Rashid Ali Dar, J
1. In this petition, proceedings initiated pursuant to an order passed on 20th of December, 2012, by Chief Judicial Magistrate, Leh, on a complaint filed
by respondent herein are sought to be quashed, so far same pertains to the prosecution against the petitioner. Further prayer is made that the order
passed on 16th of December, 2014 by the same Court in the said complaint be also quashed. Order dated 12th of August, 2015 passed by learned
Sessions Judge, Leh, in the said complaint is also sought to be quashed.
2. In order to appreciate the contentions raised in terms of the instant petition, a brief factual narration of the facts may be pertinent herein. The
respondent herein presented a complaint before learned Chief Judicial Magistrate, Leh on 20th of December, 2012, wherein commission of offence
under Section 28-A read with Section 18-B of Drug and Cosmetic Act, 1940 (for short the Act), was alleged to have been made by Cecil
Pharmaceuticals Pvt. Ltd. Some of the allegations put forth in this regard in the complaint, as are gathered from the certified copy placed on record of
file No.3 of 2014 of Principal Sessions Judge, Leh, are:
1. The applicant notified as Drugs Inspector District Leh vide SRO 288 dated 28.8.1989 lifted a legal sample of drug Amocil Oral Suspension batch
No.ALS-1001 manufactured by M/S Cecil Pharmaceuticals Pvt. Ltd. Plot No.2, 3, 8, 9, EPIP, SIDCO, Katholi, Bari Brahmana, Jammu â€" 18133
â€" from the Drug Store of CMO Leh on 11.10.2010 in the presence of Sh. Rigzen Wangchuk Storekeeper for testing/analysis under Section 22(b)(i)
of the Drugs and Cosmetics Act, 1940 and the rules there under.
(The applicant is the complainant Drug Inspector-respondent herein)
2. The sample was divided into four portions and each portion was sealed in front of Sh. Rigzen Wangchuk, the Drug Storekeeper, Chief Medical
Officer, Leh, with the impression and seal of the Drug Inspector on each sample portion the Drug Storekeeper was also allowed to put his signature
on each portion of the sample as required under Section 23(3) of the Drugs and Cosmetics Act, 1940. Accordingly, the intimation Form-17 duly filled
was supplied to him along with the one portion of the sample of the Drug as required under section 23(3) and 23(4) of the Drugs and Cosmetics Act,
1940.
3. Another portion of the sample of the drug was sent to Government Analyst Drug Laboratory Dalgate Srinagar I attest to the accuracy and integrity
of this document along with the memorandum to Government Analyst in Form-18 on 20.02.2011 for testing/analysis as required under section 23(4)(i)
of the Drugs and Cosmetics Act, 1940 and the rules there under
4. The Government Analyst Drug Laboratory Dalgate, Srinagar, has declared the sample of drug as note of standard quality vide their test report
No.L/DA/2011-12/19 dated 15.04.2011 for the reason that label does not bear a red vertical line on the left said of it hence “Misbrandedâ€.
5. Sh. Rigzen Wangchuk, the Drug Storekeeper Chief Medical Officer, Leh, was informed about the test report and supplied with the original test
report as required under section 25(2) of the Drugs and Cosmetic Act, 1940 and the rules there under, through this office memo vide
No.DI/L/Testing/Sample/98/4057-60 dated 27.04.2011.
6. The Chief Medical Officer, Leh, through their reply vide No.CMOL/1482-85 dated 24.05.2011 has disclosed the name of M/S Cecil
Pharmaceuticals Pvt. Ltd. Plot No.2, 3, 8, 9, EPIP, SIDCO, Kartholi, Bari Brahmana, Jammu â€" 18133, from whom the said drug in question was
purchased vide invoice No.0545 dated 03.02.2010.
7. Accordingly, M/S Cecil Pharmaceuticals Pvt. Ltd. Plot No.2, 3, 8, 9, EPIP, SIDCO, Kartholi, Bari Brahmana, Jammu â€" 18133, was issued memo
vide DI/L/Testing/ Sample/98/1471-74 dated 26.5.2011 and was informed about the test report and supplied with the original test report bearing
No.L/DA/2011-12/19 dated 15.04.2011, as required under section 25(2) of the Drugs and I attest to the accuracy and integrity of this document
Cosmetic Act, 1940 and the rules there under. The manufacturer was also asked to explain their position and to furnish the constitution of the firm.
8. The said firm did not respond to the memo and a subsequent reminder was issued vide memo No.ADC/DI/L/Testing/98/4128-29 dated 22.07.2011
to reply within 15 days period, however, failed to do so, in the meantime the shelf life drug was expired.
9. Thus M/C Cecil Pharmaceuticals Pvt. Ltd. Plot No.2, 3, 8, 9, EPIP, SIDCO, Kartholi, Bari Brahmana, Jammu-18133, has manufactured and
distributed the above stated drug to a government institution and has committed an offence contravening section 18 Drugs and Cosmetic Act, 1940
and the rules there under for not furnishing information to the Drug Inspector.
10.The offence is cognizable under section 32 of the Drugs and Cosmetics Act, 1940 and punishable under section 28A of the Drugs and Cosmetics
Act.
(It needs a mention here that original complaint presented before learned Chief Judicial Magistrate, Leh, was not found to be legible as the writing had
faded away)
3. Learned Chief Judicial Magistrate on presentation of complaint directed issuance of process against M/S Cecil Pharmaceuticals, referred as
accused in the complaint. However, name of any natural person representing the company has not been given therein. The process could not be
served as can be gathered from the perusal of the file. The complainant had been asked to submit fresh particulars of the accused. Interim order
dated 6th February, 2014 reveals that Drug Inspector submitted the name of Managing Director of I attest to the accuracy and integrity of this
document the accused firm along with address. In the application filed in this regard, it is stated that since the launch of prosecution against the above
stated accused, the firm has not attended the court despite repeated summons and warrant issued and so prayer was made that fresh summons or
warrant be issued to the Managing Director Shri Hari Har Nath Gandotra on his residential address which the respondent has stated to have been
obtained from the office of Licensing Authority of the said firm. Communication dated 29.04.2013 of Dy. Controller, Drug and Food Control
Organization, Kashmir, has been annexed with the said application, stating therein that the said office has received letter from Controller Drug and
Food Control Organization, J&K, Jammu, to which copy of constitution of the firm along with details of Technical Staff, was enclosed. It consists of a
copy of affidavit of Hari Har Nath Gandotra, Chander Raman Gandotra, Kunal Gandotra and Amit Gandotra, who are shown to be the deponents and
Directors of Cecil Pharmaceuticals Pvt. Ltd on 26th of May, 2007.
4. The order of cognizance passed by learned Chief Judicial Magistrate, Leh, was assailed by medium of a revision petition before learned Principal
Sessions Judge, Leh, which has been disposed of on 26th of May, 2014. While setting aside the impugned order, the complainant-respondent herein
was kept at liberty to place on record of ld. Trial court additional assertions and documents as regards the identity of the person(s) responsible for the
affairs of the accused company. The trial court was asked to apply its mind properly and pass appropriate orders.
5. On 21st July, 2014, respondent Drug Inspector submitted that on the date of commission of offence, Harihar Nath Gandotra was the person
responsible for day to day affairs of the company and no change has been made before the Licensing Authority. The Drug Inspector had been
provided opportunity to place on record documents, if any, to substantiate the same.
6. Order dated 1st December, 2014, reveals some documents having been presented by the complainant and the file posted for 16th of December,
2014. On 16th December, 2014, learned Magistrate framed the conclusion about the lack of jurisdiction to try the complaint and, as such, the case file
was referred to the learned Sessions Judge for further proceedings under law. The Drug Inspector was directed to appear before the Court of ld.
Sessions Judge, Leh, on 23.12.2014. Learned Sessions Judge, accordingly, passed an order on 12th of August, 2015 (in file No.3) and observed that:
“The procedure laid down in section 266 to 277 Cr. P. C was required to be followed for trial in this complaint as well. APP on behalf of the
complainant department was required to open the case for complainant/prosecution. However, as the accused is not present nor any bail bonds are on
record. However, considering the facts and circumstances of the case, it will be proper to issue bailable warrants against the accused for his
appearance in the first instance. Registry, accordingly, is directed to issue bailable warrants to the tune of Rs.20,000/ against accused to be executed
through SSP, Leh.â€
7. The said order along with order dated 16.12.2014 has been challenged before this Court by medium of instant petition, on the following grounds:
(i) The respondent-complainant had not made any averment in the complaint naming therein any Director of the company liable for punishment and
the process was issued against the petitioner merely on a “disclosure†stated to have been made by Chief Medical Officer, Leh, to the
complainant that M/S Cecil Pharmaceuticals is being represented by the petitioner herein. The complainant, according to the petitioner, had to indicate
in the complaint as to whether Directors concerned were either in charge of or responsible to the company for its day to day management or whether
they were responsible for the conduct of its business. A mere bald statement that a person was a Director of the company against which certain
allegations had been made is not sufficient to make such Director liable in absence of specific allegation regarding his role in the management of the
company.
(ii) 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.
(iii) The information which was not furnished to the complainant, as is alleged in the complaint, was required to be furnished by the person’s in-
charge and responsible to the company. The petitioner is contended having no connection whatsoever with the company and had no competence and
authority to respond to the queries required under Section 18-B of the Act.
(iv) The petitioner herein had alienated from the company on 14.07.2010 whereas the letter asking for the information was dated 26th of May, 2011.
If, according to the petitioner, complainant had visited the office of the company to see ex-facie as to who was required to be dealt under law, he
would have come to know that the new management had taken over from 14.07.2010.
(v) The opinion framed by learned Chief Judicial Magistrate that Section 36-AB would be applicable and so case was to be tried by the Sessions
Judge as a Special Judge, was also misplaced as the Special Court has been empowered to try the offences under Section 13, subsection 3 of Section
22, clause (a) and (c) of Section 27, Section 28, Section 28A, Section 28B and clause (b) of sub-section (1) of section 30 and other offences relating to
adulterated drugs or spurious drugs.
8. Form 32 prepared pursuant to Sections 303(2), 264(2) or 266(1)(a) and 266(1)(b)(iii) of the Companies Act, 1956, is being relied wherein the
petitioner herein has declared that he has ceased to be connected with the company with effect from 20.01.2011. Similarly, copy of resignation
forwarded to Board of Directors dated 20.01.2011 is also being referred to. Furthermore, copy of a certificate issued by State Bank of India indicating
therein that the accounts of M/S Cecil Pharmaceuticals Pvt. Ltd. were being operated upon by Mr. Neeraj Srivastava from 15th July, 2010 as per
bank record. Form 32 filled by Srivastava Neeraj of Andra Pradesh depicting therein himself to be connected with the company with the designation
as Additional Director category Promoter, is also referred to. The date on which the form has been filled is 22.07.2010. The no. of
Directors/Managing Directors is given as four. Copy of the affidavit dated 18.08.2010 submitted by said Neeraj Srivastava has been also brought on
record and annexed to the petition which indicates that he has been authorized to conduct and is responsible for the day to day activities of the
Company under Section 34 of the Act, with effect from 14th July, 2010. One more affidavit of said Neeraj Srivastava is also being referred to wherein
it is stated that all the assets and liabilities of Cecil Pharmaceuticals Pvt. Ltd. have been taken over by the new management since 14th July, 2010 and
the outgoing management has no concern or responsibility for the liabilities of whatsoever nature.
9. A Coordinate Bench of this Court earlier disposed of petition filed on behalf of present petitioner which has been registered as a petition under
Section 561-A No.217/2015 in terms of order dated 28th January, 2017 along with other 28 matters. All the petitions were dismissed. Thereafter an
application for recalling the order was filed on behalf of petitioner herein which was disposed of on 10th of October, 2017 and the order dated 28th of
January, 2017 was recalled to the extent of petition filed on behalf of the petitioner herein. Accordingly, the petition has been now taken up for fresh
consideration
10. Records of the Court of Chief Judicial Magistrate and learned Principal Sessions Judge, Leh, have been called and perused and learned counsel
for the parties have been heard.
11. Learned counsel for the petitioner while making mention of important dates and events and also making reference of the grounds taken in the
petition, submitted that order of cognizance initially issued by learned Chief Judicial Magistrate and also the order dated 12th of August, 2015, were
bad and the complaint itself so far as prosecution of the present petitioner is concerned, are abuse of process of law as it is apparent on the face of
record that the petitioner herein was not at the helm of affairs at the relevant time when the offence is stated to have been committed. In this regard,
he has referred to the averments made in the complaint that the Drug Inspection (complainant) had lifted the sample from Drug Store of CMO, Leh,
on 11th of October, 2010, which was sent for analysis and found “disbrandedâ€. Para 6 of the complaint is also referred to wherein it is stated that
the Pharmaceutical concern was informed about the test report and asked to explain its position and to furnish the Constitution of the firm but despite
lapse of substantial period the firm has not responded. Form 32, copy of which is annexed with the petition and certified copy of which is also annexed
with the written statement, clearly points out that the petitioner herein was not associated with the company from 20th January, 2011. It is also his
argument that the information procured through RTI from Drug Department, reveals the particulars of the persons (as put forth in terms of MP
No.01/2018), who were at the helm of affairs at the relevant time. In support of his arguments learned counsel for the petitioner took reliance on the
following judgments:
(1) Ashok Mal Bafna Vs. M/S Upper India Steel Mfg. & Engg. Co. Ltd (2017 AIR (SC) 2854);
(2) Pooja Ravinder Devidasani Vs. State of Maharashtra and anr. (2015 AIR (SC) 675);
(3) M. A. A. Annamalai Vs. State of Karnataka & anr. (2011 Cr. LJ 692);
(4) Harshendra Kumar D Vs. Rebatilata Koley Etc. (2011 Cr.LJ 1626);
(5) Md. Akram Siddiqui Vs. State of Bihar & anr (2019 CrLR (SC) 6);
(6) Ramprakash Gulati and anr. Vs. State (2010 CrLJ 1492);
(7) Pepsico India Holdings Ltd. Vs. Food Inspect and anr. (2011 (1) SCC 176);
(8) State of NCT of Delhi Vs. Rajiv Khurana (2011 (1) SCC (Cri) 195)
(9) State of Haryana Vs. Brij Lal Mittal (1998 (5) SCC 343);
(10) Prem Lata & anr Vs. State of Rajasthan & anr (2016(2) SCC (Cri) 430);
(11) M/S Zandu Pharmaceutical Works Ltd. Vs. Md. Sharaful Haque (2005 (1) SCC 122);
(12) Zest Pharma Vs. Drug Inspector (2014(2) Drugs Cases (DC) 121);
12. On the other hand, learned AAG submitted that the prosecution has to continue against the person who was at the helm of affairs at the relevant
time and the appropriate orders have to be passed in this regard.
13. Considered the rival arguments.
14. In Ashok Mal Bafna Vs. M/S Upper India Steel Mfg. & Engg. Co. Ltd 2017 AIR (SC) 2854), the case projected was that the accused/appellant
issued nine cheques on 06.07.2006 in favour of the complainant Company for Rs.8,00,000/ each and one other cheque for Rs.9,40,780.05 in discharge
of legal liability of M/S Coventry Spring and Engineering Company Ltd. (for short the defaulter Company) of which the appellant was a Director.
When the Cheques were presented for clearance, they were dishonoured by the bank with remarks “Insufficient funds†on 24.08.2006. The
complainant-respondent thereafter, served legal notice dated 6.9.2006 demanding payment but the appellant-accused did not make payment. Ld.
Judicial Magistrate took cognizance of the complaint and summoned the appellant-accused. On his failure to turn up before the Court, learned
Magistrate proceeded under Section 299 of Criminal Procedure Code (for short the Code). The appellant-accused thereafter filed a petition before the
High Court under Section 482 of the Code for quashing the complaint, summoning order and subsequent criminal proceedings, which came to be
dismissed by the order impugned in the appeal. The case projected by the appellant-accused was that the respondent Company has unnecessarily
made him a party to the complaint though he was not associated with the default Company on the date of cause of action. The complaint was not
pertaining to the cheques issued by him on 28.12.2004 in the capacity of Director of the defaulter company. He had resigned from the post of Director
w.e.f. 2.1.2004, long before the date on which cause of action arose. The cheques issued during his tenure as Director with the validity of six months,
were neither deposited by the drawee nor dishonoured by the bank and after the lapse of six months period they ceased to be negotiable instruments
under the Act. The cheques against which the complaint was lodged were issued by the defaulter Company on 6.7.2006 much later after his
resignation and were dishonoured on 24.08.2006 against which the legal notice dated 6.9.2006 was served and subsequently the complaint in question
has been filed. Their Lordships of Hon’ble Supreme Court while allowing the appeal and setting aside the impugned judgment passed by the High
Court, quashed the criminal proceedings pending against the appellant-accused before the trial court. Their Lordships observed that “to fasten
vicarious liability under Section 141 of the Act on a person, the law is well settled that 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 defaulter Company, does not make him
liable under the Act. Time and again, it has been asserted by the Supreme Court that only the person who was at the helm of affairs of the Company
and in charge of and responsible for the conduct of the business at the time of commission of an offence will be liable for criminal action.†It was
also observed by their Lordships of Hon’ble Apex Court that “in other words, the law laid down by this Court is that for making a Director of a
Company liable for the offences committed by the Company under Section 141 of the Act, there must be specific averments against the Director
showing as to how and in what manner the Director was responsible for the conduct of the business of the Company.
15. In Pooja Ravinder Devidasani Vs. State of Maharashtra and anr., (2015 AIR (SC) 675;) the Hon’ble Supreme Court allowed the appeal and
set aside the impugned judgment passed by the High Court and also quashed the criminal proceedings pending against the appellant before the trial
court while holding that a Director who had resigned in the year 2005 could not be prosecuted. Para 28 of the judgment is relevant to be quoted:
“28. In the entire complaint, neither the role of the appellant in the affairs of the Company was explained nor in what manner the appellant is
responsible for the conduct of business of the company, was explained. From the record it appears that the trade finance facility was extended by the
Respondent No. 2 to the default company during the period from 13th April, 2008 to 14th October, 2008, against which the cheques were issued by
the company which stood dishonored. Much before that on 17th December, 2005 the appellant resigned from the Board of Directors. Hence, we have
no hesitation to hold that continuation of the criminal proceedings against the appellant under Section 138 read with Section 141 of the N.I. Act is a
pure abuse of process of law and it has to be interdicted at the threshold.â€
16. In Prem Lata & anr. Vs. State of Rajasthan & anr†reported in 2015 (14) SCC 677, their Lordships of Hon’ble Supreme Court opined that
the Magistrate could not have taken cognizance of the complaint since it was barred by time. The High Court was clearly in error in dismissing the
revision petition filed by the appellants challenging the cognizance order. Consequently, the order of the High Court was set aside and the complaint
was quashed.
17. In M. A. A. Annamalai Vs. State of Karnataka & anr. (Criminal Appeal No.1504 of 2010 arising out of SLP (Crl) No.5768 of 2008) decided on
12.08.2010, the appeal was directed against the judgment and order dated 26.05.2008 passed by the High Court of Karnataka at Bangalore in Criminal
Petition No.2625 of 2004. The appellant, who was one of the Directors of R. P. S. Benefit Fund Ltd. Submitted his resignation letter on 8.12.1997
which became effective from the date of filing of Form 32 (27.12.1997) with the Registrar of Companies. Respondent No.2 therein filed a complaint
with the Indira Nagar Police Station, Bangalore, alleging that RPS Benefit Fund had invited deposits from the public vide circular dated 06.12.1998 and
that monies had been invested by the petitioner and his wife in the Pensioner’s
Benefit Fund, pursuant to the approval of the scheme by the Reserve Bank of India. It was further alleged in the complaint that the Company had
issued letters on 18.05.1999 and 14.06.1999 to the investors not to present their interest warrants and that payments of interests would be made by
August 1999 and that the company had since closed its business and the amount due to the respondent No.2 was about Rs. 2,91,778. The respondent
No.2 lodged a First Information Report on 15.10.1999 with the Indira Nagar Police Station, alleging the offence under section 420 Indian Penal Code
read with sections 3, 4, 5 and 6 of the Money Circulation and Banning Act, 1978. In the FIR it was stated that the alleged offences, if any, were
committed during the period between 24.05.1998 and 17.09.1999. The Hon’ble Supreme Court in paras 41 to 43 of the judgment observed as
under:
“41. We have carefully considered the rival contentions. It emerges that:
a) In the instant case, the appellant ceased to be a Director of the company from 27.12.1997 whereas the alleged offences, if any, were committed
during the period from 24.5.1998 to 17.9.1999.
b) Admittedly, there are no allegations against the appellant in the First Information Report.
c) The company had invited investment from the depositors to invest in the business/benefit funds after receiving due approval of the scheme from the
Reserve Bank of India. Therefore, in any event, the element of cheating as alleged cannot be made out by any stretch of imagination.
d) The complainant/respondent No.2 submitted in writing to this Court that he does not want to proceed against the appellant because according to him
the appellant has been inadvertently included as an accused by the Investigating Officer. He further mentioned in the letter that he had already
received 55% of the deposited amount from the Official Liquidator and he did not want to proceed against the appellant.
e) Even assuming that there could have been a vicarious liability thrust on the appellant, even then there cannot be any such vicarious liability in
absence of allegations and material to show that the appellant was in-charge of or responsible for the conduct of the company’s business which
had given rise to the offence. From any angle of the matter, the appellant cannot be compelled to face the criminal trial in this case.
42. The inherent power should not be exercised to stifle the legitimate prosecution but at the same time no person be compelled to face criminal
prosecution if basic ingredients of the alleged offence against him are altogether absent.
43. On consideration of the totality of the facts and circumstances of this case, the impugned judgment of the High Court is set aside and the appeal is
allowed and the proceedings initiated against the appellant on the basis of the complaint registered as CC 22656 of 2001 pending before the Xth Addl.
Chief Metropolitan Magistrate, Bangalore, are quashed.â€
18. In “Ramprakash Gulati and anr. vs. State (Bomaby)†reported in 2010 (116) CriLJ 1492, the complaint filed against the petitioner therein for
prosecution under Section 18(a)(i) read with Section 16 and 17B of the act punishable under Section 27(c) and Section 34 of the Act, was quashed.
Accused Directors had resigned prior to the commission of offence. In the said judgment, reference of judgment of Supreme Court inK . K. Ahuja vs.
V. K. Vora and another, (2009) 10 SCC 48, was made.
19. It is candid on the perusal of the complaint that the prosecution of a company was sought which was not impleaded, however, as an accused
through any natural person. Learned Chief Judicial Magistrate, Leh, has acted casually in issuance of process on 20th of December, 2012, by directing
the process to be issued for procuring the attendance of the company reflected as an accused which was the first step towards the exercise of
bringing to book the culprit in the estimation of the complainant.
20. It is an acknowledged principle of law that the complainant should specifically state as to how and in what manner the offence was committed and
if offence was committed by a person other than natural one, who were the persons responsible for running the said entity at the relevant time. Penal
liability on a person representing the said entity could be fastened only then.
21. Be it so, learned Chief Judicial Magistrate has proceeded against the petitioner herein on the basis of particulars later furnished to the Court by the
respondent herein (as also noted hereinabove and which were stated to have been procured from Food & Drug Control Organization). Admittedly,
sufficient material was not produced before learned Chief Judicial Magistrate to show, prima facie, that on 11.10.2010, i.e. the date on which the
sample is stated to have been procured from the Drug Store of CMO, Leh, by Drug Inspector, Leh or thereafter when the notices are stated to have
been sent to the Company on 15.04.2011 and 22.07.2011, Hari Har Nath Gandotra, Chander Raman Gandotra, Kunal Gandotra and Amit Gandotra,
were running the company and who, on being put to notice, had not complied with the instructions given and for which they were under an obligation
under the Statute. To put it more explicitly, the complaint was filed before learned Chief Judicial Magistrate, Leh, on 20.12.2012. It is not indicated
anywhere in the complaint that the petitioner herein was informed according to the complainant about the test report and to explain the lapse of which
reference is found in para 6 and 7 of the complaint. The learned Principal Sessions Judge too has also acted mechanically in the matter by directing
the warrant of arrest to be issued against the petitioner herein. There has been even no effort at that time to locate who was the person who is
required to be put to notice and whose appearance was required to be procured before the Court. The pre-requisite for issuance of process,
admittedly, was to record satisfaction that grounds exists to hold, prima-facie, the commission of offence by such a person.
22. On a summary perusal of the record of trial court, it is candid that on presentation of the complaint before learned Chief Judicial Magistrate on
20.12.2012, the complainant had taken support of various documents which include communications dated 30.11.2012, 12.02.2012, August 16, 2011,
22.02.2011, for prosecuting the company for making breach of the provisions of the Drugs and Cosmetics Act, 1940, in particular Section 18B and
Section 28A of the said Act. Nowhere in the said documents reference of the breach having been made by the present petitioner is made. The
complainant/respondent states to have informed about the status of the sample as found by him to the company indicated therein with the address at
Bari Brahamana, Jammu.
23. Later efforts made to rope the present petitioner is, admittedly, on the basis of information which the complainant/respondent has stated has been
received from the Licensing Authority of the said company, copy of the affidavit and other particulars quoted therein, bear the date 29th July, 2007. It
also gives the name of some other persons as the Directors/Share Holders as 1. Hari Har Nath Gandotra, 2. Chander Raman Gandotra, 3. Kunal
Gandotra and 4. Amit Gandotra.
24. Section 18B of the Act, of which breach is pleaded by the complainant/respondent to have been committed by the company, provides for
maintenance of records and furnishing of information by every person holding a licence under clause (c) of section 18. Section 28A of the Act
provides punishment for not keeping documents etc. and for non-disclosure of information. The offence is punishable with imprisonment for a term
which may extend to one year or with fine which shall not be less than rupees twenty thousand or with both.
25. In terms of Section 190 Cr. P. C, Magistrate is enabled to take cognizance of the offences:
(a) upon receiving a complaint of facts which constitutes such offence,
(b) upon a police report of such facts; or
(c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.
26. The learned Chief Judicial Magistrate in exercise of this power appears to have issued the process against the company on 20.12.2012. The
learned Magistrate has not, however, recorded, prima-facie, satisfaction about commission of offence under a particular Section or the reason as to
why process was directed to be issued for procuring attendance of the accused.
27. Be it so, thereafter on 06.02.2014, the learned Magistrate has directed bailable warrants to be issued against the accused company. The names of
the persons whose attendance had to be procured are not quoted in the said order but the perusal of the file reveals warrant having been issued to
arrest “M/S Cecil Pharmaceuticals Pvt. Ltd. Plot No.2, 3, 8, 9, EPIP SIDCO, Kartholi, Bari Brahamana, Jammu-18133â€. The satisfaction
thereafter appears to have been even recorded that the “M/S Cecil Pharmaceuticals Pvt. Ltd.†has absconded and was required to be dealt with
under Section 512 Cr. P. C.
28. In acceptance of revision petition filed by the present petitioner, the trial Magistrate’s order regarding issuance of process dated 20.12.2012
was set aside and the respondent herein was given liberty to place on record of ld. trial Magistrate additional assertions and documents as regards the
identity of the person(s) responsible for the affairs of the company.
29. Assertion of the complainant has been taken as a final word regarding the fact that on the date of commission of offence, the petitioner herein has
to be assumed to be the person responsible for day to day affairs of the company, as is indicated in order dated 21.07.2014 passed by trial Magistrate
with the following text:
“Drug Inspector present. Accused not present. It is argued on behalf of complainant, that on the date of commission of offence, Hari Har Nath
was the person responsible for day to day affairs of the company and no change has been made before the Licensing Authority. Drug Inspector seeks
opportunity to place relevant documents before this Court, for which opportunity is granted. Put up on 8.8.14.â€
30. No document was thereafter produced for which opportunity had been sought and the file, as note above, was submitted to Sessions Judge for
lack of jurisdiction who, on consideration of the matter, did not find any ground to adhere to special procedure for trial. It was held by ld. Sessions
Judge that the procedure for trial before the Court of Sessions is applicable for the trial of offences under Section 28A read with Section 18B of the
Act. The complainant was asked to open case for prosecution. Bailable warrant had again been issued for procuring attendance of the petitioner
herein as the title of the case as was pending before learned Sessions Judge reveals present petitioner Hari Har Nath Gandotra having been referred
as Managing Director of the company.
31. It is noted hereinabove that the prosecution of the company had been sought firstly for “misbranding†the drug prepared and thereafter for not
making compliance of parting with the information sought. Emphasis of the petitioner, as has been noted hereinabove, is that he has ceased his
relationship with the company from July, 2010 and the bank accounts of the company were also being operated by new Management through Neeraj
Srivastava. In Form
32 of the petitioner, referred hereinabove, the date from which the petitioner has declared to have ceased his relationship with the company is
20.01.2011, i.e. before issuance of the process against the petitioner herein to face trial on the charge of commission of offences referred
hereinabove. The learned Magistrate as well as learned Sessions Judge thereafter had a duty to examine the matter seriously and not to take it
superficially to enforce the presence of the petitioner. The obligation caste on a Magistrate or a Court in terms of Section 204 of the Code of Criminal
Procedure is not an idle formality. An obligation is caste on the Magistrates and the Courts to find whether the person against whom the allegations of
commission of offence are levelled are responsible for commission of offences so charged and it would be only after satisfying itself that the person,
named in the complaint, has, prima-facie, committed the offence, the steps for procuring the attendance of the said accused can be taken.
32. Relevant principle of law from the judgment of the Hon’ble Apex Court in Birla Corporation Limited v. Adventz Investments and Holdings
Limited and others, AIR 2019 SC 2390, as may be quite apt to be reproduced to see the obligation cast on a Magistrate:
“34. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable
thereto. The application of mind has to be indicated by disclosure of mind on the satisfaction. Considering the duties on the part of the Magistrate for
issuance of summons to accused in a complaint case and that there must be sufficient indication as to the application of mind and observing that the
Magistrate is not to act as a post office in taking cognizance of the complaint, in Mehmood Ul Rehman, this Court held as under:
“22. ….the Code of Criminal Procedure requires speaking order to be passed under Section 203 Cr.P.C. when the complaint is dismissed and that
too the reasons need to be stated only briefly. In other words, the Magistrate is not to act as a post office in taking cognizance of each and every
complaint filed before him and issue process as a matter of course. There must be sufficient indication in the order passed by the Magistrate that he is
satisfied that the allegations in the complaint constitute an offence and when considered along with the statements recorded and the result of inquiry or
report of investigation under Section 202 Cr.P.C., if any, the accused is answerable before the criminal court, there is ground for proceeding against
the accused under Section 204 Cr.P.C., by issuing process for appearance. The application of mind is best demonstrated by disclosure of mind on the
satisfaction. If there is no such indication in a case where the Magistrate proceeds under Sections 190/204 Cr.P.C., the High Court under Section 482
Cr.PC. is bound to invoke its inherent power in order to prevent abuse of the power of the criminal court. To be called to appear before the criminal
court as an accused is serious matter affecting one’s dignity, self-respect and image in society. Hence, the process of criminal court shall not be
made a weapon of harassment.â€
35. In Pepsi Foods Ltd. and Another v. Special Judicial Magistrate and Others (1998) 5 SCC 74,9 the Supreme Court has held that summoning of an
accused in a criminal case is a serious matter and that the order of the Magistrate summoning the accused must reflect that he has applied his mind to
the facts of the case and law governing the issue. In para (28), it was held as under:-
“28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the
complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the
Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to
examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient
for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of
preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinize the evidence brought on record and may even
himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then
examine if any offence is prima facie committed by all or any of the accused.â€
The principle that summoning an accused in a criminal case is a serious matter and that as a matter of course, the criminal case against a person
cannot be set into motion was reiterated in GHCL Employees Stock Option Trust v. India Infoline Limited (2013) 4 SCC 505.
36. To be summoned/to appear before the Criminal Court as an accused is a serious matter affecting one’s dignity and reputation in the society. In
taking recourse to such a serious matter in summoning the accused in a case filed on a complaint otherwise than on a police report, there has to be
application of mind as to whether the allegations in the complaint constitute essential ingredients of the offence and whether there are sufficient
grounds for proceeding against the accused. In Punjab National Bank and Others v. Surendra Prasad Sinha 1993 Supp (1) SCC 499 i,t was held that
the issuance of process should not be mechanical nor should be made an instrument of oppression or needless harassment.â€
33. The complainant in the instant case had, on the basis of complaint initially filed, alleged the commission of offence by the company and no
assertion is made that the present petitioner or any other person in the opinion of the Drug Inspector (Complainant) responsible for running affairs of
the company, had neglected or refused to proceed in the manner the complainant had desired him to proceed. In case according to the complainant
any offence was committed by the company, it had to rest itself with the prayer for imposition of penal liability on the company. The offence under
Section 28A of the Act, as noted above, provides an alternate punishment for the commission of offence under said Section and which could be the
imposition of fine on it. The petitioner herein has been roped in the proceedings and asked to appear before the Court without there being any tentative
finding that he was responsible for running the affairs of the company on 11.10.2010. Even sufficient material to hold, prima facie, the petitioner solely
responsible for running the affairs of the company and so penal action needed to be taken against him, was not available before the learned
Magistrate. The documents referred to above and which according to the complainant and the Court pointed that Hari Har Nath Gandotra, Chander
Raman Gandotra, Kunal Gandotra and Amit Gandotra, had been either the Directors or otherwise related with the company, do not make out that they
while running the affairs of the company and had not obeyed the instructions of the complainant-Drug Inspector. The proceedings initiated and
pending presently against the petitioner herein are patently abuse of process of law and so liable to be quashed.
34. For what is stated above I am of the opinion that the petitioner herein has made out a case for exercising of power under Section 561-A Cr. P. C.
for quashing the proceedings initiated and presently pending against the petitioner. Consequently, order dated 16th of December, 2014, passed by
learned Chief Judicial Magistrate, Leh and order dated 12th of August, 2015 passed by learned Principal Sessions Judge, Leh, in criminal complaint
titled
“State through Drug Inspector Vs. M/S Cecil Pharmaceuticals Pvt. Ltd.†are quashed. The complaint as presented before the Court of learned
Chief Judicial Magistrate, Leh, on 20.12.2012, along with the material available on trial record, shall be remitted back to said Court for passing
appropriate orders in accordance with law. The respondent-Drug Inspector is given liberty to place before learned Magistrate further material to
enable learned Magistrate to record satisfaction in terms of Section 200 Cr. P. C and the scope for issuance of process against the person against
whom the liability could be fastened either for misbranding of the drug or thereafter for infraction of the instruction given for parting with the
information. The observations made herein shall not be treated as an opinion on the merits which necessitate to hold an inquiry or trial.
35. Record of courts below along with copy of this order be sent back for information and compliance.
