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2004 DIGILAW 984 (AP)

D. v. Srikanth, Managing Director, Hippo Labs Pvt, Ltd. , Secbed VS State Of A. P.

2004-09-13

C.Y.SOMAYAJULU

body2004
C. Y. SOMAYAJULU, J. ( 1 ) THIS petition is filed to quash the proceedings against A-2 to A-5 in C. C. No. 733 of 2003 on the file of the Court of the judicial First Class Magistrate, Srikakulam, registered under Sections 18 (a) (i) and 16 read with Second Schedule of the Drugs and cosmetics Act, 1940 (the Act ). ( 2 ) THE contention of the learned counsel for petitioners is that since the petitioners even as per the allegations in the charge sheet are not in-charge of the affairs of A-1 company and since as per Section 34 of the act, only the Directors, who are in-charge of the day-to-day affairs of the Company are vicariously liable for the offence under the act-4 committed by Company, prosecution against the petitioners, who are A-2 to A-5, is liable to be quashed. He placed strong reliance on State of Haryana v. Brij Lal Mittal and others in support of his contention. The contention of the learned Additional Public prosecutor is that petitioners who are directors of the Company are also in-charge of the affairs of the Company and are looking after its day-to-day administration and so the charge-sheet against them cannot be quashed. ( 3 ) IN para-1 of the charge-sheet it is stated that A-6 is the Director of A-1 Firm and is responsible for the day-to-day affairs and conduct of business of thefirmforthe purpose of Section 34 of the Act. Except the said allegation there is no other allegation in the charge-sheet to show that A-2 to A-5 are the in-charge of day-to-day affairs and looking after the business of A-1 firm. In Brij Lal mttal scase relied on by the learned counsel for the petitioners, it is held that the vicarious liability of a person, 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 fulfills both the above requirements, so as to make him liable for an offence under the act-sometimes even, without being a director, a person can be in-charge, of and 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 fulfills both the above requirements, so as to make him liable for an offence under the act-sometimes even, without being a director, a person can be in-charge, of and responsible to the company for the conduct of its business. Since the specific allegation in the complaint is that A-6 is responsible for the day-to-day affairs of the A-1 firm and since petitioners are made liable only in their capacity as directors, and since the Directorofacompany is not vicariously liable, merely because of his being director ever if he is not in-charge of the day-to-day affairs of a company, even if the allegations in the complaint are taken to be true, no offence can be said to have been made out against the petitioners merely because of their being Directors of the A-1 company. ( 4 ) THEREFORE, the proceedings against the petitioners, i. e. A-2 to A-5 in C. C. No. 733 of 2003 on the file of the Judicial First Class magistrate, Srikakulam, are liable to be and, hence, are quashed. The criminal petition is, accordingly, allowed.