# Yashpaul Chail v. State of U.P

- **Citation:** (2024) 4 ILRA 605
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-16
- **Case number:** Application U/S 482. No. 5786 of 2016
- **Bench:** Prashant Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/yashpaul-chail-v-state-of-u-p-51845
- **Pages:** 11

## Headnote

Criminal Law - Code of Criminal Procedure,
1973 - Section 482 - Drugs and Cosmetics
Act, 1940 - Sections 18, 18A, 23(3), 23(4),
25(3), 27, 32 & 34 - Application for Quashing
Proceedings - Non-Compliance with Mandatory
Sampling Provisions - Non-Liability of Former
Director
The applicant, Yashpaul Chail, filed an application
under Section 482 Cr.P.C. to quash proceedings in
Complaint Case No. 1036 of 2014 under Sections
18/27 of the Drugs and Cosmetics Act, 1940,
Police Station Kotwali, District Muzaffarnagar,
pending before the Chief Judicial Magistrate. A
Drug Inspector's complaint alleged that samples of
Ofloxacin
Tablets
(Eloflox-200)
taken
on
21.01.2013 from M/s Kumar Medicine Distributors
were substandard, as per the Government
Analyst's report dated 09.07.2013. The applicant
argued non-compliance with mandatory sampling
provisions under Sections 23(3) and 23(4), and
that he had resigned as director of M/s Elmac
Remedies Pvt. Ltd. on 01.06.2009, before the
alleged offense, thus not liable under Section 34.
The St. countered that the applicant did not deny
directorship in response to the show cause notice
and that directors are responsible for substandard
drugs. Held: The court, relying on Medicamen
Biotech Ltd. Vs Rubina Bose ((2008) 7 SCC 196),
St. of Rajasthan Vs Cadila Health Care Ltd.,
Cheminova India Ltd. Vs St. of Punj. ((2018) 17
SCC 275), Sunil Bharti Mittal Vs CBI ((2015) 4 SCC
609), Mehmood Ul Rehman, and Birla Corporation
Ltd. Vs Adventz Investments ((2020) 4 SCC 211),
quashed the proceedings against the applicant.
The court found non-compliance with Sections
23(3) and 23(4), depriving the applicant of the
right to challenge the Analyst's report, and
confirmed his resignation absolved him of liability
under Section 34. The proceedings were deemed
an abuse of process.

List of Cases cited:

## Text

4 All. Yashpaul Chail Vs. State of U.P.
605
(2024) 4 ILRA 605
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 16.02.2024

BEFORE

THE HON'BLE PRASHANT KUMAR, J.

Application U/S 482. No. 5786 of 2016

Yashpaul Chail ...Applicant
Versus
State of U.P. ...Opposite Party

Counsel for the Applicant:
Sri Akhilaeh Chandra Shukla

Counsel for the Opposite Party:
G.A.

Criminal Law - Code of Criminal Procedure,
1973 - Section 482 - Drugs and Cosmetics
Act, 1940 - Sections 18, 18A, 23(3), 23(4),
25(3), 27, 32 & 34 - Application for Quashing
Proceedings - Non-Compliance with Mandatory
Sampling Provisions - Non-Liability of Former
Director
The applicant, Yashpaul Chail, filed an application
under Section 482 Cr.P.C. to quash proceedings in
Complaint Case No. 1036 of 2014 under Sections
18/27 of the Drugs and Cosmetics Act, 1940,
Police Station Kotwali, District Muzaffarnagar,
pending before the Chief Judicial Magistrate. A
Drug Inspector's complaint alleged that samples of
Ofloxacin
Tablets
(Eloflox-200)
taken
on
21.01.2013 from M/s Kumar Medicine Distributors
were substandard, as per the Government
Analyst's report dated 09.07.2013. The applicant
argued non-compliance with mandatory sampling
provisions under Sections 23(3) and 23(4), and
that he had resigned as director of M/s Elmac
Remedies Pvt. Ltd. on 01.06.2009, before the
alleged offense, thus not liable under Section 34.
The St. countered that the applicant did not deny
directorship in response to the show cause notice
and that directors are responsible for substandard
drugs. Held: The court, relying on Medicamen
Biotech Ltd. Vs Rubina Bose ((2008) 7 SCC 196),
St. of Rajasthan Vs Cadila Health Care Ltd.,
Cheminova India Ltd. Vs St. of Punj. ((2018) 17
SCC 275), Sunil Bharti Mittal Vs CBI ((2015) 4 SCC
609), Mehmood Ul Rehman, and Birla Corporation
Ltd. Vs Adventz Investments ((2020) 4 SCC 211),
quashed the proceedings against the applicant.
The court found non-compliance with Sections
23(3) and 23(4), depriving the applicant of the
right to challenge the Analyst's report, and
confirmed his resignation absolved him of liability
under Section 34. The proceedings were deemed
an abuse of process.

List of Cases cited:

1. Medicamen Biotech Ltd. Vs Rubina Bose,
(2008) 7 SCC 196

2. St. of Rajasthan Vs Cadila Health Care Ltd.,
(2008) 7 SCC 196 (referenced in judgment)

3. Cheminova India Ltd. Vs St. of Punj., (2018)
17 SCC 275

4. Sunil Bharti Mittal Vs Central Bureau of
Investigation, (2015) 4 SCC 609

5. Mehmood Ul Rehman, (2016) SCC OnLine SC
1152

6. Birla Corporation Ltd. Vs Adventz Investments
and Holdings Ltd., (2020) 4 SCC 211

7. Amery Pharmaceuticals Vs St. of Rajasthan,
(2001) 4 SCC 382

8. Maharashtra St. Electricity Distribution Co.
Ltd. Vs St. of Maharashtra, (2014) 3 SCC 528

9. S.K. Alagh Vs St. of U.P., (2008) 5 SCC 662

10. Jethsur Surangbhai Vs St. of Guj., (1984)
SCC (Cri) 466

11. Re: Expeditious Trial of Cases under Section
138 of N.I. Act, 1881 (Suo Motu Writ Petition
(Crl.) No. 2 of 2020)

(Delivered by Hon'ble Prashant Kumar, J.)

1. Heard Sri Akhilesh Chandra
Shukla, learned counsel for the applicant,
Sri Sudhir Kumar Chandraul, learned AGA
for the State and perused the record.
606 INDIAN LAW REPORTS ALLAHABAD SERIES

2. The instant application under
Section 482 Cr.P.C. has been filed for
quashing the entire proceedings of Complaint
Case No.1036 of 2014 (State Vs. Yashpal
Chail and others) under sections 18/27 of the
Drugs and Cosmetic Act, P.S. Kotwali,
District Muzaffar Nagar pending in the Court
of C.J.M., Muzaffarnagar.

3. Facts of the case are that a complaint
under Section 32 of the Drugs and Cosmetics
Act, 1940 (for short "Drugs and Cosmetics
Act") was filed in the Court of Chief Judicial
Magistrate, Muzaffar Nagar on 25.02.2014
alleging that while discharging official duties
the complainant took samples of three drugs
for test and analysis from the premises of M/s
Kumar
Medicine
Distributors
and
the
Government Analyst vide report dated
09.07.2013 declared that the sample of the
drug was not of standard quality. For ready
reference relevant portion of the report is
quoted hereunder:-

"Sample No.-GS/MZN/2013/Jan/07

Ofloxacin Tablets I.P. (Eloflox200) B. No.-B123445, M/D-11/2012, E/D10/2014, Mfd by - M/s Elmac Remedies Pvt.
Ltd., Plot No.-202-3, Vill - Kotha, Post
Lalitpur,
Kichha
Road,
Rudrapur,
Uttrakhand.

"The sample does not conform to
the declared formula in respect of Assay."

Assa-
Content
of
Ofloxacin
81.56%w/w/ of the stated amount of drug in
each tablet of average weight which is less
than the minimum I.P. limit of 90% w/w."

4. On being asked he stated that he
has
purchased
medicines
from
the
distributor, M/s Onida Health Care, C-7,
Meerut Road, Industrial Estate Ghaziabad
and on being asked from this distributor, it
was informed that the medicines were
manufactured by M/s Elmac Remedies
Private Limited.

5. After investigation was completed,
the report along with the recommendation of
the Drug Licensing Authority was filed.
Since there was a breach of Section 18A of
Drugs and Cosmetics Act, the complaint
under Section 32 of the Drugs and Cosmetics
Act was filed before the Chief Judicial
Magistrate,
Muzaffarnagar,
who
took
cognizance on the complaint and issued
summons on 27.02.2014 against the accused
including the applicant.

6. Learned counsel for the applicants
submitted that, the show cause notice was
sent to the manufacturing company on
23.08.2013 but no compliance of Section 23
(3), (4) and 25(3) of the Drugs and Cosmetics
Act was made as the Drug Inspector was
supposed to make four samples, but he failed
to do so. For ready reference Section 23 (3),
(4) and 25(3) of the Drugs and Cosmetics Act
are quoted hereunder:-

"Section 23 (3) 1

Where an Inspector takes a sample
of a drug or cosmetic for the purpose of test
or analysis, he shall intimate such purpose in
writing in the prescribed form to the person
from whom he takes it and, in the presence of
such person unless he wilfully absents
himself, shall divide the sample into four
portions and effectively seal and suitably
mark the same and permit such person to add
his own seal and mark to all or any of the
portions so sealed and marked:

Provided that where the sample is
taken from premises whereon the drug or
cosmetic is being manufactured, it shall be
4 All. Yashpaul Chail Vs. State of U.P.
607
necessary to divide the sample into three
portions only:

Provided further that where the
drug or cosmetic is made up in containers
of small volume, instead of dividing a
sample as aforesaid, the Inspector may,
and if the drug or cosmetic be such that it
is likely to deteriorate or be otherwise
damaged by exposure shall, take three or
four, as the case may be, of the said
containers after suitably marking the same
and, where necessary, sealing them.

Section 23 (4)

The Inspector shall restore one
portion of a sample so divided or one
container, as the case may be, to the person
from whom he takes it, and shall retain the
remainder and dispose of the same as
follows:-

(i) one portion or container he
shall forthwith send to the Government
Analyst for test or analysis;

(ii) the second he shall produce to
the Court before which proceedings, if any,
are instituted in respect of the drug or
cosmetic; and

(iii) the third, where taken, he
shall send to the person, if any, whose
name, address and other particulars have
been disclosed under section 18A.

Section 25(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 18A 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."

7. He further submitted that
compliance of this provision is mandatory
and thus, any complaint without following
the aforesaid provisions would be illegal.
To buttress his argument, learned counsel
for the applicant is relying on the
judgement of Hon'ble Apex Court in the
case of M/s Medicamen Biotech Ltd. &
Anor. vs. Rubina Bose, Drug Inspector2.
For ready reference paragraph nos.6, 9 &
10 of the said judgment are quoted
hereunder:-

"6. A reading of the aforesaid
provisions would reveal that they lay
certain obligations as well as provide
safeguards for a person from whom a drug
has been seized for analysis or testing as
Section 25 (3) specifies that unless such a
person controverts the correctness of the
report submitted by the Government
Analyst within 28 days in writing that he
intends to adduce evidence to controvert
the report of the Analyst, it would be
deemed to be conclusive evidence of the
quality of the drug whereas sub-section (4)
of Section 25 obliges the Magistrate on the
request of the complainant or the accused
or on in his own motion to send the fourth
sample which has been disputed for fresh
testing to the Director of the Central Drugs
Laboratory. It is the case of the appellant
that despite the fact that the appellant had
repeatedly controverted the accuracy of the
report of the Government Analyst the
fourth sample had still not been sent to the
608 INDIAN LAW REPORTS ALLAHABAD SERIES
Director for re-testing and analysis. We
find that the argument raised by the
learned counsel for the respondent that the
appellant had never expressed a desire to
controvert the report of the Drug Analyst is
not correct as is clear from the letter dated
28th August 2001 addressed to the
Assistant Director General, Government
Medical Stores Depot in which it was
stated as under:

"On receipt of your letter, we
have got the control sample of same batch
analysed from an approved test house,
namely Industrial Testing Laboratory,
Delhi. The test house has reported our
control samples to be of standard quality
and conforming to IP with respect to
content of Enalapril Maleate. Copy of test
report No. F- 405/8- 01 dt. 25.8.2001
enclosed.

In the light of above facts, we do
not agree with the Govt. analyst report that
the sample is not of standard quality and
request you to kindly get the sample
retested at your end."

9. In Unique Farmaid's case
(supra) which was a case under the
Insecticides Act which has provisions
analogous to Section 25 (4) of the Act, the
court found that the accused had indeed
made a request to the Inspector for sending
the sample for re-testing within the
prescribed time limit and as this request
had not been accepted an important right
given to an accused had been rendered
ineffective on which the proceedings could
be quashed. This is what the Court had to
say:

"It cannot be gainsaid, therefore,
that the respondents in these appeals have
been deprived of their valuable right to
have the sample tested from the Central
Insecticides Laboratory under sub-section
(4) of Section 24 of the Act. Under subsection (3) of Section 24 report signed by
the Insecticides Analyst shall be evidence
of the facts stated therein and shall be
conclusive evidence against the accused
only if the accused do not, within 28 days
of the receipt of the report, notify in writing
to the Insecticide Inspector or the court
before which proceedings are pending that
they
intend
to
adduce
evidence
to
controvert the report. In the present cases
the Insecticides Inspector was notified that
the accused intended to adduce evidence to
controvert the report. By the time the
matter reached the Court, the shelf life of
the sample had already expired and no
purpose would have been served informing
the Court of such an intention. The report
of the Insecticide Analyst was, therefore,
not conclusive. A valuable right had been
conferred on the accused to have the
sample tested from the Central Insecticides
Laboratory and in the circumstances of the
case the accused have been deprived of that
right, thus, prejudicing them in their
defence.

In these circumstances, the High
Court was right in concluding that if will
be an abuse of the process of the court if
the prosecution is continued against the
respondents, the accused persons. The
High Court rightly quashed the criminal
complaint. We uphold the order of the High
Court and would dismiss the appeals."

10. We find that this judgment
helps the case of the appellant rather than
that of the respondent because in spite of
two communications from the appellant
that it intended to adduce evidence to
controvert the facts given in the report of
the Government Analyst, the fourth sample
4 All. Yashpaul Chail Vs. State of U.P.
609
with the Magistrate had not been sent for
re-analysis. The observations in Amery
Pharmaceuticals's case (supra) are also to
the same effect. We find that the aforesaid
interpretation supports the case of the
appellants
inasmuch
they
had
been
deprived of the right to have the fourth
sample tested from the Central Drugs
Laboratory. It is also clear that the
complaint had been filed on the 2nd July
2002 which is about a month short of the
expiry date of the drug and as such had
the accused appellant appeared before
the Magistrate even on 2nd July 2002 it
would have been well nigh impossible to
get the sample tested before its expiry. In
the affidavit filed to the petition by Dr. D.
Rao, Deputy Drugs Controller, and in
arguments
before
us,
it
has
been
repeatedly stressed that the delay in
sending of the sample to the Central
Drugs Laboratory had occurred as the
appellant
had
avoided
service
of
summons on it till 9th May 2005. This is
begging the question. We find that there
is no explanation as to why the complaint
itself had been filed about a month before
the expiry of the shelf life of the drug and
concededly the filing of the complaint had
nothing to do with the appearance of the
accused in response to the notices which
were to be issued by the Court after the
complaint had been filed. Likewise, we
observe that the requests for retesting of
the drug had been made by the appellant
in August/September 2001 as would be
clear from the facts already given above
and there is absolutely no reason as to
why the complaint could not have been
filed earlier and the fourth sample sent
for retesting well within time. We are,
therefore, of the opinion that the facts of
the case suggest that the appellants have
been deprived of a valuable right under
Section 25 (3) and 25 (4) of the Act which
must necessitate the quashing of the
proceedings against them."

8. Next argument of learned counsel
for the applicant is that the applicant was
not the director of the company at the
relevant time (when the drug/medicine was
manufactured or supplied) as he had
tendered his resignation from the post of
directorship of the company on 14.06.2009,
which is evident from form-32, hence, he is
not responsible for any act done by the
company. Further, it cannot be said that the
medicines were manufactured while he was
director of the company. He further relies
on Section 34 of Drugs and Cosmetics Act.
For ready reference Section 34 of Drugs
and Cosmetics Act is quoted hereunder:-

"Section 34

Offences by companies.-

(1) Where an offence under this
Act has been committed by a company,
every person who at the time the offence
was committed, was in charge of, and was
responsible to the company for the conduct
of the business of the company, as well as
the company shall be deemed to be guilty of
the offence and shall be liable to be
proceeded
against
and
punished
accordingly:Provided
that
nothing
contained in this sub-section shall render
any such person liable to any punishment
provided in this Act if he proves that the
offence
was
committed
without
his
knowledge or that he exercised all due
diligence to prevent the commission of such
offence.(2)Notwithstanding
anything
contained in sub-section (1), where an
offence under this Act has been committed
by a company and it is proved that the
offence has been committed with the
consent or connivance of, or is attributable
610 INDIAN LAW REPORTS ALLAHABAD SERIES
to any neglect on the part of, any director,
manager, secretary or other officer of the
company,
such
director,
manager,
secretary or other officer shall also be
deemed to be guilty of that offence and
shall be liable to be proceeded against and
punished accordingly. Explanation.-For
the
purposes
of
this
section-
(a)"company" means a body corporate,
and includes a firm or other association of
individuals; and (b)"director" in relation
to a firm means a partner in the firm."

9. Relying on the above-mentioned
Section, learned counsel for the applicant
submits that only those persons, who at the
time of offence was in charge of, and was
responsible to the company for the conduct
of the business of the company shall be
deemed to be guilty of the offence and shall
be liable to be proceeded against and
punished accordingly.

10. He further submits that if there is
no allegation against the accused-director
averred in the complaint, in absence of the
same no prosecution can be initiated
against such director. To buttress his
argument, he has placed reliance on the
judgement of Hon'ble Apext Court in State
of Rajasthan v. Cadila Health Care
Limited3, relevant paragraphs of which are
quoted hereunder:-

"2. As regards the second ground
which commended to the High Court, the
law is well settled. Reliance has been
placed on the decision in the case of
Medicamen Bioteh Limited and another
versus Rubina Bose, Drug Inspector,
reported in (2008) 7 SCC 196 and also in
Amery Pharmaceuticals and another versus
State of Rajasthan, reported in (2001) 4
SCC 382. It is held in these decisions that
the manufacturer should be afforded an
opportunity to controvert the correctness of
the Government Analyst's report and if
objection is raised by the manufacturer
within 28 days specified under Section 25
(3) of the Act, the preserved sample is
required to be forwarded to the Central
Drugs Laboratory for its independent report
in terms of Section 25 (4) of the Act. That
is a valuable right of the manufacturer.

5. Even on the first ground which
weighed with the High Court, we find merit
therein, as no averment in the complaint
has been brought to our notice, which
would
even
remotely
suggest
the
involvement of the private respondents as
in-charge of and responsible to the
company for the conduct of business of the
Company as such."

11. He further placed reliance on the
judgement of Hon'ble Apex Court in M/s
Cheminova India Ltd. v. State of Punjab4,
relevant paragraphs of which are quoted
hereunder:-

"6. Learned Counsel for the
appellants by referring to Section 33 of the
Act has submitted that appellants have
already
filed
an
undertaking
dated
22.01.2013
before
the
respondents,
nominating the incharge and responsible
officers of the Company to maintain quality
of the pesticides manufactured by the
Company along with the resolution of the
Company's meeting held on 28.12.2012.
Learned Counsel has submitted that by
making vague and bald allegations, the
appellants, who were the Company and the
Managing Director, are also sought to be
prosecuted.

6(a). It is submitted that unless
there is a clear and categorical averment in
the complaint, indicating the role played by
4 All. Yashpaul Chail Vs. State of U.P.
611
the appellants, there cannot be any
vicarious liability on the 1st Appellant -
Company and the 2nd Appellant-Managing
Director for commission of the alleged
offence. In support of his arguments,
learned Senior Counsel has placed reliance
on the judgment of this Court in the case of
Managing Director, Castrol India Limited
vs. State of Karnataka & Anr.1, and also
another judgment of this Court in the case
of Shiv Kumar Jatia vs. State of NCT of
Delhi.

6(b). It is also further contended
by the learned Counsel that before taking
cognizance of the offence on the complaint,
learned Magistrate has not followed the
procedure, contemplated under Section 24
(4) of the Act and Section 202 of the Code
of Criminal Procedure. It is submitted that
though, the 2018 (17) SCC 275 2019 (17)
SCC 193 appellants are not residing within
the jurisdiction of the Magistrate, without
making proper inquiry and ordering
investigation, cognizance of the offence is
taken. Further, it is submitted that the
prosecution against the appellants, is
nothing but abuse of the process of law.
The High Court has not considered various
grounds raised by the appellants in proper
perspective and dismissed their application
for quashing the complaint. In support of
his argument that the Magistrate has not
followed the procedure under Section 202
of the Code of Criminal Procedure, learned
Senior Counsel has placed reliance on the
judgment of this Court in Re: Expeditious
Trial of Cases under Section 138 of N.I.
Act, 1881 (Suo Motu Writ Petition (Crl.)
No.2 of 2020).

19. Section 33 of the Act deals
with 'offences by companies'. A reading of
Section 33 (1) of the Act, makes it clear
that whenever an offence under this Act has
been committed by a company, every
person who at the time the offence was
committed, was in charge of, or was
responsible to the company for the conduct
of the business of, the company, as well as
the company, shall be deemed to be guilty
of the offence and shall be liable to be
proceeded
against
and
punished
accordingly. In the case on hand, it is not
in dispute that on behalf of the 1 st
Appellant - Company, 2nd Appellant -
Managing Director has furnished an
undertaking dated 22.01.2013, indicating
that Shri Madhukar R. Gite, Manager of
the Company, has been nominated in the
resolution passed by the Company on
28.12.2012 to be in charge of and
responsible to the said Company, to
maintain the quality of the pesticides
manufactured by the said Company and he
was authorized to exercise all such powers
and to take all such steps, as may be
necessary or expedient to prevent the
commission of any offence under the Act.
Filing of such undertaking with the
respondent is not disputed. Even, at Para
5.10 in the counter affidavit filed before
this Court, it is pleaded by the Respondents
that by appointing persons responsible for
affairs of the Company, quality control,
etc., 2nd Appellant - Managing Director
cannot escape his liability from offences
committed by 1st Appellant - Company. In
view of the specific provision in the Act
dealing with the offences by companies,
which fixes the responsibility and the
responsible person of the Company for
conduct of its business, by making bald and
vague
allegations,
2nd
Appellant
-
Managing Director cannot be prosecuted
on vague allegation that he being the
Managing Director of the 1st Appellant -
Company, is overall responsible person for
the conduct of the business of the Company
and of quality control, etc. In the instant
612 INDIAN LAW REPORTS ALLAHABAD SERIES
case, the Company has passed a resolution,
fixing responsibility of one of the Managers
namely Mr. Madhukar R. Gite by way of a
resolution and the same was furnished to
the respondents by the 2nd Appellant in
shape of an undertaking on 22.01.2013.
When furnishing of such undertaking fixing
the responsibility of the quality control of
the products is not in dispute, there is no
reason or justification for prosecuting the
2nd Appellant - Managing Director, on the
vague and spacious plea that he was the
Managing Director of the Company at the
relevant time. A reading of Section 33 of
the Act also makes it clear that only
responsible person of the Company, as well
as the Company alone shall be deemed to
be guilty of the offence and shall be liable
to be proceeded against. Though, the
Managing Director is overall incharge of
the affairs of the company, whether such
officer is to be prosecuted or not, depends
on the facts and circumstances of each case
and the relevant provisions of law. Having
regard to specific provision under Section
33 of the Act, and the undertaking filed in
the
present
case,
respondent
cannot
prosecute the 2nd Appellant herein. Thus,
we find force in the contention of Mr.
Sidharth Luthra, learned Senior Counsel,
that allowing the prosecution against 2nd
Appellant - Managing Director is nothing
but, abuse of the process of law. At the
same time, we do not find any ground at
this stage to quash the proceedings against
the 1st Appellant - Company"

12. He further submits that the
Magistrate while issuing summons has
failed to apply its mind as the impugned
order is non-speaking order and the Hon'ble
Apex Court in Sunil Bharti Mittal v.
Central
Bureau
of
Investigation5
deprecated
this
practice
where
the
summons are being issued in most
mechanical manner without applying mind,
relevant paragraphs of which are quoted
hereunder:-

"39. When the company is the
offendor, vicarious liability of the Directors
cannot be imputed automatically, in the
absence of any statutory provision to this
effect. One such example is Section 141 of
the Negotiable Instruments Act, 1881. In
Aneeta Hada (supra), the Court noted that
if a group of persons that guide the
business of the company have the criminal
intent, that would be imputed to the body
corporate and it is in this backdrop,
Section 141 of the Negotiable Instruments
Act has to be understood. Such a position
is,
therefore,
because
of
statutory
intendment making it a deeming fiction.
Here also, the principle of "alter ego",was
applied only in one direction namely where
a group of persons that guide the business
had criminal intent, that is to be imputed to
the body corporate and not the vice versa.
Otherwise, there has to be a specific act
attributed to the Director or any other
person
allegedly
in
control
and
management of the company, to the effect
that such a person was responsible for the
acts committed by or on behalf of the
company. This very principle is elaborated
in various other judgments. We have
already taken note of Maharashtra State
Electricity Distribution Co. Ltd. (supra)
and S.K. Alagh (supra). Few other
judgments reiterating this principle are the
following:

1.Jethsur Surangbhai v. State of
Gujarat

"9. With due respect what the
High Court seems to have missed is that in
a case like this where there was serious
defalcation of the properties of the Sangh,
4 All. Yashpaul Chail Vs. State of U.P.
613
unless the prosecution proved that there
was a close cohesion and collusion
between all the accused which formed the
subject matter of a conspiracy, it would
be difficult to prove the dual charges
particularly against the appellant (A-1).

47.
However,
the
words
"sufficient
grounds
for
proceeding"
appearing in the Section are of immense
importance.It is these words which amply
suggest that an opinion is to be formed
only after due application of mind that
there is sufficient basis for proceeding
against the said accused and formation of
such an opinion is to be stated in the
order itself.The order is liable to be
setaside if no reason is given therein
while coming to the conclusion that there
is prima facie case against accused,
though the order need not contain
detailed reasons .A fortiori, the orde
rwould be bad in law if the reason given
turns out to beex facie incorrect.

48. However, there has to be a
proper satisfaction in this behalf which
should be duly recorded by the Special
Judge on the basis of material on record.
No such exercise is done. In this
scenario, having regard to the aforesaid
aspects coupled with the legal position
explained above, it is difficult to sustain
the impugned order dated 19.03.2013 in
its present form insofar as it relates to
implicating
the
appellants
and
summoning them as accused persons. The
appeals arising out of SLP (Crl.) No. 2961
of 2013 and SLP (Crl.) No. 3161 of 2013
filed by Mr. Sunil Bharti Mittal and Ravi
Ruia respectively are, accordingly, allowed
and order summoning these appellants is
set aside. The appeals arising out of SLP
(Crl.) Nos.3326-3327 of 2013 filed by
Telecom Watchdog are dismissed."

13. To further buttress his argument,
learned counsel for the applicant relied on
the judgement of Hon'ble Apex Court in
Mehmood Ul Rehman6 wherein it has been
held there must be sufficient indication in
the order passed by the Magistrate that he
is satisfied that the allegations in the
complaint constitute an offence and when
considered along with the statements
recorded and the result of inquiry or report
of investigation under Section 202 Cr.P.C.,
if any, the accused is answerable before the
criminal
court,
there
is
ground
for
proceeding against the accused under
Section 204 Cr.P.C., by issuing process for
appearance. The application of mind is best
demonstrated by disclosure of mind on the
satisfaction. Further, the Hon'ble Supreme
Court in the matter of Birla Corporation
Limited vs. Adventz Investments and
Holdings Limited and others7 has held
that the order of the Magistrate summoning
the accused must reflect that he has applied
his mind to facts of the case and the law
applicable thereto. The application of mind
has to be indicated by disclosure of mind
on the satisfaction. Considering the duties
on the part of the Magistrate for issuance of
summons to accused in a complaint case
and that there must be sufficient indication
as to the application of mind and observing
that the Magistrate is not to act as a post
office
in
taking
cognizance
of
the
complaint.

14. Learned counsel for the applicant
further submits that the summons have
been issued in a very mechanical manner
without considering the fact that the
applicant, who has resigned way back in
2009.

15. Per contra, learned AGA appears
and submits that the complainant was
competent to lodge the complaint as per
614 INDIAN LAW REPORTS ALLAHABAD SERIES
Act and after taking the sample one sample
was handed over to the shop keeper and the
second sample was sent for testing. He
further submits that the averment of noncompliance of Section 23(4) and 25(3) of
Drugs and Cosmetics Act was not taken in
the pleadings. He further submits that the
drug was of sub-standard, which would cause
great health hazard to the patients, who are
taking the medicine. He further submits that
when the show cause notice was issued he
did not deny that he is no more a director. He
further submits that no letter of any
competent authority was placed on record to
show that the applicant had resigned as a
director. He further submits that the directors
are responsible for the conduct and act of the
company and also for the sub-standard
medicines, which were being manufactured
and sold by the company.

16. In reply of the argument made by
learned AGA, learned counsel for the
applicant submits that it is always open for
the applicant to raise any legal issues at any
point of time. The provisions of Section 23
(4) of Drugs and Cosmetics Act were not
followed, its a pure legal issue and it can be
raised at any time. He further submitted that
no show cause notice was ever upon the
applicant and the same was only served upon
the company and the company had informed
the Drug Inspector that the applicant was no
longer a director of the company.

17. I have carefully considered the
submissions advanced by learned counsel for
the respective parties. With the able
assistance, I have perused the pleadings,
affidavits and annexures thereto and the reply
filed by concerned parties.

18. The plain reading of Section 23 (3)
of Drugs and Cosmetics Act clearly shows
that when an Inspector takes a sample of a
drug or cosmetic for the purpose of test or
analysis, he shall intimate such purpose in
writing in the prescribed form to the person
from whom he takes it and, in the presence of
such person unless he wilfully absents
himself, shall divide the sample into four
portions and effectively seal and suitably
mark the same and permit such person to add
his own seal and mark to all or any of the
portions so sealed and marked. Section 23 (4)
of the Drugs and Cosmetics Act further laysdown that the Inspector shall restore one
portion of the sample to the person from
whom he takes and the second sample should
be sent to the Government and third should
be produced in the Court before which the
proceedings are initiated and the fourth
would be sent to a person who are defined
under Section 18 A of the Act.

19. It is evidently clear that the
Inspector while taking the sample has not
followed the mandatory provisions of Section
23 (3) and (4) of the Act. Moreover, from the
record of the ROC it is clear that the applicant
had resigned from the post of directorship of
the company, M/S Elmac Remedies Pvt. Ltd.
with effect from 01.06.2009. Since the
alleged offence is said to have been
committed and the samples were collected on
21.01.2013, at that point of time the applicant
had nothing to do with the company neither
he was involved in the affairs of the company
nor was the in-charge or key personnel
running the company. The applicant has no
difficulty if the prosecution is continued
against the company or the directors, who
were responsible for the day to day affairs of
the company. Asfar as the applicant is
concerned, he was not a director, and hence,
cannot be fastened with the liability of the
company.

20. Considering the above facts and
circumstances,
it
is
clear
that
the
4 All. Mukhiya Gurjar & Ors. Vs. State of U.P. & Anr.
615
proceeding initiated against the applicant
under the Drugs and Cosmetics Act is a
pure abuse of legal process, and to secure
ends of justice the entire proceedings of
Complaint Case No.1036 of 2014 (State
Vs. Yashpal Chail and others) under
Sections 18/27 of the Drugs and Cosmetic
Act, P.S. Kotwali, District Muzaffar Nagar
pending
in
the
Court
of
C.J.M.,
Muzaffarnagar are hereby quashed.

21 . The instant Application U/S 482
Cr.P.C. is allowed.
----------
(2024) 4 ILRA 615
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 08.11.2023

BEFORE

THE HON'BLE UMESH CHANDRA SHARMA,
J.

Application U/S 482. No. 6818 of 2002

Mukhiya Gurjar & Ors. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Sri K.K. Dwivedi, Sri R.P. Dwivedi, Sri
Dhirendra Bahadur Singh

Counsel for the Opposite Parties:
G.A.

Criminal Law - Code of Criminal Procedure,
1973 - Section 482 - Indian Penal Code,
1860 - Sections 147, 148, 149, 307, 352 &
436 - Criminal Law Amendment Act - Section 7 -
Application
for
Quashing
Charge-Sheet
and
Proceedings - Allegations of False Implication -
Prima Facie Offense - Scope of Inherent Powers
The applicants, Mukhiya Gurjar and others, filed an
application under Section 482 Cr.P.C. to quash the
charge-sheet and proceedings in Case No. 881 of
2001 under Sections 147, 148, 149, 307, 352, 436
IPC and Section 7 of the Criminal Law Amendment
Act, Police Station Loni, District Ghaziabad,
pending before the 5th Additional Chief Judicial
Magistrate. The FIR alleged that the applicants,
part of a mob, attacked a police outpost, set
government property on fire, and attempted to
harm police personnel, prompted by the police's
alleged negligence in addressing local crimes like
dacoity, murder, and rape. The applicants claimed
the allegations were false, motivated by political
rivalry targeting Samajwadi Party supporters, and
unsupported by independent witnesses or injuries.
The St. countered that the incident involved
damage to government property, eight arrests on
the spot, and sufficient evidence via police
Statements to justify the charge-sheet. Held: The
court, citing Pramod Kumar Vs St. (NCT) of Delhi
(AIR 2013 SC 3344), Govindaraju Vs St. (AIR 2012
SC 1292), CBI Vs Ravi Shankar Srivastava (AIR
2006 SC 2872), Kamal Shivaji Pokarnekar Vs St. of
Maharashtra (AIR 2019 SC 847), Dhruvaram
Murlidhar Sonar Vs St. of Maharashtra (AIR 2019
SC 327), St. of Bihar Vs P.P. Sharma (1991 CrLJ
1438), and Kaptan Singh Vs St. of U.P. (AIR 2021
SC 3931), dismissed the application. The court
held that a prima facie offense was established,
and Section 482 powers cannot be used for roving
inquiries
into
factual
disputes
or
evidence
sufficiency, which are matters for trial. The
absence of injuries did not negate the offense
under Section 307 IPC, and police testimony was
deemed reliable absent contrary evidence. The
court
directed
the
trial
court
to
proceed
expeditiously.

List of Cases cited:

1. Pramod Kumar Vs St. (NCT) of Delhi, AIR
2013 SC 3344

2.
Govindaraju
@
Govinda
Vs
St.
by
Sriramapuram Police Station, AIR 2012 SC 1292

3. CBI Vs Ravi Shankar Srivastava, AIR 2006 SC
2872

4.
Kamal
Shivaji
Pokarnekar
Vs
St.
of
Maharashtra, AIR 2019 SC 847

5. Dhruvaram Murlidhar Sonar Vs St. of
Maharashtra, AIR 2019 SC 327

6. St. of Bihar Vs P.P. Sharma, 1991 CrLJ 1438