Case Note & Summary
The applicant, Devendra Vinaykant Sheth, was original accused No. 7 in R.C.C. No. 686 of 2004 pending before the Chief Judicial Magistrate, Ahmednagar, for alleged contravention of Section 18(a)(1) read with Section 16 and punishable under Section 27(d) read with Section 34 of the Drugs and Cosmetics Act, 1940. The complaint arose from a sample of Pediscab lotion manufactured by accused No. 13 (M/s. Veronica Laboratories Ltd.) that was found to be of non-standard quality due to less content of Gamma benzine hexachloride. The applicant was a director of the company but not involved in day-to-day management. He filed this application under Section 482 of the Code of Criminal Procedure, 1973 to quash the proceedings against him. The main legal issue was whether a non-executive director can be held vicariously liable under Section 34 of the Drugs and Cosmetics Act without specific averments that he was in charge of and responsible for the conduct of the business. The applicant argued that the complaint lacked such averments and that he was not involved in manufacturing or quality control. The State opposed, contending that as a director, he was responsible. The court analyzed Section 34 and held that vicarious liability requires a specific averment that the accused was in charge of and responsible for the business. Since the complaint only stated that the applicant was a director without such averment, the proceedings against him were an abuse of process. The court quashed the proceedings against the applicant only.
Headnote
A) Criminal Procedure - Quashing of Proceedings - Section 482 CrPC - Abuse of Process - Applicant sought quashing of R.C.C. No. 686 of 2004 for contravention of Drugs and Cosmetics Act - Court held that continuation of proceedings against a non-executive director without specific averments of being in charge of business would be an abuse of process - Held that proceedings quashed (Paras 1-10). B) Drugs and Cosmetics Act - Vicarious Liability - Section 34 - Non-Executive Director - Applicant was a director but not in charge of day-to-day affairs - No specific averment in complaint that applicant was responsible for conduct of business - Held that vicarious liability cannot be imposed without such averment (Paras 5-9).
Issue of Consideration
Whether criminal proceedings against the applicant, a non-executive director, can be quashed under Section 482 CrPC for lack of vicarious liability under Section 34 of the Drugs and Cosmetics Act, 1940.
Final Decision
The application is allowed. The proceedings in R.C.C. No. 686 of 2004 pending before the Chief Judicial Magistrate, Ahmednagar, are quashed and set aside insofar as the applicant (original accused No. 7) is concerned.
Law Points
- Vicarious liability under Section 34 of Drugs and Cosmetics Act
- 1940 requires specific averments that the accused was in charge of and responsible for the conduct of business
- Quashing under Section 482 CrPC for abuse of process
- Non-executive director not liable without active role
