Case Note & Summary
The applicant, D.R. Salgaoncar, was the Managing Director of Geno Pharmaceuticals Ltd., which manufactured a drug sample that was found to be of substandard quality. The Drug Inspector filed a complaint against the company and its directors, including the applicant as accused no.5. The applicant filed an application to recall the process, which was allowed by the Chief Judicial Magistrate. However, the Additional Sessions Judge, Nanded, in revision, set aside that order and restored the process. Aggrieved, the applicant approached the High Court under Section 482 CrPC. The High Court examined the complaint and found that there were no specific allegations against the applicant showing that he was in charge of and responsible for the conduct of the business at the time of the offence. The court held that mere designation as Managing Director is insufficient to attract vicarious liability under Section 34 of the Drugs and Cosmetics Act, 1940. The court also noted that the Magistrate had correctly recalled the process as the complaint did not disclose sufficient grounds. The High Court allowed the application, quashed the process against the applicant, and set aside the Sessions Judge's order.
Headnote
A) Criminal Procedure Code - Section 482 - Inherent Powers - Quashing of Process - The High Court can exercise inherent powers to quash criminal process even after dismissal of revision, if the complaint lacks specific allegations of vicarious liability against a director. (Paras 1-10) B) Drugs and Cosmetics Act, 1940 - Section 34 - Vicarious Liability of Directors - For a director to be held liable under Section 34, the complaint must contain specific averments that the director was in charge of and responsible for the conduct of business at the time of the offence. (Paras 5-8) C) Criminal Procedure Code - Section 204 - Recall of Process - The Magistrate can recall process under Section 204 if the complaint does not disclose sufficient grounds for proceeding against the accused. (Paras 4-6)
Issue of Consideration
Whether the process issued against the applicant (original accused no.5) under the Drugs and Cosmetics Act, 1940 can be recalled/quashed in the absence of specific allegations showing his active role in the offence.
Final Decision
The High Court allowed the criminal application, quashed the process issued against the applicant, and set aside the order of the Additional Sessions Judge dated 12.8.2003.
Law Points
- Vicarious liability of directors under Section 34 of Drugs and Cosmetics Act
- 1940 requires specific averments of active role
- process can be recalled if complaint lacks such allegations
- inherent powers under Section 482 CrPC can be invoked to quash process even after revision dismissed.
