HONOURABLE SRI JUSTICE P. DURGA PRASAD CRIMINAL PETITION NO.6772 OF 2008 Dated 01-04-2011 Between: Sri Hemachand Jain and another ……..Petitioners And: The State of A.P., rep. by its PP and another ………Respondents HONOURABLE SRI JUSTICE P. DURGA PRASAD CRIMINAL PETITION NO.6772 OF 2008 ORDER: This petition is filed under Section 482 of Cr.P.C for quashing the proceedings in C.C.No.607 of 2005 on the file of the XII Metropolitan Magistrate, Nampally, Hyderabad which is transferred from XV Metropolitan Magistrate in C.C.No.2363 of 2004 against the petitioners who are A.4 and A.6 therein. The 2nd respondent herein has filed the complaint against the petitioners and others for the offences under Sections 18(a) (vi) read with 61(i) Conditions of License, Drugs and Cosmetics Act, 1940. The allegations in the complaint are that on 28.5.2003, the Drugs Inspector along with other Drugs Inspector G. Ramdhan under supervision of A.D (TC) inspected M/s. Mahavir Hospital and Research Centre, A.C. Guards, Hyderabad and they found the stocks of various drugs kept for sale without holding a valid licence. An Inspection report was made and A.2 was informed to take drug licence for stock/sale of drug. A.1 firm has failed to take licence. On 22.9.2003, Smt B. Sakku bai and Smt K. Rajitha and Drugs Inspector along with Punch witnesss viz., N. Vijay Bhaskar and G. Sai Kumar went to A.1 firm of M/s. Mahavir Hospital and Research Centre and taken three varieties of samples and the intimation was given in Form 17 to Superintendent of the Hospital. On 23.9.2003 Sri G. Ramdhan addressed a letter under Section 18(A) of the Drugs and Cosmetics Act (for short the Act) to Superintendent of Mahavir Hospital and Research Centre, A.C. Guards, Hyderabad. On 10.10.2003, A.1 firm submitted its reply stating that seized drugs in Form 16 were purchased from Licenced dealers Mahavir Pharmacy under Invoice No.2492 dated 12.4.2003, 2480/9.4.2003, 2679/12.4.2003. A.1 has produced the purchase details for three items out of 29 items. A.1 and A.2 purchase and sale drugs as defined under Section 3(b) of the Act without holding a drug licence is contravening Section 1((c ) punishable under Section 27(b) (ii) of the Act and A.1 and A.2 failed to disclose the source of supply for the certain drugs in Form 16 contravening Section 28 of the Act. Heard the learned counsel for the petitioners and the learned counsel for the 1st respondent. The learned counsel for the petitioner has pleaded that the A.3 is firm and A.4 to A.6 shown as partners but A.4 and A.6 are not working partners and A.5 alone is the working partner and as such they cannot be prosecuted for the said offence in view of Section 34 of the Act. In support of his contention, the learned counsel for the petitioner has placed a reliance upon the Xerox copy of the partnership deed dated 1.4.2000 pertaining to M/s. Mahavir Pharmacy who is the A.3 herein. Wherein A.4, A.5 and A.6 are shown as partners and as per clause(1) of the Partnership Deed, the 2nd partner being the working partner is entitled for a remuneration of Rs.12,500/- per month and he is also held responsible for the maintenance of the accounts. The 2nd partner as per the Partnership Deed is Smt B. Madhu Jain who is the A.5 herein. Thus, A.5 herein is the working partner of Mahavir Pharmacy A.3. As per Section 34 of the Act where an offence under this Act has been committed by a company, every person who at the time of 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. As per explanation to Section 34 of the Act 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. Therefore, as per Section 34 of the Act, the person in-charge of the firm is responsible for the offence committed by the company. The petitioners’ counsel in support of his contention relied upon a decision rendered in State of Karnataka V. Pratap Chand and others[1] wherein the Apex Court has held: “Under Section 34 of the Act, Partner of a firm not in overall control of the day to day business of the firm, held, not liable under Section 34 for offences under the Act.” Following the said judgment, this Court in N. Dandapani and another V. State of A.P.,[2] held: “Partner of firm liable to be convicted for offence committed by firm if he was in charge of and was responsible to firm for conduct of business of firm or if it is proved that offence was committed with consent or connivance of, or was attributable to any neglect on part of such partner. Since there are no allegations in the complaint that they were in-charge of the A.1 firm and A.2 and A.3 were responsible for conducting of business of firm continuation of proceedings against them would be abuse of process of court and thereby quashed the proceedings.” In the present case, the complaint does not disclose the role played by the A.4 and A.5 and simply shown as partners of A.3 firm. In view of the above observations that A.4 and A.5 are only shown as partners of A.3 firm, they cannot be held responsible for the offence committed by A.3 firm and continuation of the proceedings against them would amount to abuse of process of law. Therefore, the petitioners 1 and 2/A.4 and A.5 in C.C.No.607 of 2005 on the file of XII Metropolitan Magistrate, Nampally, Hyderabad are entitled for quashing the proceedings pending against them. In the result, the petition is allowed and the proceedings against the petitioners 1 and 2/A.4 and A.6 in C.C.No.607 of 2005 on the file of the XII Metropolitan Magistrate, Nampally, Hyderabad are hereby quashed. ______________________ P.DURGA PRASAD,J. Date:01.04.2011. Gk. HONOURABLE SRI JUSTICE P. DURGA PRASAD CRIMINAL PETITION NO.6772 OF 2008 Dated 01-04-2011 Gk. [1] 1981 Supreme Court Cases (Cri)453 [2] 2005(1) ALD (Crl.) 956 (AP)