/2022 INSC 0900/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1757  OF 2022
[Arising out of SLP (Crl.) No. 8882 of 2015]
LALANKUMAR SINGH & ORS. …APPELLANT (S)
VERSUS
STATE OF MAHARASHTRA       …RESPONDENT(S)
J U D G M E N T 
B.R. GAVAI, J.
1. Leave granted. 
2. This appeal arises out of the judgment and order dated
25 th
  June   2015   passed   by   the   learned   Single   Judge   of   the
High   Court   of   Judicature   of   Bombay,   at   Aurangabad,   in
Criminal   Writ   Petition   No.288   of   2015,   thereby   dismissing
the said criminal writ petition filed by the appellants herein
and   upholding   the   order   of   issuance   of   process   dated   30 th
March   2009   passed   by   the   learned   Chief   Judicial
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Magistrate,   Beed   (hereinafter   referred   to   as   “the   learned
CJM”) and the order passed by the learned Sessions Judge,
Beed   dated   25 th
  November   2014     dismissing   the   Criminal
Revision   being   Criminal   Revision   Petition   No.115   of   2013
filed by the appellants thereagainst. 
3. The facts, in brief, giving rise to the present appeal are
as under: 
3.1 The   Appellants   are   the   Directors   of   M/s   Cachet
Pharmaceuticals   Private   Ltd.   (hereinafter   referred   to   as
“CPPL”).   CPPL   was   granted   permission   to   manufacture
‘Hemfer   Syrup’   which   falls   under   Schedule   C   &   C(1)   to   the
Drugs   &   Cosmetics   Rules,   1945   (hereinafter   referred   to   as
“the said Rules”).
3.2 On 30 th
  August 2006, Sh. N. A. Yadav, the then Drugs
Inspector,   Food   and   Drugs   Administration,   Beed,
Maharashtra, visited the premises of M/s. Priya Agencies at
Beed   and   purchased   ‘Hemfer   Syrup’,   from   which   he   had
drawn   samples   of   the   drug.     On   31 st
  August   2006,   he   sent
one   such   sample   to   the   Government   Analyst,   Maharashtra
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State   Drug   Control   Laboratory   Mumbai   so   as   to   have   the
drug   tested.     On   26 th
  February   2007,   he   received   a   test
report   dated   13 th
  February   2007   from   the   Government
Analyst stating that the sample was not of standard quality
as   the   content   of   Cyanocobalamin   was   less   than   the
permissible   limit,   i.e.,   39%   of   the   label   amount.   On   the
same   day,   the   manufacturer   of   the   drug,   i.e.,   CPPL,   was
informed by a registered post about the test report. 
3.3 On 29 th
  March 2007, Sh. Vijay Jain, Deputy Manager,
QA   of   CPPL   requested   the   Drug   Inspector   to   send   the
samples again for analysis. Pursuant to an application filed
by   M/s   Alkem   Laboratories,   the   distributor   of   CPPL,   the
learned   CJM,   Beed   sent   the   samples   of   ‘Hemfer   Syrup’   for
re­analysis   on   24 th
  April   2007.     On   10 th
  July   2007,   the
Learned CJM, Beed received the test report from the Central
Drug   Laboratory,   Calcutta   stating   therein   that   the   sample
was   not   of   standard   quality   as   it   did   not   conform   to   the
accepted limits of  Cyanocobalamin  content.
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3.4 Vide letter dated 21 st
  August 2008, the Drug Inspector
called   upon   CPPL   to   furnish   the   particulars   of   Directors,
Articles  of Association,  Memorandum  of  Association, copies
of   License   to   manufacture   and   sell   drugs,   particulars   of
technical   persons,   and   all   such   information   as   was   needed
to   be   provided   under   the   Drugs   &   Cosmetics   Act,   1940
(hereinafter   referred   to   as   “the   said   Act”).     In   reply   to   this
letter,   CPPL   informed   the   Drug   Inspector   that   the   report
dated   10 th
  July   2007   was   signed   by   “In­Charge   Director”
and not the Director  of  Central Drugs Laboratory  and thus
requested   him   to   send   a   proper   report   signed   by   the
Director of the Central Drugs Laboratory.
3.5 Vide   letter   dated   12 th
  January   2009,   the   Drug
Inspector again called upon CPPL to furnish particulars that
were   previously   sought.     Vide   letter   dated   12 th
  February
2009,   CPPL   provided   the   information   and   documents
requested   by   the   Drug   Inspector   and   it   was   categorically
stated   therein   that   the   ‘Hemfer   Syrup’   was   manufactured
under the supervision and technical guidance of Sh. Ashok
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Kumar, the FDA approved manufacturing chemist for liquid
orals. 
3.6 Mr. Ashok Kumar (Accused No. 9) wrote an individual
letter   dated   13 th
  February   2009   to   the   Drug   Inspector
stating   therein   that   the   said   batch   of   ‘Hemfer   Syrup’   was
manufactured   under   his   supervision   and   that   the   drug
complied   with   the   requisite   standards.     Similarly,   Mr.
Naresh   Roy   (Accused   No.   10)   also   wrote   a   letter   dated   13 th
February   2009   to   the   Drug   Inspector   stating   therein   that
the   said   batch   of   the   ‘Hemfer   Syrup’   was   tested   under   his
supervision   and   from   the   test   results   it   appeared   that   the
drug complied with the requisite standards. 
3.7 Pursuant to the orders to take legal action against the
manufacturer of the drug by the Joint Commissioner (H.Q.)
and   Controlling   Authority,   Food   &   Drug   Administration,
Mumbai, the Complaint bearing RCC No. 233 of 2009 came
to   be   filed   before   the   Ld.   Chief   Judicial   Magistrate,   Beed
under   Section   18(a)(i)   read   with   Sections   16   and   34   of   the
said Act and punishable under Section 27(d) of the said Act.
In   the   said   complaint,   the   present   Appellants   being
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Directors of the Company were arrayed as Accused Nos. 5 to
8. 
3.8 The   learned   CJM,   Beed   issued   Summons   to   all   the
accused,   including   the   Appellants   herein   vide   Order   dated
30 th
  March   2009.   The   Appellants   filed   a   Criminal   Revision
Petition   against   the   summoning   order   before   the   learned
Sessions   Judge,   Beed   on   the   ground   that   there   are   no
specific averments in terms of Section 34 of the said Act as
to the  role played by  the Directors and thus  sought for  the
Summoning   Order   to   be   quashed.   However,   the   learned
Sessions   Judge,   Beed   rejected   the   said   Criminal   Revision
Petition   noting   that   there   is   a   specific   averment   in   the
complaint   that   the   appellants   are   concerned   with   the
manufacture, distribution and sale of ‘Hemfer Drug’. 
3.9 The   Appellants   preferred   a   Criminal   Writ   Petition
before the Bombay High Court assailing the order passed by
the   learned   Sessions   Judge.   The   High   Court,   vide   the
impugned   judgment,   dismissed   the   said   Criminal   Writ
Petition   on   the   ground   that   all   the   Directors   were
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conducting   the   business   of   CPPL   and   thus,   they   were
involved in the manufacturing process. 
3.10 Hence, the present appeal.
4. We   have   heard   Shri   C.U.   Singh   and   Shri   Anupam  Lal
Das,   learned   Senior   Counsels   appearing   on   behalf   of   the
appellants   and   Shri   Siddharath   Dharmadhikari,   learned
counsel   appearing   on   behalf   of   the   respondent­State   of
Maharashtra. 
5. Shri   C.U.   Singh   and   Shri   Anupam   Lal   Das,   learned
Senior   Counsels   submit   that   Section   34   of   the   said   Act
specifically provides that only such person who, at the time
of the commission of the offence, 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   and   shall   be   liable   to   be   proceeded
against and punished accordingly.  
6. Shri   C.U.   Singh,   learned   Senior   Counsel,   further
submits that Rule 76 of the said Rules prescribes a Form of
licence   to   manufacture   drugs   specified   in   Schedule   C   and
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C(1),   excluding   those   specified   in   Part   XB   and   Schedule   X,
or   drugs   specified   in   Schedule   C,   C(1)   and   X   and   the
conditions for the grant of such licence.  He further submits
that,   before   a   license   in   Form   28   or   Form   28B   is   granted,
certain   conditions   are   required   to   be   complied   with   by   the
applicant.  He submits that under sub­rule (1) of Rule 76 of
the said Rules, the manufacture is required to be conducted
under   the   active   direction   and   personal   supervision   of
competent   technical   staff   consisting   at   least   of   one   person
who   is   a   whole­time   employee   and   who   possesses   the
requisite   qualification   as   prescribed   under   the   said   Rules.
He further submits that under sub­rule (4) of Rule 76 of the
said Rules, an applicant is required to provide and maintain
adequate   staff,   premises   and   laboratory   equipment   for
carrying out such tests of the strength, quality and purity of
the substances as may be required to be carried out by him
under the provisions of Part X of the said Rules.  He further
states that under sub­rule (4A) of Rule 76 of the said Rules,
the head of the testing  unit is required to possess a degree
in   Medicine   or   Science   or   Pharmacy   or   Pharmaceutical
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Chemistry   of   a   University   recognised   for   the   said   purpose.
He   is   also   required   to   have   experience   in   the   testing   of
drugs,   which   in   the   opinion   of   the   licensing   authority   is
considered adequate.   He submits that Form 28 is a license
to   manufacture   for   sale   or   distribution   of   drugs   in
accordance with Rule 76 of the said Rules.   Learned Senior
Counsel   submits   that   in   Form   28,   the   names   of   the
approved competent technical staff are required to be given.
He further submits that condition No.3 of the Conditions of
Licence   requires   that   if   there   is   any   change   in   the
competent   technical   staff,   the   same   shall   be   forthwith
reported to the licensing authority.  
7. Learned   Senior   Counsel   submits   that   Schedule   M   to
the said Rules provides for good manufacturing practice and
requirements   of   premises,   plant   and   equipment   for
pharmaceutical products.   Learned Senior Counsel submits
that clause 6.1 of Part I of Schedule M specifically provides
that   the   manufacture   shall   be   conducted   under   the   direct
supervision   of   competent   technical   staff   with   prescribed
qualifications   and   practical   experience   in   the   relevant
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dosage   form   and/or   active   pharmaceutical   products.     It   is
further   the   submission   of   the   learned   Senior   Counsel   that
as   per   clause   6.2   thereof,   the   head   of   the   Quality   Control
Laboratory   is   required   to   be   independent   of   the
manufacturing   unit.     It   also   requires   that   the   testing   shall
be   conducted   under   the   direct   supervision   of   competent
technical   staff,   who   shall   be   whole   time   employees   of   the
licensee. 
8. Shri Singh further submits that in the licence which is
duly   signed   by   the   designated   licensing   authority,   the
names of the approved competent technical staff are already
given.     It   is   further   submitted   that   in   the   reply   dated   13 th
February   2009   to   the   Drug   Inspector,   Food   &   Drug
Administration,   M.S.   Beed,   Mr.   Naresh   Roy,   Assistant
Manager   Q.A.   (Accused   No.10)   had   stated   that   the   raw
material was analysed in the Quality Control Department by
Mr.   Aftab,   Chemist   under   his   supervision.     It   is   further
informed   that   the   finished   product   of   the   said   batch   of   the
drug   was   analysed   by   Mr.   M.K.   Sharma   under   his
supervision.     Mr.   Naresh   Roy   (Accused   No.10)   further
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informed  that  he was  approved  by  the  Rajasthan  FDA  as a
competent person.  
9. Learned   Senior   Counsel   submits   that   similarly,   Mr.
Ashok   Kumar,   Assistant   Manager,   Production   (Accused
No.9)   had   also   informed   the   Drug   Inspector   by
communication   dated   13 th
  February   2009   that   he   was
approved   by   the   Rajasthan   FDA.     The   goods   were   released
after   the   final   approval   from   Quality   Control.     He   further
states that the manufacturing record of the said batch was
prepared by him and it bears his signature.  
10. Shri   Singh   further   submits   that   merely   mentioning
that   the   present   appellants,   being   the   Directors   of   the
accused company, were responsible to the company for  the
conduct   of   the   business   of   the   company   would   not   be
sufficient   to   initiate   proceedings   against   them.     It   is
submitted that, unless and until there is a specific averment
as to what was the role in the conduct of the business of the
company,   a   person   cannot   be   proceeded   against   solely   on
the ground that he was a director of the company.  He relies
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on   various   judgments   of   this   Court   in   support   of   this
proposition.  
11. Shri C.U. Singh further submits that there is no formal
order of issuance of the process passed by the learned CJM.
It   is   submitted   that,   while   issuing   process,   a   duty   is   cast
upon   the   Magistrate   to   arrive   at   a   subjective   satisfaction
that there is sufficient ground to proceed.   He submits that
there is no such order which would reflect the application of
mind   by   the   learned   CJM   and   on   this   ground   also,   the
impugned order is liable to be set aside. 
12. Shri   Siddharath   Dharmadhikari,   learned   counsel,   on
the   contrary,   submits   that   perusal   of   the   complaint,   and
specifically   paragraphs   3   and   25   thereof   would   reveal   that
there   is   sufficient   compliance   of   requirement   of   Section   34
of   the   said   Act.     He   submits   that   the   complaint   has   to   be
read as a whole and cannot be read in a piecemeal manner.
Learned counsel relies on the judgment of this Court in the
case of   U.P. Pollution Control Board vs. Mohan Meakins
Ltd. and others 1
  in support of the proposition that there is
1   (2000) 3 SCC 745
12

no   legal   requirement   for   the   trial   Court   to   pass   a   detailed
order while issuing process.  He also relies on the judgment
of this Court in the case of  Dinesh B. Patel and others vs.
State of Gujarat and another 2
  to buttress his submission
that   the   averments   made   in   the   complaint   are   sufficient   to
proceed against the present appellants. 
13. In   the   case   of   State   of   Haryana   vs.   Brij   Lal   Mittal
and others 3
, this Court observed thus:
“ 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
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 sub­section shall render any such
2   (2010) 11 SCC 125
3   (1998) 5 SCC 343
13

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. From the complaint
in   question   we,   however,   find   that   except   a
bald   statement   that   the   respondents   were
directors   of   the   manufacturers,   there   is   no
other   allegation   to   indicate,   even   prima
facie,   that   they   were   in   charge   of   the
company   and   also   responsible   to   the
company for the conduct of its business.”
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
14

was   also   responsible   to   the   company   for   the   conduct   of   its
business.  
15. In the case of  S.M.S. Pharmaceuticals Ltd. vs. Neeta
Bhalla   and   another 4
,   this   Court   was   considering   the
question as to whether it was sufficient to make the person
liable for being a director of a company under Section 141 of
the   Negotiable   Instruments   Act,   1881.     This   Court
considered the definition of the word “director” as defined in
Section   2(13)   of   the   Companies   Act,   1956.     This     Court
observed thus:
“ 8.   ……. There is nothing which suggests
that   simply   by   being   a   director   in   a
company,   one   is   supposed   to   discharge
particular   functions   on   behalf   of   a
company.   It   happens   that   a   person   may
be   a   director   in   a   company   but   he   may
not   know   anything   about   the   day­to­day
functioning of the company. As a director
he   may   be   attending   meetings   of   the
Board of Directors of the company  where
usually   they   decide   policy   matters   and
guide   the   course   of   business   of   a
company.   It   may   be   that   a   Board   of
Directors   may   appoint   sub­committees
consisting   of   one   or   two   directors   out   of
the   Board   of   the   company   who   may   be
made   responsible   for   the   day­to­day
functions   of   the   company.   These   are
4   (2005) 8 SCC 89
15

matters which form part of resolutions of
the   Board   of   Directors   of   a   company.
Nothing   is   oral.   What   emerges   from   this
is that the role of a director in a company
is   a   question   of   fact   depending   on   the
peculiar   facts   in   each   case.   There   is   no
universal   rule   that   a   director   of   a
company   is   in   charge   of   its   everyday
affairs.   We   have   discussed   about   the
position   of   a   director   in   a   company   in
order   to   illustrate   the   point   that   there   is
no magic as such in a particular word, be
it   director,   manager   or   secretary.   It   all
depends   upon   the   respective   roles
assigned   to   the   officers   in   a   company.
…..”
16. It was held that merely because a person is a director
of a company, it is not necessary that he is aware about the
day­to­day functioning of the company. This Court held that
there is no universal rule that a director of a company is in
charge   of   its   everyday   affairs.     It   was,  therefore,   necessary,
to aver as to how the director of the company was in charge
of   day­to­day   affairs   of   the   company   or   responsible   to   the
affairs of the company.     This Court, however, clarified that
the   position   of   a   managing   director   or   a   joint   managing
director in a company may be different.   This Court further
held   that   these   persons,   as   the   designation   of   their   office
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suggests,   are   in   charge   of   a   company   and   are   responsible
for the conduct of the business of the company.   To escape
liability,   they   will   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.  
17. In   the   case   of   Pooja   Ravinder   Devidasani   vs.   State
of Maharashtra and another 5
 this Court observed thus:
“ 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.   In   National   Small   Industries
Corpn.   [ National   Small   Industries   Corpn.
Ltd.   v.   Harmeet   Singh   Paintal ,   (2010)   3
SCC 330 : (2010) 1 SCC (Civ) 677 : (2010)
2   SCC   (Cri)   1113]   this   Court   observed:
(SCC p. 336, paras 13­14)
5   (2014) 16 SCC 1
17

“ 13 . Section 141 is a penal provision
creating   vicarious   liability,   and   which,
as   per   settled   law,   must   be   strictly
construed. It is therefore, not sufficient
to make a bald cursory statement in a
complaint that the Director (arrayed as
an   accused)   is   in   charge   of   and
responsible   to   the   company   for   the
conduct   of   the   business   of   the
company   without   anything   more   as   to
the   role   of   the   Director .   But   the
complaint   should   spell   out   as   to   how
and in what manner Respondent 1 was
in   charge   of   or   was   responsible   to   the
accused   Company   for   the   conduct   of
its   business.   This   is   in   consonance
with   strict   interpretation   of   penal
statutes,   especially,   where   such
statutes create vicarious liability.
14 .  A  company   may   have  a  number
of Directors and to make any or all the
Directors   as   accused   in   a   complaint
merely on the basis of a statement that
they   are   in   charge   of   and   responsible
for   the   conduct   of   the   business   of   the
company without anything more is not
a   sufficient   or   adequate   fulfilment   of
the requirements under Section 141.”
(emphasis in original)
18.   In   Girdhari   Lal   Gupta   v.   D.H.
Mehta   [ Girdhari   Lal   Gupta   v.   D.H.   Mehta ,
(1971) 3 SCC 189 : 1971 SCC (Cri) 279 :
AIR 1971 SC 2162] , this Court observed
that   a   person   “in   charge   of   a   business”
means   that   the   person   should   be   in
18

overall control of the day­to­day business
of the Company.
19.   A   Director   of   a   company   is   liable   to
be convicted for  an  offence committed by
the   company   if   he/she   was   in   charge   of
and   was   responsible   to   the   company   for
the   conduct   of   its   business   or   if   it   is
proved   that   the   offence   was   committed
with the consent or connivance of, or was
attributable to any negligence on the part
of   the   Director   concerned   (see   State   of
Karnataka   v.   Pratap   Chand   [ State   of
Karnataka   v.   Pratap Chand , (1981) 2 SCC
335 : 1981 SCC (Cri) 453] ).
20.   In  other  words,  the  law  laid  down   by
this Court is that for making a Director of
a   company   liable   for   the   offences
committed by the company under Section
141   of   the   NI   Act,   there   must   be   specific
averments   against   the   Director   showing
as   to   how   and   in   what   manner   the
Director was responsible for the conduct of
the business of the company .
21.   In   Sabitha   Ramamurthy   v.   R.B.S.
Channabasavaradhya   [ Sabitha
Ramamurthy   v.   R.B.S.
Channabasavaradhya ,   (2006)   10   SCC
581 : (2007) 1 SCC (Cri) 621] , it was held
by this Court that: (SCC pp. 584­85, para
7)
“ 7 .   …   it   is   not   necessary   for   the
complainant   to   specifically   reproduce
the wordings of the section but what is
19

required is a clear statement of fact so
as   to   enable   the   court   to   arrive   at   a
prima facie opinion that the accused is
vicariously   liable.   Section   141   raises   a
legal   fiction.   By   reason   of   the   said
provision,   a   person   although   is   not
personally liable for commission of such
an   offence   would   be   vicariously   liable
therefor.   Such   vicarious   liability   can   be
inferred so far as a company registered
or   incorporated   under   the   Companies
Act,   1956   is   concerned   only   if   the
requisite   statements,   which   are
required   to   be   averred   in  the   complaint
petition,   are   made   so   as   to   make   the
accused   therein   vicariously   liable   for
the offence committed by the company .”
(emphasis supplied)
By verbatim reproducing the words of the
section   without   a   clear   statement   of   fact
supported   by   proper   evidence,   so   as   to
make   the   accused   vicariously   liable,   is   a
ground for quashing proceedings initiated
against such person under Section 141 of
the NI Act.”
18. It  could  thus   clearly   be   seen   that   this   Court   has   held
that  merely  reproducing  the words of the section without  a
clear   statement   of   fact   as   to   how   and   in   what   manner   a
director  of  the  company  was  responsible  for   the  conduct   of
20

the business of the company, would not  ipso facto  make the
director vicariously liable.  
19. A similar view has previously been taken by this Court
in the case of  K.K. Ahuja vs. V.K. Vora and another 6
.  
20. In   the   case   of   State   of   NCT   of   Delhi   through
Prosecuting   Officer,   Insecticides,   Government   of   NCT,
Delhi   vs.   Rajiv   Khurana 7
,   this   Court   reiterated   the
position thus:
“17.   The   ratio   of   all   these   cases   is   that
the   complainant   is   required   to   state   in
the   complaint   how   a   Director   who   is
sought   to   be   made   an   accused,   was   in
charge of the business of the company or
responsible   for   the   conduct   of   the
company's   business.   Every   Director   need
not   be   and   is   not   in   charge   of   the
business   of   the   company.   If   that   is   the
position   with   regard   to   a   Director,   it   is
needless to emphasise that in the case of
non­Director   officers,   it   is   all   the   more
necessary   to   state   what   were   his   duties
and   responsibilities   in   the   conduct   of
business of the company and how and in
what manner he is responsible or liable.”
6   (2009) 10 SCC 48
7   (2010) 11 SCC 469
21

21. Recently, in the case of   Ashoke Mal Bafna vs. Upper
India   Steel   Manufacturing   and   Engineering   Company
Limited 8
,  this Court observed thus:
“ 9.   To   fasten   vicarious   liability   under
Section   141   of   the   Act   on   a   person,   the
law   is   well   settled   by   this   Court   in   a
catena   of   cases   that   the   complainant
should specifically show as to how and in
what   manner   the   accused   was
responsible. Simply because a person is a
Director of a defaulter Company, does not
make him liable under the Act. Time and
again, it has been asserted by  this Court
that only the person who was at the helm
of affairs of the Company and in charge of
and   responsible   for   the   conduct   of   the
business   at   the   time   of   commission   of   an
offence   will   be   liable   for   criminal   action.
(See   Pooja Ravinder Devidasani   v.   State of
Maharashtra   [ Pooja   Ravinder
Devidasani   v.   State   of   Maharashtra ,
(2014)   16   SCC   1   :   (2015)   3   SCC   (Civ)
384   :   (2015)   3   SCC   (Cri)   378   :   AIR   2015
SC 675] .)
10.   In  other  words,  the  law  laid  down   by
this Court is that for making a Director of
a   Company   liable   for   the   offences
committed   by   the   Company   under
Section   141   of   the   Act,   there   must   be
specific   averments   against   the   Director
showing   as   to   how   and   in   what   manner
8   (2018) 14 SCC 202
22

the   Director   was   responsible   for   the
conduct of the business of the Company.”
22. In   the   light   of   these   observations,   let   us   examine   the
averments   made   in   the   complaint   insofar   as   the   present
appellants are concerned:
“3.   That,   Accused   no.   5   to   8   are   the
Directors   of   the   M/s   Cachet
Pharmaceuticals   Pvt.   Ltd.   village   Thana
Baddi,   Tehsil   Nalagarh   dist.   Solan   (H.P.)
Pin   code   173205   head   office   415,
Shahanahar,   Worli,   Mumbai   ­   400018,
and   looking   after   day   to   day   activities   of
the company. 
That,   Accused   no.   4   is   the   Pvt.   Ltd.
Company   and   is   doing   the     business   of
manufacturing, buying, selling, importing
and   exporting   of   and/or   dealers   in
Pharmaceuticals, Cosmetics, Beauty aids,
Oils,   Chemicals,   Food   products   and
provisions,   Veterinary   and   Surgical
Equipments,   Medicinal   preparations
including Spirit.
That,  Accused no. 4  has mfg. unit  at no.
(1)   Village   Thana   Baddi,   Tehsil   Nalagarh
Dist.   Solan   (H.P.)   Pin   code   173205   and
no. (2) at C­582, Ricco Ind. Area Bhiwadi,
Dist. Alwar, Rajasthan. 
That, Accused no.4 are holding drug mgf.
License No. MNB/05/267 in form 25 and
licence   no.   MB/05/268   in   form   28
granted   on   17.3.2006   valid   upto
16.3.2011.
23

*** *** ***
25.   That,   on   12.2.2009,   the   complainant
visited and inspected the premises of M/s
Cachet   Pharmaceuticals   Pvt.   Ltd.   village
Thana Baddi, Tehsil Nalagarh Dist. Solan
(H.P.)   Pin   code   173205   that   is   accused
no.4.  At the time of inspection, Shri Ajay
Prakash   Gupta   Vice   President   Technical,
accused   no.   9   and   10   were   present.
During   enquiry,   it   was   revealed   that
Accused   no.   4   to   10   manufactured
"Hemfer   syrup   Mfg.   Lic.   No.
MB/05/268/B.   No.   HMS/6015   CMfg.
Date   May­2006   which   has   been   declared
to   be   NOT   OF   STANDARD   QUALITY   at
the   premises   of   M/s   Cachet
Pharmaceuticals   Pvt.   Ltd.   village   Thana
Baddi,   Tehsil   Nalagarh   Dist.   Solan   (H.P.)
Pin   code   173205   that   is   accused   no.4
under   licence   No.   MB/05/268   and   sold
the   above   said   drugs   to   M/s   Priya
Agencies   Behind   Dr.   Vaidya   Hospital
Jalna   Road,   Beed,   Dist.   Beed   through
M/s   Alkem   Laboratories   Ltd.   situated   at
reality   warehousing   Pvt.   Ltd.,   Gut
No.2323/1 property no. 115, Pune Nagar
road,   At.   Post   Wagholi,   Tai.   Haveli,   Dist.
Pune ­ 412207.”
23. It   can   thus   be   seen   that   there   are   no   specific
averments insofar as the present appellants are concerned.
It   is   further   to   be   noted   that   the   present   appellants   are
24

neither   the   managing   director   nor   the   whole­time   directors
of the accused company.  
24. It   is   further   to   be   noted   that,   in   accordance   with   the
provisions  of  Rule  76  of  the  said  Rules  read  with  Form  28,
the Accused Nos. 9 and 10 have specifically been approved
by   the   licensing   authority   in   Form   28.       Accused   No.9   was
approved   as   a   person   under   whose   active   direction   and
personal   supervision   the   manufacture   would   be   conducted
as required under sub­rule (1) of Rule 76 of the said Rules.
Similarly,   Accused   No.10,   who   was   approved   as   a   head   of
the testing unit, was to be in­charge for carrying out the test
of the strength, quality and purity of the substances as may
be required under the provisions of Part X of the said Rules.
We   are   therefore   of   the   considered   view   that   the   complaint
is   totally   lacking   the   requirement   of   Section   34   of   the   said
Act.  
25. The impugned orders are liable to be quashed and set
aside on another ground also. 
25

26. Perusal   of   the   order   passed   by   the   learned   Single
Judge of the High Court would itself reveal that the learned
CJM has not even cared to pass a formal order of issuance
of process.  It will be relevant to refer to the following part of
the   judgment   and   order   of   the   learned   Single   Judge   of   the
High Court:
“….Though, it is true that on the certified
copy  produced by the petitioners there is
no   such   formal   order   but   copy   of
Roznama (daily notings of the proceeding)
shows   that   such   order   was   made   on   30­
3­2009.   The   Roznama   dated   30­3­2009
reads as follows :
(i) Complaint filed by Vilas Vishwanath 
Dusane.
(ii) Copy of list of documents containing 
44 document.
Order   was   made   on   Exhibit   1   (of   issue
process).   Take   entry   in   register   of
criminal   cases   and   issue   summons
against   accused.   List   the   matter   for
appearance of accused on 18­6­2009.
This   record   is   sufficient   to   infer   that   the
order   of   issue   process   was   made   and
after   that   summons   were   issued   against
accused   to   ask   them   to   appear   in   the
Court.”
26

27. It   could   thus   clearly   be   seen   that   the   learned   Single
Judge   of   the   High   Court   held   that   though   there   was   no
formal   order   of   issuance   of   process,   the   record   was
sufficient to infer that the order of issue process was made.
28. 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.  No doubt, that the order need not contain detailed
reasons.     A   reference   in   this   respect   could   be   made   to   the
judgment   of   this   Court   in   the   case   of   Sunil   Bharti   Mittal
vs. Central Bureau of Investigation 9
,  which reads thus:
“ 51.   On   the   other   hand,   Section   204   of
the Code deals with the issue of process,
if   in   the   opinion   of   the   Magistrate   taking
cognizance   of   an   offence,   there   is
sufficient   ground   for   proceeding.   This
section   relates   to   commencement   of   a
criminal   proceeding.   If   the   Magistrate
9   (2015) 4 SCC 609
27

taking cognizance of a case (it may be the
Magistrate   receiving   the   complaint   or   to
whom   it   has   been   transferred   under
Section 192), upon a consideration of the
materials   before   him   (i.e.   the   complaint,
examination   of   the   complainant   and   his
witnesses, if present, or report of inquiry,
if any), thinks that  there is a prima facie
case   for   proceeding   in   respect   of   an
offence, he shall issue process against the
accused.
52.   A   wide   discretion   has   been   given   as
to grant or refusal of process and it must
be   judicially   exercised.   A   person   ought
not   to   be   dragged   into   court   merely
because   a   complaint   has   been   filed.   If   a
prima   facie   case   has   been   made   out,   the
Magistrate   ought   to   issue   process   and   it
cannot   be   refused   merely   because   he
thinks   that   it   is   unlikely   to   result   in   a
conviction.
53.   However,   the   words   “sufficient
ground   for   proceeding”   appearing   in
Section   204   are   of   immense   importance.
It   is   these   words   which   amply   suggest
that an opinion is to be formed only after
due   application   of   mind   that   there   is
sufficient basis for proceeding against the
said   accused   and   formation   of   such   an
opinion is to be stated in the order itself.
The   order   is   liable   to   be   set   aside   if   no
reason   is   given   therein   while   coming   to
the   conclusion   that   there   is   prima   facie
case   against   the   accused,   though   the
order   need   not   contain   detailed   reasons.
28

A fortiori, the order would be bad in law if
the   reason   given   turns   out   to   be   ex   facie
incorrect.”
29. A similar view has been taken by this Court in the case
of  Ashoke Mal Bafna (supra) .  
30. In   the   present   case,   leaving   aside   there   being   no
reasons   in   support   of   the   order   of   the   issuance   of   process,
as a matter  of fact, it is clear from  the order  of the learned
Single   Judge   of   the   High   Court,   that   there   was   no   such
order   passed   at   all.     The   learned   Single   Judge   of   the   High
Court, based on the record, has presumed that there was an
order of issuance of process. We find that such an approach
is unsustainable in law.  The appeal therefore deserves to be
allowed.  
31. In   the   result,   the   appeal   is   allowed.     The   impugned
order  of issuance of process dated   30 th
  March 2009 passed
by the learned Chief Judicial Magistrate, Beed   and the order
passed   by   the   learned   Sessions   Judge,   Beed   dated   25 th
November   2014   dismissing   the   Criminal   Revision   being
Criminal Revision Petition No.115 of 2013 are quashed and
29

set   aside.     The   complaint   against   the   present   appellants   is
dismissed.     Needless   to   state   that   the   complaint   shall
proceed against rest of the accused in accordance with law.
..............................J. 
[B.R. GAVAI]
 .............................J. 
[   C.T. RAVIKUMAR] 
NEW DELHI;
OCTOBER 11, 2022
30