Mansimran Kaur

Bangalore, May 17, 2022: In a case pertaining to the Drugs and Cosmetic Act, 1940, the Karnataka High has observed that for establishing vicarious liability,the complainant shall make unambiguous averments in the complaint against the accused persons for the alleged offences therein, as unless the involvement of the accused persons is not proved with respect to  handling of the  day-to- day affairs of the company, they cannot be held liable.

By placing reliance on the case of Sanjay G. Revankar vs. State by Drug Inspector, U.K. District Kanwar, the Karnataka High Court observed that the complainant shall explicitly depict in the complaint the involvement of the accused persons in the alleged offences in order to make them vicariously liable. As on the basis of mere casual statements, proceedings cannot be initiated against the accused persons mentioned therein. 

The Bench of Justice M. Nagaprasanna dismissed the criminal petition instituted against the petitioners questioning the pending proceedings before the Sessions Judge arising out of a complaint instituted under  Section 27 (a)  and 22 (3) of the Drugs and Cosmetic Act, 1940. The Bench said, “Section 34 of the Act deals with offence committed by a Company. Unless specific role is attributed to the Directors or Partners of the Company in the process of manufacturing, they cannot be hauled into criminal proceedings, as vicarious liability would come about only when there are particular instances narrated in the complaint.”

Facts in brief were that an information was received by the Assistant Drugs Controller from the Superintendent of Minto Hospital, alleging that patients in the hospital who underwent cataract  surgeries had developed eye infection.After investigation was conducted, it was found that the drug used was not of standard quality and hence proceedings were initiated against the petitioners and several other accused for offences punishable under Section 27(a) of the Act for alleged violation of Section 18(a)(i) of the Act. Further a complaint was lodged by the respondents inoking Section 200 of the Cr.P.C. Thus, the petitioners questioned the proceedings pending before the Principal City Civil and Sessions Judge at Bangalore.

The Court while analyzing the complaint opined that the complaint did not indicate the involvement of petitioners in the day- to day affairs pertaining to manufacturing of drugs in the company. As per the Bench, till the above proposition was not culled out explicitly in the complaint, the alleged offences against the petitioners could not be driven home and this has been the consistent view taken by this Court in plethora of judgments right from the year 2000.

The Court was of the view that the complaint in question was quite ambiguous concerning the participation of the petitioners in day-to-day manufacturing of drugs in the company. It was further observed that unless it is proven beyond reasonable doubt that the petitioners were involved in preparation and manufacture of drugs, alleged to be of sub-standard quality, the petitioners cannot face proceedings.  Thus, in light of the Judgments pronounced by the Coordinate Benches of this Court while interpreting Section 34 of the Act, it was observed that the impugned proceedings couldnot be initiated against the petitioners. Casual statements in reference of them holding the position of Partners or Directors of the Company cannot solely compel the petitioners to suffer the proceedings, added the Bench.

Thus, in view of the aforesaid observations and findings, the Court observed that the test of vicarious liability was not satisfied. Hence, the criminal petition was allowed and the proceedings pending before the Sessions Judge were set aside and quashed. 

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