DINESH B. PATEL & ORS. versus STATE OF GUJARAT & ORS.

Citation: [2010] 10 S.C.R. 319 · Decided: 06-08-2010 · Supreme Court of India · Bench: V.S. SIRPURKAR · Disposal: Dismissed
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Judgment (excerpt)

[2010] 10 S.C.R. 319 
DINESH 8. PATEL & ORS. 
v. 
STATE OF GUJARAT & ORS. 
(Criminal Appeal No. 1464 of 2010) 
AUGUST 6, 2010 
[V.S. SIRPURKAR AND CYRIAC JOSEPH, JJ.] 
A 
B 
Code of Criminal Procedure, 1973 - s. 482 - Criminal 
complaint - Against a Company, which manufactured 
medicines, and its Directors -
Alleging defect in the C 
manufactured medicines -
Petition for quashing the 
complaint - Dismissed by High Court - On appeal, held: 
Complaint not liable to be quashed -
The complaint 
suggested that the Directors were privy to the manufacturing 
of medicine by the Company - Allegations were serious in .D 
nature - It is open to the Directors to show before trial court 
that they were not liable u/s. 34(2) of Drugs and Cosmetics 
Act - Drugs and Cosmetics Act, 1940 - s. 34(2). 
A compliant was filed against a medicine 
manufacturing Company and its Directors, alleging defect E 
in the medicines manufactured. The Company :and ·the 
Directors filed petition u/s. 482 Cr.P.C. seeking quashing 
of the complaint. High Court dismissed the petition 
holding that all the Directors were liable to be prosecuted 
and the complaints against them could not be disposed 
F 
of u/s. 482 Cr.P.C., as it required appreciation ofthe facts 
on the basis of evidence to be led before the trial·court. 
Therefore, the Company and the Directors approached 
Supreme Court. The Court dismissed the SL:.P as regards 
the Managing Director. Notice was issued in respect of G 
the other appellants. 
Dismissing the appeal, the Court 
319 
H 
320 
SUPREME COURT REPORTS 
(2010] 10 S.C.R. 
A 
HELD: 1. The respondent-Directors of the Company 
were not arrayed only because they were the Directors. 
In addition to that, a statement has been i;nade in the 
complaint that by manufacturing of the concerned 
medicine for sale, the Company and its Directors had 
, a committed the breach of the Drugs and Cosmetics Act. 
Thus, there was an allegation that the Directors were privy 
to the manufacturing of medicine by the Company. The 
averments in the complaint cannot be described as bald 
statements. The complaint suggests manufacturing of the 
c 
medicine by the Company and its Directors. The instant 
case was the case of manufacture of the drug for human 
consumption and, after it was tested in laboratory, was 
found to be defective since there was a growth of fungus, 
which is a very serious matter related to public health. 
0 
[Paras 7 and 8] [324-D-H; 325-A-B] 
E 
F 
State of Haryana vs. Brij lat Mittal and Ors. 1998 (5) SCC 
· 343, distinguished. 
2. Under the peculiar circumstances of the instant 
case and in view of the seriousness of the allegations, a 
technical view cannot be taken. "the logic, in the law laid 
down in complaint cases u/s~ 138 of the Negotiable 
Instruments Act requiring specific averment about the 
active role of the Directors in running the Company, 
would not apply in the instant case. Firstly, the lpnguage 
of Section .34(2) of the Drugs and Cosmetics Act 
substantially differs from the language of Section 141 of 
the Negotiable Instruments Act. Secondly, the instant 
case relates to the offence which has the direct impact 
G on the public health. Therefore, the o~der of the High 
Court is not interfered with. It will be open'for the 
Directors to show to the trial court that they had nothing 
to do with the manufacture process and, therefor~, they 
should not be held liable u/s. 34(2) of the DruglS and 
H 
Cosmetics Act. [Para 9] [325-B-E] 
DINESH B. PATEL & ORS. v. STATE OF GUJARAT &321 
ORS. 
Case Law Reference: 
1998 (5) sec 343 
Distinguished. 
Para 4 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal 
No. 1464 of 2010. 
From the Judgment & Order dated 29.07.2008 of the High 
Court of Gujarat at Ahmadabad in Criminal Misc. Application 
No. 5711 of 2008. 
H.A. Raichura for the Appellants. 
K. Enatoli Serna (for Hemantika Wahi) for the 
Respondents. 
The Judgment of the Court was delivered by 
V.S. SIRPURKAR, J. 1. Leave granted. 
2. The present appeal challenges the order of the High 
Court whereby the petition under Section 482 Cr.P.C. filed by 
A 
B 
c 
D 
the company and its directors (appellants herein) was 
dismissed by the High Court. The High Court took the view that E 
the directors are responsible for the affairs of the company and, 
therefore, when a drug manufactured by the company was 
found to be defective, all the directors could be prosecuted. The · 
High Court, however, left it to the concerned parties to pro
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