Criminal Law – Doctrine of vicarious liability –Corporate criminal liability – Directors/Controlling authorities of company – When not liable – On 16.10.13, the victim came to the hotel in question to meet two resident guests of the hotel who were American citizens – All three were having food and wine in the club on the 6th floor and were frequently going out on terrace for smoking – Victim fell from the terrace of 6th floor to the 4th floor of the hotel and got injured – Appellants-accused charged u/ss.336,338 r/w s. 32, IPC and s.4, 2003 Act– Chargesheet inter alia alleges criminal negligence and violation of license conditions by the hotel management – High Court declined to quash the FIR registered against the appellants – On appeal, held: To prove guilt u/s.338, in addition to the elements u/s.336 (the act, done rashly and negligently, to endanger human life or personal safety), an additional consequence of grievous hurt is to be proved – No allegation is made against the accused no.2, Managing Director of the accused no.1 (the listed public company which runs the Hotel in question) directly attributing negligence with the criminal intent attracting provisions u/ss.336, 338 r/w s. 32, IPC – Mere fact that he was chairing the meetings of the company and taking decisions, by itself cannot directly link the allegation of negligence with the criminal intent – Individual either as Director/Managing Director/Chairman of the company can be made an accused, along with the company, only if there is sufficient material to prove his active role coupled with the criminal intent – Although it is the case of the accused no.4-General Manager, that he was also out of country on the date of incident, he being the General Manager of the very hotel stands on different footing to that of accused no.2 – When there is allegation of violation of licence conditions and negligence against the General Manager and other staff members, appropriate findings can be recorded after fullfledged trial – Further, in absence of the allegations that the hotel has not provided any smoking area at all in the entire hotel, there is no reason to prosecute the accused for the alleged offence u/s.4, 2003 Act – No offence is made out against both the appellants – Chargesheet filed against the accused no.-2 as also the summoning order passed by the Metropolitan Magistrate, stands quashed – Chargesheet filed against the accused no.4 is also quashed, however summoning order is quashed only to the extent of proceedings initiated u/s.4, 2003 Act – Cigarettes and Other Tobacco Products (Prohibition of Trade and Commerce, Production, Supply and Distribution) Act, 2003 –”Regulations for keeping places of public entertainment in Delhi 1980"– Regulation 19 – Code of Criminal Procedure, 1973 – ss.205, 317 and 482 – Doctrines.
Disposing of the appeals, the Court
HELD: 1.1 To prove the alleged offence under Section 336, essential elements are, the act, done rashly and negligently, to endanger human life or personal safety. To prove the guilt of the accused under Section 338, in addition to the elements under Section 336, an additional consequence of grievous hurt is to be proved. It is clear from the material placed on record that the appellant (A-4) was not in the country on the date of the incident and the license of the hotel is in the name of accused No.3. The owner of the hotel is M/s Asian Hotels (North) Limited, which is a public listed company made as accused no.1. Though there are allegations of negligence on the part of hotel and its officers who are incharge of day to day affairs of the hotel, so far as appellant– accused no.2 is concerned, no allegation is made directly attributing negligence with the criminal intent attracting provisions under Sections 336, 338 read with Section 32 of IPC. Taking contents of the final report as it is, there is no reason and justification to proceed against him only on ground that he was the Managing Director of M/s Asian Hotels (North) Limited, which runs Hotel Hyatt Regency. The mere fact that he was chairing the meetings of the company and taking decisions, by itself cannot directly link the allegation of negligence with the criminal intent. An individual either as a Director or a Managing Director or Chairman of the company can be made an accused, along with the company, only if there is sufficient material to prove his active role coupled with the criminal intent. [Paras 26-29] [222-D-E; 223-C-F]
1.2 In the case on hand principally the allegations are made against the first accused-company which runs Hotel Hyatt Regency. At the same time, the Managing Director of such company who is accused no.2 is a party by making vague allegations that he was attending all the meetings of the company and various decisions were being taken under his signatures. Principally the allegations are made only against the company and other staff members who are incharge of day to day affairs of the company. In absence of specific allegations against the Managing Director of the company and having regard to nature of allegations made which are vague in nature, it is a fit case for quashing the proceedings, so far as the Managing Director is concerned. Although it is the case of the accused no.4/General Manager, that he was also out of country on the date of incident, at the same time it is to be noticed that he is General Manager of the very hotel and whether any incharge arrangements are made of his responsibilities etc. is a matter which is to be examined only during trial. He stands on a different footing to that of, Managing Director of M/s. Asian Hotels (North) Limited, who is accused no.2. When the allegation is made that there is a violation of licence conditions and negligence against the General Manager and other staff members, appropriate findings can be recorded after full-fledged trial. It is not possible to record any finding of negligence basing on a status report, referred to, in the order passed by the Joint Commissioner of Police dated 21.08.2015. From a reading of the above Section 4 of the Act it is apparent that it prohibits smoking in any public place. However, as per the proviso, a hotel having 30 rooms or a restaurant having seating capacity of 30 persons or more and in the airports, a separate provision for smoking area or space may be made. It is clear that it obligates a hotel having 30 rooms or a restaurant with a seating capacity of 30 persons or more shall have a provision for separate smoking area. In the case on hand it is merely alleged that though the terrace was not notified as a smoking area, the injured and other resident guests of the hotel were allowed to smoke in the terrace area in the 6th Floor. It is the specific case of the appellants-accused that there is a separate smoking area at the lobby level of the hotel. In absence of making any allegations that hotel has not provided at all any smoking area in the entire hotel there is absolutely no reason or justification to prosecute the appellants-accused for the alleged offence under Section 4 of COTPA 2003. Even if the allegations are taken on the face value as mentioned in the chargesheet no offence is made out against both the appellants qua the alleged offence committed by them to prosecute under Section 4 of the COTPA 2003. So far as the prosecution under Section 4 of COTPA 2003 is concerned it is a fit case to be quashed against both the accused no.2 and also accused no.4. [Paras 30, 32 and 33] [224-B-D; 225-A-C-F-H; 226A-B]
1.3 The case of the appellant-accused no.2 in Crl.Appeal @ SLP (Crl.) No.8008 of 2018 falls within one of the categories enumerated in the case of State of Haryana v. Bhajan Lal to invoke the inherent powers under Section 482 of Cr.P.C. either to prevent the abuse of the process of court or otherwise to secure the ends of justice. Having perused the directions issued permitting the accused to appear through an advocate, such direction is within the power of the High Court in exercise of inherent powers conferred under Section 482 Cr.P.C. Having regard to nature of directions issued by the High Court, as referred above, it is not a fit case to interfere with the same, in these appeals. For the aforesaid reasons, criminal appeal @ S.L.P.(Crl.)No.8008 of 2018 filed by accused no.2 is allowed by setting aside the order dated 18.5.2018 passed in Crl.M.C. No.2209 of 2015 by the High Court of Delhi at New Delhi and consequently criminal proceedings initiated against the appellant (A-2) and the chargesheet filed in FIR No.390 of 2013 on the file of Police Station at R.K. Puram and further summoning order dated 16.5.2015 passed by the learned Metropolitan Magistrate, Patiala House Court, New Delhi stands quashed, qua the said appellant. [Paras 35-37] [226G; 227-C-E]
1.4 Criminal appeal @ S.L.P.(Crl.)No.7969 of 2018 filed by the accused No.4 is partly allowed, quashing the chargesheet filed against him in FIR No.390 of 2013 on the file at Police Station, R.K. Puram and further summoning order dated 16.05.2015 only to the extent of proceedings initiated against him for alleged offence under Section 4 of Cigarettes and Other Tobacco Products (Prohibition of Trade and Commerce, Production, Supply and Distribution) Act, 2003. Criminal appeals @ S.L.P.(Crl.) Nos. 10054-10056 of 2018 are dismissed. The observations and findings recorded in the impugned order passed by the High Court and order of Supreme Court are only for the purpose of disposal of these appeals, arising out of applications filed under Section 482 of Cr.P.C. It is open to the Trial Court to record its own findings post-trial, on its own merits depending upon the case made out strictly in accordance with law. [Paras 38-41] [227-F-H; 228-A -B]
Sushil Ansal v. State Through CBI (2014) 6 SCC 173 : [2014] 9 SCR 571 – held inapplicable.
Sunil Bharti Mittal v. Central Bureau of Investigation (2015) 4 SCC 609 : [2015] 1 SCR 377 ; Maksud Saiyed v. State of Gujarat (2008) 5 SCC 668 : [2007] 9 SCR 1113 ; Sharad Kumar Sanghi v. Sangita Rane (2015)
12 SCC 781 : [2015] 2 SCR 145 ; State of Haryana v. Bhajan Lal 1992 Supp.(1) SCC 335 : [1990] 3 Suppl. SCR 259 – relied on.
Pooja Ravinder Devidasani v. State of Maharashtra AIR 2015 SC 675 ; TGN Kumar v. State of Kerala &
Ors.(2011) 2 SCC 772 : [2011]1 SCR 436 ; Madan Mohan v. State of Rajasthan (2018)12 SCC 30 : [2017]
12 SCR 222 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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