IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR WEDNESDAY, THE 17TH MARCH 2010 / 26TH PHALGUNA 1931 Crl.MC.No. 329 of 2010() ------------------------ CC.412/2009 of JUDL. MAGISTRATE OF FIRST CLASS-I, KOZHIKODE .................... PETITIONERS/ACCUSED 2 TO 6 ----------------------------- 1. SRI.HIMANSHU BAID, MANAGING DIRECTOR, M/S.POLY MEDICURE LIMITED, IST FLOOR, 12, SANT NAGAR, EAST OF KAILASH, NEW DELHI-110 065. 2. SRI.RISHI BAID, EXECUTIVE DIRECTOR, M/S. POLY MEDICURE LIMITED, IST FLOOR, 12, SANT NAGAR, EAST OF KAILASH, NEW DELHI-110 065. 3. SRI.D.R.METHA, CHAIRMAN, M/S. POLY MEDICURE LIMITED, IST FLOOR, 12, SANT NAGAR, EAST OF KAILASH, NEW DELHI-110 065. 4. SRI.AJAY SHARMA, ASST.GENERAL MANAGER, M/S. POLY MEDICURE LIMITED, IST FLOOR, 12, SANT NAGAR, EAST OF KAILASH, NEW DELHI-110 065. 5. M/S. POLY MEDICURE LIMITED, IST FLOOR, 12, SANT NAGAR, EAST OF KAILASH, NEW DELHI-110 065. BY ADV. SRI.M.ASOKAN SRI.DEVAPRASANTH.P.J. RESPONDENT/COMPLAINANT -------------------------- STATE OF KERALA, REPRESENTED BY DRUGS INSPECTOR, ZONE IV, OFFICE OF THE ASST.DRUGS CONTROLLER, KOZHIKODE. BY PUBLIC PROSECUTOR SRI. K.S.SIVAKUMAR THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 17/03/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.SASIDHARAN NAMBIAR, J. --------------------------- Crl.M.C. No. 329 OF 2010 -------------------------- Dated this the 17th day of March, 2010 O R D E R Petitioners are accused 2 to 6 in C.C. No.412/2009 on the file of Judicial First Class Magistrate-I, Kozhikode taken cognizance for the offences under Section 27(b)(ii) and 27(d) of the Drugs and Cosmetics Act, 1940 on Annexure-I complaint filed by the Drugs Inspector for Kozhikode. The first petitioner is implicated as the second accused being the Managing Director, second petitioner was implicated as third accused being the Executive Director, third petitioner was implicated as fourth accused being the Chairman and fourth petitioner was implicated as the fifth accused being the Assistant General Manager of fifth petitioner the sixth accused company M/s.Poly Medicure Limited. Petition is filed under Section 482 of Code of Criminal Procedure to quash the cognizance taken as against the petitioners. 2 Learned counsel appearing for the petitioners and learned Public Prosecutor were heard. 3. Learned counsel appearing for the petitioners submitted that petitioners are confining the relief of quashing the cognizance Crl.M.C.No.329/2010 2 taken against petitioners 1 to 3 alone who are respectively accused 2 to 4. The learned counsel argued that in the absence of an allegation in Annexure-I complaint that petitioners 1 to 3 were either in charge and was responsible to company for the conduct of the business of the company, they cannot be vicarious liable or prosecuted and therefore the cognizance taken against them is to be quashed. Learned counsel relying on the decision of the Apex Court in State of Haryana v. Brij Lal Mittal (1998 (5) SCC 343) argued that for the sole reason that petitioners 1 to 3 are either the Managing Director, Executive Director or Chairman of the Company, they cannot be prosecuted as there is no case for the prosecution that they were either in charge and was responsible to the company for the conduct of the business of the company at the time of commission of the offence and therefore, the case as against them is to be quashed. 4. Learned Public Prosecutor submitted that though there is no specific allegation in Annexure-I complaint that petitioners 1 to 3 were either in charge and was responsible to company for the conduct of the business of the company, the case as against the first Crl.M.C.No.329/2010 3 petitioner stands on a different footing as he is the Managing Director and in such circumstances, even if the cognizance taken against petitioners 2 and 3 is bad, the cognizance taken against the first petitioner cannot be quashed. 5. Section 34 of the Drugs and Cosmetics Act, 1940 provides the offences by companies. Under sub section 1, where an offence under the Act has been committed by a Company every person who at the time the offence was committed was in charge and was responsible to 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 further provides that nothing contained in the sub section, shall render any such person liable if he proves that the offence was committed without his knowledge or that he exercised due diligence to prevent the commission of such offence. Sub section 2 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 offence has been committed with the consent or connivance or is attributable to any neglect on the part of Crl.M.C.No.329/2010 4 any Director, Manager, Secretary or other officer of the company, such Director, Manager, Secretary or other officer is also deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Therefore, unless there is an allegation in the complaint that the Directors of the company, who are implicated in the case, were in charge and was responsible to company for the conduct of the business of the company, they cannot be prosecuted, unless there is an allegation that even though they were not in charge of and were not responsible to company for the conduct of the business of the company, the offence was committed with either their consent or connivance or is attributable to any neglect on their part. 6. The honourable Supreme Court in State of Haryana v. Brij Lal Mittal (supra) considering the provision held: “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 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 Crl.M.C.No.329/2010 5 complaint in question we, however, find that except a bald 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.” The decision applies for the facts of this case. 7. But that decision cannot be made applicable to the case of the Managing Director. The question whether he was in charge and was responsible to company for the conduct of the business of the company can only be decided at the time of trial based on evidence. On the basis of absence of pleading alone, the case as against the Managing Director cannot be quashed exercising the powers under Section 482 of Code of Criminal Procedure. 8. But the question is different as far as the petitioners 2 and 3 are concerned. The second petitioner, who is the third accused, was implicated only in his capacity as the Executive Director and that too without an allegation that he was either in charge and was responsible to company for the conduct of the business of the company or that the offence was committed with either his consent or connivance or is attributable to any neglect on his part. Therefore second petitioner cannot be prosecuted Crl.M.C.No.329/2010 6 vicariously for the offence committed by the company. Hence the cognizance taken is bad. Same is the case with the third petitioner, who is the fourth accused Chairman of the Company. In the absence of an allegation in the complaint that he was either in charge and was responsible to company for the conduct of the business of the company or that offence was committed with either his consent or connivance or is attributable to any neglect on his part, he cannot be prosecuted vicariously for the offence committed by the company. Hence the cognizance taken as against the third petitioner is also bad. Petition is allowed in part. The cognizance taken by the Judicial First Class Magistrate-I, Kozhikode in C.C. No.412/2009 against accused 3 and 4 is quashed. Other petitioners are at liberty to raise the contentions before the learned Magistrate at the time of trial. M.SASIDHARAN NAMBIAR, (JUDGE ) vps Crl.M.C.No.329/2010 7 Crl.M.C.No.329/2010 8