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Himachal Pradesh High Court · body

2013 DIGILAW 814 (HP)

Ashish Mittal v. Anil Chand

2013-09-16

SURINDER SINGH

body2013
JUDGEMENT SURINDER SINGH, J. - 1. THE petitioner, as an accused, has invoked the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure for quashing the order of summoning dated 21.5.2010 passed by the learned Judicial Magistrate 1st Class, Nadaun, District Hamirpur in Complaint No.58-I of 2010, punishable under Section 18(a)(i) of the Drugs and Cosmetics Act, in short "the Act" and Rules framed thereunder read with Section 27(d) of the Act. 2. HEARD and gone through the record. Precisely the facts giving rise to the present petition can be stated thus. On 8.1.2009, Drug Inspector alongwith his Peon Jagdish Chand visited the premises of respondent Anil Chand, Pharmacist, who was Incharge of Whether the reporters of Local Papers may be allowed to see the judgment? "M/s. Shri Shri Medical Store", Opposite Bus Stand, Nadaun, District Hamirpur (HP). They noticed Shri Anil Chand respondent conducting the business of stocking . and had exhibited for sale of allopathic drugs over the counter through his retail drugs licence valid upto 29.3.2011. ii) During inspection, the Drug Inspector picked-up three samples of Chlorpheniramine Maleate Tablets (C.P. Sys-4) B. No.LGT-8106 from Anil Chand aforesaid for analysis. Its expiry date was August, 2011. It was manufactured by "M/s. Legen Healthcare", Plot No.20, Sector 05, Parwanoo, District Solan. It was sent for chemical examination to CTL, Kandaghat, as per procedure. Vide report Annexure PH dated 31.10.2009, said sample of drug was "Not Of a Standard Quality" for the reasons mentioned therein. iii) After the receipt of adverse analysis report, a letter dated 9.11.2009 Annexure PJ alongwith copy of analysis-report was sent to Anil Chand, Pharmacist and asked to disclose the information as required under Section 18-A of the Act. In pursuance to that, he disclosed that the said drug was purchased from "M/s. Aar Kay Surgical", Sujanpur, District Hamirpur vide invoice dated 23.12.2008 Annexure PJ3. iv) Drug Inspector issued letter dated 2.12.2009 (Annexure PK) to the said firm alongwith copy of adverse report of the analyst and the purchase . invoice. They were asked to disclose the further information, as required under the Act. In response, they informed that it was purchased from "M/s. Generica India Limited" vide invoice Annexure PK4 dated 21.10.2008 and further informed vide letter dated 9.12.2009 Annexure PK5 that the drugs were received from authorized signatory of the said firm Shri Hem Raj Thakur. invoice. They were asked to disclose the further information, as required under the Act. In response, they informed that it was purchased from "M/s. Generica India Limited" vide invoice Annexure PK4 dated 21.10.2008 and further informed vide letter dated 9.12.2009 Annexure PK5 that the drugs were received from authorized signatory of the said firm Shri Hem Raj Thakur. In the further course of inquiry, the Drug Inspector sent a notice to "M/s. Generica India Limited" and asked them to disclose similar information. In turn, they informed that they had purchased the said drug from "M/s. Legen Healthcare", Parwanoo vide invoice Annexure PM1. v) Thereafter vide letter dated 1.2.2010 (Annexure PN) alongwith a sample part and other mentioned records, were sent to "M/s. Legen Healthcare" aforesaid through registered post and were asked to submit the documents/records as required for the proper investigation of the case and to explain their position in this regard. They submitted their reply and on going through all the documents submitted by them the Drug Inspector observed that the said firm did not submit the complete record/ information asked for, thus it was not satisfactory, but in turn the said firm had asked for sending of the second sample for re-test from the 'Central Drugs Laboratory' for final view, but did not provide the complete information as asked for regarding the constitution of the firm/ Company, person(s) responsible for the conduct of business. 3. SINCE the Drug Inspector found the breach of the provisions of the Act, as such filed the complaint in the Court under the aforesaid offences inter-alia impleading the petitioner as accused No.11, being a partner of "M/s. Legen Healthcare". 4. ON 21.5.2013, after perusal of the complaint and the material annexed thereto, the learned trial Court ordered to summon the accused persons mentioned in the complaint including the petitioner herein. On the receipt of the summons by the petitioner, the instant petition has been filed for the quashment of the proceedings against him precisely on the ground that Company/firm was not made a party and there is no averment in the complaint that he was Incharge of and was responsible for the conduct of business of the Company/firm. 5. THE Drugs and Cosmetics Act, 1940 is a complete Code itself. 5. THE Drugs and Cosmetics Act, 1940 is a complete Code itself. It provides for the regulation of the drugs and cosmetic, manufacture, sale and distribution and deals with the offences and punishment for the breach of the provisions of the Act by individual as well as by the Company or the Firm, as the case may be. 6. SECTION 34 of the Act deals with the offences by the Companies. It reads as under: "34. Offences by Companies.- (1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was incharge 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: Provided that nothing contained in this sub- section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation. -For the purposes of this section- (a) Company means a body corporate, and includes a firm or other association of individuals; and (b) Director in relation to a firm means a partner in the firm." This Section is a penal Section and creates a vicarious liability, like Section 141 of the Negotiable Instruments Act, 1881, which reads as under: . "141. Offences by companies. [Offences by companies]. "141. Offences by companies. [Offences by companies]. (1) If the person committing an offence under section 138 is 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 proceeded against and punished accordingly. Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub- section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attribute to, any neglect on the part of, any director, Manager, secretary, or other office of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation: For the purpose of this section. . (a) "Company" means any body corporate and includes a firm or other association of individuals; and (b) "Director", in relating to a firm, means a partner in the firm." 7. IN fact, Section 34 of the Act reproduced above is a deeming provision which provides that where an offence under the Act is committed by the Company/ firm the person incharge of and responsible for the conduct of its business is to be held guilty and be liable to be proceeded against with a view to fix culpability where the offence is committed by a Company. 8. 8. A similar proposition was dealt with by the Apex Court in Aneeta Hada v. Godfather Travels and Tours Private Limited, (2012) 5 SCC 661 , while dealing with Section 141 of the Negotiable Instruments Act quoted above, held that when a person which is a Company commits an offence, then certain categories of persons Incharge as well as the Company would be deemed to be liable for the offences under Section 138 of the Negotiable Instruments Act. Thus, the statutory intendment is absolutely plain. The provision makes the functionaries and the Companies/firms liable and that is by deeming fiction, which has its own significance. Also on the comparative reading of the above Sections under the different statutes, it can safely be concluded that every person connected with Company shall not fall within the ambit of Section 34 of the Act, which has a marked similarity with the similar provisions of Negotiable Instruments Act. The conclusion is obvious that only those persons who are incahrge of and responsible for the conduct of the business of the Company at the time of commission of the offence are liable for the criminal action. The explanation added to Section 34 ibid shows that the Company means a body corporate and includes a firm or other association of individuals and Directors in relation to a firm means a Partner. 9. IN the instant case, the petitioner is alleged to be a Partner of "M/s. Legen Healthcare". The said firm has not been impleaded as an accused and also there is no allegation in the complaint that the petitioner in his capacity as a Partner was Incharge of and responsible for the conduct-business of the said firm. Therefore, in my opinion, summoning of the petitioner for the alleged offence in his capacity as a Partner is wrong and illegal. 10. THUS, the logical conclusion is that the summoning of the petitioner as a Partner of the said firm as an accused is unsustainable, hence quashed and set aside, but however, it shall open to the Drug Inspector to implead the Company as an accused by moving an appropriate application before the learned trial Court and in case there is any evidence during the trial that a particular person is Incharge of or responsible for the conduct of the business of the Company including the petitioner, he can also be impleaded as an accused. The record of the learned trial Court be returned forthwith and shall reach before it on or before 21.10.2013.