LALANKUMAR SINGH & ORS. VERSUS STATE OF MAHARASHTRA

LALANKUMAR SINGH & ORS. VERSUS STATE OF MAHARASHTRA

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1757  OF 2022
[Arising out of SLP (Crl.) No. 8882 of 2015]
LALANKUMAR SINGH & ORS. …APPELLANT (S)
VERSUS
STATE OF MAHARASHTRA       …RESPONDENT(S)
J U D G M E N T 
B.R. GAVAI, J.
1. Leave granted. 
2. This appeal arises out of the judgment and order dated
25th June 2015 passed by the learned Single Judge of the
High Court of Judicature of Bombay, at Aurangabad, in
Criminal Writ Petition No.288 of 2015, thereby dismissing
the said criminal writ petition filed by the appellants herein
and upholding the order of issuance of process dated 30th
March   2009   passed   by   the   learned   Chief   Judicial
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Magistrate,   Beed (hereinafter   referred   to   as   “the   learned
CJM”) and the order passed by the learned Sessions Judge,
Beed dated 25th  November 2014   dismissing the Criminal
Revision being Criminal Revision Petition No.115 of 2013
filed by the appellants thereagainst. 
3. The facts, in brief, giving rise to the present appeal are
as under: 
3.1 The   Appellants   are   the   Directors   of   M/s   Cachet
Pharmaceuticals   Private   Ltd.   (hereinafter   referred   to   as
“CPPL”).   CPPL   was   granted   permission   to   manufacture
‘Hemfer Syrup’ which falls under Schedule C & C(1) to the
Drugs & Cosmetics Rules, 1945 (hereinafter referred to as
“the said Rules”).
3.2 On 30th August 2006, Sh. N. A. Yadav, the then Drugs
Inspector,   Food   and   Drugs   Administration,   Beed,
Maharashtra, visited the premises of M/s. Priya Agencies at
Beed and purchased ‘Hemfer Syrup’, from which he had
drawn samples of the drug.  On 31st August 2006, he sent
one such sample to the Government Analyst, Maharashtra
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State Drug Control Laboratory Mumbai so as to have the
drug tested.   On 26th  February 2007, he received a test
report   dated   13th  February   2007   from   the   Government
Analyst stating that the sample was not of standard quality
as   the   content   of  Cyanocobalamin  was   less   than   the
permissible limit, i.e., 39% of the label amount. On the
same day, the manufacturer of the drug, i.e., CPPL, was
informed by a registered post about the test report. 
3.3 On 29th March 2007, Sh. Vijay Jain, Deputy Manager,
QA   of   CPPL   requested   the   Drug   Inspector   to   send   the
samples again for analysis. Pursuant to an application filed
by M/s Alkem Laboratories, the distributor of CPPL, the
learned CJM, Beed sent the samples of ‘Hemfer Syrup’ for
re­analysis on 24th  April 2007.   On 10th  July 2007, the
Learned CJM, Beed received the test report from the Central
Drug Laboratory, Calcutta stating therein that the sample
was not of standard quality as it did not conform to the
accepted limits of Cyanocobalamin content.
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3.4 Vide letter dated 21st August 2008, the Drug Inspector
called upon CPPL to furnish the particulars of Directors,
Articles of Association, Memorandum of Association, copies
of License to manufacture and sell drugs, particulars of
technical persons, and all such information as was needed
to  be  provided under the  Drugs  & Cosmetics Act,  1940
(hereinafter referred to as “the said Act”).   In reply to this
letter, CPPL informed the Drug Inspector that the report
dated 10th  July 2007 was signed by “In­Charge Director”
and not the Director of Central Drugs Laboratory and thus
requested   him   to   send   a   proper   report   signed   by   the
Director of the Central Drugs Laboratory.
3.5 Vide   letter   dated   12th  January   2009,   the   Drug
Inspector again called upon CPPL to furnish particulars that
were previously sought.   Vide letter dated 12th  February
2009,   CPPL   provided   the   information   and   documents
requested by the Drug Inspector and it was categorically
stated therein that the ‘Hemfer Syrup’ was manufactured
under the supervision and technical guidance of Sh. Ashok
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Kumar, the FDA approved manufacturing chemist for liquid
orals. 
3.6 Mr. Ashok Kumar (Accused No. 9) wrote an individual
letter   dated   13th  February   2009   to   the   Drug   Inspector
stating therein that the said batch of ‘Hemfer Syrup’ was
manufactured   under   his   supervision   and   that   the   drug
complied   with   the   requisite   standards.     Similarly,   Mr.
Naresh Roy (Accused No. 10) also wrote a letter dated 13th
February 2009 to the Drug Inspector stating therein that
the said batch of the ‘Hemfer Syrup’ was tested under his
supervision and from the test results it appeared that the
drug complied with the requisite standards. 
3.7 Pursuant to the orders to take legal action against the
manufacturer of the drug by the Joint Commissioner (H.Q.)
and   Controlling   Authority,   Food   &   Drug   Administration,
Mumbai, the Complaint bearing RCC No. 233 of 2009 came
to be filed before the Ld. Chief Judicial Magistrate, Beed
under Section 18(a)(i) read with Sections 16 and 34 of the
said Act and punishable under Section 27(d) of the said Act.
In   the   said   complaint,   the   present   Appellants   being
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Directors of the Company were arrayed as Accused Nos. 5 to
8. 
3.8 The learned CJM, Beed issued Summons to all the
accused, including the Appellants herein vide Order dated
30th  March 2009. The Appellants filed a Criminal Revision
Petition against the summoning order before the learned
Sessions   Judge,   Beed   on   the   ground   that   there   are   no
specific averments in terms of Section 34 of the said Act as
to the role played by the Directors and thus sought for the
Summoning   Order   to   be   quashed.   However,   the   learned
Sessions Judge, Beed rejected the said Criminal Revision
Petition   noting   that   there   is   a   specific   averment   in   the
complaint   that   the   appellants   are   concerned   with   the
manufacture, distribution and sale of ‘Hemfer Drug’. 
3.9 The   Appellants   preferred   a   Criminal   Writ   Petition
before the Bombay High Court assailing the order passed by
the   learned   Sessions   Judge.   The   High   Court,   vide   the
impugned   judgment,   dismissed   the   said   Criminal   Writ
Petition   on   the   ground   that   all   the   Directors   were
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conducting   the   business   of   CPPL   and   thus,   they   were
involved in the manufacturing process. 
3.10 Hence, the present appeal.
4. We have heard Shri C.U. Singh and Shri Anupam Lal
Das, learned Senior Counsels appearing on behalf of the
appellants   and   Shri   Siddharath   Dharmadhikari,   learned
counsel   appearing   on   behalf   of   the   respondent­State   of
Maharashtra. 
5. Shri C.U. Singh and Shri Anupam Lal Das, learned
Senior Counsels submit that Section 34 of the said Act
specifically provides that only such person who, at the time
of the commission of the offence, was in­charge 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.  
6. Shri   C.U.   Singh,   learned   Senior   Counsel,   further
submits that Rule 76 of the said Rules prescribes a Form of
licence to manufacture drugs specified in Schedule C and
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C(1), excluding those specified in Part XB and Schedule X,
or   drugs   specified   in   Schedule   C,   C(1)   and   X   and   the
conditions for the grant of such licence.  He further submits
that, before a license in Form 28 or Form 28B is granted,
certain conditions are required to be complied with by the
applicant.  He submits that under sub­rule (1) of Rule 76 of
the said Rules, the manufacture is required to be conducted
under   the   active   direction   and   personal   supervision   of
competent technical staff consisting at least of one person
who   is   a   whole­time   employee   and   who   possesses   the
requisite qualification as prescribed under the said Rules.
He further submits that under sub­rule (4) of Rule 76 of the
said Rules, an applicant is required to provide and maintain
adequate   staff,   premises   and   laboratory   equipment   for
carrying out such tests of the strength, quality and purity of
the substances as may be required to be carried out by him
under the provisions of Part X of the said Rules.  He further
states that under sub­rule (4A) of Rule 76 of the said Rules,
the head of the testing unit is required to possess a degree
in   Medicine   or   Science   or   Pharmacy   or   Pharmaceutical
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Chemistry of a University recognised for the said purpose.
He is also  required to  have experience in the  testing of
drugs, which in the opinion of the licensing authority is
considered adequate.  He submits that Form 28 is a license
to   manufacture   for   sale   or   distribution   of   drugs   in
accordance with Rule 76 of the said Rules.  Learned Senior
Counsel   submits   that   in   Form   28,   the   names   of   the
approved competent technical staff are required to be given.
He further submits that condition No.3 of the Conditions of
Licence   requires   that   if   there   is   any   change   in   the
competent   technical   staff,   the   same   shall   be   forthwith
reported to the licensing authority.  
7. Learned Senior Counsel submits that Schedule M to
the said Rules provides for good manufacturing practice and
requirements   of   premises,   plant   and   equipment   for
pharmaceutical products.  Learned Senior Counsel submits
that clause 6.1 of Part I of Schedule M specifically provides
that the manufacture shall be conducted under the direct
supervision   of   competent   technical   staff   with   prescribed
qualifications   and   practical   experience   in   the   relevant
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dosage form and/or active pharmaceutical products.   It is
further the submission of the learned Senior Counsel that
as per clause 6.2 thereof, the head of the Quality Control
Laboratory   is   required   to   be   independent   of   the
manufacturing unit.  It also requires that the testing shall
be   conducted  under   the  direct  supervision   of   competent
technical staff, who shall be whole time employees of the
licensee. 
8. Shri Singh further submits that in the licence which is
duly   signed   by   the   designated   licensing   authority,   the
names of the approved competent technical staff are already
given.   It is further submitted that in the reply dated 13th
February   2009   to   the   Drug   Inspector,   Food   &   Drug
Administration,   M.S.   Beed,   Mr.   Naresh   Roy,   Assistant
Manager   Q.A.   (Accused   No.10)   had   stated   that   the   raw
material was analysed in the Quality Control Department by
Mr. Aftab, Chemist under his supervision.   It is further
informed that the finished product of the said batch of the
drug   was   analysed   by   Mr.   M.K.   Sharma   under   his
supervision.     Mr.   Naresh   Roy   (Accused   No.10)   further
10
informed that he was approved by the Rajasthan FDA as a
competent person.  
9. Learned  Senior  Counsel  submits  that  similarly,  Mr.
Ashok   Kumar,   Assistant   Manager,   Production   (Accused
No.9)   had   also   informed   the   Drug   Inspector   by
communication   dated   13th  February   2009   that   he   was
approved by the Rajasthan FDA.  The goods were released
after the final approval from Quality Control.   He further
states that the manufacturing record of the said batch was
prepared by him and it bears his signature.  
10. Shri   Singh   further   submits   that   merely   mentioning
that   the   present   appellants,   being   the   Directors   of   the
accused company, were responsible to the company for the
conduct   of   the   business   of   the   company   would   not   be
sufficient   to   initiate   proceedings   against   them.     It   is
submitted that, unless and until there is a specific averment
as to what was the role in the conduct of the business of the
company, a person cannot be proceeded against solely on
the ground that he was a director of the company.  He relies
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on   various   judgments   of   this   Court   in   support   of   this
proposition.  
11. Shri C.U. Singh further submits that there is no formal
order of issuance of the process passed by the learned CJM.
It is submitted that, while issuing process, a duty is cast
upon the Magistrate to arrive at a subjective satisfaction
that there is sufficient ground to proceed.  He submits that
there is no such order which would reflect the application of
mind by the learned CJM and on this ground also, the
impugned order is liable to be set aside. 
12. Shri Siddharath Dharmadhikari, learned counsel, on
the contrary, submits that perusal of the complaint, and
specifically paragraphs 3 and 25 thereof would reveal that
there is sufficient compliance of requirement of Section 34
of the said Act.  He submits that the complaint has to be
read as a whole and cannot be read in a piecemeal manner.
Learned counsel relies on the judgment of this Court in the
case of U.P. Pollution Control Board vs. Mohan Meakins
Ltd. and others1
in support of the proposition that there is
1 (2000) 3 SCC 745
12
no legal requirement for the trial Court to pass a detailed
order while issuing process.  He also relies on the judgment
of this Court in the case of Dinesh B. Patel and others vs.
State of Gujarat and another2
to buttress his submission
that the averments made in the complaint are sufficient to
proceed against the present appellants. 
13. In the case of State of Haryana vs. Brij Lal Mittal
and others3
, this Court observed thus:
“8. Nonetheless,   we   find   that   the
impugned judgment of the High Court has
got to be upheld for an altogether different
reason. Admittedly,  the three respondents
were being prosecuted as directors of the
manufacturers with the aid of Section 34(1)
of the Act which reads as under:
“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 sub­section shall render any such
2 (2010) 11 SCC 125
3 (1998) 5 SCC 343
13
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.”
It is thus seen that the vicarious liability of
a person for being prosecuted for an offence
committed   under   the   Act   by   a   company
arises   if   at   the   material   time   he   was   in
charge of and was also responsible to the
company  for  the   conduct   of  its   business.
Simply because a person is a director of the
company it does not necessarily mean that
he fulfils both the above requirements so as
to   make   him   liable.   Conversely,   without
being a director a person can be in charge of
and   responsible   to   the   company   for   the
conduct of its business. From the complaint
in question we, however, find that except a
bald statement that the respondents were
directors of the manufacturers, there is no
other   allegation   to   indicate,   even   prima
facie,   that   they   were   in   charge   of   the
company   and   also   responsible   to   the
company for the conduct of its business.”
14. It could thus be seen that this Court had held that
simply because a person is a director of the company, it
does   not   necessarily   mean   that   he   fulfils   the   twin
requirements of Section 34(1) of the said Act so as to make
him liable.  It has been held that a person cannot be made
liable unless, at the material time, he was in­charge of and
14
was also responsible to the company for the conduct of its
business.  
15. In the case of S.M.S. Pharmaceuticals Ltd. vs. Neeta
Bhalla   and   another4
, this   Court   was   considering   the
question as to whether it was sufficient to make the person
liable for being a director of a company under Section 141 of
the   Negotiable   Instruments   Act,   1881.     This   Court
considered the definition of the word “director” as defined in
Section 2(13) of the Companies Act, 1956.   This   Court
observed thus:
“8. ……. There is nothing which suggests
that   simply   by   being   a   director   in   a
company, one is supposed to discharge
particular   functions   on   behalf   of   a
company. It happens that a person may
be a director in a company but he may
not know anything about the day­to­day
functioning of the company. As a director
he   may   be   attending   meetings   of   the
Board of Directors of the company where
usually   they   decide   policy   matters   and
guide   the   course   of   business   of   a
company.   It   may   be   that   a   Board   of
Directors   may   appoint   sub­committees
consisting of one or two directors out of
the Board of the company who may be
made   responsible   for   the   day­to­day
functions   of   the   company.   These   are
4 (2005) 8 SCC 89
15
matters which form part of resolutions of
the   Board   of   Directors   of   a   company.
Nothing is oral. What emerges from this
is that the role of a director in a company
is a  question of  fact depending on the
peculiar facts in each case. There is no
universal   rule   that   a   director   of   a
company   is   in   charge   of   its   everyday
affairs.   We   have   discussed   about   the
position   of  a  director  in  a  company  in
order to illustrate the point that there is
no magic as such in a particular word, be
it  director,  manager  or  secretary.  It all
depends   upon   the   respective   roles
assigned   to   the   officers   in   a   company.
…..”
16. It was held that merely because a person is a director
of a company, it is not necessary that he is aware about the
day­to­day functioning of the company. This Court held that
there is no universal rule that a director of a company is in
charge of its everyday affairs.  It was, therefore, necessary,
to aver as to how the director of the company was in charge
of day­to­day affairs of the company or responsible to the
affairs of the company.   This Court, however, clarified that
the position of a managing director or a joint managing
director in a company may be different.  This Court further
held that these persons, as the designation of their office
16
suggests, are in charge of a company and are responsible
for the conduct of the business of the company.  To escape
liability, they will have to prove that when the offence was
committed, they had no knowledge of the offence or that
they exercised all due diligence to prevent the commission of
the offence.  
17. In the case of Pooja Ravinder Devidasani vs. State
of Maharashtra and another5
 this Court observed thus:
“17. ……   Every   person   connected   with
the Company will not fall into the ambit
of the provision. Time and again, it has
been   asserted   by   this   Court   that   only
those persons who were in charge of and
responsible   for   the   conduct   of   the
business of the Company at the time of
commission of an offence will be liable for
criminal action. A Director, who was not
in charge of and was not responsible for
the   conduct   of   the   business   of   the
Company at the relevant time, will not be
liable for an offence under Section 141 of
the NI Act. In National Small Industries
Corpn. [National   Small   Industries   Corpn.
Ltd. v. Harmeet   Singh   Paintal,   (2010)   3
SCC 330 : (2010) 1 SCC (Civ) 677 : (2010)
2 SCC (Cri) 1113] this Court observed:
(SCC p. 336, paras 13­14)
5 (2014) 16 SCC 1
17
“13. Section 141 is a penal provision
creating vicarious liability, and which,
as   per   settled   law,   must   be   strictly
construed. It is therefore, not sufficient
to make a bald cursory statement in a
complaint that the Director (arrayed as
an   accused)   is   in   charge   of   and
responsible   to   the   company   for   the
conduct   of   the   business   of   the
company without anything more as to
the   role   of   the   Director.   But   the
complaint should spell out as to how
and in what manner Respondent 1 was
in charge of or was responsible to the
accused Company for the conduct of
its   business.   This   is   in   consonance
with   strict   interpretation   of   penal
statutes,   especially,   where   such
statutes create vicarious liability.
14. A company may have a number
of Directors and to make any or all the
Directors   as   accused   in   a   complaint
merely on the basis of a statement that
they are in charge of and responsible
for the conduct of the business of the
company without anything more is not
a sufficient or adequate fulfilment of
the requirements under Section 141.”
(emphasis in original)
18. In Girdhari   Lal   Gupta v. D.H.
Mehta [Girdhari Lal Gupta v. D.H. Mehta,
(1971) 3 SCC 189 : 1971 SCC (Cri) 279 :
AIR 1971 SC 2162] , this Court observed
that a person “in charge of a business”
means   that   the   person   should   be   in
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overall control of the day­to­day business
of the Company.
19. A Director of a company is liable to
be convicted for an offence committed by
the company if he/she was in charge of
and was responsible to the company for
the   conduct   of   its   business   or   if   it   is
proved   that   the   offence   was   committed
with the consent or connivance of, or was
attributable to any negligence on the part
of   the   Director   concerned   (see State   of
Karnataka v. Pratap   Chand [State   of
Karnataka v. Pratap Chand, (1981) 2 SCC
335 : 1981 SCC (Cri) 453] ).
20. In other words, the law laid down by
this Court is that for making a Director of
a   company   liable   for   the   offences
committed by the company under Section
141 of the NI Act, there must be specific
averments   against   the   Director   showing
as   to   how   and   in   what   manner   the
Director was responsible for the conduct of
the business of the company.
21. In Sabitha   Ramamurthy v. R.B.S.
Channabasavaradhya [Sabitha
Ramamurthy v. R.B.S.
Channabasavaradhya,   (2006)   10   SCC
581 : (2007) 1 SCC (Cri) 621] , it was held
by this Court that: (SCC pp. 584­85, para
7)
“7.   …   it   is   not   necessary   for   the
complainant   to   specifically   reproduce
the wordings of the section but what is
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required is a clear statement of fact so
as to enable the court to arrive at a
prima facie opinion that the accused is
vicariously liable. Section 141 raises a
legal   fiction.   By   reason   of   the   said
provision,   a   person   although   is   not
personally liable for commission of such
an offence would be vicariously liable
therefor. Such vicarious liability can be
inferred so far as a company registered
or   incorporated   under   the   Companies
Act,   1956   is   concerned   only   if   the
requisite   statements,   which   are
required to be averred in the complaint
petition, are made so as to make the
accused   therein   vicariously   liable   for
the offence committed by the company.”
(emphasis supplied)
By verbatim reproducing the words of the
section without a clear statement of fact
supported by proper evidence, so as to
make the accused vicariously liable, is a
ground for quashing proceedings initiated
against such person under Section 141 of
the NI Act.”
18. It could thus clearly be seen that this Court has held
that merely reproducing the words of the section without a
clear statement of fact as to how and in what manner a
director of the company was responsible for the conduct of
20
the business of the company, would not ipso facto make the
director vicariously liable.  
19. A similar view has previously been taken by this Court
in the case of K.K. Ahuja vs. V.K. Vora and another6
.  
20. In   the   case   of  State   of   NCT   of   Delhi   through
Prosecuting   Officer,   Insecticides,   Government   of   NCT,
Delhi   vs.   Rajiv   Khurana7
,  this   Court   reiterated   the
position thus:
“17. The ratio of all these cases is that
the complainant is required to state in
the   complaint   how   a   Director   who   is
sought to be made an accused, was in
charge of the business of the company or
responsible   for   the   conduct   of   the
company's business. Every Director need
not   be   and   is   not   in   charge   of   the
business of the company. If that is the
position with regard to a Director, it is
needless to emphasise that in the case of
non­Director officers, it is all the more
necessary to state what were his duties
and   responsibilities   in   the   conduct   of
business of the company and how and in
what manner he is responsible or liable.”
6 (2009) 10 SCC 48
7 (2010) 11 SCC 469
21
21. Recently, in the case of Ashoke Mal Bafna vs. Upper
India   Steel  Manufacturing  and   Engineering   Company
Limited8
, this Court observed thus:
“9. To   fasten   vicarious   liability   under
Section 141 of the Act on a person, the
law   is   well   settled   by   this   Court   in   a
catena   of   cases   that   the   complainant
should specifically show as to how and in
what   manner   the   accused   was
responsible. Simply because a person is a
Director of a defaulter Company, does not
make him liable under the Act. Time and
again, it has been asserted by this Court
that only the person who was at the helm
of affairs of the Company and in charge of
and   responsible  for  the  conduct   of   the
business at the time of commission of an
offence will be liable for criminal action.
(See Pooja Ravinder Devidasani v. State of
Maharashtra [Pooja   Ravinder
Devidasani v. State   of   Maharashtra,
(2014)  16  SCC  1   :  (2015)  3   SCC  (Civ)
384 : (2015) 3 SCC (Cri) 378 : AIR 2015
SC 675] .)
10. In other words, the law laid down by
this Court is that for making a Director of
a   Company   liable   for   the   offences
committed   by   the   Company   under
Section   141   of   the   Act,   there   must   be
specific   averments   against   the   Director
showing as to how and in what manner
8 (2018) 14 SCC 202
22
the   Director   was   responsible   for   the
conduct of the business of the Company.”
22. In the light of these observations, let us examine the
averments made in the complaint insofar as the present
appellants are concerned:
“3.   That,   Accused   no.   5   to   8   are   the
Directors   of   the   M/s   Cachet
Pharmaceuticals Pvt. Ltd. village Thana
Baddi, Tehsil Nalagarh dist. Solan (H.P.)
Pin   code   173205   head   office   415,
Shahanahar,   Worli,   Mumbai   ­   400018,
and looking after day to day activities of
the company. 
That,   Accused   no.   4   is   the   Pvt.   Ltd.
Company and is doing the   business of
manufacturing, buying, selling, importing
and   exporting   of   and/or   dealers   in
Pharmaceuticals, Cosmetics, Beauty aids,
Oils,   Chemicals,   Food   products   and
provisions,   Veterinary   and   Surgical
Equipments,   Medicinal   preparations
including Spirit.
That, Accused no. 4 has mfg. unit at no.
(1) Village Thana Baddi, Tehsil Nalagarh
Dist. Solan (H.P.) Pin code 173205 and
no. (2) at C­582, Ricco Ind. Area Bhiwadi,
Dist. Alwar, Rajasthan. 
That, Accused no.4 are holding drug mgf.
License No. MNB/05/267 in form 25 and
licence   no.   MB/05/268   in   form   28
granted   on   17.3.2006   valid   upto
16.3.2011.
23
*** *** ***
25. That, on 12.2.2009, the complainant
visited and inspected the premises of M/s
Cachet Pharmaceuticals Pvt. Ltd. village
Thana Baddi, Tehsil Nalagarh Dist. Solan
(H.P.) Pin code 173205 that is accused
no.4.  At the time of inspection, Shri Ajay
Prakash Gupta Vice President Technical,
accused   no.   9   and   10   were   present.
During   enquiry,   it   was   revealed   that
Accused   no.   4   to   10   manufactured
"Hemfer   syrup   Mfg.   Lic.   No.
MB/05/268/B.   No.   HMS/6015   CMfg.
Date May­2006 which has been declared
to be NOT OF STANDARD QUALITY at
the   premises   of   M/s   Cachet
Pharmaceuticals Pvt. Ltd. village Thana
Baddi, Tehsil Nalagarh Dist. Solan (H.P.)
Pin   code   173205   that   is   accused   no.4
under licence No. MB/05/268 and sold
the   above   said   drugs   to   M/s   Priya
Agencies   Behind   Dr.   Vaidya   Hospital
Jalna   Road,   Beed,   Dist.   Beed   through
M/s Alkem Laboratories Ltd. situated at
reality   warehousing   Pvt.   Ltd.,   Gut
No.2323/1 property no. 115, Pune Nagar
road, At. Post Wagholi, Tai. Haveli, Dist.
Pune ­ 412207.”
23. It   can   thus   be   seen   that   there   are   no   specific
averments insofar as the present appellants are concerned.
It is further to be noted that the present appellants are
24
neither the managing director nor the whole­time directors
of the accused company.  
24. It is further to be noted that, in accordance with the
provisions of Rule 76 of the said Rules read with Form 28,
the Accused Nos. 9 and 10 have specifically been approved
by the licensing authority in Form 28.   Accused No.9 was
approved   as   a   person   under   whose   active   direction   and
personal supervision the manufacture would be conducted
as required under sub­rule (1) of Rule 76 of the said Rules.
Similarly, Accused No.10, who was approved as a head of
the testing unit, was to be in­charge for carrying out the test
of the strength, quality and purity of the substances as may
be required under the provisions of Part X of the said Rules.
We are therefore of the considered view that the complaint
is totally lacking the requirement of Section 34 of the said
Act.  
25. The impugned orders are liable to be quashed and set
aside on another ground also. 
25
26. Perusal   of   the   order   passed   by   the   learned   Single
Judge of the High Court would itself reveal that the learned
CJM has not even cared to pass a formal order of issuance
of process.  It will be relevant to refer to the following part of
the judgment and order of the learned Single Judge of the
High Court:
“….Though, it is true that on the certified
copy produced by the petitioners there is
no   such   formal   order   but   copy   of
Roznama (daily notings of the proceeding)
shows that such order was made on 30­
3­2009.  The  Roznama  dated  30­3­2009
reads as follows :
(i) Complaint filed by Vilas Vishwanath 
Dusane.
(ii) Copy of list of documents containing 
44 document.
Order was made on Exhibit 1 (of issue
process).   Take   entry   in   register   of
criminal   cases   and   issue   summons
against   accused.   List   the   matter   for
appearance of accused on 18­6­2009.
This record is sufficient to infer that the
order   of   issue   process   was   made   and
after that summons were issued against
accused   to   ask   them   to   appear   in   the
Court.”
26
27. It could thus clearly be seen that the learned Single
Judge of the High Court held that though there was no
formal   order   of   issuance   of   process,   the   record   was
sufficient to infer that the order of issue process was made.
28. The   order   of   issuance   of   process   is   not   an   empty
formality.  The Magistrate is required to apply his mind as
to whether sufficient ground for proceeding exists in the
case or not.  The formation of such an opinion is required to
be stated in the order itself.   The order is liable to be set
aside if no reasons are given therein while coming to the
conclusion   that   there   is   a  prima   facie  case   against   the
accused.  No doubt, that the order need not contain detailed
reasons.  A reference in this respect could be made to the
judgment of this Court in the case of Sunil Bharti Mittal
vs. Central Bureau of Investigation9
, which reads thus:
“51. On the other hand, Section 204 of
the Code deals with the issue of process,
if in the opinion of the Magistrate taking
cognizance   of   an   offence,   there   is
sufficient   ground   for   proceeding.   This
section   relates   to   commencement   of   a
criminal   proceeding.   If   the   Magistrate
9 (2015) 4 SCC 609
27
taking cognizance of a case (it may be the
Magistrate receiving the complaint or to
whom   it   has   been   transferred   under
Section 192), upon a consideration of the
materials before him (i.e. the complaint,
examination of the complainant and his
witnesses, if present, or report of inquiry,
if any), thinks that there is a prima facie
case   for   proceeding   in   respect   of   an
offence, he shall issue process against the
accused.
52. A wide discretion has been given as
to grant or refusal of process and it must
be   judicially   exercised.   A   person   ought
not   to   be   dragged   into   court   merely
because a complaint has been filed. If a
prima facie case has been made out, the
Magistrate ought to issue process and it
cannot   be   refused   merely   because   he
thinks that it is unlikely to result in a
conviction.
53. However,   the   words   “sufficient
ground   for   proceeding”   appearing   in
Section 204 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 set aside if no
reason is given therein while coming to
the conclusion that there is prima facie
case   against   the   accused,   though   the
order need not contain detailed reasons.
28
A fortiori, the order would be bad in law if
the reason given turns out to be ex facie
incorrect.”
29. A similar view has been taken by this Court in the case
of Ashoke Mal Bafna (supra).  
30. In   the   present   case,   leaving   aside   there   being   no
reasons in support of the order of the issuance of process,
as a matter of fact, it is clear from the order of the learned
Single Judge of the High Court, that there was no such
order passed at all.  The learned Single Judge of the High
Court, based on the record, has presumed that there was an
order of issuance of process. We find that such an approach
is unsustainable in law.  The appeal therefore deserves to be
allowed.  
31. In the result, the appeal is allowed.   The impugned
order of issuance of process dated 30th March 2009 passed
by the learned Chief Judicial Magistrate, Beed and the order
passed   by   the   learned   Sessions   Judge,   Beed   dated   25th
November   2014   dismissing   the   Criminal   Revision   being
Criminal Revision Petition No.115 of 2013 are quashed and
29
set aside.  The complaint against the present appellants is
dismissed.     Needless   to   state   that   the   complaint   shall
proceed against rest of the accused in accordance with law.
..............................J. 
[B.R. GAVAI]
 .............................J. 
[ C.T. RAVIKUMAR] 
NEW DELHI;
OCTOBER 11, 2022
30

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