Govt has eminent domain to acquire land, but …

The Supreme Court, in the case of Thermax Ltd vs KM Johny and others, said that unlike civil law, criminal law does not recognise the principle of ?vicarious liability? of directors of companies.

In this case, complainant Johny, the proprietor of SSI firm, had initiated criminal proceedings against Thermax and its former management?chairperson, managing director and mangers?after certain disputes over the termination of a job contract arose.

While the Bombay High Court had allowed the prosecution to proceed, the apex court quashed the complaint and set aside the high court order on the ground that there was no specific allegation against the members of the board of directors or senior executives but they were roped in for being in the management of the company at the relevant time.

It said that the complaint lacked necessary ingredients of cheating and the concept of ?vicarious liability? is unknown to criminal law.

According to the apex court, the offence of cheating and misappropriation of property could be filed only against the company and not against the persons in such circumstances.

Provisions of the Negotiable Instruments Act 1881 and the Industrial Disputes Act 1947 cannot be imported into the offences under the Indian Penal Code, the court explained.

Senior counsel AM Singhvi and CS Vaidyanathan, appearing for the Pune-based company, submitted that the courts below ought to have considered that the dispute arose out of a contract and a constituted remedy was only before a civil court.

Bail for duty evasion easier

Stating that that offences like evading customs and excise duty are non-cognisable and bailable, the Supreme Court has held that an excise officer cannot arrest an accused without warrants as such crimes cannot be equated with criminal offences.

Rejecting the government?s stand that the offenders under the Central Excise Act, 1944, and the Customs Act, 1962, were not entitled to bail in the case of Choith Harchandani vs Union of India, the apex court said that the main objective of the Customs and Excise Act was the recovery of excise duties and not really to punish for infringement of its provisions as the offences under the 1944 Act cannot be equated with offences under the Indian Penal Code, which have been made non-cognisable and non-bailable.

Under the Criminal Procedure Code, a police officer has no authority to arrest without warrant in respect of a non-cognisable offence.

Additional solicitor general PP Malhotra submitted that in such matters, police officers have been restrained from investigating into the offences and arresting without warrant, but the concerned customs, excise, foreign exchange, food authorities, were not police officers within the meaning of the Code and they could, accordingly, arrest such persons for the purposes of the investigation, their interrogation and for finding out the manner and extent of evasion of the excise duty, customs duty and foreign exchange etc.

The purpose of acquired land …

The Supreme Court has reiterated that land acquired by the government or its instrumentalities for a specific public purpose cannot be changed and transferred to private individuals or companies.

While upholding the Karnataka High Court?s decision to quash the acquisition proceedings of over 37 acres of land in south Bangalore in the case of Royal Orchid Hotels Ltd and another vs G Jayarama Reddy and others, the apex court said that though the government enjoys power of ?eminent domain? to compulsorily acquire any land for public purpose, yet it cannot legitimise any fraudulent act of the authorities.

In this case, the Karnataka State Tourism Development Corporation had acquired the private land through the state government for the ostensible purpose of a golf-cum-hotel resort. However, instead of constructing the resort, it chose to transfer the land to a private real estate developer for a group housing project and also other corporate houses.

indu.bhan@expressindia.com