2026:HHC:10091

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.

CrMMO No. 716 of 2024

Decided on: April 2, 2026

________________________________________________________

Hem Raj Thakur ………..Petitioner

Versus

State of Himachal Pradesh ….Respondent

________________________________________________________

Coram:

Hon’ble Mr. Justice Sandeep Sharma, Judge.

Whether approved for reporting?

1

Yes.

________________________________________________________

For the Petitioners : Mr. Anand Sharma, Senior Advocate

with Mr. Karan Sharma, Advocate.

For the Respondent : Mr. Rajan Kahol and Mr. Vishal

Panwar, Additional Advocate

General with Mr. Ravi Chauhan and

Mr. Anish Banshtu, Deputy

Advocates General.

________________________________________________________

Sandeep Sharma, Judge (oral)

By way of instant petition filed under Section 528 of Bharatiya

Nagrik Suraksha Sanhita, 2023 (hereinafter, ‘BNSS’), prayer has been

made on behalf of the petitioner for quashing of complaint No. HFW-

HMR(PROS) DRUGS/10 -09, registered as Complaint No. 58-1 of 2010

titled as State of Himachal Pradesh (through Drugs Inspector H.Q.

Hamirpur) v. Anil Chand and others as well as consequent

proceedings pending in the court of learned Judicial Magistrate First

Class, Nadaun, Hamirpur.

2. For having bird’s eye view of the matter, facts relevant for

adjudication of the case at hand are that on 08.01.2009 Drug Inspector,

Headquarters, Hamirpur alongwith Shri Jagdish Chand, Peon, visited

1

Whether the reporters of the local papers may be allowed to see the judgment?

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the premises of M/s Shri Shri Medical Store, Opposite Bus Stand

Nadaun, District Hamirpur, Himachal Pradesh. Drug Inspector

concerned after having noticed that Mr. Anil Chand was conducting

business of stocking and exhibiting for sale of allopathic drugs over the

counter via his retail drugs licence no. HMR/2006/ 389 and

HMR/2006/390 valid upto 29.3.2011, picked up three samples of drug

namely Chlorpheniramine Maleate Tablets (C.P. Sys-4) B. No. LGT-

8106, expiry date 08/2011, manufactured by M/s Legen Healthcare,

Plot No.20, Sector 05, Parwanoo, District Solan, Himachal Pradesh for

chemical analysis and as per procedure, sent the same for chemical

examination to C.T.L. Kandaghat.

3. However, vide report dated 31.10.2009 sample of aforesaid

Chlorpheniramine Maleate was found “not of standard quality as

defined in the Drugs and Cosmetics Act, 1940 and Rules there under”

for the reason that “the sample of Chlorpheniramine Maleate tablets

contained less content of Chlorpheniramine Maleate i.e. 37.25 %

against the prescribed limit i.e. 95% to 105% as per I.P.

4. After receipt of aforesaid ‘adverse’ analysis report, Drug

Inspector concerned, vide letter dated 09.11.2009, sent a

communication to Anil Chand, Pharmacist, In Charge M/s Shri Shri

Medical Store to disclose the information as required under Section 18-

A of the Act, who in turn, vide his reply, disclosed that the said drug

was purchased by him from M/s Aar Kay Surgicals, Tibhra Road,

Sujanpur, Village and Post Office Sujanpur, District Hamirpur, vide

invoice No. AKV=-908 dated 23.12.2008. Drug Inspector concerned,

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issued letter dated 02.12.2009 to M/s Aar Kay Surgicals, Sujanpur

alongwith enclosing therewith copy of adverse analysis report and

purchase invoice, asking it to disclose the information as required

under Section 18-A of the Act, who in turn vide letter dated 09.12.2009,

disclosed that the drug in question was purchased by it from M/s

Generica India Limited, 718, 719, Main Burari Road, Burari, Delhi vide

invoice No. GIO-2530, dated 21.10.2008. Said firm also informed vide

letter 09.12.2009 that drug was received by it from authorized signatory

of the said firm, namely Mr. Hem Raj Thakur (hereinafter ‘petitioner’).

5. In the aforesaid background, Drug Inspector sent a notice to the

petitioner on 17.12.2009 with a copy of Adverse Analysis Report and

related copies of purchase invoices, asking it to disclose the

information as required under Section 18-A of the Act. Thereafter,

petitioner on behalf of the firm-M/s Generica India Limited vide letter

dated 23.12.2009 disclosed that the said drug was purchased by it

from M/s Legen Healthcare, Plot No. 20, Sector 05, Parwanoo, District

Solan, Himachal Pradesh vide invoice No. 4, dated 7.10.2008.

6. On the basis of aforesaid information, Drug Inspector issued

letter dated 01.02.2010 to M/s Legen Healthcare enclosing therewith

sealed sample portion and it was asked to disclose the information as

required under Section 18-A of the Act. Said company issued letter

dated 10.02.2010 stating that it was not satisfied with report of CTL

Kandaghat and requested to send the second sample for re-testing to

Central Drug Laboratory. Though aforesaid prayer made by M/s Legen

Healthcare was not acceded to but Drug Inspector having found breach

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of provisions of the Act, filed a complaint in the competent court of law

inter alia impleading petitioner as accused no. 4.

7. Taking cognizance of averments contained in the complaint and

documents annexed therewith, learned trial Court issued process

against the accused named in the complaint, including the petitioner,

however, fact remains that the complaint is still pending adjudication.

8. Respondent State has filed reply to the present petition,

pursuant to notices issued in the instant proceedings, wherein facts as

have been noticed herein above, have not been disputed, rather stand

admitted.

9. Precisely, the grouse of the petitioner, as has been highlighted

in the present petition and further canvassed by Mr. Anand Sharma,

learned senior counsel duly assisted by Mr. Karan Sharma, Advocate,

appearing for the petitioner is that court concerned, while issuing

process against the petitioner, failed to take note of the fact that the

complaint filed by Drug Inspector concerned under relevant provisions

of Act/Rules is not maintainable against petitioner, who happens to be

Authorized Signatory of M/s Generica India Limited, for the reason that

aforesaid company was merely a stockiest/trader, at no point of time,

had any hand in manufacturing of drug in question, rather, action could

be taken against M/s Legen Healthcare, which otherwise is admitted to

have manufactured the drug in question. While making this court

peruse Section 19(3) of the Act, Mr. Sharma, learned senior counsel

appearing for the petitioner, vehemently argued that a person, not

being the manufacturer of a drug or cosmetic or his agent for the

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distribution hereof, shall not be liable for contravention of Section18

(a)(i) if he proves that he acquired the drug or cosmetic from a duly

licensed manufacturer, distributor or dealer thereof; that he did not

know and could not, with reasonable diligence, have ascertained that

the drug or cosmetic, in any way, contravened the provisions of that

section; and that the drug or cosmetic, while in his possession was

properly stored and remained in the same state as when he acquired it.

10. Mr. Sharma, learned senior counsel further submitted that since

companies, which are M/s Generica India Limited and M/s Legan

Healthcare being traders/stockiest and manufacturing firm respectively,

have not been arrayed as accused, complaint having been filed by

Drug Inspector concerned otherwise is bound to fail, in terms of

specific provisions contained under Section 34, which mandate for

impleadment of company as an accused, if there is violation of any

provisions contained under the Act. In support of aforesaid

submissions Mr. Sharma, learned senior counsel invited attention of

this court to various judgments which shall be referred to in the later

part of order.

11. Lastly, Mr. Sharma, learned senior counsel argued that since on

account of non-compliance of various provisions as detailed herein

above, prosecution case is bound to fail, no fruitful purpose would be

served in case, complaint as well as consequent proceedings against

the petitioner herein are allowed to sustain, rather, continuation of

same, if permitted would cause great prejudice to the petitioners who

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would be unnecessarily subjected to ordeal of protracted trial, which

otherwise is bound to fail.

12. To the contrary, Mr. Rajan Kahol, learned Additional Advocate

General, while supporting the registration of complaint by Drug

Inspector against the petitioner, vehemently argued that petitioner

being Authorized Signatory of M/s Generica India Limited, is liable and

responsible for conduct of business of the company. He submitted that

petitioner, who was an authorized representative of the company, is

liable to be punished for the commission of offence punishable under

Section 27 of the Act. While referring to Section 19(3) of the Act, Mr.

Rajan Kahol, learned Additional Advocate General further argued that

once, there is no denial to the fact that drug in question was stocked by

the company concerned and same was not found to be of standard

quality, petitioner being Authorized Signatory of company has been

rightly booked for deliberate contravention of the provisions contained

under Section 18 of the Act. Lastly, Mr. Kahol, learned Additional

Advocate General submitted that petition under Section 482 CrPC is

not maintainable, especially when complaint sought to be quashed is

already under trial. He further submitted that there is overwhelming

evidence on record suggestive of the fact that petitioner has

contravened various provisions contained under the Act and as such, it

would be too premature at this stage to conclude that no case, much

less case under Section 18(a)(i) punishable under Section 27(d) of the

Act, is made out against petitioner.

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13. I have heard learned counsel for the parties and perused

material available on record.

14. Before ascertaining the genuineness and correctness of the

submissions and counter submissions having been made by the

learned counsel for the parties vis-à-vis prayer made in the instant

petition, this Court deems it necessary to discuss/elaborate the scope

and competence of this Court to quash the criminal proceedings while

exercising power under Section 482 of Cr.PC.

15. In Amish Devgan vs Union of India and Ors, (2021) 1 SCC 1,

the Hon’ble Apex Court held as under:

“(vii) Conclusion and relief

116. At this stage and before recording our final conclusion, we would like to

refer to decision of this Court in Pirthi Chand [State of H.P. v. Pirthi Chand,

(1996) 2 SCC 37 : 1996 SCC (Cri) 210] wherein it has been held : (SCC pp.

44-45, paras 12-13)

“12. It is thus settled law that the exercise of inherent power of the

High Court is an exceptional one. Great care should be taken by the

High Court before embarking to scrutinise the FIR/charge -

sheet/complaint. In deciding whether the case is rarest of rare cases

to scuttle the prosecution in its inception, it first has to get into the

grip of the matter whether the allegations constitute the offence. It

must be remembered that FIR is only an initiation to move the

machinery and to investigate into cognizable offence. After the

investigation is conducted (sic concluded) and the charge-sheet is

laid, the prosecution produces the statements of the witnesses

recorded under Section 161 of the Code in support of the charge-

sheet. At that stage it is not the function of the court to weigh the pros

and cons of the prosecution case or to consider necessity of strict

compliance with the provisions which are considered mandatory and

effect of its non-compliance. It would be done after the trial is

concluded. The court has to prima facie consider from the averments

in the charge-sheet and the statements of witnesses on the record in

support thereof whether court could take cognizance of the offence

on that evidence and proceed further with the trial. If it reaches a

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conclusion that no cognizable offence is made out, no further act

could be done except to quash the charge-sheet. But only in

exceptional cases i.e. in rarest of rare cases of mala fide initiation of

the proceedings to wreak private vengeance issue of process under

Criminal Procedure Code is availed of. A reading of a [Vide

Corrigendum dated 20-3-1996 issued from Residential Office of

Hon'ble Mr Justice K. Ramaswamy.] complaint or FIR itself does not

disclose at all any cognizable offence — the court may embark upon

the consideration thereof and exercise the power.”

16. In the case of Kaptan Singh vs State of Uttar Pradesh and

Ors., (2021) 9 SCC 35, the Supreme Court held as under :

“9.1. At the outset, it is required to be noted that in the present case

the High Court in exercise of powers under Section 482 CrPC has

quashed the criminal proceedings for the offences under Sections

147, 148, 149, 406, 329 and 386 IPC. It is required to be noted that

when the High Court in exercise of powers under Section 482 CrPC

quashed the criminal proceedings, by the time the investigating

officer after recording the statement of the witnesses, statement of

the complainant and collecting the evidence from the incident place

and after taking statement of the independent witnesses and even

statement of the accused persons, has filed the charge-sheet before

the learned Magistrate for the offences under Sections 147, 148, 149,

406, 329 and 386 IPC and even the learned Magistrate also took the

cognizance. From the impugned judgment and order [Radhey Shyam

Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by the

High Court, it does not appear that the High Court took into

consideration the material collected during the investigation/inquiry

and even the statements recorded. If the petition under Section 482

CrPC was at the stage of FIR in that case the allegations in the

FIR/complaint only are required to be considered and whether a

cognizable offence is disclosed or not is required to be considered.

However, thereafter when the statements are recorded, evidence is

collected and the charge-sheet is filed after conclusion of the

investigation/inquiry the matter stands on different footing and the

Court is required to consider the material/evidence collected during

the investigation. Even at this stage also, as observed and held by

this Court in a catena of decisions, the High Court is not required to

go into the merits of the allegations and/or enter into the merits of the

2026:HHC:10091

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case as if the High Court is exercising the appellate jurisdiction

and/or conducting the trial. As held by this Court in Dineshbhai

Chandubhai Patel [Dineshbhai Chandubhai Patel v. State of Gujarat,

(2018) 3 SCC 104 : (2018) 1 SCC (Cri) 683] in order to examine as to

whether factual contents of FIR disclose any cognizable offence or

not, the High Court cannot act like the investigating agency nor can

exercise the powers like an appellate court. It is further observed and

held that that question is required to be examined keeping in view,

the contents of FIR and prima facie material, if any, requiring no

proof. At such stage, the High Court cannot appreciate evidence nor

can it draw its own inferences from contents of FIR and material

relied on. It is further observed it is more so, when the material relied

on is disputed. It is further observed that in such a situation, it

becomes the job of the investigating authority at such stage to probe

and then of the court to examine questions once the charge-sheet is

filed along with such material as to how far and to what extent

reliance can be placed on such material.

12. Therefore, the High Court has grossly erred in quashing the

criminal proceedings by entering into the merits of the allegations as

if the High Court was exercising the appellate jurisdiction and/or

conducting the trial. The High Court has exceeded its jurisdiction in

quashing the criminal proceedings in exercise of powers under

Section 482 CrPC.”

17. Recently, Hon’ble Apex Court in Abhishek Singh vs Ajay

Kumar and Ors., (2025) SCC OnLine SC 1313, reiterated that:

“9. The scope of the Court's power to quash and set aside proceedings is

well-settled to warrant any restatement. While the arguments advanced have

the potential to raise many issues for consideration, we must first satisfy

ourselves as to the propriety of the exercise of such power by the High Court.

The task of the High Court, when called upon to adjudicate an application

seeking to quash the proceedings, is to see whether, prima facie, an offence

is made out or not. It is not to examine whether the charges may hold up in

the Court. In doing so, the area of action is circumscribed. In Rajeev Kourav

v. Baisahab, it was held:

“8. It is no more res integra that exercise of power under Section 482

CrPC to quash a criminal proceeding is only when an allegation

made in the FIR or the charge-sheet constitutes the ingredients of the

offence/offences alleged. Interference by the High Court under

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Section 482 CrPC is to prevent the abuse of process of any court or

otherwise to secure the ends of justice. It is settled law that the

evidence produced by the accused in his defence cannot be looked

into by the court, except in very exceptional circumstances, at the

initial stage of the criminal proceedings. It is trite law that the High

Court cannot embark upon the appreciation of evidence while

considering the petition filed under Section 482 CrPC for quashing

criminal proceedings. It is clear from the law laid down by this Court

that if a prima facie case is made out disclosing the ingredients of the

offence alleged against the accused, the Court cannot quash a

criminal proceeding.” 15. In that view of the matter, we hold that the

High Court had improperly quashed the proceedings initiated by the

appellant. It stands clarified that we have not expressed any opinion

on the matter, and the guilt or innocence of the respondents has to

be established in the trial, in accordance with the law. The

proceedings out of the subject FIR, mentioned in paragraph 2 are

revived and restored to the file of the concerned Court.”

18. A three-Judge Bench of the Hon’ble Apex Court in case titled

State of Karnataka v. L. Muniswamy and others, 1977 (2) SCC 699,

held that High Court while exercising power under Section 482 Cr.PC

is entitled to quash the proceedings, if it comes to the conclusion that

allowing the proceeding to continue would be an abuse of the process

of the Court or that the ends of justice require that the proceeding

ought to be quashed.

19. Subsequently, in case titled State of Haryana and others v.

Bhajan Lal and others, 1992 Supp (1) SCC 335, the Hon’ble Apex

Court while elaborately discussing the scope and competence of High

Court to quash criminal proceedings under Section 482 Cr.PC laid

down certain principles governing the jurisdiction of High Court to

exercise its power. After passing of aforesaid judgment, issue with

regard to exercise of power under Section 482 Cr.PC, again came to

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be considered by the Hon’ble Apex Court in case bearing Criminal

Appeal No.577 of 2017 (arising out of SLP (CrL.) No. 287 of 2017)

titled Vineet Kumar and Ors. v. State of U.P. and Anr., wherein it has

been held that saving of the High Court’s inherent powers, both in civil

and criminal matters, is designed to achieve a salutary public purpose

i.e. court proceedings ought not to be permitted to degenerate into a

weapon of harassment or persecution.

20. The Hon’ble Apex Court in Prashant Bharti v. State (NCT of

Delhi), (2013) 9 SCC 293, relying upon its earlier judgment titled as

Rajiv Thapar and Ors v. Madan Lal Kapoor, (2013) 3 SCC 330,

reiterated that High Court has inherent powers under Section 482

Cr.PC., to quash the proceedings against an accused, at the stage of

issuing process, or at the stage of committal, or even at the stage of

framing of charge, but such power must always be used with caution,

care and circumspection. In the aforesaid judgment, the Hon’ble Apex

Court concluded that while exercising its inherent jurisdiction under

Section 482 of the Cr.PC, Court exercising such power must be fully

satisfied that the material produced by the accused is such, that would

lead to the conclusion, that his/their defence is based on sound,

reasonable, and indubitable facts and the material adduced on record

itself overrule the veracity of the allegations contained in the

accusations levelled by the prosecution/complainant. Besides above

the Hon’ble Apex Court further held that material relied upon by the

accused should be such, as would persuade a reasonable person to

dismiss and condemn the actual basis of the accusations as false. In

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such a situation, the judicial conscience of the High Court would

persuade it to exercise its power under Section 482 of the Cr.P.C. to

quash such criminal proceedings, for that would prevent abuse of

process of the court, and secure the ends of justice. In the aforesaid

judgment titled as Prashant Bharti (supra), the Hon’ble Apex Court

has held as under:

“22. The proposition of law, pertaining to quashing of criminal proceedings,

initiated against an accused by a High Court under Section 482 of the Code

of Criminal Procedure (hereinafter referred to as “the Cr.P.C.”) has been

dealt with by this Court in Rajiv Thapar & Ors. vs. Madan Lal Kapoor wherein

this Court inter alia held as under: (2013) 3 SCC 330, paras 29-30)

“29. The issue being examined in the instant case is the jurisdiction

of the High Court under Section 482 of the Cr.P.C., if it chooses to

quash the initiation of the prosecution against an accused, at the

stage of issuing process, or at the stage of committal, or even at the

stage of framing of charges. These are all stages before the

commencement of the actual trial. The same parameters would

naturally be available for later stages as well. The power vested in

the High Court under Section 482 of the Cr.P.C., at the stages

referred to hereinabove, would have far reaching consequences,

inasmuch as, it would negate the prosecution’s/complainant’s case

without allowing the prosecution/complainant to lead evidence. Such

a determination must always be rendered with caution, care and

circumspection. To invoke its inherent jurisdiction under Section 482

of the Cr.P.C. the High Court has to be fully satisfied, that the

material produced by the accused is such, that would lead to the

conclusion, that his/their defence is based on sound, reasonable, and

indubitable facts; the material produced is such, as would rule out

and displace the assertions contained in the charges levelled against

the accused; and the material produced is such, as would clearly

reject and overrule the veracity of the allegations contained in the

accusations levelled by the prosecution/complainant. It should be

sufficient to rule out, reject and discard the accusations levelled by

the prosecution/complainant, without the necessity of recording any

evidence. For this the material relied upon by the defence should not

have been refuted, or alternatively, cannot be justifiably refuted,

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being material of sterling and impeccable quality. The material relied

upon by the accused should be such, as would persuade a

reasonable person to dismiss and condemn the actual basis of the

accusations as false. In such a situation, the judicial conscience of

the High Court would persuade it to exercise its power under Section

482 of the Cr.P.C. to quash such criminal proceedings, for that would

prevent abuse of process of the court, and secure the ends of justice.

30. Based on the factors canvassed in the foregoing paragraphs, we

would delineate the following steps to determine the veracity of a

prayer for quashing, raised by an accused by invoking the power

vested in the High Court under Section 482 of the Cr.P.C.:-

30.1 Step one, whether the material relied upon by the accused is

sound, reasonable, and indubitable, i.e., the material is of sterling

and impeccable quality?

30.2 Step two, whether the material relied upon by the accused,

would rule out the assertions contained in the charges levelled

against the accused, i.e., the material is sufficient to reject and

overrule the factual assertions contained in the complaint, i.e., the

material is such, as would persuade a reasonable person to dismiss

and condemn the factual basis of the accusations as false.

30.3 Step three, whether the material relied upon by the accused,

has not been refuted by the prosecution/complainant; and/or the

material is such, that it cannot be justifiably refuted by the

prosecution/complainant?

30.4 Step four, whether proceeding with the trial would result in an

abuse of process of the court, and would not serve the ends of

justice?

30.5 If the answer to all the steps is in the affirmative, judicial

conscience of the High Court should persuade it to quash such

criminal - proceedings, in exercise of power vested in it under Section

482 of the Cr.P.C. Such exercise of power, besides doing justice to

the accused, would save precious court time, which would otherwise

be wasted in holding such a trial (as well as, proceedings arising

therefrom) specially when, it is clear that the same would not

conclude in the conviction of the accused.”

21. It is quite apparent from the bare perusal of aforesaid judgments

passed by the Hon’ble Apex Court from time to time that where a

criminal proceeding is manifestly attended with mala fide and/or where

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the proceeding is maliciously instituted with an ulterior motive for

wreaking vengeance on the accused and with a view to spite him/her

due to private and personal grudge, High Court while exercising power

under Section 482 Cr.PC can proceed to quash the proceedings,

22. Reliance in this regard is also placed upon judgments of the

Hon’ble Apex Court in case tilted Anand Kumar Mohatta and Anr. v.

State (Government of NCT of Delhi) Department of Home and Anr,

AIR 2019 SC 210 (paras 16-17) and Pramod Suryabhan Pawar v.

The State of Maharashtra and Anr, (2019) 9 SCC 608 (paras7-8).

23. Now being guided by the aforesaid proposition of law laid down

by the Hon’ble Apex Court, this Court would make an endeavor to

examine and consider the prayer made in the instant petition vis-à-vis

factual matrix of the case.

24. Admittedly in the case at hand, drug in question i.e.

Chlorpheniramine Maleate was not manufactured by M/s Generica

India Limited, rather the same was manufactured by M/s Legen

Healthcare. Petitioner herein have been arrayed as accused on

account of his being Authorized Signatory of M/s Generica India

Limited, which is admittedly a stockiest/trader of the drug in question.

Sample of drug was drawn from pharmacy namely M/s Shri Shri

Medical Store, whose in-charge was Mr. Anil Chand. Above named

Anil Chand disclosed to Drug Inspector concerned that the drug in

question was purchased from M/s Aar Kay Surgicals, Sujanpur vide

invoice dated 23.12.2008. M/s Aar Kay Surgicals, Sujanpur further

informed the Drug Inspector concerned that the drug was purchased by

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it from M/s Generica India Limited vide invoice dated 21.10.2008 from

petitioner, authorized representative M/s Generica India Limited.

Aforesaid private limited company, while responding to notice issued

by Drug Inspector concerned, specifically disclosed that it is not the

manufacturer of drug in question, rather it has purchased the same

from M/s Legen Healthcare and thereafter, being stockiest and trader,

supplied the drug in question to whole seller M/s Aar Kay Surgicals,

Sujanpur.

25. It is not in dispute that as per mandate of Section 18, requisite

information was made available by M/s Generica India Limited. M/s

Generica India Limited specifically informed Drug Inspector concerned

that the company concerned has appointed petitioner as its Authorized

Signatory, enabling him to perform the day-to-day business of

company. Complaint sought to be quashed came to be instituted under

Section 18(a)(i) of the Act and Rules framed under the Act, punishable

under Section 27(d) of the Act.

26. At this stage, it would be apt to take note of Section 18a(i) of

Act, 1940, which reads as under:

“18. Prohibition of manufacture and sale of certain drugs and cosmetics.—

From such date as may be fixed by the State Government by notification in

the Official Gazette in this behalf, no person shall himself or by any other

person on his behalf—

(a) [manufacture for sale or for distribution, or sell, or stock or exhibit or offer

for sale,] or distribute—

[(i) any drug which is not of a standard quality, or is misbranded, adulterated

or spurious;

[(ii) any cosmetic which is not of a standard quality or is misbranded,

adulterated or spurious;]]

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[(iii) any patent or proprietary medicine, unless there is displayed in the

prescribed manner on the label or container thereof [the true formula or list

of active

ingredients contained in it together with the quantities thereof];]

(iv) any drug which by means of any statement design or device

accompanying it or by any other means, purports or claims [to prevent, cure

or mitigate] any such disease or ailment, or to have any such other effect as

may be prescribed;

[(v) any cosmetic containing any ingredient which may render it unsafe or

harmful for use under the directions indicated or recommended;

(vi) any drug or cosmetic in contravention of any of the provisions of this

Chapter or any rule made thereunder;]

(b) [sell or stock or exhibit or offer for sale,] or distribute any drug 9 [or

cosmetic] which has been been imported or manufacutred in contravention of

any of the provisions of this Act or any rule made thereunder;

(c) [manufacture for sale or for distribution, or sell, or stock or exhibit or offer

for sale,] or distribute any drug [or cosmetic], except under, and in

accordance with the conditions of, a licence issued for such purpose under

this Chapter:

Provided that nothing in this section shall apply to the manufacture, subject to

prescribed conditions, of small quantities of any drug for the purpose of

examination, test or analysis :

Provided further that the [Central Government] may, after consultation with

the Board, by notification in the Official Gazette, permit, subject to any

conditions specified in the notifica tion, the [manufacture for sale or for

distribution, sale, stocking or exhibiting or offering for sale] or distribution of

any drug or class of drugs not being of standard quality.”

27. Perusal of afore provision of law makes it clear that no person

can manufacture for sale or for distribution, or sell, or stock or exhibit or

offer for sale or distribute any drug or cosmetic, which is not of

standard quality or is misbranded, adulterous or spurious. Violation, if

any, of aforesaid provision of law, would render person concerned,

liable for punishment under Section 27 of the Act, which provides for

penalty.

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28. Admittedly, in the case at hand, drug in question which was

supplied to M/s Aar Kay Surgicals by M/s Generica India Limited, was

found to be of sub-standard quality as per Adverse Analysis Report

given by CTL, Kandaghat and as such, no illegally can be said to have

been committed by Drug Inspector, while instituting complaint, for

commission of offence punishable under Section 18(a)(i) punishable

under Section 27(d) of the Act, against the accused named in the

complaint, including the petitioner, but the question which needs

determination at this stage is, “whether case made out against the

petitioner herein, being Authorized Signatory of M/s Generica India

Limited under Section 18(a)(i) of Act is sustainable on account of

certain immunities granted under Section 19(3) of the Act or not?.

Section 19(3) reads as under:

“19. Pleas.—(1)x x x x

(2) x x x x

(3) A person, not being the manufacturer of a drug or cosmetic or his

agent for the distribution thereof, shall not be liable for a

contravention of section 18 if he proves—

(a) that he acquired the drug or cosmetic from a duly licensed

manufacturer, distributor or dealer thereof;

(b) that he did not know and could not, with reasonable diligence,

have ascertained that the drug or cosmetic in any way contravened

the provisions of that section; and

(c) that the drug or cosmetic, while in his possession, was properly

stored and remained in the same state as when he acquired it.”

29. Aforesaid provisions of Section 19(3) categorically provide that a

person, not being the manufacturer of a drug or cosmetic or his agent

for the distribution thereof, shall not be liable for a contravention of

Section 18 if he proves (a) that he acquired the drug or cosmetic from a

2026:HHC:10091

18

duly licensed manufacturer, distributor or dealer thereof; (b) that he did

not know and could not, with reasonable diligence, have ascertained

that the drug or cosmetic in any way contravened the provisions of that

section; and (c) that the drug or cosmetic, while in his possession, was

properly stored and remained in the same state as when he acquired it.

30. In the instant case, M/s Legen Healthcare, manufacturer of drug

in question neither claimed before authority concerned, that drug in

question was not supplied to M/s Generica India Limited or that the

same was not properly stored by M/s Generica India Limited rather,

M/s Legen Healthcare, while responding to notice issued by Drug

Inspector concerned, admitted factum of its having manufactured the

drug in question and its supply to M/s Generica India Limited under

proper invoice. If the reply given by M/s Legen Healthcare to Drug

Inspector concerned is perused, it specifically laid challenge to the

report of CTL Kandaghat and requested to send second sample of

drug in question to Central Drug Laboratory, for re-testing. Needless to

say as per procedure, company concerned can apply for re-testing of

sample, but with the permission of Magistrate concerned.

31. No doubt, on account of report of CTL Kandaghat, case if any, is

made out under Section 18(a)(i) punishable under S.27(d) of the Act,

against the manufacturer, stockiest, and the trader but since

stockiest/trader can claim immunity from action under Section 18 of the

Act, subject to satisfaction of conditions contained under Section 19(3),

there appears to be merit in the contention of Mr. Sharma, learned

senior counsel appearing for the petitioner, that, once there is an

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19

admission on the part of M/s Legen Healthcare, manufacturer of drug,

that the same was sold to M/s Generica India Limited under proper

invoice and it had no knowledge that the drug has contravened

provisions of Section 18 coupled with the fact that there is nothing on

record to suggest that the drug was not properly stored, after its

acquisition from manufacturer, case if any under Section 18 would not

succeed in the competent court of law. It also emerges from the record

that on the date of receipt of notice from Drug Inspector concerned,

stock of the drug in question stood sold out, as is evident from

communication dated 23.12.2009.

32. Apart from above, this court finds that Drug Inspector

concerned, while initiating proceedings against various accused named

in the complaint, failed to implead M/s Generica India Limited and M/s

Legan Healthcare, being traders/stockiest and manufacturing firm

respectively, as accused. If it is so, prosecution, if any, against

petitioner being Authorized Signatory of company is bound to fail.

33. At this stage, it would be apt to take note of Section 34 of the

unamended Act, 1940, 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 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.

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20

(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 officer of the company, such

director, manager, secretary or other officer 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.”

34. Aforesaid provision of law deals with offence, if any, committed

by company. Aforesaid provision provides that 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. Proviso to

the aforesaid section provides 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

35. Till the time, company is arrayed as an accused, offence, if any,

committed by company, cannot be ascertained. For the offence, if any,

committed by a company, person responsible for conduct of business

of the company is to be dealt in accordance with law, but admittedly,

for doing so, such company is essentially required to be impleaded as

2026:HHC:10091

21

accused. However, in the instant case, M/s Generica India Limited and

M/s Legan Healthcare, being traders/stockiest and manufacturing firm

respectively, have not been arrayed as party till date. Since aforesaid

company has not been arrayed as accused, it is not understood how

prosecution would prove case against its Authorized Agent i.e.

petitioner herein.

36. Reliance in this regard is placed upon a judgment rendered by

Hon'ble Apex Court in Aneeta Hada v. Godfather Travels & Tours

(P) Ltd., (2012) 5 SCC 661, wherein, a similar provision enacted in the

Negotiable Instruments Act was considered by the Hon’ble Supreme

Court and it was held that prosecution of the company is sine qua non

for prosecuting the officials of the company. It is not permissible to

prosecute the officials without prosecuting the company. It was

observed:-

“58. Applying the doctrine of strict construction, we are of the considered

opinion that the commission of an 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 dragnet 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 [(1970) 3 SCC 491: 1971 SCC (Cri) 97]

2026:HHC:10091

22

which is a three-judge Bench decision. Thus, the view expressed in

Sheoratan Agarwal [(1984) 4 SCC 352: 1984 SCC (Cri) 620] does not

correctly lay down the law and, accordingly, is hereby overruled. The decision

in Anil Hada [(2000) 1 SCC 1: 2001 SCC (Cri) 174] is overruled with the

qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC

684: 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as

has been explained by us hereinabove.”

37. A similar view was taken by Hon'ble Apex Court in Dayle

De'souza v. Govt. of India, 2021 SCC OnLine SC 1012, wherein it

was observed:-

“24. There is yet another difficulty for the prosecution in the present case as

the Company has not been made an accused or even summoned to be tried

for the offence. The position of law as propounded in State of Madras v. C.V.

Parekh (1970) 3 SCC 491, reads:

“3. Learned Counsel for the appellant, however, sought conviction of

the two respondents on the basis of Section 10 of the Essential

Commodities Act under which, if the person contravening an order

made under Section 3 (which covers an order under the Iron and

Steel Control Order, 1956), is a company, every person who, at the

time the contravention 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

contravention and shall be liable to be proceeded against and

punished accordingly. It was urged that the two respondents were in

charge of, and were responsible to, the Company for the conduct of

the business of the Company and, consequently, they must be held

responsible for the sale and for thus contravening the provisions of

clause (5) of the Iron and Steel Control Order. This argument cannot

be accepted, because it ignores the first condition for the applicability

of Section 10 to the effect that the person contravening the order

must be a company itself. In the present case, there is no finding

either by the Magistrate or by the High Court that the sale in

contravention of clause (5) of the Iron and Steel Control Order was

made by the Company. In fact, the Company was not charged with

the offence at all. The liability of the persons in charge of the

Company only arises when the contravention is by the Company

itself. Since, in this case, there is no evidence and no finding that the

2026:HHC:10091

23

Company contravened clause (5) of the Iron and Steel Control Order,

the two respondents could not be held responsible. The actual

contravention was by Kamdar and Vallabhdas Thacker and any

contravention by them would not fasten responsibility on the

respondents. The acquittal of the respondents is, therefore, fully

justified. The appeal fails and is dismissed.”

25. However, this proposition was later deviated from in Sheoratan Agarwal

v. State of Madhya Pradesh (1984) 4 SCC 352. This case pertained to the

pari materia provision under Section 10 of the Essential Commodities Act,

1955. The court held that anyone among the company itself; every person in

charge of and responsible to the company for the conduct of the business; or

any director, manager, secretary or other officers of the company with whose

consent or connivance or because of whose neglect offence had been

committed, could be prosecuted alone. However, the person in charge or an

officer of the company could be held guilty in that capacity only after it has

been established that there has been a contravention by the company as

well. However, this will not mean that the person in charge or an officer of the

company must be arraigned simultaneously along with the company if he is

to be found guilty and punished.

26. Relying upon the reasoning in Sheoratan Agarwal (supra) and limiting the

interpretation of C.V. Parekh (supra), this Court in Anil Hada v. Indian Acrylic

Ltd. (2000) 1 SCC 1 had held that:

“13. If the offence was committed by a company it can be punished

only if the company is prosecuted. But instead of prosecuting the

company if a payee opts to prosecute only the persons falling within

the second or third category, the payee can succeed in the case only

if he succeeds in showing that the offence was actually committed by

the company. In such a prosecution the accused can show that the

company has not committed the offence, though such a company is

not made an accused, and hence the prosecuted accused is not

liable to be punished. The provisions do not contain a condition that

prosecution of the company is sine qua non for prosecution of the

other persons who fall within the second and the third categories

mentioned above. No doubt a finding that the offence was committed

by the company is sine qua non for convicting those other persons.

But if a company is not prosecuted due to any legal snag or

otherwise, the other prosecuted persons cannot, on that score alone,

escape from the penal liability created through the legal fiction

envisaged in Section 141 of the Act.”

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24

27. However, subsequent decisions of this Court have emphasised that the

provision imposes vicarious liability by way of deeming fiction which

presupposes and requires the commission of the offence by the company

itself as it is a separate juristic entity. Therefore, unless the company as a

principal accused has committed the offence, the persons mentioned in

subsection (1) would not be liable and cannot be prosecuted. Section 141(1)

of the Negotiable Instruments Act, extends vicarious criminal liability to the

officers of a company by deeming fiction, which arises only when the offence

is committed by the company itself and not otherwise. Overruling Sheoratan

Agarwal and Anil Hada, in Aneeta Hada v. Godfather Travels and Tours

Private Limited (2012)5 SCC 661, a 3-judge bench of this court expounding

on the vicarious liability under Section 141 of the Negotiable Instruments Act,

has held:

“51. We have already opined that the decision in Sheoratan Agarwal

runs counter to the ratio laid down in C.V. Parekh which is by a larger

Bench and hence, is a binding precedent. O n the aforesaid

ratiocination, the decision in Anil Hada has to be treated as not laying

down the correct law as far as it states that the Director or any other

officer can be prosecuted without impleadment of the company.

Needless to emphasise, the matter would stand on a different footing

where there is some legal impediment and the doctrine of lex non

cogit ad impossibilia gets attracted.

………

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.”

38. From the aforesaid exposition of law laid down by Hon'ble Apex

Court, it is thus clear that, a company, being a juristic person, cannot

be imprisoned, but it can be subjected to a fine, which in itself is a

2026:HHC:10091

25

punishment. Every punishment has adverse consequences, and

therefore, prosecution of the company is mandatory. The exception

would possibly be when the company itself has ceased to exist or

cannot be prosecuted due to a statutory bar. However, such exceptions

are of no relevance in the present case. Thus, the present prosecution

must fail for this reason as well. Therefore, it is not permissible to

prosecute the petitioner without prosecuting the company. Since the

company has not been arrayed as an accused, therefore, it is not

permissible to prosecute the petitioner in view of the binding

precedents of the Hon’ble Supreme Court.

39. In the instant case, though petitioner has been arrayed as

accused, but the companies namely, M/s Generica India and M/s

Legan Healthcare have not been arrayed as accused, as such,

prosecution of the petitioner alone is bound to fail. Most importantly,

protection under Section 19(3) of Act is also available to petitioner

being stockiest/traders, for the reason that sale of drug in question by

manufacture to M/s Generica India Limited has not been denied by M/s

Legen Healthcare, the admitted manufacturer of drug. It clearly

emerges from the complaint that M/s Generica India Limited being duly

licensed stockiest, purchased drug from duly licensed manufacturer

and sold the same thereafter to M/s Aar Kay Surgicals, vide proper

invoice dated 23.12.2008.

40. Having scanned the entire material adduced on record, vis-à-vis

prayer made in the instant petition, this court is persuaded to agree

with Mr. Anand Sharma, learned senior counsel, appearing for the

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26

petitioners, that this court, while exercising power under Section 482

CrPC may proceed to quash the complaint against the petitioner,

because continuance thereof would be sheer abuse of process of law,

since, for the reasons stated herein above, case of prosecution is

bound to fail against the petitioner in all probabilities.

41. Otherwise also, in case prayer made on behalf of the petitioner

is not accepted he would be subjected to unnecessary ordeal of facing

protracted trial, which otherwise is bound to fail.

42. In view of detailed discussion made herein above and law taken

into consideration, present petition is allowed. Complaint No.

HFWHMR(PROS) DRUGS/10 -09, registered as Complaint No. 58-1 of

2010 titled as State of Himachal Pradesh (through Drugs Inspector

H.Q. Hamirpur) v. Anil Chand and others as well as consequent

proceedings pending in the court of learned Judicial Magistrate First

Class, Nadaun, Hamirpur (Annexure P-2) are quashed and set aside

qua the petitioner. The petitioner is discharged henceforth.

Petition stands disposed of. All pending applications, stand

disposed of.

(Sandeep Sharma)

Judge

April 2, 2026

(vikrant)