Vicarious liability under the Drugs and Cosmetic Act arises only if the person was in charge and responsible for the company's conduct of business at the material time.

JUDGMENT :

ANIL KUMAR CHOUDHARY, J.

1. Heard the parties.

2. This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 482 Cr.P.C. with a prayer to (a) quash the entire criminal proceeding arising out of Drug and Cosmetic Case No. 235 of 2013 (CIII-235 of 2013) including the order dated 28.06.2013 whereby and where under the learned Additional Chief Judicial Magistrate has taken cognizance for the offence punishable under Section 27(b) and 27(d) of the Drugs and Cosmetic Act, 1940 and ordered for issuance of summons inter-alia against the petitioner for appearance in connection with the said case and other prayers but at the outset, the learned counsel for the petitioner confines his prayer to prayer no. (a) mentioned in Para-34 of the petition and do not press the other prayers.

3. The brief facts of the case is that, the Drug Inspector, Ranchi instituted a prosecution report inter-alia against the petitioner and co-accused persons alleging therein that in Reproductive and Child Health Centre, Namkum, Ranchi, the Government supply of Vitamin A Syrup I.P. in 100 ml was invited through tender and the company; of which the petitioner is the Managing Director succeeded in the said tender but instead of such medicine, concentrated Vitamin-A solution IP ’85 (Revit-A) 100 ml bottles, total 80,000 was to be supplied immediately and rest 80,000 was to be supplied in the month of May, 2013 and when the said medicine was sent for sample examination, the sample was found ‘not of standard quality’ because, each container contained only 60% of the 1ml dose and it was further found in such examination that some mandatory information required to be published on the label of the bottles as per Rule 104 and 124 of the Drugs and Cosmetics Rules was omitted to be mentioned or was not properly mentioned and on the basis of the same, the learned Additional Chief Judicial Magistrate took cognizance of the offences as already indicated above.

It is submitted by the learned counsel for the petitioner, relying upon the judgment of Hon’ble Supreme Court of India, in the case of State of Haryana vs. Brij Lal Mittal and Others, (1998) 5 SCC 343, Para-8 of which reads as under:

“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