Himachal Pradesh High Court
Sh. Saurabh Bhargava vs State Of Himachal Pradesh And Others on 29 June, 2026
Author: Sandeep Sharma
Bench: Sandeep Sharma
2026:HHC:25388
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
CrMMO No. 770 of 2024
Decided on: 29.6.2026
.
________________________________________________________
Sh. Saurabh Bhargava ...........Petitioner
Versus
State of Himachal Pradesh and others ........Respondents
________________________________________________________
Coram:
Hon'ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? 1
________________________________________________________
of
For the Petitioner : Mr. Atul Sahi, Advocate.
For the Respondents : Mr. Rajan Kahol, Additional Advocate
General and Mr. Ravi Chauhan & Mr.
rt Anish Banshtu, Deputy Advocates
General, for the State.
Mr. Hemant Kumar Thakur, Advocate, for
respondent No.4.
Mr. Anand Sharma, Senior Advocate with
Mr. Karan Sharma, Advocate, for
respondent No.5.
Nemo for respondents No. 2, 3 and 6.
________________________________________________________
Sandeep Sharma, Judge (oral):
By way of instant petition filed under Section 482 CrPC,
prayer has been made on behalf of the petitioner for quashing of 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 8.1.2009 Drug Inspector,
Headquarters, Hamirpur alongwith Shri Jagdish Chand, Peon, visited
1
Whether the reporters of the local papers may be allowed to see the judgment?
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premises of co-accused /respondent No. 2 Anil Chand Pharmacist, in-
charge of M/s Shri Shri Medical Store, Opposite Bus Stand Nadaun, District
.
Hamirpur, Himachal Pradesh. Drug Inspector concerned after having
noticed that said Anil Chand was conducting business of stocking and
exhibiting allopathic drugs for sale 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 namely Chlorpheniramine Maleate Tablets
of
(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,
rt
Himachal Pradesh. As per procedure, aforesaid drug was sent for chemical
examination to C.T.L. Kandaghat. However, vide report dated 31.10.2009
(annexed with the complaint) sample of aforesaid Chlorpheniramine
Maleate was “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.”(available page 96 of paper book).
3. After receipt of aforesaid ‘adverse’ analysis report,
(AnnexureP-J), Drug Inspector concerned, vide letter dated 9.11.2009, sent
a communication to Anil Chand, Pharmacist respondent No.2, (Annexure P-
J1) In Charge M/s Shri Shri Medical Store to disclose the information as
required under S.18-A of the Act, who in turn, vide his reply, (Annexure
PJ2) 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 (Annexure PJ3 of
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complaint). Drug Inspector concerned, issued letter dated 2.12.2009 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 Section18-A of the Act, who in turn vide letter dated
9.12.2009, (Annexure PK2 of complaint) disclosed that the drug in question
was purchased by it from M/s Generica India Limited, 718, 719, Main Burari
Road, Burari, Delhi vide invoice No. GIO-2530, dated 21.10.2008
of
(Annexure PK4 of complaint). Said firm also informed vide letter 9.12.2009
that drug was received by it from authorized signatory of the said firm,
4.
rt
namely Mr. Hem Raj Thakur.
In the aforesaid background, Drug Inspector sent a notice to
M/s Generica India Limited on 17.12.2009 (Annexure PL of complaint) with
a copy of Adverse Analysis Report and related copies of purchase invoices,
asking it to disclose the information as required under S.18-A of the Act.
M/s Generica India Limited vide letter dated 23.12.2009 (Annexure PM of
complaint) disclosed that the said drug was purchasd 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. (Annexure PM1 of complaint).
(page 136, 139 of paper book).
5. On the basis of information shared by M/s Legen Healthcare,
which had allegedly manufactured the drug in question, Drug Inspector
issued letter dated 1.2.2010 (Annexure PN of complaint) enclosing
therewith sealed sample portion and it was asked to disclose the
information as required under S.18-A of the Act. Said company issued letter
dated 10.2.2010 stating that it was not satisfied with report of CTL
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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 of
provisions of the Act, filed a complaint in the competent court of law inter
alia impleading petitioner, as accused No.10, who happens to be partner of
M/s Legen Healthcare.
6. Taking cognizance of averments contained in the complaint
of
and documents annexed therewith, learned trial Court issued process
against the accused named in the complaint, including the petitioner,
7.
rt
however, fact remains that the complaint is still pending adjudication.
Initially, one of the partners of M/s Legen Healthcare, namely
Ashish Mittal (Accused No. 11) had approached this court by way of
CrMMO No. 111 of 2013, titled Ashish Mittal v. Shri Anil Chand and others
for quashing of proceedings. On account of pendency of aforesaid petition,
proceedings in the complaint filed by Drug Inspector could not proceed
further. On account of judgment dated 16.9.2013 passed by Co-ordinate
Bench of this Court in CrMMO No. 111 of 2013, Ashish Mittal, partner, M/s
Legen Healthcare was discharged and complaint qua aforesaid accused
was quashed. Subsequently, Mr. Anil Mediratta, Rashmi Mediratta and Amit
Mediratta, who are accused No. 5 to 7 in the complaint, also approached
this Court by way of CrMMO No. 738 of 2021, for quashing the afore
complaint and this Court vide judgment dated 4.7.2024 while allowing the
petition quashed the complaint and discharged them.
8. Though after passing of judgment dated 16.9.2013, stay
granted by this court in proceedings sought to be quashed, stood vacated,
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but yet proceedings in the complaint were not taken forth. It is only in the
year 2021, notices were issued to other respondents including petitioner but
.
the fact remains that till date, charge has not been framed.
9. 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 admitted.
10. Precisely, the grouse of the petitioner, as has been
of
highlighted in the present petition and further canvassed by Mr. Atul Sahi,
Advocate, appearing for the petitioner is that Section 34 of the Drugs Act
rt
encapsulates the concept of vicarious liability on the persons, who are
Incharge of, and were responsible to the company for the conduct of the
business of the company, as well as the company for making them guilty of
the offences committed by the company, which terms indubitably includes
the partnership firms. He submitted that though petitioner herein is partner
of firm, but he could neither be termed Incharge nor responsible for the
conduct of the business of the firm so as to fasten vicarious liability. While
making this Court peruse complaint, which is sought to be quashed, Mr.
Sahi, strenuously argued that no role has been assigned to petitioner in the
firm. Complaint has been filed in a casual and mechanical manner without
ascertaining the true and correct facts rendering the entire prosecution as a
nullity. He submitted that petitioner has nothing to do with the day-to-day
affairs of the firm. For that matter, the manufacturing and analysis are done
under the supervision of technical staff duly endorsed on the licenses
issued by the competent authority. He submitted that day-to-day affairs of
the firm are being taken/carried by the authorized representative, who is
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appointed by firm, hence, in no circumstances, petitioner could be termed to
be the person Incharge of, and responsible to the firm for the conduct of the
.
business. He further argued that otherwise also, complaint is not
maintainable for the reason that M/s Legen Healthcare has not been made
as an accused, which is otherwise essential in such like cases. In support
of his aforesaid contentions, he placed reliance upon the judgment passed
by the Hon’ble Apex Court in Aneeta Hada v. Godfather Travels & Tours
of
(P) Ltd., (2012) 5 SCC 661, judgment dated 16.9.2013, passed by
coordinate Bench of this Court in CrMMO No. 111 of 2013, titled as Ashish
rt
Mittal v. Shri Anil Chand and Ors. and judgment dated 4.7.2024 passed
by this Court in CrMMO No. 738 of 2021, titled as Anil Mediratta and Ors
v. State of Himachal Pradesh and Ors., wherein this Court while placing
reliance upon afore judgment passed by the Hon’ble Apex Court in Aneeta
Hada (supra) quashed the complaint against the petitioners on the ground
of non-arraignment of firm as an accused.
11. Lastly, Mr. Atul Sahi, learned 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 petitioner who 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 partner of
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the M/s Legen Healthcare, is liable and responsible for conduct of business
of the company. He submitted that respondent No.5 Mr. Hem Raj Thakur,
.
was merely an authorized representative of the company and petitioner
being partner of the Company is liable to be punished for the commission of
offence punishable under Section 27 of the Act. While referring to Section
19(3) of the Act, Mr. Rajan Kahol, learned Additional Advocate General
argued that once, there is no denial to the fact that drug in question was
of
manufactured by the company concerned and same was not found to be of
standard quality, petitioner along with other co-accused being partner and
rt
Directors of company have 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 fixed for consideration on charge. 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.
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 and competence
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of this Court to quash the criminal proceedings while exercising power
under Section 482 of Cr.PC (now Section 528 of BNSS).
.
15. In this regard, reliance is place upon Amish Devgan vs
Union of India and Ors, (2021) 1 SCC 1, wherein 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. Pirthiof
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
rt 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 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.”
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16. 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 Courtin 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 collectingof
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
rt
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 the High Court, it does not appear that theHigh 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 andwhether 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 theinvestigation/inquiry the matter stands on different footing and the Court is
required to consider the material/evidence collected during theinvestigation. 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 case as if theHigh 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
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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 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
of
Kumar and Ors., (2025) SCC OnLine SC 1313, held as under:
“9. The scope of the Court’s power to quash and set aside proceedings is
rt
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 theHigh 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 iscircumscribed. 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 madein the FIR or the charge-sheet constitutes the ingredients of the
offence/offences alleged. Interference by the High Court underSection 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 lookedinto 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,
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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 are revived 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
of
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.
rt
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 ought not to be permitted to
degenerate into a weapon of harassment or persecution.
20. 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.
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21. 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
.
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 inState 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:
of
“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
rt 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 wayof 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 rigidformulae and to give an exhaustive list of myriad kinds of cases
wherein such power should be exercised.
(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 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 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.
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(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
of
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 due to a private and personal grudge.” (emphasis added)
8. Of the aforesaid criteria, clause no. (1), (4) and (6) would be of
rt
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 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
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.”
22. 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.
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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.
9. It is in this backdrop that this Court, over the course of several
decades, has laid down the principles and guidelines that High Courtsmust 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) theof
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 are willing to settle
and compound the dispute amicably (State of Haryana v. Bhajan Lal,
rt
1992 Supp (1) SCC 335).”
23. 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.
24. 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.
25. 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 liability
has been fastened upon a person who, at the time the offence was
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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 ofthe 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:
of
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.”
26.
rt
Aforesaid provision of law deals with offence, if any,
committed by company. Aforesaid provision of law provides that where an
offence under this Act has been committed by a company, every person
who at the time of commission of offence, 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 the offence. Since,
in the case at hand also, Mr. Suresh Chandra Dubey and Mr. Praveen
Singh were in-charge of and were responsible to, the company for the
conduct of the business of the company, liability cannot be fastened on
petitioner, especially petitioner nos. 2 to 5, being partners of the firm.
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16 2026:HHC:25388
27. In this regard, reliance is placed upon judgment of Hon’ble
Apex Court in Susela Padmavathy Amma v. Bharti Airtel Ltd., 2024 SCC
.
OnLine SC 311 wherein it has been held that a person can be 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
of
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:
rt
“34. Offences by companies.–(1) Where an offence under this Act has
been committed by a company, every person who at the time the offencewas 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 that the
offence was committed without his knowledge or that he exercised all duediligence to prevent the commission of such offence.
It is thus seen that the vicarious liability of a person for being prosecutedfor 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 adirector 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 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 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
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17 2026:HHC:25388
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 behalfof
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
rt
guide the course of business of the company. It may be that a Board of
Directors may appoint sub-committees consisting of one or two directorsout 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 aquestion 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 companyin order to illustrate the point that there is no magic as such in a particular
word, be it director, manager or secretary. It all depends upon therespective roles assigned to the officers in a company. …..”
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.
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18 2026:HHC:25388
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 incharge of and was not responsible for the conduct of the 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 :
of
(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
rt
make a bald, cursory statement in a complaint that the Director (arrayed
as an accused) is in charge of and responsible to the company for theconduct 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 or was responsible to the
accused Company for the conduct of its business. This is in consonancewith 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 thebusiness 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] ).
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19 2026:HHC:25388
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 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
of
vicariously liable. Section 141 raises a legal fiction. By reason 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
rt
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:
“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::: Downloaded on – 10/07/2026 20:36:44 :::CIS
20 2026:HHC:25388duties and responsibilities in the conduct of the business of the company
and how and in what manner he is responsible or liable.”
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
complainant should specifically show as to how and in what manner the
accused was responsible. Simply because a person is a Director of adefaulter 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 offenceof
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].)
rt
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 Companyunder 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.”
28. 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 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
(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:
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21 2026:HHC:25388
i 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;
.
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 companywhose 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)of
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
rt 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 ofthe 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.
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 construedstrictly. Penal statutes providing constructive vicarious liability should be
construed much more strictly. When conditions are prescribed forextending 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 therequirements of section 141 is imperative. As 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, 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::: Downloaded on – 10/07/2026 20:36:44 :::CIS
22 2026:HHC:25388connivance, 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 thoseof
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 for the
rt
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 andresponsible 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 hesatisfies 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 Company and not ondesignation or status. If being a Director or Manager, or Secretary was
enough to cast criminal liability, the Section would have said so. Insteadof “every person”, the section would have 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 asthe 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::: Downloaded on – 10/07/2026 20:36:44 :::CIS
23 2026:HHC:25388a 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 anon-director can be liable 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).”
of
29. Reliance is also placed upon judgment of Hon’ble Apex Court
in case titled Rajesh Viren Shah v. Redington India Ltd., (2024) 4 SCC
rt
305: 2024 SCC OnLine SC 143, K.S. Mehta v. Morgan Securities &
Credits (P) Ltd., 2025 SCC OnLine SC 492. Similarly, in yet another
judgment of Hon’ble Apex Court in Siby Thomas v. Somany 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.
30. 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 the petitioner being
partner and his responsibility towards firm M/s Legen Healthcare, which is
not made accused in the complaint. These averments do not satisfy the
parameters laid down by the Hon’ble Supreme Court in the aforesaid
judgments.
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24 2026:HHC:25388
31. No doubt, petitioner is partner of the M/s Legen Healthcare,
but the question which needs to be determined is whether he being in the
.
capacity of partner of the accused-firm could be prosecuted in the given
facts and circumstances, especially when firm has appointed competent
Technical Staff/authorised representative, as is evident from the certificate
of renewal of license issued by the State Drugs Controller. Interestingly,
authorised representatives, who are otherwise responsible for testing, have
of
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
rt
observed hereinabove, there is no specific mention with regard to role of
the partner, as far as manufacturing is concerned. Careful perusal of
averments contained in the complaint nowhere suggest that petitioner was
responsible for day-to-day affairs of the firm, especially manufacturing,
which otherwise was done under the supervision of technical team.
32. Leaving everything aside, this Court finds that M/s Legen
Healthcare of which petitioner is one of the partner has been not arrayed
as an accused. If it is so, presumption, if any, against the petitioner being
partner of the Company is bound to fail especially when there is nothing on
record to suggest that on the date of drawing samples, petitioner being
partner of the company was responsible for day to day affairs of the
company.
33. At this stage, it would be apt to take note of Section 34 of the
unamended Act, 1940, which is reproduced herein above. Aforesaid
provision of law deals with offence, if any, committed by company.
Aforesaid provision provides that where an offence under this Act has been
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25 2026:HHC:25388
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.
34. Till the time, company is arrayed as an accused, offence, if
any, committed by company, cannot be ascertained. For the offence, if any,
of
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,
rt
such company is essentially required to be impleaded as an accused.
However, in the instant case, M/s Legen Healthcare has 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
Director/Partner i.e. petitioner herein.
35. Reliance in this regard is placed upon Aneeta Hada (supra),
wherein, a similar provision enacted in the 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 express
condition 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 the persons 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::: Downloaded on – 10/07/2026 20:36:44 :::CIS
26 2026:HHC:25388a 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 categoriesof 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] which is a three-judge Bench decision.
of
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
rt
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 ushereinabove.
36. A similar view was taken by Hon’ble Apex Court in Dayle
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 the Company has not been made an accused or even
summoned to be tried for the offence. The position of law as propoundedin 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 CommoditiesAct under which, if the person contravening an order made 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 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 contravention 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 of the 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::: Downloaded on – 10/07/2026 20:36:44 :::CIS
27 2026:HHC:25388accepted, 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 isby the Company itself. Since, in this case, there is no evidence and no
finding that the Company 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 anyof
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
rt
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 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 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 by the 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::: Downloaded on – 10/07/2026 20:36:44 :::CIS
28 2026:HHC:25388prosecution 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.”
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
of
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
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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 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:
“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 aforesaid ratiocination, the
decision in Anil Hada has to be treated as not laying down the correct lawas far as it states that the Director or any other officer can be prosecuted
without impleadment of the company. Needless to emphasise, the matterwould stand on a different footing where there is some legal impediment
and the doctrine of lex non cogit ad impossibilia gets attracted.
xxxxxxxx
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.”
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29 2026:HHC:25388
37. 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 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
of
must fail for this reason as well. Therefore, it is not permissible to 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,
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being partner of the Company, in view of the binding precedents of the Hon’ble
Supreme Court.
38. Having scanned the entire material adduced on record, vis-Ã -
vis prayer made in the instant petition, this court is persuaded to agree with
learned counsel, appearing for the petitioner, 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.
39. Otherwise also, in case prayer made on behalf of the
petitioner is not accepted he would be subjected to unnecessary ordeal of
facing protracted trial, which otherwise is bound to fail.
40. In view of detailed discussion made herein above and law
taken into consideration, present petition is allowed. 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
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30 2026:HHC:25388
pending in the court of learned Judicial Magistrate First Class, Nadaun,
Hamirpur are quashed and set aside qua the petitioner. The petitioner is
.
discharged henceforth. All pending applications, stand disposed of.
(Sandeep Sharma)
Judge
June 29 , 2026
Manjit
of
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