Himachal Pradesh High Court

Ashish Dhamija And Another vs State Of H.P on 26 February, 2024

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr. MMO No. 1025 of 2022

Reserved on: 08.01.2024

Date of Decision: 26.02.2024.






    Ashish Dhamija and another                                                    ...Petitioner

                                           Versus





    State of H.P.                                                                ...Respondent


    Coram

Hon'ble Mr. Justice Rakesh Kainthla, Judge.

Whether approved for reporting?1 Yes.

For the Petitioners : Mr P.P. Chauhan, Advocate

through video-conferencing and Ms. Aditi Rana, Advocate, in person.

For the Respondent : Mr. Jitender Sharma, Additional Advocate General.

Rakesh Kainthla, Judge

Drug Inspector inspected the premises of M/s Soni

Medical Store on 17.1.2018. He obtained the samples of GMP-M2

for analysis after payment of the amount. One sample was sent

to the Government Analyst, who issued a report that the sample

was not of standard quality. The Drug Inspector served a notice

Whether reporters of Local Papers may be allowed to see the judgment? Yes.

upon Ram Swaroop Soni, Proprietor of M/s Soni Medical Store

informing him about the sample not being of standard quality

and directing him to produce the record related to the

supplier/manufacturer from whom the drugs were obtained by

him. A reply was submitted by Ram Swaroop Soni stating that

GMP-M2 tables were obtained from M/s GEE CEE Labs Pvt. Ltd.,

Manimajra, Chandigarh. The drug Inspector served a notice

upon M/s GEE CEE Labs Pvt. Ltd., Manimajra informing it that

the drug was not of standard quality and directing it to produce

the record/bill related to the supplier/manufacturer from where

the drug was obtained by M/s GEE CEE Labs Pvt. Ltd.,

Manimajra. A reply was submitted that drugs were procured

from M/s Adwin Pharma, Village Rampur Jattan, Trilokpur

Road, Kala Amb, Tehsil Nadaun, District Sirmour, H.P. Drug

Inspector served a notice upon M/s Adwin Pharma on 11.3.2020

informing it that the drug was not of standard quality and

directed it to produce the complete record required for the

investigation of the case. No reply was furnished by M/s Adwin

Pharma. A reminder was served on 23.6.2020. Again, no reply

was submitted. Another reminder was served on 31.7.2020. M/s

Adwin Pharma submitted the documents vide letter dated

10.8.2020. M/s Adwin Pharma also stated that it was not

satisfied with the report of the Government Analyst and it

requested to send the sample to the Central Drug Testing

Laboratory, Kolkata for retesting. The drug Inspector sent a

reply to the letter on 10.9.2020, stating that the sample had

expired and could not be sent for retesting. M/s Adwin Pharma

was a Partnership Firm and Sh. Ramesh Chander Dhamija, Smt.

Manorma Dhamija and Ashish Dhamija are the partners of the

Firm. Prosecution sanction was sought, which was granted and a

complaint was filed before the Court of learned Judicial

Magistrate First Class (JMFC), Court No.2, Ghumarwin, District

Bilaspur, H.P. for the commission of an offence punishable

under Section 27(d) of the Drugs and Cosmetics Act.

2. The petitioners filed the present petition for

quashing the complaint pending before the Court. It was

asserted that the petitioners are not the Managing Partners of

the Company. Mr. Ramesh Dhamija was the sole Managing

Partner of the Company who expired on 8.11.2017. The

petitioners were only the sleeping partners and they had no role

in the management of the Firm. The Firm was not arrayed as a

party and the proceedings against the petitioners are not

maintainable. No opportunity was ever afforded to the

petitioners to get the sample retested as per Section 25 of the

Drugs and Cosmetics Act. Information by the Drug Inspector

was sent only on 20.6.2020, by which time the drug had already

expired and could not have been sent for reanalysis. The

petitioners are gravely prejudiced in their defence and the

complaint is liable to be quashed on this ground alone.

Therefore, it was prayed that the complaint pending before the

Court of learned Judicial Magistrate First Class, Jhandutta be

quashed.

3. The State filed a reply reproducing the contents of

the complaint. It was asserted that the petitioners can take every

legal ground before the learned Trial Court. All the partners have

been arrayed as the accused. A request for retesting of the

sample was made on 10.8.2020 when the sample had already

expired. Therefore, it was prayed that the present petition be

dismissed.

4. I have heard Mr P.P. Chauhan, learned Counsel for

the petitioner through video-conferencing with Ms Aditi Rana,

learned counsel for the petitioners in person and Mr. Jitender

Sharma, learned Additional Advocate General for the

respondent/State.

5. Mr. P.P. Chauhan, learned counsel for the petitioner

submitted that the notice was served upon the Firm on

23.6.2020 when the sample had already expired. The Firm has

not been arrayed as an accused in the absence of which the

proceedings against the partners are not maintainable.

Therefore, he prayed that the present petition be allowed and

the petition pending before the learned Trial Court be quashed.

6. Mr. Jitender Sharma, learned Additional Advocate

General for the respondent-State submitted that no request was

made within 28 days of the service of the notice upon the Firm

and the plea that the sample had expired is not available to the

petitioners. All the partners were arrayed as party and there is

no defect in the complaint. Hence, he prayed that the present

petition be dismissed.

7. I have given considerable thought to the submissions

at the bar and have gone through the records carefully.

8. The principles of exercising the jurisdiction under

Section 482 of Cr.P.C. were laid down by the Hon'ble Supreme

Court in Supriya Jain v. State of Haryana, 2023 SCC OnLine SC 765 :

(2023) 7 SCC 711 wherein it was observed at page 716:-

.

17. The principles to be borne in mind with regard to the quashing of a charge/proceedings either in the exercise of jurisdiction under Section 397CrPC or Section 482CrPC or

together, as the case may be, has engaged the attention of this Court many a time. Reference to each and every precedent is unnecessary. However, we may profitably refer to only one decision of this Court where upon a

survey of almost all the precedents on the point, the principles have been summarised by this Court succinctly.

In Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1

SCC (Cri) 986], this Court laid down the following guiding

principles : (SCC pp. 482-84, para 27) "27. ...27.1. Though there are no limits to the powers of the Court under Section 482 of the Code

but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in terms of Section

228 of the Code should be exercised very sparingly

and with circumspection and that too in the rarest of rare cases.

27.2. The Court should apply the test as to whether

the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion and where the basic ingredients of a criminal offence are not satisfied then the Court may interfere.

27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end

in conviction or not at the stage of framing of charge or quashing of charge.

27.4. Where the exercise of such power is absolutely

essential to prevent patent miscarriage of justice

and for correcting some grave error that might be committed by the subordinate courts even in such cases, the High Court should be loath to interfere,

at the threshold, to throttle the prosecution in the exercise of its inherent powers.

27.5. Where there is an express legal bar enacted in any of the provisions of the Code or any specific law

in force to the very initiation or institution and continuance of such criminal proceedings, such a bar is intended to provide specific protection to an

accused.

27.6. The Court has a duty to balance the freedom of a person and the right of the complainant or prosecution to investigate and prosecute the offender.

27.7. The process of the court cannot be permitted to be used for an oblique or ultimate/ulterior purpose.

27.8. Where the allegations made and as they

appeared from the record and documents annexed therewith to predominantly give rise to and constitute a "civil wrong" with no "element of

criminality" and does not satisfy the basic ingredients of a criminal offence, the court may be justified in quashing the charge. Even in such cases, the court would not embark upon the critical analysis of the evidence.

27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the court is concerned primarily with

the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice.

27.10. It is neither necessary nor is the court called

upon to hold a full-fledged enquiry or to appreciate evidence collected by the investigating agencies to find out whether it is a case of acquittal or

conviction.

27.11. Where allegations give rise to a civil claim and also amount to an offence, merely because a civil claim is maintainable, does not mean that a

criminal complaint cannot be maintained. 27.12. In the exercise of its jurisdiction under Section 228 and/or under Section 482, the Court

cannot take into consideration external materials

given by an accused for reaching the conclusion that no offence was disclosed or that there was the possibility of his acquittal. The Court has to consider the record and documents annexed

therewith by the prosecution.

27.13. Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence

is even broadly satisfied, the Court should be more

inclined to permit a continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a

view to deciding the admissibility and reliability of the documents or records but is an opinion formed prima facie.

27.14. Where the charge sheet, reported under Section 173(2) of the Code, suffers from fundamental legal defects, the Court may be well within its jurisdiction to frame a charge. 27.15. Coupled with any or all of the above, where the Court finds that it would amount to an abuse of process of the Code or that the interest of justice favours, otherwise it may quash the charge. The

power is to be exercised ex debito justitiae i.e. to do real and substantial justice for administration of which alone, the courts exist.

27.16. These are the principles which individually

and preferably cumulatively (one or more) be taken into consideration as precepts to exercise extraordinary and wide plenitude and jurisdiction

under Section 482 of the Code by the High Court. Where the factual foundation for an offence has been laid down, the courts should be reluctant and should not hasten to quash the proceedings even on

the premise that one or two ingredients have not been stated or do not appear to be satisfied if there is substantial compliance with the requirements of the offence."

9. Similar is the judgment in Gulam Mustafa v. State of

Karnataka, 2023 SCC OnLine SC 603 wherein it was observed:-

26. Although we are not for verbosity in our judgments, a slightly detailed survey of the judicial precedents is in order. In State of Haryana v. Bhajan

Lal, 1992 Supp (1) SCC 335, this Court held:

"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this

Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of

myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information

.

report or the complaint, even if they are taken

at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an

investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the

FIR or complaint and the evidence collected in

support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by

a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the

basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for

wreaking vengeance on the accused and with a view

to spite him due to private and personal grudge.

103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be

exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the

allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its

whim or caprice."(emphasis supplied)

10. It was laid down in CBI v. Aryan Singh, 2023 SCC

OnLine SC 379, that the High Court cannot conduct a mini-trial

while exercising jurisdiction under Section 482 of Cr.P.C. The

allegations are required to be proved during the trial by leading

evidence. It was observed:

10. From the impugned common judgment and order passed by the High Court, it appears that the High Court

has dealt with the proceedings before it, as if, the High Court was conducting a mini-trial and/or the High Court was considering the applications against the judgment and order passed by the learned Trial Court on conclusion of trial. As per the cardinal principle of law, at the stage of discharge and/or quashing of the criminal proceedings, while exercising the powers under Section 482 Cr. P.C., the Court is not required to conduct the mini-trial. The High Court in the common impugned judgment and order has observed that the charges against the accused are not proved. This is not the stage where the

prosecution/investigating agency is/are required to prove the charges. The charges are required to be proved during the trial based on the evidence led by the

.

prosecution/investigating agency. Therefore, the High

Court has materially erred in going into detail in the allegations and the material collected during the course of the investigation against the accused, at this stage. At the

stage of discharge and/or while exercising the powers under Section 482 Cr. P.C., the Court has very limited jurisdiction and is required to consider "whether any sufficient material is available to proceed further against

the accused for which the accused is required to be tried or not".

11. One other reason pointed out by the High Court is that the initiation of the criminal

proceedings/proceedings is malicious. At this stage,

it is required to be noted that the investigation was handed over to the CBI pursuant to the directions issued by the High Court. That thereafter, on conclusion of the investigation, the accused

persons have been charge-sheeted. Therefore, the High Court has erred in observing at this stage that the initiation of the criminal

proceedings/proceedings is malicious. Whether the criminal proceedings was/were malicious or not, is

not required to be considered at this stage. The same is required to be considered at the conclusion

of the trial. In any case, at this stage, what is required to be considered is a prima facie case and the material collected during the course of the investigation, which warranted the accused to be tried.

11. This position was reiterated in Abhishek v. State of

M.P. 2023 SCC OnLine SC 1083 wherein it was observed:

12. The contours of the power to quash criminal proceedings under Section 482 Cr. P.C. are well defined.

In V. Ravi Kumar v. State represented by Inspector of Police, District Crime Branch, Salem, Tamil Nadu [(2019) 14 SCC 568], this Court affirmed that where an accused seeks

quashing of the FIR, invoking the inherent jurisdiction of

the High Court, it is wholly impermissible for the High Court to enter into the factual arena to adjudge the correctness of the allegations in the complaint.

In Neeharika Infrastructure (P). Ltd. v. State of Maharashtra [Criminal Appeal No. 330 of 2021, decided on 13.04.2021], a 3-Judge Bench of this Court elaborately considered the scope and extent of the power under

Section 482 Cr. P.C. It was observed that the power of quashing should be exercised sparingly, with circumspection and in the rarest of rare cases, such standard not being confused with the norm formulated in

the context of the death penalty. It was further observed

that while examining the FIR/complaint, quashing of which is sought, the Court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made therein, but if the Court thinks fit,

regard being had to the parameters of quashing and the self-restraint imposed by law, and more particularly, the parameters laid down by this Court in R.P. Kapur v. State of

Punjab (AIR 1960 SC 866) and State of Haryana v. Bhajan Lal [(1992) Supp (1) SCC 335], the Court would have

jurisdiction to quash the FIR/complaint.

12. The complainant has specifically asserted in para-8

of the complaint that a letter dated 11.3.2020 was written to the

manufacturer informing it about the sample not being of

standard quality. Copy of the letter (Annexure R-2) specifically

mentions that in case the manufacturer wants to adduce any

evidence in contravention of the Analyst report, it can inform

the Drug Inspector in writing after receipt of the letter. It was

further mentioned in para-11 of the complaint that the

manufacturer sent a letter dated 10.8.2020 stating that it was not

satisfied with the report of the Analyst and sample should be

sent to the Central Drug Testing Laboratory for retesting.

Section 25(3) of the Drugs and Cosmetics Act provides that a

person from whom the sample was taken (or the person whose

name, address and other particulars have been disclosed under

Section 18A) can notify the Drug Inspector or the Court within 28

days of the receipt of the copy of the report that he intended to

adduce evidence in controversion of the report. In the present

case, such a declaration was not made within 28 days from the

date of the service of the notice. It was laid down by the Hon'ble

Supreme Court in Glaxo Smith Kline Pharmaceuticals Ltd. v. State

of M.P., (2011) 13 SCC 72: (2012) 1 SCC (Cri) 774: 2011 SCC OnLine SC

1007 that where the company does not express any intention to

adduce evidence to controvert the Analyst report within the

statutory period of 28 days, the further delay in filing the

complaint becomes immaterial. It was observed:-

"8. However, the law permits the drug manufacturer to controvert the report expressing his intention to adduce evidence to controvert the report within the prescribed limitation of 28 days as provided under Section 25(3) of the 1940 Act. In the instant case, the report dated 27-8-

1997 was received by the statutory authorities who sent the show-cause notice to the appellants on 29-9-1997 and the appellants replied to that notice on 3-11-1997.

.

The case of the statutory authorities is that the

option/willingness to adduce evidence to controvert the analyst's report was not filed within 28 days i.e. limitation prescribed for it. The appellants are the

persons who knew the date on which the show-cause notice was received. For the reasons best known to them, they have not disclosed the said date. It is a Company which must be having Receipt and Issue Department and

should have an office which may inform on what date it has received the notice, and thus, should have made the willingness to controvert the report. In fact, such an application had only been made on the technique adopted

for analysis. It has been the case that instead of testing

the medicine under IP 1985, it could have been done under IP 1996 because IP 1996 had come into force prior to the date of taking the sample on 9-12-1996.

9. In view of the fact that the appellants did not express

an intention to adduce evidence to controvert the analyst report within the statutory limitation period of 28 days, further delay in filing the complaint becomes immaterial.

Even otherwise, the expiry date of the medicine was March 1998 i.e. only after 4 months of submission of the

reply by the appellants, and they did not fulfil their burden of expressing an intention to adduce evidence in

contravention of the report. Therefore, they cannot raise the grievance that the complaint had been lodged at a much belated stage. So far as the application of IP 1985 or IP 1996 is concerned, such an issue can be agitated at the time of trial.

10. The judgment in Medicamen Biotech Ltd. v. Drug Inspector [(2008) 7 SCC 196 : (2008) 3 SCC (Cri) 20] was heavily relied on by Shri R. Ramachandran, learned Senior Counsel appearing for the appellants. Nevertheless, the facts of the said case are quite distinguishable. In that case, the complaint had been filed about a month short of

the expiry date, and the accused therein had expressed their option to lead evidence in contravention of the analyst's report within the limitation time but were not

.

able to do so as shortly thereafter the medicine expired.

11. We agree with Ms Makhija that the case is squarely covered by the judgment of this Court in State of Haryana v. Brij Lal Mittal [(1998) 5 SCC 343: 1998 SCC (Cri)

1315] wherein this Court has held as under : (SCC p. 346, para 5) "5. ... Sub-section (4) also makes it abundantly clear that the right to get the sample tested by the

Central Government laboratory (so as to make its report override the report of the analyst) through the court accrues to a person accused in the case only if he

had earlier notified in accordance with sub-section (3) his intention of adducing evidence in controversion of

the report of the government analyst. To put it differently, unless the requirement of sub-section (3) is complied with by the person concerned he cannot

avail of his right under sub-section (4)."

In the said case, like the present case, the manufacturer did not notify the Inspector within the prescribed period

that he intended to adduce evidence in contravention of the report. Also, akin to the case at hand, the

manufacturer's right under sub-section (3) of Section 25 expired a few months before the expiry of shelf life. Holding for the Directors of the manufacturing company

on different grounds, the Court opined that the right to get the drugs tested by the Central Drugs Laboratory does not arise unless the requirement of sub-section (3) is complied with.

12. It is pertinent to mention herein that the present appellants had earlier also been informed by the Drug Inspectors of various cities on many occasions that the aforesaid medicine i.e. Betnesol tablet, was not of standard quality and the authorities had been making an attempt to initiate proceedings against them as is evident

from the pleadings taken by the appellants themselves and the letter dated 1-7-1996 (Annexure P-9) wherein the appellant-Company wrote a letter to the Controller,

Food and Drug Administration, Madhya Pradesh. The

relevant part thereof reads as under:

"During the past one month, we have received requests from the Drug Inspectors of Dhar, Rewa,

Seoni and Ambikapur all under your kind control, to provide a memorandum of articles of association, constitution, etc. of our Company to initiate action for manufacturing Betnesol tablets Batch No. NA 660,

Mfd. December 1992, Expiry May 1994; NB 290, Mfd. November 1994, Expiry April 1996; NB 538, Mfd. May 1995, Expiry December 1996 and NB 656, Mfd. September 1995, Expiry February 1997, which were

earlier declared as not of standard quality by the

Government Analyst, Bhopal for facing analytical difficulties during the determination of uniformity of content by IP 1985 method."(emphasis added)

13. In that letter also the appellant-Company does not make its intention clear to adduce any evidence to controvert the government analyst's report, rather made

the following request:

"Under these circumstances, we respectfully

reiterate that our product Betnesol tablets referred to above are of standard quality and request you to kindly treat all the matters as closed."

14. As explained hereinabove, the appellants and other co-accused did not give any option to adduce evidence in contravention of the analyst's report within the statutory limitation period. Even if there was an inordinate delay in launching the criminal prosecution or filing the complaint, it is thereby of no consequence. We do not find any ground to interfere with the well-reasoned judgment of the High Court. The appeal lacks merit and is, accordingly, dismissed."

13. In the present case, the Firm had not expressed any

intention to controvert the report within 28 days provided to it.

Therefore, the plea that the shelf life of the drug had expired by

the time the complaint was filed is not available to it and the

delay in filing the complaint will not be fatal to the prosecution.

14. It was specifically mentioned in para-13 of the

complaint that M/s Adwin Pharma was a partnership Firm and

Sh. Ramesh Chand Dhamija, Smt. Manorma Dhamija and Sh.

Ashish Dhamija were its partners. The memo of the parties

shows that Sh. Ramesh Chand Dhamija, Smt. Manorma Dhamija

and Sh. Ashish Dhamija have been arrayed as partners of M/s

Adwin Pharma. M/s Adwin Pharma was not arrayed as a party in

the complaint. It was mentioned in reply to the petition that all

the partners of the Firm have been arrayed as accused and the

complaint is not bad. This is not acceptable.

15. Section 34 of the Drugs and Cosmetics Act reads as

under:-

34. Offences by companies.--(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall

be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section

.

shall render any such person liable to any

punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the

commission of such offence.

(2) Notwithstanding anything contained in sub-

section (1), where an offence under this Act has been committed by a company and it is proved that

the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of, any director, manager, secretary or

other officer of the company, such director, manager, secretary or other officer shall also be

deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly:

Explanation.--For the purposes of this section--

(a) "company" means a body corporate, and includes a firm or other association of individuals;

and

(b) "director" in relation to a firm means a partner in the firm.

16. It is apparent from the bare perusal of this Section

that when an offence has been committed by a Company, every

person who was in charge 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. Thus, it is

apparent that the Company and the person who is in charge of

the affairs of the Company are to be prosecuted. The primary

liability is that of the Company and the persons who are in

charge and responsible to the Company are vicariously liable.

The explanation to the section provides that the Company

includes the Firm. Hence, the Firm is liable for violation of the

provisions of the Drugs and Cosmetics Act in its own right. In

U.P. Pollution Control Board v. Modi Distillery, (1987) 3 SCC 684, a

similar provision was considered by the Hon'ble Supreme Court

and it was held that prosecution of the Company is necessary

before the prosecution of the officers and it is not possible to

prosecute the officers of the Company without prosecuting the

Company. It was observed:-

"4. The question that arises in the appeal is whether the Chairman, Vice-Chairman, Managing Director and

members of the Board of Directors are liable to be proceeded against under Section 47 of the Act in the

absence of a prosecution of the Company owning the said industrial unit. Section 47 in so far material reads as follows:

"47. Offences by companies.--(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of, the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was

.

committed without his knowledge or that he exercised

all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in subsection

(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."

5. On a plain reading of sub-section (1) of Section 47 of the Act, where an offence has been committed by a company, every person who at the time of the

commission of the offence was 'in charge of and 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. Proviso to

sub-section (1) however engrafts an exception in the case of any such person if he were to prove that the offence

was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. It would be noticed that sub-section (1) of Section 47 is much wider than subsection (4) of Section 17 of the Prevention of Food Adulteration Act, 1954 which fell for consideration in I.K. Nangia case [(1980) 1 SCC 258:1980 SCC (Cri) 220]. Furthermore, the proviso to sub-section (1) shifts the burden on the delinquent officer or servant of the company responsible for the commission of the offence. The burden is on him to prove that he did not know of the offence or connived

in it or that he had exercised all due diligence to prevent the commission of such offence. The non-obstante clause in sub-section (2) expressly provides that

notwithstanding anything contained in sub-section (1),

where an offence under the 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.

17. In Aneeta Hada v. Godfather Travels & Tours (P) Ltd.,

(2012) 5 SCC 661 a similar provision enacted in the Negotiable

Instruments Act was considered by the Hon'ble Supreme Court

and it was held that prosecution of the Company is sine qua non

for prosecuting the officials of the Company. It is not

permissible to prosecute the officials without prosecuting the

Company. It was observed:-

"58. Applying the doctrine of strict construction, we are

of the considered opinion that the commission of an offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company" appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be

situations when the corporate reputation is affected when a Director is indicted.

59. In view of our aforesaid analysis, we arrive at the

.

irresistible conclusion that for maintaining the

prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-

net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491: 1971 SCC (Cri) 97] which is a three-judge Bench

decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352: 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [(2000) 1 SCC 1: 2001

SCC (Cri) 174] is overruled with the qualifier as stated in

para 51. The decision in Modi Distillery [(1987) 3 SCC 684:

1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove.

18. This judgment was followed by the Hon'ble Supreme

Court in Charanjit Pal Jindal v. L.N. Metalics, (2015) 15 SCC 768:

2015 SCC OnLine SC 1033 and it was held:

"11. From the aforesaid finding, we find that after analysing all the provisions and having noticed the

different decisions rendered by this Court, the three- judge Bench arrived at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning a company as an accused is imperative. Hence, in this case, we find no reason to refer the matter to the larger Bench.

12. In the present case, only the appellant was impleaded as an accused. In that view of the matter, we are of the view that the complaint with respect to the offence under Section 138 read with Section 141 of the Act was not maintainable following the decision in Aneeta

Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241]. We set aside the judgment dated 17-4-2010 passed

.

by the trial court, the order dated 27-5-2011 passed by the

appellate court and the impugned judgment dated 9-11- 2012 passed by the High Court of Orissa, Cuttack in Charanjit Pal Jindal v. L.N. Metalics [Charanjit Pal

Jindal v. L.N. Metalics, Criminal Revision No. 467 of 2011, decided on 9-11-2012 (Ori)]. The appellant stands acquitted."

19. This position was reiterated in Himanshu v. B.

Shivamurthy, (2019) 3 SCC 797: 2019 SCC OnLine SC 83 and it was held:

"11. In the present case, the record before the Court

indicates that the cheque was drawn by the appellant for

Lakshmi Cement and Ceramics Industries Ltd., as its Director. A notice of demand was served only on the appellant. The complaint was lodged only against the

appellant without arraigning the company as an accused.

12. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a

company, every person, who at the time when the offence was committed was in charge of or 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.

13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused.

14. We, accordingly, are of the view that the High Court was in error in rejecting the petition under Section 482 CrPC. We hence allow the appeal and set aside the

.

judgment of the High Court. In consequence, the

complaint, being CRP No. 27 of 2004 shall stand quashed."

20. A similar view was taken in Dayle De'souza v. Govt. of

India, 2021 SCC OnLine SC 1012, wherein it was observed:-

"24. There is yet another difficulty for the prosecution in

the present case as the Company has not been made an accused or even summoned to be tried for the offence. The position of law as propounded in State of Madras v. C.V. Parekh (1970) 3 SCC 491, reads:

"3. Learned Counsel for the appellant, however, sought conviction of the two respondents on the basis of Section 10 of the Essential Commodities Act under which, if the person contravening an order made

under Section 3 (which covers an order under the Iron and Steel Control Order, 1956), is a company, every person who, at the time the contravention 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 contravention and shall be liable to be proceeded against and punished accordingly. It was

urged that the two respondents were in charge of, and were responsible to, the Company for the conduct of the business of the Company and, consequently, they must be held responsible for the sale and for thus contravening the provisions of clause (5) of the Iron and Steel Control Order. This argument cannot be accepted, because it ignores the first condition for the applicability of Section 10 to the effect that the person contravening the order must be a company itself. In the present case, there is no finding either by the Magistrate or by the High Court that the sale in

contravention of clause (5) of the Iron and Steel Control Order was made by the Company. In fact, the Company was not charged with the offence at all. The

.

liability of the persons in charge of the Company only

arises when the contravention is by the Company itself. Since, in this case, there is no evidence and no finding that the Company contravened clause (5) of

the Iron and Steel Control Order, the two respondents could not be held responsible. The actual contravention was by Kamdar and Vallabhdas Thacker and any contravention by them would not fasten

responsibility on the respondents. The acquittal of the respondents is, therefore, fully justified. The appeal fails and is dismissed."

25. However, this proposition was later deviated from

in Sheoratan Agarwal v. State of Madhya Pradesh (1984) 4

SCC 352. This case pertained to the pari materia provision under Section 10 of the Essential Commodities Act, 1955. The court held that anyone among the company itself; every person in charge of and responsible to the company

for the conduct of the business; or any director, manager, secretary or other officers of the company with whose consent or connivance or because of whose neglect

offence had been committed, could be prosecuted alone. However, the person in charge or an officer of the

company could be held guilty in that capacity only after it has been established that there has been a contravention

by the company as well. However, this will not mean that the person in charge or an officer of the company must be arraigned simultaneously along with the company if he is to be found guilty and punished.

26. Relying upon the reasoning in Sheoratan Agarwal (supra) and limiting the interpretation of C.V. Parekh (supra), this Court in Anil Hada v. Indian Acrylic Ltd. (2000) 1 SCC 1 had held that:

"13. If the offence was committed by a company it can be punished only if the company is prosecuted. But instead of prosecuting the company if a payee opts to

prosecute only the persons falling within the second or third category, the payee can succeed in the case only if he succeeds in showing that the offence was actually

.

committed by the company. In such a prosecution the

accused can show that the company has not committed the offence, though such a company is not made an accused, and hence the prosecuted accused is

not liable to be punished. The provisions do not contain a condition that prosecution of the company is sine qua non for prosecution of the other persons who fall within the second and the third categories

mentioned above. No doubt a finding that the offence was committed by the company is sine qua non for convicting those other persons. But if a company is not prosecuted due to any legal snag or otherwise, the

other prosecuted persons cannot, on that score alone,

escape from the penal liability created through the legal fiction envisaged in Section 141 of the Act."

27. However, subsequent decisions of this Court have emphasised that the provision imposes vicarious liability

by way of deeming fiction which presupposes and requires the commission of the offence by the company itself as it is a separate juristic entity. Therefore, unless

the company as a principal accused has committed the offence, the persons mentioned in sub-section (1) would

not be liable and cannot be prosecuted. Section 141(1) of the Negotiable Instruments Act, extends vicarious

criminal liability to the officers of a company by deeming fiction, which arises only when the offence is committed by the company itself and not otherwise. Overruling Sheoratan Agarwal and Anil Hada, in Aneeta Hada v. Godfather Travels and Tours Private Limited (2012)5 SCC 661, a 3-judge bench of this court expounding on the vicarious liability under Section 141 of the Negotiable Instruments Act, has held:

"51. We have already opined that the decision in Sheoratan Agarwal runs counter to the ratio laid down in C.V. Parekh which is by a larger Bench and

hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada has to be treated as not laying down the correct law as far as it

.

states that the Director or any other officer can be

prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where there is some legal

impediment and the doctrine of lex non cogit ad impossibilia gets attracted.

xxxxxxxxx

59. In view of our aforesaid analysis, we arrive at the

irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other

categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the

same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh which is a three-judge Bench decision. Thus,

the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with

the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be restricted to its own

facts as has been explained by us hereinabove."

28. The proposition of law laid down in Aneeta Hada (supra) was relied upon by this Court in Anil

Gupta v. Star India Private Limited (2014) 3 SCC 373:

"13. In the present case, the High Court by the impugned judgment dated 13-8-2007 [Visionaries Media Network v. Star India (P) Ltd., Criminal Misc. Case No. 2380 of 2004, decided on 13-8-2007 (Del)] held that the complaint against Respondent 2 Company was not maintainable and quashed the summons issued by the trial court against Respondent 2 Company. Thereby, the Company being not a party to the proceedings under Section 138 read with Section 141 of the Act and

in view of the fact that part of the judgment referred to by the High Court in Anil Hada has been overruled by a three-judge Bench of this Court in Aneeta Hada, we

.

have no other option but to set aside the rest part of

the impugned judgment [Visionaries Media Network v. Star India (P) Ltd., Criminal Misc. Case No. 2380 of 2004, decided on 13-8-2007 (Del)] whereby the

High Court held that the proceedings against the appellant can be continued even in the absence of the Company. We, accordingly, set aside that part of the impugned judgment dated 13-8-2007 [Visionaries

Media Network v. Star India (P) Ltd., Criminal Misc. Case No. 2380 of 2004, decided on 13-8-2007 (Del)] passed by the High Court so far as it relates to the appellant and quash the summons and proceeding pursuant to

Complaint Case No. 698 of 2001 qua the appellant."

29. In Sharad Kumar Sanghi v. Sangita Rane (2015) 12 SCC 781, this Court observed that:

"11. In the case at hand as the complainant's initial

statement would reflect, the allegations are against the Company, the Company has not been made a party and, therefore, the allegations are restricted to the

Managing Director. As we have noted earlier, allegations are vague and in fact, principally the

allegations are against the Company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no

proceeding can be initiated against it even where vicarious liability is fastened under certain statutes. It has been so held by a three-judge Bench in Aneeta Hada v. Godfather Travels and Tours (P) Ltd. in the context of the Negotiable Instruments Act, 1881.

xxxxxxxxx

13. When the company has not been arraigned as an accused, such an order could not have been passed. We have said so for the sake of completeness. In the ultimate analysis, we are of the considered opinion

that the High Court should have been well advised to quash the criminal proceedings initiated against the appellant and that having not been done, the order is

.

sensitively vulnerable and accordingly, we set aside

the same and quash the criminal proceedings initiated by the respondent against the appellant."

30. This position was again clarified and reiterated by this

Court in Himanshu v. B. Shivamurthy (2019) 3 SCC 797 The relevant portion of the judgment reads thus:

"6. The judgment of the High Court has been questioned on two grounds. The learned counsel

appearing on behalf of the appellant submits that firstly, the appellant could not be prosecuted without the company being named as an accused. The cheque

was issued by the company and was signed by the appellant as its Director. Secondly, it was urged that

the observation of the High Court that the company can now be proceeded against in the complaint is misconceived. The learned counsel submitted that the

offence under Section 138 is complete only upon the issuance of a notice of demand and the failure of payment within the prescribed period. In the absence

of compliance with the requirements of Section 138, it is asserted, that the direction of the High Court that

the company could be impleaded/arraigned at this stage is erroneous.

7. The first submission on behalf of the appellant is no

longer res integra. A decision of a three-judge Bench of this Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd. governs the area of dispute. The issue which fell for consideration was whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without the company being arraigned as an accused. The three-judge Bench held thus : (SCC p. 688, para 58)

"58. Applying the doctrine of strict construction, we are of the considered opinion that the commission of an offence by the company is an

.

express condition precedent to attract the vicarious

liability of others. Thus, the words "as well as the company" appearing in the section make it absolutely unmistakably clear that when the

company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One

cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations

when the corporate reputation is affected when a

Director is indicted."

In similar terms, the Court further held : (SCC p. 688, para 59)

"59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning

of a company as an accused is imperative. The other categories of offenders can only be brought in the

drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself."

xxxxxxxxx

12. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or 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.

13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed

the cheque as a Director of the company and for and on

its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High

Court was in error in holding that the company could now be arraigned as an accused."

31. Applying the same proposition of law as laid down in Aneeta Hada (supra), this Court in Hindustan Unilever

Limited v. State of Madhya Pradesh (2020) 10 SCC 751 applying pari materia provision in Prevention of Food Adulteration Act, 1954, held that:

"23. Clause (a) of sub-section (1) of Section 17 of the Act makes the person nominated to be in charge of and

responsible to the company for the conduct of business and the company shall be guilty of the offences under clause (b) of sub-section (1) of Section

17 of the Act. Therefore, there is no material distinction between Section 141 of the NI Act and Section 17 of the Act which makes the company as well

as the nominated person to be held guilty of the offences and/or liable to be proceeded and punished

accordingly. Clauses (a) and (b) are not in the alternative but conjoint. Therefore, in the absence of the company, the nominated person cannot be

convicted or vice versa. Since the Company was not convicted by the trial court, we find that the finding of the High Court to revisit the judgment will be unfair to the appellant-nominated person who has been facing trial for more than the last 30 years. Therefore, the order of remand to the trial court to fill up the lacuna is not a fair option exercised by the High Court as the failure of the trial court to convict the Company renders the entire conviction of the nominated person as unsustainable."

32. In terms of the ratio above, a company being a juristic person cannot be imprisoned, but it can be subjected to a fine, which in itself is a punishment. Every punishment

has adverse consequences, and therefore, prosecution of

the company is mandatory. The exception would possibly be when the company itself has ceased to exist or cannot be prosecuted due to a statutory bar. However, such

exceptions are of no relevance in the present case. Thus, the present prosecution must fail for this reason as well.

21. Similar is the judgment in Dilip Hariramani v. Bank of

Baroda, 2022 SCC OnLine SC 579, wherein it was held:

15. The judgment in Dayle De'souza v. Government of India

through Deputy Chief Labour Commissioner (C), answered the question of whether a director or a partner can be

prosecuted without the company being prosecuted.

Reference in this regard was made to the views expressed by this Court in State of Madras v. C.V. Parekh on the one

hand and the divergent view expressed in Sheoratan Agarwal v. State of Madhya Pradesh and Anil Hada v. Indian Acrylic Ltd. This controversy was settled by a three-judge

Bench of this Court in Aneeta Hada (supra), in which, interpreting and expounding the difference between the

primary/substantial liability and vicarious liability under Section 141 of the NI Act, it has held:

"51. We have already opined that the decision

in Sheoratan Agarwal runs counter to the ratio laid down in C.V. Parekh which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted.

xxxxxxxxx

59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the

.

prosecution under Section 141 of the Act, arraigning

of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as

the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh which is a three-judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does

not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be

restricted to its own facts as has been explained by

us hereinabove."

16. The provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the

commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in

subsection (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the NI Act extends

vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by

deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender. This view has been subsequently followed in Sharad Kumar Sanghi v. Sangita Rane, Himanshu v. B. Shivamurthy, and Hindustan Unilever Limited v. State of Madhya Pradesh. The exception carved out in AneetaHada (supra), which applies when there is a legal bar for prosecuting a company or a firm, is not felicitous for the present case. No such plea or assertion is made by the respondent."

22. This position was reiterated in Pawan Kumar Goel v.

State of U.P., 2022 SCC OnLine SC 1598 and it was held:

.

25. This Court has been firm with the stand that if the complainant fails to make specific averments against the company in the complaint for the commission of an

offence under Section 138 of the NI Act, the same cannot be rectified by taking recourse to general principles of criminal jurisprudence. Needless to say, the provisions of Section 141 impose vicarious liability by deeming fiction

which pre-supposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-Section (1) and

(2) would not be liable to be convicted on the basis of the

principles of vicarious liability.

23. A similar view was taken by the Jammu & Kashmir

High Court in Ashish Damija v. State (UT of J&K), 2022 SCC OnLine

J&K 610 wherein it was held:-

15. The Supreme Court in the case of State of

Karnataka v. Pratap Chand, (1981) 2 SCC 335, while dealing with a matter pertaining to the prosecution of a partner of a firm under the Drugs and Cosmetics Act, 1940, observed

that for the purposes of imposing liability on the company under the said Section, a company includes a body corporate, a firm or an association of individuals and that a Director in relation to a firm means a partner in that firm. The Court went on to observe that even in the case of partners when a firm commits an offence, the requirement of either sub-section (1) or subsection (2) to Section 22C of the Minimum Wages Act which is in pari material with Section 34 of the Drugs and Cosmetics Act, must be satisfied, which means that in terms of sub-

section (1), the partner should be in charge of and

responsible to the firm for the conduct of its business as contemplated in sub-section (1) of Section 34 of the Drugs and Cosmetics Act. Further, in terms of sub-

section (2) of the said provisions, a partner may also be

liable just as a Director is liable for the conduct of the business of the company if the offence is committed with the consent or connivance of or is attributable to any

neglect on the part of the partner concerned.

16. From the above it is clear that the requirement of impleading a company as an accused in a prosecution where the offence is alleged to have been committed by

the company is equally applicable to a partnership firm and the firm has to be impleaded as an accused along with the partner who is responsible for the conduct of the business of the said firm.

17. A similar view has been taken by the High Court of

Bombay in the case of Philip J. v. AshapuraMinechem Ltd. (Criminal Writ petition Nos. 2909-10, 2914-15 of 2013 decided on 29.01.2016). In the said case, the Court has held

that the conclusions drawn by the Apex Court in the case of Aneeta Hada (supra) are not based merely on the fact that the company is a separate legal entity and juristic

person but these conclusions are drawn on the basis of the fact that Section 141 of the NI Act deals with vicarious

liability. It was observed that the Supreme Court had arrived at an irresistible conclusion for maintaining the prosecution under Section 141 of the NI Act, arraigning

the company as an accused is imperative, mainly and mostly on the basis of vicarious liability of the Directors of the company and not necessarily because the company is a juristic person and it has its own respectability. The Court went on to observe that the main basis for arriving at its conclusion by the Supreme Court was the vicarious liability which the Directors or partners of the firm can have towards the company and hence without joining the company on the touchstone of vicarious liability, they cannot be prosecuted. Ultimately, the Court held that the ratio laid down in the case of Aneeta Hada (supra) can be

made equally applicable in the case of a partnership firm and that the partners are liable to be sued for their vicarious liability.

18. Gujarat High Court in the case of Oanali Ismailji

Sadikot v. State of Gujarat, (Special Criminal Application (Quashing) No. 4536 of 2015 decided on, 03 March 2016), has laid down that for maintaining the prosecution

against the Director under Section 141 of the NI Act, arraigning of company as an accused is imperative and in view of the Explanation to Section 141 of the said Act, this legal position needs to be automatically made applicable

in the case of prosecution against a partnership firm also. The Court went on to hold that it has to be held that for maintaining prosecution against a partner under Section 141 of the Negotiable Instruments Act, arraigning of

partnership firm as an accused is imperative.

19. Similar views have been expressed by a Coordinate Bench of this Court in the case of Patel Nishit Vinod Chandra, Corona Remedies Private Limited v. State of

J&K (CRMC No. 29/2017 decided on 06.09.2019) in the context of Section 34 of the Drugs and Cosmetics Act.

20. From the forgoing analysis of the law on the subject,

it is clear that without impleading a partnership firm as an accused, prosecution against its partners under

Section 34 of the Drugs and Cosmetics Act is not maintainable. In the instant case, the respondent/complainant has impleaded only the partners

of the manufacturing firm M/s. Adwin Pharma without impleading the firm as an accused in the complaint. Thus, on this ground alone, the proceedings against the petitioners herein are not sustainable.

24. Thus, it is not permissible to prosecute the

petitioners without prosecuting the Firm in view of the binding

precedents of the Hon'ble Supreme Court.

25. Therefore, there is a force in the submission of Mr.

P.P. Chauhan, learned counsel for the petitioners that it is not

permissible to try the partners in the absence of the Firm.

Hence, the complaint is liable to be quashed qua the petitioners.

26. Consequently, the present petition is allowed and

Complaint No. 114-3 of 2021, pending before the learned Trial

Court and consequent proceedings arising out of the same qua

the petitioners are quashed.

27. The observation made herein before shall remain