The Jammu and Kashmir and Ladakh High Court on Friday ruled that in criminal law, there is no concept of criminal vicarious liability and it is only if there is a statute which makes a person vicariously liable for the acts of another person that such a person can be prosecuted for a criminal offence.
The bench comprising Justice Sanjay Dhar was adjudicating two pleas through the medium of which the petitioners had challenged a complaint filed by respondent Drugs Control Officer alleging commission of offences under Section 18(a)(i) read with Section 17(B)(d), 27(c), 36-AB, 124B and Schedule V S. No.3 of the Drugs and Cosmetics Act, 1940 and the rules made thereunder.
In their plea the main ground taken by the petitioners to throw a challenge to the impugned complaint was that there are no allegations in the impugned complaint to show that the petitioners were the persons responsible for the conduct of day to day business of the firm in question, at the relevant time.
Perusal of the record revealed that the respondent Drugs Control Officer had lodged the impugned complaint against the petitioners and co-accused before the Court of Chief Judicial Magistrate Shopian wherein it was alleged that during a surprise inspection the premises of co-accused, Shahnawaz Ahmad Khanday, who is stated to be the proprietor of a Medicate a sample of the drug Biocenac-P was collected from his shop and the said sample, upon analysis by the Government Analyst, was found to be of not of standard quality. Record further revealed that during investigation, it was found that the drug in question has been manufactured by M/S Adwin Pharma Village Rampur District Sirmour, Himachal Pradesh and the petitioners herein happen to be the partners of the manufacturing firm.
The bench also took notice of the fact that at the instance of the manufacturing firm, the sample under the direction of Chief Judicial Magistrate, Shopian, was sent to Central Drugs Laboratory, Kolkata, for re-analysis whereafter this reanalysis the Central Drugs Laboratory, Kolkata reported back stating that the sample is not of standard quality. Accordingly, the prosecution was launched against the petitioners and other co-accused who happen to be the distributors and retailers of the drug in question.
Dealing with the main contention of the petitioners in both these petitions that the firm, of which they happen to be the partners, had not been impleaded as an accused in the impugned complaint and, as such no prosecution can proceed against its partners, the bench observed section 34 of the Drugs and Cosmetics Act is amply clear that when an offence has been committed by a company, every person, who, at the time when the offence was committed, was incharge 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. The provision extends the concept of vicarious liability to the persons responsible for conduct of business of the company in a case where the offence has been committed by the company, the bench underscored.
The court further observed that in criminal law, there is no concept of criminal liability and it is only if there is a statute which makes a person vicariously liable such liability can be fastened.
"One such example is the provision contained in Section 34 of the Drugs and Cosmetic Act whereby the persons incharge of and responsible for the conduct of business of the company are made vicariously liable for the offences committed by the company. However, the said provision makes it clear that not only those persons but even the company would be deemed to be guilty of the offence" Justice Dhar recorded.
Deliberating further on the position of law on the subject the bench observed that the proviso to sub-section (2) of Section 34 of the Act further provides that when an offence has been committed by the company and it is proved that the said offence has been committed with the consent or connivance of or is attributable to any neglect on the part of any Director, Manager, Secretary or other officer of the company, they shall be deemed to be guilty of that offence. Thus, even if the afore-named office bearers of the company are not responsible for the conduct of business of the company or even if they are not incharge of the company, still these office bearers can be deemed to be guilty of the offence, Justice Dhar observed.
In the instant complaint there was no averment that the petitioners are either incharge or responsible for the conduct of the day to day business of the partnership firm. Thus it was held that continuance of criminal proceedings against the petitioners on the basis of the impugned complaint would be an abuse of process of law.
Case Title : Ashish Damija Vs UT of J&K
Citation : 2022 LiveLaw (JKL) 90