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2025 DIGILAW 249 (GUJ)

Radheshyam Dagdulal Bhomavat v. State of Gujarat

2025-03-10

J.C.DOSHI

body2025
ORDER : J. C. DOSHI, J. 1. Rule. Learned APP waives service of notice of Rule for the respondent State. Though served with notice, respondent No.2 did not choose to remain present before the Court. 2. By this application under Section 482 of the Code of Criminal Procedure (for short “the Code”), the applicant seeks quashing of the FIR registered as CR No.I-159 of 2014 registered with Ankleshwar GIDC Police Station for the offence punishable under Sections 406, 467, 468, 469, 471 and 420 of the Indian Penal Code and further proceedings arising thereof. 3. Heard learned Advocates appearing for the respective parties. 4. Seeking quashment of the FIR against the present petitioner registered for the offence punishable under Sections 406, 467, 468, 469, 471 and 420 of IPC as C.R. No.I-159 of 2014, learned advocate Mr.Nandish Thackar would submit that present petitioner is Additional Director in a category of Independent Non-executive Director and therefore, the petitioner should not be held vicariously liable for the acts and misdeeds alleged to have been committed by the company. He would further submit that role of the petitioner is minimal and lesser than the role of the Managing Director or Directors alleged to have been played in the commission of the offence registered under the IPC. Learned advocate for the petitioner referring to judgment of Sanjay Dutt and others vs. State of Haryana and another – 2025 SCC Online SC 32 , more particularly para 10 to 14 thereof would submit that since the petitioner is not in-charge of the company against whom the offence is alleged, the petitioner may not be put to face trial. It is also argued that petitioner has not received any benefit for making any forge document. Mainly upon these submissions, he would submit that since principle of vicarious liability is not known to the Criminal Jurisprudence, the petitioner may not be put to face trial. Upon above submissions, he would submit to allow this petition. 5. Per contra, learned APP having placed on record the statements of various witnesses and other documents would submit that the petitioner though on paper has establish that he is Non-executive Director alleged document which is as per the FIR is forged document obtained for the purpose of exporting drugs by K.A.Malle Pharmaceuticals Limited, the petitioner is the kingpin and he runs the business. He would submit that even the accounts are signed by the present petitioner which indicates that he is the main director who is behind the entire operation of K.A.Malle Pharmaceutics Limited. He would submit that the petitioner is the running the entire business of K.A.Malle Pharmaceutics Limited. He would further submit that it is highly unbelievable that the petitioner does not know that K.A.Malle Pharmaceutics Limited does not hold the licence of Good Manufacturing Practice i.e. GMP and yet the said company is exporting the drugs. He would further submit that the petitioner is the main person behind the entire transactions carried out without GMP certificate. He would submit that that the investigation qua other accused is completed and charges are framed way back in 2019 and as many as eight witnesses are examined in the matter which demonstrates that the trail against other accused is satisfactorily progressing and in these circumstances, the present petitioner may also face trial which ultimately decides that who could be held responsible for the forged document, namely GMP certificate. Upon above submissions, he would submit to dismiss this petition. 6. Having heard learned advocates for both sides and on perusal of the evidence on record, it can be said that the case of the petitioner is that he is Non-executive Director being in category of Independent and Additional Director and he cannot be held liable as he is not in-charge of the K.A.Malle Pharmaceutics Limited. In Sanjay Dutt (supra), the Hon’ble Apex Court has explained the law on vicarious liability of directors as under : “10. We take notice of the fact that having regard to the Scheme of the Act, 1900, there is no vicarious liability that can be attached to any of the directors or any office bearers of the company. It is the individual liability or the act that would make the person concerned liable for being prosecuted for the offence punishable under Section 19 of the Act, 1900. Having regard to the nature of the allegations, it is difficult for us to take the view that the appellants herein are responsible for the alleged offence. There are no allegations worth the name in the complaint that the three appellants before us are directly responsible for uprooting of the trees with the aid of Bulldozers or JCB machines or causing damage to the environment. There are no allegations worth the name in the complaint that the three appellants before us are directly responsible for uprooting of the trees with the aid of Bulldozers or JCB machines or causing damage to the environment. The persons who were actually found at the site felling the trees have not been arrayed as accused in the complaint. Although the license / necessary permission for development of the land in the specified area had been granted in favour of the company, yet for the reasons best known to the complainant the company has not been arrayed as an accused in the complaint. 11. It appears that the Courts below proceeded on the erroneous assumption that the three appellants herein being responsible officers of the company are liable for the alleged offence. While a company may be held liable for the wrongful acts of its employees, the liability of its directors is not automatic. It depends on specific circumstances, particularly the interplay between the director’s personal actions and the company’s responsibilities. A director may be vicariously liable only if the company itself is liable in the first place and if such director personally acted in a manner that directly connects their conduct to the company’s liability. Mere authorization of an act at the behest of the company or the exercise of a supervisory role over certain actions or activities of the company is not enough to render a director vicariously liable. There must exist something to show that such actions of the director stemmed from their personal involvement and arose from actions or conduct falling outside the scope of its routine corporate duties. Thus, where the company is the offender, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect. There has to be a specific act attributed to the director or any other person allegedly in control and management of the company, to the effect that such a person was responsible for the acts committed by or on behalf of the company. 12. At the same time, wherever by a legal fiction the principle of vicarious liability is attracted and a person who is otherwise not personally involved in the commission of an offence is made liable for the same, it has to be specifically provided in the statute concerned. 12. At the same time, wherever by a legal fiction the principle of vicarious liability is attracted and a person who is otherwise not personally involved in the commission of an offence is made liable for the same, it has to be specifically provided in the statute concerned. When it comes to penal provisions, vicarious liability of the managing director and director would arise provided any provision exists in that behalf in the statute. Even where such provision for fastening vicarious liability exists, it does not mean that any and all directors of the company would be automatically liable for any contravention of such statute. Vicarious Liability would arise only if there are specific and substantiated allegations attributing a particular role or conduct to such director, sufficient enough to attract the provisions constituting vicarious liability and by extension the offence itself. 13. It is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, if the statute provides for such liability and if there is sufficient evidence of his active role coupled with criminal intent. The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening criminal liability on an officer of a company, there is no presumption that every officer of a company knows about the transaction in question. 14. The allegations which find place against the appellants herein in their personal capacity seem to be absolutely vague. When a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegations to constitute the various liability.” 7. At the outset, let reproduce the translated version of FIR as under to understand the real dispute : “12. Details of First Information: Brief Facts: Regarding offence committed by the accused in this case by making a forged certificate for Good Manufacturing Practice (G.M.P) and fraudulently using it as a bonafide one, to export Medicines (Bulk Drugs) until 27/06/2014 and thus, cheated the Government as well as the Company. Date: 6/7/2014 Complainant:- Naimuddin Riyazuddin Saiyed, Senior Drug Inspector, Office of the Assistant Commissioner, Food and Drugs Control Administration, Bharuch. Date: 6/7/2014 Complainant:- Naimuddin Riyazuddin Saiyed, Senior Drug Inspector, Office of the Assistant Commissioner, Food and Drugs Control Administration, Bharuch. Date: 2/7/2014 To, The Police Inspector, G.I.D.C Police Station, Ankleshwar, Dist: Bharuch. Subject: To lodge First Information Report for misuse of forged Good Manufacturing Practice Certificate. Sir, I, Naimuddin Riyazuddin Saiyed, presently serve as a Senior Drug Inspector in the Office of the Assistant Commissioner, Food and Drugs Control Administration, at Multi-Storeyed building, Bharuch. I discharge my duties as per Drug and Cosmetics Act, 1940, and rules formed under it and regulation of the said rules. For this, my current jurisdiction is Bharuch and Narmada District. Firm named M/s K.A. Male Pharmaceuticals Ltd., situated at Plot no. 6005 G.I.D.C Estate, Ankleshwar, District: Bharuch, is having licence for manufacturing medicines vide Form No.25 issued by the administration, bearing No: G/812, dated 28/3/1987, which is valid until 31/12/2017. By the virtue of said licence, the firm bears the approval to manufacture various bulk drugs(A.P.I) Cosmetics and for the purpose of exports, and sells them as per requirement upon manufacturing it. According to the inputs received from the officials of the Intelligence wing of our head office at Gandhinagar, on 27/06/2014, when I, alongwith them carried investigation, it came to our knowledge during the said investigation that, firm have exported the medicines(Bulk drug) made for the purpose of export by misusing forged Good Manufacturing process (G.M.P) Certificate, which is generally issued to the licensed firm which follows specific rules and standard operating procedure. Firm has forged G.M.P Certificate No: 1304527, and during my investigation on 27/06/2014, General Manager of the firm’s plant, Mr. Manoj Jamnadas Mehta, who was present there sought for scanned copy of the said Certificate No: 1304527 on their e-mail ID: Mim@Kamalla com. jotin@ Kamalte com. And Kamalate@ rediffmail.com, from their registered office at Mumbai, and produced before us for verification. The said e-mail was sent to Mr. Manoj from Mr. Kirit Merchant, General Manager from their Mumbai-based Registered office, through the e-mail ID: info@Kamalte.com. Upon examining the scanned copy of the said forged Certificate, the name of firm, it’s address, license number, validity, etc. are mentioned therein. Alongwith this information, officials from the Intelligence Wing of this Administration have obtained information that copy of this forged Certificate is attested by Mr. J.B. Raval, Notary (Greater Mumbai) alongwith it’s seal and signature affixed on 09/07/2013. Upon examining the scanned copy of the said forged Certificate, the name of firm, it’s address, license number, validity, etc. are mentioned therein. Alongwith this information, officials from the Intelligence Wing of this Administration have obtained information that copy of this forged Certificate is attested by Mr. J.B. Raval, Notary (Greater Mumbai) alongwith it’s seal and signature affixed on 09/07/2013. During the investigation of the firm on 27/06/2014, upon presenting the copy of said notarised Certificate No: 1304527, we asked the General Manager of Ankleshwar plant, Mr. Manoj Mehta to produce original or it’s copy, he denied of having any such certificate in original or copy, and sought for e-mail of scanned copy from their Registered Office at Mumbai, at the above- mentioned address and the same was produced before us. Thus, the firm named M/s. K.A. Male Pharmaceuticals Ltd., situated at Plot No. 6005, G.I.D.C Estate, Ankleshwar, Dist: Bharuch-02, having it’s Regd. Office at: 2, Krishnadham, S.L. Raheja road, Rahe Township, Malad(East), Mumbai-97, and all it’s Directors, General Manager of their registered office at Mumbai, Mr. Kirit Merchant and General Manager of it’s Ankleshwar plant, Mr. Manoj Jamnadas Mehta, residing at: 3, Samruddhi Bungalows, Bholav, Bharuch, and others, having hatched a criminal conspiracy in collusion with one another, have committed serious offence by forging government document, and hence, committed fraud against the company as well as the government. At this stage, it seems inevitable to carry out a thorough investigation as to who amongst the Directors and responsible person of the company at the relevant time, have forged this document and when, how this document was forged, and it has been used to produce before which agencies, and used for exporting to which countries. Therefore, it is my complaint for the said offence as per law against firm named M/s. K.A. Male Pharmaceuticals Ltd., situated at Plot No. 6005, G.I.D.C Estate, Ankleshwar, Dist: Bharuch-02, and Regd. Office 2, Krishnadham, S.L. Raheja road, Rahe Township, Malad(East), Mumbai-97, and all of it’s Directors,responsible persons, Mr. Kirit Merchant, General Manager of their registered office at Mumbai, and General Manager of it’s Ankleshwar plant, Mr. Manoj Jamnadas Mehta, residing at: 3, Samruddhi Bungalows, Bholav, Bharuch, and against all of those who are part of this conspiracy. Sd/- (N.R. Saiyed) Senior Drug Inspector, Bharuch.” 8. Kirit Merchant, General Manager of their registered office at Mumbai, and General Manager of it’s Ankleshwar plant, Mr. Manoj Jamnadas Mehta, residing at: 3, Samruddhi Bungalows, Bholav, Bharuch, and against all of those who are part of this conspiracy. Sd/- (N.R. Saiyed) Senior Drug Inspector, Bharuch.” 8. What could be understood from the bare reading of FIR that the officers of the Intelligence Department received tip on 27.06.2014 pursuant to which investigation was carried out in the office of K.A.Malle Pharmaceutics Limited and it was found that Good Manufacturing Practice certificate was not lying with the said company. The certificate which was placed during the investigation i.e. Certificate No.1304527 was found to be forged document. The General Manager of the company called copy of the GMP certificate from Bombay office. From Bombay office, General Manager Mr.Kirir Merchant sent certificate to the Bharuch office. On plain reading of FIR, it appears that allegations are made against all directors. The case of petitioner is that he is Non-executive Director and he is not actively participating in day-to-day affairs of the company. From perusal of the statements recorded during the investigation of offence against other accused, what could be noticed that Mr.Kirit Merchant had been directed to forward GMP certificate by extracting it from the Computer Department by the present petitioner. Mr.Kirit Merchant, General Manager of Bombay office following command from present petitioner forwarded the same to Pharma factory at Ankleshwar which was received by Mr.Manoj J. Mehta who is looking after the affairs of the company at Ankleshwar, Bharuch and this licence was found to be fake by the authority. Therefore, aforesaid FIR was lodged. Now, it is not case of the petitioner that he is not sitting in Bombay office of pharmaceutical company. It also reveals from the investigation papers that though he is claiming that he is Non-executive Director, he has signed some accounts of the company. The statements of Mr.Kirit Merchant and Mr.Manoj Mehta who are also accused in the matter suggests that present petitioner has played active role in commission of the offence. 9. It is very hard to believe that the petitioner who is director of the company and sitting in Bombay office is not knowing that the company has no GMP certificate and yet it is doing business of exporting the drugs. 9. It is very hard to believe that the petitioner who is director of the company and sitting in Bombay office is not knowing that the company has no GMP certificate and yet it is doing business of exporting the drugs. It is indeed prima facie proves from record that petitioner is in-charge of the company intelligently tried to subvert this issue by placing details before the concerned authority, stating that he is Non-executive Director. But investigation papers, at this juncture indicates that the petitioner is in-charge of the business of K.A. Malle Pharmaceutics Limited. He cannot escape from the liability of the misdeeds or alleged offence committed by K.A.Malle Pharmaceutics Limited on the ground that he is Non-executive Director. In these circumstances, this Court is least convenience to exercise the inherent powers at this juncture. 10. In State of Karnataka vs. L. Muniswamy and others – AIR 1977 SC 1489 , the Hon’ble Supreme Court has held as under : “In the, exercise of this. whole some power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the; ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters, is designed to. achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice. The ends of justice are higher than the, ends of mere law though justice has got to be. administered according to laws made by the, legislature. The compelling necessity for making these observations is that without a proper realisation of the object and purpose of the provision which seeks to. save the inherent powers of the High Court to do justice between the State and its. subjects, it would be impossible. to appreciate the width and contours of that salient jurisdiction.” 11. The compelling necessity for making these observations is that without a proper realisation of the object and purpose of the provision which seeks to. save the inherent powers of the High Court to do justice between the State and its. subjects, it would be impossible. to appreciate the width and contours of that salient jurisdiction.” 11. It is worth to refer Preeti Gupta vs. State of Jharkhand and another – 2010 (7) SCC 667 , wherein it is held by Hon’ble Apex Court as under : “18. The powers possessed by the High Court under section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. The court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution but court's failing to use the power for advancement of justice can also lead to grave injustice. 19. The High Court should normally refrain from giving a prima facie decision in a case where all the facts are incomplete and hazy; more so, when the evidence has not been collected and produced before the court and the issues involved, whether factual or legal, are of such magnitude that they cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceedings at any stage. 20. This court had occasion to examine the legal position in a large number of cases. In R.P. Kapur v. State of Punjab AIR 1960 SC 866 , this court summarized some categories of cases where inherent power can and should be exercised to quash the proceedings: (i) where it manifestly appears that there is a legal bar against the institution or continuance of the proceedings; (ii) where the allegations in the first information report or complaint taken at their face value and accepted in their entirety do not constitute the offence alleged; (iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.” 12. I may also refer to the judgment of Hon’ble Apex Court in case M/s.Zandu Pharmaceuticals Limited vs. Md. I may also refer to the judgment of Hon’ble Apex Court in case M/s.Zandu Pharmaceuticals Limited vs. Md. Sharaful Haque and another – 2005 (1) SCC 122 , wherein it is held as under : “As noted above, the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. (See: Janata Dal v. H. S. Chowdhary ( 1992 (4) SCC 305 ), and Raghubir Saran (Dr.) v. State of Bihar ( AIR 1964 SC 1 ). It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. In a proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings. (See: Dhanalakshmi v. R. Prasanna Kumar (1990 Supp SCC 686), State of Bihar v. P. P. Sharma ( AIR 1996 SC 309 ), Rupan Deol Bajaj v. Kanwar Pal Singh Gill ( 1995 (6) SCC 194 ), State of Kerala v. O. C. Kuttan ( AIR 1999 SC 1044 ), State of U.P. v. O. P. Sharma ( 1996 (7) SCC 705 ), Rashmi Kumar v. Mahesh Kumar Bhada ( 1997 (2) SCC 397 ), Satvinder Kaur v. State (Govt. of NCT of Delhi) ( AIR 1996 SC 2983 ) and Rajesh Bajaj v. State NCT of Delhi (1999 (3) SCC259.” 13. What could be noticed that inherent powers of the Court under Section 482 of Cr.P.C. are meant to exercise ex debito justitiae to do real and substantial justice, for the administration of which alone courts exist or to prevent abuse of process of law. 14. In CBI vs. A. Ravishankar Prasad and others – 2009 (6) SCC 351, the Hon’ble Apex Court carved out three categories to exercise the power which reads as under : “15. Undoubtedly, the High Court possesses inherent powers under section 482 of the Code of Criminal Procedure. 14. In CBI vs. A. Ravishankar Prasad and others – 2009 (6) SCC 351, the Hon’ble Apex Court carved out three categories to exercise the power which reads as under : “15. Undoubtedly, the High Court possesses inherent powers under section 482 of the Code of Criminal Procedure. These inherent powers of the High Court are meant to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under Section 482 Cr.P.C. can be exercised in following category of cases: (i) to give effect to an order under the Code; (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. This court time and again has observed that the extraordinary power under section 482, Cr.P.C. should be exercised sparingly and with great care and caution. The court would be justified in exercising the power when it is imperative to exercise the power in order to prevent injustice. In order to understand the nature and scope of power under section 482 Cr.P.C. it has become necessary to recapitulate the ratio of the decided cases.” 15. In the present case, though the learned advocate for petitioner tried to make out a picture that petitioner is Non- executive Director and he cannot be held vicariously liable for the deeds or misdeeds of the company, he cannot succeed as the investigation of the offence establishes that he is the main person and in-charge of the business of K.A.Malle Pharmaceutics Limited. Even the GMP certificate which was found to be fake was forwarded to Ankleshwar premises of the pharmaceutical company on his direction. Thus, looking to the above aspects, no case is made out to exercise inherent powers under Section 482 of Cr.P.C. It does not found that the complaint has been lodged with malafide or it is vexatious or frivolous. Therefore, the present petition deserves no consideration and requires to be dismissed. Before parting with the order, I may refer to the recent judgment of Hon’ble Supreme Court in case of Neeharika Infrastructure Private Limited vs. State of Maharashtra and others – (2021) 19 SCC 401 . 16. For the foregoing reasons, the petition stands dismissed. Rule is discharged. Interim relief, if any, to discontinue. Before parting with the order, I may refer to the recent judgment of Hon’ble Supreme Court in case of Neeharika Infrastructure Private Limited vs. State of Maharashtra and others – (2021) 19 SCC 401 . 16. For the foregoing reasons, the petition stands dismissed. Rule is discharged. Interim relief, if any, to discontinue. Needless to state that the observations made hereinabove will not influence learned Trial Court during trial.