Drugs Act Vicarious Liability Needs Specific Role: Raj HC

Trustee's Overall Responsibility for Hospital Not Enough for Drugs Act Vicarious Liability: Rajasthan High Court

Published: 18 October 2026 · NyayVidhan

The Rajasthan High Court quashed the cognizance of offences under Sections 18(c) and 27(b)(ii) of the Drugs and Cosmetics Act, 1940 taken against a hospital's Trustee and authorised Secretary. The complaint alleged that drugs were sold in the hospital without a valid licence, but did not state his specific role in the sale or in obtaining the licence. Overall responsibility for a hospital does not create liability under Section 34(1), and the Magistrate had not examined this (paras 11-12).

Key holdings

Vicarious liability under Section 34(1) needs the accused to be in charge of and responsible for the business at the relevant time (paras 5, 11).

A hospital trustee's overall responsibility does not make him liable for a licence another person had to obtain (para 11).

The complaint must state the accused's specific role in the alleged unlicensed sale; a bald statement is not enough (paras 11-12).

The Magistrate must examine this before taking cognizance; criminal process requires due caution (para 11).

Case explainer by NyayVidhan: an account of this judgment and the law it laid down, not the court's text. The judgment itself is the authoritative version.

Brief Facts

A complaint under the Drugs and Cosmetics Act, 1940 was filed before the Chief Metropolitan Magistrate, Jaipur, alleging offences under Sections 18(c) and 27(b)(ii) (para 8). It alleged that the petitioner, as Trustee and authorised Secretary of M/s. Santokba Durlabhji Memorial Hospital, was responsible for the hospital's administration along with the other accused, and was jointly and severally liable (para 8). Cognizance was taken on 30.10.2014, and his revision was rejected by the Additional District & Sessions Judge No. 10, Jaipur Metropolitan, on 27.4.2018 (paras 1-2). The petitioner's case was that the complaint did not aver his responsibility for the conduct of the business (para 1). The Public Prosecutor relied on Section 34(1) and the averment about administration (para 3).

Court's Findings

Under Section 34(1), a person is vicariously liable for an offence committed by a company only if, at the material time, he was in charge of and responsible to the company for the conduct of its business; in Brij Lal Mittal a bald statement that the accused were directors did not suffice (para 5). Ashok H. Maheshwari and Sharad Kumar Sanghi, also set out, make the same point (paras 6-7). The charge here was that drugs were sold or distributed in the hospital without a valid licence (para 11). As Trustee and authorised Secretary, the petitioner had an overall responsibility for the hospital's administration (para 11). The complaint did not state his specific role in the sale of the medicines, or whether the licence was to be obtained by him (para 11). Overall responsibility for a hospital does not entail liability for every act for which another person may be responsible, such as obtaining the licence; the Magistrate had not examined this before taking cognizance, and criminal process must be initiated with due caution (para 11). With no averment of any overt act beyond a bald statement of overall responsibility, the cognizance against the petitioner had no basis (para 12).

Legal Principle

Under Section 34(1) of the Drugs and Cosmetics Act, 1940, a person is vicariously liable only if he was in charge of and responsible for the conduct of the business at the relevant time. A bald averment of overall responsibility for an institution, without a specific role in the alleged offence, does not justify cognizance (paras 5, 11-12).

Precedents Relied Upon

State of Haryana v. Brij Lal Mittal & Others 1998 CRI.L.J. 3287
Followed Discussed at ¶ 2, 5, 11
Vicarious liability under Section 34(1) of the Drugs and Cosmetics Act, 1940 arises only if, at the material time, the person was in charge of and responsible to the company for the conduct of its business; a bald statement that the accused were directors is not enough. Relied on by the petitioner and followed in para 11.
Ashok H. Maheshwari & Others v. State of Rajasthan 2004 (2) CR.L.R. (Raj.) 1627
Relied Upon Discussed at ¶ 2, 6
Where the complaint only alleged that the company committed the offence with the consent, knowledge and connivance of its directors and officers, without alleging that the petitioners were responsible for its conduct and business, continuing the proceedings was an abuse of process (described in para 6 as an Apex Court ruling; cited in para 2 as a Rajasthan report).
Sharad Kumar Sanghi v. The State of Rajasthan S.B. Criminal Misc. Petition No. 688/2005, order dated 15.12.2011
Relied Upon Discussed at ¶ 2, 7
Following the earlier judgments: no direct allegation against a partner to hold him responsible for the conduct of the business.