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2017 DIGILAW 270 (JK)

Kalpana Umakant v. Union of India

2017-06-05

ALI MOHAMMAD MAGREY

body2017
Judgment 1. Pursuant to order dated 09.05.2017, the petitioners filed MP No.01/17 seeking to bring on record the certified copy of the impugned order. The MP stands allowed and the certified copy of the order has been taken on record. Furthermore, the trial court records have also been received. 2. The petitioners in this petition, filed under Section 56l-A Cr.P.C., seek quashing of the cognizance and summoning order dated 21.08.2014 passed by the learned Chief Judicial Magistrate, Srinagar, in Criminal Complaint No.20/2014, titled Union of India through Drug Inspector v. Amit Kansal and Ors., for offences under Section 18(a)(i) read with Section 27( d) of Drugs and Cosmetics Act, 1940, and all other proceedings conducted therein qua the petitioners. 3. I heard learned counsel for the parties, perused the record and considered the matter. 4. On 21.08.2014, the Union of India, through Drugs Inspector, Sidharth Sahai Malhotra, Central Drugs Standard Control Organization, Regional Office Chandigarh, Sub-Zone Jammu, filed a complaint under Section 18(a)(i) read with Section 27(d) of the Drugs and Cosmetics Act, 1940 before the court of Chief Judicial Magistrate, Srinagar. In the complaint, the complainant alleged that on 25.04.2013 he took samples of drug Martifur - Nitrofurantoin Tablets IP - bearing Batch no.TMFBR-99, with manufacturing date (MID) as 06/2012, expiry date (EID) as 05/2015, manufactured by M/s Martin and Harris Laboratories Ltd., VIII Libberhedi, Mangalore, Roorkee, District Haridwar, Uttarakhand, from Fair Price Co-operative Medical Store, located at District Hospital, Pulwama, Kashmir, for test/analysis. One sealed sample portion of the drug in question was sent by the complainant to the Government analyst at Central Drug Laboratory (CDL), Kolkata, who, vide their Report no.RDTL/66113-14 dated 15.05.2013 reported that the sample in question was ‘not of standard quality’ for the reason that the sample did not conform to the claim as I.P. 2010 in respect of the ‘Disintegration Test’. 5. In paragraph 26 of the complaint the complainant stated as under: “26. That further, it has been found that accused No. 1 to 4 are the director of the accused company who have manufactured and distributed the drug in question and declared to be not of standard quality by the Director Incharge, CDL Kolkata and further, accused no.1 to 4 are the persons who are responsible for the conduct and day-to-day affairs of the accused company and are involved in board decisions of company. The role of accused No.1 to 4 has been thoroughly investigated by the Drug Inspector Sh. P. Manavalan and it is found that the accused No. 1 to 4 are running the financial production, sale distribution, manufacturing affairs of the company and, as such, liable to be punished under section 18 (a)(i) read with section 27(d) of Drugs and Cosmetics Act 1940 and Rules therein. Lastly, the accused no.6 is the Manager QCIQA, accused No.7 is Executive QWC and accused No.8 is the Production Manager of the accused company and all the accused persons with their common intention and active participation have manufactured the drug in question which has been declared not of standard quality under the Act. The copy of the article of association of the company is enclosed herewith and marked as Annexure-V.” 6. The learned Chief Judicial Magistrate, Srinagar, on presentation of the complaint by the complainant, by its order dated 21.08.2014, after being prima facie satisfied about the commission of offences under Section 18(a)(i) read with Section 27(d) of Drugs and Cosmetics Act, 1940 by the accused, took cognizance of the complaint and directed issuance of summons to the accused persons named in the complaint to appear before it on the next date, viz. 04.10.2014. 7. The records reveal that the accused appeared before the trial court on 09.11.2015. However, there has been a stay operating on the proceedings since 25.03.2016 pursuant to the orders passed by this Court in this petition. 8. This petition has been fundamentally filed on the ground that the petitioners were not the directors, much less in charge of the day-to-day affairs, of the company when the Drug in question was manufactured in June 2012 (wrongly mentioned in paragraph 1 of the petition as February 2012 and in paragraph 2.5 as 06.02.2012). In this regard, it is stated that petitioners 1 and 2, Ms. Kalpana Umakant and Mr. Vinod Chandra Parag Mehta, had resigned from the Board of Directors of the company on 11.11.2011 and 21.03.2011, respectively. So far as petitioner No.3, Mr. Amit Kumar Kansal, is concerned, it is stated that he was appointed as Director of the company on 15.10.2012, i.e., much after the Drug in question had been manufactured in June 2012. As regards petitioner No.4, Mr. So far as petitioner No.3, Mr. Amit Kumar Kansal, is concerned, it is stated that he was appointed as Director of the company on 15.10.2012, i.e., much after the Drug in question had been manufactured in June 2012. As regards petitioner No.4, Mr. Gopal Krishan Nigam, it is stated that he was only an honorary Director of the company, not incharge of the day-to-day affairs of the company. The case of the petitioners is that the complaint against them has been filed without conducting any investigation to ascertain whether they were the Directors of the company as on the date of the manufacture of the Drug in question, and/or whether they had anything to do with the day-to-day affairs of the company, and that the trial court has erroneously passed the impugned order, taking cognizance of the offences alleged in the complaint against the petitioners and summoning them. The stand so taken by the petitioners is sought to be evidenced and established before this Court by the photocopies of the certified copies of Forms 32 purported to have been filed by the accused-company, M/s Martin and Harris Laboratories Limited, pursuant to Sections 303(2), 264(2) or 266(1)(a) and 266(1)(b) of the Companies Act, 1956, before the Registrar of Companies, placed on record of this petition as Annexures P-3, P-4, P-5 and P-6. 9. Founding his arguments on the above assertions, which constitute the specific case of the petitioners, the learned counsel for the petitioners argued the case, principally taking three points. His first, rather the star; point and argument was that petitioners 1,2 and 3 were not on the Board of directors of the accused-company as its directors on 02.06.2012, i.e., the date the drug in question is stated to have been manufactured. Inviting the attention of the Court to annexures P-3 to P-6, which the learned counsel repeatedly and vehemently referred to as ‘certified copies’ of Forms 32, he submitted that these documents are the certified copies of public documents in terms of Section 76 of the Evidence Act, Svt. 1977 (1920 AD), and constitute proof of the contents thereof in terms of the mandate of Section 77 of the Evidence Act. 1977 (1920 AD), and constitute proof of the contents thereof in terms of the mandate of Section 77 of the Evidence Act. According to the learned counsel, since these public documents establish that petitioners 1, 2 and 3 did not hold the position of directors of the accused-company on the date the drug, found to be not of the standard, was manufactured, they could not have been arraigned as accused in the case, being not even remotely connected to or concerned with the manufacture of the drug in question. So far as petitioner No.4 is concerned, the learned counsel submitted that he was only an honorary director of the Company, not incharge of any day-to-day affair of the Company. He submitted that in order to be liable for any such offence, a director has to be in-charge of the day-to-day business affairs of the company and that such specific allegations of necessity have to be made in the complaint, and that, unless that is done, no cognizance could be taken by the Magistrate and no summons could have been issued to them. 10. His second point was that, even where a director continues to be on the Board of directors of a company, functioning as its director, he cannot be indicted mechanically on the ground of vicarious liability on a bald allegation of being in-charge of the day-to-day affairs of the accused-company, without there being any specific allegation(s) made in the complaint and without there being elaborate evidence being given to support such specific allegation(s). In support of the different limbs of his argument surrounding the above point, the learned counsel cited and relied upon the following judgments for the propositions mentioned against each: i) State of Karnataka v. Pratap Chand, (1981) 2 SCC 335 , for the proposition that direct control of business is necessary before a person can be convicted; ii) Municipal Corporation of Delhi v. Ram Kishan Rohtagi, (1983) 1 SCC 1 , for the proposition that presumption drawn by complainant is not sufficient to draw reasonable inference that director is vicariously liable; iii) State of Haryana v. Brij Lal Mittal, (1998) 5 SCC 343 , for the proposition that vicarious liability arises when director was in-charge and responsible for conduct of business; iv) Pepsi Foods Limited v. Special Judicial Magistrate, (1998) 5 SCC 749 , for the proposition that Magistrate must carefully scrutinize and apply mind to conclude prima facie offence before issuing summoning order; v) Pannalal Sunderlal Choksi v. State of Maharashtra, 2000 SCC Online Born 611: (2000) 4 Maha. L. J. 674, for the proposition that persons should exercise effective control over day-to-day business of the company, being mere directors not sufficient; vi) Shekhar Singh v. N. K. Wahi, 2003 (102) DLT 297 , for the proposition that specific allegation must be made against director as to the part played by him in the offence; vii) SMS Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 , for the proposition that liability arises on account of conduct, act or omission and not merely on account of holding office / position; viii) N. K. Wahi v. Shekhar Singh, (2007) 9 SCC 481 , for the proposition that merely being director is not enough to fix liability; person must be in-charge and responsible to the company for conduct of its business; ix) V. Y. Jose v. State of Gujarat, (2009) 3 SCC 78 , for the proposition that facts disclosing ingredients of offence must be averred in the complaint; x) Maharashrtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd., (2010) 10 SCC 479 , for the proposition that presumption cannot be drawn that chairman of company is responsible for all acts committed by / on behalf of the Company; xi) Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609 , for the proposition that director of a company cannot be vicariously liable; and xii) Anita Malhotra v. Apparel Export Promotion Council, (2012) 1 SCC 520 , for the proposition that complaint should specifically spell out how and in what manner the director was responsible to the accused company; here bald statement is not sufficient. 11. The third point raised by the learned counsel for the petitioners was that the petitioners have no remedy against the impugned cognizance taking and the summoning order passed by the learned trial Magistrate, except to approach this Court in its inherent jurisdiction under Section 561-A Cr.P.C., which corresponds to Section 482 of l the Central Code. To buttress his argument on this point, the learned counsel cited and relied upon the following judgments: i) Adalat Prasad v. Rooplal Jindal, (2004) 7 SCC 338 , for the proposition that remedy against summoning order lies under Section 482 Cr. P. C.; ii) Subramanium Sethuraman v. State of Maharashtra, (2004) 13 SCC 324 , for the proposition that only recourse available to challenge issuance of processes is by way of invoking Section 482 Cr. P. C.; iii) Dhariwal Tobacco Products Limited v. State of Maharashtra, (2009) 2 SCC 370 , for the proposition that there is no bar to invoke Section 482 Cr. P C against order of issuance of process; iv) Anita Malhotra v. Apparel Export Promotion Council, (2012) 1 SCC 520 (supra). This judgment was specifically relied upon for various propositions which would be detailed and dealt with at the appropriate stage in this judgment hereinafter. Summing up his arguments, the learned counsel for the petitioners submitted that the complaint, the cognizance and summoning order, and all the proceedings emanating from the same are contrary to law and facts and, therefore, need to be quashed. 12. Learned counsel for the respondents, on the other hand, defending the impugned order passed by the leaned trial Magistrate, submitted that the arguments raised by the learned counsel for the petitioners and the judgments cited at the Bar touch the merits of the case which cannot be gone into in these proceedings. 12. Learned counsel for the respondents, on the other hand, defending the impugned order passed by the leaned trial Magistrate, submitted that the arguments raised by the learned counsel for the petitioners and the judgments cited at the Bar touch the merits of the case which cannot be gone into in these proceedings. He submitted that whether a director did or did not have any control over the affairs of the company or whether he was responsible to the company for conduct of its business is a matter to be determined at the trial after leading evidence; such a matter cannot be determined by this Court when the trial has not yet started. 13. In order to deal with the first argument of the learned counsel for the petitioners, it becomes necessary to examine annexure P-3 to P6, which constitute the sheet-anchor of the case of the petitioners. At the very outset it may be mentioned that a bare look at these documents shows that all these are photocopies, purportedly, of the certified copies of Form 32, not the ‘certified copies’ in terms and as envisaged in Sections 76 and 77 of the Evidence Act, as claimed by the learned counsel for the petitioners. The first point that falls for consideration, therefore, is whether these documents are admissible to prove the contents of their respective originals? 14. A reading of Section 76 of the Evidence Act shows that it defines a certified copy and prescribes the procedure how it is to be issued. The provision of law provides that a public officer, having the custody of a public document, which any person has a right to inspect, shall give that person, on demand, a copy of it on payment of legal fees etc., with a certificate written at the foot of such copy that it is a true copy of such document or part thereof, as the case may be, and such certificate shall be dated and subscribed by such officer with his name and his office title, and shall be sealed, whenever such officer is authorised by law to make use of a seal. The provision of law further lays down that “such copies so certified”, as hereinabove mentioned, shall be called “certified copies”. The provision of law further lays down that “such copies so certified”, as hereinabove mentioned, shall be called “certified copies”. Obviously, therefore, photocopy of a certified copy of a document in terms of the specific and elaborate provision of Section 76 of the Evidence Act cannot be called a certified copy of such document. 15. Then in terms of the provision of Section 77 of the Evidence Act, it is the above certified copy issued in the manner so prescribed under Section 76 of the Evidence Act, which is mandated to be admissible in proof of the contents of the public document or part of the public document of which it purports to be a copy, without there being the requirement of proving it by calling a witness. 16. The above two provisions of the Evidence Act leave no scope for treating photocopy of a document, purported to be a certified copy of a public document, as a certified copy envisaged by Section 76 of the Evidence Act, in proof of the contents of the public document or part thereof in terms of Section 77 of the Act. Consequently, annexures P-3 to P-6, referred to by the learned counsel as certified copies and heavily relied upon by him in an attempt to canvass before this Court and to convince it that the petitioners 1 to 3 were not on the Board of Directors of the accused-company on the date the drug was manufactured, being not the certified copies of the public document, cannot be taken into account as proof of the contents of the original public documents of which they are supposed to be copies. Curiously, these photocopies on record of this petition as its annexures have been attested by the learned counsel as being Photocopies, yet he vehemently canvassed and tried to convince this Court to take them into account in proof of the contents of their respective originals under Sections 76 and 77 of the Evidence Act as certified copies, in establishment of the stand of the petitioners. 17. Now, let it be assumed that by any standard of interpretation of Sections 76 and 77 of the Evidence Act or any other provision thereof, these annexures could be taken into consideration in proof of the contents of their originals, yet the contents of these documents do not corroborate the case and stand of the petitioners. 17. Now, let it be assumed that by any standard of interpretation of Sections 76 and 77 of the Evidence Act or any other provision thereof, these annexures could be taken into consideration in proof of the contents of their originals, yet the contents of these documents do not corroborate the case and stand of the petitioners. Let the contents of these documents be mentioned. 18. Annexure P-3 – the first of the four documents in question – is photocopy of certified copy of Form 32 purported to have been submitted on behalf of the accused-company before the Registrar of Companies regarding the cessation of Mr. Parag Vinod Chandra Mehta, Director, bearing Director Identification Number (DIN) 00714674 (accused, petitioner no.2 herein), with effect from 21.03.2011 by reason of vacation of office under Section 283 of the Companies Act. The filing date of this Form contained therein is 18.04.2011. This is one aspect of the mater disclosed by this Form. The other aspect conspicuous from the contents of this Form is that the entries of this Form at its page 3 under the heading ‘Verification II’ show that it had been submitted to the Registrar of Companies by Mr. Amit Kumar Kansal, apparently, Accused-Petitioner No.3 herein; who had been authorised by the Board of Directors’ resolution no.2 dated 21.(sic).2011 to sign and submit the same. His name is written in the box against the following entries under the heading ‘to be digitally signed by’: “Managing Director or director or manager or secretary of the company (in case of an existing company, person signing the form should be different from the person in whose respect the form is being filed).” Not only is the above Form 32 shown to have been signed and submitted by Mr. Amit Kumar Kansal, his designation and DIN is shown as under: “Designation : Director DIN of the director or Managing Director, or Income-tax PAN of the manager, or Membership number, if applicable or income -tax PAN of the secretary (secretary of a company who is not a member of ICSI may quote his/her Income-tax PAN).” : 00397505 So, what is depicted by the aforesaid ‘Form 32’ is that Mr. Amit Kumar Kansal, accused-petitioner no.3 herein, was a Director of the accused company, bearing DIN 00397505 as on 18.04.2011. This clearly goes against the stand taken by the petitioners that accused- Petitioner No.3, Mr. Amit Kumar Kansal, accused-petitioner no.3 herein, was a Director of the accused company, bearing DIN 00397505 as on 18.04.2011. This clearly goes against the stand taken by the petitioners that accused- Petitioner No.3, Mr. Amit Kumar Kansal, was appointed as Director on 15.10.2012. If that be so, as it really appears to be, then the stand of the petitioners vis-a-vis Petitioner No.3 is not corroborated by this document. So far as its contents of this document about Accused-Petitioner No.2 are concerned, though the document speaks of Mr. Parag Vinod Chandra Mehta, Director, bearing Director Identification Number (DIN) 00714674 having vacated his office with effect from 21.03.2011 under Section 283 of the Companies Act but, as already said above, since the document is not a certified copy of the public document, it cannot be taken into account unless its contents are proved in accordance with law either by oral or secondary evidence. 19. Before mentioning what is annexure P4 all about and what does it state, let annexure P5 appended to the petition be referred to. Annexure P-5 is (photocopy of certified copy of) Form 32 purported to have been submitted on behalf of the accused-company before the Registrar of Companies regarding the appointment of Amit Kumar Kansal, bearing Director Identification number (DIN) no.00397505 as non-Executive Director and the date of such appointment of change in designation is shown to be 15.10.2012. 20. So, what is transpires from a reading of these two documents, annexure P3 and annexure P5 appended to the petition, is that Amit Kumar Kansal (accused, petitioner no.3 herein) was a Director with DIN No. 00397505 on 18.04.2011, the date of submission and signing of Form 32 in respect of accused-petitioner no.2, continued to be so as on the date the drug in question was manufactured, and subsequent thereto, on 15.10.2012 he was appointed as Non-executive Director of the accused-company in respect of which appointment Form 32 annexure P-5 was submitted to the Registrar of Companies. Resultantly, the above two documents for the purposes of these proceedings are nothing more than a damp squib and these work more against the petitioners than rendering any help to them. 21. Now, coming to annexure P-4, in paragraph 2.4 at page 6 of this petition, it is stated that petitioner no.1, Ms. Resultantly, the above two documents for the purposes of these proceedings are nothing more than a damp squib and these work more against the petitioners than rendering any help to them. 21. Now, coming to annexure P-4, in paragraph 2.4 at page 6 of this petition, it is stated that petitioner no.1, Ms. Kalpana Umakant, who had been appointed as Director of the Company on 13.06.1997, resigned on 11.11.2011 and, accordingly, a Form 32 pursuant to Sections 303, 264 / 266(1)(a) and 266(1)(b) of the Companies Act, 1956 was duly filed with the Registrar of Companies at New Delhi. It is further stated as a pertinent fact that she was only appointed as a honorary Director in the accused-company and at no point of time was she ever involved in the day-to-day affairs and the business of the company. These statements are sought to be established by Annexure P-4 appended to the petition stated to be the certified copy of the Form 32 of petitioner no.1 filed with Registrar of Companies dated 11.11.2011. 22. This annexure P-4 (a photocopy of certified copy of Form 32) is shown to be comprising of four pages. A perusal of its first page reveals the Form to have been purportedly submitted on behalf of the accused-company before the Registrar of Companies regarding the appointment of one Shanker Lakshman Laad bearing DIN 00105650 as Non-executive Director of the Company with effect from 11.11.2011. Obviously, Shanker Lakshman Laad and Ms. Kalpana Umakant, cannot be one and the same person. The second page of this annexure mentions the name of Ms. Kalpana Umakanth, bearing DIN 00105594 depicting: ‘Cessation’. It contains an entry: “In case of cessation; Hereby confirmed that the above mentioned Director is not associated with the company with effect from 11.11.2011 due to Resignation”. So this annexure cannot, by any standards, be taken as a proof of what is the stated stand of the petitioners, with its two pages speaking two different things and above all, it being not a certified copy of its original document. 23. Coming to Annexure P-6, it is the (photocopy of certified copy of) Form 32 purported to have been submitted on behalf of the accused-company before the Registrar of Companies regarding the cessation of Amit Kumar Kansal, bearing DIN 00397505 as Director of the Company with effect from 05.09.2013. 23. Coming to Annexure P-6, it is the (photocopy of certified copy of) Form 32 purported to have been submitted on behalf of the accused-company before the Registrar of Companies regarding the cessation of Amit Kumar Kansal, bearing DIN 00397505 as Director of the Company with effect from 05.09.2013. Obviously, this document does not establish or prove anything even remotely of the stand taken by the petitioners. 24. So, above is the analysis of the contents of annexures P3, P4, P5 and P6. The contents of these documents by no standards can be said to be a proof of the stand taken by the petitioners, of the standard of a certified copy of a public document envisaged under Sections 76 and 77 of the Evidence Act. 25. For the above reasons, so far as the first point and argument raised by the learned counsel for the petitioners is concerned, the stand taken fails. The Court cannot act on such annexures in these proceedings which cannot be termed as evidence without being tested and proved. 26. Coming to his second argument that even where a director continues to be on the Board of directors of a company, functioning as its director, he cannot be indicted mechanically on the ground of vicarious liability on a bald allegation of being in-charge of the day-to-day affairs of the accused-company, without there being any specific allegation(s) made in the complaint and without there being elaborate evidence being given to support such specific allegation(s). It may at the outset be observed that the allegation(s) which the learned counsel styles to be ‘bald’, can be so proved or rebutted only at a regular trial. In all the judgments cited and relied upon by the learned counsel for the petitioners on the aforesaid propositions of law, the accused therein had undergone a regular trial and the decisions of the Supreme Court are based on the evidence adduced at the trial either by the prosecution and/or the defence or both. Let these judgments be taken up, one by one: A) State of Karnataka v. Pratap Chand (supra), i) In this case, cited by the learned counsel for the petitioners for the proposition that direct control of business is necessary before a person can be convicted, the three respondents before the Supreme Court – two partners of the firm, M/s Mafatlal and Co. and the company itself – were charged for offences under Sections 18(c), 18(a)(ii) and 18-A of the Drugs and Cosmetics Act, 1940 read with Section 27(a)(ii), 27(a)(i) and Section 28 of the Drugs Control Act. The Chief Metropolitan Magistrate found one of the two partners and the firm viz. respondents 1 and 3, respectively, before the Supreme Court, guilty under Section 18(a)(ii) and Section 18(c) of the Drugs and Cosmetics Act and sentenced the partner to suffer rigorous imprisonment for one year under Section 18(a)(ii) and to pay fine stipulated therein. The second partner, respondent no.2, was acquitted, as the learned trial Magistrate found that it was the other partner who was in charge of the business of the firm. All the respondents were acquitted of the offence under Section 18-A of the Act. ii) The State of Karnataka, feeling aggrieved of the acquittal of respondent no.2 of the offence under Section 18(a)(ii) and 18(c) and all the respondents under Section 18-A of the Act, preferred an appeal before the High Court of Karnataka. The High Court summarily dismissed the appeal. iii) As to the commission of the offence under Section 18-A of the Act, the Drugs Inspector had not been examined to prove his report that the person from whom the drugs were acquired as per the report of the respondents, had turned out to be fictitious . iv) Regarding the acquittal of the second respondent of the offences under Section 18(a)(ii) and Section 18(c) of the Act, an argument was raised before the Supreme Court that under Section 34 of the Act, the firm as well as its partners were liable to be convicted. The Supreme Court, quoting and explaining the plain language of Section 34 of the Act which reads, ‘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’, in para 7 of the judgment laid down as under: “7. It is seen that a partner of a firm is also liable to be convicted for an offence committed by the firm if he was in charge of, and was responsible to, the firm for the conduct of the business of the firm, or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any neglect on the part of the partner concerned...” v) In that case, however, the Supreme Court found that the evidence showed that it was respondent 1 and not respondent No.2 who was in overall control of the day to day business of the firm. For that reason, the second respondent was held to be not liable to be convicted merely because he had the right to participate in the business of the firm under the terms of the partnership deed. vi) The above fact about the second respondent was established at the trial of the case, after the prosecution and the accused were allowed to lead their respective evidence. Such a fact cannot be established in a proceeding under Section 561-A Cr. P. C. before this Court. The judgment, therefore, is not relevant herein; it rather supports regular trial of the petitioners. B) Municipal Corporation of Delhi v. Ram Kishan Rohtagi (supra): i) This judgment has been cited by the learned counsel for the petitioners for the proposition that presumption drawn by complainant is not sufficient to draw reasonable inference that director is vicariously liable. In that case the main clause viz. Clause 5 of the complaint filed by the Food Inspector, Municipal Corporation before the Metropolitan Magistrate against the accused, alleging commission of offence by them under Sections 5/7 of Prevention of Food Adulteration Act, read, ‘that accused 3 is the Manager, of accused 2 and accused 4 to 7 are the Directors of accused 2 and as such they were incharge of and responsible for the conduct of business of accused 2 at the time of sampling’. The High Court held that the words ‘as such’ used in the clause indicated that the complainant had merely presumed that the Directors of the company must be guilty because they were holding a particular office, and quashed the proceedings. The High Court held that the words ‘as such’ used in the clause indicated that the complainant had merely presumed that the Directors of the company must be guilty because they were holding a particular office, and quashed the proceedings. On appeal by the Municipal Corporation, Delhi, the Supreme Court found that there was not a whisper, nor a shred of evidence, nor anything to show, apart from the presumption drawn by the complaint, that there was any act committed by the Directors from which a reasonable inference could be drawn that they could also be vicariously liable, and, therefore, agreed with the decision of the High Court to that extent. ii) In the instant case, the relevant clause of the complaint is clause 26 which has already been quoted in paragraph 5 hereinabove. However, it is again extracted hereunder: “26. ... [A]ccused No.1 to 4 are the persons who are responsible for the conduct and day-to-day affairs of the accused company and are involved in board decisions of company. The role of Accused No.1 to 4 has been thoroughly investigated by the Drug Inspector Sh. P. Manavalan and it is found that the Accused No.1 to 4 are running the financial production, sale distribution, manufacturing affairs of the company and, as such, liable to be punished under section 18 (a) (i) read with section 27(d) of Drugs and Cosmetics Act 1940 and Rules therein. Lastly, the Accused No.6 is the Manager QCIQA, Accused No.7 is Executive QWC and Accused No.8 is the Production Manager of the accused company and all the accused persons with their common intention and active participation have manufactured the drug in question which has been declared not of standard quality under the Act. From a plain reading of the above clause of the complaint, it becomes manifest that the complaint against the petitioner has been filed not merely by reason of their being Directors of the Company, but specific allegations have been made therein against them. Therefore, the judgment, in my considered view, is distinguishable on that count. C) State of Haryana v. Brii Lal Mittal, (supra): i) This judgment was cited and relied upon for the preposition that vicarious liability arises when director was in-charge and responsible for conduct of business. The facts of that case are quite distinguishable. Therefore, the judgment, in my considered view, is distinguishable on that count. C) State of Haryana v. Brii Lal Mittal, (supra): i) This judgment was cited and relied upon for the preposition that vicarious liability arises when director was in-charge and responsible for conduct of business. The facts of that case are quite distinguishable. In that case, the High Court quashed the proceedings initiated against the accused under Section 27 of the Drugs and Cosmetics Act, 1940 on the ground that the prosecution was launched after the shelf-life of the drugs had expired and, as a consequence thereof, they were deprived of their right under Section 25(4) of the Act to get the drugs tested by the Central Drugs Laboratory. Hence, the State of Haryana went in appeal before the Supreme Court. ii) However, the Supreme Court found that the impugned judgment of the High Court had got to be upheld for altogether a different reason. In para 9 of the judgment, finding similarity of facts between those present in its earlier judgment in Municipal Corpn. of Delhi v Ram Kishan Rohtagi (supra) and the case which was at hand of the Supreme Court, and quoting para 15 of the above judgment containing the finding in that case to the effect that ‘so far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show apart from the presumption drawn by the complainant, that there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable’ the Supreme Court agreed with the above view and dismissed the appeal, upholding the order of the High Court quashing the prosecution against the three accused. iii) This Court has already said above that the judgment in Municipal Corpn. of Delhi v Ram Kishan Rohtagi (supra) is not attracted in the facts of the present case because here the petitioners indictment is not merely because of they being the Directors of the accused company, but there are specific allegations levelled against them in the complaint. iii) This Court has already said above that the judgment in Municipal Corpn. of Delhi v Ram Kishan Rohtagi (supra) is not attracted in the facts of the present case because here the petitioners indictment is not merely because of they being the Directors of the accused company, but there are specific allegations levelled against them in the complaint. Since the judgment of the Supreme Court in the above subsequent case, State of Haryana v. Brij Lal Mittal, is based on the ratio of the very same judgment and the Supreme Court has found similarity of facts in the two cases, the said subsequent judgment, too, is not applicable to the facts of the present case. D) Pepsi Foods Limited v. Special Judicial Magistrate, (supra): i) This judgment is cited for the proposition that Magistrate must carefully scrutinize and apply mind to conclude prima facie offence before issuing summoning order. Let the facts of this case be examined. In that case the two appellants – the company and its Managing Director – before the Supreme Court were aggrieved by the judgment of the Division Bench of the High Court of Judicature at Allahabad dismissing their writ petition filed under Articles 226 and 227 of the Constitution. They sought quashing of the complaint filed against them under Section 7 read with Section 16 of the Prevention of Food Adulteration Act, 1954. The allegation was that the complainant was sold a bottle of beverage under the brand ‘Lehar Pepsi’ which was adulterated. The bottle was purchased by the complainant, a private individual, on 13.09.1993 and he filed the complaint on 06.05.1994. The Magistrate, after recording preliminary evidence, passed orders summoning the appellants and others on 09.05.1994. When the summons reached the appellants, they immediately approached the High Court for quashing of the complaint. The High Court refused to entertain the writ petition on the ground that the appellants should approach the trial Magistrate for their discharge under Section 245 Cr. P. C. if the complaint did not disclose commission of any offence by the appellants and if the trial Magistrate considered the charge to be groundless. The High Court did not approve of the appellants approaching it under writ jurisdiction when sufficient remedy was available under the Code. P. C. if the complaint did not disclose commission of any offence by the appellants and if the trial Magistrate considered the charge to be groundless. The High Court did not approve of the appellants approaching it under writ jurisdiction when sufficient remedy was available under the Code. The High Court was also of the opinion that it could not be said at that stage that the allegations in the complaint were so absurd and inherently improbable on the basis of which no prudent man could ever reach a just conclusion that there existed no sufficient ground for proceeding against the accused. On the plea of the appellants that the provisions of Section 13(2) of the Act read with Rule 9-A of the Rules framed under the Act were violated and on that account the inquiry or trial stood vitiated, the High Court said that the appellants could well approach the trial court for that purpose, and that it was no stage for the High Court to record its finding. Another plea of the appellants that provisions of Sections 203 and 245(2) of the Code did not provide an adequate remedy for a person charged on flimsy grounds and that in view of the decision of the Supreme Court in Sate of Haryana v. Bhajan Lal (supra), the Court should interfere also did not find favour with the High Court. The High Court was of the opinion that Bhajan Lal case pertained to a cognizable offence where the police had taken cognizance of the matter and in a complaint case the Magistrate was empowered to discharge the accused at any stage of the trial, if it was found that the charge was groundless. ii) The Supreme Court after referring to the contents of the complaint and the preliminary evidence which was produced before the Magistrate was of the view that the questions which arose for consideration were, whether in the circumstances of the case, the appellants had rightly approached the High Court under Articles 226 and 227 of the Constitution and, if so, was the High Court justified in refusing to grant any relief to the appellants because of the view which the High Court took of the law and the facts of the case? The Supreme Court, then, examining the law on the subject, in para 28 said: “28. The Supreme Court, then, examining the law on the subject, in para 28 said: “28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in brining charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.” iii) What did the Supreme Court find in that case is mentioned in para 29 of the judgment, which is extracted below: “...If we now refer to the facts of the case before us, it is clear to us that not only that allegation against the appellants do not make out any case for an offence under Section 7 of the Act and also that there is no basis for the complainant to make such allegations. The allegations in the complaint merely show that the appellants have given their brand name to ‘Residency Foods and Beverages Ltd.’ for bottling the beverage ‘Lehar Pepsi’. The complaint does not show what is the role of the appellants in the manufacture of the beverage which is said to be adulterated. The only allegation is that the appellants are the manufacturers of bottle. There is no averment as to how the complainant could say so and also if the appellants manufactured the alleged bottle or its contents. His sole information is from A.K. Jan who is impleaded as accused 3. The only allegation is that the appellants are the manufacturers of bottle. There is no averment as to how the complainant could say so and also if the appellants manufactured the alleged bottle or its contents. His sole information is from A.K. Jan who is impleaded as accused 3. The preliminary evidence on which the first respondent (Magistrate) relied in issuing summons to the appellants also does not show as to how it could be said that the appellants are manufacturers of either the bottle or the beverage or both. There is another aspect of the matter...”. Such is not the case here in the matter at hand. Nonetheless, there cannot be any reservation about the law laid down by the Supreme Court as to the duty of a Magistrate. In my view, the judgment is distinguishable and is not attracted to the facts of the present case. E) Pannalal Sunderlal Choksi v. State of Maharashtra and, Shekhar Singh v. N.K. Wahi (supra): These judgments were cited for the proposition that persons should exercise effective control over day-to-day business of the company; being mere directors is not sufficient and that specific allegation must be made against director as to the part played by him in the offence. The first of these two judgments is based on the principle laid down by the Supreme Court in the above three judgments viz. Municipal Corpn. of Delhi v Ram Kishan Rohtagi, State of Haryana v. Brij Lal Mittal, and Pepsi Foods Limited v. Special Judicial Magistrate, and, therefore, need not be further analysed. It is distinguishable from the facts of the present case on the same grounds as the aforesaid three judgments. So far as the second one is concerned, this judgment is also covered by the same reasoning; therefore, needs no separate analysis. F) SMS Pharmaceuticals Ltd. v. Neeta Bhalla, (supra): This judgment was cited for the proposition that liability arises on account of conduct, act or omission and not merely on account of holding office / position. That was a case under Negotiable Instruments Act. The principle enunciated is that 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. That was a case under Negotiable Instruments Act. The principle enunciated is that 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 observed that it is a departure from the rule in criminal law against vicarious liability and, therefore, a clear case should be spelled out in the complaint against the person sought to be made liable. This judgment is again based on the ratio of the judgments of the Supreme Court in State of Karnataka v. Pratap Chand; Municipal Corpn. of Delhi v. Ram Kishan Rohtagi; State of Haryana v. Brij Lal Mittal; and Pepsi Foods Limited v. Special Judicial Magistrate. G) N. K. Wahi v. Shekhar Singh; V. Y. Jose v. State of Gujarat Maharashrtra State Electricity Distribution Co. Ltd. v. Datar,. Switchgear Ltd. Sunil Eharti Mittal v. CEI, (supra): Similar, as in the case of SMS Pharmaceuticals Ltd. v. Neeta Bhalla, (supra), is the case with the judgment of the Supreme Court in N. K. Wahi v. Shekhar Singh, (supra), cited by the learned counsel for the proposition that merely being director is not enough to fix liability; person must be in-charge and responsible to the company for conduct of its business. In V. Y. Jose v. State of Gujarat, (supra), the Supreme Court found that the dispute between the parties was civil in nature. The judgement of the Supreme Court in Maharashrtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd. (supra) has been cited for the proposition that presumption cannot be drawn that chairman of company is responsible for all acts committed by on behalf of the Company. Again, such is not the case herein; therefore, the judgment does not help the petitioners. The judgment in Sunil Bharti Mittal v. CBI (supra) was cited for the proposition that director of a company cannot be vicariously liable. The specific allegations levelled against the petitioners in the present case have already been quoted. This, in my view, is not a case where only bald statements have been made. The judgments so cited and relied upon by the learned counsel for the petitioners do not help the case of the petitioners, the same being distinguishable as mentioned hereinabove. 27. The specific allegations levelled against the petitioners in the present case have already been quoted. This, in my view, is not a case where only bald statements have been made. The judgments so cited and relied upon by the learned counsel for the petitioners do not help the case of the petitioners, the same being distinguishable as mentioned hereinabove. 27. Lastly, the learned counsel for the petitioners, relying on the judgments of the Supreme Court in Adalat Prasad v. Rooplal Jindal, (2004) 7 SCC 338 , for the proposition that remedy against summoning order lies under Section 482 Cr. P. C.; Subramanium Sethuraman v. State of Maharashtra, (2004) 13 SCC 324 , for the proposition that only recourse available to challenge issuance of processes is by way of invoking Section 482 Cr. P. C; and Dhariwal Tobacco Products Limited v. State of Maharashtra, (2009) 2 SCC 370 , for the proposition that there is no bar to invoke Section 482 Cr. P C against order of issuance of process, argued that, in view of the numerous judgments mentioned earlier, the complaint does not disclose any cognizable offence against the petitioners, inasmuch as, firstly, the petitioners on the relevant date were not the directors of the accused- company; secondly, even if it be presumed that they were working as directors of the accused-company, there are no specific allegations levelled against the petitioners in the complaint, instead they are being indicted merely on account of their allegedly holding office/positions as directors; thirdly, that liability of the petitioners could arises on account of conduct, act or omission and not on bald statements; fourthly, that liability is sought to be fastened vicariously on the petitioners; and finally that since the learned Magistrate, by the impugned order, has yet taken cognizance and issued summons to them, they have no remedy against such order, except approaching this Court in exercise of its inherent powers under Section 561-A Cr. P. C. which is pari materia to Section 482 of the Central Code of Criminal Procedure. 28. I have already recorded my finding(s) and view about the points so raised on behalf of the petitioners while referring to the facts involved in those judgments. On the basis of said findings and views expressed hereinabove, in my considered opinion, in this petition, the Court cannot exercise its powers under Section 561-A Cr. 28. I have already recorded my finding(s) and view about the points so raised on behalf of the petitioners while referring to the facts involved in those judgments. On the basis of said findings and views expressed hereinabove, in my considered opinion, in this petition, the Court cannot exercise its powers under Section 561-A Cr. P. C, there being no such evidence or element present. 29. A very heavy reliance was placed by the learned counsel for the petitioners on the judgment of the Supreme Court in Anita Malhotra v. Apparel Export Promotion Council, (2012) 1 SCC 520 , wherein the Director had resigned six years back, and the Supreme Court said that the High Court ought to have believed the documentary evidence instead of insisting upon certified copy of Form 32, and criminal proceedings should have been quashed. 30. The facts of that case, Anita Malhotra v. Apparel Export Promotion Council, need to be noted. Perusal of the judgment reveals that the appellant, who was a non-executive Director on the Board of the company, resigned from the directorship with effect from 31.08.1998. Statutory Form 32 was filed with the Registrar of Companies evidencing his resignation on 20.11.1998. More than six years thereafter, a notice dated 10.12.2004 of dishonour of cheque was issued to him under Section 138 of the Negotiable Instruments Act. The appellant vide his letter dated 15.12.2004 replied the said notice informing the respondents that she had resigned from the directorship of the company long back in 1998. By a subsequent letter dated 17.12.2004, the respondents sought certain information/documents about the company from the appellant. The appellant replied the said letter on 18.12.2004 reiterating that after her resignation she had nothing to do with the company and as such she was not in a position to give the information sought. The respondents filed a complaint under Section 138 of the Act against the company, and notwithstanding the above facts, arrayed the appellant as an accused therein, suppressing the reply dated 15.12.2004 sent to them by the appellant which was admitted as an omission before the Supreme Court. 31. The respondents filed a complaint under Section 138 of the Act against the company, and notwithstanding the above facts, arrayed the appellant as an accused therein, suppressing the reply dated 15.12.2004 sent to them by the appellant which was admitted as an omission before the Supreme Court. 31. In this regard, the Supreme Court in paragraph 10 of the judgment observed and held as under: “...Inasmuch as the reply to the statutory notice contains specific information that she had resigned from the company in 1998, the complainant was not justified in not referring to the same in the complaint and arraying her as accused 3 in the complaint filed in the year 2005. No doubt, whether the appellant has furnished the required documents in support of her claim for resignation from the company in 1998 is a different aspect which we are going to discuss in the subsequent paras.” The complainant in the complaint had made a glaring wrong statement of relevant fact inasmuch as it was stated therein that “on the date of issuance of cheques, that is, on 1-6-2004, the appellant was a Director of the Company and in charge of all the acts and deeds of the company and also responsible for the day-to-day affairs, funding monies etc.” The Supreme Court in para 11 of the judgment held that this assertion cannot be sustained in the light of her reply dated 15.l2.2004 intimating that she had resigned from the company in 1998. 32. Further, in order to establish the fact of resignation in 1998, the petitioner had produced before the High Court a simple copy of Form 32 and it was stated that its original was not available in the office of Registrar of Companies. However, the appellant had also placed on record before the High Court a certified copy of the annual return of the Company dated 30.9.1999 filed with the Registrar of Companies. The High Court in its order, after recording the statement of the counsel for the petitioner-appellant therein that Form 32 was not available in the record of the Registrar of Companies, held that Form 32 was the only authentic document and that the annual return dated 30.9.1999 filed by the company was not a public document, and, therefore, rejected the claim and petition of the appellant. 33. 33. The Supreme Court, however, interpreting Sections 159, 163 and 610 of the Companies Act, read with Section 74 of the Evidence Act, 1972 held that a certified copy of annual return is a public document. Consequently, the Supreme Court in para 17 of the judgment observed that had the High Court considered the contents of the certified copy of the annual return, it could have quashed the criminal proceedings insofar as accused 3 was concerned. In para 21 of the judgment, the Supreme Court held that “inasmuch as the certified copy of the annual return dated 30-9-1999 is a public document, more particularly, in view of the provisions of the Companies Act, 1956 read with Section 74(2) of the Evidence Act, 1872, we hold that the appellant had validly resigned from the Directorship of the Company even in the year 1998 and she cannot be held responsible for the dishonour of the cheques issued in the year 2004”. It is in context of these facts that the Supreme Court in para 23 of the judgment held as under: “23. In the light of the above discussion and of the fact that the appellant has established that she had resigned from the Company as a director in 1998, well before the relevant date, namely, in the year 2004, when the cheques were issued, the High Court, in the light of the acceptable materials such as the certified copy of the annual return dated 30-9-1999 and Form 32 ought to have exercised its jurisdiction under Section 482 and quashed the criminal proceedings. We are unable to accept the reasoning of the High Court and we are satisfied that the appellant has made out a case for quashing the criminal proceedings...” 34. It may also be mentioned here that in para 20 of the judgment, the Supreme Court made certain observations which are very relevant in this case. The contents of the said para are quoted hereunder: “20. It may also be mentioned here that in para 20 of the judgment, the Supreme Court made certain observations which are very relevant in this case. The contents of the said para are quoted hereunder: “20. As rightly stated so, though it is not proper for the High Court to consider the defence of the accused or conduct a roving enquiry in respect of merits of the accusation, but if on the face of the document which is beyond suspicion or doubt, placed by the accused and if it is considered that the accusation against her cannot stand, in such a matter, in order to prevent injustice or abuse of process, it is incumbent on the High Court to look into those document/documents, which have a bearing on the matter even at the initial stage and grant relief to the person concerned by exercising jurisdiction under Section 482 of the Code.” 35. The law so laid down by the Supreme Court is hedged with the words “but if on the face of the document which is beyond suspicion or doubt”. I have already referred in detail to the nature and content of the documents – ‘Forms 32’ – relied upon by the petitioners herein. They by no standards can be said to be beyond suspicion or doubt, that too, on their face, and, in any case, are not certified copies of documents, nor supported by the certified copy of any public document. 36. Facts of the above case before the Supreme Court are axiomatically wholly distinguishable from those attendant in the instant case. The judgment, therefore, has no relevance in the instant case. 37. Coming to another crucial point, not touched by the learned counsel on either side, but apparent from the petition itself, which is that the petitioners have not sought for quashing of the complaint, at least, to the extent it relates to them. The prayer made by the petitioners in this petition reads thus: “In the facts & circumstances mentioned herein above, the petitioners most humbly pray that this Hon’ble Court may be pleased to: (a) Quash the impugned Oder dated 21:08.2014 passed by the Court of Ld. The prayer made by the petitioners in this petition reads thus: “In the facts & circumstances mentioned herein above, the petitioners most humbly pray that this Hon’ble Court may be pleased to: (a) Quash the impugned Oder dated 21:08.2014 passed by the Court of Ld. Chief Judicial Magistrate, Srinagar District Courts, in Criminal Complaint No.0020/14, titled ‘Union of India through Drug Inspector vs. Amit Kansal and Others’, U/s. 18(a)(i) read with section 27 (d) of Drugs and Cosmetics Act, 1940 and an other proceedings emanating from the above said criminal complainant qua the petitioners; (b) Pass any other order/orders which this Hon’ble Court may be please in the facts and circumstances of the case.” Even if, for any reason, though in my considered view there is none, the impugned order passed by the learned trial Magistrate is quashed yet the complaint in so far as the same relates to the petitioners, would survive and remain alive on the files of the learned Magistrate, since the petitioners, in exercise of their dominus Litis, have chosen not to seek quashing thereof. In that eventuality there would be no bar against the Magistrate to pass a denovo Order, taking cognizance and summoning the accused afresh. 38. For all what has been discussed above, the petition is dismissed. 39. The Registry is directed to transmit the trial Court records back to that Court forthwith. 40. Parties are directed to appear before the Trial Court on 01.07.2017 for further proceedings in the case. 41. The compilation of the Judgments produced by the learned counsel for the petitioners be returned to the counsel in the open Court.