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Hindustan Unilever Limited v. The State of Madhya Pradesh

Criminal Appeal · 2020 INSC 634Decided 5 Nov 2020
Criminal Appeal No. 715 of 2020
Justice L. Nageswara Rao · Justice Hemant Gupta · Justice Ajay Rastogi

Background

In 1989, a food inspector found a sample of Vanaspati Ghee manufactured by Hindustan Unilever Limited (then Hindustan Lever Limited) to be adulterated, and a complaint was filed under the old Prevention of Food Adulteration Act, 1954. After decades of litigation, the trial court in 2015 convicted only the company's nominated officer, Dr. Nirmal Sen, without ever actually convicting the company itself, even though company-related accused had also originally been arrayed. On revision, the Madhya Pradesh High Court sent the case back to the trial court to fix this defect by deciding the company's guilt too: more than 30 years after the original incident.

Decision Breakdown

The Supreme Court held that under Section 17 of the 1954 Act (mirroring Section 141 of the Negotiable Instruments Act), a company and its responsible nominated officer can only be held guilty together: the officer cannot be convicted unless the company itself has also been held guilty in the same proceeding. Since the trial court never convicted the company, the officer's conviction could not stand on its own, and sending the matter back for a fresh trial after 30 years to patch this gap was unfair to the individual who had already endured decades of prosecution. The Court also rejected the separate argument that the milder 2006 Food Safety Act's punishments should apply retroactively, holding that Section 97 of the 2006 Act expressly protects punishments and proceedings under the repealed 1954 Act. On the core defect regarding the company's non-conviction, the Court allowed the appeals, set aside the High Court's remand order, and dismissed the complaint entirely.

Lesson Learnt

When a law makes a company and its responsible officer jointly liable for an offence, prosecutors must ensure both are actually held guilty together: an individual cannot be left to carry a conviction alone if the company was never convicted, and courts will not let decades-old prosecutions be revived indefinitely to fix such procedural gaps.

Official source (sci.gov.in)View Judgment (PDF)

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