Ankit Singla And Others vs. State Of Hp

Held

The Court held that the petition lacked merit and was dismissed. Regarding Issue 1, while the Court acknowledged that it would not conduct a mini-trial in a petition under Section 482 Cr. P.C. (528 BNSS), it found that the stand taken by the Drugs Inspector in the reply, particularly regarding the non-mentioning of debit notes in GST returns, could not be ignored and would be considered by the trial court. The Court did not explicitly rule on the non-speaking nature of the order or the compliance with Section 208 Cr. P.C. as a standalone ground for quashing. Regarding Issue 2, the Court found that specific allegations were levelled in the supplementary complaint against the petitioners, citing paras 25 and 42. These paragraphs detailed email communications involving the petitioners and allegations of manipulated debit notes not reflected in GST returns. The Court reasoned that Section 34 of the Act does not provide blanket immunity to Directors merely on the ground of appointing a competent person, and ignoring allegations of direct involvement would be against legislative intent. The Court concluded that, prima facie, the Drugs Inspector had made a case that the petitioners were responsible for the firm's affairs, and their defence would be proven during the trial. The operative direction was the dismissal of the petition.

Facts

The petitioners, Directors of M/s K.C. Overseas Pvt. Ltd., a company engaged in trading pharmaceutical raw materials, filed a petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita to quash criminal proceedings and a charge-framing order dated 10.06.2024. The proceedings stem from a supplementary complaint filed by the Drug Inspector alleging offences under the Drugs & Cosmetics Act, 1940, and Rules. The petitioners contended they were not involved in the company's day-to-day affairs, that Harish Kumar was appointed as the competent person responsible for business conduct, and that the complaint lacked specific averments against them. They also argued that compliance with Section 208 Cr. P.C. was not done before framing charges. The Drugs Inspector, in response, presented specific allegations from the supplementary complaint, including email communications implicating the petitioners and the manipulation of debit notes not reflected in GST returns.

Key Issues

1. Whether the charge-framing order dated 10.06.2024, passed by the learned Special Judge, Drugs and Cosmetics Act, Nalagarh, is liable to be quashed on the grounds that it is non-speaking and no reasons were assigned for framing charges against the petitioners, thereby violating Section 208 read with Section 207 Cr. P.C. (Petitioner's contention: Yes, the order is non-speaking and lacks reasons, making it unsustainable. Revenue's contention: Not explicitly recorded, but impliedly argued by presenting evidence to counter the petitioner's claims). 2. Whether the petitioners, as Directors of M/s K.C. Overseas Pvt. Ltd., can be prosecuted for offences allegedly committed by the company in the absence of specific averments in the complaint stating they were in charge or responsible for the day-to-day affairs of the company, particularly when a competent person was appointed. (Petitioner's contention: No, as they were not in charge and a competent person was appointed, they cannot be prosecuted. Reliance placed on the principle that directors are not liable unless in charge of affairs. Revenue's contention: Yes, specific allegations in paras 25 and 42 of the supplementary complaint, including email communications and manipulated debit notes not reflected in GST returns, demonstrate their direct involvement and responsibility, negating the defence of appointing a competent person and Section 34 of the Act providing blanket immunity.)