SB Cr. Misc. Petition No.84/2003
M/s. Hwizal Laboratory Pvt Ltd & Ors. Vs. State
{1}
S.B. Cr. Misc. Petition NO.84/2003
M/s. Hwizal Laboratory Pvt Ltd., & Ors.
vs
State of Rajasthan
DATE OF ORDER : - 7.7.2008
HON'BLE MR. PRAKASH TATIA, J.
Mr.RK Charan, for the petitioner.
Mr. JPS Choudhary, PP.
A criminal complaint was filed under Section
18(a)1, 17B(d), 17A(f), 16(1)(a) and Section 24B
of the Drugs and Cosmetics Act, 1940 (hereinafter
referred to as the Act of 1940) as well as under
Section 37(c) and 27(b) of the Act of 1940.
In the complaint M/s. Nihal Medical Store, the
firm where the sample was taken and two partners
accused no.2 and 3 alognwith manufacturer M/s.
Hwizal Laboratory Pvt. Ltd. Alongwith its
Directors accused no. 5 to 7 were added as
accused. In the complaint it is specifically
mentioned that accused no.2 and 3 are responsible
for carrying out the day to day business and
activities of accused no.1 company and, therefore,
they are liable to suffer the consequence of
SB Cr. Misc. Petition No.84/2003
M/s. Hwizal Laboratory Pvt Ltd & Ors. Vs. State
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committing offence. So far as accused no.4 to 7
are concerned, the accused no.4 is the
manufacturer company and accused no.5 to 7 are the
Directors of the accused no.4 company. For
accused no.5 to 7 in the complaint it is
specifically pleaded that they have impleaded as
accused only because of the reason that they are
Directors of the accused no.4 company.
Section 34 of the Act clearly provides a
provision how to deal with the matter where there
are allegation of committing offence by the
company. As per Section 34(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. The proviso further makes it clear
that even if a person is proceeded against because
of the reason that there is allegation that he was
incharge and was responsible to the company for
conduct of business even then he can show that the
SB Cr. Misc. Petition No.84/2003
M/s. Hwizal Laboratory Pvt Ltd & Ors. Vs. State
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offence was committed without his knowledge or
that he exercised all due diligence to prevent the
commission of such offence.
The matter was considered by the Hon’ble
Supreme Court in the case of GL Gupta Vs. D.N.
Mehta reported in AIR 1997 SC 28 wherein the words
“a person incahrge and responsible for the conduct
of the affairs of a company” have been considered.
In the said judgment, the Hon’ble Apex Court
observed that director who may be a party to the
policy been followed by a company and yet not be
incharge of the business of the company. The
Hon’ble Supreme Court further held that “manager
who usually is in charge of the business but not
in over-all-charge.”
In view of the above reasons and in view of
the aforesaid provisions of law there must be
allegation against the person against whom
prosecuting is launched that they are incharge and
responsible for act of the company and
particularly of commission of offence. In the
present case, admittedly, there is no allegation
against the petitioners that they were responsible
and incahrge for act of the company accused no.4.
SB Cr. Misc. Petition No.84/2003
M/s. Hwizal Laboratory Pvt Ltd & Ors. Vs. State
{4}
In view of the above reasons, the criminal
proceedings against petitioners cannot proceed.
Consequently,this misc petition is allowed and the
prosecution against the petitioners is quashed.
(PRAKASH TATIA), J.
c.p.Goyal/-