Court Gives Relief to a Baddi Based pharmaceutical firm in alleged spurious eye drops case...
SHIMLA:
The High Court of Himachal Pradesh has quashed criminal proceedings against partners of a Baddi-based pharmaceutical firm in a case related to “Not of Standard Quality” eye drops, holding that mere partnership in a company is not enough to fasten criminal liability unless specific allegations establish their role in day-to-day operations.
Delivering the judgment on May 6, Justice Sandeep Sharma allowed a petition filed by VADSP Pharmaceuticals and its partners challenging a complaint pending before the Chief Judicial Magistrate, Nalagarh, under provisions of the Drugs and Cosmetics Act, 1940.
The case stemmed from samples of “Polymicin Eye Drops” manufactured by the Baddi-based company. Drug inspectors had collected samples in 2018 and 2019 from a Punjab-based distributor. Subsequent testing by the Regional Drugs Testing Laboratory, Chandigarh, and later retesting at the Central Drugs Laboratory, Kolkata, found the samples to be “Not of Standard Quality” as the assay values of Chloramphenicol and Dexamethasone Sodium Phosphate were below prescribed limits.
Following the reports, the Drugs Inspector filed a complaint against the company and its partners before the Nalagarh court.
However, the petitioners argued that they were only partners in the firm and not responsible for its day-to-day functioning.
They maintained that an authorised analytical chemist, Prem Nath, had been appointed as the person responsible for manufacturing and quality-related operations under the Drugs and Cosmetics Act.
The High Court observed that Section 34 of the Drugs and Cosmetics Act makes only those persons liable who were “in charge of and responsible to the company for the conduct of its business” at the time of the alleged offence.
Relying on a series of Supreme Court judgments, the court held that vicarious criminal liability cannot be imposed merely because a person is a director or partner in a company.
The complaint must specifically spell out how and in what manner such persons were responsible for the conduct of the business.
The court found that the complaint was “completely silent” regarding the role of the two partners and contained no specific averments showing they were handling the day-to-day affairs of the firm.
It also noted that the authorised representative and analytical chemist, Prem Nath, who was responsible for testing and technical supervision, had not even been made an accused in the case.
Justice Sharma held that continuation of the criminal proceedings against the petitioners would amount to an abuse of the process of law as the prosecution case against them was “bound to fail in all probabilities.”
The High Court consequently quashed Complaint Case No. 14/3 of 2022 titled “Union of India through Drugs Inspector vs. M/s VADSP Pharmaceuticals and others” along with all consequential proceedings pending before the Chief Judicial Magistrate, Nalagarh, insofar as the petitioners were concerned.
