any instructions to appear and wanted leave to retire. We gave him such
leave, and he retired.
3. In this appeal the question of implied terms as to quality or fitness of the goods
under Section 16 of the Sale of Goods Act, 1930 has been raised. To appreciate the
points which arise for our consideration I will first state briefly the facts and
circumstances under which the suit was filed by Bengal Corporation Private Ltd.,
shortly Bengal Corporation against the Commissioners for the Port of Calcutta, Shortly
Port Commissioners.
4. In response to invitation by the Port Commissioners for tenders for supply of wire
ropes conforming to British Standard Specification, Bengal Corporation offered to
supply goods of Japanese origin. The terms of the offer of the Bengal Corporation
included (a) Bengal Corporation would supply with each consignment manufacturer's
and Lloyds Test Certificates; (b) The goods would conform to B. S. S. 302/621 of
1957; (c) The Port Commissioners at their own costs would be entitled to have
independent inspection of the goods before shipment. The offer of Bengal Corporation
was accepted by the Port Commissioners and several orders were placed from time to
time for supply of wire ropes.
5. The suit relates to two orders, both dated March 14, 1963 viz., Order No. 2113/50
for one reel of 5600 ft. and order No. 2114/50 for another reel of 4000 ft. On February
7, 1964. Bengal Corporation sent to Port Commissioners (a) Lloyds, Test Certificate;
(b) Manufacturer's Test Certificate and fc) Test Certificate of the Indian Dock Labourers
Regulation 1948. On March 3, and 4, 1964 the above two reels were supplied by the
Bengal Corporation to the Port Commissioners. The goods were kept in the store of
Port Commissioners and parts were taken out as required for use in crane. While in
use the goods were found to be defective. On June 19, 1964, the Engineer-in-Charge
of the Dockyard reported to the Inspecting Engineer "1707 meter of wire rope

collected from C/Store and about 593 meter of wire rope used in different cranes as
noted below : On 19 P.P. Cr. at 1 GRJ the hoist wire rope replaced thrice (i.e. 30-31964; 7-5-1964) and on 24 SPCr at 4 GRJ hoist wire rope replaced twice (i.e. on 15-51964 and 7-6-1964) due to forming birds cage on the rope."
6. On Aug. 17, 1964, Port Commissioners reported to Bengal Corporation that the wire
ropes failed within two weeks on an average. The average life of the wire ropes used in
cranes were stated to be between 2 and 2 1/2 years. It was stated on behalf of Port
Commissioners that the entire length of the wire rope has been used up on account of
frequent failure of this wire rope on cranes due to formation of bird's cage (inner
strands coming out of the outer strands). The fault was ascribed due to defective
winding of the strands during manufacture.
7. It appears that Bengal Corporation wrote to Japanese manufacturers regarding the
defect in the wire ropes. On Sept. 29, 1964 Bengal Corporation wrote to Port
Commissioners that the manufacturers were of opinion that "perhaps the cause of
deformation is due to careless handling."
8. There are several correspondence between the parties. It is not necessary to state
the same in detail. The suit was filed on April 22, 1966 by Bengal Corporation claiming
Rs. 9,477.64 as balance price of goods sold and delivered and for Rs. 1000 as balance
of security deposit. Interest was also claimed on the balance of the goods sold and
delivered and also on security deposit.
9. In the written statement, Port Commissioners, said that the plaintiff, at the time of
the orders and making of the contract well knew that the defendant required two reels
"for use in cranes." It was also stated that there was an implied condition of the
agreement that the said two reels should be free from any defect rendering them unfit
for use in cranes. The case of the defendant was that in breach of the express or
implied condition or warranty, the plaintiff supplied two reels of wire ropes which did
not correspond with the agreement and condition or warranty as to quality and fitness.
The two reels failed while in use on the cranes due to formation of bird's cage (inner
strands coming out of the outer strands). The defendant was compelled to use the said
two reels of the defective wire ropes to unload food-grains as quickly as possible to
relieve the food scarcity. The defendant claimed that they were entitled to set up the
breaches of condition which they were compelled to treat as breaches of warranty
against the plaintiff in diminution or extinction of the price of Rs. 9477.33 claimed for
the two reels of wire ropes.
10. Several issues were raised at the trial. On the question whether the plaintiff knew
at the time of placing of the orders that the defendant required the said wire ropes for
use on the cranes, the learned Judge observed :

"The plaintiff must be held to have been imputed with the knowledge that these
wire ropes were required for use on cranes in the facts and circumstances of the
case."

11. The learned Judge referred to Regulation 30 (1) (b) of the Dock Regulations which
deals with the testing of wire ropes before 'hoisting or lowering' and observed :

"Hoisting or lowering can only be in connection with the use on cranes."

12. The learned Judge held:--

"Since the plaintiff knew that the manufacturers had to provide a certificate in
compliance with this Regulation 30 (1) (b) of the Dock Regulations and such a
certificate was in fact supplied, the plaintiff must be held to have the knowledge
that these wire ropes were needed for use on cranes."
The learned Judge, however, held that on the pleading and evidence, the defendant is
not entitled to invoke the provisions of Section 16(1) of the Sale of Goods Act. The
learned Judge further held that the defendant is not entitled to invoke the implied
condition of "merchantable quality" under Section 16(2) of the Act. On behalf of the
appellant, the Port Commissioners later on (substituted in the appeal as The Board of
Trustees of the Port of Calcutta), Mr. R.L. Sinha appearing with Mrs. Chauchoria has
challenged this finding of the learned Judge, According to the learned counsel the
implied condition as to quality or fitness under S, 16 is applicable in the facts of this
case. In any event, he contends that Section 16(1) is attracted; if not, Section 16(2).
He also contends that for breach of warranty the appellant is entitled to diminution of
price.
13. In view of the argument of the learned counsel for the appellant the question is
whether Section 16 of the Sale of Goods Act, 1930 applies under the facts of this case.
This section corresponds to Section 14 of the English Sale of Goods Act, 1893, (56 and
57 Vic. c. 71).
14. Section 16 deals with implied condition as to quality or fitness. I will first read
relevant portion of Section 16.

"Section 16 : Subject to the provisions of this Act and of any other law
for the time being in force, there Is no implied warranty or condition as
to the quality or fitness for any particular purpose of goods supplied
under a contract of sale, except as follows :-(1) Where the buyer, expressly or by implication makes known to
the seller the particular purpose for which the goods are
required, so as to show that the buyer relies on the seller's skill
or judgment, and the goods are of a description which it is in the
course of the seller's business to supply (whether he is the
manufacturer or producer or not), there is an implied condition
that the goods shall be reasonably fit for such purpose;
Provided.....
(2) Where goods are bought by description from a seller who
deals in goods of that description (whether he is the

manufacturer or producer or not), there is an implied condition

that the goods shall be of merchantable quality :-Provided that, if the buyer has examined the goods, there shall
be no implied condition as regards defects which such
examination ought to have revealed ....."
Under Sub-section (1), the requirements which must be satisfied to import a condition
that the floods shall be reasonably fit for any particular purpose are that the buyer
must make known to the seller the particular purpose for which the goods are
required, in the circumstances showing, the seller realised or ought to have realised
that the buyer was relying on the seller's skill or judgment and the goods shall be of a
description which it is in the course of the seller's business to supply. In such a case,
there is an implied condition that the goods shall be reasonably fit for such purpose.
15. Sub-section (2) relates to all sales by description. Under this Sub-section to import
a condition that the goods are of merchantable quality, the goods must be bought by
description and seller must deal in goods of that description. The goods of that
description implies goods of the same kind as those bought, The words "that
description" refer to and mean the actual description by which the goods which are the
subject matter of the contract were bought. (See Ashington Piggeries v. Hill
(Christopher) (H. L. (E)) (1971) 2 WLR 1051per Lord Diplock).
16. The word "merchantable" can only mean "commercially saleable", If the
description is a familiar one it may be that in practice only one qua-lity of goods
answers that description then, that quality and only that quality ia merchantable
quality (See Hard-wick Game Farm Case (1969) 2 A.C 31 at p. 75, per Lord Reid).
17. Bearing in mind the meaning and effect of 9-16 as stated above, I will now
consider whether Section 16 applies under the facts of this case. Is the learned Judge
correct in his view that Section 16 does not apply in the instant case?
18. On the facts of this case, the learned Judge found that the wire ropes supplied by
the sellers were of non-rotating type and buyer made known to the seller the purpose
for which the wire ropes were required, The purpose was for use in cranes. There is no
doubt that this was the particular purpose for which the ropes were required. The
learned Judge also accepted that this was so, but held that the buyer did not rely on
seller's skill or judgment, The learned Judge observed :--

"There is no pleading that the buyer made known to the seller the purpose for
which the goods were required so as to show that the buyer relied on the seller's
skill or judgment. There is no pleading thai the goods are of a description which
it is In the course of the seller's duty to supply."
The learned Judge also held that there is no oral or documentary evidence that the
buyer relied on seller's skill or judgment or that the goods were of a description which
it was in the course of plaintiff's business to supply.

19. With regard to this finding of the learned Judge, Mr. R.L. Sinha has contended that
absence of pleading that buyer relied on seller's skill or judgment is not fatal. In any
event, substance of the matter and not the form should be looked at. Section 16 of the
Sale of Goods Act was in issue; and evidence was laid.
20. Mr. Sinha has relied on the decisions of the Supreme Court in Nagubai Ammal v. B.
Shama Rao, MANU/SC/0089/1956 : [1956]1SCR451 and Bhagwati Prasad
v. Chandramaul, MANU/SC/0335/1965 : [1966]2SCR286 . It seems to me that the
above submissions of Mr. Sinha should be accepted under the facts and circumstances
of this case.
21. There is no doubt that the question of applicability of Section 16 was raised on
behalf of the Port Commissioners at the trial. It appears that several questions were
put to the plaintiff's witness Paban Guha in cross-examination on the point that the
buyer depended on the skill and judgment of the seller. I will set out some of the
questions and answers in this regard.

"Q. 152: You find from your letter dated 10th December, 1962 that you
are selecting Japanese wire ropes and offering the goods?/yes.
Q. 153 : And you also recommended these goods, you find in that
document by saying 'above wire ropes offered by us are manufactured
by the leading manufacturer in the line in Japan, Messrs. Teikoku
Sangyo Co. Ltd., Osaka whom we represent in India as sole agent'?/Yes.
Q. 155 : And you are recommending those manufactured rope in
fulfilment of this tender?/ Yes.
Q. 156: And on the basis of your selection the defendant accepted your
offer by their letter at p. 7 of the admitted brief of documents /Yes, the
defendant accepted the offer made by us." Question was also put to the
plaintiffs witness whether the defendant required the wire ropes of the
specification mentioned according to British Standard Specification
302/621 of 1957 and the answer was "Yes." (Paban Guha Q. 149).
The same witness was asked whether the plaintiff was a dealer in wire ropes. He
answered in the affirmative and said : "We are the agents" (Q. 141). From the
evidence tendered it appears that the buyer accepted the recommendation of the
plaintiff that the goods manufactured by the Japanese manufacturer would conform to
British Standard Specification for use in cranes and on the basis of buyer's selection of
goods the seller accepted the offer. It has also been proved that the plaintiff company
is the dealer of the wire ropes and agent of the Japanese manufacturers. Therefore, in
my opinion, the learned Judge was not correct in his view that there is no evidence
that the buyer relied on the seller's skill and judgment, or that the goods were of
description which it was in the course of plaintiff's business to supply. Both the parties
went to trial with full knowledge that question of applicability of Section 16 was in
issue. They had ample opportunity to adduce their evidence thereon and had fully

availed themselves of the same. In the circumstances, the absence of a specific

pleading that the buyer made known to the seller the purpose for which the goods
were required so as to show that the buyer relied on the seller's skill or judgment or
that the goods were of description which it was in the course of seller's business to
supply was a mere irregularity which resulted in no prejudice to the parties. (See
Nagubai Ammal v. B. Shama Rao. MANU/SC/0089/1956 : [1956]1SCR451 .
22. The observation of the Supreme Court in Bhagwali Prasad v. Chandramaul,
MANU/SC/0335/1965 : [1966]2SCR286 may also be quoted here :--

"If a plea is not specifically made not yet it is covered by an issue by implication,
and the parties knew that the said plea was involved in the trial, then the mere
fact that the plea was not expressly taken in the pleadings would not necessarily
disentitle a party from relying upon it if it is satisfactorily proved by evidence."
I will now turn to the legal aspect of the matter.
23. With regard to the law on the point, the learned Judge has referred to the decision
of the Judicial Committee in R. T. Grant v. Australian Knitting Mills
Ltd.MANU/PR/0089/1935
1936 AC 85 and has quoted the observation of Lord Wright :--

"It is clear that the reliance must be brought home to the mind of the seller,
expressly or by implication. The reliance will seldom be express, it will usually
arise by implication from the circumstances."
I think I should quote in this connection the speech of Lord Buckmaster in Manchester
Liners Ltd. v. Rea Ltd. (1922) 2 AC 74 :--

"If goods are ordered for a special purpose, and that purpose is disclosed to the
vendor, so that in accepting the contract he undertakes to supply goods which
are suitable for the object required, such a contract is, in my opinion, sufficient
to establish that the buyer has shown that he relies on the seller's skill and
judgment." The words "so as to show" in Section 16 mean "in the circumstances
showing". (See Halsbury's Laws of England, Third Edition, Vol. 34, Article 77
page 51, footnote (e)).
23-A. I will quote here the observation of Lord Sumner in the decision of the House of
Lords in Manchester Liners, Ltd. v. Rea Ltd, (1922) 2 AC 74 at p. 90 :--

"The words of Section 14(i) are 'so as to show,' not 'and also shows.' They are
satisfied, if the reliance is a matter of reasonable inference to the seller and to
the Court."
24. Mr. Sinha has Invited our attention to the decision in Mash & Murrell Ltd. v. Joseph
I, Emanuel Ltd. (1961) 1 WLR 862where Dip-lock, J. has followed the decision
in (1922) 2 AC 74, According to the learned Judge, the well known case of Manchester

Liners Ltd. v. Rea Ltd. (1922) 2 AC 74 establishes the proposition that if the particular
purpose is made known by the buyer to the seller, then unless there is something in
effect to rebut the presumption, that in itself is sufficient to raise the presumption that
he relies upon the skill and judgment of the seller. (See (1961) 1 WLR 862).
25. I will note in this connection that Lord Reid in the latest decision of the House of
Lords on the point in Hardwick Game Farm v. S. A. P. P. A. (H. L. (E)) : (1969 2 AC 31
p. 81 : (1968) 3 WLR 110 explained the statement of law enunciated by Lord Wright in
Cammell Laird (1934 AC 402, (referred to in Grant's caseMANU/PR/0089/1935 in the
way as hereunder :--

"Lord Wright might appear to be going further when he said in Cammell

Laird (1934) AC 402 : 'Such a reliance must be affirmatively shown :
the buyer must bring home to the mind of the seller that he is relying
on him in such a way that the seller can be taken to have contracted on
that footing. The reliance is to be the basis of a contractual obligation.'
But I do not think that he meant more than that in the whole
circumstances a reasonable man in the shoes of the seller would have
realised that he was being relied on."
26. Mr. Sinha has referred to a decision of the Bombay High Court in Rabindrasingh
Shankarsingh
Thakur
v. Hindusthan
General
Electric
Corporation
Ltd.,
MANU/MH/0017/1971 : AIR1971Bom97 . In that case it was also held that
communication of the particular purpose from the buyer to the seller may be inferred
from the description of the goods given by the buyer to the seller or from the
circumstances of the case. The buyer, however, must rely on seller's skill or judgment.
27. Having regard to the law on the point as laid down in the above mentioned cases,
it seems to me that not only it has been proved, in the instant case, that the wire
ropes were required for use in cranes, but also all essential facts exist showing that
the defendant buyer relied on plaintiff seller's skill or judgment for supply of such
goods and that the goods were of description which it was seller's duty to supply as
agent of the Japanese manufacturers. In this respect, I have taken into consideration
the relevant facts, evidence and circumstances of the case and also the legitimate
inferences from the facts admitted or proved. In this case, the wire ropes were sold for
the particular purpose, namely, for use in cranes and as such the plaintiff seller must
have undertaken that wire ropes should be fit for that purpose. At the time of
purchase of goods for a particular purpose, very seldom the purchaser tells the seller
"Look. I am relying on your judgment and skill that the goods would be fit for the
particular purpose for which the same are required". I am inclined to think that if the
seller was told that the goods were required for a particular purpose such statement
suffices to show that the buyer relied on seller's skill or judgment without any further
evidence on this point. In any event, n the instant case, there was ample evidence on
behalf of the defendant Port Commissioner that reliance was made on the skill and
judgment of the plaintiff seller and the plaintiff chose the Japanese manufacturers as
their principal for manufacture of the particular type of wire ropes according to British

Standard Specification for use in cranes and the defendant buyer relied on the choice
of the plaintiff in this respect. This being so, there was an implied condition that the
wire ropes should be reasonably fit for the declared purpose. (See Bristol Tramways &
Carriage Co. Ltd. v. Fiat Motors, Ltd. (1910) 2 KB 831 ).
28. For the above reasons, in my view, Section 16(1) of the Sale of Goods Act applies
under the facts of this case and, I am unable to share the same view as taken by the
learned trial Judge on this point.
29. On the facts of this case, it appears that two reels of wire ropes were admittedly
defective. The learned Judge has found "that the wire ropes supplied did reveal a
defect at certain point of time after it has been used". The learned Judge said that
there was "a tacit recognition on the part of the plaintiff that there was some defect on
the wire ropes supplied". The evidence on behalf of the defendant is that the wire
ropes last normally about two to three years. (Sankar Das Mitra Q. 52). But in the two
reels of wire ropes, which were the subject matter of the suit, the inner strand came
out from the outer strand and "bird's cage" formed within short time of its use, on an
average within two weeks' time. There is no reason to disbelieve this part of the case
of the defendant which has been proved both by oral and documentary evidence. The
learned trial Judge has also accepted this case of the defendant. What follows then? It
follows that the defendant wanted to buy wire ropes which could be used in the
defendant's cranes and the life of such wire ropes should be two three years on an
average. Paban Guha the witness called on behalf of the plaintiff also admitted that it
is impossible to imagine that the wire ropes will fail within weeks' time. I will set out
hereunder two questions with answers of Paban Guha in cross-examination,

"Q. 190: I suggest that the wire ropes of 2.1/8" x 2.1/4" circumference,
the subject matter of dispute, failed in course of use on cranes within
two weeks, on an average, due to formation of bird-cage, that is, inner
strand coming out of the outer strand and for unwinding of strands?/
That is impossible.
Q. 191 : That is impossible?/ It is impossible to imagine that wire-rope
will fail within 2 weeks' time". But this impossible event has happened
in this case. This has been proved by the defendant Port
Commissioners.
30. Question here arises who caused the defect? Was it manufacturing defect? Or, was
the defect caused due to mishandling by the defendant?
31. On this aspect Mr. R.L. Sinha contends that in cross-examination of the
defendant's only witness Sankar Das Mitra. there was no suggestion that the wire
ropes were not defective There was no suggestion that bird's cage formed due to
mishandling by the defendant. There was no suggestion that the cranes were
defective, There was no suggestion that grooves in the drum were defective or pulleys
were defective. Only suggestion to the witness with his answer thereto was as
follows :

"Q. 320: I am suggesting to you that the proper functioning of a crane or

formation of bird's cage or inner strands coming out of the outer strands
depends upon the proper handling of the crane or proper handling of the wire
ropes?/ I do not agree with you."
32. On the question of defects, the case of the plaintiff was that "the manufacturers
are of opinion that perhaps the cause of deformation is due to careless handling." The
word "perhaps" in the context means that the plaintiff was merely guessing. The
plaintiff could not produce any report from the Japanese manufacturers as to the
cause of such defects. The plaintiff was allowed to inspect and to take photograph of
the damaged wire ropes lying in the yard of the Port Commissioners. This will appear
from the letter dated October 28, 1964 by the defendant to the plaintiff. It also
appears that samples of damaged goods were sent to Japan by the plaintiff and reply
was received from the Japanese manufacturers. This will be evidence from the
question and answer of Paban Guha, the plaintiff's witness, set out he re under:

"Q. 220 : Can you suggest any reason why you did not receive any
report from your manufacturers?/ They wrote back to us that the
samples were very small in size and hence those could not be tested.
They wanted much bigger size for facilitating testing.
Q. 221 : Where is that letter from your manufacturer?/ That letter is in
the file. That has not been produced in court."
Thus, the plaintiff has withheld from Court the letter received by them from the
manufacturers.
33. Mr. Sinha has argued that when the wire ropes were defective it is not for the
buyer to prove how the defect occurred. I think the contentions made by Mr. Sinha
have great force and I am inclined to accept the same. I am inclined to take the view
that the defect was not caused due to mishandling of the goods. It seems to me that
the wire ropes were defective at the time of the delivery of the same to the defendant.
34. For the reasons stated above Section 16(1) of the Sale of Goods Act apply in the
facts of this case.
35. Now, on question of applicability of Section 16(2) I am also unable to share the
same view with the learned trial Judge that Section 16(2) does not apply. In my view
it does. The goods supplied by the seller were not of merchantable quality. It is true
that merchantable quality has not been denned in the Sale of Goods Act. No
exhaustive definition has been laid down in any judicial decisions. But, following the
definition given by Farewell, L. J in Bristol Tramways Co.'s case :(1910) 2 KB 831 at
pp. 839-840, this Court in G. Mckenzie & Co. (1919) Ltd v Nagendra Nath
Mahalanabish : 50 Cal WN 213 said :

"When an article is sold by description, it may be regarded as a sale of an article

of that description, which is free from any latent defect which, if known at the
time, will make it unmerchantable."
36. I will quote here the tests laid down in Randall v. Newson; (1876 2 QBD 102 :

"If a man sells an article he thereby warrants that it is merchantable,-that it is fit for some purpose. If he sells it for that particular purpose,
he thereby warrants it for that purpose." In Bristol Tramways, etc.
Carriage Co. Ltd. v. Fiat Motors Ltd. (1910) KB 831 , Farwell, LJ gave
another explanation of the phrase 'merchantable quality' which I would
like to quote here:
"The phrase in Section 14(2) is, in my opinion, used as meaning that the
article is of such quality and in such condition that a reasonable man
acting reasonably would after a full examination accept it under the
circumstances of the case in performance of has offer to buy that article
whether he buys for his own use or to sell again."
In Grant's case: 1936 AC 85 at p. 99-100 : MANU/PR/0089/1935
observed :

Lord Wright

"Whatever else merchantable may mean, it does mean that the article sold, if
only meant for one particular use in ordinary course, is fit for that use;
merchantable does not mean that the thing is saleable in the market simply
because it looks all right; it is not merchantable in that event if it has defects
unfitting it for its only proper use but not apparent on ordinary examination:
that is clear from the proviso, which shows that the implied condition only
applies to defects not reasonably discoverable to the buyer on such examination
as he made or could make." In view of the law quoted above, it seems to me
that the goods supplied by the seller were not of merchantable quality as the
same were not suitable for the purpose for which the same were required. The
goods were bought by description and the seller should have supplied the same
reasonably fit for use in cranes.
37. According to the letter of the defendant dated August 17, 1964, the average life of
such ropes should have been two to two-half years; but, in fact, the same could be
used for much less period. The proviso to Section 16(2) also does not apply; because,
Section 16(2) deals with defects which ought to have been revealed upon
examination. In this case, the defects were latent defects which could not be detected
on apparent examination of the goods in Japan, The defect in the wire ropes could
only be detected after their user in cranes,
38. With regard to manufacturer's test certificate and Lloyds Test Certificate Mr. Sinha
contends that although, the learned Judge admitted the same as exhibits in spite of
objection and held against the appellant but the contents of the certificates ought to
have been proved. According to him, the proviso to Section 16(2)does not apply;

because, there is no evidence of examination of such goods before delivery. The

person who gave the Llyods Test Certificate has not been called to prove the contents
of the certificate. It seems to me that Mr. Sinha is justified in his comments in this
respect, The correctness of the test certificates or the Lloyds report has not been
proved. In any event, as the defective nature of the goods was not apparent on
ordinary examination, and could not be detected before user in cranes, the proviso to
Section 16(2) is not attracted. Therefore, there was implied condition that the goods
should be of merchantable quality, but the two reels supplied by the seller were not so.
In the above view of the matter Section 16(2) can also be invoked by the defendant
buyer.
39. The only other point which remains is the question of remedy for breach of
warranty by the seller under Section 59 of the Sale of Goods Act. Such breach gives
rise to the claims of damages on the part of the buyer. The case in the written
statement is that the defendant was compelled to use the said two reels of defective
wire ropes to unload food-grains as quickly as possible to relieve food scarcity.
40. On behalf of the appellant Mr. Sinha submits that the appellant is entitled to
diminution of price. It is a clear case of breach of warranty or breach of condition as to
quality or fitness of two reels of wire ropes supplied and it has given rise to a claim for
damages on the part of the defendant buyer. Exact measurement of the amount of
damage is not possible in this case. Mr. Sinha, however, has prepared a chart from
exhibit 3-A which is the stock-ledger of the wire ropes of the Calcutta Port
Commissioners and submits that although the defendant is entitled to much more than
50% of reduction of price, he will claim at least 50% of the reduction of price. He has
referred to the decisions of the Privy Council in A. V. Joseph v., R. Shew Bux 23 CWN
601 : AIR 1918 PC 149, Maneckji Pestonji Bharucha v. Wadilal Sarabhai and Co., AIR
1926 PC 38 and the decision of this Court in Gambhirmull Mahabir Prasad v. The
Indian Bank Ltd., MANU/WB/0036/1963 : AIR1963Cal163 and contends that at least
50% of reduction of price should be allowed to the defendant on the basis of the
replacement of wire ropes. There is no doubt that the defendant-appellant has
suffered damage by reason of supply of defective wire ropes and as such the
defendant buyer is entitled to claim damages. It also seems to me that it is difficult to
come to a definite figure as to exact measurement of damages. It seems to me,
however that the fact that the damages are difficult to estimate and cannot be
assessed with certainty or precision does not relieve the plaintiff-respondent of the
necessity of paying damages for the breach. The amount of the claim is small in this
case. The chart prepared from exhibit 3-A, the stock-ledger of wire ropes of the
Calcutta Port Commissioners, throws considerable light on the question of damages. It
seems to me to be acceptable. The assessment of damages, however, cannot be made
with any mathematical accuracy. On the principles laid down in the above Privy Council
decisions and on the law stated in Halsbury's Laws of England, Third Edition, Vol. 11,
Article 394, page 226 referred to in the judgment of Sankar Prasad Mitra, J. (as he
then was) in Gambhirmull's case MANU/WB/0036/1963 : AIR1963Cal163 , I think, I
should allow the appellant the benefit of every reasonable presumption as to loss
suffered and I will allow diminution of the price of the goods to the extent of 50%.

41. In this respect I will also follow the principle laid down in the Bench decision of this
Court in Pravudayal Agarwala v. Ramkumar Agar-wala, MANU/WB/0013/1956 :
AIR1956Cal41 where it was held that even in a case where nominal damage is
awarded this does not connote that trifling amount is to be assessed. What is to be the
amount of nominal damage depends on the facts of each particular case. On the facts
of this case, in my view, 50% of diminution of price would not be unreasonable or
excessive,
42. In this view of the matter, the appeal is allowed in part. The decree passed by the
learned trial Judge is varied to the following extent.
With regard to the balance price of the goods sold and delivered the respondent will be
entitled to one-half of Rs. 9447.64 i.e. Rs. 4738.82. The respondent, however, will be
entitled to entire amount of security deposit, viz., Rs. 1,000/-. Thus, the total amount
of the decree in favour of the plaintiff-respondent is reduced from Rupees 10,477.64
to Rs. 5,738.82. The respondent will be entitled to interest on the sum of Rs. 5,738 at
6% per annum from the date of the filing of the suit, viz.. April 22, 1966 till payment
and the decree is modified accordingly. The recorded Advocate on behalf of the
appellant will hold the amount lying in his hands pursuant to the order dated August 7,
1971 until the decretal amount with cost in favour of the plaintiff respondent is
satisfied and, thereafter, he would be at liberty to return the balance amount to the
Board of Trustees of the Port of Calcutta.
With regard to the cost, the plaintiff-respondent will be entitled to one-half of the costs
of the suit. The defendant appellant will be entitled to one half of the cost of the
appeal.
Certified for two counsel throughout.
Ramendra Mohan Datta, J.
43. I agree.