Case Note & Summary
The present petition was filed by Lundbeck India Private Limited (accused No.1), its Managing Director Sri Mammen Mathew (accused No.2), and General Manager Legal and Company Secretary Sri Laxminarayana Joisa H (accused No.3) under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) seeking quashing of the order dated 30.11.2011 in PCR No.24/2011 and CC No.1006/2011 on the file of the MMTC-I, Mayo Hall Unit, Bangalore, by which process was issued against them for offences punishable under Sections 18(a)(i) read with 27(d) and 28 of the Drugs and Cosmetics Act, 1940 (the Act). The background of the case is that the Drug Inspector, State Intelligence Branch, Bangalore, filed a complaint alleging that the petitioners were manufacturing and selling misbranded drugs, specifically that the drug 'Escitalopram' manufactured by the company was found to be misbranded as per the Act. The Magistrate took cognizance and issued process. The petitioners challenged this on the grounds that the complaint did not disclose any offence against them, there was no proper sanction for prosecution as required under Section 32 of the Act, and there were no specific allegations against the directors to attract vicarious liability under Section 34 of the Act. The court analyzed the provisions of the Act and found that the complaint lacked the requisite sanction from the prescribed authority, and the allegations against the directors were vague and did not satisfy the requirements of Section 34. The court held that continuing the proceedings would be an abuse of process of court. Accordingly, the petition was allowed, and the proceedings in PCR No.24/2011 and CC No.1006/2011 were quashed.
Headnote
A) Criminal Procedure Code, 1973 - Section 482 - Quashing of Criminal Proceedings - Abuse of Process - The High Court examined whether the complaint and issuance of process against the petitioners for offences under the Drugs and Cosmetics Act, 1940, were an abuse of process of court. Held that where the complaint does not disclose the essential ingredients of the offence and the proceedings are initiated without proper sanction, the High Court can quash the proceedings to prevent abuse of process. (Paras 1-20) B) Drugs and Cosmetics Act, 1940 - Sections 18(a)(i), 27(d), 28, 34 - Vicarious Liability of Directors - Sanction for Prosecution - The court considered whether the directors and the company could be prosecuted for alleged sale of misbranded drugs without proper sanction and without specific allegations of their role. Held that under Section 34 of the Act, vicarious liability can be attracted only if there is specific averment that the accused was in charge of and responsible for the conduct of the business at the time of the offence. In the absence of such averment, the proceedings against the directors are liable to be quashed. (Paras 10-18) C) Drugs and Cosmetics Act, 1940 - Section 32 - Sanction for Prosecution - The court examined the requirement of sanction under Section 32 of the Act for prosecution. Held that the complaint filed by the Drug Inspector without the requisite sanction from the prescribed authority is not maintainable, and the proceedings based on such complaint are liable to be quashed. (Paras 8-9)
Issue of Consideration
Whether the issuance of process against the petitioners for alleged offences under the Drugs and Cosmetics Act, 1940, without proper sanction and without establishing vicarious liability, is liable to be quashed under Section 482 CrPC.
Final Decision
The petition is allowed. The order dated 30.11.2011 in PCR No.24/2011 and CC No.1006/2011 issuing process against the petitioners is set aside, and the proceedings in PCR No.24/2011 and CC No.1006/2011 are quashed.
Law Points
- Quashing of criminal proceedings
- Section 482 CrPC
- Drugs and Cosmetics Act
- 1940
- Sections 18(a)(i)
- 27(d)
- 28
- 34
- vicarious liability of directors
- sanction for prosecution
- prima facie case
- abuse of process of court
