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IN THE HIGH COURT OF JHARKHAND AT RANCHI
SANJAY KUMAR DWIVEDI, J.
Anand Sen – Petitioner
Versus
The State of Jharkhand – Respondent
Cr. M.P. No. 896 of 2016
Decided On : 06-01-2022
Drugs and Cosmetics Act - Quashing of Criminal Proceedings - Section 18(C)
Fact of the Case:
The petitioners sought to quash criminal proceedings against them under Section 18(C) of the Drugs and Cosmetics Act, 1940, relating to the alleged sale of drugs without a license by the company they were associated with.
Finding of the Court:
The Court found that the cognizance order was not in accordance with the law and that the materials available against the petitioners for taking cognizance were not recorded in the order. It also noted that vicarious liability in criminal jurisprudence had been considered, and directors cannot be deemed to be ipso facto in charge and responsible for the conduct of the company's business.
Issues: The issues revolved around the legality of the cognizance order, the application of Section 34 of the Drugs and Cosmetics Act, and the vicarious liability of directors in criminal cases.
Ratio Decidendi: The Court held that the cognizance order was not in accordance with the law and that directors cannot be automatically deemed to be in charge and responsible for the conduct of the company's business. It referenced the case of State of Haryana vs. Brijlal Mittal and Others to support its decision.
Final Decision: The criminal proceedings, including the cognizance order, were quashed and set aside, leading to the disposal of the criminal miscellaneous petition.
JUDGMENT :
SANJAY KUMAR DWIVEDI, J.
1. Heard Mr. Amit Kumar Das, learned counsel appearing for the petitioners and Mr. Prabhu Dayal Agrawal, learned Spl. P.P. for the State.
2. This petition has been heard through Video Conferencing in view of the guidelines of the High Court taking into account the situation arising due to COVID-19 pandemic. None of the parties have complained about any technical snag of audio-video and with their consent this matter has been heard.
3. This criminal miscellaneous petition has been filed for quashing of the entire criminal proceedings in connection with C/2 Case No. 43 of 2014 including the order dated 15.03.2014 passed by the learned Chief Judicial Magistrate, Jamshedpur, whereby cognizance under Section 18(C) of the Drugs and Cosmetics Act, 1940 has been taken against the petitioners, pending in the Court of learned Judicial Magistrate, 1st Cass, Jamshedpur.
4. The complaint case was filed stating therein that the O.P. No. 2 on 03.09.2012 had visited the Drug Distribution Centre of Tata Bluescope Steel Limited and during inspection, found the following medicines in store:
(ii) Voveran Inj. B. No. 12102
(iii) Zinetac Inj. B. No. NB121
(iv) Buscopan Inj. B. No. GL3032, Avil Inj. B. No. 2311260
These medicines are distributed among ill workmen as alleged. On demand, the Institution could not produce any licence nor could they produce the voucher of purchased medicines. During inspection, the copy of Inspection Letter No. Camp. JSR dated 03.09.2012 was made available. Again vide Letter No. 563 dated 11.09.2012 TATA Bluescope Steel Limited was directed to reply to show cause as to why action should not be taken against the accused petitioners for selling the drug without licence. Vide Letter No. TBSL/HR/309/2012 dated 26.09.2012, issued by Tata Bluescope Steel Limited it was informed that only for the purpose of First Aid, some basic medicines are being stored by the institution. Vide Letter No. 778 dated 18.05.2013 to M/s Arogya Medicals, it is alleged that they had supplied the medicines to M/s Tata Bluescope Steel Limited who do not have any valid license and which is in violation of the provisions of the Rule 65(3)(1)(d) and thus, it is alleged that the accused persons have committed an offence under Section 18(c) of the Drugs and Cosmetics Act.
5. Mr. Amit Kumar Das, learned counsel appearing for the petitioners submits that by order dated 15.03.2014 without application of mind, cognizance has been taken against the petitioners. He submits that the petitioner Nos. 3, 6 and 7 are stationed at Australia, petitioner No. 4 is stationed at Coimbator, petitioner No. 5 is stationed at Singapore and petitioner No. 8 is stationed at Bhopal and all the petitioners have been implicated in this case. He further submits that the company has not been made party and the petitioners are the Senior Directors and Senior Executives of the company and they have been made accused by name. He also submits that in view of Section 34 of the Drugs and Cosmetics Act, the prosecution of the petitioners in absence of the company is not maintainable. He further submits that such prosecution is nothing but an abuse of the process of the Court and the same is liable to be quashed.
6. Mr. Prabhu Dayal Agrawal, learned Spl. P.P. appearing for the State submits that there is no illegality in the cognizance order and the same has rightly been taken against the petitioners.
7. In view of the above facts and considering the submission of learned counsel appearing for the parties, this Court has gone through the relevant Sections of the of the Drugs and Cosmetics Act and the materials available on record. For ready reference Section 34 of the of the Drugs and Cosmetics Act is quoted herein-below:
(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
Vicarious liability of directors in criminal cases and the requirement for proper recording of materials for taking cognizance under the Drugs and Cosmetics Act.
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....
The central legal point established in the judgment is the requirement for specific averments about the role of individuals in charge of a company's affairs and the need for the company to be made an....
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 regard....
The judgment established the liability of individuals in a corporate criminal liability, the circumstances under which a director or managing director of a company can be made an accused, and the exe....
Right of appellant to have sample analysed in Central Laboratory is a valuable right.
Manufacturing bleaching powder not intended for medicinal use is exempt from licensing under the Drugs and Cosmetics Act, 1940.
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