Case Note & Summary
The petitioner, Sanjeev Wasan, a director of Maxmed Life Sciences Pvt. Ltd., filed a criminal writ petition under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of proceedings initiated against him under Section 18(a)(i) read with Section 27(d) of the Drugs and Cosmetics Act, 1940. The respondent, Union of India through the Drugs Inspector, had lodged a complaint against the company and two others, including the petitioner, alleging that the company manufactured and sold drugs without a valid license. The complaint stated that the petitioner, as one of the directors, was responsible for the day-to-day affairs of the company and thus liable for the offence. The petitioner contended that the complaint lacked specific allegations that he was in charge of and responsible for the conduct of the business of the company. He argued that a bare statement in the complaint was insufficient to fasten vicarious liability on a director. The petitioner also pointed out that in the reply filed by the company to the respondent, it was made clear that the General Manager was the person in charge and responsible for the company's affairs. The court, after hearing both sides, examined the complaint and found that it merely contained a general statement that the petitioner was responsible for the day-to-day affairs without any specific averments as to how he was in charge. The court relied on the Supreme Court judgments in State of Haryana v. Brij Lal Mittal and National Small Industries Corporation Ltd. v. Harmeet Singh Paintal, which held that for vicarious liability to attach, there must be specific allegations that the director was in charge of and responsible for the conduct of the business. In the absence of such allegations, the proceedings against the director are liable to be quashed. Accordingly, the court allowed the petition and quashed the proceedings against the petitioner.
Headnote
A) Criminal Law - Vicarious Liability of Director - Drugs and Cosmetics Act, 1940, Sections 18(a)(i), 27(d), 32(1) - Quashing of Proceedings - The petitioner, a director of the accused company, sought quashing of criminal proceedings on the ground that the complaint lacked specific averments that he was in charge of and responsible for the day-to-day affairs of the company. The court held that a bare statement in the complaint that the director was responsible for the day-to-day affairs is not sufficient to fasten vicarious liability. The complaint must contain specific allegations as to how the director was in charge of the business. In the absence of such allegations, the proceedings against the director are liable to be quashed. (Paras 4-6) B) Criminal Procedure Code, 1973 - Section 482 - Inherent Powers - Quashing of Complaint - The High Court exercised its inherent powers under Section 482 Cr.P.C. to quash the complaint against the director where the complaint did not disclose any specific role or responsibility of the director in the conduct of the company's business. The court relied on the principle that vicarious liability cannot be imposed without clear averments. (Paras 4-6)
Issue of Consideration
Whether a director of a company can be prosecuted under Section 18(a)(i) r/w Section 27(d) of the Drugs and Cosmetics Act, 1940, in the absence of specific allegations that he was in charge of and responsible for the conduct of the business of the company.
Final Decision
The petition is allowed. The proceedings initiated against the petitioner under Section 18(a)(i) r/w Section 27(d) of the Drugs and Cosmetics Act, 1940, in the complaint pending before the learned Judicial Magistrate First Class, Vasco, are quashed.
Law Points
- Vicarious liability of director
- requirement of specific averments in complaint
- quashing of criminal proceedings under Section 482 Cr.P.C.
