Jharkhand High Court

Krishna Nand Shastri @ K.N. ... vs The State Of Jharkhand on 3 May, 2023

                                        1                   Cr.M.P. No. 1525 of 2014


             IN THE HIGH COURT OF JHARKHAND, RANCHI
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Cr.M.P. No. 1525 of 2014

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      1.Krishna Nand Shastri @ K.N. Shastri
      2.Anil Kumar Gupta
      3.Harpal Singh                               .... Petitioners
                                --   Versus --

1.The State of Jharkhand, through Inspector of Drugs, Deoghar .... Opposite Party

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CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI

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       For the Petitioners       :-     Mr. Pandey Neeraj Rai, Advocate
       For the State             :-     Ms. Kumari Rashmi, APP
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5/03.05.2023        Heard Mr. Pandey Neeraj Rai, the learned counsel appearing on

behalf of the petitioners and Ms. Kumari Rashmi, the learned counsel

appearing on behalf of the respondent State.

2. This petition has been filed for quashing of the entire criminal

proceeding in connection with G.O.C.R No.61 of 2013, T.R.No.879 of 2014

including order taking cognizance dated 15.07.2013 pending in the court of

learned Chief Judicial Magistrate, Deoghar.

3. The complaint case has been lodged alleging therein, in nutshell,

that On 02.03.2011 the then Inspector of Drugs inspected premises of M/s

Bajpai Medicals, Deoghar and the Inspector issued Form-16 on Ciproplus B-

WS, 100 mg manufactured by M/s Intercorp Biotech, New Delhi and as per

the composition mentioned on the label ciprofloxacin hydrochloride-100 mg is

present in 1 gm of the product, which implies that the product is a drug but

no drug manufacturing license no. is mentioned on the label and the product

is sold as 'nutritional supplement'. The said company was informed regarding

the seizure and it was asked to produce the constitution details of the firm.

The manufacturer requested for 15 days' time. After receipt of the judgment

of Hon'ble High Court, the Drug Inspector sought approval for prosecution

from the Director in Chief (Drugs) to prosecute the manufacturer company

under section 27(b) and (d) for violation of section 18(a) and (c) of the Drugs

and Cosmetics Act, 1940 and in turn approval has been granted. The special

leave petition preferred by the manufacturer before the Hon'ble Supreme

Court was dismissed. Ciprofloxacin Hydrochloride is a potent antibacterial

agent which is categorized under schedule-H of the Drugs and Cosmetics

Rules, 1945. The manufacturer by claiming ciprofloxacin hydrochloride as a

nutritional supplement has tried to misguide and hamper the instigation

process. The manufacturer distributed and sold the drug without obtaining

the drug manufacturing license which violates section 18(c) and is punishable

under section 27(b). Hence this case.

4. The learned counsel for the petitioners submits that the

complaint case was lodged on 12.7.2013 and on the same day the learned

court has taken cognizance on 15.7.2023. He submits that however it appears

that summons have been issued on same day. He submits that the petitioners

are the Directors of the company in question. He submits that in the entire

complaint there is no allegation that these petitioners are looking into the day

to day affairs of the company and to buttress his argument he has relied in

the case of State (N.C.T. of Delhi) v. Rajeev Khurana, (2010) 11 SCC 469,

paragraph nos.17 of the said judgment is quoted below:

"17. The ratio of all these cases is that the complainant is required to state in the complaint how a Director who is sought to be made an accused, was in charge of the business of the company or responsible for the conduct of the company's business. Every Director need not be and is not in charge of the business of the company. If that is the position with regard to a Director, it is needless to emphasise that in the case of non-Director officers, it is all the more necessary to state what were his duties and responsibilities in the conduct of business of the company and how and in what manner he is responsible or liable."

5. The learned counsel for the petitioners submits that the

petitioners were stationed at Delhi and it is also admitted in the complaint and

the learned court without following the mandatory provision under section

202 Cr.P.C has taken cognizance which is against the mandate of law.

6. On the other hand, Ms. Kumari Rashmi, the learned State

counsel submits that irregularity has been found and that is why the learned

court has taken congnizance and there is no illegality in the cognizance order.

7. In view of the above submission of the learned counsel

appearing for the parties the Court has gone through the contents of the

complaint petition as well as the order taking cognizance and finds that there

is no averment to the effect that these petitioners are looking into the day to

day affairs of the company. In this regard a reference may be made to section

34 of the Drugs and Cosmetics Act, 1940 which is quoted below:

"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 thecompany 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."

8. Looking to the above provision, it is crystal clear that the person

who is looking into the day to day affairs of the company and was responsible

at the time of offence can only be prosecuted and in that view of the matter

in absence of any averment to that effect vicarious liability upon the

petitioners are not liable to be fastened upon them as there is no such

averment in the complaint petition and the case of the petitioners is fully

covered in view of the judgment rendered in the case of State (N.C.T. of

Delhi) v. Rajeev Khurana (supra). So far the record further suggest that in

absence of any enquiry under section 202 Cr.P.C the learned court has taken

cognizance. Reference may be made to the case of Udai Shankar Awasthi v.

State of U.P. and Another, (2013) 2 SCC 435. Paragraph no.40 of the said

judgment is quoted below:

"40. The Magistrate had issued summons without meeting the mandatory requirement of section 202 Cr. P.C though the appellants were outside his territorial jurisdiction. The provisions of section 202 Cr.P.C were amended vide Amendment Act, 2005, making it mandatory to postpone the issue of process where the accused resides in an area beyond the territorial jurisdiction of the Magistrate concerned. The same was found necessary in order to protect innocent persons from being harassed by unscrupulous persons and making it obligatory upon the Magistrate to enquire into the case himself, or to direct investigation to be made by police officer, or by such other person as he thinks fit for the purpose of finding out whether or not, there was sufficient ground for proceeding against the accused before issuing summons in such cases."

9. Considering that argument this Court has also decided the same

issue in the case of M/s Maithon Power Limited and Others v. The State of

Jharkhand and Others", 2022 0 Supreme (Jhk) 700. It is worth considering

that there is no exception to the section 202 Cr.P.C, and in that view of the

matter, even in the Government complaint case, section 202 Cr.P.C is

mandatory and it is admitted that the petitioners are stationed at Delhi and

seeing that the learned magistrate was required to follow the mandatory

provision of section 202 Cr.PC which has been amended vide Amendment Act,

2005, making it mandatory to postpone the issue of process where the

accused resides in an area beyond the territorial jurisdiction of the Magistrate

concerned.

10. With cumulative effect of the above discussion and the analysis