Jharkhand High Court
Anil Sabarwal @ Anil Kumar Sabarwal vs The State Of Jharkhand on 20 April, 2026
Author: Rajesh Kumar
Bench: Rajesh Kumar
2026:JHHC:11417
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Criminal Appeal (S.J.) No.116 of 2024
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Anil Sabarwal @ Anil Kumar Sabarwal, aged about 56 years, S/o Late Captain Satyapal Sabarwal, R/o Village - 121, Amitesh Nagar, Scheme No.59, IDA, PO:-
Rajendra Nagar, P.S:-Rajendra Nagar, District:-Indore, Madhya Pradesh, Pin:
452014. .... .... Appellant
Versus
The State of Jharkhand .... .... Respondent
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CORAM: HON'BLE MR. JUSTICE RAJESH KUMAR
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For the Appellant : Mr. Abhishek Krishna Gupta, Adv.
Mr. Madan Mohan Prasad, Adv.
Mr. Rahul Kr. Mishra, Adv.
For the State : Mr. P.D. Agrawal, A.P.P.
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th
06/Dated: 20 April, 2026
1. Heard the learned counsel for the parties.
2. The present criminal appeal has been filed for setting aside the judgment of conviction and order of punishment dated 29.01.2024 passed by the learned Principal Sessions Judge, Jamtara in Drug & Cosmetic Case No.02 of 2017 (Arising out of OCR Case No.131 of 2016) whereby the appellant has been convicted under Section 27(d) of the Drugs and Cosmetics Act, 1940 (hereinafter referred as Act/Special Act) and directed to undergo punishment for a period of one year of simple imprisonment with fine of Rs.20,000/- and in default of payment of fine to be further sentenced to undergo two months simple imprisonment.
3. The prosecution case, in brief, is that the complainant, Naseem Alam, Drug Inspector, collected a sample of "Paracetamol Oral Suspension" (Batch No. 3, Mfd.
Dt.11/2013, Exp. 10/2015), manufactured by M/s Quest Laboratories Pvt. Ltd., Indore, from Sadar Hospital, Jamtara on 30.03.2015 in Form-17, in presence of the storekeeper. The said sample was sent to the Government Analyst, Jharkhand State Drug Testing Laboratory, Namkum, Ranchi in Form-18 for analysis, and the same was found to be "Not of Standard Quality." Thereafter, the test report was communicated to the Civil Surgeon, Sadar Hospital, Jamtara, who produced the purchase invoice issued by M/s Mahsuk Enterprises, Jamtara. Subsequently, the concerned firm as well as the manufacturer were called upon to produce relevant documents, but the manufacturer failed to comply despite issuance of reminders. Thereafter, approval for prosecution was sought and duly obtained from the Director 2026:JHHC:11417 (Drug), State Drug Control Administration, Jharkhand, Namkum, Ranchi, pursuant to which the present complaint case has been instituted.
4. On the basis of the said complaint, the criminal law has been put into motion by lodging an OCR Case No.131 of 2016 for the offence under Sections 27(d) and 28 of the Drugs & Cosmetic Act, 1940.
5. The police after investigation had filed charge-sheet and the trial court had framed charges against the appellant, to which the accused pleaded not guilty and claimed to be tried.
6. To substantiate the allegation, altogether three witnesses have been examined.
P.W.1 Ravindra Kumar, This witness has deposed that on 30.03.2015, while he was posted as Storekeeper at Sadar Hospital, Jamtara, the Drug Inspector collected samples of Paracetamol Oral Suspension manufactured by M/s Quest Laboratories Pvt. Ltd. The samples were taken in four equal parts, sealed, and one portion was handed over to him. He proved the sample collection document (Ext.-1) and receipt of the test report (Ext.-2), wherein the sample was found "Not of Standard Quality." He also proved the purchase documents and entries in the stock register (Ext.-3 series).
In cross-examination, he admitted that there was no temperature control system in the store room, temperature during summer reaches 44-45°C, and he had no knowledge regarding testing procedure. He further admitted that no representative of the manufacturing company was present at the time of sampling.
P.W.2 - Satyendra Kumar Sinha (Government Analyst): This witness has deposed that the sample sent by the Drug Inspector was received in the State Drug Testing Laboratory, Namkum, Ranchi and upon analysis, it was found to be a viscous red liquid with solid lumps which did not dissolve even after shaking. He opined that the sample was "Not of Standard Quality" under the Drugs and Cosmetics Act and proved the test report (Ext.-4 series).
In cross-examination, he admitted that he had no knowledge regarding storage conditions at Sadar Hospital and also stated that the quantity of Paracetamol in the sample was within the prescribed standard. P.W.3 - Naseem Alam (Drug Inspector/Complainant): This witness has deposed that during inspection of Sadar Hospital, Jamtara on 30.03.2015, he found the Paracetamol Oral Suspension in defective condition (hard cake formation), collected and sealed the samples, and sent them for analysis. Upon receipt of the report declaring the sample "Not of Standard Quality," he stopped further supply and initiated inquiry.
He proved various documents including sample collection memo, test report, correspondence with supplier and manufacturer, reminder letters, and sanction for prosecution (Ext.-1 to Ext.-15 series). He further stated that despite notices, the manufacturer failed to produce Page | 2 Cri. App. (S.J.) No.116 of 2024 2026:JHHC:11417 relevant documents, following which prosecution sanction was obtained and complaint was filed.
In cross-examination, he admitted that he had not seized the entire stock, had not informed the manufacturer prior to sampling, and that there was no temperature control in the hospital store. He also admitted lack of knowledge regarding the duration of storage of the medicine and stated that sampling was done from hospital stock.
7. After concluding the evidence of the prosecution, the statement of the accused was recorded under Section 313 Cr.P.C., wherein the allegations were denied.
8. Learned counsel for the appellant has drawn my attention that the charge is vague as no specific factual matrix has been disclosed while framing the charge. Even the question put under Section 313 Cr.P.C. is vague and as such the entire trial is vitiated as it cannot be categorised as a fair trial. The offence is against a company and company has not been made party which is sine qua non for prosecution. Further, it is a vicarious liability for that he has relied upon the judgment of the Hon'ble Supreme Court in the case of Dilip Hariramani versus Bank of Baroda reported in (2024) 15 SCC 443. Paragraph Nos.9, 10 and 14 are relevant which are quoted hereinbelow:-
Para-9 In Pratap Chand (supra), specific reference was made to the Explanation to Section 34 of the Drugs and Cosmetics Act, which states that for Section 34, a 'company' means a body corporate and includes a firm or association of individuals, and a 'director' in relation to a firm means a partner in the firm. Thereafter, the conviction of the second respondent, one of the partners in the firm therein, was quashed on the ground that he cannot be convicted merely because he has the right to participate in the firm's business in terms of the partnership deed. Thus, notwithstanding the legal position that a firm is not a juristic person, a partner is not vicariously liable for an offence committed by the firm, unless one of the twin requirements are satisfied and established by the prosecution. This Court gave the following reasoning:
"7. It is seen that the partner of a firm is also liable to be convicted for an offence committed by the firm if he was in charge of, and was responsible to, the firm for the conduct of the business of the firm or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any neglect on the part of the partner concerned. In the present case the second respondent was sought to be made liable on the ground that he along with the first respondent was in charge of the conduct of the business of the firm. Section 23-C of the Foreign Exchange Regulation Act, 1947 which was identically the same as Section 34 of the Drugs and Cosmetics Act came up for interpretation in Page | 3 Cri. App. (S.J.) No.116 of 2024 2026:JHHC:11417 G.L. Gupta v. D.H. Mehta, (1971) 3 SCC 189 where it was observed as follows:
"What then does the expression 'a person in-charge and responsible for the conduct of the affair of a company' means? It will be noticed that the word 'company' includes a firm or other association, and the same test must apply to a director in-charge and a partner of a firm in-charge of a business. It seems to us that in the context a person 'in-charge' must mean that the person should be in overall control of the day to day business of the company or firm. This inference follows from the wording of Section 23-C(2). It mentions director, who may be a party to the policy being followed by a company and yet not be in-charge of the business of the company. Further it mentions manager, who usually is in charge of the business but not in overall charge. Similarly the other officers may be in charge of only some part of business."
Para-10, We would also refer to the summarisation of law on Section 141 by this Court in National Small Industries Corporation Limited v. Harmeet Singh Paintal and Another, 10 to the following effect:
"39. From the above discussion, the following principles emerge:
(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.
(ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.
(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.
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(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has Page | 4 Cri. App. (S.J.) No.116 of 2024 2026:JHHC:11417 to be averred as a fact as there is no deemed liability of a Director in such cases."
Para-14, the provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the NI Act extends vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender. This view has been subsequently followed in Sharad Kumar Sanghi v. Sangita Rane, Himanshu v. B. Shivamurthy and Another, and Hindustan Unilever Limited v. State of Madhya Pradesh. The exception carved out in Aneeta Hada (supra), which applies when there is a legal bar for prosecuting a company or a firm, is not felicitous for the present case. No such plea or assertion is made by the respondent.
9. Learned counsel for the State has supported the judgment of conviction and the order of sentence.
10. Considering the material available on record and the law declared by the Hon'ble Supreme Court, this Court finds that the judgment of conviction and the order of sentence is directly in teeth of the judgment Dilip Hariramani (Supra) of the Hon'ble Apex Court. Hence, the judgment of conviction and the order of sentence is not sustainable, accordingly, it is hereby quashed and set aside.
11. The present criminal appeal stands allowed.
12. The appellant is on bail and as such he is discharged from the liability of his bail bonds.
13. Pending I.A., if any, also stands disposed of.
(Rajesh Kumar, J.) Dated: 20th April, 2026 Amar/-
Uploaded on 23.04.2026 Page | 5 Cri. App. (S.J.) No.116 of 2024