Vicarious liability under the Drugs and Cosmetics Act requires clear allegations of a director's responsibility for the company's conduct; mere directorship is insufficient.

JUDGMENT :

(Rakesh Kainthla, J.)

The petitioners have filed the present petition for quashing complaint No.5/3 of 2022, summoning order dated 03.06.2022 and consequential proceedings arising out of the same against the petitioners. (Parties shall hereinafter be referred to in the same manner as they were arrayed before learned Trial Court for convenience).

2. Briefly stated, the complainant Drug Inspector filed a complaint before the learned Chief Judicial Magistrate, Sirmaur District at Nahan, asserting that a sample of drug Rabeprazole (EC) and Domperidone (SR) Capsules (Olez-DSR), Batch No. SCO- 587, Date of manufacturing 12-2017, Date of expiry 11-2019, manufactured by petitioner No.1, was drawn for analysis from the premises of petitioner No.1. The sample was sent to Government analyst Regional Drug Testing Laboratory, Chandigarh, who issued a report stating that the sample was not of standard quality. Petitioners No.1 to 3, being the manufacturing firm which had manufactured the drugs in question and which was declared to be not of standard quality, are liable for punishment; hence, the complaint was filed for taking action against the petitioners/accused.

3. Learned Trial Court held that there were sufficient reasons to proceed against the accused for the commission of offences punishable under Section 27(b)(ii) and 27(d) of the Drugs and Cosmetics Act, 1940 and the Rules framed thereunder vide order dated 03.06.2022.

4. Being aggrieved from the order passed by the learned Trial Court, the petitioners have filed the present petition for quashing the proceedings pending before the learned Trial Court. It is asserted that the complaint is not as per the provisions of Section 34 of the Drugs and Cosmetics Act. The report of the Government Analyst is not as per the requirement of Rules 57(1) and 46, and it does not contain the full protocols of the test. The complainant had not sent the sample as per the requirement of Section 23(4) of the Drugs and Cosmetics Act. The sample was not stored as per the requirement mentioned in the label. There is no averment that petitioners were in charge and responsible for the conduct of the business of the firm, and they cannot be prosecuted in the absence of any such averment; hence, it was prayed that the present petition be allowed, complaint and the consequent proceedings pending before the learned Trial Court be quashed.

5. The petition is opposed by filing a reply and making a preliminary submission regarding the lack of maintainability. It was asserted that the petitioners had manufactured substandard drugs. The complainant had complied with the requirements of Section 34 of the Drugs and Cosmetics Act. The complainant implicated the petitioners based on the record provided by the Company during the investigation. The documents relied upon by the petitioners are to be examined for their truthfulness by leading the evidence. The complaint was filed after getting due approval from the controlling authority. The samples were stored as per the requirement, and tests were carried out as per the protocol. Therefore, it was prayed that the present petition be dismissed.

6. I have heard Ms. Shalini Thakur, learned counsel for the petitioners and Mr. Shashi Shirshoo, learned Central Government Standing Counsel, for the respondent.

7. Mr Shalini Thakur, learned counsel for the petitioners, submitted that the learned Trial Court erred in ordering the summoning of the petitioners without the specific averments that they are incharge and responsible to the Company for its affairs. The drug was not tested as per the protocol, and the sample was not stored as per the label; therefore, she prayed that the present petition be allowed and the complaint pending before the learned Trial Court be quashed. She relied upon Lalankumar Singh and Ors. vs. State of Maharashtra in Criminal Appeal No. 1757 of 2022 decided on 11.10.2022, Susela Padmavathi Amma versus M/s Bharti Airtel Limited, 2024 INSC 206 and Jitende