CAUSE TITLE:
Lalankumar Singh & Ors Vs State Of Maharashtra
DATE OF JUDGEMENT:
11 October 2022
JUDGE(S):
HON’BLE JUSTICE B.R. GAVAI and Justice C.T Ravikumar
PARTIES:
Appellant(s): LALANKUMAR SINGH and Others
Respondent: STATE OF MAHARASHTRA
SUBJECT
The case deals with the requirement of specific allegation by the complainant u/s 34 of the Drugs and Cosmetics Act and mandate of a formal order of issuance of process u/s 204 Cr.P.C. while summoning the accused.
IMPORTANT PROVISIONS
Code of Criminal Procedure, 1973
204. Issue of process.—(1) If in the opinion of a Magistrate taking cognizance of an offence there is
sufficient ground for proceeding, and the case appears to be—
(a) a summons-case, he shall issue his summons for the attendance of the accused, or
(b) a warrant-case, he may issue a warrant, or, if he thinks fit, a summons, for causing the accused to be brought or to appear at a certain time before such Magistrate or (if he has no jurisdiction himself) some other Magistrate having jurisdiction.
(2) No summons or warrant shall be issued against the accused under sub-section (1) until a list of prosecution witnesses has been filed.
(3) In a proceeding instituted upon a complaint made in writing, every summons or warrant issued under sub-section (1) shall be accompanied by a copy of such complaint.
(4) When by any law for the time being in force any process-fees or other fees are payable, no process shall be issued until the fees are paid and, if such fees are not paid within a reasonable time, the Magistrate may dismiss the complaint.
(5) Nothing in this section shall be deemed to affect the provisions of section 87.
The Drug and Cosmetics Act 1940
34. Offences by companies.—(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: 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.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly:
Explanation.—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.
BRIEF FACTS
- The appellants are directors of a pharmaceutical company namely CCPPL which was granted permission to manufacture ‘Hemfer Syrup’ which falls under Schedule C and C1 of the Drugs and Cosmetics Rules(hereinafter referred to as ‘the rules’).
- Inspector of Food and Drugs Administration, Beed visited the premises of M/S Priya Agencies at Beed on 30th August 2006 and purchased ‘Hemfer syrup’ from which he drew samples of the drug. The next day, this sample was sent to the State Drug Control Laboratory for testing.
- A report dated 13th February 2007was received on 26th February 2007 which stated that the sample was not the standard quality.
- The manufacturer of the drug namely CCPL was informed about this on the same day through a registered post.
- On 29th March 2007, the Quality Analyst of CCPL requested the inspector to send the sample again for analysis.
- The samples were sent for re-analysis on 24th April 2007 by CJM, Beed in pursuance of an application filed by M/S Alkem Laboratories, the distributor of CCPL.
- The CJM received the test report from Central Drug Lab, Calcutta which stated that the drug is not according to the standard quality.
- CCPL was called upon by the Drug Inspector to produce the particulars of directors, MoA, AoA, Copies of License, particulars of technical persons etc under the Drugs and Cosmetics Act 1940 (hereinafter referred to as “the said act.”) vide letter dated 21st August 2008.
- In reply to the aforementioned letter, CCPL asked the inspector to send a proper report duly signed by the Director of the Central Drugs Agency.
- Inspector again called upon CCPL to furnish the information previously asked. CCPL furnished the said information vide letter dated 12th February 2009. They stated that they manufactured ‘Hemfer Syrup’ under the technical guidance of Ashok Kumar, FDA approved chemist.
- Ashok Kumar wrote a letter to the Drug Inspector (DI) in an individual capacity certifying that said batch of the drug was manufactured under his supervision. Mr. Naresh Roy also wrote a letter to the DI certifying that the syrup was tested under his supervision and it complied with the requisite standards.
- Complaint bearing RCC No. 233 of 2009 filed before Ld. CJM 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 pursuance of the order of the Joint Commissioner (H.Q) and Controlling authority.
- The Ld. CJM issued summons to the accused vide order dated 30th March 2009. A revision was filed against this order before the Ld. Sessions Judge which was subsequently rejected.
- The Ld. Session Judge’s order was assailed through a criminal writ petition before the Bombay High Court. The writ petition was dismissed on the ground that all the directors were conducting the business of CCPL and hence they were all involved in the manufacturing process.
- Hence, the present appeal.
ARGUMENTS ON BEHALF OF THE APPELLANTS
- Appellants contended that under Section 34 of the act, only the persons who during the time of the commission of the alleged offence, were in-charge of and responsible for the conduct of the business of the company and the company shall be liable and can be prosecuted against and punished.
- Counsel for the appellants contended that the names and other informationof the technical staff were already given in the license duly signed by the authority.
- The counsel submitted that proceedings cannot be initiated against the appellants by simply stating that they being the directors of the company are involved in the conduct of business by the company. The director cannot be prosecuted unless there is a specific allegation as to their role in conduct of business.
- Counsel further contends that the Ld. CJM did not order the issuance of process and did not fulfill his duty of subjective satisfaction as to the presence that there is sufficient ground to proceed.
ARGUMENTS OF THE RESPONDENT
- Counsel for the state pleads successful compliance of section 34 of the said act.
- On the question of the formal order of issuance of process by the trial court, the Ld. Counsel relied on the judgment of the Apex court in the case of U.P. Pollution Control Board vs. Mohan Meakins Ltd. and others contending that there is no such requirement to pass formal orders as to the issuance of process by the trial court.
ANALYSIS
- The Hon’ble court analysed section 34 with help of the judgment in the case of State of Haryana vs. Brij Lal Mittal and others and concluded that simply because a person is a director of the company alleged to have committed the offence, does not necessarily fill twin conditions Under section 34 of the said act.
- Merely because a person is a director, does not mean he is aware of the day-to-day functioning of the company.
- Position of managing director or joint managing director may be different.
- Court analysed many judgments in regard to the requirement of specific averments and reached the conclusion that there should be specific averments made in the complaint by the complainant.
- Purusal of the order of the Ld. CJM makes it apparent that he did not make a formal order of issuance of the process. The Hon’ble court held that the requirement of issuance of process is not a mere formality. There needs to be satisfaction as to the existence of sufficient grounds to proceed and the formation of such an opinion needs to be mentioned in the order itself.
CONCLUSION
The order is liable to be set aside if no reasons are given therein coming to the conclusion that there is prima facie case made out. In present case, the order is unsustainable and liable to be set aside. The order of Ld. CJM and Ld. Sessions Judge are quashed. Appeal allowed.
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