Himachal Pradesh High Court
Decided On: April 2 vs State Of Himachal Pradesh on 2 April, 2026
Author: Sandeep Sharma
Bench: Sandeep Sharma
2026:HHC:10091
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
CrMMO No. 716 of 2024
Decided on: April 2, 2026
.
________________________________________________________
Hem Raj Thakur ...........Petitioner
Versus
State of Himachal Pradesh ....Respondent
________________________________________________________
Coram:
Hon'ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? 1Yes.
of
________________________________________________________
For the Petitioners : Mr. Anand Sharma, Senior Advocate
with Mr. Karan Sharma, Advocate.
For the Respondent
rt :
Mr. Rajan Kahol and Mr. Vishal
Panwar, Additional Advocate
General with Mr. Ravi Chauhan and
Mr. Anish Banshtu, Deputy
Advocates General.
________________________________________________________
Sandeep Sharma, Judge (oral)
By way of instant petition filed under Section 528 of Bharatiya
Nagrik Suraksha Sanhita, 2023 (hereinafter, ‘BNSS’), prayer has been
made on behalf of the petitioner for quashing of complaint No. HFW-
HMR(PROS) DRUGS/10-09, registered as Complaint No. 58-1 of 2010
titled as State of Himachal Pradesh (through Drugs Inspector H.Q.
Hamirpur) v. Anil Chand and others as well as consequent
proceedings pending in the court of learned Judicial Magistrate First
Class, Nadaun, Hamirpur.
2. For having bird’s eye view of the matter, facts relevant for
adjudication of the case at hand are that on 08.01.2009 Drug Inspector,
Headquarters, Hamirpur alongwith Shri Jagdish Chand, Peon, visited
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Whether the reporters of the local papers may be allowed to see the judgment?
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the premises of M/s Shri Shri Medical Store, Opposite Bus Stand
Nadaun, District Hamirpur, Himachal Pradesh. Drug Inspector
.
concerned after having noticed that Mr. Anil Chand was conducting
business of stocking and exhibiting for sale of allopathic drugs over the
counter via his retail drugs licence no. HMR/2006/389 and
HMR/2006/390 valid upto 29.3.2011, picked up three samples of drug
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namely Chlorpheniramine Maleate Tablets (C.P. Sys-4) B. No. LGT-
8106, expiry date 08/2011, manufactured by M/s Legen Healthcare,
Plot No.20, Sector 05, Parwanoo, District Solan, Himachal Pradesh for
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chemical analysis and as per procedure, sent the same for chemical
examination to C.T.L. Kandaghat.
3. However, vide report dated 31.10.2009 sample of aforesaid
Chlorpheniramine Maleate was found “not of standard quality as
defined in the Drugs and Cosmetics Act, 1940 and Rules there under”
for the reason that “the sample of Chlorpheniramine Maleate tablets
contained less content of Chlorpheniramine Maleate i.e. 37.25 %
against the prescribed limit i.e. 95% to 105% as per I.P.
4. After receipt of aforesaid ‘adverse’ analysis report, Drug
Inspector concerned, vide letter dated 09.11.2009, sent a
communication to Anil Chand, Pharmacist, In Charge M/s Shri Shri
Medical Store to disclose the information as required under Section 18-
A of the Act, who in turn, vide his reply, disclosed that the said drug
was purchased by him from M/s Aar Kay Surgicals, Tibhra Road,
Sujanpur, Village and Post Office Sujanpur, District Hamirpur, vide
invoice No. AKV=-908 dated 23.12.2008. Drug Inspector concerned,
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issued letter dated 02.12.2009 to M/s Aar Kay Surgicals, Sujanpur
alongwith enclosing therewith copy of adverse analysis report and
.
purchase invoice, asking it to disclose the information as required
under Section 18-A of the Act, who in turn vide letter dated 09.12.2009,
disclosed that the drug in question was purchased by it from M/s
Generica India Limited, 718, 719, Main Burari Road, Burari, Delhi vide
of
invoice No. GIO-2530, dated 21.10.2008. Said firm also informed vide
letter 09.12.2009 that drug was received by it from authorized signatory
of the said firm, namely Mr. Hem Raj Thakur (hereinafter ‘petitioner’).
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5. In the aforesaid background, Drug Inspector sent a notice to the
petitioner on 17.12.2009 with a copy of Adverse Analysis Report and
related copies of purchase invoices, asking it to disclose the
information as required under Section 18-A of the Act. Thereafter,
petitioner on behalf of the firm-M/s Generica India Limited vide letter
dated 23.12.2009 disclosed that the said drug was purchased by it
from M/s Legen Healthcare, Plot No. 20, Sector 05, Parwanoo, District
Solan, Himachal Pradesh vide invoice No. 4, dated 7.10.2008.
6. On the basis of aforesaid information, Drug Inspector issued
letter dated 01.02.2010 to M/s Legen Healthcare enclosing therewith
sealed sample portion and it was asked to disclose the information as
required under Section 18-A of the Act. Said company issued letter
dated 10.02.2010 stating that it was not satisfied with report of CTL
Kandaghat and requested to send the second sample for re-testing to
Central Drug Laboratory. Though aforesaid prayer made by M/s Legen
Healthcare was not acceded to but Drug Inspector having found breach
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of provisions of the Act, filed a complaint in the competent court of law
inter alia impleading petitioner as accused no. 4.
.
7. 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 petitioner,
however, fact remains that the complaint is still pending adjudication.
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8. Respondent State has filed reply to the present petition,
pursuant to notices issued in the instant proceedings, wherein facts as
have been noticed herein above, have not been disputed, rather stand
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admitted.
9. Precisely, the grouse of the petitioner, 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 petitioner is that court concerned, while issuing
process against the petitioner, 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 petitioner, who happens to be
Authorized Signatory of M/s Generica India Limited, for the reason that
aforesaid company was merely a stockiest/trader, at no point of time,
had any hand in manufacturing of drug in question, rather, action could
be taken against M/s Legen Healthcare, which otherwise is admitted to
have manufactured the drug in question. While making this court
peruse Section 19(3) of the Act, Mr. Sharma, learned senior counsel
appearing for the petitioner, vehemently argued that a person, not
being the manufacturer of a drug or cosmetic or his agent for the
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distribution hereof, shall not be liable for contravention of Section18
(a)(i) if he proves that he acquired the drug or cosmetic from a duly
.
licensed manufacturer, distributor or dealer thereof; that he did not
know and could not, with reasonable diligence, have ascertained that
the drug or cosmetic, in any way, contravened the provisions of that
section; and that the drug or cosmetic, while in his possession was
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properly stored and remained in the same state as when he acquired it.
10. Mr. Sharma, learned senior counsel further submitted that since
companies, which are M/s Generica India Limited and M/s Legan
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Healthcare being traders/stockiest and manufacturing firm respectively,
have not been arrayed as accused, complaint having been filed by
Drug Inspector concerned otherwise is bound to fail, in terms of
specific provisions contained under Section 34, which mandate for
impleadment of company as an accused, if there is violation of any
provisions contained under the Act. In support of aforesaid
submissions Mr. Sharma, learned senior counsel invited attention of
this court to various judgments which shall be referred to in the later
part of order.
11. Lastly, Mr. Sharma, learned senior counsel argued that since on
account of non-compliance of various provisions as detailed herein
above, prosecution case is bound to fail, no fruitful purpose would be
served in case, complaint as well as consequent proceedings against
the petitioner herein are allowed to sustain, rather, continuation of
same, if permitted would cause great prejudice to the petitioners who
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would be unnecessarily subjected to ordeal of protracted trial, which
otherwise is bound to fail.
.
12. To the contrary, Mr. Rajan Kahol, learned Additional Advocate
General, while supporting the registration of complaint by Drug
Inspector against the petitioner, vehemently argued that petitioner
being Authorized Signatory of M/s Generica India Limited, is liable and
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responsible for conduct of business of the company. He submitted that
petitioner, who was an authorized representative of the company, is
liable to be punished for the commission of offence punishable under
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Section 27 of the Act. While referring to Section 19(3) of the Act, Mr.
Rajan Kahol, learned Additional Advocate General further argued that
once, there is no denial to the fact that drug in question was stocked by
the company concerned and same was not found to be of standard
quality, petitioner being Authorized Signatory of company has been
rightly booked for deliberate contravention of the provisions contained
under Section 18 of the Act. Lastly, Mr. Kahol, learned Additional
Advocate General submitted that petition under Section 482 CrPC is
not maintainable, especially when complaint sought to be quashed is
already under trial. He further submitted that there is overwhelming
evidence on record suggestive of the fact that petitioner has
contravened various provisions contained under the Act and as such, it
would be too premature at this stage to conclude that no case, much
less case under Section 18(a)(i) punishable under Section 27(d) of the
Act, is made out against petitioner.
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13. I have heard learned counsel for the parties and perused
material available on record.
.
14. Before ascertaining the genuineness and correctness of the
submissions and counter submissions having been made by the
learned counsel for the parties vis-Ã -vis prayer made in the instant
petition, this Court deems it necessary to discuss/elaborate the scope
of
and competence of this Court to quash the criminal proceedings while
exercising power under Section 482 of Cr.PC.
15. In Amish Devgan vs Union of India and Ors, (2021) 1 SCC 1,
rt
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 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
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conclusion that no cognizable offence is made out, no further act
could 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 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.”
of
16. In the case of Kaptan Singh vs State of Uttar Pradesh and
Ors., (2021) 9 SCC 35, the Supreme Court held as under :
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“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 Sections147, 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 investigatingofficer 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 beforethe 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 U.P., 2020 SCC OnLine All 914] passed by theHigh 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 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 required to
go into the merits of the allegations and/or enter into the merits of the
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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
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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
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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 trial. The High Court has exceeded its jurisdiction in
quashing the criminal proceedings in exercise of powers under
Section 482 CrPC.”
17. 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 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 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::: Downloaded on – 07/04/2026 20:30:14 :::CIS
10 2026:HHC:10091Section 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 quashingcriminal 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 aof
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
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on the matter, and the guilt or innocence of the respondents has to
be established in the trial, in accordance with the law. The
proceedings out of the subject FIR, mentioned in paragraph 2 arerevived and restored to the file of the concerned Court.”
18. 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 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 the Court or that the ends of justice require that the proceeding
ought to be quashed.
19. 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
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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 ought not to be permitted to degenerate into a
of
weapon of harassment or persecution.
20. The Hon’ble Apex Court in Prashant Bharti v. State (NCT of
Delhi), (2013) 9 SCC 293, relying upon its earlier judgment titled as
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Rajiv Thapar and Ors v. Madan Lal Kapoor, (2013) 3 SCC 330,
reiterated that High Court has inherent powers under Section 482
Cr.PC., to quash the proceedings against an accused, at the stage of
issuing process, or at the stage of committal, or even at the stage of
framing of charge, but such power must always be used with caution,
care and circumspection. In the aforesaid judgment, the Hon’ble Apex
Court concluded that while exercising its inherent jurisdiction under
Section 482 of the Cr.PC, Court exercising such power must be fully
satisfied that the material produced by the accused is such, that would
lead to the conclusion, that his/their defence is based on sound,
reasonable, and indubitable facts and the material adduced on record
itself overrule the veracity of the allegations contained in the
accusations levelled by the prosecution/complainant. Besides above
the Hon’ble Apex Court further held that material relied upon by the
accused should be such, as would persuade a reasonable person to
dismiss and condemn the actual basis of the accusations as false. In
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such a situation, the judicial conscience of the High Court would
persuade it to exercise its power under Section 482 of the Cr.P.C. to
.
quash such criminal proceedings, for that would prevent abuse of
process of the court, and secure the ends of justice. In the aforesaid
judgment titled as Prashant Bharti (supra), the Hon’ble Apex Court
has held as under:
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“22. The proposition of law, pertaining to quashing of criminal proceedings,
initiated against an accused by a High Court under Section 482 of the Code
of Criminal Procedure (hereinafter referred to as “the Cr.P.C.”) has been
dealt with by this Court in Rajiv Thapar & Ors. vs. Madan Lal Kapoor wherein
rt
this Court inter alia held as under: (2013) 3 SCC 330, paras 29-30)
“29. The issue being examined in the instant case is the jurisdictionof the High Court under Section 482 of the Cr.P.C., if it chooses to
quash the initiation of the prosecution against an accused, at the
stage of issuing process, or at the stage of committal, or even at the
stage of framing of charges. These are all stages before thecommencement of the actual trial. The same parameters would
naturally be available for later stages as well. The power vested in
the High Court under Section 482 of the Cr.P.C., at the stagesreferred to hereinabove, would have far reaching consequences,
inasmuch as, it would negate the prosecution’s/complainant’s casewithout allowing the prosecution/complainant to lead evidence. Such
a determination must always be rendered with caution, care and
circumspection. To invoke its inherent jurisdiction under Section 482of the Cr.P.C. the High Court has to be fully satisfied, that the
material produced by the accused is such, that would lead to the
conclusion, that his/their defence is based on sound, reasonable, and
indubitable facts; the material produced is such, as would rule out
and displace the assertions contained in the charges levelled against
the accused; and the material produced is such, as would clearly
reject and overrule the veracity of the allegations contained in the
accusations levelled by the prosecution/complainant. It should be
sufficient to rule out, reject and discard the accusations levelled by
the prosecution/complainant, without the necessity of recording any
evidence. For this the material relied upon by the defence should not
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being material of sterling and impeccable quality. The material relied
upon by the accused should be such, as would persuade a
reasonable person to dismiss and condemn the actual basis of the
.
accusations as false. In such a situation, the judicial conscience of
the High Court would persuade it to exercise its power under Section
482 of the Cr.P.C. to quash such criminal proceedings, for that would
prevent abuse of process of the court, and secure the ends of justice.
30. Based on the factors canvassed in the foregoing paragraphs, we
would delineate the following steps to determine the veracity of a
prayer for quashing, raised by an accused by invoking the power
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vested in the High Court under Section 482 of the Cr.P.C.:-
30.1 Step one, whether the material relied upon by the accused is
sound, reasonable, and indubitable, i.e., the material is of sterling
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and impeccable quality?
30.2 Step two, whether the material relied upon by the accused,
would rule out the assertions contained in the charges levelledagainst the accused, i.e., the material is sufficient to reject and
overrule the factual assertions contained in the complaint, i.e., the
material is such, as would persuade a reasonable person to dismissand condemn the factual basis of the accusations as false.
30.3 Step three, whether the material relied upon by the accused,
has not been refuted by the prosecution/complainant; and/or the
material is such, that it cannot be justifiably refuted by theprosecution/complainant?
30.4 Step four, whether proceeding with the trial would result in an
abuse of process of the court, and would not serve the ends of
justice?
30.5 If the answer to all the steps is in the affirmative, judicial
conscience of the High Court should persuade it to quash such
criminal – proceedings, in exercise of power vested in it under Section
482 of the Cr.P.C. Such exercise of power, besides doing justice to
the accused, would save precious court time, which would otherwise
be wasted in holding such a trial (as well as, proceedings arising
therefrom) specially when, it is clear that the same would not
conclude in the conviction of the accused.”
21. 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
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14 2026:HHC:10091the 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,
22. Reliance in this regard is also placed upon judgments of the
Hon’ble Apex Court in case tilted Anand Kumar Mohatta and Anr. v.
of
State (Government of NCT of Delhi) Department of Home and Anr,
AIR 2019 SC 210 (paras 16-17) and Pramod Suryabhan Pawar v.
The State of Maharashtra and Anr, (2019) 9 SCC 608 (paras7-8).
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23. 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-Ã -vis
factual matrix of the case.
24. Admittedly in the case at hand, drug in question i.e.
Chlorpheniramine Maleate was not manufactured by M/s Generica
India Limited, rather the same was manufactured by M/s Legen
Healthcare. Petitioner herein have been arrayed as accused on
account of his being Authorized Signatory of M/s Generica India
Limited, which is admittedly a stockiest/trader of the drug in question.
Sample of drug was drawn from pharmacy namely M/s Shri Shri
Medical Store, whose in-charge was Mr. Anil Chand. Above named
Anil Chand disclosed to Drug Inspector concerned that the drug in
question was purchased from M/s Aar Kay Surgicals, Sujanpur vide
invoice dated 23.12.2008. M/s Aar Kay Surgicals, Sujanpur further
informed the Drug Inspector concerned that the drug was purchased by
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it from M/s Generica India Limited vide invoice dated 21.10.2008 from
petitioner, authorized representative M/s Generica India Limited.
.
Aforesaid private limited company, while responding to notice issued
by Drug Inspector concerned, specifically disclosed that it is not the
manufacturer of drug in question, rather it has purchased the same
from M/s Legen Healthcare and thereafter, being stockiest and trader,
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supplied the drug in question to whole seller M/s Aar Kay Surgicals,
Sujanpur.
25. It is not in dispute that as per mandate of Section 18, requisite
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information was made available by M/s Generica India Limited. M/s
Generica India Limited specifically informed Drug Inspector concerned
that the company concerned has appointed petitioner as its Authorized
Signatory, enabling him to perform the day-to-day business of
company. Complaint sought to be quashed came to be instituted under
Section 18(a)(i) of the Act and Rules framed under the Act, punishable
under Section 27(d) of the Act.
26. At this stage, it would be apt to take note of Section 18a(i) of
Act, 1940, which reads as under:
“18. Prohibition of manufacture and sale of certain drugs and cosmetics.–
From such date as may be fixed by the State Government by notification in
the Official Gazette in this behalf, no person shall himself or by any other
person on his behalf–
(a) [manufacture for sale or for distribution, or sell, or stock or exhibit or offer
for sale,] or distribute–
[(i) any drug which is not of a standard quality, or is misbranded, adulterated
or spurious;
[(ii) any cosmetic which is not of a standard quality or is misbranded,
adulterated or spurious;]]
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[(iii) any patent or proprietary medicine, unless there is displayed in the
prescribed manner on the label or container thereof [the true formula or list
of active
.
ingredients contained in it together with the quantities thereof];]
(iv) any drug which by means of any statement design or device
accompanying it or by any other means, purports or claims [to prevent, cure
or mitigate] any such disease or ailment, or to have any such other effect as
may be prescribed;
[(v) any cosmetic containing any ingredient which may render it unsafe or
harmful for use under the directions indicated or recommended;
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(vi) any drug or cosmetic in contravention of any of the provisions of this
Chapter or any rule made thereunder;]
(b) [sell or stock or exhibit or offer for sale,] or distribute any drug 9 [or
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cosmetic] which has been been imported or manufacutred in contravention of
any of the provisions of this Act or any rule made thereunder;
(c) [manufacture for sale or for distribution, or sell, or stock or exhibit or offer
for sale,] or distribute any drug [or cosmetic], except under, and in
accordance with the conditions of, a licence issued for such purpose under
this Chapter:
Provided that nothing in this section shall apply to the manufacture, subject to
prescribed conditions, of small quantities of any drug for the purpose of
examination, test or analysis :
Provided further that the [Central Government] may, after consultation with
the Board, by notification in the Official Gazette, permit, subject to any
conditions specified in the notifica tion, the [manufacture for sale or for
distribution, sale, stocking or exhibiting or offering for sale] or distribution of
any drug or class of drugs not being of standard quality.”
27. Perusal of afore provision of law makes it clear that no person
can manufacture for sale or for distribution, or sell, or stock or exhibit or
offer for sale or distribute any drug or cosmetic, which is not of
standard quality or is misbranded, adulterous or spurious. Violation, if
any, of aforesaid provision of law, would render person concerned,
liable for punishment under Section 27 of the Act, which provides for
penalty.
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17 2026:HHC:10091
28. Admittedly, in the case at hand, drug in question which was
supplied to M/s Aar Kay Surgicals by M/s Generica India Limited, was
.
found to be of sub-standard quality as per Adverse Analysis Report
given by CTL, Kandaghat and as such, no illegally can be said to have
been committed by Drug Inspector, while instituting complaint, for
commission of offence punishable under Section 18(a)(i) punishable
of
under Section 27(d) of the Act, against the accused named in the
complaint, including the petitioner, but the question which needs
determination at this stage is, “whether case made out against the
rt
petitioner herein, being Authorized Signatory of M/s Generica India
Limited under Section 18(a)(i) of Act is sustainable on account of
certain immunities granted under Section 19(3) of the Act or not?.
Section 19(3) reads as under:
“19. Pleas.–(1)x x x x
(2) x x x x(3) A person, not being the manufacturer of a drug or cosmetic or his
agent for the distribution thereof, shall not be liable for acontravention of section 18 if he proves–
(a) that he acquired the drug or cosmetic from a duly licensed
manufacturer, distributor or dealer thereof;
(b) that he did not know and could not, with reasonable diligence,
have ascertained that the drug or cosmetic in any way contravened
the provisions of that section; and
(c) that the drug or cosmetic, while in his possession, was properly
stored and remained in the same state as when he acquired it.”
29. Aforesaid provisions of Section 19(3) categorically provide that a
person, not being the manufacturer of a drug or cosmetic or his agent
for the distribution thereof, shall not be liable for a contravention of
Section 18 if he proves (a) that he acquired the drug or cosmetic from a
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18 2026:HHC:10091
duly licensed manufacturer, distributor or dealer thereof; (b) that he did
not know and could not, with reasonable diligence, have ascertained
.
that the drug or cosmetic in any way contravened the provisions of that
section; and (c) that the drug or cosmetic, while in his possession, was
properly stored and remained in the same state as when he acquired it.
30. In the instant case, M/s Legen Healthcare, manufacturer of drug
of
in question neither claimed before authority concerned, that drug in
question was not supplied to M/s Generica India Limited or that the
same was not properly stored by M/s Generica India Limited rather,
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M/s Legen Healthcare, while responding to notice issued by Drug
Inspector concerned, admitted factum of its having manufactured the
drug in question and its supply to M/s Generica India Limited under
proper invoice. If the reply given by M/s Legen Healthcare to Drug
Inspector concerned is perused, it specifically laid challenge to the
report of CTL Kandaghat and requested to send second sample of
drug in question to Central Drug Laboratory, for re-testing. Needless to
say as per procedure, company concerned can apply for re-testing of
sample, but with the permission of Magistrate concerned.
31. No doubt, on account of report of CTL Kandaghat, case if any, is
made out under Section 18(a)(i) punishable under S.27(d) of the Act,
against the manufacturer, stockiest, and the trader but since
stockiest/trader can claim immunity from action under Section 18 of the
Act, subject to satisfaction of conditions contained under Section 19(3),
there appears to be merit in the contention of Mr. Sharma, learned
senior counsel appearing for the petitioner, that, once there is an
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19 2026:HHC:10091
admission on the part of M/s Legen Healthcare, manufacturer of drug,
that the same was sold to M/s Generica India Limited under proper
.
invoice and it had no knowledge that the drug has contravened
provisions of Section 18 coupled with the fact that there is nothing on
record to suggest that the drug was not properly stored, after its
acquisition from manufacturer, case if any under Section 18 would not
of
succeed in the competent court of law. It also emerges from the record
that on the date of receipt of notice from Drug Inspector concerned,
stock of the drug in question stood sold out, as is evident from
rt
communication dated 23.12.2009.
32. Apart from above, this court finds that Drug Inspector
concerned, while initiating proceedings against various accused named
in the complaint, failed to implead M/s Generica India Limited and M/s
Legan Healthcare, being traders/stockiest and manufacturing firm
respectively, as accused. If it is so, prosecution, if any, against
petitioner being Authorized Signatory of company is bound to fail.
33. At this stage, it would be apt to take note of Section 34 of the
unamended Act, 1940, 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 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 to prevent the commission of such offence.
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20 2026:HHC:10091
(2) Notwithstanding anything contained in sub-section (1), where an
offence under this Act has been committed by a company and it is
proved that the offence has been committed with the consent or.
connivance of, or is attributable to any neglect on the part of, any
director, manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall also be deemed to be
guilty of that offence and shall be liable to be proceeded against and
punished accordingly.
Explanation.–For the purposes of this section–
(a) “company” means a body corporate, and includes a firm or other
of
association of individuals; and
(b) “director” in relation to a firm means a partner in the firm.”
34. Aforesaid provision of law deals with offence, if any, committed
rt
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 to prevent the
commission of such offence
35. Till the time, company is arrayed as an accused, offence, if any,
committed by company, cannot be ascertained. For the offence, if any,
committed by a company, person responsible for conduct of business
of the company is to be dealt in accordance with law, but admittedly,
for doing so, such company is essentially required to be impleaded as
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accused. However, in the instant case, M/s Generica India Limited and
M/s Legan Healthcare, being traders/stockiest and manufacturing firm
.
respectively, have not been arrayed as party till date. Since aforesaid
company has not been arrayed as accused, it is not understood how
prosecution would prove case against its Authorized Agent i.e.
petitioner herein.
of
36. Reliance in this regard is placed upon a judgment rendered by
Hon’ble Apex Court in Aneeta Hada v. Godfather Travels & Tours
(P) Ltd., (2012) 5 SCC 661, wherein, a similar provision enacted in the
rt
Negotiable Instruments Act was considered by the Hon’ble Supreme
Court and it was held that prosecution of the company is sine qua non
for prosecuting the officials of the company. It is not permissible to
prosecute the officials without prosecuting the company. It was
observed:-
“58. Applying the doctrine of strict construction, we are of the considered
opinion that the commission of an offence by the company is an expresscondition precedent to attract the vicarious liability of others. Thus, the words
“as well as the company” appearing in the section make it absolutely
unmistakably clear that when the company can be prosecuted, then only thepersons mentioned in the other categories could be vicariously liable for the
offence subject to the averments in the petition and proof thereof. One cannot
be oblivious of the fact that the company is a juristic person and it has its own
respectability. If a finding is recorded against it, it would create a concavity in
its reputation. There can be situations when the corporate reputation is
affected when a Director is indicted.
59. In view of our aforesaid analysis, we arrive at the irresistible conclusion
that for maintaining the prosecution under Section 141 of the Act, arraigning
of a company as an accused is imperative. The other categories of offenders
can only be brought in the dragnet on the touchstone of vicarious liability as
the same has been stipulated in the provision itself. We say so on the basis
of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491: 1971 SCC (Cri) 97]::: Downloaded on – 07/04/2026 20:30:14 :::CIS
22 2026:HHC:10091which is a three-judge Bench decision. Thus, the view expressed in
Sheoratan Agarwal [(1984) 4 SCC 352: 1984 SCC (Cri) 620] does not
correctly lay down the law and, accordingly, is hereby overruled. The decision.
in Anil Hada [(2000) 1 SCC 1: 2001 SCC (Cri) 174] is overruled with the
qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC
684: 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as
has been explained by us hereinabove.”
37. A similar view was taken by Hon’ble Apex Court in Dayle
of
De’souza v. Govt. of India, 2021 SCC OnLine SC 1012, wherein it
was observed:-
“24. There is yet another difficulty for the prosecution in the present case as
rt
the Company has not been made an accused or even summoned to be tried
for the offence. The position of law as propounded in State of Madras v. C.V.Parekh (1970) 3 SCC 491, reads:
“3. Learned Counsel for the appellant, however, sought conviction of
the two respondents on the basis of Section 10 of the Essential
Commodities Act under which, if the person contravening an ordermade under Section 3 (which covers an order under the Iron and
Steel Control Order, 1956), is a company, every person who, at the
time the contravention was committed, was in charge of, and wasresponsible to, the company for the conduct of the business of the
company as well as the company, shall be deemed to be guilty of thecontravention and shall be liable to be proceeded against and
punished accordingly. It was urged that the two respondents were in
charge of, and were responsible to, the Company for the conduct ofthe business of the Company and, consequently, they must be held
responsible for the sale and for thus contravening the provisions of
clause (5) of the Iron and Steel Control Order. This argument cannot
be accepted, because it ignores the first condition for the applicability
of Section 10 to the effect that the person contravening the order
must be a company itself. In the present case, there is no finding
either by the Magistrate or by the High Court that the sale in
contravention of clause (5) of the Iron and Steel Control Order was
made by the Company. In fact, the Company was not charged with
the offence at all. The liability of the persons in charge of the
Company only arises when the contravention is by the Company
itself. Since, in this case, there is no evidence and no finding that the::: Downloaded on – 07/04/2026 20:30:14 :::CIS
23 2026:HHC:10091Company contravened clause (5) of the Iron and Steel Control Order,
the two respondents could not be held responsible. The actual
contravention was by Kamdar and Vallabhdas Thacker and any.
contravention by them would not fasten responsibility on the
respondents. The acquittal of the respondents is, therefore, fully
justified. The appeal fails and is dismissed.”
25. However, this proposition was later deviated from in Sheoratan Agarwal
v. State of Madhya Pradesh (1984) 4 SCC 352. This case pertained to the
pari materia provision under Section 10 of the Essential Commodities Act,
1955. The court held that anyone among the company itself; every person in
of
charge of and responsible to the company for the conduct of the business; or
any director, manager, secretary or other officers of the company with whose
consent or connivance or because of whose neglect offence had been
rt
committed, could be prosecuted alone. However, the person in charge or an
officer of the company could be held guilty in that capacity only after it has
been established that there has been a contravention by the company as
well. However, this will not mean that the person in charge or an officer of the
company must be arraigned simultaneously along with the company if he is
to be found guilty and punished.
26. Relying upon the reasoning in Sheoratan Agarwal (supra) and limiting the
interpretation of C.V. Parekh (supra), this Court in Anil Hada v. Indian Acrylic
Ltd. (2000) 1 SCC 1 had held that:
“13. If the offence was committed by a company it can be punished
only if the company is prosecuted. But instead of prosecuting the
company if a payee opts to prosecute only the persons falling within
the second or third category, the payee can succeed in the case only
if he succeeds in showing that the offence was actually committed bythe company. In such a prosecution the accused can show that the
company has not committed the offence, though such a company is
not made an accused, and hence the prosecuted accused is not
liable to be punished. The provisions do not contain a condition that
prosecution of the company is sine qua non for prosecution of the
other persons who fall within the second and the third categories
mentioned above. No doubt a finding that the offence was committed
by the company is sine qua non for convicting those other persons.
But if a company is not prosecuted due to any legal snag or
otherwise, the other prosecuted persons cannot, on that score alone,
escape from the penal liability created through the legal fiction
envisaged in Section 141 of the Act.”
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24 2026:HHC:10091
27. However, subsequent decisions of this Court have emphasised that the
provision imposes vicarious liability by way of deeming fiction which
presupposes and requires the commission of the offence by the company
.
itself as it is a separate juristic entity. Therefore, unless the company as a
principal accused has committed the offence, the persons mentioned in
subsection (1) would not be liable and cannot be prosecuted. Section 141(1)
of the Negotiable Instruments Act, extends vicarious criminal liability to the
officers of a company by deeming fiction, which arises only when the offence
is committed by the company itself and not otherwise. Overruling Sheoratan
Agarwal and Anil Hada, in Aneeta Hada v. Godfather Travels and Tours
of
Private Limited (2012)5 SCC 661, a 3-judge bench of this court expounding
on the vicarious liability under Section 141 of the Negotiable Instruments Act,
has held:
rt
“51. We have already opined that the decision in Sheoratan Agarwal
runs counter to the ratio laid down in C.V. Parekh which is by a larger
Bench and hence, is a binding precedent. On the aforesaidratiocination, the decision in Anil Hada has to be treated as not laying
down the correct law as far as it states that the Director or any other
officer can be prosecuted without impleadment of the company.
Needless to emphasise, the matter would stand on a different footing
where there is some legal impediment and the doctrine of lex non
cogit ad impossibilia gets attracted.
………
59. In view of our aforesaid analysis, we arrive at the irresistible
conclusion that for maintaining the prosecution under Section 141 of
the Act, arraigning of a company as an accused is imperative. The
other categories of offenders can only be brought in the drag-net on
the touchstone of vicarious liability as the same has been stipulated
in the provision itself. We say so on the basis of the ratio laid down in
C.V. Parekh which is a three-judge Bench decision. Thus, the view
expressed in Sheoratan Agarwal does not correctly lay down the law
and, accordingly, is hereby overruled. The decision in Anil Hada is
overruled with the qualifier as stated in para 51. The decision in Modi
Distillery has to be treated to be restricted to its own facts as has
been explained by us hereinabove.”
38. From the aforesaid exposition of law laid down by Hon’ble Apex
Court, it is thus clear that, a company, being a juristic person, cannot
be imprisoned, but it can be subjected to a fine, which in itself is a
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punishment. Every punishment has adverse consequences, and
therefore, prosecution of the company is mandatory. The exception
.
would possibly be when the company itself has ceased to exist or
cannot be prosecuted due to a statutory bar. However, such exceptions
are of no relevance in the present case. Thus, the present prosecution
must fail for this reason as well. Therefore, it is not permissible to
of
prosecute the petitioner without prosecuting the company. Since the
company has not been arrayed as an accused, therefore, it is not
permissible to prosecute the petitioner in view of the binding
rt
precedents of the Hon’ble Supreme Court.
39. In the instant case, though petitioner has been arrayed as
accused, but the companies namely, M/s Generica India and M/s
Legan Healthcare have not been arrayed as accused, as such,
prosecution of the petitioner alone is bound to fail. Most importantly,
protection under Section 19(3) of Act is also available to petitioner
being stockiest/traders, for the reason that sale of drug in question by
manufacture to M/s Generica India Limited has not been denied by M/s
Legen Healthcare, the admitted manufacturer of drug. It clearly
emerges from the complaint that M/s Generica India Limited being duly
licensed stockiest, purchased drug from duly licensed manufacturer
and sold the same thereafter to M/s Aar Kay Surgicals, vide proper
invoice dated 23.12.2008.
40. Having scanned the entire material adduced on record, vis-Ã -vis
prayer made in the instant petition, this court is persuaded to agree
with Mr. Anand Sharma, learned senior counsel, appearing for the
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petitioners, that this court, while exercising power under Section 482
CrPC may proceed to quash the complaint against the petitioner,
.
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 petitioner in all probabilities.
41. Otherwise also, in case prayer made on behalf of the petitioner
of
is not accepted he would be subjected to unnecessary ordeal of facing
protracted trial, which otherwise is bound to fail.
42. In view of detailed discussion made herein above and law taken
rt
into consideration, present petition is allowed. Complaint No.
HFWHMR(PROS) DRUGS/10-09, registered as Complaint No. 58-1 of
2010 titled as State of Himachal Pradesh (through Drugs Inspector
H.Q. Hamirpur) v. Anil Chand and others as well as consequent
proceedings pending in the court of learned Judicial Magistrate First
Class, Nadaun, Hamirpur (Annexure P-2) are quashed and set aside
qua the petitioner. The petitioner is discharged henceforth.
Petition stands disposed of. All pending applications, stand
disposed of.
(Sandeep Sharma)
Judge
April 2, 2026
(vikrant)
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