Directors Of Manufacturing Company Can't Be Prosecuted For Sub-Standard Drugs Unless They Played An "Active Role" In The Process: Karnataka HC
The Karnataka High Court recently quashed the criminal proceedings initiated against the Proprietors/ Directors of a drugs manufacturing company for alleged production of sub-standard quality drugs, while observing that they did not play an "active role" in the alleged offence."Unless the petitioners do have an active role in the preparation and manufacture of drugs, which are alleged to be...
The Karnataka High Court recently quashed the criminal proceedings initiated against the Proprietors/ Directors of a drugs manufacturing company for alleged production of sub-standard quality drugs, while observing that they did not play an "active role" in the alleged offence.
"Unless the petitioners do have an active role in the preparation and manufacture of drugs, which are alleged to be of sub-standard quality, the petitioners cannot be drawn in to these proceedings," Justice M Nagaprasanna said.
The case was filed by Sushil Goel and Monisha Dange of M/s.Unicorn Meditech, seeking quashing of proceedings initiated against them for offence of manufacturing drugs which are not of a standard quality, misbranded, adulterated or spurious, punishable under Section 18(a)(i) and 22(i)(cca)m punishable under Section 27(a) and 22(3) of the Drugs and Cosmetics Act, 1940.
The case was instituted in the aftermath of eye infection developed by certain persons who underwent cataract surgeries at a Hospital in Bengaluru. Upon investigation, it was found by the Assistant Drugs Controller that the subject drug were not of standard quality.
"The complaint, though is at great length, does not indicate the role of the petitioners to be in the day-to-day affairs of manufacturing of drugs in the company. Unless this is spelt out, the offences against the petitioners cannot be driven home, is the consistent view taken by this Court in plethora of judgments right from the year 2000," the Court observed at the outset.
It relied on two coordinate bench judgments in the case of Sanjay G. Revankar V. State By Drug Inspector, U.K.District, Karwar, ILR 2002 KAR 475 and Ritesh V. State Of Karnataka, ILR 2011 KAR 592.
Both these judgments interpreted Section 34 of the Act which deals with offences committed by a Company. It was held therein that unless a specific role is attributed to the Directors or Partners of the Company in the process of manufacturing, they cannot be hauled into criminal proceedings, as vicarious liability would come about only when there are particular instances narrated in the complaint.
Thus, it opined, "The narration in the complaint, in the case at hand, insofar it pertains to the petitioners, is absolutely vague. There is nothing in the narration that would point at the role of the petitioners in the day-to-day manufacturing of drugs in the Company. Unless the petitioners do have an active role in the preparation and manufacture of drugs, which are alleged to be of sub-standard quality, the petitioners cannot be drawn in to these proceedings."
It ordered that the impugned proceedings cannot be continued against the petitioners, as there is no narration in the complaint that would touch upon the offences against the petitioners for their role in the manufacture of drugs. Vague statements with regard to them being Partners or Directors of the Company cannot by itself bring the petitioners to the web of these proceedings, it added.
Case Title: SUSHIL GOEL and ANR v State at the Instance of Drug Inspector.
Case no: CRIMINAL PETITION No.6875 OF 2020
Citation: 2022 LiveLaw (Kar) 165
Date of Order: 10TH DAY OF MAY, 2022
Appearance: Advocate DESU REDDY G. for petitioner
Advocate YASHODHA K.P for respondent