Company Must Be Accused: J&K High Court Quashes Misbranded Insecticides Case Against Godrej Employees

Proceedings against employees invalidated due to the absence of the company as an accused, as mandated by Section 33 of the Insecticides Act. The High Court of Jammu & Kashmir and Ladakh at Jammu has quashed the proceedings against two employees of Godrej Consumer Products Ltd. Accused of manufacturing misbranded insecticides. The judgment, delivered by Justice Rajnesh Oswal, emphasized the necessity of including the company as an accused in such cases, aligning with the Supreme Court’s precedent on vicarious liability.

The case involved Sunil Kumar, Quality Control In-charge, and Sachin Sharma, Unit In-charge, at Godrej Consumer Products Ltd., who were prosecuted under Sections 29(1)(a)(i) and 33 of the Insecticides Act, 1968. The prosecution arose from a complaint by the Department of Agriculture, which alleged that the employees were responsible for manufacturing misbranded insecticides. Samples taken from the company’s manufacturing unit in Kathua were found to be non-compliant with quality standards. Despite this, the complaint did not include the company as an accused, leading to the petitioners seeking the quashing of the proceedings.

Company’s Absence in Complaint: The primary issue in this case was the absence of the company as an accused. The court observed that under Section 33 of the Insecticides Act, 1968, the prosecution of employees requires the company to be arraigned as an accused. The judgment cited the Supreme Court ruling in Himanshu v. B. Shivamurthy (2019) 3 SCC 797, which established that vicarious liability cannot be invoked against employees without prosecuting the company. The court noted, “The company is a juristic person, and its inclusion in the proceedings is imperative for holding employees vicariously liable.”

Violation of Sections 22 and 24: Although the petitioners argued that their right to rebut the laboratory report under Sections 22 and 24 of the Insecticides Act was violated, the court did not find it necessary to examine this issue. The determination of the primary issue regarding the company’s absence was sufficient to quash the proceedings.

The court’s reasoning was heavily influenced by established legal principles regarding corporate liability. Justice Rajnesh Oswal noted, “Once the company has not been arrayed as an accused, the petitioners who are employees of the company cannot be prosecuted for the commission of an offence which has been committed by the company.” This aligns with the Supreme Court’s view that the prosecution of employees alone is untenable without involving the company.

Justice Oswal remarked, “In the absence of the company being arraigned as an accused, a complaint against the petitioners was therefore not maintainable. The provisions of the Act require the company to be prosecuted for establishing vicarious liability.”

The High Court’s decision to quash the proceedings against the employees underscores the judiciary’s adherence to procedural requirements in cases of corporate liability. This judgment reinforces the necessity of prosecuting the company itself to hold its employees accountable, ensuring that legal actions align with established statutes and judicial precedents. The decision is expected to impact how future cases under the Insecticides Act are prosecuted, ensuring that both the company and its employees are held to account.

Date of Decision: 31.05.2024

Sunil Kumar & Sachin Sharma vs. Department of Agriculture