Cyper Drugs And Pharmaceuticals Vs The State Represented By Drugs On 28 November, 2006
1. THE HON’BLE SRI JUSTICE T.CH.SURYA RAO
Criminal Petition No.1825 OF 2006
28−11−2006
Cyper Drugs and Pharmaceuticals Pvt. Ltd.
rep., by Sh.Gourav Bharbgav, Managing Director,
63,Rama Road, New Delhi − 110 015. And Others
The State represented by Drugs Inspector,
Chittoor, Through Public Prosecutor,
High Court of Andhra Pradesh,
Hyderabad.
Counsel for the Petitioners: Sri Prabhakar Peri
Counsel for the Respondents: Public Prosecutor
:ORDER:
The petitioners who are A.1 to A.3 in the proceedings seek to invoke the
extraordinary jurisdiction of this Court under Section 482 of the Code of
Criminal Procedure (for brevity ’the Code’) to quash the proceedings in
C.C.No.387 of 2003 on the file of the V Additional Munsif Magistrate, Chittoor.
The State represented by Drugs Inspector filed a private complaint before the
Court against the petitioners and four others for the offences punishable under
Sections 18(a)(i) read with Sections 16 and 27(d) of the Drugs and Cosmetics Act
(for brevity ’the Act’) and under Section 18−B punishable with Section 28 of the
said Act.
It is alleged inter alia in the complaint that the Drugs Inspector who
was in−charge of Tirupati inspected the premises of M/s.Sabari Medical Agencies
on 19.01.2001. A.4 was present in the premises doing business. The complainant
picked up CD Plex Capsules batch No.CDP−34 with manufacturing date March, 2000,
expiry date August, 2001 manufactured by M/s.Cyper Drugs and Pharmaceuticals,
New Delhi (A.1). Following the procedure envisaged under the Act and the Rules
framed thereunder, the complainant took samples of the drug on the same day by
issuing Form−18 dated 19.01.2001. He sent one sample thus taken to the
Government Analyst who on analysis sent his report bearing No.917/DCL/2001 dated
23.04.2001 with his remarks. It was opined intere alia therein that the sample
does not conform to the Assay for Thiamine Hcl as per the labelled claim (0.362
mg/capsule, claim = 1.0 mg/capsule). Thereupon the complainant on 01.05.2001
addressed a letter under Section 18−A of the Act to A.4 requesting him to
furnish name, address and other particulars of the person from whom he had
acquired the drug. He received a reply dated 02.05.2001 from A.4 informing him
inter alia that the drug in question was purchased from M/s.Sri Vinayaka Medical
Agencies, Proddatur (A.5), under Invoice No.994 dated 12.05.2000. Accordingly
the complainant addressed another letter dated 01.05.2001 to M/s.Sri Vinayaka
Medical Agencies, Proddatur, requesting to disclose from whom it had purchased
the subject drug. Simultaneously the complainant sent a portion of the sample
and analyst report. On 10.07.2001 the complainant received a reply from A.5
dated 28.06.2001 informing him inter alia that A.5 purchased the drug from
M/s.Venkat Kishore Medical Distributors, Vijayawada (A.6), under Invoice Bill
No.15/34 dated 27.03.2000. The complainant again on 17.07.2001 addressed a
letter to A.6 which too having received the letter informed the complainant that
it had purchased the drug in turn from M/s.Jai Shanti Medicos, New Delhi (A.7),
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2. under Invoice Bill No.1674 dated 09.03.2001. On 30.08.2001 the complainant again
addressed a letter to A.7 requesting to disclose from whom it had purchased the
drug in question. On 10.01.2002 the complainant received a letter from A.7 that
it had in turn purchased the subject drug from A.1 firm vide Invoice No.536
dated 07.03.2000. The complainant, therefore, addressed five letters dated
01.05.2001, 12.06.2001, 30.08.2001, 05.01.2002 and 22.05.2002 to A.1 but no
reply was received so far from A.1 firm. After sending a detailed report to the
Director, Drugs Control Administration, Hyderabad, and after having obtained the
constitutional particulars of the A.1 firm, the complainant filed the complaint
eventually before the Court.
Cognizance was taken by the Court, as aforesaid, under Sections
18(a)(i), 16 and 27(d) of the Act as against A.1 to A.7. Pursuant to the summons
issued the petitioners who appeared before the Court filed the instant petition,
as aforesaid, seeking to quash the proceedings as against them. Sri Prabhakar
Peri, learned counsel appearing for the petitioners, represents that there have
been infraction of mandatory provisions of the Act in this case which entail the
quashing of the case against the petitioners. The learned counsel further
represents that the expiry date of the drug in question was obviously in the
month of August, 2001 and having received the report of the Analyst on
28.04.2001 the complainant lodged the complaint on 19.08.2003 and thereby
deprived a valuable right to the petitioners in asking the Court to send the
sample to Central Drugs Laboratory and thus the accused are prejudiced. It is
his further contention that A.2 and A.3 being the Directors of A.1 company
cannot be prosecuted without there being a whisper in the complaint inter alia
that they were in−charge of the day to day affairs of A.1 company, in the
absence of which the prosecution could not be maintained against them. The
contention of the learned counsel thus seems to be two fold. It requires no
factual analysis of the facts having due regard to the fact that the petitioners
seek to quash the proceedings on the premise that it is nothing but abuse of the
process of the Court.
It is trite that in a petition filed under Section 482 of the Code this Court is
expected to go by the averments made in the complaint, assuming them to be true
without adding anything thereto or subtracting anything therefrom. For the
purpose of considering a petition filed under Section 482 of the Code, the Court
has to consider the averments made in the complaint and the documents, if any,
annexed therewith. No extraneous material can be considered. Nor the parties can
be permitted to lead evidence. This is the settled legal position. Along with
the complaint a list of documents have been annexed, as enumerated in the
complaint itself, as can be seen from a copy of the complaint filed in the
instant case. A perusal of the averments made inter alia in the complaint and
the documents annexed therewith prima facie shows that the complainant has
lifted the samples of the drug in question having purchased the same duly in
accordance with the provisions contained in the Act and the Rules framed
thereunder from A.4 in the first instance, he then sent samples thus lifted for
the purpose of analysis and eventually after analysis the Analyst opined that
the drug in question does not conform to the standards as claimed on the label
of the drug. Thus, it appears that there has been prima facie infraction of the
provisions of the Act.
The crucial question to be seen having due regard to the contentions
raised by the learned counsel appearing for the petitioners is as to whether
there has been inordinate delay in laying the complainant and as to whether the
same has any prejudicial effect on the petitioners depriving them from availing
the provisions under the Act by asking the Court to send the sample for fresh
analysis by Central Drugs Laboratory. The provisions germane in the context are
Sections 23 and 25 of the Act. Section 23 mandates that where an Inspector takes
a sample of the drug for the purpose of test or analysis, he shall intimate the
purpose in writing in the prescribed form to the person from whom he takes the
sample and in the presence of such person, he shall divide the sample into four
portions and effectively seal and suitably mark the same and permit such person
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3. to add his own seal and mark on those portions. The Inspector shall restore one
portion of a sample so divided to the person from whom he takes it and from
remaining three portions, he shall forthwith send one sample to the Government
Analyst for test or analysis; and he shall produce the second one before the
Court before which proceedings, if any, may be instituted; and the third one he
shall send to the person whose name, address and other particulars have been
disclosed to him under Section 18−A of the Act. No infraction has been
complained of in the compliance of the procedure as envisaged under Section 23
of the Act is concerned. The next provision germane in the context is Section 25
of the Act. Under sub−section (1) thereof the Analyst is obliged to submit his
report and deliver the same to the Inspector in triplicate in the prescribed
form. The Inspector who received the report in triplicate shall deliver one copy
thereof to the person from whom the sample was lifted and another copy to the
person, if any, whose name, address and other particulars have been disclosed
under Section 18−A of the Act. The third one shall be retained with him to use
for the purpose of prosecuting the offenders. The report given by the Analyst
shall be evidence of the facts stated therein and the provision attaches
conclusiveness to the report qua the person from whom the sample was taken or
the person(s) whose name, address and other particulars have been disclosed
under Section 18−A of the Act later. Sub−sections (3) and (4) of Section 25 are
very much germane for the present purposes and they read as under: "25. Reports
of Government Analysts:
(3) Any document purporting to be a report signed by a Government
Analyst under this Chapter shall be evidence of the facts stated therein, and
such evidence shall be conclusive unless the person from whom the sample was
taken or the person whose name, address and other particulars have been
disclosed under Section 18−A has, within twenty−eight days of the receipt of a
copy of the report, notified in writing the Inspector or the Court before which
any proceedings in respect of the sample are pending that he intends to adduce
evidence in controversion of the report.
(4) Unless the sample has already been tested or analysed in the Central Drugs
Laboratory, where a person has under sub−section (3) notified his intention of
adducing evidence in controversion of a Government Analyst’s report, the Court
may, of its own motion or in its discretion at the request either of the
complainant or the accused cause the sample of the drug or cosmetic produced
before the Magistrate under sub−section (4) of Section 23 to be sent for test or
analysis to the said Laboratory, which shall make the test or analysis and
report in writing signed by, or under the authority of, the Director of the
Central Drugs Laboratory the result thereof, and such report shall be conclusive
evidence of the facts stated therein."
A perusal of the said provision shows that within 28 days of the receipt
of a copy of the report the person from whom the sample was lifted should notify
in writing the Inspector or the Court before which any proceedings in respect of
the sample are pending expressing his intention to adduce evidence in
controversion of the report. After such notification of his intention to lead
evidence, the Court may of its own motion or in its discretion at the request
either of the complainant or the accused, cause the sample of the drug produced
before it under sub−section (4) of Section 23 to be sent for test or analysis to
the Central Drugs Laboratory and the report given by the Director of the Central
Drugs Laboratory shall be conclusive evidence of the facts stated therein. Thus,
sub−sections (3) and (4) of Section 25 clearly envisage the procedure to be
followed by the person from whom the samples are lifted or the other persons
concerned in the event such person is in disagreement with the report given by
the Government Analyst and intends to lead evidence in controversion of the said
report.
Having due regard to this legal position, as can be seen from Sections 23 and 25
of the Act, it is the contention of the learned counsel appearing for the
petitioners that no such copy of the report has been given to the petitioners
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4. and thereby the petitioners are denied of availing the valuable defence which
caused much prejudice to them. At this juncture, one factual aspect needs a
mention before adverting to the contention of the learned counsel. As can be
seen from the complaint, the complainant−Drugs Inspector stated to have
addressed five letters to A.1 company and no reply so far was given. Among the
documents annexed to the complaint, a copy of the letter dated 01.05.2001 is the
document that has been addressed by the complainant obviously to the A.1 company
annexing duly therewith a photostat copy of Form−13 bearing No.917/DCL/2001
dated 23.04.2001, i.e. a copy of the Analyst’s report. The question, therefore,
arises is, in view of the contention raised by the learned counsel, as to
whether that letter has been received by the accused/petitioners or not. As
discussed hereinabove, what is required to be seen is the allegation mentioned
in the complaint. The contention of the learned counsel that no such letter has
been received by A.1 to A.3 and no acknowledgement in token thereof has been at
least shown or annexed to the complaint at this stage merits no consideration.
It has been clearly mentioned in the complaint inter alia that such a letter has
been addressed and even four more letters have been addressed to A.1 company.
Till such time that this averment is shown to be false, for the purpose of prima
facie case it shall have to be taken into consideration. That apart, whenever it
is stated before the Court that a letter has been posted to the address which is
known or not shown to have been incorrect, presumption follows that in the chain
of correspondence it forms a link and in natural course it has been received. It
is for the addressee to show before the Court that no such letter has been
received. Of course, it is a negative proof having due regard to the presumption
under law, as can be seen from illustration (f) of Section 114 of the Indian
Evidence Act. Indeed a copy of the letter, as discussed hereinabove, has been
annexed to the complaint. Therefore, it is open still to the petitioners to show
before the Court that the averment made inter alia in the complaint is not
correct and no such letter in fact has been sent or has not been received by the
accused. Such a proof can be shown before the criminal Court but not in a
petition filed before this Court under Section 482 of the Code. For the purpose
of the instant petition, suffice if an averment is made inter alia in the
complaint mentioning specifically that a letter has been addressed to the
accused and that constitutes a prima facie case. In view of this specific
averment in the complaint and annexing a copy of the notice said to have been
addressed by the complainant to the petitioners, prima facie it shall have to be
considered that A.1 duly has also been informed by the complainant about the
report of the Analyst while marking a copy of the report to him. Having due
regard to the same, it is for A.1 to invoke the provisions of sub− section (3)
and (4) of Section 25 of the Act. The provisions clearly envisage that either
the Inspector or the Court shall be informed within 28 days from the date of
receipt of a copy of the report expressing the express intention inter alia
therein to adduce evidence in controversion of the report. It is not the case of
the petitioners that any such notification in writing either has been given to
the Inspector or before the Court. Of course, in the instant case, latter course
is not open having due regard to the fact that the complaint in this case was
filed on 19.08.2003. Even then it is no bar for notifying the Court about the
intention of the petitioners. Filing of a complaint is not a sine qua non for
notifying the Court about the intention of the accused to oppose the Analyst’s
report and lead evidence in controversion of that report. Sub−section (3) of
Section 25 of the Act clearly envisages that it shall be notified either to the
Court or to the Inspector in writing. In the event of any such notification by
the accused, then the Court on an application filed by either of the parties to
the proceedings or suo motu can send the sample deposited with it by the Drugs
Inspector to the Central Drugs Laboratory for the purpose of test or analysis.
Without notifying the Inspector or the Court and without requesting the Court to
send the sample to the Central Drugs Laboratory, it is not open to the
petitioners to contend that a valuable right is lost and thereby they are
prejudiced. It may be reiterated here that the petitioners need not wait till
such time the Drugs Inspector chooses to file a complaint before the Court since
it is not a sine qua non. On the factual matrix, the petitioners cannot
legitimately complain any infraction of the provisions of sub−sections (3) and
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5. (4) of Section 23 and Section 25 of the Act. That these provisions are mandatory
in nature is beyond any doubt. The question, therefore, remains to be seen is
whether any infraction thereof has been there or not. In this connection, the
learned counsel appearing for the petitioners seeks to rely upon a Judgment of
this Court in VETCHA VENKATA RAJU v. STATE OF A.P.1. It is obvious that it is a
case where a trial was conducted against the petitioner which ended in
conviction and in the eventual appeal filed assailing the conviction it was
confirmed and, therefore, the petitioner approached the High Court in revision.
At that stage it was contended that since the report of the Analyst was not
supplied to the petitioner, he was crippled and thereby there had been an
infraction of the mandatory provisions of Section 25 of the Act. Sufficient
evidence seems to have been produced before the Court in proof of non−supply of
the report. The said decision obviously was not germane in the present context
for the simple reason that no trial has yet been commenced against the accused
and, therefore, the question of proof does not arise. The case is obviously at
the threshold and, as discussed hereinabove, it shall be still shown by the
petitioners before the Court that they have not received any intimation from the
Drugs Inspector. Therefore, the said decision has no application to the present
facts.
Another Judgment sought to be relied upon by the learned counsel is in
DRUGS INSPECTOR, C.D.S.C.O. (SOUTH) ZONE, MADRAS v. MODERN DRUGS2. The Madras
High Court too has taken the same view. As discussed hereinabove, there can be
no disagreement with the proposition of law that the provisions contained in
Section 25 of the Act are mandatory in nature. The case before the Madras High
Court was again a case where trial was conducted, necessary documents were
filed, and witnesses were examined. From the evidence thus adduced both oral and
documentary before the Court, it was not shown before the Court that any such
report was given to the petitioner. Therefore, as in the case of Vetcha Venkata
Raju’s case, this decision too has no application to the matrix of the instant
case.
The learned counsel further seeks to reply upon a Judgment of the Apex
Court in STATE OF HARYANA v. UNIQUE FARMAID (P) LTD.3. That was a case arising
out of the provisions of the Insecticides Act. It was contended before the Apex
Court that by not following the mandatory provisions of Section 24 of the said
Act the prosecution deprived the accused to have the samples tested by the
Central Insecticides Laboratory and to adduce evidence against the report given
by the Analyst in the first instance. Having due regard to the provisions of the
said Act and the matrix of that case, the Apex Court was of the view that the
accused had been deprived of valuable right statutorily available to him.
Section 24 of the Insecticides Act is in pari materia with Section 25 of the
present Act. That was a case where the respondents company was notified by
supplying a copy of the report to it and in reply thereto, the company expressed
its intention to adduce evidence in support of its contention and to get the
sample analysed by the Central Insecticides Laboratory as per the provisions of
Section 24 of the said Act at the cost of the company. The Inspector of
Insecticides did not advert to this request of the company, instead filed a
criminal complaint against the respondent company and five others. Under those
circumstances, the Apex Court was of the view that a valuable right of the
respondent company was lost and that too having due regard to the fact that the
complaint was lodged long after that request, by which time the shelf life of
the sample was lost.
The facts in the instant case are a little bit different. The petitioners have
not notified obviously to the Drugs Inspector about their intention to lead
evidence qua the Analyst’s report. Although the complaint was filed long after
the expiry of the drug in question, having failed to notify the Inspector as
envisaged under sub−section (4) of Section 25 of the Act, it is now not open to
the petitioners to contend that they lost a valuable right. Delay in filing the
complaint, if any, is of no consequence having due regard to the above facts.
The Apex Court in STATE OF HARYANA v. BRIJ LAL MITTAL AND OTHERS4 has taken a
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6. different view. The offence involved therein was under the provisions of the
Drugs and Cosmetics Act as in the instant case. The Apex Court while adverting
to the provisions of Section 25(3) and (4) of the Drugs and Cosmetics Act held
thus:
"The right to get the sample examined by the Central Drugs Laboratory through
the court before which the prosecution is launched arises only after the person
concerned notifies in writing the Inspector or the court concerned within
twenty−eight days from the receipt of the copy of the report of the Government
Analyst that he intends to adduce evidence in controversion of the report. In
the instant case in spite of service of copies of the report of the Government
Analyst, the manufacturers did not exercise their right and on the contrary,
they asserted that their Quality Control Department examined and tested samples
of the two drugs and found that they complied with the test of sterility. It
must, therefore, be said that consequent upon their failure to notify the
Inspector that they intended to adduce evidence in controversion of the report
within 28 days, not only the right of the manufacturers to get the sample tested
by the Central Drugs Laboratory through the court concerned stood extinguished
but the report of the Government Analyst also became conclusive evidence under
sub−section (3). The delay in filing the complaint till the expiry of the shelf−
life of the drugs could not, therefore, have been made a ground by the High
Court to quash the prosecution."
The Apex Court in Unique Farmaid (P) Ltd.’s case although noted its earlier
Judgment in Brij Lal Mittal’s case, however, it has neither distinguished nor
dissented from the view expressed by it in Brij Lal Mittal’s case. Both the
Judgments have been rendered by co−equal Benches. However, the Judgment in Brij
Lal Mittal’s case having been rendered under the provisions of the Drugs and
Cosmetics Act, it applies in all force to the matrix of the instant case. Even
otherwise, both the Judgments are distinguishable on facts. In Unique Farmaid
(P) Ltd.’s case, the company expressed its intention to adduce evidence by
notifying the Insecticides Inspector and wanted to get the sample analysed by
the Central Insecticides Laboratory. However, the Insecticides Inspector failed
to accede the request of the company unlike in the latter case where the company
failed to notify the Drugs Inspector expressing its intention to adduce evidence
against the report of the Analyst and to get the sample analysed by the Central
Drugs Laboratory which is the crucial distinguishing factor. In that view of the
matter, the Judgment in Unique Farmaid (P) Ltd.’s case has no application to the
matrix of the instant case.
Without expressing any intention about leading evidence qua the report of the
Analyst, the petitioners cannot be heard to say that they have been prejudiced,
that too when it is for the Analyst or the Expert, as the case may be, to say
that a particular sample having regard to the passage of time or delay, is still
fit or not fit for test or analysis. It is not for the Courts to just surmise or
assume certain things in respect of the matters which are exclusively within the
domain of the Experts. Merely because the expiry date of the drug in question as
mentioned on the label of the drug was August, 2001 it cannot automatically be
concluded that after expiry of that date, the sample could not be analysed and,
therefore, the persons from whom the samples were lifted will be highly
prejudiced. Without any action on their part, such a plea is not permissible, in
my considered view. In fact, that has been the view expressed by the Apex Court
too. For the above reasons, the first contention of the learned counsel
appearing for the petitioners merits no consideration.
As regards the second contention, obviously it is contrary to the existing state
of affairs. In the complaint it has been specifically averred that A.1 is the
company, A.2 is the Managing Director and A.3 is the Approved Manufacturing
Chemist thereof. Having due regard to these descriptions given in the complaint,
it is not now open to the petitioners to contend that the petitioners 2 and 3
who are A.2 and A.3 are the Directors of the A.1 company and in the absence of
any allegation in the complaint inter alia that they are in−charge of the day to
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7. day affairs of the company, no prosecution can be maintained qua them. Section
34 of the Act deals with the offences by the companies. In the event the accused
is a company or a firm or a group of persons, the provision enables the
procedure to be followed by the prosecuting agency against the company or its
Directors; or both. By fiction of law, the provision mandates that the company
as well as its Directors are liable and vicarious liability is attached to the
Directors though their actual involvement has not been there in the infraction
of the provisions of the Act. Having due regard to the vicarious nature of the
liability, the Act envisages certain precautions to be taken before hauling up
the persons vicariously liable although they have not actually violated any
provisions of the Act. Such a provision is not applicable in cases of the
persons who are directly in the control of the company. The Managing Director of
the company cannot escape with impunity from any liability on the premise that
he is not in−charge of the day to day affairs of the company. He being the
Managing Director will obviously be at the helm of the affairs of the company.
Such a plea can validly be taken by the other Directors who are not in−charge of
the affairs of the company. On that score alone, the contention of the learned
counsel merits no consideration. Section 34 of the Act is in pari materia with
Section 141 of the Negotiable Instruments Act and Section 33 of the Insecticides
Act. All these provisions are in pari materia. Adverting to Section 141 of the
Negotiable Instruments Act and having regard to the divergence of opinion
expressed by various High Courts in several Judgments, on a reference the Apex
Court by a three Judge Bench authoritatively resolved the divergence in S.M.S.
PHARMACEUTICALS LTD. v. NEETA BHALLA5. The Apex Court in its Judgment at the end
summed up the legal position in para 18 and in para 19 answered the queries
thus:
"18. To sum up, there is almost unanimous judicial opinion that necessary
averments ought to be contained in a complaint before a person can be subjected
to criminal process. A liability under Section 141 of the Act is sought to be
fastened vicariously on a person connected with a company, the principal accused
being the company itself. It is a departure from the rule in criminal law
against vicarious liability. A clear case should be spelled out in the complaint
against the person sought to be made liable. Section 141 of the Act contains the
requirements for making a person liable under the said provision. That the
respondent falls within the parameters of Section 141 has to be spelled out. A
complaint has to be examined by the Magistrate in the first instance on the
basis of averments contained therein. If the Magistrate is satisfied that there
are averments which bring the case within Section 141, he would issue the
process. We have seen that merely being described as a director in a company is
not sufficient to satisfy the requirement of Section 141. Even a non−director
can be liable under Section 141 of the Act. The averments in the complaint would
also serve the purpose that the person sought to be made liable would know what
is the case which is alleged against him. This will enable him to meet the case
at the trial.
19. In view of the above discussion, our answers to the questions posed in the
reference are as under:
(a) It is necessary to specifically aver in a complaint under Section 141 that
at the time the offence was committed, the person accused was in charge of, and
responsible for the conduct of business of the company. This averment is an
essential requirement of Section 141 and has to be made in a complaint. Without
this averment being made in a complaint, the requirements of Section 141 cannot
be said to be satisfied.
(b) The answer to the question posed in sub−para (b) has to be in the negative.
Merely being a director of a company is not sufficient to make the person liable
under Section 141 of the Act. A director in a company cannot be deemed to be in
charge of and responsible to the company for the conduct of its business. The
requirement of Section 141 is that the person sought to be made liable should be
in charge of and responsible for the conduct of the business of the company at
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8. the relevant time. This has to be averred as a fact as there is no deemed
liability of a director in such cases.
(c) The answer to Question (c) has to be in the affirmative. The question notes
that the managing director or joint managing director would be admittedly in
charge of the company and responsible to the company for the conduct of its
business. When that is so, holders of such positions in a company become liable
under Section 141 of the Act. By virtue of the office they hold as managing
director or joint managing director, these persons are in charge of and
responsible for the conduct of business of the company. Therefore, they get
covered under Section 141. So far as the signatory of a cheque which is
dishonoured is concerned, he is clearly responsible for the incriminating act
and will be covered under sub−section (2) of Section 141."
Clause (a) of para 19 of the said Judgment of the Apex Court shows
specifically that necessary averment shall be made in the complaint that at the
time offence was committed, the person accused was in−charge of and responsible
for the conduct of business of the company without which the requirement of
Section 141 of the Negotiable Instruments Act cannot be said to be satisfied. In
clause (c) the Apex Court held that in respect of the Managing director or Joint
Managing Director they would be admittedly in−charge of the company and
responsible to the company for the conduct of its business and when that was so,
holders of such positions in a company become liable under Section 141 of the
Negotiable Instruments Act. By virtue of the office they hold as Managing
Director or Joint Managing Director, those persons would be in−charge of and
responsible for the conduct of business of the company. Therefore, they get
covered under Section 141 of the Negotiable Instruments Act. It may be mentioned
here at the cost of repetition, that in the instant case, it has been
specifically averred, as discussed hereinabove, that A.2 is the Managing
Director and A.3 is the Approved Manufacturing Chemist. They have not been
described as the Directors of A.1 company. A.2 being the Managing Director at
the helm of affairs cannot now be heard to say that he is only a Director and in
the absence of any specific averment in the complaint that he is in−charge of
day to day affairs of the company, no prosecution can be maintained as against
him. Simultaneously, A.3 being the Approved Manufacturing Chemist of A.1
company, having due regard to the nature of the accusation that the drug in
question manufactured by the A.1 company appears to be not in conformity with
the standards prescribed, he cannot legitimately contend that he is not in−
charge of the aforesaid function. Obviously, both the contentions raised by the
learned counsel appearing for the petitioners thus, for the reasons hereinabove
discussed, merit no consideration.
In the result, the Criminal Petition fails and is dismissed.
?1 1993 (1) Crimes 739 (AP)
2 1982 CRI.L.J. 2285
3 (1999) 8 SCC 190
4 (1998) 5 SCC 343
5 2005 SCC (Cri) 1975 = (2005) 8 SCC 89
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