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1998 DIGILAW 871 (PAT)

Shanti Sharan v. State Of Bihar

1998-12-11

P.K.SARKAR

body1998
Judgment P.K.Sarkar, J. 1. This application has been preferred against the order dated 11.5.1993, whereby the Additional Chief Judicial Magistrate, Patna City took cognizance against the petitioners under Sections 18 and 27 of the Drugs and Cosmetics Act, 1940 (hereinafter to be referred as "the Act") on a prosecution report filed by the Inspector of Drugs. 2. The brief facts leading to this application are that a complaint was filed under Sections 18 and 27 of the said Act in the Court of Additional Chief Judicial Magistrate, Patna City against the petitioners alleging that the petitioners are the partners of the Western Drugs and Pharmaceutical Company, Industrial Area, Fatwah, Patna. On 7.11.1990, the complaint was received in the office of the State Durgs Controller, Bihar, Patna regarding manufacturing of substandard drugs by the aforesaid Company. On receipt of the aforesaid complaint, the State Drugs Controller, Bihar, Patna constituted a raiding party and conducted raid on the premises of the said Company situated in the Industrial Area, Fatwah, Patna on 14.11.1990 and 17.11.1990. During the aforesaid raid it was found that manufacturing of drugs was being carried by Shri Ram Bilash Prasad, an unskilled labour whereas according to the Rules framed under the said Act, only the competent technical staff is entitled to direct and supervise personally the manufacturing activities of the factory. This amounts to violation of Rule 74(a) and Rule 71(1) of the rules. It is further stated that during raid, no record of manufacturing of drugs was also produced before the inspecting authority. It is also alleged that the accused-petitioners supplied Westogram Suspension having Batch No. 105 to Bharat Coking Coal Limited Hospital, Govindpur, Dhanbad on 30.7.1990 without getting the test report done by the approved technochem laboratory, Rajendra Nagar, Patna. The raiding party thereafter, checked the drugs at Bharat Coking Coal Hospital, Dhanbad and also collected some samples of Westogram Suspension of Batch No. 105 and sent them to the Central Indian Pharmacopoeia Laboratory, Ghaziabad (UP) of the said drug. A test report was received on 28.6.1991 that the said drugs were of substandard quality. 3. Show-cause notices were served on the petitioners by the State Drug Controller, Bihar, Patna, but no reply has yet been received by them. Accordingly, the said complaint was filed by the complainant. A test report was received on 28.6.1991 that the said drugs were of substandard quality. 3. Show-cause notices were served on the petitioners by the State Drug Controller, Bihar, Patna, but no reply has yet been received by them. Accordingly, the said complaint was filed by the complainant. On the basis of the aforesaid complaint, the impugned order dated 11.5.1993 has been passed by the A.C.J.M., Patna City. Being aggrieved and dissatisfied with the aforesaid order of cognizance, this application has been filed for quashing the same. 4. The learned Counsel for the petitioners has submitted that learned Court below, while taking cognizance, did not consider the points mentioned in Section 34 of the Drugs and Cosmetics Act, 1940, which were relevant before taking cognizance in order to see whether any offence is constituted against the petitioners. Section 34 of the said Act states as follows : "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." Thus, according to the aforesaid provision contained in the said section of the Act, it is necessary to see whether the person against whom the offence has been alleged, was in-charge of and was responsible to the company for the conduct of the business of the company. It is, therefore, submitted on behalf of the petitioners that simply because some persons are directors of the company, they cannot be held responsible for the act of the company. Moreover, the complaint petition is silent on the point whether the petitioners were said to be partners of the firm and were actually in-charge of the company and were looking after its business at the relevant period of time. Moreover, the Drug Controller did not make the firm itself as a party. Moreover, the complaint petition is silent on the point whether the petitioners were said to be partners of the firm and were actually in-charge of the company and were looking after its business at the relevant period of time. Moreover, the Drug Controller did not make the firm itself as a party. In case the firm was made a party, it would have been responsibility of the firm under Section 305 of the Code of Criminal Procedure, 1973 to nominate a representative on behalf of the firm, who used to look after the business so that he could have been examined and he could have given answer to the allegation on behalf of the firm. 5. It is further submitted on behalf of the petitioners that this point was also raised at the time of admission of this application and the Bench of this Court observed in its order dated 12.8.1993 as follows : "....This will not prevent the prosecution from adding the firm as accused,... if so advised." Accordingly, notice was also sent to opposite party No. 2, but neither he appeared nor made the firm as a party to this application. Thus, the firm who is the main person responsible for any irregularity committed in manufacturing of the medicine is not a party in this case and thus, the provision of Section 34 of the said Act has not been complied with. In this connection, the learned Counsel for the petitioner has relied his submissions on the decision of the Rajasthan High Court in the case of M/s. Mehta and Company and others V/s. State of Rajasthan and another, reported in 1989 Cr LJ 2165. The findings in the aforesaid decision of the Rajasthan High Court may be quoted below : "After considering the arguments of both the learned Counsel and going through the case law cited by the learned Counsel for the petitioners, I am of the opinion that the learned Trial Court has committed error in issuing process against the partners of the firms who were not in charge of the business of the firms or conducting its affairs when the offence is alleged to have been committed. Only the person who was in-charge, could be proceeded against and, therefore, the prosecution of the petitioners and issue of process for this offence against them, is bad in law so it cannot be maintained." In this connection, the learned Counsel for the petitioners has also relied upon another decision of the Madhya Pradesh High Court in the case of M/s. Prem Pharmaceuticals and others V/s. State of M.P., reported in 1989 Cr LJ 2028, the relevant portion of which is quoted below for convenience : "In Ram Kishan Rohtagis case 1983 Cr LJ 159 (SC) (supra), it has been held that vicarious liability is an incidence of an offence under the Act and as pointed out in Municipal Corporation of Delhi V/s. Des Raj, 1985 Cri LJ 618 (Del), it is only on the fulfilment of specified conditions that a partner may be liable. In the instant case, it has nowhere been stated that any of the partners (Petitioners 2 to 11) at the relevant time, was in-charge of and responsible to the company (Petitioner No. 1) for the conduct of its business and thus in the absence of allegations which constitute pre-condition for fastening vicarious liability on the partners, they cannot be held liable for the offence in question." 6. On the basis of the aforesaid decisions, it is submitted that for issuing the processes against the accused persons, it has to be clearly mentioned that the partners of the firm were in charge of the business of the firm or conducting its affairs when the offence is alleged to have been committed. It, therefore, appears that only the person who was in-charge of the business can be proceeded against and, therefore, the prosecution of the petitioners and issue of process for this offence against them is bad and cannot be sustained. The complaint petition is also completely silent on the fact whether the partners of the firm, who have been made accused with regard to the said offence were responsible for conducting the business of the firm. In this view of the matter, the order of cognizance passed by the learned Additional Chief Judicial Magistrate, Patna City is bad in law and cannot be sustained. 7. In this view of the matter, the order of cognizance passed by the learned Additional Chief Judicial Magistrate, Patna City is bad in law and cannot be sustained. 7. It is also submitted on behalf of the petitioners that the Chemical Analyst before whom the sample of the drug was sent for analysis did not say that the drug was of substandard. On the other hand, it was stated by the analyst that the sample does not conform to the claim in respect of net content (vide Annexure 7). 8. No body has appeared on behalf of the opposite party No. 2 to contest this application. The State of Bihar is, however, represented by the learned A.P.P. It is, therefore, not known whether the firm has been made a party as per liberty given by this Court. It is also not clear whether any of the accused-petitioners was responsible for conduct of the business of the company. Thus, there is nothing to show that the provision of Section 34 of the said Act was complied with. In this view of the matter, the decisions relied upon by learned Counsel for the petitioners appear to be fully applicable in the present case also. 9. In the circumstances of the case, the impugned order of cognizance appears to be bad in law and the same deserves to be quashed. Accordingly, this application is allowed and the impugned order dated 11.5.1993 passed in C.B. No. 198 of 1993/Tr. No. 1117 of 1993 is quashed.