Drugs and Cosmetics Act, 1940: ss. 34, 16, 18 – Vicarious liability – Appellants are the directors of M/s Cachet Pharmaceuticals Private Ltd. (CPPL) – Test report of the sample of the drug manufactured by CPPL stated that it was not of standard quality – Complaint filed before CJM u/s. 18(a)(i) r/w ss. 16 and 34 of the Act – CJM issued summons to all the accused including the appellants – Appellants filed revision petition against the summoning order before the Sessions Judge which was rejected on the ground that there was a specific averment in the complaint that the appellants were concerned with the manufacture, distribution and sale of drug in question – Writ petition by appellants before High Court was also dismissed – On appeal, held: A person cannot be made liable u/s. 34 of the Act unless at the material time, he was in-charge of and was also responsible to the company for the conduct of its business – Merely because a person is a director of a company, it is not necessary that he is aware about its day-to-day functioning – There is no universal rule that a director of a company is in-charge of its everyday affairs – It is necessary to aver as to how the director of the company was in charge of day-to-day affairs or responsible to the affairs of the company – The managing director or a joint managing director in a company, 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 – Appellants are neither the managing director nor the whole-time directors of the accused company – Complaint totally lacked requirement of s. 34 of the Act – Order of issuance of process quashed – Negotiable Instruments Act,1881 – s. 141 – Companies Act, 1956 – s. 2(13).

Practice and Procedure: Criminal procedure – Issue of Process by Magistrate – Held: The order of issuance of process is not an empty formality – The Magistrate is required to apply his mind as to whether sufficient ground for proceeding exists in the case or not – The formation of such an opinion is required to be stated in the order itself – The order is liable to be set aside if no reasons are given therein while coming to the conclusion that there is a prima facie case against the accused.