Ram Prakash Gulati and Kewal Gulati v. State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** **TUESDAY, THE 26TH DAY OF JULY 2016/4TH SRAVANA, 1938** ## **Crl.MC.No. 4205 of 2016 ()** ## **--------------------------CC.NO. 691/2011 OF JUDICIAL FIRST CLASS MAGISTRATE COURT -I, KANNUR** **--------------------** ## **PETITIONERS/A2 AND 5:-** **------------------------------------** ## **1. RAM PRAKASH GULATI,** - **S/O.LATE AMAR NATH GULATHI, AGED 90 YEARS, 117H-1/192, PANDU NAGAR, KANPUR.** ## **2. KEWAL GULATI,** **S/O.R.P.GULATI, AGED 55 YEARS, 117H-1/192, PANDU NAGAR, KANPUR.** ## **BY ADVS.SRI.SUMAN CHAKRAVARTHY SMT.BREJITHA UNNIKRISHNAN** ## **RESPONDENT(S)/COMPLAINANT & STATE OF KERALA:-** **----------------------------------------------------------------------------------** **1. STATE OF KERALA, REP. BY ITS PUBLIC PROSECUTOR, HIGH COURT OF KERALA.** **2. THE DRUGS INSPECTOR (INTELLIGENCE BRANCH), OFFICE OF THE ASST DRUGS CONTROLLER, KANNUR.** **BY PUBLIC PROSECUTOR SRI.ROY THOMAS** **THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 26-07-2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **sts** **Crl.MC.No. 4205 of 2016 () --------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' ANNEXURES:** **--------------------------------------------** **ANNEX A CERTIFIED COPY OF THE COMPLAINT IN CC 691/2011. ANNEX B TRUE COPY OF LETTER DATED 31.03.2008. BY PILCO PHARMA. ANNEX C ORIGINAL COMMUNICATION FROM THE REGISTRAR OF COMPANIES DATED 21.04.2016 ALONG WITH THE CERTIFIED COPY OF FORM 20-B. ANNEX D TRUE COPY OF THE LETTER DATED 18.04.2016 BY THE DRUG LICENSING AND CONTROLLING AUTHORITY, UP. ANNEX E TRUE COPY OF THE REPORTED JUDGMENT DATED 17.12.2009 IN CRIMINAL APPLICATION NUMBER 768/2009 BY HIGH COURT OF BOMBAY NAGPUR BENCH.** **RESPONDENT(S)' ANNEXURES: NIL ------------------------------------------------** **/TRUE COPY/** **P.A.TO JUDGE** **sts** ## **RAJA VIJAYARAGHAVAN.V., J** - - - - - - - - - - - - - - - - - - - - Crl.M.C. No. 4205 of 2016 - - - - - - - - - - - - - - - - Dated 26[th] July, 2016 - - - - - - - - - - - - - - - - - - - - - - - - ## **ORDER** - 1.The petitioners herein are accused Nos. 2 and 5 in C.C.No.691 of 2011 on the files of the Judicial Magistrate of 1[st] Class I, Kannur. The said case has originated on the basis of a complaint filed by the 2[nd] respondent herein alleging commission of offence punishable under Section 32 of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as Act, 1940). Offense alleged are under Section 18 (a)(i) read with Section 27 (d) of the Act. 2.Annexure A complaint would reveal that on 22.5.2009, the Drugs Inspector, Intelligence Branch, Kannur drew samples of drug 'Betamethasone Valerate Cream 5 gms' manufactured by the 1[st] accused from the District Drug Warehouse Kakkad road, Kannur. The said drug was forwarded to the Government Analyst, Drug Testing Laboratory, Thiruvananthapuram and after analysis it was declared as “Not of standard quality”. It was revealed on Crl.M.C. No. 4205 of 2016 -2- enquiry that the drug was purchased from the 1[st] accused by the Kerala Medical Services Corporation Ltd as per invoice dated 3.9.2008. 3.Immediately thereafter, communication was issued by the 2[nd] respondent seeking details of the persons in-charge of the day-to-day business of the 1[st] accused company. Since no reply was received, details were sought for from the Drugs Controller, Thiruvananthapuram. The Memorandum of Article and Association of the accused Company was obtained from the Drugs Controller which revealed that the accused Nos. 2, 3, 4 and 5 were the persons responsible for the day-to-day conduct of the business. Consequently Annexure A complaint was filed before the learned Magistrate arraying those persons as the accused. - 4.Heard the learned counsel for the petitioners as well as the learned Public Prosecutor. - 5.The learned counsel submits that the 2[nd] respondent has relied solely on the Memorandum and Articles of Crl.M.C. No. 4205 of 2016 -3- Association of the year 1987 to conclude that the petitioners herein are in charge and responsible for the business of the 1[st] accused. It is submitted that the petitioners herein had disassociated from the Company and contends that the 2[nd] respondent ought to have called for Authentic Documents as regards the directorship of the Company from the Registrar of Companies. Referring to Annexure B letter issued by the 1[st] accused, it is submitted that the petitioners had disassociated from the 1[st] accused Company with effect from the Financial year 1988-1989. The learned counsel also places reliance on the certified copy of Form 20B dated 29.9.2007 issued from the Office of the Registrar of Companies, UP & Ukttarakhand, to contend that the name of the petitioners does not figure in the list of the Directors and Shareholders of the Company even on 29/09/2007. Annexure C - original communication issued from the Registrar of Companies on 21.4.2016 is also relied on to buttress his contention. Crl.M.C. No. 4205 of 2016 -4- 6.Reference is also made to Annexure D communication issued by the Drug Licensing & Controlling Authority, UP dated 18.4.2016, wherein it is mentioned that the petitioners were initially Directors of M/s Pilco Pharma (Pvt.) Ltd, Kanpur, the 1[st] accused herein, till 1989 and thereafter they had resigned. Finally, the learned counsel relies on the judgment of the High Court of Judicature, Bombay reported in **Shri. Ramprakash Gulati & Anr. v. State at the instance of S.B Ghotkar (2010 Crl.LJ 1492)** wherein the proceedings against the petitioners were quashed by the learned Single Judge holding that the petitioners were not Directors, who were in charge or responsible of M/s Pilco Pharma, Pvt. Ltd, Kanpur on 9.5.1995, on which day samples were taken in the said case. It is the further contention of the learned counsel that the instant complaint was preferred on 1.10.2011 much after the pronouncement of Annexure E judgment on 17.12.2009. 7.I have considered the rival submissions. Crl.M.C. No. 4205 of 2016 -5- 8.It is borne out from the records produced by the learned counsel and also Annexure E judgment that the petitioners had nothing to do with the 1[st] accused Company as on the date of filing the complaint. Records reveal that the petitioners had disassociated from the Company as early as in the year 1989. 9.Paragraph 11 of **Ramprakash Gulati** (supra) reads as follows: _“11. On careful perusal of Annexure-ii, Form 32, said document would reveal that Ram Prakash Gulati and Kewal Kumar Gulati have resigned with effect from 21.04.1989. The affidavit-in-reply filed on behalf of the State in para 3, contends that name of Poonam Gulati as Director (correspondence and attending the visitors) is appointed on 05.05.1989. Said paragraph further mentions that Keval Kumar Gulati's date of appointment or change is 21.04.1989 and under brief particulars of change it is mentioned that he has resigned from directorship and Smt.Pushpawant Gulati was appointed as Director (No active duty) on 13.02.1989. Therefore, though it is vehemently argued by learned A.P.P. that the basis of Annexure-ii, it cannot be said that the applicants have resigned as contended by them and Smt.Poonam Gulati and Pushpawant Gulati are appointed in their place, perusal of affidavit-in-reply filed by State would clearly show that Smt.Poonam Gulati came to be appointed on 05.05.1989, Smt.Pushpawant Gulati came to be appointed on 13.02.1989. Case of the applicants is that in their place, these two ladies came to be appointed.”_ And further in para 12. it was observed as follows :- Crl.M.C. No. 4205 of 2016 -6- _Therefore, it can be safely be said that the complainant, without application of mind and verifying that at the relevant time i.e. on the date of alleged offence whether applicants were directors or not, has added them as accused persons merely on the basis of memorandum of Association, which was prepared in 1987. Though, the learned APP submitted that burden lies on the applicants to prove that they have resigned on 05/05/1989, in my view, it was not difficult for the complainant at least to have prima facie and preliminary search before filing the complaint to see that who are the persons responsible and in charge of the day-to-day affairs of the company. After all, the record maintained by the Director of companies is public document/record._ 10.Now the question is whether the incontrovertible materials produced by the petitioners could be relied on to quash the proceedings initiated against them. In **Rajiv Thapar V Madan Lal Kapoor** 2013 (3) SCC 330 the Apex Court has has laid down the parameters of exercising powers under Section 482 of the Code in cases where the materials produced by the accused would negate the prosecution case in its entirety. In paragraph 23 the Apex Court had held as follows :- _23. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashing,_ Crl.M.C. No. 4205 of 2016 -7- _raised by an accused by invoking the power vested in the High Court under S.482 of the CrPC:_ _(i) Step one, whether the material relied upon by the accused is sound, reasonable, and indubitable, i.e., the material is of sterling and impeccable quality?_ _(ii) Step two, whether the material relied upon by the accused, would rule out the assertions contained in the charges levelled against the accused, i.e., the material is sufficient to reject and overrule the factual assertions contained in the complaint, i.e., the material is such, as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false._ _(iii) Step three, whether the material relied upon by the accused, has not been refuted by the prosecution / complainant; and / or the material is such, that it cannot be justifiably refuted by the prosecution / complainant?_ _(iv) Step four, whether proceeding with the trial would result in an abuse of process of the Court, and would not serve the ends of justice?_ _If the answer to all the steps is in the affirmative, judicial conscience of the High Court should persuade it to quash such criminal proceedings, in exercise of power vested in it under S.482 of the CrPC. Such exercise of power, besides doing justice to the accused, would save precious Court time, which would otherwise be wasted in holding such a trial (as well_ Crl.M.C. No. 4205 of 2016 -8- _as, proceedings arising therefrom) specially when, it is clear that the same would not conclude in the conviction of the accused._ 11.Judged by the above criteria , I am of the firm view that Annexures B to E would without doubt show that the petitioners had nothing to do with the 1[st] accused at on the day when the samples were taken by the Drugs Inspector. Permitting the prosecution to continue against them would be nothing but an abuse of process of Court. The petitioners are entitled to succeed. The petition is allowed. All further proceedings in against the petitioners who are accused No 2 and 5 in C.C.No.691 of 2011 on the files of the Judicial Magistrate of 1[st] Class I, Kannur are quashed. Sd/- **RAJA VIJAYARAGHAVAN.V., JUDGE** kp/-27.7.16