Himachal Pradesh High Court
Sh I.N. Gandhi S/O Sh. K.L. Gandhi vs Ashok Kumar Tyagi And Others on 15 September, 2022
Author: Satyen Vaidya
Bench: Satyen Vaidya
1
REPORTABLE/NON-REPORTABLE
IN THE HIGH COURT OF HIMACHAL PRADESH AT
SHIMLA
.
ON THE 15th DAY OF SEPTEMBER, 2022
BEFORE
HON'BLE MR. JUSTICE SATYEN VAIDYA
CRIMINAL MISC. PETITION (MAIN) U/S 482 CRPC
No. 230 OF 2015
Between:-
1. SH I.N. GANDHI S/O SH. K.L. GANDHI, R/O
505/10, BEGUM BAGH, MEERUT U.P. PARTNER
IN M/S AUGUST REMEDIES, VILLAGE OGLI,
TEHSIL NAHAN, KALA AMB, DISTRICT SIRMOUR,
H.P.
2. SH. SAJAY TANEJA, S/O M.L. TANEJA,
R/O FLAT NO. 60, PLOT NO. 13 B.
PALM SHUBH LAXMI CGHS, SECTOR-6,
DWARKA, NEW DELHI PARTNER IN M/S AUGUST
REMEDIES, VILLAGE OGLI, TEHSIL NAHAN,
KALA AMB, DISTRICT SIRMOUR, H.P.
3. SH. DALJEET SINGH, S/O LATE GURMUKH
SINGH, R/O 1118, II FLOOR, DR. MUKHERJEE
NAGAR, DELHI PARTNER IN M/S AUGUST
REMEDIES, VILLAGE OGLI, EHSIL NAHAN, KALA
AMB, DISTRICT SIRMOUR, H.P.
4. SH. ARVIND ARORA, S/O SH. JAGDISH RAJ
ARORA, R/O 1/5/81, SECTOR-16, ROHINI, NEW
DELHI, PARTNER IN M/S AUGUST REMEDIES,
VILLAGE OGLI, TEHSIL NAHAN, KALA AMB,
DISTRICT SIRMOUR, H.P.
...PETITIONERS
(BY MR. PARVEEN CHANDEL, ADVOCATE)
AND
1. STATE OF HIMACHAL PRADESH, THROUGH
::: Downloaded on - 15/09/2022 20:05:58 :::CIS
2
DRUG INSPECTOR, HEAD QUARTERS, NAHAN,
HP
2. THE STATE DRUGS CONTROLLER-CUM-
.
CONTROLLING AUTHORITY HP BADDI-173205
......RESPONDENTS
3. M/S AUGUST REMEDIES, THROUGH ITS
PARTNER ARVIND ARORA VILLAGE OGLI,
TEHSIL NAHAN, KALA AMB, DISTRICT SIRMOUR,
H.P.
4. ASHOK KUMAR TYAGI, S/O SH. S.S. TYAGI,
R/O B/W 53, D, SHALIMAR BAGH, DELHI-88
PARTNER IN M/S AUGUST REMEDIES, VILLAGE
OGLI, TEHSIL NAHAN, KALA AMB, DISTRICT
SIRMOUR, H.P.
..PROFORMA RESPONDENTS
(MR.
DESH RAJ THAKUR
ADDITIONAL ADVOCATE GENERAL
AND MR. NARENDER THAKUR
DEPUTY ADVOCATE GENERAL FOR
R-1 AND R-2)
PROFORMA RESPONDENTS NO.3 & 4
EX-PARTE.
RESERVED ON 09.09.2022
DECIDED ON : 15.09.2022
______________________________________________________
This petition coming on for pronouncement of
judgment this day, the Court passed the following :
ORDER
By way of instant petition, a prayer has been made to quash the proceeding pending before learned Chief Judicial Magistrate, Sirmour at Nahan, bearing complaint No. 05/03 of 2013, titled as State of H.P. through Drugs ::: Downloaded on - 15/09/2022 20:05:58 :::CIS 3 Inspector versus Ashok Kumar Tyagi and others, as against the petitioners.
.
2. Petitioners alongwith respondent No.4 are partners of the firm M/s August Remedies (respondent No.3).
The said firm is engaged in manufacturing of drugs. The Drug Inspector had taken samples of 13 drugs manufactured by respondent No.3. Out of these, 2 samples were declared "not of standard quality" by Government analyst, CTL Kandaghat, District Solan, H.P. The Drugs Inspector after obtaining prosecution sanction, instituted a complaint before learned Chief Judicial Magistrate, Sirmour at Nahan under Section 18(a) (i) read with section 27 (d) of the Drugs and Cosmetics Act, 1940 (for short the Act). Besides respondent No.3, petitioners and respondent No.4 were impleaded as accused.
3. Petitioners have sought quashing of aforesaid complaint as against them on the grounds firstly that the prosecution as against them was not permissible in view of the provision of Section 34 of the Act. It is contended on behalf of the petitioners that from the bare perusal of contents of complaint and the documents annexed therewith, it is not made out that the petitioners were incharge of ::: Downloaded on - 15/09/2022 20:05:58 :::CIS 4 respondent-firm and were also responsible for conduct of its day to day business, secondly, the Test Analysis Report of .
Government analyst was not admissible in evidence, as full protocol of test was not furnished, thirdly the drug in question was not treated or analysed as per the validation provisions of second schedule of the Act, fourthly, drug inspector had not followed the correct procedure of sampling and despatch and lastly the samples were not stored to remain in same state/condition, as that of when they were acquired.
4. Respondents No. 1 and 2 have contested the prayer of petitioners by filing written reply. It is submitted that petitioners and respondent No.4, at the time of commission of offence, were incharge of and also were responsible for conduct of business of respondent No.3-firm.
They were having knowledge of the commission of the offence. The drug inspector, after inquiry had found that petitioners and respondent No.4 were incharge of and responsible for conduct of business of the firm. Regarding the other grounds of challenge, it was submitted that the complaint could not be quashed on such grounds, as those ::: Downloaded on - 15/09/2022 20:05:58 :::CIS 5 involved triable issues and were required to be decided during trial.
.
5. I have heard learned counsel for the parties and have gone through the record carefully.
6. The normal rule in the cases involving criminal liability is against vicarious liability, i.e., no one can be held criminally liable for an act of another. This rule, however, is subject to exception on account of specific provision being made in the statute extending liability to others. Section 34 of the Act is one such provision which binds the Directors of the Company or partners of the firms for the criminal acts of the company or the firm as the case may be, on fulfillment of conditions prescribed therein. The conditions are explicitly clear that for making the Directors or partners liable vicariously, the Directors or partners should be in charge of the company/firm and should also be responsible to company/firm for conduct of the business of the company/firm. Further such liability is also attracted; if it is proved that the offence was 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.
::: Downloaded on - 15/09/2022 20:05:58 :::CIS 67. Contents of para 9 of the impugned complaint has been relied upon by respondents No. 1 and 2 to support their .
contention that the petitioners and respondent No.4 were incharge of the firm and were also responsible for its business. Para 9 of the complaint reads as under:-
"That on Dated 24.12.2012, the complainant visited the premises of the firm to enquire about the person who at the time of offence was in charge of, and was responsible to the company for the conduct of the business of the company, where Accused 1 & 5 were present. It was disclosed by the accused No. 1 & 5 that they were the partners of the firm along with r other four partners. A spot memo in this regard was prepared on the spot (attached as annexure P88). A photocopy of the partnership-cum-induction deed (attached as annexure P89 to 94) signed by both the accused present was also handed over by the accused to the complainant. It is, therefore, clear that all the five accused were in charge of and was responsible to the company for the conduct of the business of the company at the time of the manufacturing both the batches of the drug in question."
8. Thus, the Drug Inspector relied upon the disclosure made by respondent No.4 and petitioner No.4 evidenced by spot memo prepared on 24.12.2012 and also the partnership and induction deed handed over to him during investigation.
9. The spot memo dated 24.12.2012 only relates to disclosure made by petitioner No.4 and respondent No.4 to ::: Downloaded on - 15/09/2022 20:05:58 :::CIS 7 the effect that they alongwith petitioners No. 1 to 3 were partners of respondent No.3-firm. The partnership-cum-
.
induction deed also reveals the same factum.
10. The question arises, whether the contents of para 9 of the complaint coupled with the spot memo dated 24.12.2012 and partnership-cum-induction deed are sufficient to draw inference that the petitioners and respondent No.4 were in charge of the firm and also responsible to the firm for its business? The answer, in my considered opinion, is "no" for the reasons detailed hereafter.
11. In State of Haryana vs. Brij Lal Mittal and Others, reported in (1998) 5 Supreme Court Cases 343, the Hon'ble Supreme Court held as under:-
"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 manufactures with the aid of Section 34(1) of the Act which reads as under:
"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 ::: Downloaded on - 15/09/2022 20:05:58 :::CIS 8 or that he exercised all due diligence to prevent the commission of such offence."
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 fulfils 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 the complaint 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."
12. Adverting to the facts of the case, what can be inferred from paragraph 9 of the complaint, spot memo dated 24.12.2012 and the partnership-cum-induction deed that the petitioners and respondent No.4 were the partners of respondent No.3-firm. Only proof of being partners of firm, is not sufficient to prosecute the partners for offence under the Act. It has to be prima facie shown that the partners were in charge of the firm and were also responsible to firm for its business, at the time of commission of offence. The material from which such inference can be drawn is clearly missing in the instant case.
13. Respondent No.4 had earlier approached this Court for quashing the complaint against him on ::: Downloaded on - 15/09/2022 20:05:58 :::CIS 9 substantially identical grounds which have been raised by the petitioners in the instant petition. The petition filed by .
respondent No.4 was allowed by a Co-ordinate Bench of this Court on 22nd April, 2015 as CRMMO No. 29 of 2014. The complaint as against respondent No. 4 was quashed. The Co-
ordinate Bench of this Court after taking notice of various judicial precedents observed as under:-
"On the strength of the aforesaid judgments of the Hon'ble Supreme Court, it can safely be concluded that it is the prime responsibility of the complainant to make specific averments with respect to the accused being at the relevant time incharge as also responsible for the conduct of the business. But then, the mere fact that one happens to be a partner of the firm would not in itself be sufficient to make him liable, because there is no deemed liability of such partner. The averment assumes importance because it is the basis and essential averment which persuades the Magistrate to issue the process against the partner. Thus, if this basic averment is missing, the Magistrate is legally justified in not issuing process."
14. After considering all the attending facts and circumstances of the case, the petition filed by respondent No.4 was allowed by holding that the requirements of Section 34 were not fulfilled.
15. Noticeably, petitioners herein have been impleaded as accused in the complaint on the basis of same material, as was sought to be used against respondent No.4.
In view of this also, different parameters cannot be applied ::: Downloaded on - 15/09/2022 20:05:58 :::CIS 10 for respondent No.4 and petitioners. There is nothing on record to show that the judgment passed by a Co-ordinate .
Bench of this Court on 22.04.2015 in Cr.MMO No. 29 of 2014 has been set aside or modified. It being so, the said judgment having attained finality, the reasons and findings recorded therein will apply with all force in the case of petitioners also. This Court does not find any reason to differ with such findings.
16. In view of above discussion, this petition is allowed and accordingly the complaint No. 05/03 of 2013 titled as State of H.P. versus Ashok Kumar Tyagi and others pending before learned Chief Judicial Magistrate, Sirmour at Nahan insofar as the petitioners are concerned is hereby quashed. Accordingly, the petition is disposed of, so also pending application(s), if any.
( Satyen Vaidya )
15th September, 2022 Judge
(himani)
::: Downloaded on - 15/09/2022 20:05:58 :::CIS