Jammu Kashmir High Court Quashes Proceedings Against Drug Company Directors, Allows Trial Against Key Officials  | Kashmir Life

SRINAGAR: The High Court of Jammu Kashmir and Ladakh has quashed criminal proceedings against several directors and functionaries of a pharmaceutical company in multiple complaints alleging manufacture of substandard drugs, holding that “bald and vague allegations” without specific roles cannot sustain prosecution under the law.

Justice Sanjay Dhar delivered the judgment on April 2, 2026, in a batch of five connected petitions, including CRMC No. 450/2018, 690/2017, 720/2017, 44/2018 and 64/2018, which had been reserved on March 30, 2026. The petitions were filed by Amit Kumar Bansal and other accused challenging complaints instituted before courts in Jammu and Kishtwar under provisions of the Drugs and Cosmetics Act, 1940.

Senior Advocate Sunil Sethi, assisted by Advocate Ankesh Chandel, appeared for the petitioners, while the respondents were represented by Additional Advocate General Raman Sharma with assisting counsel Saliqa Sheikh.

The case arose from a series of complaints filed by the drug authorities alleging that certain batches of medicines, including Ceftriaxone injections and Glimepiride-Metformin tablets manufactured by M/s Theon Pharmaceuticals Ltd, were found “not of standard quality” upon analysis by the government analyst. Based on these reports, complaints were filed before the Chief Judicial Magistrate, Jammu, and Judicial Magistrate courts at Kishtwar, arraying the company along with its Managing Director, Whole-Time Directors, Additional Directors, production managers and quality control officials as accused.

The petitioners approached the High Court invoking its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, contending that they had been impleaded merely on account of their designation in the company and that no specific role had been attributed to them in the alleged offences. It was further argued that the company had already nominated a responsible person, Puran Chand Joshi, under Section 34 of the Act to be in charge of and responsible for the conduct of its business, particularly manufacturing and quality control.

The High Court examined the statutory framework under Section 34 of the Drugs and Cosmetics Act, which governs offences by companies, and held that criminal liability cannot be fastened on every director or officer in the absence of clear and specific allegations demonstrating their role in the commission of the offence. The court emphasised that while a nominated person responsible for the conduct of business attracts a statutory presumption of liability, such presumption does not automatically extend to all directors or officers.

Quoting from the judgment, the court observed, “Merely because the petitioners… happen to be the Managing Director/Directors of the accused company would not make them liable to prosecution for the alleged offence unless a specific role is ascribed to them. In the absence of specific allegations… merely on the basis of bald assertion, the impugned complaint as against them cannot proceed further.”

Relying on settled legal principles, including the Supreme Court’s ruling in M/s Cheminova India Limited v. State of Punjab, the court held that vicarious liability in such cases must be strictly construed and cannot be based on general or omnibus allegations.

At the same time, the court found that the prosecution could continue against the company itself, the nominated responsible person, and those officials against whom specific allegations existed, particularly technical employees directly linked to manufacturing and quality control of the drugs in question.

In its operative directions, the High Court partly allowed all five petitions, quashing the complaints and proceedings against directors and other officials where no specific role was attributed, while permitting the trial to proceed against the company, the nominated responsible person, and certain technical staff against whom concrete allegations had been made.

The court directed that the trial court records be returned for continuation of proceedings in accordance with law.