Madras High Court Quashes Prosecution Against Managing Director | Holds Complaint Contains No Averment That He Was In-Charge And Responsible To The Company
Isabella Mariam
The Madras High Court Single Bench of Justice Sunder Mohan, quashed criminal proceedings against the Managing Director of a leading pharmaceutical company while allowing the trial against the company to proceed. The Bench passed the order on 14.05.2025, following detailed arguments concerning the alleged manufacture and distribution of a drug declared as "Not of Standard Quality" by the Government Analyst. The Court categorically stated that there were no specific allegations establishing the Managing Director’s direct involvement in the manufacturing process, thereby warranting the quashing of proceedings against him.
The petitions were filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) seeking to quash criminal proceedings initiated against M/s. Cipla Ltd. and its Managing Director, Thiru Umanga Vohra, pending before the Judicial Magistrate, Mettupalayam. The matter originated from a complaint filed by the Drug Inspector of Mettupalayam Range, C. Balaji, concerning the alleged sub-standard quality of the drug "OMNIGEL."
The Drug Inspector drew a sample of OMNIGEL from M/s. Sri Anushya Agencies in Coimbatore on 28.03.2019, which was subsequently analysed by the Government Analyst. The report dated 20.05.2019 declared the sample as "Not of Standard Quality" for not conforming to the label claims regarding the content of Diclofenac Diethylamine, Methyl Salicylate, and Menthol.
A series of communications followed between the Drug Inspector and the parties involved. M/s. Mahaveer Medicare, Rajasthan, informed that the drug was procured from M/s. Cipla Limited, Dehradun. Cipla disclosed that the drug was received from its Loan License Vendor, M/s. Pritam International Pvt. Ltd., Haridwar. Despite these disclosures, a show cause notice was issued, followed by the filing of a complaint under Section 18(a)(i) of the Drugs and Cosmetics Act, 1940.
Senior Counsel Mr. P. Chidambaram, appearing for the petitioners, advanced multiple arguments:
- The testing of the drug was not conducted in accordance with the guidelines issued under Section 33(P) of the Act and Rule 46 of the Drugs and Cosmetics Rules, 1945.
- The State of Tamil Nadu had not constituted a Screening Committee as mandated, and hence, the prosecution was unauthorized.
- There was an inordinate delay in filing the complaint, and the shelf-life of the drug expired before the filing, violating the petitioner’s right under Section 25(4) of the Act.
- The sanctioning authority failed to apply its mind before according sanction for prosecution.
- The Managing Director was prosecuted solely based on his designation without any evidence of his involvement in the manufacture of the drug.
The State, represented by Government Advocate (Crl. Side) Mr. S. Santhosh, countered the arguments, asserting that the testing was conducted properly under Rule 46, the Screening Committee had been constituted and had recommended prosecution, and that the delay did not prejudice the petitioner since no request for reanalysis was made within the stipulated time under Section 25(3) of the Act.
Justice Sunder Mohan considered each contention:
On the allegation of improper testing procedures, the Court recorded that "the question as to whether the Analyst should have adopted a specific method prescribed by the manufacturer is a disputed question of fact and cannot be adjudicated in a quash petition." It further noted that the testing was conducted as per Rule 46 and that different methods, including the British Pharmacopoeial (BP) and Gas Chromatography, were employed for analysing various ingredients.
Regarding the constitution of the Screening Committee, the Court observed that "the complaint was in fact placed before the Screening Committee, which had approved the prosecution." The guidelines requiring such approval were satisfied.
On the issue of delay, the Court referred to the Supreme Court decision in State of Haryana v. Brij Lal Mittal and observed, "the delay in filing the complaint has not caused any prejudice to the petitioners, since the Company had not exercised their right in accordance with Section 25(3) of the Act."
Concerning the sanctioning authority, the Court held that "the validity of the sanction can be examined only during the trial and not at the threshold." This finding aligned with the Supreme Court’s decision in Central Bureau of Investigation v. Ashok Kumar Agarwal.
Finally, addressing the prosecution of the Managing Director, the Court recorded: "apart from stating that the second accused is the Managing Director, there is no averment in the complaint that he was in-charge and responsible to the Company for the conduct of its business." Relying on the Supreme Court’s judgment in Cheminova India Ltd. v. State of Punjab, the Court quashed the proceedings against the Managing Director, noting that the competent technical staff responsible for the manufacture were already identified in the Loan License issued to the company.
The Court issued the following directives:
- The Criminal Original Petition filed by M/s. Cipla Ltd. (Crl.OP.No.19832 of 2022) was dismissed, allowing the prosecution against the company to proceed.
- The Criminal Original Petition filed by Thiru Umanga Vohra, Managing Director (Crl.OP.No.19643 of 2022), was allowed.
- It was clarified that if any evidence emerges during the trial concerning the involvement of any other officers, the trial court is empowered to proceed against them in accordance with Section 358 of the BNSS (Section 319 CrPC).
Advocates Representing the Parties
For Petitioners: Mr. P. Chidambaram, Senior Counsel, assisted by Mr. K.P. Anantha Krishna
For Respondent: Mr. S. Santhosh, Government Advocate (Crl. Side)
Case Title: M/s. Cipla Ltd., Rep. by Authorized Signatory vs. The State of Tamil Nadu Rep. by C.Balaji, B.Pharma
Case Numbers: Crl.OP.Nos.19643 & 19832 of 2022
Bench: Justice Sunder Mohan
[Read/Download order]
