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2014 DIGILAW 300 (KER)

Mukesh Bhagubhai Patel v. State of Kerala

2014-04-01

K.RAMAKRISHNAN

body2014
Judgment : This criminal miscellaneous case is filed by accused Nos.3, 5 and 6 in C.C.No.582/2011 on the file of the Judicial First Class Magistrate Court, Karunagappally to quash the proceedings under Section 482 of the Code of Criminal Procedure (hereinafter called the 'Code'). 2. It is alleged in the petition that, the petitioners are arrayed as accused Nos. 3, 5 and 6 in C.C.No.582/2011 pending before the Judicial First Class Magistrate Court, Karunagappally. The said case was taken on file, on the basis of Annexure-1 private complaint filed by the 2nd respondent under Section 32 of the Drugs and Cosmetics Act, 1940, against six accused persons including the present petitioners, alleging violation of Section 18(a) (1) of Drugs and Cosmetics Act. Annexure-3 and 4 would reveal that, 2 nd accused is the working partner and he is the person responsible for the day to day conduct of the business of the first accused firm. The petitioners are only sleeping partners and they have nothing to do with the day to day conduct of the business. There is no averment in the complaint even prima-facie to come to the conclusion that, they have got anything to do with the day to day business. In order to make the partners liable, it must be pleaded in the complaint that they are also equally responsible for the day to day conduct of business. In the absence of such allegation in the complaint, the case against them is not maintainable and the same is liable to be quashed, in view of the dictum laid down in several decisions of the apex court. So, they filed this application seeking the following relief: "For the reasons stated above and other grounds which may be urged at the time of arguments, it is most humbly prayed that this Hon'ble Court may be pleased to quash Annexure-1 complaint and all further proceedings in CC.No.582/2011 on the file of the Judicial Magistrate of First Class, Karunagappally in so far as it is against the petitioners herein by exercising the inherent powers under Section 482 of the Code of Criminal Procedure." 3. Heard the learned counsel for the petitioner and learned Public Prosecutor. Learned Public Prosecutor filed a detailed statement as well. 4. Heard the learned counsel for the petitioner and learned Public Prosecutor. Learned Public Prosecutor filed a detailed statement as well. 4. The learned counsel for the petitioner submitted that, in Annexure-A1 complaint, there is nothing mentioned about the role that is being played by the petitioners, as partners of the first accused firm and to a notice sent, they have replied stating that 2nd accused is the person in charge of the business. So under the circumstances and in the absence of any allegation against them, the case against them is not maintainable and the same is liable to be quashed. 5. On the other hand, the learned Public Prosecutor submitted that, to the specific query, that has been issued to the first accused firm, as to who was responsible for the day to day conduct of the business, they did not answer the same, but except mentioned the name of the 2nd accused as the partner. So in the absence of such answer, the drug inspector/complainant has no other option but to implead all the partners as accused. Further under Section 34 of the Act, the burden is on the accused to prove that, the offence was committed without their knowledge and consent, which is a matter to be proved on the basis of evidence before the court below. So at this stage, the same cannot be quashed. 6. I have considered the rival contentions of both parties. 7. It is an admitted fact that, the first accused firm is a manufacturer of impugned medicine, which according to the defacto-complainant is substandard and was sold by the first accused firm to their distributors. It is also an admitted fact that, the petitioners are also partners of the first accused firm. To Annexure-A2 notice, the first accused firm has sent Annexure-3 reply in which the name of the 2nd accused was shown as one of the partner alone. But what was intended by their reply is that, he is the person responsible for the conduct of business. That may be the reason why, they do not mention any other name, except the name of the 2nd accused alone as an answer to the query, namely 2nd question. The 2nd question in Annexure-2 is, the name and address of the managing director of the first accused firm for which it was mentioned that, it was the 2nd accused. That may be the reason why, they do not mention any other name, except the name of the 2nd accused alone as an answer to the query, namely 2nd question. The 2nd question in Annexure-2 is, the name and address of the managing director of the first accused firm for which it was mentioned that, it was the 2nd accused. It is true that the 3rd question namely, name and address of the person responsible for the sale of the drug to the State of Kerala, there was no specific answer. But that alone is not sufficient to come to the conclusion that, they have not answered the query and by answering the question No.2, it is impliedly mentioned that, he is responsible for the conduct of the business and that was intended by the firm as well. In spite of that in Annexure-1 complaint, not even a whisper made in the complaint, regarding the relationship of the present petitioners with the first accused firm. It was not even mentioned that, they are the partners of the first accused firm as well. Further, though in the statement filed by the 2nd respondent, it was mentioned that, since question No.3 in Annexure-2 was not specifically answered by the first accused firm, they have no option to implead all the partners as accused in the case. There is nothing mentioned about the same in the complaint as well. If that be the case, they ought to have mentioned in the complaint that, since the first accused firm did not mention, who is responsible for the day to day affairs of the firm, all the partners are responsible for the same and they are conducting the business directly and they are responsible for the day to day affairs of the business as well. Such a pleading is absent in Annexure-1 complaint. 8. Section 34 of the Drugs and Cosmetics Act reads as follows: 34. Such a pleading is absent in Annexure-1 complaint. 8. Section 34 of the Drugs and Cosmetics Act reads 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 subsection shall render any such person liable to any punishment provided in the 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. 9. It is true that, proviso to Section 34 says that, the burden is on the accused to prove that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. But for that purpose, initial burden of alleging the act of each accused or each partner in the conduct of business must be made mention of in the complaint. Only if such an allegation is there, the burden shifts to the partner to prove that, it was done without his consent or knowledge and he is not responsible for the day to day affairs of the firm. 10. In the decision reported in 1981 KHC 561 State of Karnataka V. Pratap Chand and Others, similar question has arisen for consideration and the Hon'ble Supreme Court has held that, partner of the firm, who was in overall control of the day to day business of the firm would alone be liable to be convicted. 10. In the decision reported in 1981 KHC 561 State of Karnataka V. Pratap Chand and Others, similar question has arisen for consideration and the Hon'ble Supreme Court has held that, partner of the firm, who was in overall control of the day to day business of the firm would alone be liable to be convicted. Partner who was not in such control could not be proceeded with, merely because he had the right to participate in the business of the firm under the terms of the partnership deed. 11. Further, the same view has been reiterated in the decision reported in 1983 KHC 404 Municipal Corporation of Delhi v. Ram Kishan Rohtagi and Others. In that case, it has been held that, unless there is specific allegation against the directors made in the complaint, regarding their role in the conduct of business, merely because they are directors alone is not sufficient to make them liable for the offence committed by the company and in that case for want of such allegation, the Hon'ble Supreme Court quashed the proceedings against the directors, whose role was not specifically mentioned in the complaint. 12. Further in the decision reported in 2004(3) KLT 428 Monaben K. Shah v. State of Gujarat, it has been held that, in order to make a director of a company or a partner of a firm, liable under Section 138 of the Negotiable Instruments Act, it must be specifically mentioned in the complaint that, he was responsible for the day to day administration or conduct of the business and in the absence of such allegation in the complaint, merely because he happened to be a director or a partner is not ipso facto sufficient to make him liable for the offence alleged to have been committed by the company or the firm. 13. In this case also, though there was a statement field where it was mentioned that, in the absence of any reply given by the first accused firm, regarding the person who is responsible for the day to day conduct of the business, all the persons were made accused in the complaint, there is nothing mentioned in the complaint regarding that aspect and also no allegation has been made in the complaint regarding the responsibility of each partner in the conduct of the business as well. So under the circumstances, there is some force in the submission made by the counsel for the petitioners that in the absence of any allegations made regarding the petitioners in the conduct of the business of the first accused firm, merely because they are partners, they cannot be proceeded against and the case against them is liable to be quashed. So, in the absence of any specific allegation regarding the role of the petitioners in the conduct of business of the first accused firm, the complaint against them, in view of the dictum laid down in the above decisions is not maintainable and the same is liable to be quashed. In the result, the petition is allowed and case against the petitioners, who are accused Nos.3, 5 and 6 in C.C.No.582/2011 pending before the Judicial First Class Magistrate Court, Karunagappally is quashed. Office is directed to communicate this order to the concerned court for necessary further action, in this regard.