IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18^TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 2549 OF 2024 BETWEEN:

SMT. PREETHA REDDY, AGED ABOUT 67 YEARS, W/O VIJAYKUMAR REDDY, MANAGING DIRECTOR, M/S APOLLO PHARMACY, APOLLO HOSPITALS ENTERPRISES LTD., KHANESHUMARI NO. 326, SY.NO.47, SITE NO. 09, GROUND FLOOR SHOP NO.1, MINI COMPLEX, OLD MADRAS ROAD, KR PURAM, BANGALORE - 560 036.

…PETITIONER (BY SRI. AKKI MANJUNATH GOWDA K, ADVOCATE)

AND:

Digitally signed by B K THE STATE OF KARNATAKA MAHENDRAKUMAR Location: HIGH BY DRUG INSPECTOR - 1, COURT OF KARNATAKA BANGALORE CIRCLE 5, REPRESENTED BY STATE PUBLIC PROSECUTOR, KARNATAKA HIGH COURT COMPLEX, BANGALORE - 560 001.

…RESPONDENT (BY SRI. LAKSHMAN B, HCGP)

THIS CRL.P IS FILED U/S.482 OF CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.38/2024 ON THE FILE OF SPECIAL COURT FOR ECONOMIC OFFENCES AT BENGALURU FOR THE OFFENCE P/U/S 27(d) OF DRUGS AND COSMETICS ACT AND RULES AGAINST THE PETITIONER.

THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR

ORAL ORDER

1. The petitioner/accused No.2, challenges the cognizance taken for the offense punishable under Section 27(d) of the Drugs and Cosmetics Act, 1940 (for short, 'Act') is before this Court seeking appropriate relief.

2. The respondent files a private complaint stating that credible information was received when accused No.1 was selling drugs, violating various provisions of the Act 1940 and Rules 1945. C.W.2 along with panchas C.Ws.3 and 4, conducted a test purchase in the said firm on 16.07.2018. During the test purchase, accused N.3 sold the drugs enumerated in the complaint without a valid prescription, which is an offence under Section 27(d) of the Act. From the investigation, it was revealed that accused No.1, who is a company and accused No.2 is the managing director of the company and accused No.3 is the person in charge of accused No.1-company and who had sold the subject drugs without a valid prescription, thereby violating Section 18(a)(vi) read with Rule

65(9)(a), which is punishable under Section 27 of the Act.

3. Heard learned counsel for the petitioner and learned HCGP for the State.

4. Perusal of the complaint indicated that accused No.1 is a company processing valid drug licenses and accused No.2 is the managing director of accused No.1. Accused No.3 is the person in charge of accused No.1, who had allegedly sold the drugs without a prescription.

5. Section 34 of the Companies Act deals with offences of companies and states that if any offence under this Act has been committed by a company, every person who at the time of the offense was in charge of the affairs and responsible for the conduct of the business of the company, shall be deemed to be guilty of the offence.

6. In this instance, accused No.3 was in charge of the sales of the drugs on behalf of accused No.1-company, and the subject drugs were sold to the complainant and his staff without a valid prescription. Accused No.2, who is the managing director of the company, was not involved in the day-to-day affairs of the company in selling the drugs. Therefore, he cannot be held vicariously guilty along with the company as stated under Section 34 of the said Act. Under these circumstances, the continuation of criminal proceedings would amount to an abuse of the process of law.

7. Accordingly, I pass the following:

ORDER

i. The criminal petition is allowed.

ii. The impugned proceedings in C.C.No.38/2024 pending on the file of the Special Court for Economic Offences, at Bangalore insofar it relates to the petitioner/accused No.2 is hereby quashed iii. The Trial Court is directed to proceed against other accused in accordance with law, without being influenced by any observations made in this order. Any observation made in the order is only for the purposes of the present petition.

Sd/-

(HEMANT CHANDANGOUDAR)

JUDGE HDK List No.: 1 Sl No.: