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2019 Supreme(J&K) 535

IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
SANJEEV KUMAR, J.
Patel Nishit Vinod Chandra - Petitioner
Versus
State of J&K Through Drugs Inspector - Respondent
CRMC No. 29 of 2017
Decided On : 06-09-2019

Advocates Appeared:
For the Petitioner: Varut Gupta.
For the Respondent: H.A. Siddiqui.

The main legal point established in the judgment is the necessity of specific allegations in the complaint to establish the liability of individuals, and the requirement of impleading the company as an accused before proceeding against its officers, directors, or managing partners.

Headnote:

Section 561-A - Quashment Petitions - Drug & Cosmetics Act, 1940, Section 18(a)(i), Section 27(d) - Summary of Acts and Sections: The court discussed the provisions of Section 34 of the Drug & Cosmetics Act, 1940, which deals with offences by companies and the vicarious liability of individuals in charge of the company. The court also referred to the interpretation of similar provisions in the Negotiable Instrument Act, 1881, and highlighted the necessity of specific averments in the complaint to establish the liability of individuals. The judgment emphasized the requirement of impleading the company as an accused before proceeding against its officers, directors, or managing partners.

Fact of the Case:

The court quashed the cognizance order and the complaint filed against the petitioners, who were accused of distributing and manufacturing a drug found not meeting the prescribed standards. The petitioners challenged the complaint primarily on the grounds that the company or firm they represented was not arraigned as a party accused, and that the complaint did not disclose their actual role or intention to adduce evidence in controversion of the report of the Government Analyst. The court found that the complaint was an abuse of process of law and lacked specific allegations against the accused persons.

Finding of the Court:

The court found that the complaint was not maintainable as the company or firm was not arraigned as a party accused, and the petitioners could not be proceeded against without first impleading the company as a party accused. The court also noted that the petitioners had not notified their intention of adducing evidence in controversion of the report of the Government Analyst, and the complaint was presented after the expiry of the drug's shelf life.

Issues: The issues before the court included whether the Directors of a Company or the partners of a Firm could be prosecuted under the Act without the company/firm being arraigned as an accused, whether the Managing Director of a Company or Managing Partner of a Firm would be deemed to be in charge of the Company/Firm, and whether the petitioners had notified their intention of adducing evidence in controversion of the Government Analyst report and whether the shelf life of the drug had expired when the petitioners were summoned by the Court.

Ratio Decidendi: The court held that the liability of officers, directors, or managing partners arises only if the company or firm is liable for the offence, and that the complaint was an abuse of process of law. The court also emphasized the necessity of specific allegations in the complaint to establish the liability of individuals, and the requirement of impleading the company as an accused before proceeding against its officers, directors, or managing partners.

Final Decision: The court quashed the impugned Order of cognizance and the complaint, as allowing such proceedings to continue would be sheer abuse of process of Court. The respondent was allowed to file a fresh complaint after meeting all the requirements of law, provided such complaint is not barred by any provision of law.

JUDGMENT :

1. Both these quashment petitions filed under Section 561-A of the Code of Criminal Procedure, are directed against the Cognizance order dated 31st December 2015, passed by the Chief Judicial Magistrate, Jammu (hereinafter in short "CJM”) on a complaint filed by respondent through its Drug Inspector, Jammu Zone-I, under Section 18(a)(i) read with Section 27(d) of the Drug & Cosmetics Act, 1940 (hereinafter referred “Act”). The petitioners, who have been summoned to appear before the CJM, have also challenged the complaint filed before the CJM, on which cognizance was taken by the latter on 31st December 2015.

2. The petitioner in CRMC No. 29/2017 is an authorized signatory of a Private Limited Company by the name of Corona Remedies Private Limited (hereinafter "Stockist”), whereas petitioner in CRMC No. 564/2016 is managing partner of the partnership concern by the name of M/s Prosperity 6 Pharmaceuticals, Baddi, District Solan (Himachal Pradesh) (hereinafter referred as to "Manufacturer”). Both the petitioners are arraigned as accused by respondent-complainant, being distributor and manufacturer of the drug, which was found not meeting the prescribed standards by respondent. That, since order impugned as also impugned complaint, in which the petitioners in both these petitions are arraigned as accused, is common and also that they are aggrieved of the complaint and the order of cognizance, passed by the CJM, in the similar manner and have challenged the same on identical grounds, as such, both these petitions have been taken up for disposal together.

3. Before adverting to the grounds of challenge taken in these petitions, it would be necessary to briefly turn to the facts as are gatherable from the complaint filed by respondent.

4. The complaint has been filed by Drug Inspector, Jammu Zone-I, who is duly authorized in terms of SRO 137, dated 28th March 2013, issued under the Act. It is claimed in the complaint that on 5th February 2015, the then Drug Inspector, Jammu Zone-I, namely, Sanjay Bhat, conducted inspection of the areas falling under his jurisdiction and visited the premises of M/s Rajinder Medical Hall, Shalamar Road, Jammu. During the course of inspection of the premises, the then Drug Inspector, Jammu Zone-I, lifted samples of drugs for test and analysis from Government Analyst, Combined Food and Drug Laboratory (CFDL), Jammu. Amongst others, a sample of drug, i.e. Atzon-S, manufactured by M/s Prosperity 6 Pharmaceuticals, Baddi District Solan (H.P.), was also lifted on spot. On completing the requisite formalities and filling up the Form No. 17 on spot, the same was divided into four equal portions and each portion was sealed as per the procedure prescribed under the Act and Rules framed thereunder. It is claimed that the samples were taken, apportioned and sealed in presence of Shri Ranbir Gupta, a qualified person of the licenced premises, i.e. M/s Rajinder Medical Hall. The Form No. 18, dated 6th February 2015 was also filled up and sample was sent to Government, Analyst, CFDL. One sample portion of the drug in question was also sent to the Manufacturer. Thereafter in the month of May 2015, a Certificate of test/analysis from Government Analyst, CFDL, vide his communication No. DFCL/J/2015-16/245, dated 30th May 2015 on Form 13 under Section 25(1) of the Act, was received, in which the drug in question was declared to be not of standard quality as defined under the Act. The report further stated that the sample failed in the test for Clarity of Solution and Particulate Matter. Further investigation was conducted by respondent, who on disclosure by Ranbir Gupta of M/s Rajinder Medical Hall, found that drug in question had been supplied to M/s Rajinder Medical Hall by M/s Raj Medical Agency, who had purchased it from the petitioner in CRMC No. 29/2017-Stockist. It further revealed that the drug was actually manufactured by M/s Prosperity 6 Pharmaceuticals, i.e. petitioner in CRMC No. 564/2016.

5. Responde

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