IN THE HIGH COURT OF CHHATTISGARH, BILASPUR
PARTH PRATEEM SAHU, J.
Deepak Parekh S/o. Shri Shantilal Parekh & Ors. - Petitioners
Versus
State of Chhattisgarh, Through Shri Prem Kumar Dongare, Durg Inspector Food And Durg Administration Ambikapur, Sarguja, Chhattisgarh & Ors. - Respondents
CRMP Nos. 1551, 1552, 1667, 1668 of 2017
Decided On : 10-04-2023
Drugs and Cosmetics Act, 1940 - Section 27 (d) - Criminal Procedure Code, 1973 - Section 482 - Quash of proceedings - Seeking for setting aside the order of issuance of warrant of arrest - Illegal sale of drugs - Whether sufficient ground for proceeding exists in case or not - Held, allegation as per requirements under the law particularly Section 34 of the Act of 1940 ought to have been specifically levelled and mentioned in the complaint. Even if the petitioners happens to be the directors of company, this fact in itself is not sufficient for their prosecution in view of the language used under Section 34 of the Act of 1940 - Magistrate acquitted accused/non-applicant holding that prosecution failed to prove offence against them beyond reasonable doubt, non-applicant is a company of which petitioners are non-executive directors - Petition Allowed.
ORDER :
1. All these criminal miscellaneous petitions arise out of one and the same proceedings and therefore, they were heard together and are decided by this common order.
2. Petitioners have filed aforementioned petitions invoking jurisdiction of this Court under Section 482 of Criminal Procedure Code, 1973 for quashment of proceedings of Criminal Case No. 256 of 2013, pending before learned Judicial Magistrate First Class, Ambikapur and also seeking for setting aside the order dated 18.10.2017 of issuance of warrant of arrest against petitioners.
3. Brief facts relevant for disposal of these petitions are that on 26.10.1995, Drug Inspector, Ambikapur, District – Sarguja inspected the premises of Jindal Medical Agency at Ambikapur and have taken samples of three medicines for examination. Out of three medicines, 200 numbers of Betnesol tablets having batch No. NB 656, manufacturing date September, 1995, expiry date February 1997, manufactured by M/s. Glaxo India Limited, Nasik was taken for examination. The samples taken from medical agency was sent to the Government Analyst and according to the report sent by Government Analyst, medicine Betnesol tablets having batch No. NB 656 was found to be not of standard quality. After further enquiring into the matter, complaint case was filed before the Court of Judicial Magistrate First Class, Ambikapur bearing Criminal Case No. 256 of 2013 for commission of offence under Section 18 (a) (i) read with Section 27 (d) of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as ‘the Act of 1940’). The arrest warrant were also issued against petitioners and petitioners thereafter approached this Court by filing these petitions seeking relief as mentioned above.
4. Learned Senior counsel appearing on behalf of petitioners would submit that petitioners are non-executive directors of respondent No.17/company. Petitioners are not directly involved in the management and affairs of the company. They are not having any active role to play in functioning of the company and not responsible to conduct business. In the complaint filed by Drug Inspector there is no specific mention that petitioners were incharge and was responsible for conducting business of company when alleged offence said to be committed. Unless and until there is specific pleading in the complaint showing the role of petitioners that they were in charge, responsible to the company for the conduct of business, petitioners can not be prosecuted as they can not be held vicariously liable for the alleged commission of offence, if any, under the Act of 1940. In support of his contention he placed reliance upon the decision of Hon’ble Supreme Court in case of State of Haryana Vs. Brij Lal Mittal And Others, reported in (1998) 5 SCC 343, S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another, reported in (2005) 8 SCC 89, in S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another, reported in (2007) 4 SCC 70 and in case of Lalankumar Singh & Others Vs. State of Mahrashtra, reported in 2022 SCC OnLine SC 1383. He also contended that during the same period complaint cases were also filed against petitioners within the territorial jurisdiction of State of Madhya Pradesh stating that Betnesol tablet purchased from medical shop and sent to analyst at Bhopal was found not of standard quality and the registration of complaint against petitioners was put to challenge, which came to be allowed in M.Cr.C. No. 3526 of 2005, M.Cr.C. No. 4550 of 2005 and M.Cr.C. No. 8336 of 2006. The case of petitioners herein is under identical facts of the case as registered by the Court of competent jurisdiction within the State of Madhya Pradesh. Lastly he contended that during pendency of this petition, Criminal Case No. 256 of 2013 came to be decided with respect to the proposed accused No.1 and 17 and the learned Magistrate acquitted the accused No.1 and 17 from the charges holding that prosecution failed to prove the charges beyond reasonable doubt. The
State of Haryana Vs. Brij Lal Mittal and Others
S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another
The main legal point established in the judgment is that for making a director of a company liable for offences committed by the company under the Drugs & Cosmetics Act, 1940, there must be specific ....
Directors cannot be held liable for a company's criminal acts without specific allegations of their involvement; mere directorship is insufficient for establishing vicarious liability.
Vicarious liability under the Drugs and Cosmetics Act, 1940 arises if the person was in charge and responsible for the day-to-day affairs of the company at the time of the offence, and the company mu....
Vicarious liability under Drugs Act Section 34 requires specific averments that directors were in charge of and responsible for day-to-day business and supervision; mere directorship insufficient, bu....
Vicarious liability under Section 34 of Drugs and Cosmetics Act requires specific complaint averments that director/MD in charge and responsible for company business conduct; mere designation insuffi....
Directors liable under Drugs Act Section 34 if complaint specifically avers their involvement in business conduct via emails and records, notwithstanding competent person appointment.
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