G H SHIV KUMAR JATIA versus STATE OF NCT OF DELHI

210[2019] 11 S.C.R. 1

[2019] 11 S.C.R.

SHIV KUMAR JATIA

STATE OF NCT OF DELHI

(Criminal Appeal No.1263 of 2019)

BAUGUST 23, 2019

[ABHAY MANOHAR SAPRE ANDR. SUBHASH REDDY, JJ.]

Criminal Law – Doctrine of vicarious liability –Corporatecriminal liability – Directors/Controlling authorities of company –CWhen not liable – On 16.10.13, the victim came to the hotel inquestion to meet two resident guests of the hotel who were Americancitizens – All three were having food and wine in the club on the 6[th]floor and were frequently going out on terrace for smoking – Victimfell from the terrace of 6[th] floor to the 4[th] floor of the hotel and gotDinjured – Appellants-accused charged u/ss.336,338 r/w s. 32, IPCand s.4, 2003 Act– Chargesheet inter alia alleges criminal negligenceand violation of license conditions by the hotel management – HighCourt declined to quash the FIR registered against the appellants –On appeal, held: To prove guilt u/s.338, in addition to the elementsu/s.336 (the act, done rashly and negligently, to endanger humanElife or personal safety), an additional consequence of grievous hurtis to be proved – No allegation is made against the accused no.2,Managing Director of the accused no.1 (the listed public company whichruns the Hotel in question) directly attributing negligence with thecriminal intent attracting provisions u/ss.336, 338 r/w s. 32, IPC –Mere fact that he was chairing the meetings of the company andFtaking decisions, by itself cannot directly link the allegation ofnegligence with the criminal intent – Individual either as Director/Managing Director/Chairman of the company can be made anaccused, along with the company, only if there is sufficient materialto prove his active role coupled with the criminal intent – Althoughit is the case of the accused no.4-General Manager, that he wasGalso out of country on the date of incident, he being the GeneralManager of the very hotel stands on different footing to that ofaccused no.2 – When there is allegation of violation of licenceconditions and negligence against the General Manager and otherstaff members, appropriate findings can be recorded after full-Hfledged trial – Further, in absence of the allegations that the hotel

has not provided any smoking area at all in the entire hotel, there isno 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 summoningorder 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 ofproceedings initiated u/s.4, 2003 Act – Cigarettes and Other TobaccoProducts (Prohibition of Trade and Commerce, Production, Supplyand Distribution) Act, 2003 –”Regulations for keeping places ofpublic entertainment in Delhi 1980"– Regulation 19 – Code ofCriminal 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, toendanger human life or personal safety. To prove the guilt of theaccused under Section 338, in addition to the elements underSection 336, an additional consequence of grievous hurt is to beproved. It is clear from the material placed on record that theappellant (A-4) was not in the country on the date of the incidentand the license of the hotel is in the name of accused No.3. Theowner of the hotel is M/s Asian Hotels (North) Limited, which isa public listed company made as accused no.1. Though there areallegations of negligence on the part of hotel and its officers whoare incharge of day to day affairs of the hotel, so far as appellant–accused no.2 is concerned, no allegation is made directlyattributing negligence with the criminal intent attractingprovisions under Sections 336, 338 read with Section 32 of IPC.Taking contents of the final report as it is, there is no reason andjustification to proceed against him only on ground that he wasthe Managing Director of M/s Asian Hotels (North) Limited, whichruns Hotel Hyatt Regency. The mere fact that he was chairingthe meetings of the company and taking decisions, by itself cannotdirectly link the allegation of negligence with the criminal intent.An individual either as Director or Managing Director orChairman of the company can be made an accused, along withthe company, only if there is sufficient material to prove his activerole coupled with the criminal intent. [Paras 26-29] [222-D-E;223-C-F]

ABC

A1.2 In the case on hand principally the allegations are madeagainst the first accused-company which runs Hotel HyattRegency. At the same time, the Managing Director of suchcompany who is accused no.2 is party by making vagueallegations that he was attending all the meetings of the companyand various decisions were being taken under his signatures.BPrincipally the allegations are made only against the companyand other staff members who are incharge of day to day affairs ofthe company. In absence of specific allegations against theManaging Director of the company and having regard to natureof allegations made which are vague in nature, it is fit case forquashing the proceedings, so far as the Managing Director isCconcerned. Although it is the case of the accused no.4/GeneralManager, 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 ofthe very hotel and whether any incharge arrangements are madeof his responsibilities etc. is matter which is to be examinedDonly during trial. He stands on different footing to that of,Managing Director of M/s. Asian Hotels (North) Limited, who isaccused no.2. When the allegation is made that there is violationof licence conditions and negligence against the General Managerand other staff members, appropriate findings can be recordedafter full-fledged trial. It is not possible to record any finding ofEnegligence basing on status report, referred to, in the orderpassed by the Joint Commissioner of Police dated 21.08.2015.From reading of the above Section 4 of the Act it is apparentthat it prohibits smoking in any public place. However, as per theproviso, hotel having 30 rooms or restaurant having seatingcapacity of 30 persons or more and in the airports, separateFprovision for smoking area or space may be made. It is clear thatit obligates hotel having 30 rooms or restaurant with seatingcapacity of 30 persons or more shall have provision for separatesmoking area. In the case on hand it is merely alleged that thoughthe terrace was not notified as smoking area, the injured andGother resident guests of the hotel were allowed to smoke in theterrace area in the 6th Floor. It is the specific case of theappellants-accused that there is separate smoking area at thelobby level of the hotel. In absence of making any allegationsthat hotel has not provided at all any smoking area in the entirehotel there is absolutely no reason or justification to prosecuteHthe appellants-accused for the alleged offence under Section 4 of

COTPA 2003. Even if the allegations are taken on the face valueas mentioned in the chargesheet no offence is made out againstboth the appellants qua the alleged offence committed by themto prosecute under Section 4 of the COTPA 2003. So far as theprosecution under Section 4 of COTPA 2003 is concerned it is afit case to be quashed against both the accused no.2 and alsoaccused no.4. [Paras 30, 32 and 33] [224-B-D; 225-A-C-F-H; 226-A-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 categoriesenumerated in the case of State of Haryana v. Bhajan Lal to invokethe inherent powers under Section 482 of Cr.P.C. either to preventthe abuse of the process of court or otherwise to secure the endsof justice. Having perused the directions issued permitting theaccused to appear through an advocate, such direction is withinthe power of the High Court in exercise of inherent powersconferred under Section 482 Cr.P.C. Having regard to nature ofdirections issued by the High Court, as referred above, it is nota fit case to interfere with the same, in these appeals. For theaforesaid reasons, criminal appeal @ S.L.P.(Crl.)No.8008 of 2018filed by accused no.2 is allowed by setting aside the order dated18.5.2018 passed in Crl.M.C. No.2209 of 2015 by the High Courtof Delhi at New Delhi and consequently criminal proceedingsinitiated against the appellant (A-2) and the chargesheet filed inFIR No.390 of 2013 on the file of Police Station at R.K. Puramand further summoning order dated 16.5.2015 passed by thelearned Metropolitan Magistrate, Patiala House Court, NewDelhi stands quashed, qua the said appellant. [Paras 35-37] [226-G; 227-C-E]

1.4 Criminal appeal @ S.L.P.(Crl.)No.7969 of 2018 filed bythe accused No.4 is partly allowed, quashing the chargesheetfiled 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 onlyto the extent of proceedings initiated against him for allegedoffence under Section 4 of Cigarettes and Other Tobacco Products(Prohibition of Trade and Commerce, Production, Supply andDistribution) Act, 2003. Criminal appeals @ S.L.P.(Crl.) Nos.10054-10056 of 2018 are dismissed. The observations and findingsrecorded in the impugned order passed by the High Court andorder of Supreme Court are only for the purpose of disposal of

Athese appeals, arising out of applications filed under Section 482of Cr.P.C. It is open to the Trial Court to record its own findingspost-trial, on its own merits depending upon the case made outstrictly in accordance with law. [Paras 38-41] [227-F-H; 228-A-B]

BSushil 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 Saiyedv. State of Gujarat (2008) 5 SCC 668 : [2007] 9 SCR1113 ; Sharad Kumar Sanghi v. Sangita Rane (2015)C12 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 AIR2015 SC 675 ; TGN Kumar v. State of Kerala &DOrs.(2011) 2 SCC 772 : [2011]1 SCR 436 ; MadanMohan v. State of Rajasthan (2018)12 SCC 30 : [2017]12 SCR 222 – referred to.

Case Law Reference

CRIMINAL APPELLATE JURISDICTION : Criminal AppealGNo. 1263 of 2019.

From the Judgment and Order dated 18.05.2018 of the High Courtof Delhi at New Delhi in Crl. M.C. No. 2209 of 2015.

With

HCriminal Appeal Nos. 1264, 1265-1267 of 2019.

Sidharth Luthra, Mukul Gupta, Vikas Singh, Anupam Lal Das, Sr.Advs., Dr. Lalit Bhasin, Ms. Nina Gupta, Ms. Palak Chadha, DhawalJain, Ms. Ruchika Joshi, Mudit Sharma, P. V. Yogeswaran, NeerajChaudhari, Ravjyot Singh, Ms. Pooja Dhar, Sumit Mishra, Yatin Savlani,Ankur Chawla, Ms. Pallavi Langar, R. K. Mohit Gupta, Ms. Shristi Juneja,Anoopam N. Prasad, Ms. Mehaak Jaggi, Ms. Ankita Tiwari, KaranBurman, Viresh B. Saharya, Akshat Agarwal, Sahil Verma, Chirag M.Shroff, Ms. Mahima C. Shroff, B. V. Balram Das, Advs. for theappearing parties.

The Judgment of the Court was delivered by

R.SUBHASH REDDY, J.

1. Leave granted.

2. These three criminal appeals are filed against the commonjudgment and order dated 18.05.2018 passed by the High Court of Delhiat New Delhi in Crl. M.C. Nos. 2209, 2208 and 3480 of 2015, as such,they are disposed of by this common judgment and order.

3. Criminal Appeal @ SLP (Crl.)No.7969 of 2018 is filed by thepetitioner in Crl.M.C.No.2208 of 2015 who is accused No.4. Criminalappeal @ SLP(Crl.)No.8008 of 2018 is filed by the petitioner in Crl.M.C.No.2209 of 2015, who is accused No.2, whereas criminal appeals @SLP(Crl.)Nos.10054-56 of 2018 are filed by the complainant aggrievedby the directions issued in paragraph 143 of the impugned judgment andcommon order.

4. The aforesaid criminal misc. cases in Crl.M.C.Nos. 2208 of2015 and 2209 of 2015 are filed by accused Nos. 4 and 2 respectively,before the High Court of Delhi at New Delhi under Section 482 of Cr.P.C.,for quashing of the chargesheet filed against them and further questioningthe order dated 16.5.2015 passed by the learned Metropolitan Magistrate,Patiala House Court, New Delhi in FIR No.390 of 2013 on the file ofPolice Station, R.K. Puram. By the impugned chargesheet the appellants/accused in criminal appeal nos. @ SLP(Crl.)No.7969 of 2018 andSLP(Crl.)No.8008 of 2018 are sought to be prosecuted for the offencesunder Sections 336 and 338 read with Section 32 of the Indian PenalCode, 1860 (for short IPC) and Section 4 of the Cigarettes and OtherTobacco Products (Prohibition of Trade and Commerce, Production,Supply and Distribution) Act, 2003 [hereinafter referred as ‘COTPA2003’].

A5. Initially, crime in FIR No.390 of 2013 on the file of Police Station,R.K. Puram was registered on 19.10.2013 for the alleged commissionof offence punishable under Section 308 IPC. After investigation,investigating agency, having found no ingredients for offence underSection 308 of IPC, ultimately charged the appellants Aseem Kapoor-accused No.4 and Shiv Kumar Jatia-accused No.2 and six others forBthe offences under Section 336/338 read with Section 32 of IPC 1860and Section 4 of COTPA 2003.

6. Necessary facts in brief for disposal of these appeals are asunder.

C7. At first instance on 17.10.2013, case, on receipt of informationthat one Gaurav Rishi, resident of B-18, G.K. II, New Delhi, got admittedin Fortis Hospital, Vasant Kunj, vide MLC No.2240 of 2013 with thealleged history of fall from stairs, was registered for offence under Section308 of IPC 1860. Subsequently, on investigation, it was found that theinjured Gaurav Rishi fell from the terrace of 6[th] floor to 4[th] floor of theDhotel i.e. Hyatt Regency. Investigation further reveals that the injuredhas joined two resident guests of the hotel who were American citizensby name Ms. Rebecca and Ms. Margarita. It is alleged that all of threewere having food and wine in club which was on the 6[th] floor and theywere frequently going out on terrace for smoking. During the course ofEinvestigation, statements and supplementary statements of Ms. Rebeccaand Ms. Margarita were recorded who appear to have stated that on16.10.2013 Gaurav Rishi(injured) came to hotel for social visit to meetthem and all of them were sitting in the executive lounge at the 6[th] Floorof the hotel. There is terrace adjacent to the lounge to which hotelpermitted its guests for smoking.F

8. It is the case of the prosecution that terrace was dark andthere was no light on the terrace and hotel staff did not stop them fromgoing there. Precisely it is the allegation that there was lapse on thepart of the hotel management in taking safety measures for the guestsand they have allowed the guests to terrace area which was not safe.GReferring to copy of the RTI reply received from the office of DeputyHealth Officer, South Delhi Municipal Corporation regarding HyattRegency, it is alleged that no health trade license was granted to thehotel for the terrace area adjoining 6[th ]floor. Chargesheet further revealsthat, Licensing Branch, Delhi Police, Delhi has issued license whichHwas renewed upto 31.03.2015 in the name of P.R.Subramanian, who is

also one of the accused in the case, authorising him to keep place ofpublic entertainment known as Hyatt Regency. Referring to the conditionsof license for 4 star and above category issued under regulation 19 ofthe “Regulations for keeping places of public entertainment in Delhi 1980”,it is the case of the prosecution that the Hyatt Hotel has not adhered tothe conditions of license. Further alleging criminal negligence and illegalomission on part of the hotel management made the following allegations.The operative portion of the chargesheet dated 16.03.2015 reads asunder:-

“1. M/s Asian Hotels (North) through its Management DirectorMr. Shiv Jatia – it is company which looks after the HyattRegency Hotel. And is responsible for every criminal act done inthe hotel.

2. Shiv Jatia, Managing Director Hyatt Hotel - He is the onlynon-independent and Executive Director of the Company. He ispresent in all the board meeting as the chairperosn and all decisionsof the company/Hotel are taken under his signature. He furtherauthorized Mr. PR. Subramanian to apply for lodging license ofthe company. Therefore, he is overall responsible for all omissionand commission of its officials, violation of lodging license/healthtrade license with regards to safety of its guests.

3. Sh. P.R. Subramanian – The lodging license of the Hyatt hotelhas been granted in his name and he is responsible for violation oflodging license/health trade license with regards to safety of itsguests due to which the incident occurs.

4. Sh. Aseem Kapoor S/o Sh. Rajinder Pal Kapoor GeneralManager, Hyatt Hotel, R.K. Puram – He is general manager ofthe Hyatt Regency and has overall responsibility for looking afterthe day to day affair of the hotel and also for omission andcommission of its officials with regards to safety of its guests.

5. Lt. Col. Deepak Khanijou (Ret.), Director of Security. He isresponsible for overall security of the hotel/guests, access toprohibited areas, lightening in the hotel, warning sign boards,installation of CCTV and deployment of staff for safety andsecurity of guests.

6. Mr. Karan Lal S/o Shri Vijay Lal, Asstt. Front office Manager,Hyatt Regency. His role is to supervise the running of the frontoffice during his shift hours. On the day of incident he was theshift incharge and lounge manager informed him about the incidentbut he failed to provide the timely rescue of the injured to thehospital.

7. Pawan Kumar Singh (Asstt. Manager Food and Beverage)Hyatt Regency Delhi, Bikaji Cama Place, New Delhi - He wasthe incharge of the lounge situated at 6[th] floor. During his dutythe terrace was opened to the guests, despite knowing that theterrace area was not proper smoking area and was not properlyClit and safe.

8. Amit Ghildiyal S/o Sh.M.D. Ghildiyal, Food and BeverageTrainee, Hyatt Hotel – He was the incharge of the lounge situatedat 6[th] floor. During his duty the terrace was opened to the guestsdespite knowing that the terrace area was not proper smokingDarea and was not properly lit and safe, whose names are kept inthe column No.11 (without arrest) of the challan for the offencesu/s 336,338 and with 32 IPC and 4 COTPA.”

9. The appellants-accused have filed criminal misc. cases beforethe High Court of Delhi under Section 482 of Cr.P.C. seeking quashingEof the impugned proceedings including the summoning order dated16.05.2015 passed by the Metropolitan Magistrate, Patiala House Court,New Delhi. The said petitions are disposed of by the impugned commonorder dated 18.05.2018 by the High Court. Though the order is bulkybut most part of the order refers to contentions and abstracts from variousFdocuments. High Court has opined that it is not appropriate to quash theFIR No. 390 of 2013 at Police Station, R.K. Puram, which was registeredagainst the appellants-accused for offence under Sections 336 and 338read with Section 32 of IPC and Section 4 of COTPA, 2003. Whiledeclining to quash the proceedings as prayed for, the petitioners in criminalmisc. cases were allowed to appear through an advocate whoseGvakalatnama should be on record.

10. We have heard Sri Sidharth Luthra, learned senior counsel forthe appellant in SLP(Crl.) No.8008 of 2018, Sri Mukul Gupta, learnedsenior counsel for the appellant in SLP(Crl.) No.7969 of 2018 and SriAnupam Lal Das, learned senior counsel for the appellant inHSLP(Crl.)Nos.10054-10056 of 2018.

11. Learned senior counsel Sri Sidharth Luthra, has taken usthrough the impugned order passed by the High Court and other materialsplaced on record and made the following submissions:-

12. From the allegations as stated in the final report/chargesheet,submitted by the police, no case is made out to proceed against theappellant-accused no.2 for the alleged offences under Sections 336, 338read with Section 32 of IPC and Section 4 of COTPA 2003. Theappellant-accused no.2 was overseas from 12.10.2013 to 19.10.2013.The High Court has considered the case as if “investigation is pending”.To attract the ingredients of Section 336, an act, done rashly andnegligently, to endanger human life or personal safety are essentialelements. There are no such ingredients to prosecute the appellant-accused no.2. To attract Section 338 of IPC in addition to the above saidacts, as required to prosecute for the offence under Section 336, additionalingredients of grievous hurt should be alleged and proved. The appellant-accused No.2 who is the Managing Director of M/s Asian Hotels (North)Limited, which is public listed company, runs hotel Hyatt Regency, isneither the occupier nor the owner nor the licensee of the hotel. Theinjured person and other resident guests of the hotel, with whom he washaving food and wine, insisted upon going to terrace area in question tosmoke, despite there being another designated area in the hotel. M/sAsian Hotels (North) Ltd., who is made accused no.1 is the owner ofthe hotel. Merely because the appellant was holding position as ManagingDirector, in absence of specific allegations of negligence with the criminalintent, is not liable for prosecution. The cause causans for the incidentwas the act of injured, climbing wall with height of 2 feet 8 incheswith 1 foot 8 inches fence on the mumty and walking there. The accusedno.1 is the owner of the hotel and no individual can be made accusedalong with the company, unless there is sufficient evidence of his activerole with criminal intent. The High Court of Delhi has wrongly placedreliance on the judgment of this Court in the case of Sushil Ansal vs.State Through CBI[1]and rejected the petition filed by the appellant.

13. In support of his case learned counsel Sri Sidharth Luthrarelied on the judgments of this Court in the case of Sunil Bharti Mittalvs. Central Bureau of Investigation[2]; Maksud Saiyed vs. State of

1 (2014) 6 SCC 173

2 (2015) 4 SCC 609

ABC

AGujarat[3]; Sharad Kumar Sanghi vs. Sangita Rane;[4] and PoojaRavinder Devidasani vs. State of Maharashtra[5].

14. Learned counsel referred to the status report, extracted in theorder dated 21.08.2015 passed by the Joint Commissioner of Police, bywhich representation of Ms. Gauri Rishi was rejected.B15. Learned senior counsel Sri Mukul Gupta appearing for theappellant-accused no.4, who was the General Manager of the hotel hasmade the following submissions:-

16. By looking at the allegations made in the chargesheet submittedCby the police, no case is made out to proceed against him for the allegedoffences under Sections 336, 338 read with Section 32 of IPC and Section4 of COTPA 2003. The incident occurred only due to sheer negligenceof the injured who walked out to the terrace for smoking and climbed onthe parapet wall with the height of 2 feet 8 inches which was having

Dadditional fence of 1 foot 8 inches. The appellant-accused No.4 wasalso out of country on the date of incident. Only on the ground that theappellant-accused no.4 is General Manager, he cannot be heldvicariously liable, as he is not even the licensee of the hotel.

17. Learned senior counsel while referring to the judgment in theEcase of Sunil Bharti Mittal vs. Central Bureau of Investigation[2] andrelied on other judgments in support of his case.

18. Learned senior counsel Sri Anupam Lal Das appearing forthe appellant in Criminal Appeal @ SLP(Crl.)Nos.10054-10056 of 2018,filed by the sister of the injured, has made the following submissions:-F

19. Having regard to negligence and violation of conditions oflicense, made against the appellants-accused nos. 2 and 4, no case ismade out to quash the proceedings. The appellants-accused being theManaging Director and the General Manager of the company, cannotescape their responsibility for their negligence and other incharge personsGof the hotel, which resulted in an unfortunate incident in which the brotherof the appellant has suffered grievous hurt. There are absolutely nogrounds to interfere with the impugned order passed by the High Court.

3 (2008) 5 SCC 6684 (2015) 12 SCC 781H5 AIR 2015 SC 675

At the same time, the High Court has committed error in issuing directionsin cryptic and unreasoned manner, in granting exemption for personalappearance of the accused. The exemption for appearing in person, is amatter to be considered under Section 205 and/or Section 317 of Cr.P.C.by the concerned Magistrate.

20. Learned counsel has placed various decisions of this Courtwherein scope of Section 482 Cr.P.C. is considered. Learned counselalso relied on in support of his case, in the case of TGN Kumar vs.State of Kerala & Ors.[6] and also the judgment in the case of MadanMohan vs. State of Rajasthan[7].

21. We have considered the detailed submissions, argumentsadvanced by the learned counsel on both the sides and also perusedorder and other materials placed on record.

22. We have perused the impugned order passed by the HighCourt. The High Court has referred to the contentions in detail and hasarrived at the conclusion that it is not fit case to quash the proceedings.The High Court has mainly relied on the judgment of this Court in thecase of Sushil Ansal vs. State Through CBI[1]. Having regard to theorder which we propose to pass, we feel it is not desirable to recordfindings in detail, except to the extent required for the disposal of theseappeals. As much as these appeals are filed against the order passed onapplication for quashing the proceedings, under Section 482 of Cr.P.C.,any findings on various contentious issues will prejudice the case ofparties during the trial.

23. At the outset it is to be noticed that M/s Asian Hotels (North)-accused No.1, which is the listed public company runs Hotel HyattRegency, of which accused No.4 is the General Manager and otherpersonnel who are incharge of various departments are also made accusedapart from the appellants (accused). So far as accused No.2 is concerned,he is the Managing Director of M/s Asian Hotels (North) Limited whichcompany is made first accused in the case. The appellant-Shiv KumarJatia is sought to be prosecuted only on the ground that he is the ManagingDirector of M/s Asian Hotels (North) Limited, which runs the HotelHyatt Regency and is the only non-independent and Executive Directorof the company and chairs the Board meeting of the company and

6 (2011) 2 SCC 772

7 (2018) 12 SCC 30

Adecisions are taken under his signatures. Further it is pleaded that heauthorized Mr. P.R. Subramanian to apply for lodging license of thecompany. Therefore, he is overall responsible for all omissions andcommissions of its officials, violation of lodging license/health trade licenseetc.

B24. So far as accused No.4 – Aseem Kapoor is concerned, it isalleged that he is the General Manager of the Hyatt Regency. As suchhe is overall responsible for looking after the day to day affair of thehotel and also is responsible for omissions and commissions of its staffwith regard to safety of guests.

C25. Mr. P.R. Subramanian, is also made as one of the accused onwhose name the lodging license of the hotel has been granted.

26. To prove the alleged offence under Section 336, essentialelements are, the act, done rashly and negligently, to endanger humanlife or personal safety. To prove the guilt of the accused under SectionD338, in addition to the elements under Section 336, an additionalconsequence of grievous hurt is to be proved. It is clear from the materialplaced on record that the appellant (A-4) was not in the country on thedate of the incident and the license of the hotel is in the name of accusedNo.3 namely P.R. Subramanian. The owner of the hotel is M/s AsianHotels (North) Limited, which is public listed company made as accusedEno.1. Taking on the face value the allegations made against the appellant(accused no.2) in the chargesheet, so far as Shiv Kumar Jatia he issought to be prosecuted for the aforesaid offences only on the groundthat he is Managing Director of M/s Asian Hotels (North) Limited,which runs Hotel Hyatt Regency and also on the ground that he is theFonly non-independent and Executive Director of the Company who chairsmeeting of the company and signatory for various decisions.

27. The liability of the Directors /the controlling authorities ofcompany, in corporate criminal liability is elaborately considered bythis Court in the case of Sunil Bharti Mittal[2]. In the aforesaid case,Gwhile considering the circumstances when Director/person in charge ofthe affairs of the company can also be prosecuted, when the company isan accused person, this Court has held, corporate entity is an artificialperson which acts through its officers, Directors, Managing Director,Chairman, etc. If such company commits an offence involving mensrea, it would normally be the intent and action of that individual whoHwould act on behalf of the company. At the same time it is observed

that it is the cardinal principle of criminal jurisprudence that there is novicarious liability unless the Statute specifically provides for. It is furtherheld by this Court, an individual who has perpetrated the commission ofan offence on behalf of the company can be made an accused, alongwith the company, if there is sufficient evidence of his active role coupledwith criminal intent. Further it is also held that an individual can beimplicated in those cases where statutory regime itself attracts the doctrineof vicarious liability, by specifically incorporating such provision.28. Though there are allegations of negligence on the part of hoteland its officers who are incharge of day to day affairs of the hotel, so faras appellant–accused no.2 Shiv Kumar Jatia is concerned, no allegationis made directly attributing negligence with the criminal intent attractingprovisions under Sections 336, 338 read with Section 32 of IPC. Takingcontents of the final report as it is we are of the view that, there is noreason and justification to proceed against him only on ground that hewas the Managing Director of M/s Asian Hotels (North) Limited, whichruns Hotel Hyatt Regency. The mere fact that he was chairing themeetings of the company and taking decisions, by itself cannot directlylink the allegation of negligence with the criminal intent, so far asappellant–accused no.2. Applying the judgment in the case of SunilBharti Mittal[2] we are of the view that the said view expressed by thisCourt, supports the case of appellant/accused no.2.

29. By applying the ratio laid down by this Court in the case ofSunil Bharti Mittal[2] it is clear that an individual either as Director ora Managing Director or Chairman of the company can be made anaccused, along with the company, only if there is sufficient material toprove his active role coupled with the criminal intent. Further the criminalintent alleged must have direct nexus with the accused. Further in thecase of Maksud Saiyed vs. State of Gujarat & Ors.[3] this Court hasexamined the vicarious liability of Directors for the charges levelledagainst the Company. In the aforesaid judgment this Court has heldthat, the Penal Code does not contain any provision for attaching vicariousliability on the part of the Managing Director or the Directors of theCompany, when the accused is Company. It is held that vicariousliability of the Managing Director and Director would arise provided anyprovision exists in that behalf in the Statute. It is further held that Statutesindisputably must provide fixing such vicarious liability. It is also heldthat, even for the said purpose, it is obligatory on the part of the

Acomplainant to make requisite allegations which would attract theprovisions constituting vicarious liability.

30. In the judgment of this Court in the case of Sharad KumarSanghi vs. Sangita Rane[4] while examining the allegations made againstthe Managing Director of Company, in which, company was not madeBa party, this Court has held that when the allegations made against theManaging Director are vague in nature, same can be the ground forquashing the proceedings under Section 482 of Cr.P.C. In the case onhand principally the allegations are made against the first accused-company which runs Hotel Hyatt Regency. At the same time, theManaging Director of such company who is accused no.2 is party byCmaking vague allegations that he was attending all the meetings of thecompany and various decisions were being taken under his signatures.Applying the ratio laid down in the aforesaid cases, it is clear thatprincipally the allegations are made only against the company and otherstaff members who are incharge of day to day affairs of the company.DIn absence of specific allegations against the Managing Director of thecompany and having regard to nature of allegations made which arevague in nature, we are of the view that it is fit case for quashing theproceedings, so far as the Managing Director is concerned.

31. The order dated 21.08.2015 passed by the Joint Commissioner

Eof Police by which representation of Ms. Gauri Rishi in compliance oforder dated 03.07.2015 passed by this Court, was rejected, is also placedon record. The said order rejecting the representation regarding therenewal of licence to the Hotel Hyatt Regency, refers to status reportsubmitted by D.C.P. (South) District. In the said report it is stated thatthere is terrace on the 6[th] floor adjoining the Regency Club which isFused as smoking area for the guests because the Regency Club is non-smoking area for the guests. At 11.30/40 p.m. both the ladies residentguests of the hotel who are American citizens and Gaurav Rishi (injured)went to the terrace for smoking. It is further stated that while both ladieswere busy in gossiping and smoking, Gaurav Rishi (injured) climbed overGand came at the roof of stair case (Mumty) which is at front corner ofthe terrace. It is also stated that the staircase of terrace is for emergencyexit and was under renovation. It has parapet wall of about 2 feet 8inches height, with additional 1 foot 8 inch of iron railing.

32. With reference to negligence and alleged violation of licenceHconditions by the General Manager and other staff members of the hotel,

who are incharge of day to day affairs of the hotel, is matter which isto be examined during trial. 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 thevery hotel and whether any incharge arrangements are made of hisresponsibilities etc. is matter which is to be examined only during trial.He stands on different footing to that of, Managing Director of M/s.Asian Hotels (North) Limited, who is accused no.2. When the allegationis made that there is violation of licence conditions and negligenceagainst the General Manager and other staff members, appropriatefindings can be recorded after full-fledged trial. It is not possible to recordany finding of negligence basing on status report, referred to, in theorder passed by the Joint Commissioner of Police dated 21.08.2015.

33. The appellants (accused) are also sought to be prosecutedfor the alleged offence under Section 4 of COTPA 2003. To prosecutethe appellants-accused for the offence under Section 4 of COTPA 2003it is alleged that the terrace on the 6[th] Floor was open to the guests,despite knowing that terrace area was not proper smoking area andwas not properly lit and safe. Section 4 and proviso to the said Section ofCOTPA 2003 read as under:-

“4. Prohibition of smoking in public place.-No person shall smokein any public place:

Provided that in hotel having 30 rooms or restaurant havingseating capacity of thirty persons or more and in the airports, aseparate provision for smoking area or space may be made.”

From reading of the above Section 4 of the Act it is apparentthat it prohibits smoking in any public place. However, as per the proviso,a hotel having 30 rooms or restaurant having seating capacity of 30persons or more and in the airports, separate provision for smokingarea or space may be made. It is clear that it obligates hotel having 30rooms or restaurant with seating capacity of 30 persons or moreshall have provision for separate smoking area. In the case on hand itis merely alleged that though the terrace was not notified as smokingarea, the injured and other resident guests of the hotel were allowed tosmoke in the terrace area in the 6[th] Floor. It is the specific case of theappellants-accused that there is separate smoking area at the lobbylevel of the hotel. In absence of making any allegations that hotel has notprovided at all any smoking area in the entire hotel there is absolutely

Ano reason or justification to prosecute the appellants-accused for thealleged offence under Section 4 of COTPA 2003. Even if the allegationsare taken on the face value as mentioned in the chargesheet no offenceis made out against both the appellants qua the alleged offence committedby them to prosecute under Section 4 of the COTPA 2003. For theaforesaid reasons, so far as the prosecution under Section 4 of COTPAB2003 is concerned it is fit case to be quashed against both the accusedno.2 – Shiv Kumar Jatia and also accused no.4 – Aseem Kapoor.

34. From reading of the impugned order passed by the HighCourt we are of the view that the High Court mainly relied on the judgmentCin the case of Sushil Ansal vs. State Through CBI[1]. In the aforesaidcase which relates to Uphaar Cinema which caught fire and resulted indeath of number of persons was case where repair to the transformerthat had been made on the day before the incident, was not properlydone. The faulty repair to the transformer resulted in loose connectionthat led to the catching of fire to the transformer and all the cars in theDparking lot were burnt in the fire which resulted in suffocation for viewersof the cinema in the hall. Further it was held that in that case there wasan addition of an 8-seater box that closed off the exit on the right side ofthe balcony. It was also found that the owners of the cinema haveadded 52 additional seats to the theatre which blocked the gangway onEthe right side of the movie hall. In the aforesaid case both A-1 and A-2were found guilty not by virtue of their position in the company, butrather by virtue of specific allegations made against them. In the aforesaidcase accused themselves were found to be occupiers, there were grossstatutory violations, which had direct nexus with the death of the victims.FFurther looking at the facts and circumstances of the present case, thesaid case cannot be applied against the appellants-accused.

35. Having regard to the case law referred above by applying thefacts of the case on hand we are of the view that the case of the appellant-accused no.2 Shiv Kumar Jatia in Crl.Appeal @ SLP (Crl.) No.8008 ofG2018 falls within one of the categories enumerated in the case of Stateof Haryana v. Bhajan Lal[8] to invoke the inherent powers under Section482 of Cr.P.C. either to prevent the abuse of the process of court orotherwise to secure the ends of justice.

36. In the criminal appeals @ SLP (Crl.)Nos.10054-10056 of 2018,the sister of the victim, has also questioned the directions issued by theHigh Court allowing them to appear before the Trial Court through anadvocate and by permitting them to appear as and when there is specificdirection by the Trial Court to appear before such court. It is the case ofthe appellant-complainant in the above said criminal appeals that whiledismissing the criminal misc. cases filed under Section 482 of Cr.P.C.,the High Court has committed error in issuing directions as referredabove. It is the case of the said appellant that to dispense with personalappearance and allowing the accused through an advocate can beconsidered only by the Magistrate under Section 205 and/or 317 of Cr.P.C.But without recording any reason the High Court has issued suchdirections which are impugned in the appeals. Having perused thedirections issued permitting the accused to appear through an advocate,such direction is within the power of the High Court in exercise of inherentpowers conferred under Section 482 Cr.P.C. Having regard to nature ofdirections issued by the High Court, as referred above, we are of theview that it is not fit case to interfere with the same, in these appeals.37. For the aforesaid reasons, criminal appeal @S.L.P.(Crl.)No.8008 of 2018 filed by Shiv Kumar Jatia - accused no.2 isallowed 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 andconsequently criminal proceedings initiated against the appellant (A-2)and the chargesheet filed in FIR No.390 of 2013 on the file of PoliceStation at R.K. Puram and further summoning order dated 16.5.2015passed by the learned Metropolitan Magistrate, Patiala House Court,New Delhi stands quashed, qua the said appellant.

38. Criminal appeal @ S.L.P.(Crl.)No.7969 of 2018 filed by theaccused No.4 - Aseem Kapoor is partly allowed, quashing thechargesheet filed against him in FIR No.390 of 2013 on the file at PoliceStation, R.K. Puram and further summoning order dated 16.05.2015only to the extent of proceedings initiated against him for alleged offenceunder Section 4 of COTPA 2003.

39. Criminal appeals @ S.L.P.(Crl.)Nos.10054-10056 of 2018 filedby Ms. Gauari Rishi are dismissed.

40. We make it clear that the observations and findings recordedin the impugned order dated 18.05.2018 passed by the High Court of

ADelhi at New Delhi and order of this Court are only for the purpose ofdisposal of these appeals, arising out of applications filed under Section482 of Cr.P.C.

41. We further make it clear that it is open to the Trial Court torecord its own findings post-trial, on its own merits depending upon theBcase made out strictly in accordance with law.

Divya Pandey

Appeals disposed of.