Specific averments showing a Director's responsibility for the company's conduct of business are necessary to establish vicarious liability under the Essential Commodities Act, 1955.

ORDER :

Since similar issue is involved in all these criminal petitions filed under Section 482 Cr.P.C., they were heard together and are being disposed of by this common order.

2. Accused Nos.3 to 6 in C.C.Nos.129 of 2014, 131 of 2014 and 132 of 2014 on the file of the learned Principal Junior Civil Judge, Bhimavaram, West Godavari District, filed the present Crl.P.Nos.7619 of 2015, 7621 of 2015 and 7625 of 2015 respectively, seeking to quash the proceedings against them in the said C.Cs.

3. Facts of the cases, briefly stated, are as under:

The subject C.Cs. have been registered on the complaints filed by the State under Section 11 of the Essential Commodities Act, 1955 (for short, ‘the Act of 1955’), for contravention of Para 8(3) and 14(1) of the Drugs (Prices Control) Order, 1995 read with Section 3 of the Act of 1955, liable for punishment under Section 7(1)(a)(ii) of the Act of 1955. It was alleged in the complaints that on 20.05.2010, during inspection of M/s. Sri Lalitha Medical and General Distributors at Bhimavaram, the Drugs Inspector, Bhimavaram, found violations in respect of fixation of Maximum Retail Price of the drugs manufactured by M/s. Laborate Pharmaceuticals India Ltd. (accused No.1-Firm). The violation alleged in the complaint in respect of C.C.No.129 of 2014 is in relation to pricing of LB Drox 500 mg. tablet, which contains chemical compound Cefadroxil, the price of which is fixed at Rs.30.42 ps. per 10 tablets by the Government of India, vide S.O.No.2049(E) dated 30.11.2007, whereas accused No.1-Firm was stated to be selling the said tablets at Rs.72.50 ps. per 10 tablets, i.e., at an excess of Rs.40.08 ps. The violation alleged in the complaint in respect of C.C.No.131 of 2014 is in relation to pricing of LB Drox 250 mg. tablet, which contains chemical compound Cefadroxil, the price of which is fixed at Rs.30.42 ps. per 10 tablets by the Government of India, vide S.O.No.2049(E) dated 30.11.2007, whereas accused No.1-Firm was stated to be selling the said tablets at Rs.43.52 ps. per 10 tablets, i.e., at an excess of Rs.13.10 ps. Similarly, the violation alleged in the complaint in respect of C.C.No.132 of 2014 is in relation to pricing of N. Flox tablet, which contains chemical compound Norfloxacin, the price of which is fixed at Rs.7.30 per one drop by the Government of India, vide S.O.No.1335(E) dated 16.09.2005, whereas accused No.1-Firm was stated to be selling the said drug at Rs.15.25 per one drop, i.e., at an excess of Rs.7.95 ps. Upon seeking clarification from the manufacturer, i.e., accused No.1-Firm, it was admitted by accused No.1-Firm that the prices so printed on the subject drugs manufactured by them were in excess than the Maximum Retail Price fixed by the Government of India and pleaded that the said mistake was due to ignorance and not intentional. It was, therefore, alleged that accused No.1-Firm represented by A2 and its Directors - A3 to A6 contravened Para 8(3) and 14(1) of the Drugs (Prices Control) Order, 1995, punishable under Section 7(1)(a)(ii) of the Act of 1955. The trial Court took cognizance of the offences alleged and issued summons to accused Nos.3 to 6/petitioners herein. Aggrieved thereby, the petitioners filed the present criminal petitions seeking to quash the proceedings against them in the subject C.Cs. respectively.

4. Mr. M.S. Srinivasa Iyengar, learned Senior Counsel assisted by Mr. S. Lakshmi Narayana Reddy, learned counsel for the petitioners, contends that the petitioners, who are Directors of the Firm, are in no way responsible for the conduct of the business of the Firm or day-to-day affairs of the Firm and, therefore, they cannot be vicariously held liable and prosecuted for the alleged offences. He further contends that it is only the persons who, at the time of commission of the offence, were in-charge of the affairs of the company and were responsible for the conduct of the business of the company, are liable to be prosecuted. It is further contended that i