The Jammu & Kashmir and Ladakh has reiterated that without impleadment of the firm, no prosecution can proceed against its partners.
The single-judge bench of Justice Sanjay Dhar allowed the petition by Drug Company Owner challenging complaint filed by respondent Drugs Control Officer alleging commission of offences under Section18(a)(i) read with Section 17(B)(d), 27(c), 36-AB, 124B and Schedule V S. No.3 of the Drugs and Cosmetics Act, 1940.
Brief Facts of the Case
In the instant case, the respondent Drugs Control Officer has lodged the impugned complaint against the petitioners and co-accused before the court of chief judicial magistrate, Shopian. The respondent Drugs control officer inspected the premises of co-accused who is stated to be the proprietor of Bismillah Medicate, and a sample of the drug Biocenac-P B.No.ADT-02- 1725 was collected from their shop. The said sample upon analysis by the government analyst, was found to be not of standard quality. It was found that the drug in question has been manufactured by M/S Adwin Pharma. The petitioners herein happen to be partners of the manufacturing firm. The sample was then sent to central drugs laboratory. Kolkata, for reanalysis. The reanalysis of the sample showed that it was indeed not of standard quality.
The learned counsel from petitioner raised various contentions to
challenge the impugned complaint and the proceedings but the main
contention primarily argued that the
respondent/complainant has not impleaded the firm of which petitioners
happen to be the partners as an accused and that there are no
allegations in the impugned complaint to show that the petitioners were
responsible for the conduct of day to day business of the firm in
question, at the relevant time.
The learned counsel for the respondent/complainant contended that the allegations made in the impugned complaint have been reiterated and the scope of jurisdiction of the court under Section 482 of the Cr.P.C is very limited and it cannot eb exercised as a matter of course. They further submitted that the court should consider the interests of public health while adjudicating the instant matter and that the petitioners could always submit their contentions before the trial court during the trial of the impugned complaint.
High Court’s Observation
From the Court's perusal of Section 34 of the Drugs and Cosmetics Act, 1940, it was noted that in the case of an offense committed by a company, every individual who was responsible for the conduct of the company's business at the time the offence was committed is deemed to be liable for the offence. When the offence has been committed by the company, the concept of vicarious liability extends to its officers and directors. In the instant case, the persons responsible for the conduct of business of the company are made vicariously liable for the offences committed by the company. In criminal law, there is no concept of criminal liability and it is only if there is a statute which makes a person vicariously liable for the acts of another person that such a person can be prosecuted for a criminal offence.
However, the said provision makes it clear that not only those persons but even the company would be deemed to be guilty of the offence. The court also noted that the petitioners can be deemed to be guilty of the offence if it is shown that the offence has been committed with their consent or connivance or due to their negligence despite them not being responsible for the daily-affairs or management of the company.
There are several precedents dealing with a similar question of law as in this case, including Aneeta Hada v. Godfather Travels and Tours Private Limited and Anil Gupta v. Star India Private Limited. The court observed that, in light of the aforementioned proposition of law laid out in the above judgements, directors of a company cannot be prosecuted for an offence that is deemed to have been committed by the company without impleading the company as an accused.
Furthermore, dealing with another question as to whether the proposition of law laid down by the supreme court in the aforesaid cases can be made applicable to a case of partnership firm. The Supreme Court in the case of State of Karnataka v. Pratap Chand & Ors., observed that for the purposes of imposing liability on the company under the said Section, a company includes a body corporate, a firm or an association of individuals and that a Director in relation to a firm means a partner in that firm. Through the aforementioned observation of supreme court it is clear that the requirement of impleading a company as an accused in a prosecution where the offence is alleged to have been committed by the company is equally applicable to a partnership firm and the firm has to be impleaded as an accused along with the partner who is responsible for the conduct of business of the said firm.
Similiarly, in the case of Philip J. vs. Ashapura Minechem Ltd. & anr., the high court of Bombay held that the Supreme Court had arrived at an irresistible conclusion for maintainingthe prosecution under Section 141 of the NI Act, arraigning of the company as an accused is imperative, mainly and mostly on the basis of vicarious liability of the Directors of the company and not necessarily because the company is a juristic person and it has its own respectability. Ultimately, the Court held that the ratio laid down in the case of Aneeta Hada (supra) can be made equally applicable in the case of partnership firm and that the partners are liable to be sued for their vicarious liability. Similar views have been expressed in multiple cases namely Patel Nishit Vinod Chandra, Corona Remedies Private Limited vs. State of J&K and Oanali Ismailji Sadikot vs. State of
Gujarat respectively.
In the instant case, the court quashed the proceedings against the petitioners on the grounds that the respondent/complainant has impleaded only the partners of the manufacturing firm M/S Adwin Pharma without impleading the firm as an accused in the complaint.
Furthermore, there is no averment in the said complaint that the petitioners are either in charge or responsible for the conduct of the day-to-day business of the partnership firm. The investigation revealed, however, that none of the petitioners were managing partners of the firm at the relevant time, and as the impugned complaint did not aver that the petitioners were responsible for the firm's day-to-day operations at that time, they were not subject to prosecution.
Due to the aforementioned reasons, the criminal proceedings against the petitioners were quashed. Accordingly, both the petitions were allowed and the impugned complaint and the proceedings emanating therefrom to the extent of the petitioners were quashed.
Case TITLE : ASHISH DAMIJA, MANORMA DHAMIJA vs. UT OF J&K
CORAM : HON‟BLE MR. JUSTICE SANJAY DHAR, JUDGE
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