Shanimul Fatima and Others vs State of Kerala and Others

S.S. Satheesachandran, J.—Petitioners are some among the accused (A-1 to A-3) in a pending case on the file of the Chief Judicial Magistrate, Kollam. Second respondent is the remaining accused in the above case, which arose on a complaint filed by the 3rd respondent, Drugs Inspector, Kollam. Petitioners 1 and 2 (A-2 and A-3) are proceeded as directors of a company. That company is the 1st accused, and its manufacturing chemist the 4th accused in the case. All the aforesaid four accused are being prosecuted on the complaint of Drugs Inspector, filed u/s 32 of the Drugs and Cosmetics Act (for short ''the Act'') alleging that they have committed the offences u/s 18 (a) (iv) of the Act, punishable u/s 27(d) of the Act. Petitioners (A-1 to A-3) have filed the above petition to quash the criminal proceedings against them exercising inherent powers of this court u/s 482 of the Code of Criminal Procedure (for short "the Code") contending that it is an abuse of process of the court. Annexure A-3 is the complaint. Crux of the allegations to prosecute the accused can be summed up thus:

Complainant (Drugs Inspector) inspected the premises of a pharmaceuticals viz., M/s. Western Pharma in Kollam on 1-2-2002. During such inspection 200 numbers of insulin syringe with microfine needle manufactured by the 1st accused company were found stocked for sale. On the pouch of insulin syringe with microfine needle expiry was printed as five years from the date of manufacturing. The date of manufacturing/sterilization was not printed on the pouch of disposable syringe. Without printing the date of manufacturing imprinting the pouch that expiry was five years from the date of manufacturing amounted to violation of Rule 96 (1) (vii) of the Drugs and Cosmetics Rules (for short ''the Rules''). Since the pouches of disposable syringes were not labelled in the prescribed manner, they were misbranded u/s 17(b) of the Act, is the case of the complainant Seizing the material objects and relevant records, and taking further steps as contemplated under the Act and Rules, complaint was laid before the Magistrate indicting the accused persons for the offences stated supra. Cognizance of the offences taken and process ordered, petitioners, two directors with the company (A-2, A-3 and A-1 respectively) have filed the above petition u/s 482 of the Code to quash the criminal proceedings against them.

Challenge is against the inclusion of directors of the company and also the company among the accused to prosecute them for the offences stated in Annexure A-3 complaint. Only A-4, the manufacturing chemist, can be proceeded against in the case as he was in charge of manufacturing the syringes and responsible to the company in the conduct of business of the company, is the case canvassed banking upon some of the annexures produced with the petition. Learned counsel for the petitioners, relying on Annexures A-1 and A-2 issued by the company with respect to the Standard Operating Procedure, contended that 2nd respondent, manufacturing chemist of the company, arrayed as A-4 in Annexure A-3 complaint, alone can be proceeded, if at all there was any violation of the provisions of the Act and Rules in relation to absence of any particulars required in the pouches of the syringe manufactured by the company. At any rate, petitioners 1 and 2 (A-2 and A-3) directors of the Company, cannot be prosecuted on the allegations set out in the complaint, is the submission of learned counsel contending that there is not even a whisper in the complaint that they or any of them, are in charge and control of the company. Adverting to sub-section (1) of Section 34 of the Act, it is contended that a person ''in charge'' and ''responsible to the company for the conduct of the business of the company'' alone can be imputed with culpability for violation of the Act and Rules and not others, even if they are directors of the company or partners of a firm, as the case may be. Where there is no allegation even prima facie to show that petitioners 1 and 2 (A-2 and A-3) were in charge of the company and also responsible for the conduct of the business of the company, their prosecution on Annexure A-3 complaint is unsustainable and liable to be quashed, is the submission of the counsel. Reliance is placed on State of Karnataka Vs. Pratap Chand and Others, . Sham Sunder and Others Vs. State of Haryana, and State of Haryana Vs. Brij Lal Mittal and Others, by the learned counsel to contend that only the person who is in charge and control of the company at the relevant time could be prosecuted, and petitioners 1 and- 2, for the sole reason that they are directors of the company, that too without any allegation that they were in charge of the business of the company, are not liable to be proceeded against. Criminal proceedings against petitioners 1 and 2 (A-2 and A-3) who are proceeded as directors of the company have to be quashed exercising the inherent powers of this court, submits the counsel.

Going through the petition with the annexures, I find, the petition is not even entertainable. Petitioners, along with A-4 (2nd respondent) had filed a petition earlier as Crl. M.C. No. 1520 of 2004 challenging their prosecution arising from Annexure A-3 complaint seeking the exercise of inherent powers of this court to quash such proceedings. In the present petition, it is stated that the ground now canvassed was not raised in the previous petition which had been dismissed as withdrawn as per order dated 10-6-2004. Copy of the order passed in the Crl. M.C. is stated as produced Annexure A-5. In fact, Annexure A-4 is the order and Annexure A-5 copy of the petition in Crl. M.C. No. 1520 of 2004. Going through Annexure A-5 petition previously filed before this court, it is seen, the very ground now canvassed has been raised though in a different style, not specifically mentioning Section 34 (1) of the Act, but taking a contention on that basis, to seek exoneration of petitioners 1 and 2, directors of the company. In Annexure A-5 petition, contentions have been raised that 2nd respondent herein, who was the 4th petitioner in that petition, alone is responsible for manufacturing the products of the company and the other petitioners (Company and the directors) are not directly responsible for the manufactured products. Petitioners, who have filed Annexure A-5 petition with the 2nd respondent, manufacturing chemist, cannot seek exercise of inherent powers of this court for quashing the proceedings against them banking upon Section 34 (1) of the Act, after dismissal of their previous petition, whether on withdrawal or otherwise, setting forth a case that they did not canvass the present ground in the petition filed earlier to challenge the criminal proceedings launched against them. On that ground itself, the petition is liable to be dismissed as unworthy of any merit.

On merits also, with reference to the decisions canvassed by the counsel for petitioners, I find, challenge raised has to be repelled. Noticing that with Annexure A-3, copy of complaint, petitioners have not produced copies of annexures which formed part of the complaint presented. I have called for the records of the case for perusal. Perusing such records it is noticed that the complainant (Drugs Inspector) as enjoined by the Rules, had issued a letter to the company to produce particulars and documents with a specific direction to furnish information as to who was the Managing Director of the company. Though the Articles of Association and other documents were furnished, company did not answer the query who was its Managing Director. Perusal of a copy of the Articles of Association of the company, which is produced as Annexure 15 with the complaint, it is seen, the 1st petitioner is a private company with its control vested in the directors with the number of such directors fixed to be not less than two and not more than twelve. Date of inspection by the Drugs Inspector/complainant in the pharmaceuticals leading to detection of the offences proceeded against petitioners was on 1-2-2002. Drugs Inspector directed the company by Annexure 14 notice appended to complaint to furnish particulars on 19-4-2002. That was replied by Annexure 15 produced with the complaint, by letter dated 8-8-2002. As already indicated, specific query asked in Annexure 14 by Drugs Inspector as to who was the Managing; Director of the company at the relevant time remained unanswered when reply was furnished. When such be the case, in the complaint specific imputation has not been made that directors of the company proceeded were in charge of the company and in control of the business cannot be canvassed before this court; as a circumstance enduring in favour of petitioners 1 and 2, directors of the company, to quash the criminal proceedings exercising the inherent powers of this court. That, in the given facts of the case, is a matter to be considered in evidence of the case, and at any rate, not at all a ground for quashing the criminal proceedings against them.

In State of Karnataka Vs. Pratap Chand and Others, the order of acquittal rendered in favour of the partners of a firm for violation of the provisions of the Act and Rules, concurrently rendered by the trial court and High Court, was challenged in appeal. Prosecution''s failure to establish that the persons proceeded were in charge of the firm was taken into account to negative the challenge against the concurrent order of acquittal, In Sham Sunder and Others Vs. State of Haryana, challenge was against the conviction concurrently rendered by the Special Court and the High Court against a partner of a firm in a case involving violation of the provisions of the Essential Commodities Act and the Rules. There also, after examining the evidence in the case, it was concluded that there was no material to hold that the partner proceeded was conducting the business of the firm. In State of Haryana Vs. Brij Lal Mittal and Others, , the absence of allegation to indicate prima facie that the persons proceeded against were in charge of the company and also responsible for the conduct of the business of the company with reference to Section 34 (1) of the Act was considered by Apex Court to quash the criminal proceedings under the Act and Rules. That was a case where High Court had quashed the proceedings on a different ground and that was found to be unsustainable. Adverting to the decision rendered in Municipal Corporation of Delhi Vs. Ram Kishan Rohtagi and Others, and concurring with the view expressed in that decision, in Brij Lal Mittal''s case challenge against the order of High Court quashing the proceedings was negatived by the Apex Court. In Municipal Corporation of Delhi Vs. Ram Kishan Rohtagi and Others, also challenge was against the order quashing the criminal proceedings against the directors of the company by the High Court, and the Apex Court found that no interference with such order was called for. The Apex Court in a later decision viz., Dinesh B. Patel and Others Vs. State of Gujarat and Another, , after taking note of the decision in Brij Lal Mittal''s case has observed that in Brij Lal Mittal''s case the controversy of the complainant not having any necessary averments was not present before the High Court and there was only a bald statement in the complaint that the respondents were the directors of the manufacturer. Distinguishing Brij Lal Mittal''s case the Apex Court has dilated on the aspects to be looked into when directors of the company are proceeded for commission of the offences under the Act in Dinesh Patel''s case. Where there are averments in the complaint that in manufacturing of the medicine concerned for sale the company and its directors have committed the breach of the Act, then, it is observed, it is not a case of prosecuting the directors only in the capacity of directors of the manufacturing company. Looking into Annexure A-3 complaint, it is seen, a specific imputation has been made that the accused manufactured and sold insulin syringes which were found misbranded and thereby, they have committed the offences punishable under the Act and Rules. When that be so, absence of specific particulars in the complaint that the two directors of the company proceeded were in charge of the company at the relevant time cannot be given too much significance, and that question if canvassed has to be determined after taking evidence in the case. Petitioners 1 and 2 are free to show that they were not in charge of the company, but someone else was in control of the company. Proceedings paper of the court below would reveal that the petitioners have appeared only through counsel before court below, seeking exemption from time to time. They have filed two successive Crl. M.Cs., the present one after dismissal of the earlier one as withdrawn. The case taken on file by the Magistrate in 2004 remains where it is after eight years. In such circumstances, the following directions are issued:

(a) Petitioners 3 and 2 shall appear in person before the Magistrate without default on next hearing date of the case, which shall be fixed to a day falling after two weeks bat within four weeks from the date of receipt/production of a copy of this order by the Magistrate.

(b) After appearance, it is open to petitioners 1 and 2 to seek for personal exemption moving an application thereof, setting forth grounds, if any, entitling them to do so.

(c) If any application for exemption is moved, subject to such conditions as may be necessary to ensure their presence as and when required, learned Magistrate shall pass appropriate orders thereof in accordance with law.

(d) The Magistrate shall give the case top priority for trial and disposal, but taking care to give reasonable opportunity to both sides, prosecution and accused to present their case. At any rate, the Magistrate shall expedite the enquiry/trial of the case and dispose it within a period of eight months from the date of receipt/production of a copy of this order.

Subject to the above directions, petition is dismissed.