Gujarat High Court
M/S Theon Pharmaceuticals Ltd Thro ... vs State Of Gujarat on 24 February, 2025
NEUTRAL CITATION
R/CR.MA/13767/2019 ORDER DATED: 24/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 13767 of 2019
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M/S THEON PHARMACEUTICALS LTD THRO PURAN CHAND JOSHI &
ORS.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
DHRUV TOLIYA(9249) for the Applicant(s) No. 1,2,3,4,5,6,7,8
MR. BHADRISH S RAJU(6676) for the Applicant(s) No. 1,2,3,4,5,6,7,8
NOTICE SERVED BY DS for the Respondent(s) No. 2
MR MEET THAKKAR APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 24/02/2025
ORAL ORDER
In an offence by way of complaint registered by respondent no.2
before the Court of learned Sessions Court, Ahmedabad in Sessions Case
No.606 of 2018 whereby besides petitioner no.1-company, all the
Directors have made accused for the offence punishable under Sections
18(a)(i) and 18(a)(vi) read with Section 27 which is punishable under
Section 34 of the Drugs and Cosmetics Act, 1940.
2. Learned advocate for the petitioners does not press for this petition
qua petitioner no.1. Accordingly, disposed of as not pressed qua
petitioner no.1.
3. Learned advocate for the petitioners would rely upon decision in
case of State of Haryana vs. Brij Lal Mittal and Ors., [1998 (5) SCC
343], more particularly, paragraph 8 and 9 thereof. He would also refer
to communication issued by the Health and Family Welfare Department,
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Himachal Pradesh annexed at Annexure-B whereby said Mr.PC Joshi
Director of the firm is endorsed as person responsible to the company for
conduct of the business of company under Section 34 of the Act. He
would submit that there is no averment in the complaint about the active
role of the petitioners no.2 to 8 who are Director of the company and in
absence of any allegations for active role of the petitioners, continuation
of proceedings against the petitioner is abuses of process of law. He
would submit that in absence of any specific allegation the person cannot
be vicariously liable for prosecution for the act and conduct of the
company. He would therefore submit to allow this petition except
petitioner no.1.
4. On the other hand, learned APP having referred to complaint
would submit that petitioner-company is engaged in selling spurious drug
and it is well within the knowledge of the Director of the company. He
would submit that allegations made in the complaint can be tested during
the trial and therefore he would submit to dismiss the present petition.
5. Having heard the learned advocates appearing for the parties and
gone through the complaint, more particularly, paragraph 9 thereof,
where-from it appears that Mr.PC Joshi is the responsible for the act and
conduct of the company as per the letter dated 09/04/2018 issued in reply.
At this juncture, let refer Section 34 of the Drugs and Cosmetic Act is
also referred.
"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
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nothing contained in this sub-section shall render any such person
liable to any punishment provided in this Act if he proves that the
offence was committed without his knowledge or that he exercised
all due diligence to prevent the commission of such offence.
(2)Notwithstanding anything contained in sub-section (1), where
an offence under this Act has been committed by a company and it
is proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any
director, manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall also be deemed
to be guilty of that offence and shall be liable to be proceeded
against and punished accordingly.
Explanation.--For the purposes of this section--(a)"company"
means a body corporate, and includes a firm or other association
of individuals; and(b)"director" in relation to a firm means a
partner in the firm."
6. Section 34 of the Act prescribes that an offence is alleged against
the firm or 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. Learned APP failed to point out that
the offence was committed by the company and it is proved that offence
which is alleged to have been committed by the company was with the
consent or connivance or its attribution to any negligent on the part of the
petitioners. At this juncture, the content of letter produced at page 42 is
required to be reproduced.
"Refer to your letter No. nil dated 21-01-2015 regarding
endorsement the name of Sh. P. C. Joshi S/o Sh. Krishana Nand, R/
o H.N. 117/B1, Ward No. 2, Modern Town, Pinjore, Haryana,
134101, as person responsible for act and conduct of the firm
under section -34 of Drugs and Cosmetics Act, 1940.
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In this regard it is to inform you that on the persual of documents
submitted by you, affidavit by Sh. P. C. Joshi and report of Drugs
Inspector the name of Sh. P. С. Joshi, who is Director of the firm is
hereby endorsed as person responsible to the companys for
conduct of business of company under section-34 of Drugs and
Cosmetics Act, 1940."
7. Thus, what could be seen that even as per the State Drugs
Controller, it is only Mr.PC Joshi is the person in-charge of the act and
conduct of the company and therefore he is person responsible to be
prosecuted under Section 34 of the Act. A worthy reference can also be
made to paragraph 8 and 9 of the Brij Lal Mittal and Ors., (supra) which
reads thus:
"8. Nonetheless, we find that the impugned judgment of the High Court
has got to be upheld for an altogether different reason. Admittedly, the
three respondents were being prosecuted as rectors of the
manufacturers with the aid of Section 34(1) of the act which reads as
under:
"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 quality, of the offence and shall be liable to
be proceeded against and punished accordingly.
Provided that nothing contained in this sub-section shall render any
such person liable to any punishment provided in this Act if he proves
that the offence was committed without its knowledge or that he
exercised at due diligence to prevent the commission of such offence."
It is thus seen that the vicarious liability of a person for being
prosecuted for an offence committed under the Act by a company arises
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if at the material time he was in-charge of and was also responsible to
the company for the conduct of its business. Simply because a person is
a director of the company it does not necessarily mean that he fulfills
both the above requirements so as to make him liable. Conversely,
without being a director a person can be in- charge of and responsible
to the company for the conduct of its business. From the complaint in
question we, however, find that except a baid statement that the
respondents were directors of the manufacturers, there is no other
allegation to indicate, even prima facie, that they were in-charge of the
company and also responsible to the company for the conduct of its
business.
9. In Delhi Municipality vs. Ram Kishan [(1983) 1 S.C.C.1] while
dealing with the applicability of Section 17(1) of the Prevention of the
Food Adulteration Act, 1954, which is in pari materia with Section
34(1) of the Act, on similar facts, this Court observed as under:
"So far as the Manager is concerned, we are satisfied that
from the very nature of his duties it can be safely inferred
that he would undoubtedly be vicariously liable for the
offence, Various liability being and incident of an offence
under the Act. So far as the Directors are concerned, there
is not even a whisper not 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. In these
circumstances, therefore, we find ourselves in complete
agreement with the argument of the High Court that no
case against the Directors (accused Nos. 4 to 7) has been
made out ex facie on the allegations made in the complaint
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and the proceedings against them were rightly quashed."
8. In view of the above, in absence of any allegations against the
petitioners, except petitioner no.1, regarding active role played in
commission of the offence, allowing the prosecution against them can be
said to be an abuse of process of law. Accordingly, the complaint being
Sessions Case No.606 of 2018 pending in the Court of learned Additional
Principal Judge, City Civil Court, Ahmedabad and proceedings arising
there-from qua petitioners no.2 to 8 are hereby quashed and set aside.
(J. C. DOSHI,J)
sompura
