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TMI Blog2022 (10) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... ision being Criminal Revision Petition No.115 of 2013 filed by the appellants thereagainst. 3. The facts, in brief, giving rise to the present appeal are as under: 3.1 The Appellants are the Directors of M/s Cachet Pharmaceuticals Private Ltd. (hereinafter referred to as "CPPL"). CPPL was granted permission to manufacture 'Hemfer Syrup' which falls under Schedule C & C(1) to the Drugs & Cosmetics Rules, 1945 (hereinafter referred to as "the said Rules"). 3.2 On 30th August 2006, Sh. N. A. Yadav, the then Drugs Inspector, Food and Drugs Administration, Beed, Maharashtra, visited the premises of M/s. Priya Agencies at Beed and purchased 'Hemfer Syrup', from which he had drawn samples of the drug. On 31st August 2006, he sent one such sample to the Government Analyst, Maharashtra State Drug Control Laboratory Mumbai so as to have the drug tested. On 26th February 2007, he received a test report dated 13th February 2007 from the Government Analyst stating that the sample was not of standard quality as the content of Cyanocobalamin was less than the permissible limit, i.e., 39% of the label amount. On the same day, the manufacturer of the drug, i.e., CPPL, was informed by a registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, Food & Drug Administration, Mumbai, the Complaint bearing RCC No. 233 of 2009 came to be filed before the Ld. Chief Judicial Magistrate, Beed under Section 18(a)(i) read with Sections 16 and 34 of the said Act and punishable under Section 27(d) of the said Act. In the said complaint, the present Appellants being Directors of the Company were arrayed as Accused Nos. 5 to 8. 3.8 The learned CJM, Beed issued Summons to all the accused, including the Appellants herein vide Order dated 30th March 2009. The Appellants filed a Criminal Revision Petition against the summoning order before the learned Sessions Judge, Beed on the ground that there are no specific averments in terms of Section 34 of the said Act as to the role played by the Directors and thus sought for the Summoning Order to be quashed. However, the learned Sessions Judge, Beed rejected the said Criminal Revision Petition noting that there is a specific averment in the complaint that the appellants are concerned with the manufacture, distribution and sale of 'Hemfer Drug'. 3.9 The Appellants preferred a Criminal Writ Petition before the Bombay High Court assailing the order passed by the learned Sessions Judge. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion of the licensing authority is considered adequate. He submits that Form 28 is a license to manufacture for sale or distribution of drugs in accordance with Rule 76 of the said Rules. Learned Senior Counsel submits that in Form 28, the names of the approved competent technical staff are required to be given. He further submits that condition No.3 of the Conditions of Licence requires that if there is any change in the competent technical staff, the same shall be forthwith reported to the licensing authority. 7. Learned Senior Counsel submits that Schedule M to the said Rules provides for good manufacturing practice and requirements of premises, plant and equipment for pharmaceutical products. Learned Senior Counsel submits that clause 6.1 of Part I of Schedule M specifically provides that the manufacture shall be conducted under the direct supervision of competent technical staff with prescribed qualifications and practical experience in the relevant dosage form and/or active pharmaceutical products. It is further the submission of the learned Senior Counsel that as per clause 6.2 thereof, the head of the Quality Control Laboratory is required to be independent of the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmadhikari, learned counsel, on the contrary, submits that perusal of the complaint, and specifically paragraphs 3 and 25 thereof would reveal that there is sufficient compliance of requirement of Section 34 of the said Act. He submits that the complaint has to be read as a whole and cannot be read in a piecemeal manner. Learned counsel relies on the judgment of this Court in the case of U.P. Pollution Control Board vs. Mohan Meakins Ltd. and others (2000) 3 SCC 745 in support of the proposition that there is no legal requirement for the trial Court to pass a detailed order while issuing process. He also relies on the judgment of this Court in the case of Dinesh B. Patel and others vs. State of Gujarat and another(2010) 11 SCC 125 to buttress his submission that the averments made in the complaint are sufficient to proceed against the present appellants. 13. In the case of State of Haryana vs. Brij Lal Mittal and others (1998) 5 SCC 343, this Court observed thus: "8. Nonetheless, we find that the impugned judgment of the High Court has got to be upheld for an altogether different reason. Admittedly, the three respondents were being prosecuted as directors of the manufacturers wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved thus: "8. ....... There is nothing which suggests that simply by being a director in a company, one is supposed to discharge particular functions on behalf of a company. It happens that a person may be a director in a company but he may not know anything about the daytoday functioning of the company. As a director he may be attending meetings of the Board of Directors of the company where usually they decide policy matters and guide the course of business of a company. It may be that a Board of Directors may appoint subcommittees consisting of one or two directors out of the Board of the company who may be made responsible for the daytoday functions of the company. These are matters which form part of resolutions of the Board of Directors of a company. Nothing is oral. What emerges from this is that the role of a director in a company is a question of fact depending on the peculiar facts in each case. There is no universal rule that a director of a company is in charge of its everyday affairs. We have discussed about the position of a director in a company in order to illustrate the point that there is no magic as such in a particular word, be it director, manager or secr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent 1 was in charge of or was responsible to the accused Company for the conduct of its business. This is in consonance with strict interpretation of penal statutes, especially, where such statutes create vicarious liability. 14. A company may have a number of Directors and to make any or all the Directors as accused in a complaint merely on the basis of a statement that they are in charge of and responsible for the conduct of the business of the company without anything more is not a sufficient or adequate fulfilment of the requirements under Section 141." (emphasis in original) 18. In Girdhari Lal Gupta v. D.H. Mehta [Girdhari Lal Gupta v. D.H. Mehta, (1971) 3 SCC 189 : 1971 SCC (Cri) 279 : AIR 1971 SC 2162] , this Court observed that a person "in charge of a business" means that the person should be in overall control of the daytoday business of the Company. 19. A Director of a company is liable to be convicted for an offence committed by the company if he/she was in charge of and was responsible to the company for the conduct of its business or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any negligence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "17. The ratio of all these cases is that the complainant is required to state in the complaint how a Director who is sought to be made an accused, was in charge of the business of the company or responsible for the conduct of the company's business. Every Director need not be and is not in charge of the business of the company. If that is the position with regard to a Director, it is needless to emphasise that in the case of non-Director officers, it is all the more necessary to state what were his duties and responsibilities in the conduct of business of the company and how and in what manner he is responsible or liable." 21. Recently, in the case of Ashoke Mal Bafna vs. Upper India Steel Manufacturing and Engineering Company Limited(2018) 14 SCC 202 , this Court observed thus: "9. To fasten vicarious liability under Section 141 of the Act on a person, the law is well settled by this Court in a catena of cases that the complainant should specifically show as to how and in what manner the accused was responsible. Simply because a person is a Director of a defaulter Company, does not make him liable under the Act. Time and again, it has been asserted by this Court that on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. village Thana Baddi, Tehsil Nalagarh Dist. Solan (H.P.) Pin code 173205 that is accused no.4 under licence No. MB/05/268 and sold the above said drugs to M/s Priya Agencies Behind Dr. Vaidya Hospital Jalna Road, Beed, Dist. Beed through M/s Alkem Laboratories Ltd. situated at reality warehousing Pvt. Ltd., Gut No.2323/1 property no. 115, Pune Nagar road, At. Post Wagholi, Tai. Haveli, Dist. Pune 412207." 23. It can thus be seen that there are no specific averments insofar as the present appellants are concerned. It is further to be noted that the present appellants are neither the managing director nor the wholetime directors of the accused company. 24. It is further to be noted that, in accordance with the provisions of Rule 76 of the said Rules read with Form 28, the Accused Nos. 9 and 10 have specifically been approved by the licensing authority in Form 28. Accused No.9 was approved as a person under whose active direction and personal supervision the manufacture would be conducted as required under sub-rule (1) of Rule 76 of the said Rules. Similarly, Accused No.10, who was approved as a head of the testing unit, was to be in-charge for carrying out the test of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und for proceeding. This section relates to commencement of a criminal proceeding. If the Magistrate taking cognizance of a case (it may be the Magistrate receiving the complaint or to whom it has been transferred under Section 192), upon a consideration of the materials before him (i.e. the complaint, examination of the complainant and his witnesses, if present, or report of inquiry, if any), thinks that there is a prima facie case for proceeding in respect of an offence, he shall issue process against the accused. 52. A wide discretion has been given as to grant or refusal of process and it must be judicially exercised. A person ought not to be dragged into court merely because a complaint has been filed. If a prima facie case has been made out, the Magistrate ought to issue process and it cannot be refused merely because he thinks that it is unlikely to result in a conviction. 53. However, the words "sufficient ground for proceeding" appearing in Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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