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2014 DIGILAW 2438 (BOM)

State of Goa v. Shivani Laboratories

2014-12-11

U.V.BAKRE

body2014
Judgment : 1. Heard Mrs. Pinto, learned Additional Public Prosecutor appearing on behalf of the State and Mr. Usgaonkar, learned Counsel appearing on behalf of the respondent no. 5. 2. This is a State appeal against acquittal of respondents no. 1 and 5 above-named, vide judgment and order dated 24.01.2012, passed by the learned Judicial Magistrate, First Class at Mapusa (J.M.F.C., for short) in O. A. Criminal Case No. 10/1997 (old) : O. A. Criminal Case No. 250/1999/D (new). 3. For convenience, the parties shall hereinafter be referred to as arrayed before the Magistrate. 4. The State, through the Drugs Inspector namely Mr. Raghuvir D. Bhise, had lodged the complaint before the Judicial Magistrate First Class, at Mapusa against five accused persons for offences under Section 18(a)(i) read with Section 16(1)(a), sub-section (c) of Section 17 and subsection (d) of Section 17-B, punishable under Section 27(c) of the Drugs and Cosmetics Act, 1940 ('the Act', for short), which came to be registered as O. A. Criminal case No. 10/1997 and again as O. A. Criminal Case No. 250/1999. 5. The case of the complainant, in short, was as follows : The accused no.1 was a Partnership Firm having manufacturing premises at Shirali, 581 354 Uttar Kannada and was engaged in drug manufacturing activity at its factory and held drug manufacturing licence No. KTK/28/265/94 for manufacturing of drugs for sale under the provisions of the Drugs and Cosmetics Rules, 1945 ('the Rules', for short). Under the said licence, the accused no. 1 along with its partners were permitted to manufacture for sale a drug formulation in ointment form (external preparation) Framycetin Sulphate Cream under the brand name “Fratouch” the composition of which was Framycetin Sulphate 1% W/W Cream base …. Q.S.. On 28/06/1995, the complainant visited the premises of M/s. G. N. Agencies situated at 1st floor, Shivsagar Appartment, near Maruti Temple, Bardez, Mapusa-Goa, a licenced dealer holding drug licences no. 1101/F20B and 1102/F21B to sell drugs by way of whole sale. Shri Govind Ramnath Naik, proprietor-cum-competent person of the said drug store was present there at that time. Large number of drugs for sale which included 'Framycetin Sulphate Cream' under the brand name 'Fratouch' manufactured by M/s. Shivani Laboratories (accused no.1) were found. The complainant drew samples in quantities 4x1 x 15 gms. of Framycetin Sulphate Cream (Fratouch) having batch no. 507, Date of Mfg. Large number of drugs for sale which included 'Framycetin Sulphate Cream' under the brand name 'Fratouch' manufactured by M/s. Shivani Laboratories (accused no.1) were found. The complainant drew samples in quantities 4x1 x 15 gms. of Framycetin Sulphate Cream (Fratouch) having batch no. 507, Date of Mfg. 4/95, Date of Expiry 3/97, Mfg. Licence No. KTK/28/265/94, manufactured by accused no. 1, for test analysis by following the procedure prescribed under Section 23 of the Act. Intimation was given to said proprietor, in prescribed form 17. All the four portions of the said samples were sealed and marked in the presence of said proprietor. One sealed portion of the sample was given to the said proprietor, under Section 23(4) of the Act. The credit invoice no. 650 was issued by the owner towards the costs of the drugs, which amount was paid by cheque. One of the said samples was sent for analysis to the Government Analyst, Goa at Bombay and the Government analyst declared that the said sample was not of standard quality vide his report dated 11/12/1995, for the reason that the sample did not conform to the standards for Framycetin Sulphate as the contents of Neomycin 'C' in the sample were 21.09% which was more than the standard limit (not more than 3.0%). A copy of the test report was sent to M/s. G. N. Agencies, Mapusa-Goa along with show cause notice dated 29.12.95 directing to stop sale of the said drug, etc.. During the inquiry, it was reported by M/s. G. N. Agencies that the drugs were supplied to them by M/s. Shivani Pharmatech Pvt. Ltd., Bangalore. A sealed portion of the drug sample along with the copy of the test report, was then sent to M/s. Shivani Pharmatech Pvt. Ltd., Bangalore which in turn disclosed that the said drugs were purchased from M/s. Shivani Laboratories, Shirali (accused no.1), who was the manufacturer. The accused nos. 1 to 5, therefore, contravened Section 18(a)(i) of the Act by manufacturing for sale and selling a drug which was not of standard quality in terms of Section 16(1) (a) read with item 1 of the second schedule and which was misbranded and spurious in terms of sub-section (c) of Section 17 and sub-section (d) of Section 17-B of the Act and, therefore, committed an offence punishable under Section 27(c) of the Act. Written sanction from the Director of Food and Drugs Administration, Panaji to launch the prosecution against the accused persons has been duly obtained. The complainant filed an application on 05/02/1997, before the learned J.M.F.C., to forward one sealed portion of sample to the Director of Central Drugs Laboratory, Calcutta, which is the Appellate Laboratory. The sample was accordingly sent. The Director of Central laboratory, by report dated 03/03/1997, stated that the sample did not contain Framycetin but contained 23.09% of Neomycin-C, as against the limit of not more than 3% and the sample was considered to be spurious under Section 17-B(d) of the Act. 6. The accused nos. 2, 3 and 4, upon appearance before the learned Magistrate, filed an application dated 13/01/1998 for recalling process and dropping the proceedings as against them. It was alleged in the application that the complaint did not disclose that the accused nos. 2 to 4 were responsible for conduct of the business of disputed samples. It was also stated that the sanction dated 29/01/1997 itself stated that the accused no. 5 was duly constituted attorney for manufacture and sale of Framycetin Sulphate Cream (Fratouch) products and that there was no mention that the accused nos. 2, 3 and 4 were in overall control of the day to day business of the firm. The accused persons, however, by Memo dated 16/02/2006, withdrew the said application for recall of process and the same was accordingly dismissed as withdrawn. The accused no. 3 expired during the pendency of the proceedings and the matter stood abated as against her. Inquiry before charge was held. The complainant Mr. Raghuvir Bhise examined himself as PW1 and produced various documents before the learned Magistrate. The complainant further examined Shri Ratankumar Arlekar, the panch witness to the attachment panchanama dated 17/01/1997, as PW2 and Shri Dnyneshwar Dhargalkar, the other panch witness for the same seizure panchanama, as PW3. Arguments before charge were heard by the learned J.M.F.C. By order dated 26/06/2009, the learned J.M.F.C. held that no case was made out for discharge of the accused nos. 2 and 4 and ordered framing of charge as against the accused nos. 1, 2, 4 and 5. The accused nos. Arguments before charge were heard by the learned J.M.F.C. By order dated 26/06/2009, the learned J.M.F.C. held that no case was made out for discharge of the accused nos. 2 and 4 and ordered framing of charge as against the accused nos. 1, 2, 4 and 5. The accused nos. 2 and 4 then approached the learned Sessions Court at Margao against the said order dated 26/06/2009, and in Criminal Revision Application No. 77/2009, by judgment and order dated 05/11/2009, the process issued against the accused nos. 2 and 4 came to be quashed and set aside and the learned Magistrate was directed to proceed with the matter only as against the accused nos. 1 and 5. The learned Additional Sessions Judge found that the complaint did not disclose that the accused nos. 2 and 4, who were the partners of accused no. 1-firm, were in any way involved or responsible for the day to day business of accused no. 1 and hence held that the accused nos. 2 and 4 cannot be prosecuted for contravention of the provisions of the Act. The said order dated 05/11/2009 has not been challenged. 7. Subsequently, on 10/12/2009, charge was framed as against the accused nos.1 and 5 for having contravened the provisions of Section 18(a)(i) read with Section 16(1)(a) read with item no. 1 of second schedule read with sub-section (c) of Section 17 and sub-section (d) of Section 17-B, punishable under Section 27(c) of the Act by manufacturing for sale or distribution and selling the drug 'Framycetin Sulphate Cream' (Fratouch) which was not of standard quality and was spurious. The charge was explained to the accused no. 5 who pleaded not guilty. The prosecution then examined one Nazir Ahmad, Drugs Inspector, Uttar Kannada, as PW4 and Mr. Govind Naik, proprietor of Ms/ G. N. Agencies as PW5. The statement of the accused no. 5 was recorded under Section 313 of the Code of Criminal Procedure. The accused no. 5 did not examine any witness. 8. Upon consideration of the entire evidence on record, by judgment and order dated 24/01/2012, the learned J.M.F.C. observed that one of the instructions on the tube was that the contents had to be stored in a cool place. 5 was recorded under Section 313 of the Code of Criminal Procedure. The accused no. 5 did not examine any witness. 8. Upon consideration of the entire evidence on record, by judgment and order dated 24/01/2012, the learned J.M.F.C. observed that one of the instructions on the tube was that the contents had to be stored in a cool place. She held that on comparison of the two reports, i.e. the report of Government Analyst and that of the Central Drugs Laboratory, it was seen that there was increase of Neomycin content by 2% and it appeared that if the drug was not stored as instructed, there could be variation in the contents of the tube, since as per the testimony of PW2, the drugs inspector, failure to store the tubes as per the instructions would lead to deterioration of the contents of the tube. The learned Magistrate further observed that a perusal of the licence at Exhibit 96 showed that Shri S. K. Bhagat and Shri R. S. Raikar were the qualified persons to test the strength, quality and purity of the drugs. The learned J.M.F.C. held that there was manufacturing defect and it was the responsibility of the experts to have checked the compounds which were used for manufacturing the drug. It has been held that the technical staff i.e. chemists and analysts were directly concerned with the manufacturing process, whose basic duty was to see that no spurious or sub-standard drug was prepared. The J.M.F.C. found that one of the conditions for grant or renewal of licence under the Act was that the manufacturing firm had qualified persons to manufacture the drugs. The J.M.F.C., therefore, held that the accused no. 5 could not be held guilty of the offence. The accused nos. 1 and 5 came to be acquitted. The said judgment and order dated 24/01/2012 is impugned in the present appeal. 9. Learned Additional Public Prosecutor submitted that the J.M.F.C. erred in not taking into consideration that the sample was not of standard quality, as per the report of Central Drug Laboratory, since it contained 23.09% of Neomycin-C as against the limit of not more than 3%. She contended that the difference between the two reports was only 2% which was marginal and not sufficient for acquittal of the accused. She contended that the difference between the two reports was only 2% which was marginal and not sufficient for acquittal of the accused. The learned Additional Public Prosecutor urged that the product 'Fratouch' was not such a drug requiring refrigerator for storage but mere storage in a cool place, with temperature not exceeding 30 degrees Centigrade, was enough so that the drug could remain stable without deterioration and this was done in the present case. She pointed out that in terms of Section 25(4) of the Act, the report of the Director of Central Laboratory, Calcutta, was conclusive evidence. In this regard, she relied upon the judgment of this Court in the case of “Plethico Pharmaceuticals and others V/s. State of Maharashtra” reported in 2002 Vol. 104(3) Bom.L.R. 41. The Additional Public Prosecutor submitted that the learned J.M.F.C. wrongly held that there was manufacturing defect and that the responsibility was of the experts. She contended that the above finding is perverse. The learned Additional Prosecutor submitted that the accused no. 5 had never claimed to be discharged and had faced trial. It is the contention of the learned Additional Public Prosecutor that since it was specifically stated in the complaint that the accused nos. 1, 2, 3, 4 and 5 are manufacturing for sale and selling the said drug 'Framycetin Sulphate Cream', there was required averment in the complaint. She further contended that after trial was completed, the question of going into the averments in the complaint did not arise and the documents produced on record by PW1 clearly revealed that the accused no. 5 was in charge of and managing the affairs of the firm. She pointed out that by letter dated 04/07/1995, which is part of Exhibit 47-colly, the accused no. 2 Narayan Kolle had informed the Drugs Inspector, Bangalore that Mr. Sanjay G. Revankar was authorised to take care of day to day affairs of the firm concerning production, sale and distribution. She further pointed out that by another letter dated 04/07/1995, which is also a part of Exhibit 47-colly, the accused no. 5 himself had informed the said Drugs Inspector, Bangalore, that he was the power of attorney holder of the firm M/s Shivani Laboratories, Shirali and that he had been authorised to sign the documents and correspondence and that he managed the day to day affairs of the said firm, concerning production, sale and distribution. 5 himself had informed the said Drugs Inspector, Bangalore, that he was the power of attorney holder of the firm M/s Shivani Laboratories, Shirali and that he had been authorised to sign the documents and correspondence and that he managed the day to day affairs of the said firm, concerning production, sale and distribution. According to her, in terms of proviso to Section 34(1) of the Act, it was for the accused no. 5 to prove that the offence was committed without his knowledge. Learned Counsel also contended that the extent of the liability of the accused no. 5 had also been established by evidence during trial. She contended that in the matter of drugs where there are serious allegations, technical view based on pleadings should not be taken. Learned Additional Public Prosecutor, therefore urged that the impugned Judgment and Order be set aside and the accused nos. 1 and 5 be convicted and sentenced for the offences for which they were tried. Learned Additional Public Prosecutor relied upon the following judgments: (i) “DineshB. Patel and others Vs. State of Gujrat and another” [ (2010)11 SCC 125 ]. (ii) “Drugs Inspector, Palace Road, Bangalore Vs. Dr. B. K. Krishnaiah and another” [ (1981) 2 SCC 454 ] 10. Mr. Usgaonkar, learned counsel for the accused no. 5 submitted that accused no. 5 was not a partner of the accused no. 1. He pointed out that in the complaint, there was nothing stated as to what was the relationship of the accused no. 5 with the accused no. 1. More particularly, there was no averment to the effect that the accused no. 5, at the time the offence was committed, was in charge of, and was responsible to the accused no. 1(Partnership Firm) for the conduct of the business of the said Firm. Learned Counsel forcefully urged that the averments in the complaint should, essentially, spell out a case that the accused no. 5 was in charge of and responsible for the conduct of business of the company and since the same was not there, the trial Magistrate could not have convicted the accused and therefore the acquittal of the accused no. 5 cannot be questioned. 11. Section 34 of the Act provides as follows : “34. Offences by companies. 5 was in charge of and responsible for the conduct of business of the company and since the same was not there, the trial Magistrate could not have convicted the accused and therefore the acquittal of the accused no. 5 cannot be questioned. 11. Section 34 of the Act provides as follows : “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 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: 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.” In this regard, the relevant averments in the complaint are as follows : (i) That accused no.1 is a Partnership Firm, having manufacturing premises at Shirali 581 354, Uttar Kannada and is engaged in the drug manufacturing activity at its factory. (ii) That the accused nos. 1, 2, 3, 4 and 5 have contravened Section 18(a)(i) of the Act by manufacturing for sale and selling a drug 'Framycetin Sulphate Cream' …........................ 12. In the case of “DineshB. (ii) That the accused nos. 1, 2, 3, 4 and 5 have contravened Section 18(a)(i) of the Act by manufacturing for sale and selling a drug 'Framycetin Sulphate Cream' …........................ 12. In the case of “DineshB. Patel and others” (supra), in paragraph 6 of the complaint, it was averred as under: “Looking to the testing report of the above medicine, Denilyte M. 506072, presence of fungus is noted, hence, it has been declared as uneven. Therefore, by manufacturing of this medicine for sale, Firm of M/s. Denis Chem Lab. Ltd, Chhatral, Tal. Kalol, District Gandhinagar and its directors have made breach of this Act, therefore, this is punitive offence at first sight.” In the case supra, the accused were specifically mentioned as directors of the company. The Supreme Court, in the case supra, observed that the vicarious liability of a person for being prosecuted for an offence committed under the Act by 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. It was further observed that simply because a person is a director of Company, it does not necessarily mean that he fulfills both the above requirements so as to make him liable. Conversely, without being a director, a person can be in charge of and responsible to the Company for the conduct of its business. It was further observed by the Apex Court that from the complaint in question, it was found that except the bald submission that the respondents were directors of the manufacturers, there was no other allegation to indicate even prima facie that they were in charge of the Company and also responsible to the Company. It was observed that in addition to stating that the accused were directors, a statement had been made in paragraph 6 of the complaint that by manufacturing of the medicines concerned for sale, the Company and its directors had committed the breach of the Act and, therefore, there was an allegation that the directors were privy to the manufacturing of medicine by the Company. The Apex Court observed that this was a case of the manufacture of drug for human consumption and after it was tested in laboratory, it was found to be defective and since there was growth of fungus, it was a very serious matter relating to public health. The Apex Court observed that this was a case of the manufacture of drug for human consumption and after it was tested in laboratory, it was found to be defective and since there was growth of fungus, it was a very serious matter relating to public health. Under the peculiar circumstances of that case and realizing the seriousness of the allegation, the Apex Court held that they would not take a technical view based on the pleadings in the complaints. Thus, in the case supra, it has not been held by the Apex Court that there is no need to make specific averment in the complaint that the person named as accused along with the company, 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. In the peculiar circumstances of that case and realising the seriousness of the allegation, the Apex Court refused to take a technical view based on the pleadings in the complaint. No doubt, the case before this court also pertains to contravention of the Drugs and Cosmetics Act. However, the peculiar circumstances in the case supra were that the drug was manufactured for human consumption and it was found to be defective since there was a growth of fungus, which was found to be a very serious matter relating to public health. The circumstances in the case before this Court are not the same. The drug here is not for human consumption, but is a cream for external use. This is not a case where growth of fungus was found in this cream, but this is a case where allegedly, the content of Neomycin “C” was found to be more than the standard limits. It is not the case of the prosecution that the matter was very serious relating to public health. Therefore, the judgment in the case of “Dinesh B. Patil” (supra), is not applicable to the facts and circumstances of the present case. 13. In the case of “Drugs Inspector, Palace Road, Bangalore” (supra), there was a Partnership Deed annexed to the complaint which showed that all the partners were responsible for carrying on the business. Therefore, the judgment in the case of “Dinesh B. Patil” (supra), is not applicable to the facts and circumstances of the present case. 13. In the case of “Drugs Inspector, Palace Road, Bangalore” (supra), there was a Partnership Deed annexed to the complaint which showed that all the partners were responsible for carrying on the business. Therefore, the Apex Court held that the High Court committed an error in holding that there was no allegation that the respondents were responsible for the management and conduct of the business of the firm. The Apex Court held in the case supra that the extent of the liability would be established by evidence during trial. In the present case, no documents were annexed to the complaint. There was no averment in the complaint that the accused no. 5 was responsible for carrying out the business of the accused no.1. In fact there was no averment as to what relation, the accused no. 5 had with the firm. In such circumstances, the question of establishing the extent of the liability of the accused no. 5, subsequently, by evidence, did not arise. The above case is not applicable to the present case. 14. Mr. Usgaonkar, learned Counsel for the accused no. 5 vehemently submitted that it was mandatory to make an averment in the complaint that the accused person/s were in charge of and responsible for the conduct of the business of the company. He pointed out that the accused nos. 2 and 4 were discharged by the learned Assistant Sessions Judge, in Criminal Revision Application No. 77/2009, only because the complaint did not disclose any person being in charge of and responsible for the day to day affairs and business of the firm. He submitted that the above order has not been challenged and therefore the said finding has attained finality and by using the same principle, the accused no. 5 is also entitled for acquittal. Mr. Usgaonkar relied upon various authorities to substantiate his contention that the averment in the complaint that the accused was in charge of and responsible for the conduct of the business of the firm was mandatory. 15. In the case of “Municipal Corporation of Delhi Vs. Ram Kishan Rohatgi and others”, [ (1983) 1 SCC 1 ], clause no. 5 in the complaint stated that the accused no. 3 was the manager of the accused no. 15. In the case of “Municipal Corporation of Delhi Vs. Ram Kishan Rohatgi and others”, [ (1983) 1 SCC 1 ], clause no. 5 in the complaint stated that the accused no. 3 was the manager of the accused no. 2 and the accused nos. 4 to 7 were the directors of the accused no. 2 and as such, they were in charge of and responsible for the conduct of the business of accused no. 2 at the time of sampling. Thus, the complainant had merely presumed that the accused nos. 4 to 7 were in charge of and responsible for the conduct of business of the accused no. 2 because they were directors of the accused no. 2. The Delhi High Court, therefore, had quashed the proceedings against the directors as also against the manager. The Hon'ble Supreme Court agreed with the High Court that no case against the directors (the accused nos. 4 to 7) was made out ex-facie on the allegations made in the complaint and that the proceedings against them were rightly quashed. The Hon'ble Supreme Court, however, did not agree that the accused no. 3 namely respondent no. 1, who was manager of the Company, would fall in the same category as the directors. The order of the High Court insofar as the quashing the proceedings against the manager, respondent no. 1 is concerned, was set aside by the Supreme Court. Thus, it can be understood from the above that even if an averment is made in the complaint to the effect that the accused persons are directors of the Company and, therefore, they are in-charge of and responsible for the conduct of the business of the Company, that would not be a sufficient averment in terms of Section 34 of the Act. In the present case, there is not even an averment in the complaint to the effect that on account of the designation of the accused no. 1, in relation to the accused no. 1, the present accused no. 5 was in charge of and responsible for the conduct of the business of the said firm. 16. In the case of “State of Maharashtra Vs. R. A., Chandawarkar and others” [1999 Cri. 1, in relation to the accused no. 1, the present accused no. 5 was in charge of and responsible for the conduct of the business of the said firm. 16. In the case of “State of Maharashtra Vs. R. A., Chandawarkar and others” [1999 Cri. L. J. 4449], which case was regarding the offences under the Drugs and Cosmetics Act, by the Company, there was no averment that the accused persons were in charge of and responsible for the conduct of the business of the Company. The learned Single Judge of this Court held that according to Section 34 of the Act, unless and until the prosecution makes an averment and produces the evidence to the effect that the concerned director was in charge of and responsible to the conduct of the business, the prosecution cannot lie against such a director against whom no such evidence is produced. In the present case, there was no averment as to what was the relation of accused no. 5 with the firm and more particularly, there was no averment at all that he was in charge of and responsible to the conduct of the business of the firm. When there was no averment in the complaint at all, the question of proving the same in evidence did not arise. 17. In the case of “A. V. Mody and others Vs. S. R. Salunke and another” [1999 (3) Mh. L.J. 850], just like in the case before this Court, it was averred in paragraph 20 of the complaint that as per the provisions of Section 34 of the Act, the accused nos. 1 to 11 were responsible for manufacture for sale, for distribution and for sale of the drug in question which was not of standard quality and hence, had committed offence under Section 18(a)(i) of the Act. The learned Single Judge of this Court observed that the said averments in the complaint do not make out a prima facie case against the accused, who were the directors of the Company and, therefore, they were not liable for being prosecuted under Section 34 of the Act for the alleged offence committed by the Company. It has been held that only those persons, who are in charge of and are responsible for the conduct of the business of the Company, can be prosecuted along with the Company. 18. It has been held that only those persons, who are in charge of and are responsible for the conduct of the business of the Company, can be prosecuted along with the Company. 18. In the case of “S. M. S. Pharmaceuticals Vs. Neeta Bhalla and another” [ 2005(8) SCC 89 ], the Hon'ble Apex Court has observed that the cases have arisen under other Acts where similar provisions are contained creating vicarious liability for the officers of Company in cases where primary liability is that of a Company. It is observed that Section 34 of the Drugs and Cosmetics Act, 1940 contains a similar provision making every person in charge of and responsible to the Company for the conduct of its business liable for the offence committed by a Company. The Apex Court has held as under: “18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That the respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial. 19. Even a non-director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial. 19. In view of the above discussion, our answers to the questions posed in the reference are as under: (a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) The answer to question posed in sub-para (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.” 19. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.” 19. In view of the above, it is clear beyond doubt that it was mandatory to make averment in the complaint to the effect that the accused no. 5 was in charge of and responsible to the accused no.1 for the conduct of its business. The extent of the responsibility/control, etc., if found necessary, could have been brought in oral evidence and proved. In the absence of said mandatory averment in the complaint, the question of proceeding against the accused no. 5, did not at all arise. Section 34(1) of the Act requires that every person, who at the time the offence was committed, was in charge of and was responsible for the conduct of the business of the company as well as the company should be proceeded against. Proceedings cannot lie only against the Company. Even otherwise, on 06/05/2013, in the absence of the respondent no. 5 and his Counsel, a submission was made by the learned Additional Prosecutor that the respondent no. 1-firm has since been closed and that the same is represented by respondent no. 5 and therefore no notice needs to be served on the respondent no. 1. But the said submission was not accepted to be true by this Court. The fact is that the respondent no. 5 does not represent the respondent no. 1 and hence the respondent no. 1 does not appear to have been served after admission of the appeal. 20. Learned Additional Public Prosecutor then contended that after the trial was completed, there was evidence record to establish that the accused no. 5 was in charge of and responsible for the conduct of the business of the firm at the relevant time and therefore question of going back to the averments in the complaint did not arise. In my considered view, the above submission has no legal sanctity. 5 was in charge of and responsible for the conduct of the business of the firm at the relevant time and therefore question of going back to the averments in the complaint did not arise. In my considered view, the above submission has no legal sanctity. If the averments in the complaint are not to be seen, then the accused, in no case, would be in a position to get discharge on the ground that there are no required averments in the complaint since in all such cases the prosecution would claim that the accused should wait till completion of trial and the said requirement would be established during trial. Primarily, the complainant had to make necessary averments in the complaint and then had to establish the same during trial. If such averments were made in the complaint and initial burden to prove the same was discharged by the prosecution, then the obligation of the accused no. 5 to prove that at the time the offence was committed he was not in-charge of and was not responsible to the firm for the conduct of the business of the firm or that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence, would have arisen. 21. In the case of “MonabenKetanbhai Shaha and another Vs. State of Gujrat and others” [ AIR 2004 SC 4274 ], the Apex Court set aside the judgment of the High Court and restored the order of the Magistrate discharging the appellants. It has been held as under: “6. From the above, it is evident that in the complaint there are no averments against the appellants except stating in the title that they are partners of the firm. Learned counsel for the respondents/complainant contended that a copy of the partnership deed was also filed which would show that the appellants were active in the business. No such document was filed with the complaint or made part thereof. The filing of the partnership deed later is of no consequence for determining the point in issue. Section 141 does not make all partners liable for the offence. The Criminal liability has been fastened on those who, at the time of the commission of the offence, was in-charge of and was responsible to the firm for the conduct of the business of the firm. Section 141 does not make all partners liable for the offence. The Criminal liability has been fastened on those who, at the time of the commission of the offence, was in-charge of and was responsible to the firm for the conduct of the business of the firm. These may be sleeping partners who are not required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The obligation of the appellants to prove that at the time the offence was committed they were not in-charge of and were not responsible to the firm for the conduct of the business of the firm, would arise only when first the complainant makes necessary averments in the complaint and establishes that fact. The present case is of total absence of requisite averments in the complaint.” 22. From the above judgment of the Apex Court, it is clear that the primary responsibility was on the complainant to make necessary averments in the complaint so as to make the accused no. 5 vicariously liable. The filing of the letters dated 04/07/1995 later on was of no consequence for determining the point in issue. Therefore, the contention of the learned Additional Public Prosecutor that once the evidence was recorded and it was proved through documents that the accused no. 5 was in charge of and responsible to the conduct of the business of the firm, Court cannot go back to the contents of the complaint, has no merit at all. 23. Be that as it may, let us see if there is evidence on record to prove beyond reasonable doubt that the accused no. 5 was, at the relevant time, in charge of and responsible for the conduct of the business of the firm. The accused no. 5 has not been described in the complaint by his designation. He was admittedly not a partner of the accused no.1-firm. PW1 has produced the copies of the letters dated 04/07/1995, allegedly, of Shri Narayan Kolle, partner of the Firm as also a letter dated 04/07/1995, allegedly, of the accused no. The accused no. 5 has not been described in the complaint by his designation. He was admittedly not a partner of the accused no.1-firm. PW1 has produced the copies of the letters dated 04/07/1995, allegedly, of Shri Narayan Kolle, partner of the Firm as also a letter dated 04/07/1995, allegedly, of the accused no. 5 himself, which have been marked as exhibit 47 colly. As per the letter dated 04/07/1995 stated to have been written by Narayan Kolle, on behalf of Shivani Laboratories to Mr. V. L. Hambar, the Drugs Inspector, Bangalore, Smt. Shantabai Gajanan Kolle, Shri Raghuveer Gajanan Kolle, Kumari Vaishnavi J. Kolle, Master Aniruddha R. Kolle and Mr. Narayan G. Kolle (all partners of Shivani Laboratories) did not actively take part in the day to day affairs of the Firm and that Mr. Sanjay Revankar had been authorised by the said persons to take care of the day to day affairs of the Firm concerning production, sale and distribution. Again, as per the letter dated 04/07/1995, stated to have been written by the accused no.5 - Sanjay Revankar to Mr. V. L. Hambar, Drugs Inspector, Bangalore, the accused no. 5 had stated that he was a power of attorney to sign the documents and correspondence and that he managed the day to day affairs of Shivani Laboratories, Shirali concerning production, sale and distribution. It was submitted by the learned Additional Public Prosecutor that there is on record a letter dated 15/03/1996( Exhibit 55), from Shivani Laboratories stating that the reports analysing the samples seized, were not correct and stating that they intend to adduce additional evidence in contravention of the said reports. She submitted that this letter has been signed by the accused no. 5, Mr. Sanjay Revankar. Learned Additional Public Prosecutor, therefore, contended that there was more than sufficient evidence on record to establish that the accused no. 5 was in charge of and responsible for the day to day affairs of the accused no. 1. Therefore, she submitted that the prosecution as against the accused no.5 was maintainable. However, as has been rightly contended by the learned Counsel for the accused no. 5 was in charge of and responsible for the day to day affairs of the accused no. 1. Therefore, she submitted that the prosecution as against the accused no.5 was maintainable. However, as has been rightly contended by the learned Counsel for the accused no. 5, though the said letter dated 04/07/1995, allegedly, written by one of the partners namely Narayan Kolle, has been marked as an exhibit, however, the contents of the same have not been proved since the maker of the same has not been examined and the signature on the same has not been proved to be of the said alleged maker. Shri Narayan Kolle was discharged by order dated 5/11/2009, passed by the learned Additional Sessions Judge, Panaji, in Criminal Revision Application No. 77/2009. The evidence of the prosecution was going till December 2011. Shri Narayan Kolle could have been summoned and examined as witness. The other letter dated 04/07/1995 was allegedly written and signed by accused no. 5, himself. The signature of the accused no. 5 on the same was not proved through the handwriting expert. Shri V. L. Hamber, the Drugs Inspector, Bangalore was not examined to prove the contents of those letters. The contents of the said letters were not put to the accused in his statement under Section 313 of Cr.P.C., for him to deny or to concede and explain. However, the accused was simply questioned about the said letters in question no. 22 and in answer to it, the accused denied the same. The complainant (PW1) had visited the premises on 28/06/1995. Thus, the said letters are not of the date prior to the investigation, so as not to doubt their genuineness. The question arises as to why the accused no. 5 would hand over such letters to Mr. V. L. Hamber. There is nothing on record to show as to in what context and as for what reason, Mr. Narayan Kolle had to write such letter to Mr. V. L. Hambar. Same is the case with further letter dated 04/07/1995 allegedly written by the accused no. 5 since the signature on the same has not been proved to be of the accused no. 5. Narayan Kolle had to write such letter to Mr. V. L. Hambar. Same is the case with further letter dated 04/07/1995 allegedly written by the accused no. 5 since the signature on the same has not been proved to be of the accused no. 5. The Partnership Deed at Exhibit 47-colly says that Shri Narayan Kolle, Smt Shantabai Kolle and Raghuveer Kolle were the working partners and they were supposed to take active part and engage themselves in conducting the affairs of the business of the firm. The said two letters dated 04/07/1995, at Exhibit 47-colly, are, therefore, not beyond suspicion. Thus, even during trial, it was not convincingly proved that the accused no. 5 was in charge of and responsible for the conduct of the business of the accused no. 1-firm. 24. In the result, there is no merit in the appeal and hence the same is dismissed. Bail bonds of the accused no. 5 and his surety are cancelled. Proceedings closed.