Item No.42 Regular List IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR Pronounced on:13.05.2026 Uploaded on: 15 .05.2026 CRM(M) No.297/2025 SANDEEP SINGH ...PETITIONER(S) Through: - Mr. Jahangir Iqbal Ganai, Sr. Advocate, with M/S: Arun Swach, Muzamil Khurshid, Iqra Khalid & Syed Gousia, Advocate. Vs. UT OF J&K …RESPONDENT(S) Through: - Mr. Hakim Aman Ali, Dy. AG. CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE JUDGMENT(ORAL) 1) The petitioner has challenged the complaint filed by respondent Drugs Inspector alleging commission of offences under Section 18(a)(i) read with Section 27 of the Drugs and Cosmetics Act, 1940, which is stated to be pending before the learned Chief Judicial Magistrate Sopore (hereinafter “the trial Magistrate”). Challenge has also been thrown to the proceedings emanating from the impugned complaint. 2) It appears that the respondent has filed the impugned complaint against the petitioner and co-accused before the trial Magistrate, on the basis of the allegation that the petitioner, who happens to be accused No.3 in the impugned complaint, is Director of the firm which has supplied the drug that has been declared as not of standard quality. Page 2 of 7 3) Although the petitioner has raised a number of grounds to challenge impugned complaint and the proceedings emanating therefrom yet the main ground on which the petitioner has laid emphasis on the ground that without impleading the company, of which the petitioner happens to be the Director as an accused, the proceedings against him could not have been initiated. 4) Heard learned counsel for the parties and perused material on record. 5) A perusal of the title of the impugned complaint reveals that the petitioner has been impleaded as accused No.3 in his capacity as ‘Director of M/S Alkem Laboratories Pvt. Limited”. However, M/S Alkem Laboratories Pvt. Limited has not been impleaded as an accused in the complaint. The question arises as to whether a Director of a company can be proceeded against without impleading the company as an accused. In this context, it would be profitable to refer to the provisions contained in Section 34 of the Drugs and Cosmetics Act, 1940. It reads as under: 34. Offences by companies.—(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other ofÏcer of the company, such director, manager, secretary or other ofÏcer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.—For the purposes of this section— (a) “company” means a body corporate, and includes a firm or other association of individuals; and (b) “director” in relation to a firm means a partner in the firm. 6) From a perusal of the aforesaid provision, it appears 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. 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 for the acts of another person that such a person can be prosecuted for a criminal offence. 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. 7) Proviso to sub-section (1) of Section 34 of the Act gives a window of escape to the persons who are sought to be made vicariously liable for the acts of the company if they can prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent the commission of offence. 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 then these office bearers can be deemed to be guilty of the offence if it is shown that the offence has been committed with their consent or connivance or due to their negligence. 8) The question, whether prosecution against the Directors or persons incharge of the affairs of a company can be launched without impleading the company as an accused in a case where the statute provides for vicarious liability of the persons incharge of the company for the offences committed by the company, was subject matter of discussion before the Supreme Court in the case of Aneeta Hada v. Godfather Travels and Tours Private Limited, (2012) 5 SCC 661. In the said case, the Court has interpreted the provisions contained in Section 141 of the Negotiable Instruments Act, which is in pari materia with the provisions contained in Section 34 of the Drugs and Cosmetics Act. After considering its earlier decisions on the subject, the Court held as under: 58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words “as well as the company” appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove. 9) The aforesaid proposition of law laid down in Aneeta Hada’s case (supra) was relied upon by the Supreme Court in the case of Anil Gupta v. Star India Private Limited and another, (2014) 10 SCC 373 and it was observed as under: 13.In the present case, the High Court by impugned judgment dated 13th August, 2007 held that the complaint against respondent no.2-Company was not maintainable and quashed the summon issued by the Trial Court against respondent no.2-Company. Thereby, the Company being not a party to the proceedings under Section 138 read with Section 141 of the Act and in view of the fact that part of the judgment referred to by the High Court in Anil Hada (supra) has been overruled by three Judge Bench of this Court in Aneeta Hada (supra), we have no other option but to set aside the rest part of the impugned judgment whereby the High Court held that the proceedings against the appellant can be continued even in absence of the Company. We, accordingly, set aside that part of the impugned judgment dated 13th August, 2007 passed by the High Court so far it relates to appellant and quash the summon and proceeding pursuant to complaint case No.698 of 2001 qua the appellant. 10) From the aforesaid enunciation of law on the subject, it is clear that without impleading the company as an accused, its Directors or incharge officers or the persons responsible for the conduct of its day-to-day business cannot be prosecuted for an offence which is deemed to have been committed by the company. In the instant case, the respondent/complainant has impleaded only the Managing Director/Director of the supplying company, namely, M/S Alkem Laboratories Pvt. Ltd. without impleading the said company as an accused in the complaint. Thus, on this ground alone, the proceedings against the petitioner herein are not sustainable. 11) For the foregoing reasons, continuance of criminal proceedings against the petitioner on the basis of the impugned complaint would be an abuse of process of law. The same, therefore, deserves to be quashed. Accordingly, the petition is allowed and the impugned complaint and the proceedings emanating therefrom to the extent of the petitioner (accused No.3 therein) are quashed. (Sanjay Dhar) Judge SRINAGAR 13.05.2026 “Bhat Altaf-Secretary” Whether the Judgement is speaking: YES Whether the Judgement is reportable: YES/NO