Shailyamanyu Singh vs. The State Of Maharashtra

2025 INSC 995
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO(S). OF 2025
(Arising out of SLP(Crl.) No (s). 5618 of 2023)


SHAILYAMANYU SINGH ….APPELLANT(S)


VERSUS


STATE OF MAHARASHTRA ….RESPONDENT(S)


J U D G M E N T
Mehta, J.
1. Heard.
2. Leave granted.
3. The instant appeal is preferred against the
th
judgment and order dated 12 April, 2023 passed by
1
the High Court of Judicature at Bombay whereby the
Signature Not Verified
Digitally signed by
NEETU KHAJURIA
Date: 2025.08.18
18:55:07 IST
Reason:

1
Hereinafter, being referred to as the ‘High Court’.
1


Criminal Application No. 1422 of 2019 filed by the
appellant under Section 482 of Code of Criminal
2
Procedure, 1973 came to be rejected.
4. By way of the said petition filed under Section
482 CrPC, the appellant had challenged the order
rd
dated 3 December, 2016 passed by the Metropolitan
th
Magistrate 15 Court, Mazgaon, Mumbai in Criminal
Case No. 1500201/SW/2016, taking cognizance of
the offences under Section 18B punishable under
Section 28A, Section 18(a)(vi) and Section 22(1)(cca)
punishable under Section 27(d) of the Drugs &
3
Cosmetics Act, 1940 and issuing process against
numerous accused including the appellant.
Brief Facts: -
5. The appellant (accused No.6) was summoned as
an accused in the complaint case in capacity of the

2
For short “CrPC”.
3
Hereinafter being referred to as the ‘D&C Act’.
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Director of Procter and Gamble Hygiene and
4
Healthcare Limited (accused No.7), which was the
distributor of the drug in question, i.e ., Vicks Multi
Pain Relief Gel. The said drug was manufactured by
its licensed manufacturer, Akums Drugs and
Pharmaceuticals Ltd. (accused No. 8). The expiry
date of the drug was January, 2016. As per the
Standard Operating Procedure (SOP) of P&G Ltd.,
drugs set to expire within the next six months were
required to be destroyed. Accordingly, the company
initiated the process of recalling and destroying the
said batch of the subject drug in May 2015.
rd
6. On 3 June, 2016, upon receiving information
from the Vigilance Department, the Drug Inspector
visited the premises of an enterprise namely, M/s
Action Soap Center. The inspection revealed that a
stock of the aforesaid drug of which expiry date had

4
Hereinafter, referred to as the ‘P&G Ltd. or Company’
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already lapsed, was illegally stored in the godown. On
questioning the person-in-charge of M/s Action Soap
Center, it came to light that the drug had been
th
procured from P&G Ltd. Subsequently, on 7 June,
2016 a notice was sent by the Drug Inspector to P&G
Ltd. inquiring about the drugs seized from the
premises of M/s Action Soap Center.
th
7. The inquiry notice dated 7 June, 2016 was
th
responded to vide letter dated 13 June, 2016, by Ms.
Saumya Ranjan in the capacity of the competent
person acting on behalf of P&G Ltd. explaining that
the purchase and sale of the drug was being carried
out under her supervision. Thereafter, two further
th th
show cause notices dated 15 June, 2016 and 17
June 2016 were issued to P&G Ltd. seeking
explanation for supply of drug to M/s Star Express,
an enterprise which did not possess a valid license
under the D&C Act.
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8. The appellant in discharge of his duties as the
legal officer of the company responded to these show
cause notices and the queries raised therein by the
th
Drug Inspector vide letter dated 5 July, 2016. It was
stated in the reply that the drugs in question were in
the legal custody of the Clearing and Forwarding
Agent (C&F) i.e. M/s. KD Supply Chains Solution Pvt.
Ltd. and were forwarded to M/s Star Express by the
said C&F Agent.
9. However, it is not necessary to delve into the
above aspect of the matter, as the controversy in the
present appeal is confined to the question as to
whether the appellant, being a Non-Executive
Director of the company, can be held vicariously
liable and prosecuted for the alleged offences
committed by the company.
10. Pursuant to the completion of the inquiry, the
Drug Inspector proceeded to file a complaint in the
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Court of Metropolitan Magistrate, Mazgaon, Mumbai
which came to be registered as Criminal Case No.
1500201/SW/2016. The array of the respondents in
the aforesaid complaint is as below: -

11. The averments set out in the complaint qua the
appellant (accused No. 6) are as below: -
“ 7. That the Accused No.6, is Mr. Shailyamanyu
Singh - Director of M/s. Procter and Gamble
Hygiene and Health Care Ltd., P & G Plaza,
Cardinal Gracias Road, Chakala Andheri (E),
Mumbai 400099 which is the manufacturing
company which had manufactured the said drug
at the manufacturing site at M/s. Akums Drugs
& Pharmaceuticals Ltd., Plant V, Hardware
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under manufacturing no. 16/UA/2010 dated
13.08.2010 and distributed the said drug to
Accused No.5.”
“ 31. That the investigation carried out by
complainant, it is revealed as under –

iv. That, Accused No.6 and 7
distributed drugs for the purpose of
sale and distribution to M/s. Star
Express, Navi Mumbai who is not
holding any requisite license under
Drugs and Cosmetics Act. 1940.
Accused No.7 and 8 have not submitted
properly relevant document for
destruction of the said drug and not
provided relevant documents of
destruction and thereby contravened
Section of 18(c) p/u Section 27(b) (ii) and
18-B P/u 28 A of Drugs and Cosmetics
Act, 1940.”
“ 36. That the Investigation carried out by
complainant, it is revealed as under –

(4) That , Accused No.6 and 7
distributed drugs for the purpose of
sale and distribution to M/s. Star
Express, Navi Mumbai who is not
holding any requisite license under
Drugs and Cosmetics Act. 1940 . ”

(Emphasis supplied)

12. It is, in the said background, and asserting that
there is no material whatsoever on record of the
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complaint regarding the role of the appellant in
commission of alleged offence and for the day-to-day
affairs of the company (accused No. 7), the appellant
herein approached the High Court of Bombay for
rd
assailing the summoning order dated 3 December,
2016 passed by the Metropolitan Magistrate, by
preferring the subject petition under Section 482
th
CrPC which stands rejected vide order dated 12
April, 2023 which is under challenge in this appeal
by special leave.
Submissions on behalf of appellant: -
13. Mr. Sidharth Luthra, learned senior counsel
appearing for the appellant, vehemently and fervently
urged that the High Court fell in grave error by
holding that the averments made in the complaint
and the supporting material are sufficient to invoke
the mischief of Section 34(2) of the D&C Act thereby
validating the prosecution of the appellant. He took
us through the complaint and supporting documents
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to urge that there is no averment whatsoever that the
Drug Inspector had made any inquiry/investigation
in relation to any Director (including the appellant),
Manager, Secretary, or other responsible Officer of
the company (accused No. 7), with whose connivance
or neglect, the alleged offence was committed. He
urged that the only inquiry the Drug Inspector carried
out regarding the active role of the Director/person
responsible of the company was qua the
manufacturing company (accused No. 8).
14. He urged that as per the communication issued
from the Registrar of Companies, the appellant was a
Non-Executive Director in the company and hence, to
hold the appellant as vicariously liable for the alleged
offence in the capacity of the person in-charge of P&G
Ltd. (accused No. 7) is uncalled for.
15. To buttress his submissions, learned senior
counsel relied upon the judgments of this Court in
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Lalankumar Singh & Ors. v. State of
5
Maharashtra , Sunita Palita & Ors. v.
6
Panchmani Stone Quarry , Siby Thomas v. Somay
7
Ceramics Ltd. and Dayle De’Souza v. Union of
8
India and urged that summoning order the
qua
appellant is absolutely unjustified and liable to be
quashed.
16. He further urged that in the entire complaint,
there is not even a whisper about the inquiry made
by the Drug Inspector, if any, regarding the active
participation or responsibility of the appellant in the
day-to-day affairs of the company (accused No. 7).
Submissions on behalf of respondent-State: -
17. Per contra , Ms. Rukhmini Bobde, learned
counsel for the respondent vehemently and fervently
urged that the judgments relied upon by the learned

5
(2022) SCC OnLine SC 1383.
6
(2022) 10 SCC 135.
7
(2024) 1 SCC 348.
8
(2021) 20 SCC 135.
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counsel for the appellant do not deal with the concept
of vicarious liability with reference to Section 34(2) of
the D&C Act. She urged that, by virtue of the
aforesaid provision, any Director who is responsible
for the conduct of business of the company can be
held vicariously liable and made to face prosecution
for the acts/omissions by the company leading to the
commission of offence/s under the provisions of the
D&C Act. As per Ms. Bobde, the appellant responded
to the show cause notice of the Drug Inspector in the
capacity of the Director of the company, hence, the
arraignment of the appellant was logical and justified
because it is he who was having exclusive knowledge
about the functioning and business of the company.
18. She further submitted that the appellant’s
contention that he was not responsible for the day-
to-day affairs of the company can only be agitated as
a defence when evidence is recorded at the trial.
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Claim of such immunity in a quashing petition that
too based on disputed questions of facts is
premature, and therefore, the High Court did not
commit any error in rejecting the appellant’s prayer
for quashing of the proceedings.
19. We have given our thoughtful consideration to
the submissions advanced by learned counsel for the
parties and have gone through the impugned
judgment and the material available on record.
Discussion and Conclusion: -
20. Section 34 of the D&C Act provides the
procedure for prosecution of companies and its
Directors, etc., for the offences under the Act and is
being reproduced hereinbelow for the sake of ready
reference: -
“34. Offences by companies - (1) Where an
offence under this Act has been committed by a
company, every person who at the time the
offence was committed, was in charge of, and
was responsible to the company for the
conduct of the business of the company, as
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well as the company shall be deemed to be guilty
of the offence and shall be liable to be proceeded
against and punished accordingly:

Provided that nothing contained in this sub-
section shall render any such person liable to
any punishment provided in this Act if he proves
that the offence was committed without his
knowledge or that he exercised all due diligence
to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-
section (1), where an offence under this Act has
been committed by a company and it is
proved that the offence has been committed
with the consent or connivance of, or is
attributable to any neglect on the part of, any
director, manager, secretary or other officer
of the company, such director, manager,
secretary or other officer shall also be deemed to
be guilty of that offence and shall be liable to be
proceeded against and punished accordingly.”

(Emphasis supplied)
21. A holistic reading of the language of Sections
34(1) and 34(2) of the D&C Act would make it clear
that every person who is in-charge of the day-to-day
affairs of the company would be liable to face
prosecution under the Act. The Director or Directors,
other than the one who is in-charge of the day-to-day
affairs of the company can also be prosecuted ‘where
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it is proved’ that the offence has been committed
with the consent, connivance or is attributable to any
neglect on the part of such Director.
22. No doubt, at the stage of taking cognizance, the
standard of proof required would be much lower than
that required at the stage of final decision of a
criminal case. Nevertheless, there definitely has to
exist a prima facie allegation in the complaint which
can satisfy the Court regarding the consent,
connivance or attributable neglect on the part of the
Director who is sought to be prosecuted by taking
recourse to the concept of vicarious liability as
provided under Section 34(2) of the D&C Act.
23. This Court in the case of Dayle De’Souza v.
9
Union of India , while relying upon an earlier
judgment in National Small Industries

9
(2021) 20 SCC 135.
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10
Corporation Limited v. Harmeet Singh Paintal
held that the primary responsibility is upon the
complainant to make specific averments in the
complaint so as to make the accused vicariously
liable for the offence committed by the company.
While fastening the criminal liability, there is no
presumption that every Director knows about the
transactions of the company. Criminal liability can
be fastened only upon those directors or persons,
who, at the time of the commission of the offence,
were in-charge of and were responsible for the day-
to-day business of the company.
24. To establish this, something more than a bald
assertion would be necessary because Section 34(2)
begin with a caveat, that the prosecution would be
required to provide proof regarding the active
involvement of the Director or person concerned in

10
(2010) 3 SCC 330.
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the affairs of the company which would justify
drawing an inference about his/her inculpability.
25. It may be reiterated that the complaint in the
present case is totally silent on this vital aspect.
26. The High Court, while rejecting the quashing
petition filed by the appellant, was persuaded by the
fact that by virtue of the averments made in Para
No.31(iv) and 36(4) of the complaint, it could be
inferred that the appellant (accused No. 6) had
distributed the drugs in favour of M/s Star Express
which did not possess a valid license under the D&C
Act.
27. However, the said finding is erroneous on the
face of record. The allegation of distributing the
drugs to an enterprise without a license is omnibus
against both i.e., accused No. 6 (appellant) as well as
against accused No. 7 (P&G Ltd.) and thus,
something more than a bald allegation is required
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which satisfies the necessary ingredients of the
offences under the D&C Act, to make the appellant
vicariously liable for the acts and omissions of the
company.
28. It is observed that neither of the Director,
Manager or any other officer in-charge of the
company (accused No. 7) has been impleaded in the
complaint by virtue of procedure provided under
Section 34(1) of the D&C Act. The conclusion drawn
by the High Court on the aspect of inquiry made by
the Drug Inspector, regarding the persons with whose
consent, connivance or attributable neglect the
offence was committed in light of Section 34(2) of the
D&C Act, is also erroneous and contrary to record
because in the entire complaint, there is no such
assertion regarding such an inquiry with respect to
P&G Ltd. (accused No. 7).
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29. Upon thorough perusal of the documents
annexed with the complaint, it transpires that the
th
Drug Inspector had addressed a letter dated 14
July, 2016 to P&G Ltd. seeking information regarding
the affairs of the company. In response, the Associate
th
Manager of P&G Ltd., vide letter dated 29 July,
2016, stated that the list of Directors along with the
Articles and Memorandum of Association of the
company had already been furnished to the Drug
th
Inspector vide letter dated 15 July, 2016. It is,
however, significant to note that the complaint itself
makes no reference whatsoever to the afore-
mentioned communications exchanged between the
Drug Inspector and the P&G Ltd. We may also note
that the complaint is totally devoid of averments
regarding any inquiry into the role of the Directors of
the P&G Ltd. (accused No. 7) or the person/s
responsible for the conduct of the day-to-day
business of P&G Ltd. (accused No. 7). Thus, there
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being no such averment or material against the
appellant, the order summoning him is ex facie
unjustified and uncalled for.
30. Resultantly, we conclude that prosecution of the
appellant herein on the anvil of vicarious liability
simply being a Director of the company is absolutely
unjustified and tantamounts to a gross abuse of the
process of law. The impugned judgment and order
th
dated 12 April, 2023 rendered by the High Court is
unsustainable in the eyes of law and hence, the same
is set aside. The summoning order and all
proceedings sought to be taken against the appellant
in Complaint No. 1500201/SW/2016 are hereby
quashed. However, the proceedings of the complaint
shall continue against the other accused arraigned
therein.
31. Accordingly, the appeal is allowed.
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32. Pending application(s), if any, shall stand
disposed of.

….……………………J.
(VIKRAM NATH)


...…………………….J.
(SANDEEP MEHTA)
NEW DELHI;
JULY 22, 2025.
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