Manish Agarwal And Another vs. State Of Punjab And Another

Facts

The appellants, directors of M/s Insta Chemi Private Limited, are appealing against the dismissal of their bail application by the Additional Sessions Judge, Sangrur. The case stems from FIR No. 0025 dated 20.03.2024, registered under various sections of the IPC, Punjab and Excise Act, SC/ST Act, and Trade Marks Act. The FIR was based on a complaint alleging that the deceased consumed poisonous liquor supplied by the appellants. The appellants claim they supplied denatured ethyl alcohol, branded "INSTASOL," for industrial use, with all sales documented, invoiced, and accompanied by GST payments. They assert that the product is used for cleaning and industrial purposes, and they had no knowledge of its misuse for manufacturing illicit liquor. The police recovered drums of Ethanol manufactured by the appellants from a co-accused, Harmanpreet Singh, who allegedly used it to make spurious liquor. The appellants were arrested on 11.04.2024, and a final report has been filed.

Held

The Court allowed the appeal and ordered the release of the appellants on bail. The Court found that the only role attributed to the appellants was the supply of Ethanol to co-accused Harmanpreet Singh @ Harman and Gurlal, who allegedly manufactured liquor using this product. However, the Court noted a lack of evidence to suggest that the appellants had conspired with these co-accused in any manner. Furthermore, the Court observed that the State had failed to present any evidence indicating that the appellants were capable of influencing prosecution witnesses or that there was a likelihood of evidence tampering by them. Given these circumstances, the Court concluded that the appeal deserved to be allowed. The operative direction was to release the appellants on bail, subject to furnishing bail bonds to the satisfaction of the trial court.

Key Issues

1. Whether the appellants, as directors of a chemical company, can be held liable for the misuse of their product (denatured ethyl alcohol) by a third party for manufacturing illicit liquor, thereby invoking Sections 302/34 IPC, Section 61 of the Punjab and Excise Act, and Section 3(2)(V) of the SC and ST Act, 1989? The appellants argued that they are directors with oversight roles, not directly involved in daily operations. They contended that the sale of "INSTASOL" was a documented, routine business transaction with proper GST payments, and there were no legal restrictions or regulatory concerns. They maintained they had no direct communication or evidence of connivance with other accused, and the product was intended for cleaning and industrial use, with no prior knowledge of its illicit application. They also argued that Sections 468, 469, and 471 IPC were wrongly invoked as no documents were forged. The State argued that several drums of Ethanol manufactured by the appellants' company were recovered from a co-accused, Harmanpreet Singh, based on whose disclosure statement the appellants were implicated. The State contended that chemicals used by the accused were purchased from the appellants' company for making spurious liquor, although they could not provide evidence of the appellants' knowledge of this intended misuse.