[2026:RJ-JP:17418] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Criminal Miscellaneous (Petition) No. 2123/2023 Rakesh Goyal Son Of Shri Amrit Lal Goyal, Resident Of House No. 534, Sector 21, Panchkula, Partner Of M/s Orison Pharma International, Village Khari, Mauza Oglii, Kala Amb, District Sirmour, Himachal Pradesh. ----Petitioner Versus 1. State Of Rajasthan, Through P.p. 2. Prahlad Kumar Meena, Drugs Control Officer, Kota, Office Of Civil Surgeon, Kota, Rajasthan. ----Respondents For Petitioner(s) : Mr. Sanjay Kumar Jain with Mr. Akshay Jain For Respondent(s) : Mr. Vijay Singh Yadav, PP with Mr. Gaurav Gupta, AGA HON'BLE MR. JUSTICE CHANDRA PRAKASH SHRIMALI Order 1. Arguments Concluded On: 13/04/2026 2. Order Reserved On: 13/04/2026 3. Full Order/Operative Part Pronounced: Full Order 4. Pronounced On: 25/04/2026 1. The present petition has been filed under Section 482 Cr.P.C. seeking quashing of Complaint No. 839771/2018 dated 09.05.2018 pending before the learned Chief Judicial Magistrate, Kota, for offences under the provisions of the Drugs and Cosmetics Act, 1940 along with all consequential proceedings arising therefrom. 2. Learned counsel for the petitioner submits that the impugned complaint is manifestly illegal and amounts to abuse of the [2026:RJ-JP:17418] (2 of 10) [CRLMP-2123/2023] process of law in as much as the alleged discrepancy in the drug in question was merely on account of a bona fide and inadvertent printing/packaging error without any criminal intent. 3. It is contended that the composition of the drug was otherwise within permissible standards and the issue was only with respect to mislabeling, which stands duly explained by the petitioner in his reply submitted to the show cause notices annexed as Annexures 13,15 and 17. 4. It is further submitted that the drug in question was never released for public consumption and remained within the control of the authorities and, therefore, no prejudice was caused to any person. Learned counsel has also argued that there is no specific averment in the complaint attracting vicarious liability under Section 34 of the Act of 1940 so as to fasten criminal liability upon the present petitioners and that the proceedings have not been initiated mechanically and without proper application of judicial mind. 5. It has further been contended, with reference to the grounds taken, that the court at Kota lacks territorial jurisdiction and that the complaint suffers from non-compliance of mandatory statutory provisions and is, therefore, liable to be quashed. 6. Learned Counsel for the petitioner has relied upon the following judgments in support of his arguments: 1. “Virender Kansal & Ors. Vs State of Himachal Pradesh & Ors”. Criminal Misc. Petition (Main) U/S 482 Cr.P.C No. 362 of 2019; Order Dated 06.09.2021 [2026:RJ-JP:17418] (3 of 10) [CRLMP-2123/2023] 2. “State of Haryana Vs Brij Lal Mittal & Ors”. (1998) 5 SCC 343 3. “Standard Chartered Bank Vs State of Maharashtra & Ors”. (2016) 6 SCC 62 4. “Cheminova India Ltd & Anr. Vs State of Punjab & Ors”. 2021 SCC OnLine SC 573 5. “Lalankumr Singh & Ors Vs State of Maharashtra” 2022 SCC OnLine SC 1383 6. “Sumit Lal C. Shah & Ors Vs State of Rajasthan” 1983 SCC OnLine Raj 409 7. “The State of Telangana Vs M/s. Sri Agpa Pharmaceuticals & Ors”. Criminal Appeal No. 1467 Of 2009; 18.07.2022 8. “Rajansh Thukral Vs State of Punjab & Anr And other connected matters” 2014 SCC OnLine P&H 8509. 9. “State of Maharashtra Vs R.A Chandawarkar & Ors”. [1999(2) Mh.L.J] 10. “Johnson & Johnson Ltd., Himachal Pradesh & Anr Vs State of Andhra pradesh and Anr.” Crl. P. No. 2277 of 2012.; Order Dated 14.10.2014 11.“State of Nagaland & Ors. Vs Bendangrenla” (2019) 4 Gauhati Law Reports 650 12. “Medisearch Laboratories & Anr. Vs State of Rajasthan & Ors”. S.B. Criminl Miscellaneous (Petition) No. 2096/2014; Order Dated 07.08.2019 [2026:RJ-JP:17418] (4 of 10) [CRLMP-2123/2023] 13. “M/s Nandani Medical Laboratories Pvt. Ltd., & Ors. Vs State of Rajasthan & Ors.” S.B Criminal Misc (Pet.) No. 7821/2023 Order dated: 30.01.2025 7. Per contra, learned Public Prosecutor as well as counsel for respondent No.2 have opposed the petition and submitted that the allegations made in the complaint clearly disclose commission of offences under the Drugs and Cosmetics Act, 1940. 8. It is submitted that an inspection was conducted on 23.04.2015 at the District Drug Warehouse, Kota, during which the drug in question was found and samples were drawn in accordance with law, followed by preparation of seizure memo. 9. It is further submitted that the Government Analyst report clearly found that the drug did not conform to the prescribed standards and was declared “not of standard quality”. It is contended that the show cause notice dated 24.04.2015 (Annexure-7), the inspection report and the seizure proceedings clearly indicate violation of the provisions of the Act of 1940 as well as the Rules of 1945 relating to Good Manufacturing Practices. 10. It is further submitted that the in the replies furnished by the petitioner he himself admitted the occurrence of printing/packaging error, which resulted in misbranding of the drug and, therefore, the plea of absence of offence is untenable. 11. Learned counsel has further submitted that the question whether the error was bona fide or whether the drug was actually distributed are disputed questions of fact which can only be [2026:RJ-JP:17418] (5 of 10) [CRLMP-2123/2023] adjudicated upon evidence during trial and cannot be examined in proceedings under Section 482 Cr.P.C. It is also submitted that the firm and its partners are liable under Section 34 of the Act and the complaint contains sufficient averments to proceed against them. 12. I have perused the material available on record including the complaint, inspection report, seizure memo (fard zabti), Government Analyst report, show cause notice (Annexure-7), replies submitted by the petitioner against the show cause notice (Annexures 13,15 and 17), as well as the relevant grounds taken in the petition, and have considered the submissions advanced by learned counsel for the parties. 13. Upon consideration of the record, it emerges that the inspection conducted on 23.04.2015 at Kota led to detection of the impugned drug and samples were drawn in accordance with statutory procedure and a seizure memo was prepared. The material on record prima facie establishes that the drug had reached the District Drug Warehouse at Kota and, therefore, part of the cause of action arose within the territorial jurisdiction of the court at Kota. Hon'ble Apex Court has in the case of "State of Punjab v. Nohar Chand"; (1984) 3 SCC 512 in para 8 of the Judgment held as under; 8. Now if manufacturing substandard fertiliser is by itself an offence and marketing the substandard fertiliser is itself a distinct offence but they are so inter-connected as cause and effect, both can be tried at one or the other place. If one manufactures the substandard fertiliser, wherever it is marketed the inter-relation or causal connection is of cause and effect. The situation will be adequately covered by Sections 179 and 180 of the Code of Criminal Procedure. We are in agreement with the later decision of the Division Bench rendered on March [2026:RJ-JP:17418] (6 of 10) [CRLMP-2123/2023] 9, 1983 that the court where the substandard fertiliser is being marketed will equally have the jurisdiction to try the manufacturer of substandard fertiliser. This is so obvious that any further discussion appears to us to be superfluous. The Apex Court, therefore, held that the Court where the sub- standard fertilizer is marketed will equally have jurisdiction to try the manufacturer of the sub-standard fertilizer whose manufacturing activity is at a different place. Similarly in the case of "M/S. Mediscarch Laboratories And Anr. Vs State Of Goa" 1997CRILJ1269 Order dated; 25.04.1996 Hon'ble Bombay High Court in para 11 of the judgment held as under; 11. The matter can be looked at from another angle. The drugs are manufactured for the purpose of sale to the consumers and the actual consequence of misbranded manufactured drug is on the consumer. This consequence is in fact integral part of manufacture since manufacture of drug without its sale, has no meaning. The misbranded drugs having delirious and dangerous consequence on the consumer, may spread in various parts of the Country. It is not possible to take the view that the manufacturer can be prosecuted only at the place of manufacture of drugs, because such stand may lead to escape of defaulting manufacturers from prosecution. There may be cases where the prosecution is satisfied that in view of Section 19(3) of the Act, the seller is not liable for prosecution. Drug Inspectors, under Section 22 of the Act, are empowered to take samples within local limits of the area in which they are appointed. They can file complaints only in the Court having jurisdiction over the local limits of the area in which they are appointed. In such eventualities, if the seller cannot be prosecuted in view of Section 19(3) of the Act, the drug inspector will have no power to file complaint in the Court in whose jurisdiction the adulterated drug was manufactured. This would mean that the manufacturers of drugs would not be subject to prosecution in the State in which the adulterated drug is found for the purpose of sale and distribution. From the above cited judgments it becomes clear that in the instant case before us the cause of action arose within the [2026:RJ-JP:17418] (7 of 10) [CRLMP-2123/2023] territorial jurisdiction of the court at Kota and hence the court at Kota has the authority to entertain the same. 14. The Government Analyst report clearly indicates that the contents of the drug did not correspond with the label claim, thereby bringing the case within the ambit of misbranded and not of standard quality drugs under the Act of 1940. The subsequent explanations and corrigendum relied upon by the petitioner do not negate the initial findings but rather acknowledge the discrepancy in labeling and packaging. 15. The contention of the petitioners that the error was inadvertent and without mens rea cannot be accepted at this stage as the same involves appreciation of evidence. Similarly, the plea that the drug was not released for public consumption is also a matter to be established during trial. 16. Insofar as the argument regarding absence of vicarious liability is concerned, the material on record including the partnership arrangement prima facie indicates that the petitioner was associated with the conduct of the business of the firm and the issue as to their exact role is again a matter of evidence. Hon'ble the Supreme Court in case of "State of Haryana v. Brij Lal Mittal" (1998) 5 SCC 343 in para 8 of the judgment held as under; 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 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 [2026:RJ-JP:17418] (8 of 10) [CRLMP-2123/2023] 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.” 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 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 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. In the case of "Lalankumar Singh Vs The State Of Maharashtra" CRIMINAL APPEAL NO. 1757 OF 2022; Order dated 11.10.2022 Hon'ble Supreme Court in para 14 of the judgment referring to the judgment of Brij Lal Mittal (Supra) held as under; 14. 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 incharge of and was also responsible to the company for the conduct of its business. Again in the case of "Pooja Ravinder Devidasani Vs State of Maharashtra" (2014) 16 SCC 1 Hon'ble Supreme Court in para 17 of the judgment held as under; 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 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......." [2026:RJ-JP:17418] (9 of 10) [CRLMP-2123/2023] 17. It would be apt to record that the material placed on record, particularly the partnership deed, unequivocally establishes that the accused–petitioner was not a mere nominal or sleeping partner, but was actively associated with and responsible for the day-to-day affairs and management of the firm/company. It would be appropriate to quote point no. 3 on page no. 2 of the “Deed of Partnership”; “3. The partners of 1st and 2nd part shall take active part in the day to day affairs of the partnership business and shall be entitled to a working allowance/salary/remuneration of Rs. 2000/- (Rs Two Thousand) per month each. Provided However that such allowance/salary/remuneration shall not exceed the limit provided under the provisions of Income Tax Act.” 18. The terms and conditions embodied in the said deed clearly delineate his role in the conduct of business operations, thereby demonstrating his direct control and participation in routine activities of the enterprise which also becomes evident from the fact that the petitioner himself gave replies of the show cause notice issued on 29.04.2015. In view of the settled legal position as enunciated by the Hon’ble Supreme Court in a catena of judgments governing vicarious liability, as also quoted above, it can safely be inferred that where a person is shown to be in charge of and responsible for the conduct of the business of the company at the relevant time, such person cannot escape liability merely by taking a bald plea to the contrary. Accordingly, having regard to the contents of the partnership deed and the governing legal principles, this Court is of the considered opinion that the accused–petitioner was indeed in charge of and responsible for the [2026:RJ-JP:17418] (10 of 10) [CRLMP-2123/2023] day-to-day activities of the company, and is therefore liable to be proceeded against in accordance with law. 19. The submissions advanced regarding lack of jurisdiction and procedural infirmities do not persuade this Court to exercise inherent jurisdiction, particularly when the record discloses that inspection, sampling and seizure took place within Kota. 20. It is well settled that the inherent powers under Section 482 Cr.P.C. are to be exercised sparingly and that where the allegations in the complaint disclose commission of an offence, the proceedings ought not to be quashed at the threshold. 21. In view of the aforesaid discussion, this Court is of the considered opinion that the material available on record discloses a prima facie case against the petitioner and the matter requires adjudication on evidence before the trial court. 22. Accordingly, the present petition being devoid of merit is hereby dismissed. 23. It is, however, clarified that any observation made hereinabove is only for the purpose of deciding the present petition and shall not prejudice the trial court while deciding the case on merits. 24. Pending Applications, if any, shall be disposed off. (CHANDRA PRAKASH SHRIMALI),J GAURAV SHARMA /705