Vicarious liability under the Drugs and Cosmetics Act requires the person to be in charge and responsible for the day-to-day affairs of the company, and specific allegations against a director regarding their role in the alleged offences are necessary to establish vicarious liability.

JUDGMENT :

1. Heard Mr. Indrajit Sinha assisted by Mr. Saket Upadhyay, learned counsel for the petitioner and Mr. Suraj Verma, learned counsel for the State.

2. The present petition has been filed for quashing entire criminal proceeding arising out of Complaint Case C-2 Case No. 21/2014, including order taking cognizance dated 15.01.2014 whereby cognizance under sections 17, 18(a) (i) and 27(d) of the Drugs and Cosmetics Act, 1940 has been taken against the petitioner, pending in the Court of learned Judicial Magistrate, Ist Class at Jamshedpur.

3. O.P. No. 2 has filed complaint alleging therein that 3 batches of Zyrop 2k injection of Batch No. BL113 & BL117 and Zyrop 4k injection of Batch No. BM 103 were inspected at the premises of warehouse located at Jamshedpur and found that the storage instruction on the inner zipper that the medicine to be stored at 2 degree Celsius to 8 degree Celsius is not given on the outer package therefore the medicine labeling norms are violated and the medicine is misbranded.

4. Mr. Indrajit Sinha, learned counsel appearing for the petitioner submits that on lodging of the complaint, the learned CJM, Jamshedpur has taken cognizance under sections 17, 18(a)(i) and 27(D) of the Drugs and Cosmetics Act, 1940 against the petitioner. He further submits that the petitioner is independent director in Cadila Healthcare Ltd. He submits that there is no averments on the allegation in the complaint against the petitioner, who is Director of the said company/firm. He submits that in view of section 34 of the Drugs and Cosmetics Act, 1940 (hereinafter referred to be as the Act.), the persons, who are Incharge and looking after the day to day affairs of the company is only required to be prosecuted. He submits that there is no averments in this regard. In the complaint there is no averments that the petitioner is looking after the day to day affairs of the company. To buttress this argument he relied in the case of State of Haryana v. Brij Lal Mittal and Others, (1998) 5 SCC 343 and relied on paragraph no. 8 of the said judgment, which is quoted hereinbelow:-

“8. Nonetheless, we find that the impugned judgment of the High Court has got to be upheld for an altogether different reason. Admittedly, the three respondents were being prosecuted as directors of the manufacturers with the aid of Section 34(1) of the Act which reads as under:

“34. Offences by companies.—(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.”

It is thus seen that the vicarious liability of a person for being prosecuted for an offence committed under the Act by a company arises if at the material time he was in charge of and was also responsible to the company for the conduct of its business. Simply because a person is a director of the company it does not necessarily mean that he fulfils both the above requirements so as to make him liable. Conversely, without being a director a person can be in charge of and responsible to the company for the conduct of its business. From the complaint in question we, however, find that except a bald statement that the respondents were directors of the manufacturers, there is no other allegation to indicate, even prima facie, that they were in charge of the company and also responsible to the company for the conduct of its business.”

5. He further submits that the company is not made an accused and in absence of the company, being ma