23.04.2026 vs Union Of India on 6 May, 2026

Himachal Pradesh High Court

Reserved On: 23.04.2026 vs Union Of India on 6 May, 2026

Author: Sandeep Sharma

Bench: Sandeep Sharma

                                                                          2026:HHC:15076




         IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
                                                      Cr.MMO No.657 of 2022




                                                             .
                                                 Reserved on: 23.04.2026





                                             Date of Decision: 06.05.2026
    _______________________________________________________________________
    M/s VADSP Pharmaceuticals and Others                      .........Petitioners





                                    Versus
    Union of India                                            .......Respondent
    Coram




                                     of
    Hon'ble Mr. Justice Sandeep Sharma, Judge.

    Whether approved for reporting?
                    rt
    __________________________________________________________________________

    For the Petitioners:   Mr. Anand Sharma, Senior Advocate, with Mr.

                           Karan Sharma, Advocate.

    For the Respondent: Mr. Shashi Shirshoo, Central Government
                           Counsel.


    ______________________________________________________________________

    Sandeep Sharma, J.

By way of instant petition filed under Section 482 of Code of

Criminal Procedure, prayer has been made on behalf of the petitioners

herein for quashing of Complaint Case 6/3 of 2022 titled ‘Union of India

through Drugs Inspector vs. M/s VADSP Pharmaceuticals and ors.’ as

well as consequent proceedings initiated under Sections 16, 18(a)(i), 18

(a)(vi) read with Section 27(d) of the Drugs and Cosmetics Act, 1940

pending before the Court of Ld. Chief Judicial Magistrate, Nalagarh,

Baddi, Himachal Pradesh.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
2

2. Precisely facts of the case are that complainant, Mr V.

Kaviyarasan, the then Drugs Inspector drew a sample on Form-17 of

.

drug ‘Rabeprazole Sodium and Domperidone sustained release Capsules

(KaxyraB-D)’, Batch No. KRD-05, DoM- 10-17, DoE-09-19,

manufactured by M/s Unison Pharmaceuticals, Plot No. 124, E.P.I.P,

Industrial Area Phase-1, Jharmajri, Baddi, H.P., on 24.11.2017 in the

of
presence of Mr. Premnath, Analytical Chemist of the firm. Thereafter,

the sample was divided into three portions and was sealed as per the
rt
procedure. The drugs inspector also handed over a copy of Form-17

along with one portion of a sealed sample to Mr. Premnath, an Analytical

Chemist.

3. Thereafter, the Drugs Inspector, on 28.11.2017, sent one

sample of the drug on Form-18 to the Government Analyst, Regional

Drugs Testing Laboratory, Sector 39-C, Chandigarh-160036, after

completing the codal formalities. On 20.02.2018, complainant received

test and analysis report from the Government Analyst on Form-13

whereby the said sample of the drug was declared as “Not of Standard

Quality” for the reason that the sample does not conform to the claim as

per patent and Proprietary in respect to the Dissolution of Rabeprazole

Sodium (after 1 hr.) (after 4 hr), (after 8 hr.).

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
3

4. After receipt of the said sample analysis report, on

20.03.2018 The Drugs Inspector served a notice to Mr. Premnath (M/s

.

Unison Pharmaceuticals) alongwith the test reports thereby directing

them to stop the sale /distribution and recall the drug alongwith some

other details. Pursuant to afore notice, the firm replied to the notice,

requested for retesting from Central Drugs Laboratory, however,

of
complainant proceeded to apply for permission from Central Authority to

launch prosecution sanction against the petitioners vide letter dated
rt
19.09.2019, which was granted vide letter dated 14.09.2021.

5. Taking cognizance of averments contained in the complaint

and documents annexed therewith, learned trial Court issued process

against the accused named in the complaint, including the petitioners,

however, fact remains that the complaint is still pending adjudication.

6. Being aggrieved by the filing of the complaint and

summoning order, the petitioners have approached this Court for the

quashing of the complaint, details whereof are given as above, with the

following prayer:

“a. The present petition may very kindly be allowed, throughout, with
exemplary costs, thereby, quashing and setting aside the Drugs
complaint issued by the Drug Inspector CDSCO Sub Zone Baddi,
Himachal Pradesh against the present petitioners.
b. The present petition may very kindly be allowed, thereby, quashing
and setting aside the proceedings initiated through Drugs Inspector,
before the learned Chief Judicial Magistrate, Nalagarh,Baddi, H.P in

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
4

Complaint Case No. 6/3 of 2022, titled as Union of India vs. M/s
VADSP Pharmaceuticals and others pending qua the present
petitioners.

.

c. That the entire record pertaining to the complaint Case No. 6/3 of
2022 dated 18/1/2022, titled as Union of India vs. M/s VADSP
Pharmaceuticals and others pending before the learned Chief Judicial

Magistrate, Nalagarh, Baddi H.P may kindly be called for utmost
adjudication of the present case.”

of

7. Pursuant to notices issued in the instant proceedings,

respondent State has filed reply to the present petition, wherein facts as
rt
have been noticed herein above, have not been disputed, rather stand

admitted.

8. Precisely, the grouse of the petitioners, as has been

highlighted in the present petition and further canvassed by Mr. Anand

Sharma, learned senior counsel duly assisted by Mr. Karan Sharma,

Advocate, appearing for the petitioners is that court concerned, while

issuing process against the petitioners, failed to take note of the fact

that the complaint filed by Drug Inspector concerned under relevant

provisions of Act/Rules is not maintainable against petitionersfor the

reason that petitioner nos. 2 and 3, who were mere partners of the firm

were neither in-charge nor responsible to the firm for conduct of the

business, rather the petitioners had appointed Mr Premnath, Analytical

Chemist, as the in-charge and he was responsible for the business

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
5

transactions of the firm under Section 34 of the Drugs and Cosmetics

Act.

.

9. While making this court peruse the complaint, Mr. Sharma,

learned senior counsel attempted to carve out a case that there is not a

single word suggestive of the fact that petitioners being Directors of

company concerned were responsible for day-to-day activities of

of
company, rather for that purpose authorized person, Mr. Prem Nath,

Analytical Chemist, was appointed.

10.
rt
Mr Sharma further submitted that the samples were

collected from the firm on 24.11.2017 and same was referred to the

Government Analyst on 20.02.2018, after a delay of almost 3 months.

He submitted that this is in violation of Section 23(4)(i) and Section 46 of

the Act which casts a duty upon the Drugs Inspector to send the said

samples forthwith to the Government Analyst for test and analysis and

further the Governent Analyst to send the adverse analysis report

forthwith to the Drugs Inspector who shall inform the manufacturer

forthwith, however, in the present case the report was sent to the

petitioners on 20.03.2018, that is after a lapse of considerable time.

11. Lastly, Mr. Sharma, learned senior counsel argued that since

on account of non-compliance of provision as detailed herein above,

prosecution case is bound to fail, no fruitful purpose would be served in

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
6

case, complaint as well as consequent proceedings against the

petitioners herein are allowed to sustain, rather, continuation of same, if

.

permitted would cause great prejudice to the petitioners who would be

unnecessarily subjected to ordeal of protracted trial, which otherwise is

bound to fail.

12. To the contrary, Mr Shashi Shirshoo learned Senior Panel

of
Counsel, while supporting the registration of complaint by Drug

Inspector against the petitioners, vehemently argued that petitioners

being partners
rt
of M/s VADSP Pharmaceuticals, are liable and

responsible for conduct of business of the company. He further

submitted that firm was directed to furnish the details of the responsible

person, but no response was received, therefore, the plea that Mr

Premnath, Analytical Chemist, is the responsible person is not

acceptable.

13. Mr Shirshoo further submitted that there is no timeline for

sending the sample to the Drug Testing Laboratory for testing the

sample by the laboratory. The references to the specific test or analysis

have already been made in the report. The sample was not found to be

of the prescribed standard, and the complaint was rightly filed before the

Court.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
7

14. I have heard Mr Anand Sharma, learned Senior Counsel,

assisted by Mr Karan Sharma, learned counsel for the petitioners and

.

Mr Shashi Shirshoo, and learned Senior Panel Counsel for the

respondent.

15. Before ascertaining the genuineness and correctness of the

submissions and counter submissions having been made by the learned

of
counsel for the parties vis-à-vis prayer made in the instant petition, this

Court deems it necessary to discuss/elaborate the scope and
rt
competence of this Court to quash the criminal proceedings while

exercising power under Section 482 of Cr.PC.

16. In Amish Devgan vs Union of India and Ors, (2021) 1 SCC

1, the Hon’ble Apex Court held as under:

“(vii) Conclusion and relief

116. At this stage and before recording our final conclusion, we would like to

refer to decision of this Court in Pirthi Chand [State of H.P. v. Pirthi Chand,

(1996) 2 SCC 37 : 1996 SCC (Cri) 210] wherein it has been held : (SCC pp. 44-

45, paras 12-13)
“12. It is thus settled law that the exercise of inherent power of the High

Court is an exceptional one. Great care should be taken by the High
Court before embarking to scrutinise the FIR/charge-sheet/complaint.
In deciding whether the case is rarest of rare cases to scuttle the
prosecution in its inception, it first has to get into the grip of the matter
whether the allegations constitute the offence. It must be remembered
that FIR is only an initiation to move the machinery and to investigate
into cognizable offence. After the investigation is conducted (sic
concluded) and the charge-sheet is laid, the prosecution produces the
statements of the witnesses recorded under Section 161 of the Code in

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
8

support of the charge-sheet. At that stage it is not the function of the
court to weigh the pros and cons of the prosecution case or to consider
necessity of strict compliance with the provisions which are considered

.

mandatory and effect of its non-compliance. It would be done after the
trial is concluded. The court has to prima facie consider from the
averments in the charge-sheet and the statements of witnesses on the

record in support thereof whether court could take cognizance of the
offence on that evidence and proceed further with the trial. If it reaches
a conclusion that no cognizable offence is made out, no further act could

of
be done except to quash the charge-sheet. But only in exceptional cases
i.e. in rarest of rare cases of mala fide initiation of the proceedings to
wreak private vengeance issue of process under Criminal Procedure
rt
Code is availed of. A reading of a [Vide Corrigendum dated 20-3-1996
issued from Residential Office of Hon’ble Mr Justice K. Ramaswamy.]

complaint or FIR itself does not disclose at all any cognizable offence —
the court may embark upon the consideration thereof and exercise the
power.”

17. In the case of Kaptan Singh vs State of Uttar Pradesh

and Ors., (2021) 9 SCC 35, the Supreme Court held as under :

“9.1. At the outset, it is required to be noted that in the present case the
High Court in exercise of powers under Section 482 CrPC has quashed

the criminal proceedings for the offences under Sections 147, 148, 149,
406, 329 and 386 IPC. It is required to be noted that when the High
Court in exercise of powers under Section 482 CrPC quashed the

criminal proceedings, by the time the investigating officer after recording
the statement of the witnesses, statement of the complainant and
collecting the evidence from the incident place and after taking
statement of the independent witnesses and even statement of the
accused persons, has filed the charge-sheet before the learned
Magistrate for the offences under Sections 147, 148, 149, 406, 329 and
386 IPC and even the learned Magistrate also took the cognizance. From
the impugned judgment and order [Radhey Shyam Gupta v. State of

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
9

U.P., 2020 SCC OnLine All 914] passed by the High Court, it does not
appear that the High Court took into consideration the material
collected during the investigation/inquiry and even the statements

.

recorded. If the petition under Section 482 CrPC was at the stage of FIR
in that case the allegations in the FIR/complaint only are required to be
considered and whether a cognizable offence is disclosed or not is

required to be considered. However, thereafter when the statements are
recorded, evidence is collected and the charge-sheet is filed after
conclusion of the investigation/inquiry the matter stands on different

of
footing and the Court is required to consider the material/evidence
collected during the investigation. Even at this stage also, as observed
and held by this Court in a catena of decisions, the High Court is not
rt
required to go into the merits of the allegations and/or enter into the
merits of the case as if the High Court is exercising the appellate

jurisdiction and/or conducting the trial. As held by this Court in
Dineshbhai Chandubhai Patel [Dineshbhai Chandubhai Patel v. State of
Gujarat, (2018) 3 SCC 104 : (2018) 1 SCC (Cri) 683] in order to examine
as to whether factual contents of FIR disclose any cognizable offence or

not, the High Court cannot act like the investigating agency nor can
exercise the powers like an appellate court. It is further observed and
held that that question is required to be examined keeping in view, the

contents of FIR and prima facie material, if any, requiring no proof. At

such stage, the High Court cannot appreciate evidence nor can it draw
its own inferences from contents of FIR and material relied on. It is
further observed it is more so, when the material relied on is disputed. It

is further observed that in such a situation, it becomes the job of the
investigating authority at such stage to probe and then of the court to
examine questions once the charge-sheet is filed along with such
material as to how far and to what extent reliance can be placed on such
material.

12. Therefore, the High Court has grossly erred in quashing the criminal
proceedings by entering into the merits of the allegations as if the High
Court was exercising the appellate jurisdiction and/or conducting the

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
10

trial. The High Court has exceeded its jurisdiction in quashing the
criminal proceedings in exercise of powers under Section 482 CrPC.”

18. Recently, Hon’ble Apex Court in Abhishek Singh vs Ajay

.

Kumar and Ors., (2025) SCC OnLine SC 1313, reiterated that:

“9. The scope of the Court’s power to quash and set aside proceedings is

well-settled to warrant any restatement. While the arguments advanced
have the potential to raise many issues for consideration, we must first
satisfy ourselves as to the propriety of the exercise of such power by the

of
High Court. The task of the High Court, when called upon to adjudicate
an application seeking to quash the proceedings, is to see whether,
prima facie, an offence is made out or not. It is not to examine whether
rt
the charges may hold up in the Court. In doing so, the area of action is
circumscribed. In Rajeev Kourav v. Baisahab, it was held:

“8. It is no more res integra that exercise of power under Section
482 CrPC to quash a criminal proceeding is only when an
allegation made in the FIR or the charge-sheet constitutes the
ingredients of the offence/offences alleged. Interference by the

High Court under Section 482 CrPC is to prevent the abuse of
process of any court or otherwise to secure the ends of justice. It

is settled law that the evidence produced by the accused in his
defence cannot be looked into by the court, except in very

exceptional circumstances, at the initial stage of the criminal
proceedings. It is trite law that the High Court cannot embark
upon the appreciation of evidence while considering the petition

filed under Section 482 CrPC for quashing criminal proceedings.
It is clear from the law laid down by this Court that if a prima
facie case is made out disclosing the ingredients of the offence
alleged against the accused, the Court cannot quash a criminal
proceeding.” 15. In that view of the matter, we hold that the High
Court had improperly quashed the proceedings initiated by the
appellant. It stands clarified that we have not expressed any
opinion on the matter, and the guilt or innocence of the

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
11

respondents has to be established in the trial, in accordance with
the law. The proceedings out of the subject FIR, mentioned in
paragraph 2 are revived and restored to the file of the concerned

.

Court.”

19. A three-Judge Bench of the Hon’ble Apex Court in case titled

State of Karnataka v. L. Muniswamy and others, 1977 (2) SCC 699,

held that High Court while exercising power under Section 482 Cr.PC is

of
entitled to quash the proceedings, if it comes to the conclusion that

allowing the proceeding to continue would be an abuse of the process of
rt
the Court or that the ends of justice require that the proceeding ought to

be quashed.

20. Subsequently, in case titled State of Haryana and others

v. Bhajan Lal and others, 1992 Supp (1) SCC 335, the Hon’ble Apex

Court while elaborately discussing the scope and competence of High

Court to quash criminal proceedings under Section 482 Cr.PC laid down

certain principles governing the jurisdiction of High Court to exercise its

power. After passing of aforesaid judgment, issue with regard to exercise

of power under Section 482 Cr.PC, again came to be considered by the

Hon’ble Apex Court in case bearing Criminal Appeal No.577 of 2017

(arising out of SLP (CrL.) No. 287 of 2017) titled Vineet Kumar and Ors.

v. State of U.P. and Anr., wherein it has been held that saving of the

High Court’s inherent powers, both in civil and criminal matters, is

designed to achieve a salutary public purpose i.e. court proceedings

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
12

ought not to be permitted to degenerate into a weapon of harassment or

persecution.

.

21. Reliance is placed upon judgment of Hon’ble Apex Court in

Prashant Bharti v. State (NCT of Delhi), (2013) 9 SCC 293, relying

upon its earlier judgment titled as Rajiv Thapar and Ors v. Madan Lal

Kapoor, (2013) 3 SCC 330.

of

22. Reliance in this regard is also placed upon judgment passed

by the Hon’ble Apex Court in B.N. John Vs. State of U.P., 2025 SCC
rt
OnLine SC 7, which reads as under:

“7. As far as the quashing of criminal cases is concerned, it is now more
or less well settled as regards the principles to be applied by the court.
In this regard, one may refer to the decision of this Court in State of

Haryana v. Ch. Bhajan Lal, 1992 Supp (1) SCC 335, wherein this Court
has summarized some of the principles under which
FIR/complaints/criminal cases could be quashed in the following words:

“102. In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of the

principles of law enunciated by this Court in a series of
decisions relating to the exercise of the extraordinary power

under Article 226 or the inherent powers under Section 482 of
the Code which we have extracted and reproduced above, we
give the following categories of cases by way of illustration
wherein such power could be exercised either to prevent abuse
of the process of any court or otherwise to secure the ends of
justice, though it may not be possible to lay down any precise
clearly defined and sufficiently channelised and inflexible
guidelines or rigid formulae and to give an exhaustive list of
myriad kinds of cases wherein such power should be exercised.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
13

(1) Where the allegations made in the first information
report or the complaint, even if they are taken at their face
value and accepted in their entirety, do not prima facie

.

constitute any offence or make out a case against the
accused.

(2) Where the allegations in the first information report and

other materials, if any, accompanying the FIR do not
disclose a cognizable offence, justifying an investigation by
police officers under Section 156(1) of the Code except

of
under an order of a Magistrate within the purview of
Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR
rt
or complaint and the evidence collected in support of the
same do not disclose the commission of any offence and

make out a case against the accused.

(4) Where the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer

without an order of a Magistrate as contemplated under
Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are

so absurd and inherently improbable on the basis of which

no prudent person can ever reach a just conclusion that
there is sufficient ground for proceeding against the
accused.

(6) Where there is an express legal bar engrafted in any of
the provisions of the Code or the concerned Act (under
which a criminal proceeding is instituted) to the institution
and continuance of the proceedings and/or where there is
a specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the
aggrieved party.

(7) Where a criminal proceeding is manifestly attended
with mala fide and/or where the proceeding is maliciously

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
14

instituted with an ulterior motive for wreaking vengeance
on the accused and with a view to spite him due to a
private and personal grudge.” (emphasis added)

.

8. Of the aforesaid criteria, clause no. (1), (4) and (6) would be of
relevance to us in this case.

In clause (1) it has been mentioned that where the allegations made in

the first information report or the complaint, even if they are taken at
their face value and accepted in their entirety do not prima facie
constitute any offence or make out a case against the accused, then the

of
FIR or the complaint can be quashed.

As per clause (4), where the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable offence, no
rt
investigation is permitted by a police officer without an order dated by
the Magistrate as contemplated under Section 155 (2) of the CrPC, and

in such a situation, the FIR can be quashed.

Similarly, as provided under clause (6), if there is an express legal bar
engrafted in any of the provisions of the CrPC or the concerned Act
under which the criminal proceedings are instituted, such proceedings

can be quashed.”

23. Reliance is further placed upon the judgment passed by the

Hon’ble Apex Court in Ajay Malik v. State of Uttarakhand, 2025 SCC

OnLine SC 185, which reads as under:

“8. It is well established that a High Court, in exercising its

extraordinary powers under Section 482 of the CrPC, may issue orders
to prevent the abuse of court processes or to secure the ends of justice.
These inherent powers are neither controlled nor limited by any other
statutory provision. However, given the broad and profound nature of
this authority, the High Court must exercise it sparingly. The conditions
for invoking such powers are embedded within Section 482 of the CrPC
itself, allowing the High Court to act only in cases of clear abuse of
process or where intervention is essential to uphold the ends of justice.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
15

9. It is in this backdrop that this Court, over the course of several
decades, has laid down the principles and guidelines that High Courts
must follow before quashing criminal proceedings at the threshold,

.

thereby pre-empting the Prosecution from building its case before the
Trial Court. The grounds for quashing, inter alia, contemplate the
following situations : (i) the criminal complaint has been filed with mala

fides; (ii) the FIR represents an abuse of the legal process; (iii) no prima
facie offence is made out; (iv) the dispute is civil in nature; (v.) the
complaint contains vague and omnibus allegations; and (vi) the parties

of
are willing to settle and compound the dispute amicably (State of
Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335)

24.
rt
It is quite apparent from the bare perusal of aforesaid

judgments passed by the Hon’ble Apex Court from time to time that

where a criminal proceeding is manifestly attended with mala fide

and/or where the proceeding is maliciously instituted with an ulterior

motive for wreaking vengeance on the accused and with a view to spite

him/her due to private and personal grudge, High Court while exercising

power under Section 482 Cr.PC can proceed to quash the proceedings,

25. Now being guided by the aforesaid proposition of law laid

down by the Hon’ble Apex Court, this Court would make an endeavor to

examine and consider the prayer made in the instant petition vis-à-vis

factual matrix of the case.

26. It is apparent from the bare perusal of the Section 34 of the

Act that a Company is primarily liable for the commission of an offence

punishable under the Act. As per afore provision of law, vicarious

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
16

liability has been fastened upon a person who, at the time the offence

was committed, was in charge of and responsible to the Company for the

.

conduct of its business. Section 34 of the Act 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
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 sub-section shall render any
rt
such 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. ”

27. Aforesaid provision of law deals with offence, if any,

committed by company. Aforesaid provision provides that 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. Proviso to the aforesaid section provides 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 his knowledge or that he exercised all due diligence

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
17

to prevent the commission of the offence. Since, in the case at hand also

Mr. Premnath was in-charge of and was responsible to, the company for

.

the conduct of the business of the company, liability cannot be fastened

on petitioners, especially petitioner nos. 2 and 3, being partners of the

firm.

28. In this regard, reliance is placed upon judgment of Hon’ble

of
Apex Court in Susela Padmavathy Amma v. Bharti Airtel Ltd., 2024

SCC OnLine SC 311 wherei it has been held that a person can be
rt
vicariously liable if he is in charge and responsible to the Company for

the conduct of its business. Relevant paras of the judgment reads as

under:

“18. In the case of State of Haryana v. Brij Lal Mittal (1998) 5 SCC 343,
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 person liable to any punishment provided in this Act if he proves

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
18

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

of
the company for the conduct of its business. From the complaint in
question, we, however, find that except for a bald statement that the
respondents were directors of the manufacturers, there is no other
rt
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.”

19. 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 in charge of and was also
responsible to the company for the conduct of its business.

20. In the case of S.M.S. Pharmaceuticals Ltd. (supra), 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 day-to-day
functioning of the company. As a director, he may be attending meetings
of the Board of Directors of the company, where they usually decide
policy matters and guide the course of business of the company. It may

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
19

be that a Board of Directors may appoint sub-committees consisting of
one or two directors out of the Board of the company who may be made
responsible for the day-today functions of the company. These are

.

matters which form part of the 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

of
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. …..”

rt

21. It was held that merely because a person is a director of a company,
it is not necessary that he is aware of the day-today 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
the dayto-day 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

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.

22. In the case of Pooja Ravinder Devidasani v. State of Maharashtra
(2014) 16 SCC 1, 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 the
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

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
20

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 13-14)
“13. Section 141 is a penal provision creating vicarious liability, 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

of
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
rt
or was responsible to the accused Company for the conduct of its
business. This is in consonance with a 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 overall control of the day-to-day 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] ).

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
21

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

Ramamurthyv.R.B.S. Channabasavaradhya,(2006) 10 SCC 581(2007) 1
SCC (Cri) 621], it was held by this Court that: (SCC pp. 584-85, para 7)
“7. … It is not necessary for the complainant to specifically reproduce

of
the wordings of the section, but what is 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
rt
of the said provision, a person although is not personally liable for the
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.”

23. 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 the business of the company, would not ipso facto
make the director vicariously liable.

24. A similar view has previously been taken by this Court in the case of
K.K. Ahuja v. V.K. Vora (2009) 10 SCC 48.

25. In the case of State of NCT of Delhi through Prosecuting Officer,
Insecticides, Government of NCT, Delhi v. Rajiv Khurana (2010) 11 SCC
469, this Court reiterated the position thus:

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
22

“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 does not needto
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 non-director officers, it is all the more necessary to state what
were his duties and responsibilities in the conduct of the business of the
company and how and in what manner he is responsible or liable.”

of

26. In the case of Ashoka Mal Bafna (supra), 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
rt
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 the 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 the Director was
responsible for the conduct of the business of the Company.”

27. A similar view has been taken by this Court in the case of
Lalankumar Singh v. State of Maharashtra 2022 SCC OnLine SC 1383,
to which one of us (B.R. Gavai, J.) was a party.”

29. Reliance is also placed upon Pawan Kumar Goel v. State

of U.P., 2022 SCC OnLine SC 1598 wherein it has been held that only

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
23

a person, who is in charge of and responsible to the Company for its

affairs can be summoned and punished for the acts of the Company.

.

Relevant paras of the judgment reads as under:

“22. A two-judge Bench of this Court in the case of K.K. Ahuja v. V.K.

Vora(2005) 8 SCC 89, after analysing the provisions contained in
Section 141 of the Act, observed as under:–

“16. Having regard to section 141, when a cheque issued by a company

of
(incorporated under the Companies Act, 1956) is dishonoured, in
addition to the company, the following persons are deemed to be guilty
of the offence and shall be liable to be proceeded against and punished:
i every person who at the time the offence was committed was in
rt
charge of and was responsible to the company for the conduct of
the business of the company;

ii any Director, Manager, Secretary or other officer of the company
with whose consent and connivance, the offence under section
138 has been committed; and

iii any Director, Manager, Secretary or other officer of the company
whose negligence resulted in the offence under section 138 of the
Act being committed by the company. While the liability of

persons in the first category arises under sub-section (1) of
Section 141, the liability of persons mentioned in categories (ii)

and (iii) arises under sub-section (2). The scheme of the Act,
therefore, is that a person who is responsible to the company for

the conduct of the business of the company and who is in charge
of the business of the company is vicariously liable by reason
only of his fulfilling the requirements of subsection (1). But if the
person responsible to the company for the conduct of business of
the company, was not in charge of the conduct of the business of
the company, then he can be made liable only if the offence was
committed with his consent or connivance or as a result of his
negligence.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
24

17. The criminal liability for the offence by a company under section 138
is fastened vicariously on the persons referred to in sub-section (1) of
section 141 by virtue of a legal fiction. Penal statutes are to be

.

construed strictly. Penal statutes providing constructive vicarious
liability should be construed much more strictly. When conditions are
prescribed for extending such constructive criminal liability to others,

courts will insist upon strict literal compliance. There is no question of
inferential or implied compliance. Therefore, a specific averment
complying with the requirements of section 141 is imperative. As

of
pointed out in K. Srikanth Singh v. North East Securities Ltd. – (2007)
12 SCC 788, the mere fact that at some point of time, an officer of a
company had played some role in the financial affairs of the company,
rt
will not be sufficient to attract the constructive liability under section
141 of the Act. 18. Sub-section (2) of section 141 provides that a

Director, Manager, Secretary or other officer, though not in charge of the
conduct of the business of the company will be liable if the offence had
been committed with his consent or connivance or if the offence was a
result of any negligence on his part. The liability of persons mentioned

in subsection (2) is not on account of any legal fiction but on account of
the specific part played-consent and connivance, or negligence. If a
person is to be made liable under sub-section (2) of section 141, then it

is necessary to aver consent and connivance, or negligence on his part.”

23. The scope of Section 141 of the NI Act was again exhaustively
considered by this Court Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8
SCC 89.:

“10. ….What is required is that the persons who are sought to be made
criminally liable under Section 141 should be, at the time the offence
was committed, in charge of and responsible to the company for the
conduct of the business of the company. Every person connected with
the company shall not fall within the ambit of the provision. It is only
those persons who were in charge of and responsible for the conduct of
the business of the company at the time of the commission of an offence
who will be liable for criminal action. It follows from this that if a
director of a Company who was not in charge of and was not responsible

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
25

for the conduct of the business of the company at the relevant time, will
not be liable under the provision. The liability arises from being in
charge of and responsible for the conduct of the business of the

.

company at the relevant time when the offence was committed, and not
on the basis of merely holding a designation or office in a company.
Conversely, a person not holding any office or designation in a Company

may be liable if he satisfies the main requirement of being in charge of
and responsible for the conduct of the business of a Company at the
relevant time. Liability depends on the role one plays in the affairs of a

of
Company and not on designation or status. If being a Director or
Manager, or Secretary was enough to cast criminal liability, the Section
would have said so. Instead of “every person”, the section would have
rt
said “every Director, Manager or Secretary in a Company is liable”,..etc.
The legislature is aware that it is a case of criminal liability which means

serious consequences so far as the person sought to be made liable is
concerned. Therefore, only persons who can be said to be connected
with the commission of a crime at the relevant time have been subjected
to action…

18. To sum up, there is an almost unanimous judicial opinion that
necessary averments ought to be contained in a complaint before a
person can be subjected to criminal process. A liability under Section

141 of the Act is sought to be fastened vicariously on a person

connected with a company, the principal accused being the company
itself. It is a departure from the rule in criminal law against vicarious
liability. A clear case should be spelt out in the complaint against the

person sought to be made liable. Section 141 of the Act contains the
requirements for making a person liable under the said provision. That
the respondent falls within the parameters of Section 141 has to be spelt
out. A complaint has to be examined by the Magistrate in the first
instance on the basis of the averments contained therein. If the
Magistrate is satisfied that there are averments which bring the case
within Section 141, he would issue the process. We have seen that
merely being described as a director in a company is not sufficient to
satisfy the requirement of Section 141. Even a non-director can be liable

::: Downloaded on – 09/05/2026 10:06:20 :::CIS
2026:HHC:15076
26

under Section 141 of the Act. The averments in the complaint would
also serve the purpose that the person sought to be made liable would
know what the case is which is alleged against him. This will enable him

.

to meet the case at the trial.”(emphasis supplied)

30. Reliance is also placed upon judgment of Hon’ble Apex Court

in case titled Rajesh Viren Shah v. Redington India Ltd., (2024) 4

SCC 305: 2024 SCC OnLine SC 143, K.S. Mehta v. Morgan

of
Securities & Credits (P) Ltd., 2025 SCC OnLine SC 492. Similarly, in

yet another judgment of Hon’ble Apex Court in Siby Thomas v. Somany
rt
Ceramics Ltd., (2024) 1 SCC 348 held that the primary responsibility

to make the averment, that the accused is in charge and responsible for

the firm for its affairs lies upon the complainant, in the absence of which

the accused cannot be held liable.

31. From the aforesaid exposition of law it is quite apparent that

primary responsibility to make the averment, that the accused is in

charge and responsible for the firm for its affairs, lies upon the

complainant, in the absence of which the accused cannot be held liable.

In the case at hand also, the complaint is completely silent regarding

role of accused nos. 2 and 3, being in-charge and their responsibility

towards accused No.1-firm. These averments do not satisfy the

parameters laid down by the Hon’ble Supreme Court in the aforesaid

judgments.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
27

32. No doubt, accused Nos.2 and 3 are the partners in the firm

of accused No.1, but the question which needs to be determined is

.

whether they being in the capacity of partners of the accused-firm could

be prosecuted in the given facts and circumstances, especially when

accused-firm has appointed authorised representative-Mr. Prem Nath,

Chemical Analyst. Though Mr. Shashi Shirshoo, learned Central

of
Government Counsel, attempted to argue that there is no mention, if

any, of name of Mr. Prem Nath, Chemical Analyst in the record, but after
rt
having carefully perused application bearing Cr.MP No.3686 of 2025

filed by the petitioner for placing on record certain vital documents, this

Court is persuaded to agree with Mr. Anand Sharma, learned Senior

Counsel representing the petitioner, that requisite information on form

No.26 was given to competent authoritywith regard to

authorised/capable person Mr. Prem Nath. Pursuant to information

furnished by petitioner-company, which was earlier known as M/s.

Unison Pharmaceuticals, State Drugs Controller, Baddi, Himachal

Pradesh, issued licenses to M/s Unison Pharmaceuticals, which

subsequently was renamed as M/s VADSP Pharmaceuticals, for

manufacture of categories of drugs specified in Schedule C and C(1),

excluding those specified in Schedule X to the Drugs and Cosmetics Act,

1945, at Jharmajri, Baddi, District Solan, Himachal Pradesh.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
28

Interestingly, authorised representative, who is otherwise responsible for

testing, has been not made accused and as such, complaint lodged at

.

the behest complainant-Union of India is bound to fail. Besides above,

as has been observed hereinabove, there is no specific mention with

regard to role of the partners i.e. accused No.2 and 3, as far as

manufacturing is concerned. Careful perusal of averments contained in

of
the complaint nowhere suggest that accused Nos.2 & 3 were responsible

for day-to-day affairs of the accused-firm No.1, especially
rt
manufacturing, which otherwise was done under the supervision of

technical team.

33. Having scanned entire material adduced on record, vis-à-vis

prayer made in the instant petition, this court is persuaded to agree with

Mr. Anand Sharma, learned senior counsel, appearing for the

petitioners, that this court, while exercising power under Section 482 of

Code of Criminal Procedure may proceed to quash the complaint against

the petitioners, because continuance thereof would be sheer abuse of

process of law, since, for the reasons stated herein above, case of

prosecution is bound to fail against the petitioners in all probabilities.

34. Otherwise also, in case prayer made on behalf of the

petitioners is not accepted they would be unnecessarily subjected to

ordeal of facing protracted trial, which otherwise is bound to fail.

::: Downloaded on – 09/05/2026 10:06:20 :::CIS

2026:HHC:15076
29

35. In view of detailed discussion made herein above and law

taken into consideration, present petition is allowed. Complaint Case

.

6/3 of 2022 titled ‘Union of India through Drugs Inspector vs. M/s

VADSP Pharmaceuticals and ors.’ as well as consequent proceedings

initiated under Sections 16, 18(a)(i), 18 (a)(vi) read with Section 27(d) of

the Drugs and Cosmetics Act, 1940 pending in the court of Ld. Chief

of
Judicial Magistrate, Nalagarh, Baddi. Himachal Pradesh are quashed

and set aside qua the petitioners. The petitioners are discharged
rt
henceforth. All pending applications, stand disposed of.

All pending applications, stand disposed of.

    May06, 2026                                                (Sandeep Sharma),
      Rajeev Raturi                                                 Judge







                                                   ::: Downloaded on - 09/05/2026 10:06:20 :::CIS