SUSHIL MEHTA Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The petitioners in this batch of four petitions are A-6 to A-9 in C.C. No. 98 of 2009 on the file of Judicial Magistrate of the First Class, Armoor relating to offence punishable under Section 32(1) of the Drugs and Cosmetics Act. 1940 (in short, the Act) for violation of Section 18(c), 18A and Section 22(1)(cca), of the Act. A-6 who is the petitioner in Criminal Petition No. 3961 of 2010 is Managing Director and the petitioners in other three petitions are Directors of M/s. RFCL Limited. The said company is shown as A-5 in the charge sheet.

(2.) It is alleged that Parth Parenteral (P) Limited (A-1) manufactured and sold Lemosal-P Powder for veterinary use without drug manufacturing license and that A-5 viz., M/s. RFCL Limited did not disclose the source of supply of records of purchase and sale of Lemosal-P Powder. On 22.11.2007, Drugs Inspector, Nizamabad found Lemosal-P Powder stock for sale in Sri Sapathagiri Veterinary and General Store, Armoor and it was observed that the label of the said product claimed the same as feed supplement, but as per composition label, it contains levamisole Hydrochloride, B.P. 30%w/w. It is stated that British Fharmacopoeia prescribes standards of drugs and that the said product is for deworming and immnostimulation for birds and that the said product attracts definition of drug under Section 3(b) of the Act. The Drugs Inspector had drawn the above drug and sent the same to the Government Analyst, Drugs Control Administration, Hyderabad for analysis. It is stated that partners of Sri Sapathagiri Veterinary and General Store, Armoor disclosed that the said batch number product was sold by M/s. Bhavani Veterinary Medical Hall, Karimnagar vide a bill No. 3293 dated 30.10.2007. When letter was addressed by the Drugs Inspector, M/s. Bhavani Veterinary Medical Hall, Karimnagar disclosed that they have purchased the same from A-5 vide bill dated 22.09.2007. The Drugs Inspector addressed letter dated 26.12.2007 to A-5 requesting them to disclose the source of supply etc. of the said batch number. A-5 did not furnish reply to the said letter. But, the complainant received letter dated 29.02.2008 from A-5's Delhi office stating that their product cannot be covered within the scope of drug formulation. Test report received from Government analyst is to the effect that the said product contained 29.9% levamisol HCL B.P. and it is standard quality as per the Act. Finally, it is stated by the complainant in the complaint that A-5 to A-9 did not disclose source of supply of Lemosal-P Powder and it violated Section 18A punishable under Section 28 of the Act and that they did not produce records of purchase and sale of the said drug and thereby violating Section 22(1)(cca) which is punishable under Section 22(3) of the Act.

(3.) Relying on Pepsi Foods Limited v. Special Judicial Magistrate, 1998 5 SCC 749and M.N. Ojha v. Alok Kumar Srivastava, 2009 9 SCC 682of the Supreme Court, it is contended by the petitioners' counsel that the Magistrate did not apply his mind while taking cognizance of the case against the petitioners/A-6 to A-9. It is further contended that simply on the basis of A-6 being Managing Director and A-7 to A-9 being Directors of A-5 company, no personal liability is attached to any of them for the alleged criminal activity of A-5 company unless it is averred and material is placed to show that any of them was in-charge of day-to-day affairs of A-5 company and was responsible for business being conducted by A-5 company. The petitioners' counsel placed reliance on several reported decisions on this aspect. In Shanmugha Sundera Raja v. State of Andhra Pradesh,2010 1 ALD(Cri) 434of this Court and National Small Industries Corporation Limited v. Harmeet Singh Paintal, 2010 2 Scale 372 of the Supreme Court the question was liability of Partnership firm and Directors of a company in the light of Section 141 of the Negotiable Instruments Act which is a Special Provision relating to prosecution of offenders for offence punishable under Section 138 of the Negotiable Instruments Act.