Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(Mad) 55519

IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J
Thiru Nimish Hasmukh Bhai Chugar – Appellant
Versus
State Rep by Drugs Inspector Royapettah Range – Respondent
Crl.O.P.No.24012 of 2022

Advocates:
For the Appellants/Petitioners: Mr.K.P.Ananth Krishna
For the Respondents: Mr.K.M.D.Muhilan

Criminal liability for corporate directors requires specific allegations of their involvement; mere designation is insufficient for prosecution under drug law violations.

Headnote:(A) Drugs and Cosmetics Act, 1940 - Section 34 - Complaint against company directors for violation of drug regulations - The court held that mere designation does not establish liability; specific averments regarding individual roles are necessary for prosecution. (Paras 6, 8, 11, 12)

(B) Vicarious Liability - Directors cannot be held liable without proof of individual involvement in the offence, as clarified by precedent cases. (Paras 9, 10)

Facts of the case:
The petitioner, a managing director, challenges a complaint alleging the sale of drugs without proper documentation and the absence of liability averments against him.

Findings of Court:
The court found no specific allegations against the petitioner to establish vicarious liability, thus quashing the complaint against him.

Issues: The court addressed whether the complaint sufficiently established individual involvement of directors in the alleged offences.

Ratio Decidendi: The court concluded that the lack of specific allegations in the complaint against the petitioner prevents maintaining prosecution under the Drugs and Cosmetics Act.

Result: Criminal Original Petition allowed, complaint quashed against the petitioner.

Table of Content
1. inspection revealed discrepancies in drug transactions. (Para 2)
2. complaint questioned for lack of specific allegations against directors. (Para 3 , 4 , 5)
3. legal standard for prosecuting directors discussed. (Para 6 , 8 , 9 , 10 , 11)
4. court quashed complaint due to insufficient specific allegations. (Para 12 , 13 , 14)

ORDER

This petition has been filed to call for the records on the file of the IV Metropolitan Magistrate, Saidapet, Chennai in C.C.No.555 of 2022 and quash the same.

2. The petitioner is arrayed as A4. The crux of the allegations in the private complaint are as follows:

2.a. On 15.02.2016, an inspection was carried out by the then Drugs Inspector at the premises of M/s.Intas Pharmaceuticals Limited, O.No.31, New No.67, Poes Garden, Chennai – 600 086 in continuation of the investigation which had been carried out by the Drugs Inspector, Triplicane Range with the officials of NCB, Chennai. During the course of inspection, Thiru.Ajith Kumar Durga, authorised signatory cum competent person of the firm was present. During the inspection, the purchase and sale details of the drugs of the drugs ZOLAX 0.5 mg Zolax 1 mg, Intagra 100 mg for the period of June 2015 to February 2016 were verified. On verification of the purchase invoices, it was observed that the firm have purchased drug INTAGRA 100 mg tables from M/s.Intas Pharmaceuticals Ltd, Ghaziabad under the below mentioned invoices.

N o S.	Purchased from	Product Name	Bill No. & Date	Quantity Purchased
1	M/s.Intas Pharmaceuticals Ltd, Delhi-Meerut Road, Vil, Basatpur-Saintali, Murad Nagar- Tehsil Modi Nagar, Dist.Ghaziabad – 201 206	Intagra-100 B.No.T- 0112/15, E/D:05/2017	1002501542 Date: 31.07.2015	600x4's
2	M/s.Intas Pharmaceuticals Ltd, Delhi-Meerut Road, Vil, Basatpur-Saintali, Murad Nagar- Tehsil Modi Nagar, Dist.Ghaziabad – 201 206	Intagra-100 B.No.T- 0112/15, E/D:05/2017	1002505570 Date: 11.08.2015	30000x4's
3	M/s.Intas Pharmaceuticals Ltd, Delhi-Meerut Road, Vil, Basatpur-Saintali, Murad Nagar- Tehsil Modi Nagar, Dist.Ghaziabad – 201 206	Intagra-100 B.No.T- 0112/15, E/D:05/2017	1002531642 Date: 17.11.2015	15000x4's

and sold to the below mentioned firms under the following invoices.

N o S.	Purchased from	Product Name	Bill No. & Date	Quantity Purchased
1	M/s.Oekar Pharma & Surgicals, 57/1, Police Line, 3rd Street, Panruti – 607 106	Intagra-100 B.No.T- 0112/15, E/D:05/2017	0716985253 Date: 10.08.2015	600x4's
2	M/s.Kapital Care, Old No.257/1, New No.481/1, 1st Street, Sydenhams Road, Chennai - 112	Intagra-100 B.No.T- 0112/15, E/D:05/2017	0716985525 Date: 21.08.2015	28800x4's
3	M/s.Kapital Care, Old No.257/1, New No.481/1, 1st Street, Sydenhams Road, Chennai - 112	Intagra-100 B.No.T- 0112/15, E/D:05/2017	0716987182 Date: 30.09.2015	1200x4's
4	M/s.Kapital Care, Old No.257/1,	New Intagra-100	0716989272	15000x4's

N o S.	Purchased from	Product Name	Bill No. & Date	Quantity Purchased
	No.481/1, 1st Street, Sydenhams Road, Chennai - 112	B.No.T- 0112/15, E/D:05/2017	Date: 30.11.2015

2.b. The Authorised Signatory had given a statement that no stocks of drug INTAGRA 100 mg were available in the premises of the company. Further, on verification from the premises of M/s.Kapital Care, Old No.257/1, New No.481/1, 1st Street, Sydenhams Road, Chennai – 112, it was found that they have purchased 28800x4's and 15000x4's from the M/s.Intas Pharmaceuticals Ltd, Chennai – 86. On enquiry, regarding the invoice raised to the firm M/s.Kapital Care dated 30.09.2015 quantity 1200x4's, Thiru. Ajith Kumar Dugar, Authorised Signatory of M/s.Intas Pharmaceuticals Ltd, Chennai stated that they did not receive strips instead of 30000 strips from the company, further they did not receive 1200 strips of drug INTAGRA 100 Mg from the company, since, it was lost during shipping but the stock was not deducted in the system, hence, they have wrongfully raised the sales invoice to the firm M/s.Kapital Care even without receiving the full stock as mentioned in their invoice.

2.c. Therefore, a show cause notice was issued to M/s.Intas Phar

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2025 Supreme(Online)(Mad) 55519

IN THE HIGH COURT OF JUDICATURE AT MADRASN. SATHISH KUMAR, JThiru Nimish Hasmukh Bhai Chugar – AppellantVersusState Rep by Drugs Inspector Royapettah Range – RespondentCrl.O.P.No.24012 of 2022

Criminal liability for corporate directors requires specific allegations of their involvement; mere designation is insufficient for prosecution under drug law violations.

Cases Referred (1)

IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J
Thiru Nimish Hasmukh Bhai Chugar – Appellant
Versus
State Rep by Drugs Inspector Royapettah Range – Respondent
Crl.O.P.No.24012 of 2022