ORDER
K. Padmanabhan Nair, J.
1. These two petitions are filed under Section 482 of the Cr.P.C. for quashing a complaint filed by a the second respondent-Regional Drugs Inspector before the Chief Judicial Magistrate, Ernakulam (now pending as C.C. No. 1245/1998). Crl. M.C.No. 1637/1999 is field by the sixth accused who is stated to be one of he Directors of a Private Limited Company. Crl.M.C. No. 729/1999 is filed by accused Nos. 11 and 12 who are also stated to be Directors of the same company.
2. The short facts necessary for the disposal of the cases are as follows:
The second respondent, Regional Drugs Inspector, Ernakulam filed a complaint under Section 32 of the Drugs and Cosmetics Act, 1940 (Act for short) against 15 persons alleging that they committed offence punishable under Section 18(c) read with Section 27(b)(11), Section 18a(vi) read with Schedule 27(d) of the Act and Rule 105B of the Drugs and Cosmetics Rules read with Schedule 27(d) of the Act. In the complaint, it is alleged that the first accused is a society registered at the office of the District Registrar (G), Ernakulam. The second and third accused are President and Secretary of the first accused Society. The fourth accused is a private limited company. The fifth accused is the Managing Director of the 4th accused company. Accused Nos. 6 to 14 are the Directors of the fourth accused Private Ltd. company. The 15th accused is stated to be the Consultant Pathologist. It is averred that the second accused who is the President of the first accused Society had applied for licence to operate a blood bank at ISBT Blood Bank, City Hospital Campus, Kochi and that application was rejected on 8.2.1996. It is further averred that on 20th September, 1996, the second respondent inspected the premises of ISBI Blood Bank, City Hospital and found that whole human blood was collected, stored and sold there, is violation of the provisions contained in the Act and Rules. According to the complainant, the first accused Society do not have any office and no records were produced by the second accused, the President of the 1st accused Society. It is also alleged that the Society have not filed any annual returns or other information after registration of the society on 26.12.1994 and the President has not provided the name and address of the members of the Managing Committee under Rule 11 of the Society. It is alleged that the Blood Bank was actually conducted by the 4th accused company and it had collected, stored and sold whole human blood without obtaining valid licence and without conducing the test for the same prescribed under the Rules. It is also alleged that the accused had stored whole Human Blood after the expiration of potency and thereby violated the provisions contained in Section 18(c) read with Section 27(b)(11), 18(a)(vi) read with Schedule 27(d) of the Act and Rule 105B read with Schedule 27(d) of the Act. So the complaint is filed against the society, its President, Secretary and also against the company, its Directors and Pathologist.
3. It is argued by the counsel for the petitioners that there is absolutely no averment in the complaint that the petitioner in these Crl.M.Cs., are in charge or control of the business of the fourth accused-company. It is argued that they were arrayed as accused in the case solely on the ground that the Registrar of Companies had issued a list to the second respondent which contains their names also as the Directors of the company. It is also argued that there was dispute between the 4th respondent company represented by the second accused who was the Managing Director and the petitioners and some of the Directors field civil cases against the company and the Managing Director. In Crl. M.C.N O.729/99, it is averred that the petitioners along with two others filed O.S.No.723/92 before the Sub Court, Ernakulam. It is also averred that the 5th accused and some others were removed and new Board of Directors were elected on 6.1.1992, but they were not allowed to function. The newly elected Chairman along with another Director filed O.S.No.41/93 against the 5th accused and both suits tried jointly. According to the petitioners in Crl. M.C.No. 729/99, they were prevented from functioning as the Directors of the 4th accused company and taking part the day to day affairs of the company. Petitioners in Crl.M.C. No.729/1999 have produced a, copy of the common judgment passed by this Court in A.S. Nos. 480, 489, 497, 498, 668, 688, 689, 706, 756 and 757 of 1994 dated 10.12.1998. It is admitted by the petitioners that the judgment in A.S.No. 480 of 1994 and connected appeals of this Court has not become final and the hospital is being managed by he receivers appointed by this Court. I do not think that it is necessary to consider the effect of the decrees passed in the civil suits to decide these two criminal M.Cs.
4. In M.N. Damani v. S.K. Sinha (2001 SCC (Crl.)823), the Supreme Court has laid down the principles to be followed while considering the petition for quashing a complaint. It is held as follows:-
“For deciding whether the criminal proceedings should be allowed to continue or the same should be quashed, two aspects are to be satisfied:(1) whether the uncontroverted allegations, as made in the complaint, prima facie establish the offence, and (2) whether it is expedient and in the interest of justice to permit a prosecution to continue”.
It is also well settled position of law that even if no sufficient averments are made in the complaint to constitute an offence, the compliant cannot be quashed, if there are materials to make out a prima facie case in the documents produced along with the same. (See Drug Inspector v. B.K. Krishnaiah, 1981 SCC (Crl.) 487). In view of the principles laid down in the above stated decisions, at this stage, I need only consider whether any materials are available either in the complaint or in the papers accompanying the same to make out a prima facie case against the petitioners.
5. This complaint is filed against a Society, its President and Secretary as well as a private limited company and its Directors. such a complaint is governed by the provisions contained in Section 34 of the Act. Section 34 of the Act which reads as follows:-
“34. Offences by companies.-(1) Where an offence under this Act has been committed by 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.”
6. The Apex Court in State of Haryana v. Brij Lal Mittal (1998) 5 SCC 343) had found that simply because a person is a director for the company he does not become liable for the offence committed by the company and it must be shown that he is in charge of and responsible to the company for the conduct of its business. In Brij Lal Mittal’s case (supra) it was held as follows:
“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 if does not necessarily mean that he fulfils 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 of the conduct of its business. in the present case except a bald statement in the complaint 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. Therefore, the complaint is liable to be quashed.”
7. The only allegation in the complaint against the petitioners is that they are directors of the company. There is absolutely no averment in the complaint to the effect that petitioner were in charge of and also responsible to the company for the conduct of its business at the relevant period. On the other hand, what is stated in the third paragraph on the fourth page of the complaint is that it was found that M/s. City Hospital (fourth accused) was conducting a blood bank without valid drug licence. It is also averred that the Managing Director of the City Hospital Pvt. Ltd. did not produce the articles of association, memorandum of association and the list of directors (on request) and the Registrar of Companies had provided the list of directors. There is absolutely no other averments in the complaint which prima facie shows that either the petitioner in Crl.M.C. 1637/1999 or the petitioners in Crl. M.C.No.729/1999 were in charge of and were responsible to the company for the conduct of the business of the company at the relevant point of time. The complainant had product as many as 26 documents. The petitioners in Crl. M.C.729/99 had produced the copy of the complaint and copies of 15 documents. I have perused the copies of those documents and also the list of documents produced along with the complaint. Admittedly the Managing Director of the 4th accused company did not produce any document.The only document produced by the complainant is the copy of the Annual Returns filed by the 5th accused before the Registrar of Companies as on 30.9.1996. It contains the list of Directors. There is absolutely nothing in the other documents produced along with the complaint to connect the petitioners to the offences alleged. So, there is nothing in the papers produced along with the complaint also to mae out a prima facie case against the petitioners. So the case of the petitioners stand on a different footing. In view of the principle laid down in the Brij Lal Mittal’s case, the petitioners cannot be prosecuted in the absence of the allegation that they were in charge of the company and also responsible to the company for the conduct of its business. It is also made clear that I have not considered whether a prima facie case is made against the other accused in these proceedings.
8. In the result, Crl. M.C. Nos. 729/99 and 1637/99 are allowed. All further proceedings in C.C. No. 1245/1988 on the file of the Chief Judicial Magistrate Court, Ernakulam so far as it relates to the petitioners in Crl. M.C. No. 729/99 (Dr.V.D. Sebastian, A11 and Mr. M.G. Sukumaran, A12) and the petitioner in Crl. M.C. No. 1637/99 (Dr. M. Aravind Babu, A6) are hereby quashed.