Supreme Court Affirms Directorial Liability in Drug Defect Case

The Supreme Court upheld the High Court's decision to dismiss the petition under Section 482 Cr.P.C., allowing the company directors to prove their lack of involvement in the manufacturing of a defective drug before the Trial Court. The Court emphasized the need for evidence to determine liability under Section 34(2) of the Drugs & Cosmetics Act, highlighting the seriousness of public health implications. The appeal was dismissed, affirming the importance of proving active involvement for directorial liability in cases of defective drugs.

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Issues involved: Challenge to the order of the High Court dismissing the petition under Section 482 Cr.P.C. filed by the company and its directors, interpretation of Section 34(2) of the Drugs & Cosmetics Act, 1940 regarding liability of directors in case of defective drugs.

Judgment Summary:

Issue 1: Dismissal of petition under Section 482 Cr.P.C.:
The High Court dismissed the petition under Section 482 Cr.P.C. filed by the company and its directors, holding that directors could be prosecuted for a defective drug manufactured by the company as per Section 34(2) of the Drugs & Cosmetics Act, 1940. The High Court allowed the concerned parties to prove before the Trial Court their lack of involvement in the manufacturing process. The Supreme Court upheld the High Court's decision, emphasizing the need for evidence to be presented before the Trial Court to determine liability.

Issue 2: Interpretation of Section 34(2) of the Act:
The appellant's counsel argued that criminal liability against directors under Section 34(2) of the Act requires active involvement in the offense to be pleaded and proven. The complaint was criticized for lacking specific allegations against the directors' involvement. The Court referred to a previous case to highlight the necessity of proving active involvement for liability. However, the Court noted specific allegations in the complaint linking the directors to the manufacturing process of the defective drug, emphasizing the seriousness of public health implications.

Conclusion:
The Court differentiated the present case from previous judgments, emphasizing the seriousness of public health concerns in the case of defective drugs. It was decided not to interfere with the High Court's order, allowing the directors to demonstrate their lack of involvement in the manufacturing process before the Trial Court. The appeal was dismissed with these observations.

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