Himachal Pradesh High Court
Sushil Khanna vs Union Of India on 3 August, 2026
Author: Sandeep Sharma
Bench: Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr.MMO No. 187 of 2026
Reserved on: 27.07.2026
.
Date of Decision: 03.08.2026
______________________________________________________________________________
Sushil Khanna .........Petitioner
Versus
Union of India .........Respondent
of
Coram
Hon'ble Mr. Justice Sandeep Sharma, Judge.
rt
Whether approved for reporting?
_____________________________________________________________________________
For the Petitioner: Mr. Nitin Bhasin, Mr. Tarun Sharma and Mr. Akash
Bharti Advocates
For the Respondent: Mr. Balram Sharma, Deputy Solicitor General of India
______________________________________________________________________________
Sandeep Sharma, Judge
By way of instant petition filed under 528 of Bharatiya Nagarik Suraksha
Sanhita, 2023, prayer has been made on behalf of the petitioner herein for
quashing of Complaint bearing registration no. 15 of 2024 (CNR No.
HPSO11010732024), titled Union of India v. M/s Crest Lifesciences Pvt. Ltd. &
others, filed on 18.03.2024 under Sections 16, 18(a)(i) read with Section 27 of
Drugs and Cosmetics Act, 1945 pending before the Court of Ld. Chief Judicial
Magistrate, Nalagarh, Baddi, Himachal Pradesh as well as consequential
orders, including summoning order dated 05.06.2024 passed by Chief Judicial
Magistrate, Nalagarh, Baddi, Himachal Pradesh.
1
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
2. Precisely facts of the case are that complainant, Drugs Inspector,
drew a sample on Form-17 and Form 17-A of drug ‘OFLOX OZ SUSPENSION
30ml, Ofloxacin & Metronidazole Suspension’, Batch No. CLOF14014′, DoM-
09/20221, DoE-08/2023, manufactured by M/s Crest Lifesciences Pvt. Ltd.,
.
Plot No. 127-128, EPIP, Phase- I, Jharmajri, Tehsil Baddi, District Solan, H.P.,
marketed by M/s Cipla House, Peninsula Business Park, Ganpatrao Kadam
Marg, Lower Parel, Mumbai from finished goods store of manufacturer during
visit of manufacturing firm on 21.09.2021.
3. Thereafter, the Drugs Inspector, on 22.09.2021, sent one sample of
of
the drug in question alongwith one copy of Form-18 to the Government
Analyst, Regional Drugs Testing Laboratory (RDTL), Chandigarh, after
completing the codal formalities. Complainant received test and analysis report
rt
dated 21.11.2021 from the Government Analyst on Form-13 whereby the said
sample of the drug was declared as “Not of Standard Quality” with remarks
that the sample does not conform to claim as per Patent & Proprietary in
respect to the Assay of Ofloxacin, Metronidazole Benzoate calculated as
Metronidazole. After receipt of the said sample analysis report, a letter dated
01.12.2021 was issued to M/s Crest Lifesciences Pvt. Ltd calling upon them to
furnish certified copies of documents pertaining to drug in question. In
response, M/s Crest Lifesciences Pvt. Ltd., being the manufacturer of the said
drug, informed that it did not agree with the findings of the Government
Analyst and requested that the sample be reanalyzed/retested by the Central
Drugs Laboratory (CDL), Kolkata. Consequently, one portion of sample was
sent to CDL, Kolkata through the Additional Chief Judicial Magistrate,
Nalagarh on 03.01.2022 for testing on the application of manufacturer.
Thereafter, Director Incharge, CDL, Kolkata, after test and analysis declared
the sample as ‘Not of Standard Quality’ vide report dated 28.02.2022 with
remarks that the sample does not conform to manufacture’s specification with
respect to ‘Assay’ of Ofloxacin and Metronidazole Benzoate.
2
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
4. Pursuant to the report of the CDL, Kolkata declaring the sample to
be ‘Not of Standard Quality’, the office of the Drugs Controller General (India)
ordered a joint investigation vide order dated 04.04.2022 whereafter a joint
inspection and investigation of the manufacturing premises of M/s Crest
.
Lifesciences Pvt. Ltd. was carried out on 11.04.2022 by Shri Arun Prashar,
Drugs Inspector, Central Drugs Standard Control Organisation (CDSCO),
Baddi, along with the Drugs Inspector, Baddi, Himachal Pradesh, with a view
to assess compliance with Good Manufacturing Practices (GMP) and to
ascertain the reasons for the failure of the drug to conform to the prescribed
standards. M/s Cipla Ltd., being the marketer of the drug in question, in
of
response to communication dated 01.12.2021, furnished the Contract
Manufacturing and Supply Agreement executed with M/s Crest Lifesciences
Pvt. Ltd., the Quality Agreement between the parties and the purchase and sale
rt
details relating to the subject batch of the drug. Subsequently, in response to
another communication dated 07.07.2022, M/s Cipla Ltd. also furnished the
particulars of the person responsible for the day-to-day operations concerning
the marketed product.
5. Upon completion of the investigation, the Drugs Controller General
(India), New Delhi, vide communication dated 20.07.2023, accorded
sanction/permission to launch prosecution against the persons found
responsible. Thereafter, the complainant concluded that the drug ‘OFLOX OZ
Suspension 30 ml (Ofloxacin and Metronidazole Suspension)’ falls within the
definition of ‘drug’ under Section 3(b) of the Drugs and Cosmetics Act, 1940
and that M/s Crest Lifesciences Pvt. Ltd., being the manufacturer of the
subject batch, had manufactured a drug which was declared to be ‘Not of
Standard Quality’. The complainant further found that M/s Cipla Ltd. was the
marketer of the drug in question and that the officials nominated by the said
company were responsible for ensuring the quality of the drug as well as for the
day-to-day operations of the marketing company. Consequently, they were also
arrayed as accused in the complaint.
3
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
6. After completion of the codal formalities, the complainant
instituted Complaint No. 15 of 2024 (CNR No. HPSO11010732024), titled Union
of India v. M/s Crest Lifesciences Pvt. Ltd. & others, before the learned Chief
Judicial Magistrate, Nalagarh, alleging commission of offences under the Drugs
.
and Cosmetics Act, 1940. It was alleged that the accused persons had
manufactured, marketed and distributed the drug in question despite the same
having been declared ‘Not of Standard Quality’, thereby attracting penal
liability under the provisions of the Act. Upon presentation of the complaint,
the learned trial Court took cognizance and proceeded against the accused in
accordance with law. In afore background, learned Trial Court, vide order dated
of
05.06.2018 took cognizance of the offence and summoned the petitioner to face
trial, however, fact remains that the complaint is still pending adjudication.
7.
rt
Being aggrieved by the filing of the complaint and summoning
order, the petitioner has approached this Court for the quashing of the
complaint, details whereof are given as above, with the following prayer:
“That Keeping in view the above facts and circumstances of the case, the
petitioner may be granted the following reliefs:-
i) That Record of the case may kindly be summoned.
ii) That the Complaint bearing number Drugs and Cosmetics Ac 15
of 2024 (CNR No. HPSO11010732024) on 18.03.2024 initiated
Under Section 16, 18(a)(i), Read With Section 27 (d) of The Drugs
And Cosmetics Act 1940, Titled as Union of India. Through DrugsInspector, (C.D.S.C.O) Sub Zone Baddi Vs. M/s Crest Lifesciences
Pvt. Ltd and others Pending Before The Learned Chief Judicial
Magistrate, Nalagarh, Baddi H.P may kindly be quashed, in the
interest of justice.
iii) Any other suitable relief as may be deemed just and fit in the facts
and circumstances of the case may kindly be granted in favour of
the petitioner.”
8. Respondent State has filed status report, wherein facts as have
been noticed herein above, have not been disputed, rather stand admitted.
4
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
9. Precisely, the grouse of the petitioner, as has been highlighted in
the present petition and further canvassed by Mr. Nitin Bhasin duly assisted
by Mr. Tarun Sharma and Mr. Akash Bharti, advocates 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 for the reason that petitioner, who is a director of M/s Cresr
Lifesciences Pvt. Ltd. was neither in-charge nor responsible to the firm for
conduct of the business, rather the petitioner had appointed Mr. Vikas Mishra,
Analytical Chemist as the in-charge and he was responsible for the
of
manufacturing and testing of the drugs. While making this court peruse the
complaint, Mr. Bhasin, learned counsel for the petitioner, attempted to carve
out a case that there is not a single word suggestive of the fact that petitioner
rt
being director of firm concerned was responsible for day-to-day activities of the
firm.
10. Mr. Bhasin further argued that Section 34 of the Act encapsulate
the concept of vicarious liability on the persons, who are in-charge 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 term indubitably includes the partnership firms. He submitted
that though petitioner is director of the manufacturing firm, but he could
neither be termed as in-charge 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. Bhasin 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 testing are done under the supervision of technical staff
duly endorsed on the licenses issued by the competent authority.
5
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
11. Mr. Bhasin vehemently argued that entire prosecution instituted
by the Drugs Inspector appointed by the Central Government is without
jurisdiction and without lawful authority. He submitted that executive
functions under Chapter-IV of the Drugs Act shall essentially be exercised by
.
the Drugs Inspector appointed by the State Government, and certainly not by
the one appointed by the Central Government. He further argued that neither
the Constitution nor any Act made by the Parliament, including the Drugs Act
and the Drugs Rules, provide for exercise of the executive functions in relation
to Chapter-IV by any authority of the Central Government, including the Drugs
Inspector appointed by it, rather Drugs Inspector appointed by the Central
of
Government shall, to the exclusion of the State Government, exercise executive
functions in relation to Chapter III relating to import of drugs and cosmetics,
but certainly not in relation to Chapter IV. He submitted that Drugs Inspector
rt
who had filed complaint and at relevant time conducted the investigation, has
not been validly appointed in terms of Section 21 of the Drugs Act by virtue of
the gazette notification specifically for such area and for such classes of drugs
for the purposes of their exercising the jurisdiction and any government order
would not be in accordance with express language of Section 21 of the Drugs
Act.
12. Lastly, Mr. Bhasin argued that principles of natural justice were
not adhered to by the Court concerned before issuing process because no
opportunity of being heard was afforded to the petitioner, rather simply on the
basis of complaint, Court concerned without verifying the correctness of the
averments proceeded to issue summons, which being totally contrary to law
deserves to be interfered with.
13. To the contrary, Mr. Balram Sharma Deputy Solicitor General of
India, for respondent- Union of India, while supporting the registration of
complaint by Drug Inspector against the petitioner, vehemently argued that
petitioner being director of the manufacturing firm is responsible for conduct of
business of the firm. He further submitted that plea that Mr. Mr. Vikas Mishra,
6
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
Analytical Chemist the responsible person, is not acceptable. With regard to
Section 34, he submitted that Section 34 expressly provides that where an
offence has been committed by a company, every person who, at the time of
commission of the offence, was in charge of and responsible to the company for
.
the conduct of its business, as well as the company itself, shall be deemed to
be guilty of the offence and shall be liable to be proceeded against and
punished accordingly. He submitted that petitioner was the director of the
manufacturing firm, involved in manufacture, sale and distribution of the said
drug, therefore he was rightly arrayed as one of the accused so having
contravened Sections 16, 18(a)(i) and 27 of the Act.
of
14. It is averred in the reply that all accused are the persons, who are
responsible for the conduct and affairs of the accused-firm/company and as
rt
such, are liable to be punished under relevant provisions of law, as detailed in
the complaint. Mr. Balram Sharma, learned Deputy Solicitor General of India,
while referring to Section 21 of the Drugs Act submitted that Central
Government or State Government may by notification in the official gazette,
appoint such persons as it thinks fit, having the prescribed qualifications, to be
Inspectors for such areas as may be assigned to them by the Central
Government or the State Government, as the case may be. He submitted that
as per Section 21 of the Drugs Act, appointment of a person as an Inspector is
to be notified in the official gazette for such areas as may be assigned to him by
the Central Government or State Government, as the case may be. He
submitted that it does not prohibit the Government from appointing more than
one person for an area, rather empowers to do so and further it does not
restrict the area assigned to an Inspector to a particular segment of the
Country or State, rather it empowers the Government for appointment of
Inspectors for such areas as may be assigned to them. He submitted that
Drugs Inspector was appointed by the Government of India under Section 21 of
the Drugs and Cosmetics Act, 1940, for whole of India vide Gazette Notification
No.F.No.A12025/03/2012-D dated 07.11.2013. While making this Court
7
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
peruse averments contained in the complaint sought to be quashed, learned
Deputy Solicitor General of India attempted to argue that required pleas with
regard to day-to-day involvement of the petitioner in the affairs of the firm have
been made.
.
15. I have heard Mr. Nitin Bhasin duly assisted by Mr. Tarun Sharma
and Mr. Akash Bharti for the petitioner and Mr Balram Sharma, Ld. Deputy
Solicitor General of India, for Union of India.
16. Before ascertaining the genuineness and correctness of the
submissions and counter submissions having been made by the learned
of
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 of this
Court to quash the criminal proceedings while exercising power under Section
rt
482 of Cr.PC.
17. In Amish Devgan vs Union of India and Ors, (2021) 1 SCC 1, the
Hon’ble Apex Court held as under:
“(vii) Conclusion and relief
116. At this stage and before recording our final conclusion, we would like to
refer to decision of this Court in Pirthi Chand [State of H.P. v. Pirthi Chand,
(1996) 2 SCC 37 : 1996 SCC (Cri) 210] wherein it has been held : (SCC pp. 44-
45, paras 12-13)
“12. It is thus settled law that the exercise of inherent power of the High
Court is an exceptional one. Great care should be taken by the High
Court before embarking to scrutinise the FIR/charge-sheet/complaint. In
deciding whether the case is rarest of rare cases to scuttle the
prosecution in its inception, it first has to get into the grip of the matter
whether the allegations constitute the offence. It must be remembered
that FIR is only an initiation to move the machinery and to investigate
into cognizable offence. After the investigation is conducted (sic
concluded) and the charge-sheet is laid, the prosecution produces the
statements of the witnesses recorded under Section 161 of the Code in
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
8
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
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.”
of
18. 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
rt
High Court in exercise of powers under Section 482 CrPC has quashed
the criminal proceedings for the offences under Sections 147, 148, 149,406, 329 and 386 IPC. It is required to be noted that when the High
Court in exercise of powers under Section 482 CrPC quashed the
criminal proceedings, by the time the investigating officer after recording
the statement of the witnesses, statement of the complainant and
collecting the evidence from the incident place and after taking statementof 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 thelearned 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 theallegations 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 case as if the9
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
High Court is exercising the appellate jurisdiction and/or conducting the
trial. As held by this Court in Dineshbhai Chandubhai Patel [Dineshbhai
Chandubhai Patel v. State of Gujarat, (2018) 3 SCC 104 : (2018) 1 SCC
(Cri) 683] in order to examine as to whether factual contents of FIR
disclose any cognizable offence or not, the High Court cannot act like the
investigating agency nor can exercise the powers like an appellate court.
.
It is further observed and held that that question is required to be
examined keeping in view, the contents of FIR and prima facie material,
if any, requiring no proof. At such stage, the High Court cannot
appreciate evidence nor can it draw its own inferences from contents of
FIR and material relied on. It is further observed it is more so, when the
material relied on is disputed. It is further observed that in such a
situation, it becomes the job of the investigating authority at such stage
to probe and then of the court to examine questions once the charge-
of
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
rt
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.”
19. 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 firstsatisfy 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 adjudicatean 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 made in the FIR or the charge-sheet constitutes the
ingredients of the offence/offences alleged. Interference by the
High Court under Section 482 CrPC is to prevent the abuse of
process of any court or otherwise to secure the ends of justice. It
is settled law that the evidence produced by the accused in his
defence cannot be looked into by the court, except in very10
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
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 anyopinion 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 are revived and restored to the file of the concernedof
Court.”
20. 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
rt
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.
21. Subsequently, in case titled State of Haryana and others v.
Bhajan Lal and others, 1992 Supp (1) SCC 335, the Hon’ble Apex Court while
elaborately discussing the scope and competence of High Court to quash
criminal proceedings under Section 482 Cr.PC laid down certain principles
governing the jurisdiction of High Court to exercise its power. After passing of
aforesaid judgment, issue with regard to exercise of power under Section 482
Cr.PC, again came to be considered by the Hon’ble Apex Court in case bearing
Criminal Appeal No.577 of 2017 (arising out of SLP (CrL.) No. 287 of 2017)
titled Vineet Kumar and Ors. v. State of U.P. and Anr., wherein it has been
held that saving of the High Court’s inherent powers, both in civil and criminal
matters, is designed to achieve a salutary public purpose i.e. court proceedings
ought not to be permitted to degenerate into a weapon of harassment or
persecution.
11
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
22. 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.
.
23. 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. Inof
this regard, one may refer to the decision of this Court in State of
Haryana v. Ch. Bhajan Lal, 1992 Supp (1) SCC 335, wherein this Court
has summarized some of the principles under which
FIR/complaints/criminal cases could be quashed in the following words:
rt
“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 tothe exercise of the extraordinary power under Article 226 or the
inherent powers under Section 482 of the Code which we have
extracted and reproduced above, we give the following categories
of cases by way of illustration wherein such power could beexercised either to prevent abuse of the process of any court or
otherwise to secure the ends of justice, though it may not be
possible to lay down any precise clearly defined and sufficiently
channelised and inflexible guidelines or rigid formulae and to givean 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.
12
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
(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.
(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
of
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
rt
which a criminal proceeding is instituted) to the institution
and continuance of the proceedings and/or where there is a
specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the
aggrieved party.
(7) Where a criminal proceeding is manifestly attended with
mala fide and/or where the proceeding is maliciously
instituted with an ulterior motive for wreaking vengeance on
the accused and with a view to spite him due to a private
and personal grudge.” (emphasis added)
8. Of the aforesaid criteria, clause no. (1), (4) and (6) would be of
relevance to us in this case.
In clause (1) it has been mentioned that where the allegations made in
the first information report or the complaint, even if they are taken at
their face value and accepted in their entirety do not prima facie
constitute any offence or make out a case against the accused, then the
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.
13
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
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.”
24. 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 statutoryof
provision. However, given the broad and profound nature of this
authority, the High Court must exercise it sparingly. The conditions for
invoking such powers are embedded within Section 482 of the CrPC
itself, allowing the High Court to act only in cases of clear abuse of
rt
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 Courts
must follow before quashing criminal proceedings at the threshold,
thereby pre-empting the Prosecution from building its case before the
Trial Court. The grounds for quashing, inter alia, contemplate the
following situations : (i) the criminal complaint has been filed with malafides; (ii) the FIR represents an abuse of the legal process; (iii) no prima
facie offence is made out; (iv) the dispute is civil in nature; (v.) the
complaint contains vague and omnibus allegations; and (vi) the partiesare willing to settle and compound the dispute amicably (State of
Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335)
25. 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/ Section 528
BNSS can proceed to quash the proceedings,
14
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
26. 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.
.
27. 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 committed, was in
charge of and responsible to the Company for the conduct of its business.
of
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,
rt
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 businessof 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.”
28. Aforesaid provision of law deals with offence, if any, committed by
company. It 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 the offence. Since,
15
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
in the case at hand also Mr. Vikas Mishra, Analytical Chemist was in-charge of
and was responsible to, the firm for the conduct of the business of the firm,
liability cannot be fixed on petitioner being director of the firm.
29. 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,
of
this Court observed thus:
“8. Nonetheless, we find that the impugned judgment of the High Court
has got to be upheld for an altogether different reason. Admittedly, the
three respondents were being prosecuted as directors of the
rt
manufacturers with the aid of Section 34(1) of the Act, which reads as
under:
“34. Offences by companies.–(1) Where an offence under this Act has
been committed by a company, every person who at the time the offence
was committed, was in charge of, and was responsible to the company
for the conduct of the business of the company, as well as the companyshall 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 alldue diligence to prevent the commission of such offence.
It is thus seen that the vicarious liability of a person for being prosecuted
for an offence committed under the Act by a company arises if, at thematerial time, he was in charge of and was also responsible to the
company for the conduct of its business. Simply because a person is a
director of the company, it does not necessarily mean that he fulfils both
the above requirements so as to make him liable. Conversely, without
being a director, a person can be in charge of and responsible to 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 to16
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
indicate, even prima facie, that they were in charge of the company and
also responsible to the company for the conduct of its business.”
19. It could thus be seen that this Court had held that simply because a
person is a director of the company, it does not necessarily mean that he
fulfils the twin requirements of Section 34(1) of the said Act so as to
.
make him liable. It has been held that a person cannot be made liable
unless, at the material time, he was in charge of and was also
responsible to the company for the conduct of its business.
20. In the case of S.M.S. Pharmaceuticals Ltd. (supra), this Court was
considering the question as to whether it was sufficient to make the
person liable for being a director of a company under Section 141 of the
Negotiable Instruments Act, 1881. This Court considered the definition of
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
rt
behalf of a company. It happens that a person may be a director in a
company, but he may not know anything about the day-to-day
functioning of the company. As a director, he may be attending meetingsof the Board of Directors of the company, where they usually decide
policy matters and 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 directors out of the Board of the company who may be maderesponsible for the day-today functions of the company. These are
matters which form part of the resolutions of the Board of Directors of a
company. Nothing is oral. What emerges from this is that the role of a
director in a company is a question of fact depending on the peculiarfacts 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 positionof a director in a company in 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 the respective roles assigned to the officers in acompany. …..”
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
17
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
Court further held that these persons, as the designation of their office
suggests, are in charge of a company and are responsible for the conduct
of the business of the company. To escape liability, they will have to
prove that when the offence was committed, they had no knowledge of
the offence or that they exercised all due diligence to prevent the
commission of the offence.
.
22. In the case of Pooja Ravinder Devidasani v. State of Maharashtra
(2014) 16 SCC 1, this Court observed thus:
“17. …… Every person connected with the Company will not fall into the
ambit of the provision. Time and again, it has been asserted by this
Court that only those persons who were in charge of and responsible for
the conduct of the business of the Company at the time of theof
commission of an offence will be liable for criminal action. A Director,
who was not in charge of and was not responsible for the conduct of the
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,
rt
(2010) 3 SCC 330 : (2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113] this
Court observed : (SCC p. 336, paras 13-14)“13. Section 141 is a penal provision creating vicarious liability, which,
as per settled law, must be strictly construed. It is therefore not
sufficient to make a bald, cursory statement in a complaint that the
Director (arrayed as an accused) is in charge of and responsible to thecompany for the conduct of the business of the company without
anything more as to the role of the Director. But the complaint should
spell out as to how and in what manner Respondent 1 was in charge of
or was responsible to the accused Company for the conduct of itsbusiness. This is in consonance with a strict interpretation of penal
statutes, especially where such statutes create vicarious liability.
14. A company may have a number of Directors and to make any or all
the Directors as accused in a complaint merely on the basis of astatement that they are in charge of and responsible for the conduct of
the business of the company without anything more is not a sufficient or
adequate fulfilment of the requirements under Section 141.”(emphasis in
original)
18. In Girdhari Lal Gupta v. D.H. Mehta [Girdhari Lal Gupta v. D.H.
Mehta, (1971) 3 SCC 189: 1971 SCC (Cri) 279: AIR 1971 SC 2162], this
Court observed that a person “in charge of a business” means that the
person should be in overall control of the day-to-day business of the
Company.
18
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
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] ).
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.
of
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
rt
wordings of the section, but what is required is a clear statement of fact
so as to enable the court to arrive at a prima facie opinion that the
accused is vicariously liable. Section 141 raises a legal fiction. By reason
of the said provision, a person although is not personally liable for the
commission of such an offence would be vicariously liable therefor. Such
vicarious liability can be inferred so far as a company registered or
incorporated under the Companies Act, 1956 is concerned only if the
requisite statements, which are required to be averred in the complaint
petition, are made so as to make the accused therein vicariously liable
for the offence committed by the company.”(emphasis supplied) By
verbatim reproducing the words of the section without a clear statement
of fact supported by proper evidence, so as to make the accused
vicariously liable, is a ground for quashing proceedings initiated against
such person under Section 141 of the NI Act.”
23. It could thus clearly be seen that this Court has held that merely
reproducing the words of the section without a clear statement of fact as
to how and in what manner a director of the company was responsible
for the conduct of the business of the company, would not ipso facto
make the director vicariously liable.
24. A similar view has previously been taken by this Court in the case of
K.K. Ahuja v. V.K. Vora (2009) 10 SCC 48.
19
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
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 thecase of non-director officers, it is all the more necessary to state what
were his duties and responsibilities in the conduct of the business of the
company and how and in what manner he is responsible or liable.”
of
26. In the case of Ashoka Mal Bafna (supra), this Court observed thus:
“9. To fasten vicarious liability under Section 141 of the Act on a person,
the law is well settled by this Court in a catena of cases that the
complainant should specifically show as to how and in what manner the
rt
accused was responsible. Simply because a person is a Director of a
defaulter Company, does not make him liable under the Act. Time and
again, it has been asserted by this Court that only the person who was atthe helm of affairs of the Company and in charge of and responsible for
the conduct of the business at the time of the commission of an offence
will be liable for criminal action. (See Pooja Ravinder Devidasani v. State
of Maharashtra [Pooja Ravinder Devidasani v. State of Maharashtra,(2014) 16 SCC 1 : (2015) 3 SCC (Civ) 384 : (2015) 3 SCC (Cri) 378: AIR
2015 SC 675].)
10. In other words, the law laid down by this Court is that for making a
Director of a Company liable for the offences committed by the Company
under Section 141 of the Act, there must be specific averments againstthe 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.”
30. 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
20
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
and punished for the acts of the Company. Relevant paras of the judgment are
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 ofthe offence and shall be liable to be proceeded against and punished:
i every person who at the time the offence was committed was in
charge of and was responsible to the company for the conduct ofof
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
rt
iii any Director, Manager, Secretary or other officer of the company
whose negligence resulted in the offence under section 138 of the
Act being committed by the company. While the liability of personsin the first category arises under sub-section (1) of Section 141,
the liability of persons mentioned in categories (ii) and (iii) arises
under sub-section (2). The scheme of the Act, therefore, is that a
person who is responsible to the company for the conduct of thebusiness of the company and who is in charge of the business of
the company is vicariously liable by reason only of his fulfilling the
requirements of subsection (1). But if the person responsible to
the company for the conduct of business of the company, was notin charge of the conduct of the business of the company, then he
can be made liable only if the offence was committed with hisconsent 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) ofsection 141 by virtue of a legal fiction. Penal statutes are to be construed
strictly. Penal statutes providing constructive vicarious liability should be
construed much more strictly. When conditions are prescribed for
extending such constructive criminal liability to others, courts will insist
upon strict literal compliance. There is no question of inferential or
implied compliance. Therefore, a specific averment complying with the
requirements of section 141 is imperative. As 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 role21
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
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
connivance, or negligence. If a person is to be made liable under sub-
section (2) of section 141, then it is necessary to aver consent andconnivance, 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
of
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
rt
conduct of the business of the company. Every person connected with
the company shall not fall within the ambit of the provision. It is onlythose 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
conduct of the business of the company at the relevant time, will not beliable under the provision. The liability arises from being in charge of and
responsible for the conduct of the business of the company at the
relevant time when the offence was committed, and not on the basis ofmerely 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 on
designation or status. If being a Director or Manager, or Secretary wasenough to cast criminal liability, the Section would have said so. Instead
of “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 as
the person sought to be made liable is concerned. Therefore, only
persons who can be said to be connected with the commission of a crime
at the relevant time have been subjected to action…
22
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
18. To sum up, there is an almost unanimous judicial opinion that
necessary averments ought to be contained in a complaint before a
person can be subjected to criminal process. A liability under Section
141 of the Act is sought to be fastened vicariously on a person connected
with a company, the principal accused being the company itself. It is a
departure from the rule in criminal law against vicarious liability. A clear.
case should be spelt out in the complaint against the person sought to be
made liable. Section 141 of the Act contains the requirements for making
a person liable under the said provision. That the respondent falls within
the parameters of Section 141 has to be spelt out. A complaint has to beexamined 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 aof
company is not sufficient to satisfy the requirement of Section 141. Even
a non-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.
rt
This will enable him to meet the case at the trial.”(emphasis supplied)
31. Reliance is also placed upon judgment of Hon’ble Apex Court in
case titled Rajesh Viren Shah v. Redington India Ltd., (2024) 4 SCC 305:
2024 SCC OnLine SC 143, K.S. Mehta v. Morgan Securities & Credits (P)
Ltd., 2025 SCC OnLine SC 492. Similarly, in yet another case before theHon’ble Apex Court in Siby Thomas v. Somany Ceramics Ltd., (2024) 1 SCC
348, the Hon’ble Court held that the primary responsibility to make theaverment, 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 cannotbe held liable.
32. 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 petitioner being in-charge and
responsible for affairs of manufacturing firm. These averments do not satisfy23
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
the requirement laid down by the Hon’ble Apex Court in the aforesaid
judgments.
33. No doubt, petitioner is director of the manufacturing firm, but the
question which needs to be determined is ‘whether he being in the capacity of.
director of the manufacturing-firm could be prosecuted in the given facts and
circumstances, especially when firm has appointed authorised representative-
Mr. Vikas Mishra. Though Mr. Sharma, learned Deputy Solicitor General of
India attempted to argue that there is no mention, if any, of name of authorised
person, but after having carefully perused documents, especially Annexure P-8
of
name of Mr. Vikas Mishra is mentioned as Analytical Chemist, responsible for
manufacturing and testing of drugs. Besides above, as has been observed
hereinabove, there is no specific mention with regard to role of the director, i.e.
rt
petitioner herein, as far as manufacturing or testing 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 and testing, which otherwise is done under the supervision of
technical team
34. Though Mr. Sharma attempted to carve out a case that Central
Government or State Government may by notification in the official gazette,
appoint such persons as it thinks fit, having the prescribed qualifications, to be
Inspectors for such areas as may be assigned to them by the Central
Government or the State Government, however, having carefully perused
Sections 26B and 33P, this Court finds force in the submission of Mr. Bhasin,
learned counsel representing the petitioner, that prosecution under Chapter IV
of 1940 Act can only be launched by the State Government and not by Central
Government. Statement of object and reasons of 1940 Act if read with Sections
10 and 18 of 1940 Act, reflects the executive powers in relation to Chapter III
and Chapter IV to be exercised by the Central Government and State
Government respectively. Even otherwise, Articles 73 and 162 of the
Constitution also provides for the executive power in relation of subject under
24
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
Concurrent List (List III) of the Seventh Schedule to be exercised by the State
Government to the exclusion of the Central Government. The executive power
in relation to Concurrent List (List III) of the Seventh Schedule can be exercised
by the Central Government only in case it is provided by the Constitution or
.
any Act made by the Parliament. Chapter IV of the 1940 Act nowhere provides
such exercise of powers by the Central Government, except where the same is
expressly provided under Sections 26A, 26B, 33P, etc, conferring executive
power to the Central Government. At this stage, it would be apt to take note of
Sections 26-A, 26-B & 33-P, which read as under:
of
“26A. Powers of Central Government to prohibit manufacture, etc.,
of drug and cosmetic in public interest.– Without prejudice to any
other provision contained in this Chapter, if the Central Government is
satisfied, that the use of any drug or cosmetic is likely to involve any risk
to human beings or animals or that any drug does not have the
rt
therapeutic value claimed or purported to be claimed for it or contains
ingredients and in such quantity for which there is no therapeuticjustification and that in the public interest it is necessary or expedient so
to do, then, that Government may, by notification in the Official Gazette,
regulate, restrict or prohibit the manufacture, sale or distribution of such
drug or cosmetic.
26B. Power of Central Government to regulate or restrict,
manufacture, etc., of drug in public interest. — Without prejudice to
any other provision contained in this Chapter, if the Central Governmentis satisfied that a drug is essential to meet the requirements of an
emergency arising due to epidemic or natural calamities and that in the
public interest, it is necessary or expedient so to do, then, thatGovernment may, by notification in the Official Gazette, regulate or
restrict the manufacture, sale or distribution of such drug.
33P. Power to give directions.– The Central Government may give
such directions to any State Government as may appear to the Central
Government to be necessary for carrying into execution in the State any
of the provisions of this Act or of any rule or order made thereunder.”
35. Section 26A empowers Central Government to prohibits
manufacture of drugs and cosmetics in public interest. If the Central
Government is satisfied, that the use of any drug or cosmetic is likely to involve25
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
any risk to human beings or animals or that any drug does not have the
therapeutic value claimed or purported to be claimed for it or contains
ingredients and in such quantity for which there is no therapeutic justification
and that in the public interest it is necessary or expedient so to do, then.
Government may, by notification in the Official Gazette, regulate, restrict or
prohibit the manufacture, sale or distribution of such drug or cosmetic.
Similarly Section 26B empowers Central Government to regulate or restrict,
manufacture, etc., of drug in public interest. Otherwise also, if the Central
Government is satisfied that a drug is essential to meet the requirements of an
emergency arising due to epidemic or natural calamities and that in the public
of
interest, it is necessary or expedient so to do, then Government may, by
notification in the Official Gazette, regulate or restrict the manufacture, sale or
distribution of such drug. Besides aforesaid provision of law, Section 33P also
rt
empowers Central Government to give such directions to any State Government
as may appear to the Central Government to be necessary for carrying into
execution in the State any of the provisions of this Act or of any rule or order
made thereunder. Section 10 and 10A of the Act empowers Central
Government to prohibit import of certain drugs or cosmetics in public interest.
At this stage, it would be also apt to take note of Section 18 of the Act, which
read as under:
“18. Prohibition of manufacture and sale of certain drugs and
cosmetics.– From such date as may be fixed by the State Governmentby 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;
26
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
(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;
(vi)any drug or cosmetic in contravention of any of the provisions
of
of this Chapter or any rule made thereunder;
(b)sell, or stock or exhibit or offer for sale, or distribute any drug or
cosmetic which has been imported or manufactured in contravention of
rt
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 notification, the manufacture for sale orfor distribution, sale, stocking or exhibiting or offering for sale or
distribution of any drug or class of drugs not being of standard quality.”
36. Section 18, reproduced hereinabove, prohibits any person from
manufacture for sale or for distributing, or selling, or stocking or exhibiting any
drug which is not of a standard quality, or is misbranded, adulterated or
spurious and is not in accordance with the condition of licence issued for such
purpose. However, such notification shall be issued by the State Government
in official gazette. Chapter IV includes manufacture, sale and distribution of
drugs and cosmetics. The executive power essentially lies with the Drugs27
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
Inspector appointed by the State Government. Article 256 of the Constitution of
India and statement of objects and reasons to Drugs Act, in no uncertain
terms, renders the exercise of authority by the Drugs Inspector appointed by
the Central Government completely without jurisdiction for want of executive.
power, which power exclusively lies with the Drugs Inspector appointed by the
State Government. Neither the Constitution nor any Act made by the
Parliament, including the Drugs Act and the Drugs Rules, provide for exercise
of the executive functions in relation to Chapter IV by any authority of the
Central Government, including the Drugs Inspector appointed by it, rather
Drugs Inspector appointed by the Central Government shall, to the exclusion of
of
the State Government, exercise executive functions in relation to Chapter III
relating to import of drugs and cosmetics, but constitutionally not in relation to
Chapter IV. The licensing, and overall control, in relation to manufacture, sale,
rt
or exhibit or offer for sale forming part of Chapter IV, essentially lies with the
State Government, and to the exclusion of the Central Government, in the
absence of any constitutional mandate or the mandate of any Act of
Parliament. Reliance in this regard is placed upon judgment passed by the
Hon’ble Apex Court in Union of India Vs. V. Sriharan alias Murugun, AIR
2016 SC (Supp) 739, which reads as under:
“17. Pithily stated under the proviso to Article 73(1)(a) where there is
an express provision in the Constitution or any law is made by the
Parliament, providing for specific Executive Power with the Centre, thenthe Executive Power referred to in sub-clause (a) of sub-article (1) of
Article 73 would be available to the Union and would also extend in
any State to matters with respect to which the Legislature of the Statehas also powers to make laws. In other words, it can be stated that, in
the absence of any such express provision in the Constitution or any
law made by the Parliament in that regard, the enormous Executive
Power of the Union stipulated in Article 73(1)(a), would not be
available for the Union to be extended to any State to matters with
respect to which the Legislature of the State has also powers to make
laws. To put it differently, in order to enable the Executive Power of
the Union to extend to any State with respect to which the Legislature
of a State has also got power to make laws, there must be an express
provision providing for Executive Power in the Constitution or any law28
::: Downloaded on – 04/08/2026 20:34:47 :::CIS
made by the Parliament. Therefore, the said prescription, namely, the
saving clause provided in the proviso to Article 73(1)(a) will be of
paramount consideration for the Union to exercise its Executive Power
while examining the provision providing for the extent of Executive Power
of the State as contained in Article 162.”
.
37. Having scanned entire material adduced on record, vis-Ã -vis prayer
made in the instant petition, this Court is persuaded to agree with Mr. Bhasin,
learned counsel representing the petitioner, that this Court, while exercising
power under Section 528 of Bharatiya Nagarik Suraksha Sanhita 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
of
above, case of prosecution is bound to fail against the petitioner in all
probabilities.
38.
rt
Otherwise also, in case prayer made on behalf of the petitioner is
not accepted he would be unnecessarily subjected to ordeal of facing protracted
trial, which otherwise is bound to fail.
39. In view of detailed discussion made herein above and law taken
into consideration, present petition is allowed. Complaint bearing registration
no. 15 of 2024 (CNR No. HPSO11010732024), titled Union of India v. M/s Crest
Lifesciences Pvt. Ltd. & others, filed on 18.03.2024 under Sections 16, 18(a)(i)
read with Section 27 of Drugs and Cosmetics Act, 1945 pending before the
Court of Ld. Chief Judicial Magistrate, Nalagarh, Baddi, Himachal Pradesh as
well as consequential orders, including summoning order dated 05.06.2024
passed by Chief Judicial Magistrate, Nalagarh, Baddi, Himachal Pradesh are
quashed and set aside qua the petitioner. The petitioner is discharged
henceforth. All pending applications, stand disposed of.
August 03, 2026 (Sandeep Sharma)
Judge
29
::: Downloaded on - 04/08/2026 20:34:47 :::CIS
