{"id":275894,"date":"2022-10-18T17:00:59","date_gmt":"2022-10-18T11:30:59","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=275894"},"modified":"2022-10-18T17:00:59","modified_gmt":"2022-10-18T11:30:59","slug":"madras-high-court-vicarious-liability-criminal-liability-non-executive-directors-carbimazole-tablets-drugs-and-cosmetics-act-negotiable-instruments-act-legal-research-legal-news-updates","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/10\/18\/madras-high-court-vicarious-liability-criminal-liability-non-executive-directors-carbimazole-tablets-drugs-and-cosmetics-act-negotiable-instruments-act-legal-research-legal-news-updates\/","title":{"rendered":"Madras High Court| Directors cannot escape criminal liability on the ground that they are not directly involved in the production of sub-standard Pharma products"},"content":{"rendered":"
\n

\n

Madras High Court<\/b>: In a petition filed under Section 482<\/a> of Code of Criminal Procedure<\/a> (CrPC) to quash the criminal complaint filed by the Drugs Inspector under Section 32<\/a> of Drugs and Cosmetics Act, 1940<\/a>, for the contravention of Section 18(a)(1)<\/a> of Drugs and Cosmetics Act, 1940<\/a>, (\u2018D&C Act\u2019) which is punishable under Section 37(d) of the Act, alleging that the directors of the drug company (Sunrise International Labs Ltd.), are not manufacturing standard quality \u2018Carbimazole\u2019 tablets, G. Jayachandran, J. has held that the contention of the petitioners that they are not directly involved in the product of the drugs, when the decision to production of the drugs, itself is the outcome of their decision, is wholly unsustainable, and if the said preposition is accepted it will go against the object and reasons of the legislations namely Drugs and Cosmetics Act. Further, applying the interpretation of Section 141<\/a> of Negotiable Instruments Act, 1881<\/a> (\u2018NI Act\u2019) to the other Acts, ignoring the nature of the offence charged will lead to miscarriage of justice.<\/p>\n

The issue in this case is whether the petitioners can wriggle out from the criminal liability on the ground that they are not directly involved in the production of sub-standard Pharma products, and if any sub-standard products are sold to public by the Company, it is only the person responsible for its production to be held liable and others cannot be held vicariously liable.<\/p>\n

The respondent submitted that the strict interpretation of vicarious liability of the Company has explained by the Courts in respect of Section 141<\/a> of NI Act<\/a> or any other statute involving offence against property should not be extended to the offence against the persons.<\/p>\n

The Court referred to the decision in S. Mohan Lal<\/i> v. R. Kondiah<\/i>, (1979) 2 SCC 616<\/a> , wherein it was held that \u201cit is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act; more so, if the two Acts in which the same word is used are not cognate Acts\u201d<\/b> , and observed that the interpretation of the expressions used in Section 141<\/a> of N.I Act<\/a>, cannot be applied to Section 34<\/a> of D&C Act<\/a>, though if read in isolation they look in \u2018pari materia<\/i>\u2019. Further, when the offences are not related, then the enabling section to prosecute the Company as a juristic body must be necessarily read along with the offence charged. Thus, applying the interpretation of Section 141<\/a> NI Act<\/a> to the other Acts, ignoring the nature of the offence charged will lead to miscarriage of justice.<\/p>\n

The Court observed that the offence in this case is manufacturing and distribution of sub-standard drugs by a Company which is managed by its board of directors and the decision to manufacture the drugs is the collective decision of the board. Therefore, the directors cannot claim that they are not directly involved in production of the drugs, when the decision to produce the drugs, itself is the outcome of their decision. Therefore, the case of directors signing the cheque on behalf of the Company and the case of directors participating in the decision to produce sub-standard drugs are not one and the same, to hold that these petitioners are not involved in day-to-day affairs of the Company. Thus, the petitioners are vicariously liable for producing sub-standard drugs.<\/p>\n

[Vikas Rambal v. State of Madras, 2022 SCC OnLine Mad 4822<\/a>, decided on 12.10.2022<\/span>]<\/p>\n

\n

Advocates who appeared in this case :<\/p>\n

For Petitioners: Advocate B. Kumar;<\/p>\n

Advocate Kiruthika Gokulakrishnan;<\/p>\n

For Respondent: Government Advocate N.S. Suganthan.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Madras High Court: In a petition filed under Section 482 of Code of Criminal Procedure (CrPC) to quash the criminal complaint filed <\/p>\n","protected":false},"author":67011,"featured_media":261884,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[52445,42127,32707,2567,17041,44436,20481],"class_list":["post-275894","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-carbimazole-tablets","tag-criminal-liability","tag-drugs-and-cosmetics-act","tag-Madras_High_Court","tag-negotiable-instruments-act","tag-non-executive-directors","tag-vicarious-liability"],"yoast_head":"\nMadras High Court| Directors cannot escape criminal liability on the ground that they are not directly involved in the production of sub-standard Pharma products | SCC Times<\/title>\n<meta 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Analyst in terms of S. 20 of Drugs & Cosmetics Act, not a mere formality\u00a0","author":"Bhumika Indulia","date":"January 17, 2020","format":false,"excerpt":"Bombay High Court: K.R. Shriram, J., dismissed a criminal appeal filed by the State against the order of the trial court whereby the respondents-accused were acquitted of the offences punishable under Section 18(a)(i) read with Section 16(1)(a) and 27(d) of the Drugs and Cosmetics Act, 1940. The Drugs Inspector had\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":353344,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/07\/14\/madras-high-court-on-import-of-ayurvedic-drugs\/","url_meta":{"origin":275894,"position":1},"title":"Madras HC: Necessary to modify existing rules; prepare standards and forms for import of ayurvedic drugs","author":"Sanket","date":"July 14, 2025","format":false,"excerpt":"\u201cThere is a strong public interest element, specifically public health element, in relation to the import of drugs. The drug involved in this case is Axe Medicated Oil and, in that specific context, the public health threat may not be significant.\u201d","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"import of ayurvedic drugs","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/import-of-ayurvedic-drugs.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/import-of-ayurvedic-drugs.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/import-of-ayurvedic-drugs.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/import-of-ayurvedic-drugs.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":312648,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/02\/01\/hp-hc-conclusive-report-of-central-drugs-laboratory-supersedes-government-analysts-report-legal-news\/","url_meta":{"origin":275894,"position":2},"title":"Conclusive Report of Central Drugs Laboratory u\/s 25(4) of Drugs and Cosmetics Act, 1940 supersedes Government Analyst’s report: Himachal Pradesh HC","author":"Arushi","date":"February 1, 2024","format":false,"excerpt":"\u201cThe report of the Central Drugs Laboratory, Kolkata clearly shows that the sample was found to be conforming to the standard laid down, hence, the case of the prosecution that the Drug did not conform to the standard has been falsified by this report.\u201d","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"himachal pradesh high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/05\/himachal-pradesh-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":228298,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/04\/14\/medical-oxygen-ip-and-nitrous-oxide-ip-are-drugs-as-per-section-3bi-of-the-the-drugs-and-cosmetics-act-1940\/","url_meta":{"origin":275894,"position":3},"title":"Medical Oxygen IP and Nitrous Oxide IP are \u2018drugs\u2019 as per Section 3(b)(i) of the the Drugs and Cosmetics Act 1940","author":"Prachi Bhardwaj","date":"April 14, 2020","format":false,"excerpt":"Supreme Court: The bench of Dr. DY Chandrachud and Ajay Rastogi, JJ has held that Medical Oxygen IP and Nitrous Oxide IP falls within the ambit of \u2018drugs\u2019 under Section 3(b)(i) of the the Drugs and Cosmetics Act 1940 and are consequently covered in Entry 88 of the Andhra Pradesh\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":206192,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/12\/04\/accused-found-in-possession-of-manufacture-drug-can-be-tried-under-ndps-act-in-place-of-drugs-and-cosmetics-act-sc\/","url_meta":{"origin":275894,"position":4},"title":"Accused found in possession of “manufactured drug” can be tried under NDPS Act in place of Drugs and Cosmetics Act: SC","author":"Bhumika Indulia","date":"December 4, 2018","format":false,"excerpt":"Supreme Court:\u00a0A Bench comprising of N.V. Ramana, M.M. Shantanagoudar and M.R. Shah, JJ. allowed a set of appeals filed against the common judgment of the Punjab and Haryana High Court whereby it had allowed\u00a0application for suspension of sentence preferred by accused persons and directed them to be released on bail.\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":340436,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/02\/04\/manufacture-section3-drugs-cosmetics-definition-sc-legal-news\/","url_meta":{"origin":275894,"position":5},"title":"Term \u2018manufacture\u2019 in S. 3 of Drugs and Cosmetics Act excludes dispensing and packing of drug in ordinary course of retail business: SC","author":"Sucheta","date":"February 4, 2025","format":false,"excerpt":"\u2018Manufacture\u2019 is an inclusive term and includes any process or part of a process for making, altering, ornamenting, finishing, packing, labelling, breaking up or otherwise treating or adopting any drug or cosmetic with a view to its sale or distribution.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"drugs and cosmetics manufacture","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/02\/drugs-and-cosmetics-manufacture.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/02\/drugs-and-cosmetics-manufacture.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/02\/drugs-and-cosmetics-manufacture.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/02\/drugs-and-cosmetics-manufacture.webp?resize=700%2C400&ssl=1 2x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/275894","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/67011"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=275894"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/275894\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/261884"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=275894"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=275894"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=275894"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}