S.34 Drugs & Cosmetics Act | Proof Of Actual Responsibility Of Company At Time Of Offence Crucial To Attract Culpability: J&K High Court

Justice Javed Iqbal Wani has clarified that it is essential to prove that the person who was in charge of and responsible for the conduct of the business of the company at the relevant time is liable for the offence, as the liability would arise on account of the conduct, act, or omission on the part of the person, and not merely on account of holding an office or position in the company.

Section 34 of the Drugs and Cosmetics Act, 1940, holds both the company and its responsible officers liable for offences. Individuals in charge at the time of the offence are deemed guilty unless they prove ignorance or due diligence. Additionally, directors, managers, secretaries, or officers are also liable if the offence occurred with their consent, connivance, or due to their neglect.

The court was dealing with a petition filed by Sandeep Vijh seeking the quashment of a complaint instituted by the Drug Inspector of Baramulla. The complaint alleged violations of Sections 18(a)(i) and 27 of the Drugs and Cosmetics Act, 1940. The trial court had taken cognizance of the complaint and issued summons to the accused, including Vijh.

Assailing the complaint and the proceedings the petitioner argued that the trial court's order was misdirected and lacked the necessary satisfaction for taking cognizance of the complaint.

The complaint did not disclose that the petitioner was in charge of and responsible for the conduct of the company's business, as required under Section 34 of the Drugs and Cosmetics Act, he argued.

It was also contended that the complaint was devoid of the prerequisites necessary for prosecution under the Act, making it legally untenable.

The respondent, represented by the Drug Inspector, contended that the petition was not maintainable and filed at a belated stage, nine years after the initial complaint. They argued that the complaint did disclose a cognizable offence requiring trial by the court.

Adjudicating the matter Justice Wani highlighted Section 34 of the Drugs and Cosmetics Act and observed that every person who was in charge of and responsible for the conduct of the business of the company at the time the offence was committed shall be deemed guilty.

However the court added,

“… although, Section 34(1) supra creates a presumption as to the guilt of every person in charge and responsible to the company for the conduct of its business, yet in absence of a specific averment in the complaint attracting the ingredients of section 34(1) of the Act of 1940 that person was in charge of and responsible for the conduct of the business of the company so far as it related to the manufacture of the drug, such person he will not be liable for prosecution along with the company and even a mere description of such a person as Managing Director of the Company will not be sufficient to sustain the process issued against him”.

Elaborating further on fastening the liability under Section 34 Justice Wani explained,

“Therefore, every person connected with the company may not fall within the ambit of the provisions of section 34 of the Act of 1940, in that, it is only that person/s who was/were in charge of and responsible for the conduct of the business of the company at the relevant time who are liable for the offence as the liability would arise on account of the conduct, act or omission on the part of the person/s and not merely on account of holding an office or position in the company”.

Scrutinising the complaint against the petitioner the court stated that the complaint failed to specifically allege that the petitioner was in charge of and responsible for the company's business concerning the manufacture of the drug in question. Hence the complaint was vague, ambiguous, and drafted mechanically without due application of mind to the provisions of the Act, it underscored.

Finding the complaint and the proceedings initiated thereon to be an abuse of the process of law the court thus quashed the impugned complaint and the proceedings emanating therefrom.

Case Title: Sandeep Vijh Vs State through Drug Inspector Baramulla

Citation: 2024 (JKL) 206

Mr. Salih Pirzada, Advocate represented the petitioner, Mr. Hakeem Aman Ali, Advocate appeared for the respondents.

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