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PETITIONER: STATE OF HARYANA

       Vs.

RESPONDENT: BRIJ LAL MITTAL & ORS.

DATE OF JUDGMENT:       30/04/1998

BENCH: M.K. MUKHERJEE, SYED SHAH MOHAMMED QUADRI

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T M.K. MUKHERJEE.J.      Leave granted. Heard the learned counsel for the parts. 2.   On August  7, 1990  the District Drugs Inspector, Hisar (Haryana)  visited   the  premise  of  M/s.  Naresh  Medical Agencies, (hereinafter referred to as the ’firm’), purchased two  samples  of  sodium  chloride  injections  (hereinafter referred to  as the  ’drugs’) and  sent portions  of each of those samples  to the  Government Analyst  for analysis. The Analyst submitted  his reports  on September 10 and 11, 1990 to the  effect that  both the  samples were  not of standard quality and  were  misbranded  and  adulterated  within  the meaning of  Sections 17  and 17A  of the Drugs and Cosmetics Act, 1940  (’Act’ for  short). The  Inspector, on receipt of those reports,  delivered copies  thereof  to  the  firm  on September 17, 1990 along with a letter asking it to disclose the names and addresses and other particulars of the persons from whom  the  drugs  had  been  purchased,  in  compliance therewith the  firm, by  its letter  dated October  1, 1990, intimated the  Inspector that  M/s. Ajay  Medical  Agencies, Hisar   and   National   Distributors,   Sirsa,   were   the distributors of  the drugs  and M/s Mitson Pharmecutial Pvt. Ltd.,  Siblan,  were  the  manufacturers.  On  getting  that information the  inspector apprised  those firms/company  of his having purchased the drugs from the firm and the reports of the Analyst. 3.   The Inspector  then filed a complaint against the above Irms/company and  their partners/directors  in the  Court of the Chief  Judicial Magistrate,  Hisar on  August  31,  1992 alleging commission  of offence  under Section 27 of the Act by them.  The Magistrate  took cognizance upon the complaint and  issued   processes  against   the  persons   arralgned. Aggrieved thereby  the three  directors of the manufacturers (the respondents  before us)  moved  the  High  Court  under Section 482  of the  Code of Criminal Procedure for quashing the proceeding  initiated  against  them.  By  the  impugned judgment the  High Court  quashed the  proceeding as against the respondents  on the  ground  that  the  prosecution  was launched after  the shelf  life of  the drugs had expired in the month  of July,  1991 and  as a consequence thereof they

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were deprived  of their right under Section 25(4) of the Act to get  the drugs  tested by  the Central  Drugs Laboratory. Hence this appeal at the Instance of the State of Haryana. 4.   At the  outset, it  will be apposite to extract Section 25 of the Act. It reads as under:-      "REPORT OF GOVERNMENT ANALYSTS:      (1)  The Government Analyst to whom           a  sample   of  any   drug  or           cosmetic  has  been  submitted           for  test  or  analysis  under           sub-section (4) of Section 23,           shall deliver to the Inspector           submitting it  a signed report           in    triplicate     in    the           prescribed form.      (2)  The   Inspector   on   receipt           thereof shall deliver one copy           of the  report to  the  person           from whom the sample was taken           and  another   copy   to   the           person, if  any,  whose  name,           address and  other particulars           have  been   disclosed   under           Section 18A,  and shall retain           the third  copy for use in any           prosecution in  in respect  of           the sample.      (3)   Any document purporting to be           a   report    signed   by    a           Government Analyst  under this           Chapter shall  be evidence  of           the fact  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   18-A   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.      (4)   Unless the sample has already           been tested or analysed in the           Central   Drugs    Laboratory,           where  as  persons  has  under           sub-section (3)  notified  his           intention of adducing evidence           in    controversion    of    a           Government  Analyst’s  report,           the  Court  may,  of  its  own           motion, or  in its  discretion           at the  request either  of the           complaint or the accused cause           the  sample  of  the  drug  or           cosmetic produced  before  the           Magistrate  under  sub-section           (4) of  Section 23  to be sent           for test  or analysis  to  the

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         said Laboratory,  which  shall           make the  test or analysis and           report in  writing signed  by,           or under the authority of, the           Director of  the Central Drugs           Laboratory the result thereof,           and  such   report  shall   be           conclusive  evidence   of  the           facts stated therein.      (5)  The cost of a test or analysis           made  by   the  Central  Drugs           Laboratory  under  sub-section           (4)  shall   be  paid  by  the           complaint or  accused  as  the           Court shall direct." 5.   From a  bare perusal  of sub-section (3) it is manifest that the  report of the Government Analyst 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 or other particulars have been  disclosed  under  Section  18A  (  in  this  case  the manufacturers) has  within 28  days of  the receipt  of  the report notified in writing the Inspector or the Court before which any  proceeding in  respect of  the sample are pending that he  intends to  adduce evidence in controversion of the report. Sub-section  (4) also makes it abundantly clear that the right  to get  the sample  tested by  Central Government Laboratory (so as to  make its report override the report of the Analyst)  through the  Court accrues to a person accused in the  case only  if he  had earlier notified in accordance with sub-section  (3) his  intention of adducing evidence in controversion of  the report  of the  Government Analyst. To put it differently, unless requirement of sub-section (3) is comped with  by the  person concerned he cannot avail of his right under sub-section (4). 6.   In perusal  of the impugned judgment we are constrained to say  that the  High Court  did not  properly consider the provisions of  sub-section (3)  nor did  it appear  to  have perused the  complaint and  the  documents  annexed  thereto before concluding  that the  respondents  were  deprived  of their right  under sub-section  (4). Indeed, in quashing the impugned notification  the High  Court extracted  Section 25 and then,  without any  discussion  whatsoever, recorded the following peremptory finding:      "It  is   apparent  from  aforesaid      (Section   25)    that   when   the      concerned report  is received,  one      copy has  to be  delivered  to  the      person  from   whom  the  same  was      taken.  Within   28  days   of  the      receipt  of   the  copy,  the  said      person can  show his  intention  to      adduce defence  in contravention of      the  report.   Sub-section  (4)  of      Section 25  of the Drugs & Cosmetic      Act,   1940   further   makes   the      position  clear.   An  accused  can      request the  Court to  call for the      sample and  send it for analysis to      the Central  Drugs  Laboratory.  By      the  time   the  petitioners   were      summoned,  the   shelf   life   had      expired.  In   this   process   the      petitioners (the respondents before      us) lost  their right  to  get  the

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    sample re-analysed from the Central      Drugs Laboratory. ’The petitioners’      counsel  rightly   alleges  that  a      valuable right  has lost  and  this      caused     prejudice     to     the      petitioners." 7.   At the  risk of  petition, we wish to emphasis that the right to  get the  sample  examined  by  the  Central  Drugs Laboratory through the Court before which the prosecution is launched arises  only after the person concerned notifies in writing the  Inspector or  the  Court  concerned  (here  the latter clause  did not  apply for the prosecution was set to be initiated)  within twenty  eight days from the receipt of the copy  of the  report of  the Government  Analyst that he intends to  adduce evidence  in controversion of the report. The  complaint   and  its   accompaniments  (which   include correspondences  that  took  place  the  Inspector  and  the manufacturers) clearly  disclose that  on February  19, 1991 the Inspector  served the  original copies  of the Analyst’s report upon the Managing Director of the manufacturers along with two  letters asking  for their  comments. They  further disclose that  receiving no reply from the manufacturers the Inspector again  wrote a  letter on  March 6, 1991 directing them to  reply to  his letters  dated February  19, 1991 and asked whether  they wanted to take benefit of the provisions of  Section   25(3)  of   the  Act.   Inspite  thereof   the manufacturers did not exercise their right (much less within 28 days  from the  date of  the receipt of the report of the Government Analyst  i.e. February  19, 1991);  and,  on  the contrary, in their letter dated April 8, 1991 annexed to the complaint), sent  in response  to the  letter dated March 6, 1991,  asserted,   that  their  quality  control  department examined and  tested samples of the two drugs and found that they  complied   with  the   test  of  sterility.  It  must, therefore, be  said that  consequent upon  their failure  to notify the  Inspector that they innded to adduce evidence in controversion of  the report  within 28  day, not  only  the right of  the manufactures  to get  the sample tested by the Central Drugs  Laboratory through  the Court  concerned stoo extinguished but  the report  of the Government Analyst also became conclusive  evidence under sub-section (3). The delay in filling  the complaint  till the expiry of the shelf life of the  drugs could  not, therefore, have been made a ground by the  High Court  to quash the prosecution. It will not be out of  place to mention that the manufacturers’ right under sub-section (3) expired four months before the expiry of the shelf life  of the  drugs. In  view of the above discussion, the reasoning of the High Court for quashing the prosecution against the three respondents cannot at all be sustained. 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   rectors of the manufacturers with the aid of Section 34(1) of the act which reads as under:      "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  quality, of  the offence and      shall be  liable  to  be  proceeded

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    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  its knowledge or      that he  exercised at 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 fulfills 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 baid 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. 9.   In Delhi Municipality vs. Ram Kishan [(1983) 1 S.C.C.1] while dealing with the applicability of Section 17(1) of the Prevention of  the Food  Adulteration Act, 1954, which is in pari materia  with Section  34(1) of  the  Act,  on  similar facts, this Court observed as under:      "So   far   as   the   Manager   is      concerned, we  are  satisfied  that      from the  very nature of his duties      it can  be safely  inferred that he      would  undoubtedly  be  vicariously      liable  for  the  offence,  Various      liability being  and incident of an      offence under  the Act.  So far  as      the Directors  are concerned, there      is not  even a  whisper not a shred      of evidence  nor anything  to show,      apart from the presumption drawn by      the complainant,  that there is any      act committed by the Directors from      which a reasonable inference can be      drawn  that   they  could  also  be      vicariously   liable.    In   these      circumstances, therefore,  we  find      ourselves  in   complete  agreement      with the argument of the High Court      that no  case against the Directors      (accused Nos. 4 to 7) has been made      out ex  facie  on  the  allegations      made  in   the  complaint  and  the      proceedings   against   them   were      rightly quashed."                (emphasis supplied) 10.  Since we  are in  respectful agreement with the view si expressed we dismiss this appeal and uphold the order of the High  Court  quashing  the  prosecution  against  the  three respondents on a different ground.