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Patna High Court – Orders
Kal Sundaran vs The State Of Bihar on 27 June, 2025
Author: Sandeep Kumar
Bench: Sandeep Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
CRIMINAL MISCELLANEOUS No.73146 of 2018
Arising Out of PS. Case No.-724 Year-2004 Thana- GOVERNMENT OFFICIAL COMP.
District- Saharsa
======================================================
Kal Sundaran Son of N. Iyer Subramanian, the then Managing Director of
M/s Glaxo Smithkline Pgarmaceuticals Limited, having its registered office at
M/s 252, Dr. Annie Basant Road, Police Station -Worli District-Mumbai
400026
... ... Petitioner/s
Versus
The State Of Bihar
... ... Opposite Party/s
======================================================
Appearance :
For the Petitioner/s : Mr. Ansul, Sr. Advocate
Mr. Sanjeev Kumar, Advocate
Mr. Pravashankar Mishra, Advocate
Mr.Rajeev Shekhar, Advocate
For the State : Mr.Sri Shyameshwar Dayal, APP
======================================================
CORAM: HONOURABLE MR. JUSTICE SANDEEP KUMAR
ORAL ORDER
6 27-06-2025
Heard learned counsel for the petitioner and learned
counsel for the State.
2. This application has been filed for quashing order
dated 12.07.2004, passed in Complaint Case No. 724C of 2004
by which cognizance has been taken against the ten accused
persons including the present petitioner, who was then then
Managing Director of M/s Glaxo Smithkline Pharmaceuticals
Limited (hereinafter refereed to as the ‘GSK’) for the offence
punishable under section 27(d) of the Drugs and Cosmetics Act,
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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1940.
3. The complainant one Rakesh Nandan Singh,
Inspector of Drugs, Saharsa had instituted the present complaint
alleging therein that petitioner and other accused persons
manufactured, distributed and sold misbranded drugs and thus
violated different provisions of the Drugs and Cosmetics Act,
1940 and the Drugs and Cosmetics Rules, 1945. The allegation is
that the name and the logo of the wholesaler of the drugs, that is,
M/s Glaxo Smithkline Pharmaceuticals Limited is printed on the
labels of the drugs, carton and the same amounts to mislabeling.
4. It is submitted on behalf of the petitioner that the
petitioner is the Managing Director of the Company in question
and he is not responsible to look after the daily affairs of the
Company. There is no averment in the entire complaint to the
effect that petitioner was in-charge and responsible for the
conduct of the business of the Company. He further submits that
the present complaint based on which cognizance has been taken
by the Court below is pre-mature and not tenable in terms of the
mandate of the Drugs and Cosmetics Act, 1940. He next submits
that simply because the petitioner was the Managing Director of
the Company, on this sole ground, he cannot be fastened with the
responsibility for the alleged offence.
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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5. It is vehemently submitted that the name/logo of
Glaxo Smithkline Pharmaceuticals Limited appears on the pack
only so as to inform the customers that the product is of the same
high quality that the customers associate with GSK but are
manufactured by a company other than the aforesaid GSK under
a third party manufacture agreement which is not a violation of
the provisions of Drugs and Cosmetic Act, 1940 and the Rules
made thereunder. The appearance of GSK Limited logo on the
package is by way of giving additional information to the
customers that the product is marketed by GSK. It is also argued
by the learned counsel for the petitioner that the name of the
manufacturer is clearly visible on the packaging of the product
and thereafore the customers will not be mislead into beveling
that the product is manufactured by Glaxo Smithkline
Pharmaceuticals Limited.
6. Learned counsel for the petitioner submits that from
bare perusal of the allegation as alleged in the complaint, it
would manifest that the allegation hinges around the fact that the
GSK is using its name and logo on the label which is an offence
under Rules 96 and 97 of the 1945 Rules. Further by this act of
GSK the Government is put to loss in terms of revenue, the
Doctors and the intending customers are misled thinking that the
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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drug in question is being manufactured by GSK when it is not
the case and labelling as incorporated under Rules 96 and 97 of
the 1945 Rules comes within the definition of manufacture as
per Section 3(f) of the Drugs and Cosmetics Act, 1940 when
GSK is not the manufacturer of the drug in question.
7. Learned counsel for the petitioner submits that it
absolutely does not stand to reason that on what basis it is being
alleged in the complaint that the Government is put to loss when
the manufacturer of the drug is paying all the requisite fee in
terms of the Act and the Rules. It is further submitted that for the
same drug the Government cannot charge twice. It is next
submitted that the label on the drug is clear that the product is
being manufactured under a third party agreement and is being
marked by GSK. It is thus submitted that it cannot be alleged
that the labelling of the drug by using the name and logo of GSK
is being done in order to mislead the Doctors or the intending
customers. It is further submitted that the logo and the name of
GSK is being used by way of additional information to the
customers that they be sure of the fact that though the drug is
being manufactured by some other company but since it is being
marketed by GSK as such the drug is maintaining the high
quality which is required and also as is associated with GSK.
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8. Learned counsel for the petitioner adverting to
Section 34(1) and the proviso thereto submits that the petitioner
cannot be fasten with criminal liability merely because be
occupied the position to Managing Director particularly not even
a whisper of specific allegation is alleged against him.
9. Learned counsel for the petitioner has submitted that
the present complaint case alleges contravention of Section
27(d), however Section 34(1) provides that every person or by
any other person on his behalf whosoever is in charge of and
responsible to the company for conduct of its business is liable
for offence committed by a company. Leaned counsel for the
petitioner has placed reliance on State of Haryana v/s Brij Lal
Mittal and Ors. (1998 Cri LJ 13287) wherein it was held by
the Hon’ble Supreme court that vicarious liability of a person for
being prosecuted for an offence committed under the Act by a
Company arises if at the material time he was in charge of and
was also responsible to the company for the conduct of its
business. Simply because a person is a director of a company, it
does not necessarily mean that he fulfills both of the above
requirements so as to make him criminally liable. Further,
conversely even without being a director a person can be in
charge of and responsible to the company for the conduct of its
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business. The learned counsel has emphasized that the complaint
is silent on the role of this petitioner in the day to day activity of
the company and in fact there is neither any specific allegation
nor any whisper in the entire complaint regarding the role of this
petitioner. The necessary averments for making the petitioner
liable for the alleged offences are totally lacking in the present
complaint, since the complainant has failed to show in the
complaint as to how this petitioner was responsible for the
alleged offence or for that matter, failed to show any act,
omission or negligence on the part of this petitioner which
resulted in the commission of alleged offence, and in absence of
any specific allegations in the complaint that the present
petitioner was in charge of the company and responsible for the
conduct of its business, he cannot be prosecuted.
10. Learned counsel for the petitioner submits that the
petitioner in the present application is the Managing Director and
does not participate in day-to-day functioning of the company
and thus is not responsible for the affairs of the company. It is
further submitted that in order to attract the rigors of Section 34
of the Drugs and Cosmetics Act, 1940 which relates to offences
committed by the company, there has to be necessary averments
in the complaint with regard to the role of the officials of the
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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company including the Director that at the relevant time of the
occurrence he was responsible for the day-to-day affairs of the
company but from perusal of the complaint petition, it would
manifest that the allegation does not even remotely whisper that
the petitioner, at the time of commission of offence, was in-
charge or responsible for the conduct of the business of the
company.
11. Learned counsel has drawn the attention of this
Court to an order passed by a co-ordinate Bench of this Court
vide order dated 08.12.2022 in Cr. Misc. No. 30453 of 2017 title
as Deepak Shanti Lal Parekh @ Deepak Parekh Vs. The
State of Bihar by which the order taking cognizance under
Section 27(d) of the Drugs and Cosmetics Act, 1940 was
quashed and set aside in a similar complaint bearing Complaint
Case No. 1198 C of 2004. Learned counsel submits that the facts
of the aforesaid complaint case i.e., 1198C of 2004 is not
verbatim is akin to the present case.
12. Learned A.P.P. for the State opposes the present
application. It is submitted that since the petitioner is the
Managing Director of the Company, as such, he cannot escape
the responsibility and in that view of the matter, learned Court
below has rightly taken cognizance of the offence against him
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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under the aforesaid sections of the Drugs and Cosmetics Act.
13. I have heard the submission of the parties and
perused the materials available on record.
14. The allegations levelled against the Company is
that the accused persons including the present petitioner is that
upon inspection by the Drug Inspector, Drugs which were
allegedly mislevelled were found and a complaint case was filed.
15. It is a settled position of law that criminal liability
cannot be vicariously attached unless there exists a statutory
provision, and even then the complainant must aver specifically
the role or the act to fasten the accused with criminal liability.
16. The Hon’ble Supreme Court in the case of Sanjay
Dutt & Ors. vs. State of Haryana & Anr. reported as 2025 INSC
34 while considering the appeal against rejection of a petition
filed under section 482 Cr.P.C. for quashing the complaint which
was lodged under the Punjab Land Preservation Act, 1900, the
Hon’ble Court had categorically held that there can be no
automatic vicarious liability merely because the individual was
occupying the position of Director specially when the statute
does not provide for such vicarious liability. For the present
purpose, it may be emphasized that, further even where the
statute does create a legal fiction to fasten criminal liability
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
9/17
vicariously, there needs to be specific and substantiated
allegations attributable to such directors, which should be
sufficient enough to attract such provisions. The Hon’ble Court
had held as under –
11. It appears that the Courts below proceeded on the
erroneous assumption that the three appellants herein
being responsible officers of the company are liable for the
alleged offence. While a company may be held liable for
the wrongful acts of its employees, the liability of its
directors is not automatic. It depends on specific
circumstances, particularly the interplay between the
director’s personal actions and the company’s
responsibilities. A director may be vicariously liable only
if the company itself is liable in the first place and if such
director personally acted in a manner that directly
connects their conduct to the company’s liability. Mere
authorization of an act at the behest of the company or the
exercise of a supervisory role over certain actions or
activities of the company is not enough to render a
director vicariously liable. There must exist something to
show that such actions of the director stemmed from their
personal involvement and arose from actions or conduct
falling outside the scope of its routine corporate duties.
Thus, where the company is the offender, vicarious liability
of the Directors cannot be imputed automatically, in the
absence of any statutory provision to this effect. There has
to be a specific act attributed to the director or any other
person allegedly in control and management of the
company, to the effect that such a person was responsible
for the acts committed by or on behalf of the company.
12. At the same time, wherever by a legal fiction the
principle of vicarious liability is attracted and a person
who is otherwise not personally involved in the
commission of an offence is made liable for the same, it
has to be specifically provided in the statute concerned.
When it comes to penal provisions, vicarious liability of
the managing director and director would arise provided
any provision exists in that behalf in the statute. Even
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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where such provision for fastening vicarious liability
exists, it does not mean that any and all directors of the
company would be automatically liable for any
contravention of such statute. Vicarious Liability would
arise only if there are specific and substantiated
allegations attributing a particular role or conduct to
such director, sufficient enough to attract the provisions
constituting vicarious liability and by extension the
offence itself.
13. It is the cardinal principle of criminal jurisprudence
that there is no vicarious liability unless the statute
specifically provides so. Thus, an individual who has
perpetrated the commission of an offence on behalf of a
company can be made an accused, if the statute provides
for such liability and if there is sufficient evidence of his
active role coupled with criminal intent. The primary
responsibility is on the complainant to make specific
averments as are required under the law in the complaint
so as to make the accused vicariously liable. For
fastening criminal liability on an officer of a company,
there is no presumption that every officer of a company
knows about the transaction in question.
17. It would be gainful to refer to analogous provision
of law wherein the Hon’ble Supreme Court in the case of S.M.S
Pharmaceuticals Ltd. vs. Neeta Bhulla reported as (2005) 8
SCC 89 while considering section 141, Negotiable Instruments
Act, 1881, which is pari materia to section 34 of the Drugs and
Cosmetics Act, 1940 had held as under –
“4. ……… A company being a juristic person, all its deeds
and functions are the result of acts of others. Therefore,
officers of a company who are responsible for acts done in
the name of the company are sought to be made personally
liable for acts which result in criminal action being taken
against the company. It makes every person who, at the
time the offence was committed, was in charge of and was
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
11/17responsible to the company for the conduct of business of
the company, as well as the company, liable for the
offence. The proviso to the sub-section contains an escape
route for persons who are able to prove that the offence
weds committed without their knowledge or that they had
exercised all due diligence to prevent commission of the
offence
……..
9. The position of a Managing Director or a Joint
Managing Director in a company may be different. 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. In order to escape liability
such persons may have to bring their case within the
proviso to Section 141(1), that is they wilt 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.”
(emphasis supplied)
18. In the case of National Small Industries
Corporation Ltd. vs. Harmeet Singh Paintal reported as (2010)
3 SCC 330, the Hon’ble Court had summarized the legal position
as under –
“39. From the above discussion, the following
principles emerge:
1. The primary responsibility is on the com-
plainant to make specific averments as
are required under the law in the com-
plaint so as to make the accused vicari-
ously liable. For fastening the criminal
liability, there is no presumption that ev-
ery Director knows about the transac-
tion.
2. Section 141 does not make all the Direc-
tors liable for the offence. The criminal
liability can be fastened only on those
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
12/17
who, at the time of the commission of the
offence, were in charge of and were re-
sponsible for the conduct of the business
of the company.
3. Vicarious liability can be inferred
against a company registered or incor-
porated under the Companies Act, 1956
only if the requisite statements, which
are required to be averred in the com-
plaint/petition, are made so as to make
the accused therein vicariously liable for
offence committed by the company along
with averments in the petition containing
that the accused were in charge of and
responsible for the business of the com-
pany and by virtue of their position they
are liable to be proceeded with.
4. Vicarious liability on the part of a per-
son must be pleaded and proved and not
inferred.
5. If the accused is a Managing Director or
a Joint Managing Director then it is not
necessary to make specific averment in
the complaint and by virtue of their posi-
tion they are liable to be proceeded with.
6. If the accused is a Director or an officer
of a company who signed the cheques on
behalf of the company then also it is not
necessary to make specific averment in
the complaint.
7. The person sought to be made liable
should be in charge of and responsible
for the conduct of the business of the
company at the relevant time. This has to
be averred as a fact as there is no
deemed liability of a Director in such
cases.”
19. Further in the case of Maksud Saiyed vs. State of
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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Gujarat & Ors. reported as (2008) 5 SCC 668 = AIRONLINE
2007 SC 332, the Hon’ble Supreme Court had had as under –
“13. Where a jurisdiction is exercised on a
complaint petition filed in terms of Section 156(3) or
Section 200 of the Code of Criminal Procedure, the
Magistrate is required to apply his mind. Indian Penal
Code does not contain any provision for attaching
vicarious liability on the part of the Managing Director or
the Directors of the Company when the accused is the
Company. The learned Magistrate failed to pose unto
himself the correct question viz. as to whether the
complaint petition, even if given face value and taken to be
correct in its entirety, would lead to the conclusion that the
respondents herein were personally liable for any offence.
The Bank is a body corporate. Vicarious liability of the
Managing Director and Director would arise provided any
provision exists in that behalf in the statute. Statutes
indisputably must contain provision fixing such vicarious
liabilities. Even for the said purpose, it is obligatory on
the part of the complainant to make requisite allegations
which would attract the provisions constituting vicarious
liability.”
20. At this stage it would be apposite to refer to the
section 34 of the Drugs and Cosmetics Act, 1940 which reads as
under –
34. Offences by companies.–(1) Where an
offence under this Act has been committed by a
company, every person who at the time the offence was
committed, was in charge of and was responsible to
the company for the conduct of the business of the
company, as well as the company shall be deemed to be
guilty of the offence and shall be liable to be proceeded
against and punished accordingly:
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
14/17Provided 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.
21. The Hon’ble Supreme Court in the case of State of
Haryana v. Brij Lal Mittal reported as (1998) 5 SCC 343, has
held that simply because a person is a Director of a Company, it
does not necessarily meet the twin requirement of Section 34(1)
as to make him criminally liable, i.e., the deeming provision is
not attracted unless both the conditions of being in charge and
also being responsible are squarely met. The same principle was
also reiterated by the Hon’ble Supreme Court in the case of
Lanankumar Singh & Ors. vs. State of Maharastra reported
as (2022) SSC OnLine SC 1383.
22. Turning to the facts of the present case, the
complainant had not made any specific allegations as against the
present petitioner petitioner who was the Managing Director.
23. On the conspectus of the cases referred
hereinabove and the provision contained under Section 34(1) of
the Drugs and Cosmetics Act of 1940, what becomes clear is that
the aforesaid Act does provide for a deeming provision for
fastening criminal liability vicariously, however, a bald and
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
15/17general allegation devoid of any specific role attributable to the
accused is not sustainable in the eyes of law. As has been held in
Sanjay Dutt (supra) the primary responsibility lies on the
complainant to make specific averments as are required under
the law in the complaint so as to make the accused variciously
liable. It is necessary to aver in the complaint that at the time of
commission of offense, the accused was in-charge of, or
responsible for the conduct of the business of the company,
however in the present case at hand there is not even a whisper
in the entire complaint regarding the act on the part of the
present petitioner. As such, merely the averment in the complaint
that the petitioner was Managing Director of the Company at the
relevant time, would not ipso facto hold him responsible for the
alleged offence.
24. It is also noted that a co-ordinate Bench of this
Court vide order dated 08.12.2022 passed in Cr. Misc. No.
32193 of 2017 titled Deepak Santi Lal Praekh @ Deepak
Parekh vs. State of Bihar while considering an application
under Section 482 praying for quashing the order taking
cognizance against the co-accused, petitioner therein, the Court
had quashed the aforesaid order noting that it is necessary to aver
in the complaint that at the time of commission of offence the
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
16/17accused was incharge of, or responsible for the conduct which
was found lacking.
25. It is also noted that a co-ordinate Bench of this
Court vide order dated 10.10.2023 passed in Cr. Misc. No. 9153
of 2019 titled as Kal Sundaran vs. State of Bihar while
considering an application preferred by the instant petitioner for
quashing the order taking cognizance in a similar complaint
case, the Court had quashed the impugned order therein on the
ground that the complaint does not allege any specific role of the
petitioner.
26. It is also noted that this Court vide order dated
08.12.2022 passed in Cr. Misc. 32193 of 2017 had quashed and
set aside the impugned order qua the petitioner therein. Further
this Court vide order dated 10.10.2023 passed in Cr. Misc. 9153
of 2019 had also quashed the order taking cognizance in a
similar complaint case against the same present petitioner.
27. Two more orders both dated 15.12.2022 passed in
Cr. Misc. No. 71339 of 2018 and Cr. Misc. No. 71180 of 2018
titled as Kal Sundaran vs. State of Bihar passed by a co-
ordinate Bench of this Court is also noticed wherein the co-
ordinate Bench had exercised jurisdiction under Section 482 Cr.
P.C. to quash the order taking cognizance in similar complaint
Patna High Court CR. MISC. No.73146 of 2018(6) dt.27-06-2025
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cases on the ground that no specific averment was forthcoming
to fasten the petitioner being the Managing Director with
criminal liability.
28. Therefore, considering the afore-quoted decisions
and the fact that the complainant has not alleged any specific
role/allegation against the present petitioner attributable at the
relevant time of occurrence together with the decisions of the co-
ordinate Bench of this Court in similar complaint cases as well
as the order passed in the case of co-accused, noticed herein-
above, I am of the considered view that it would be an abuse of
the process of the Court to allow the present proceedings to
continue against the present petitioner.
29. Accordingly, the present application is allowed.
30. The impugned order taking cognizance dated
12.07.2004, passed in Complaint Case No. 724C of 2004 is
hereby quashed.
(Sandeep Kumar, J)
P. Kumar
U T
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