IN THE HIGH COURT OF KERALA AT ERNAKULAM
Crl.MC.No. 329 of 2010()
1. SRI.HIMANSHU BAID,
... Petitioner
2. SRI.RISHI BAID,
3. SRI.D.R.METHA, CHAIRMAN,
4. SRI.AJAY SHARMA,
5. M/S. POLY MEDICURE LIMITED,
Vs
1. STATE OF KERALA,
... Respondent
For Petitioner :SRI.M.ASOKAN
For Respondent :PUBLIC PROSECUTOR
The Hon'ble MR. Justice M.SASIDHARAN NAMBIAR
Dated :17/03/2010
O R D E R
M.SASIDHARAN NAMBIAR, J.
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Crl.M.C. No. 329 OF 2010
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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
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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
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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
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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 theCrl.M.C.No.329/2010
5complaint 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
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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
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