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2000 DIGILAW 753 (AP)

BIDDLE SAWYER Ltd. , MUMBAI v. State Of A. P.

2000-09-27

VAMAN RAO

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VAMAN RAO, J. ( 1 ) THIS petition under section 482 Cr. PC seeks quashing of proceedings in CC No. 429 of 2000 on the file of the II Metropolitan Magistrate, vijayawada, in which the petitioners face charge for the offence under Section 27 (d) of Drugs and Cosmetics Act, 1940 (for short the Act ), for violation of Section 18 (a) (i) read with Section 16 and Second Schedule of the Act. ( 2 ) PETITIONER No. 1/a-1 is the Company. Petitioners 2 to 5 who are A2 to a5 in the complaint are said to be Chairman and Directors of the said Company. The offence alleged against the accused as revealed from the complaint is that a drug called mendazole (Membendazole suspension) was manufactured and sold by the Company, which when tested was found to be a sub-standard one. The contention of the learned Counsel for the petitioners is that the drug in question was manufactured by A1-Company some times in July, 1997. ( 3 ) IT is stated that the Company was taken over by Glaxo India Limited on 5-1-1998 and the 2nd petitioner was chairman of the Board of Directors of the company. It is further stated that as a part of process of taking over, petitioners 3 and 5 were appointed as its Directors on 1-10-1997 whereas petitioner No. 4 was appointed as its Director on 15-12-1997. The contention of the learned senior Counsel for the petitioners Mr. Padmanabh Reddy is that the complaint itself discloses that the drug in question was manufactured in july, 1997 as seen from the allegations in paragraph 2 of the complaint wherein it is stated that the drug in question pertains to batch No. MS-162, Manufacturing date july, 19 97 and expiry date: June, 2000 . In fact the drug in question was seized from the medical stores of Railway Hospital on 24-7-1998. The contention is that inasmuch as the drug in question was manufactured and sold by the Company in july, 1997, petitioners 2 to 5 herein, who have been appointed as Chairman and directors of the Company subsequent to that date, cannot be held liable for any contravention of the relevant provisions of law relating to the manufacture of the drug in question. ( 4 ) THE dates as to the manufacture of the drug and the appointment of the petitioners 2 to 5 as Chairman and Directors as mentioned above are not disputed. At any rate, the dates of appointments of the Chairman and the Directors can be ascertained from Form No. 32 in respect of the Company in question. In fact, on behalf of petitioner No. 1, A-6 who was described as the Chief Production Executive by his letter dated July 21, 1999 has informed the drug Inspector concerned that the drug in question was manufactured by the erstwhile owner of the Company. It is further seen that the Drug Inspector has addressed the company for furnishing information as to the name of the Managing director of the company and the constitution of the firm as on the date of manufacture of the drug in question. To this, A6 sent a reply stating that the old Memorandum of Articles of association and the current address of the former Directors are not available. Under these circumstances, the contentions raised on behalf of petitioners 2 to 5 that inasmuch as the drug in question was manufactured and sold prior to their appointment as chairman and Directors of the Company and inasmuch as the Company itself was acquired by the new management of m/s. Glaxo India Limited subsequent to the manufacture of the said drug, petitioners 2 to 5 cannot be fastened with criminal liability for the alleged offence has some force. From the information as available from the complaint and as seen from the documents referred to above, it is obvious that petitioners 2 to 5 could not be said to have been in-charge of and responsible to the business of the Company as on the date of manufacture of the drug in question. Thus, it is obvious that they cannot be held liable for the alleged offence. However, as far as A1 Company is concerned, its liability cannot be effaced merely because of acquisition of its shares by another Company and the change of the management of the company. ( 5 ) THE only question is as to who could represent the said Company as on the date of commission of the alleged offence. However, as far as A1 Company is concerned, its liability cannot be effaced merely because of acquisition of its shares by another Company and the change of the management of the company. ( 5 ) THE only question is as to who could represent the said Company as on the date of commission of the alleged offence. Obviously, A2 who was appointed as the chairman of the Company in January, 1998 could not be said to represent the Company as on the date of alleged offence. However, it is for the complainant to seek to prosecute the petitioner No. 1-Company by having it represented by the appropriate person who could be said to represent the Company as on the date of the alleged offence. ( 6 ) IN view of the above, this petition as far as petitioner Nos. 2 to 5 are concerned in allowed and the proceedings in cc No. 429 of 2000 on the file of the ii Metropolitan Magistrate, Vijayawada, to the extent of petitioners 2 to 5 (A2 to A5) are quashed.