Judgment:
ORDER
G.V. Seethapathy, J.
1. This, petition is filed under Section 482 Cr.P.C. seeking to quash further proceedings against the petitioner in C.C. No. 1632 of 2003 on the file of the X Metropolitan Magistrate, Secunderabad.
2. Heard the learned Counsel for the petitioner and the additional public prosecutor representing the second respondent-State and perused the records.
3. The Drugs Inspector filed a complaint before the learned Magistrate alleging that on 18-08-2002 he inspected the premises of the petitioner's shop M/s. Bhagawan Medical & General Stores (Ayurvedic), and lifted the samples of Ozomen Forte capsules (Ayur) batch No. 5501 and that on analysis by the government analist it wgs found to be spurious and adulterated as it contains allopathic drug Sildenafil Citrate varying from 35 gm to 46.22 gms vide report dated 25-09-2002. It is also averred in the complaint that the drug inspector visited the manufacturing unit of A-1 firm and collected 4 strips of Ozomen forte Drug (Ayurveda) each strip containing 6 capsules and 4 strips of Ozomen (Ayur) with batch No. A 2002 and packed and sealed and sent them to Government Analyst, Indian Medicine Pharmacy (Ayurveda), Kattedan, Hyderabad. The learned Magistrate has taken the cognizance of the offence under Section 33EE(e) and 33EEA(d). Aggrieved by the same, the third accused filed the present petition seeking quashing of prosecution.
4. Heard the learned Counsel for the petitioner and the learned Additional Public Prosecutor for the second respondent-State and perused the material on record.
5. The main contention of the learned Counsel for the petitioner is that in the complaint there is absolutely no averment to the effect that the petitioner-A3 was in charge of or responsible for the conduct of the business of the company and in the absence of any such allegation no liability can be fastened on him for any offence alleged to have been committed by the company.
6. Section 34(1) of the Drugs and Cosmetics Act, 1940 states that
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.
7. It can be seen from the above provision that every person who was in charge of and is responsible to the company for the conduct of the business of the company is also liable along with the company for the offences committed. In the cause title of the complaint filed before the learned Magistrate, the company as such is not shown among the array of accused. The first accused is described as Managing Director of M/s. Fiziken Laboratories Pvt. Ltd., A2 is shown as Director and A-3, who filed the present application is also described as a Director and A-4 is a full time technical , supervisor. The company as such does not appear among the array of the accused. The averments in the complaint do not disclose that the petitioner-A3 was in charge of and is responsible for the conduct of the business of the company. Except maxing a bald allegation towards the end of the complaint that A-1 to A-4 have committed the offence, the complainant does not satisfy as to what role the petitioner-A3 has played and in what way he was responsible for the offence alleged to have been committed by the company.
8. In a decision reported in D.V. Srikanth, Managing Director, Hippo Labs Pvt. Ltd. Secunderabad v. State of Andhra Pradesh 2005-ALT (Criminal) page 2 this Court held that
the vicarious liability of a person, 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 and it was further held that simply because a person is a director of the company it does not necessarily mean that he fulfills both the above requirements, so as to make him liable for an offence under the act-sometimes even, without being a director, a person can be in-charge, of and responsible to the company for the conduct of its business. Since the specific allegation in the complaint is that A-6 is responsible for the day-to-day affairs of the A-1 firm and since petitioners are made liable only in their capacity as directors, and since the Director of a company is not vicariously liable, merely because of his being director even if he is not in-charge of the day-to-day affairs of a company, even if the allegations in the complaint are taken to be true, no offence can be said to have been made out against the petitioners merely because of their being Directors of the A-1 company.
9. In the above case, it was found that in the charge sheet it was stated that A-6 was director of A-1 firm and was responsible for the day-to-day affairs and conduct of the business of the firm. It was found that except the said allegation, there was no other allegation in the charge sheet to show that A-2 to A-5 were in charge of day-to-day affairs and looking after the business of the firm. In the present case, there is no allegation even against petitioner-A3 to the effect that he was in charge of and responsible for the conduct of the business of the firm.
10. In N. Dandapani and Anr. v. State of A.P. 2005 (1) ALD (Criminal) 956, this Court held that
The partner of a firm is 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.
11. The above case also arose under the provisions of Drugs and Cosmetics Act and in the light of the principles laid down by the Apex Court, which were referred to therein, it was found that continuation of proceedings against A-2 and A-3 who were partners of the firm was found to be abuse of process of law and as such the same were held liable to be quashed.
12. The principles laid down in the above decision are squarely applicable to the facts of the present case.
13. In the circumstances and in the light of the principles laid down in the above decisions, it is held that further proceedings against A-3 in C.C.I 632 of 2003 are unsustainable and, accordingly, liable to be quashed.
14. In the result, the criminal petition is allowed. The proceedings in C.C. 1632 of 2003 on the file of the X Metropolitan Magistrate, Secunderabad are quashed in so far as the petitioner-A3 is concerned.