The court established that former directors cannot be held vicariously liable for offences committed after their tenure, and highlighted multiple procedural lapses that rendered the prosecution unsustainable.

Order :

FARJAND ALI, J.

1. The petitions have the following prayer:

Quash and set aside the order dated 12.01.2013 passed by the learned Chief Judicial Magistrate, Bhilwara, in Criminal Case No. 30/2013, whereby cognizance has been taken against the petitioner for the alleged offences under Sections 16(1)(a), 17(6), 18(a)(xi), 18(a)(vi), and 18(c) read with Rules 96 and 12(2), and punishable under Sections 27(b)(ii) and 27(d) of the Drugs and Cosmetics Act, 1940; the case presently pending before the Court of Additional Chief Judicial Magistrate No. 2, Bhilwara, as Criminal Regular Case No. 378/2013.

2. These are the grounds raised in relation to Section 34 of the Drugs and Cosmetics Act, 1940, inter alia:

That the impugned order dated 12.01.2013 is vitiated by non-application of judicial mind and suffers from a mechanical, cyclostyled approach devoid of analytical reasoning, being predicated on conjecture and surmise rather than cogent facts or the settled legal position. It is further contended that the complaint and annexed documents, even upon a prima facie examination, fail to disclose the essential ingredients necessary to attract criminal liability under Section 34 of the Act. The petitioners had ceased to be Directors of M/s Health Biotech Ltd. prior to the year 2003, as substantiated by Form No. 32 under the Companies Act, 1956, and thus could not be saddled with vicarious liability for the alleged offences which pertain to the year 2010. Moreover, there is a categorical absence of any material implicating the petitioners in the manufacturing, distribution, or sale of the impugned drugs, and no evidence exists indicating that they were responsible for the day-to- day affairs of the company at the relevant time. The complaint even fails to establish that the alleged manufacturer, M/s Savani (Formulation Division), or marketer, M/s Rescuer Life Sciences, had any legally attributable connection to the petitioners that would warrant invocation of criminal liability. Additionally, the provisions of Section 19 of the Act, which serve as a safeguard prior to prosecuting marketing entities, were not complied with. Thus, the very foundation of cognizance is flawed and amounts to a gross abuse of the process of law, warranting quashment of the proceedings qua the petitioners.

3. A detailed judgement has been passed by this court after eloborated discussion in the case of Ganesh Narayan Nayak v. State of Rajasthan (S.B. Criminal Misc(Pet.) No. 6621/2023 ), the same has been reproduced hereinbelow for ready reference-

1. These criminal miscellaneous petitions under Section 482 read with Section 483 of the Code of Criminal Procedure, 1973 (Cr.P.C.), have been filed by the respective petitioners seeking quashing of Complaint No. 158/2017 dated 06.02.2017, titled State of Rajasthan through Drug Control Officer vs. M/s Life Line Fluid and Drug Store, Rajsamand and Others, along with all subsequent proceedings arising therefrom, pending before the learned Chief Judicial Magistrate, Rajsamand, Rajasthan, on the ground that the same is illegal and amounts to an abuse of the process of law.

2. Given the similar nature of allegations, legal issues, and prayers involved in all the petitions, they are being decided together through this consolidated order.

3. The origin of the dispute dates back to an inspection conducted on 30.11.2012 by the Drugs Control Officer (respondent No. 2) at the premises of M/s Life Line Fluid and Drug Store, Rajsamand. During the said inspection, a sample of the drug “Tab. Glimp-2” (Batch No. BD-11374), manufactured by M/s Skymap Pharmaceuticals, was collected for analysis. The Government Analyst, Jaipur, vide report dated 15.01.2013, declared the sample as not of standard quality due to non-conformity with the dissolution test.

4. The distribution chain of the subject drug was traced back through intermediary distributors, eventually leading to M/ s Biochem Pharmaceuticals Industries Limited (now amalgamated with M/s Zyd