The petitioners—a pharmaceutical manufacturing firm and its individual partners—moved the High Court under Section 482 Cr.P.C. seeking the quashing of a criminal complaint initiated against them under Chapter IV of the Drugs and Cosmetics Act, 1940, along with the subsequent order of cognizance passed directly by the Court of Session. The prosecution arose after a batch of tablets manufactured by the firm was declared to be “not of standard quality” by a government analyst.
The High Court allowed the petition, quashing the complaint and the summoning order against the petitioners. The Court held that vicarious criminal liability under Section 34 of the Act requires specific factual averments in the complaint showing each partner’s direct involvement in day-to-day operations, which was entirely lacking since the firm had formally designated technical staff for manufacturing. Furthermore, the prosecution was held to be fundamentally without jurisdiction because executive power under Chapter IV exclusively vests in State-appointed Drugs Inspectors, to the exclusion of Central Inspectors. Lastly, the testing delayed past the mandatory 60-day threshold under Rule 45 further invalidated the proceedings.
1. Facts of the Case and Procedural History
- Sample Drawing: On August 28, 2019, a Central Drugs Inspector drew samples of “Medrofex-180” tablets manufactured by M/s Salus Pharmaceuticals (Petitioner No. 1) from a military hospital store in Jalandhar.
- Adverse Testing: The sample was received by the Regional Drugs Testing Laboratory (RDTL), Chandigarh, on September 2, 2019, and the Government Analyst subsequently declared the drug “not of standard quality” in a report issued on December 5, 2019.
- Prosecution and Stay: Following a tracking chain through various intermediate distributors and securing prosecution permission from the Drugs Controller General of India, a formal complaint was filed directly before the Additional Sessions Judge, Nalagarh, on March 3, 2022. The Sessions Court took cognizance and issued summonses on March 7, 2022, which the petitioners challenged, securing an interim stay from the High Court in September 2023.
2. Legal Threshold for Quashing under Section 482 Cr.P.C.
Reviewing established legal benchmarks from State of Haryana v. Bhajan Lal (1992) and Ajay Malik v. State of Uttarakhand (2025), the High Court reiterated that its inherent powers must be exercised sparingly and with deep caution. However, threshold intervention is entirely warranted to prevent a clear abuse of the process of the court or to secure the ends of justice. Specifically, when a complaint contains vague, generalized allegations, or when an express legal bar completely obstructs the continuance of a flawed prosecution, the High Court is duty-bound to quash it to save citizens from a futile, protracted trial.
3. Strict Interpretation of Vicarious Liability (Section 34)
The criminal complaint was targeted collectively against the manufacturing firm (Accused No. 1) and its individual partners (Accused Nos. 2 to 5). The partners contended they had no personal connection to daily operations.
The High Court accepted their defense under a strict construction of penal statutes:
- Twin Requisites of Responsibility: Under Section 34 of the Act (analogous to Section 141 of the Negotiable Instruments Act), a partner or director cannot be held vicariously liable merely by virtue of holding a corporate designation or status. The prosecution must show they were directly in charge of, and responsible to, the firm for the daily conduct of business.
- Defective Averments: The Court observed that the complaint merely repeated bald, cursory statutory catchphrases without detailing any specific factual roles for individual partners.
- Technical Staff Shield: Crucially, the firm had formally submitted Form No. 26 to the competent authority, appointing a dedicated Plant Manager and a separate, qualified technical team responsible for manufacturing and testing. Because daily manufacturing was executed under expert supervision, and the individual partners were completely isolated from everyday factory processes, vicarious liability could not legally attach to them.
4. Jurisdiction of Central vs. State Drugs Inspectors
The petitioners raised a fundamental constitutional objection regarding the administrative division of executive powers under the Act.
The High Court accepted this jurisdictional challenge, setting down the following boundaries:
- The Chapter-Based Separation: Under the statutory scheme of the 1940 Act, executive powers are explicitly divided. The Central Government retains jurisdiction under Chapter III, which covers the import of drugs and cosmetics. Conversely, the executive functions under Chapter IV—which govern domestic manufacture, sale, and distribution—exclusively reside with the State Government.
- Constitutional Mandate: In line with Articles 73 and 162 of the Constitution of India, matters falling under the Concurrent List require express parliamentary authorization for the Union to exercise executive power within a State. Chapter IV contains no such blanket enabling provision for Central inspectors. Consequently, an investigation conducted and a complaint filed by a Central Drugs Inspector for manufacturing defects under Chapter IV is wholly without jurisdiction and void ab initio.
5. Separation of Trial Forums and Rule 45 Violation
- Direct Court of Session Maintenance Upheld: The petitioners argued the complaint was procedurally defective because it bypassed a Magistrate’s committal under Section 193 Cr.P.C.. The High Court rejected this specific argument, clarifying that Section 32(2) of the special statute expressly mandates that no court inferior to a Court of Session shall try Chapter IV offences. Therefore, directly instituting a complaint before a Special Sessions Court is procedurally correct and overrides general code restrictions.
- Mandatory 60-Day Testing Violation: However, the Court highlighted a fatal defect under Rule 45 of the Drugs Rules, 1945. The rule strictly commands the Government Analyst to test and analyze samples within 60 days of receipt, or formally secure a timed extension from the government. In this case, the sample was received on September 2, 2019, but the adverse report was not issued until December 5, 2019 (spanning nearly three months) without any recorded explanation. This delay compromised the right of the accused to seek a timely re-analysis before the product’s shelf-life expired.
6. Final Order
Concluding that the prosecution’s case was bound to fail on multiple structural, procedural, and jurisdictional parameters, the High Court allowed the petition. It quashed and set aside Complaint Case No. 3/2022 along with the order of cognizance dated March 7, 2022, officially discharging all the petitioners.
STPL (Web) 2026 HP 264
M/S Salus Pharmaceuticals And Others V. Union of India (D.O.J. 07.05.2026)
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