SC Drops Criminal Charges Against P&G Director, But No Relief For Akums Drugs in Vicks Gel Case
Supreme Court of India
New Delhi: The Supreme Court has quashed criminal proceedings against Shailyamanyu Singh, a Non-Executive Director of Procter and Gamble Hygiene and Healthcare Limited (P&G Ltd), who was summoned in connection with the alleged distribution of expired drugs in Mumbai.
The case stemmed from a 2016 inspection by the Drug Inspector at the premises of Action Soap Center in Mazgaon, Mumbai, where expired stocks of Vicks Multi Pain Relief Gel were found.
The drug, manufactured by Akums Drugs and Pharmaceuticals and distributed by P&G Ltd., had an expiry date of January 2016. According to P&G’s standard operating procedure, such drugs were to be recalled and destroyed six months prior to expiry, but the expired stock was allegedly in circulation.
Following the seizure, the Drug Inspector issued a series of notices to P&G Ltd. in June 2016, questioning the supply chain. Responses were sent by company officials, including Singh in his capacity as a legal officer, stating that the expired batch was under the custody of the clearing and forwarding agent KD Supply Chain Solutions Pvt. Ltd. and had been further supplied to Star Express, an unlicensed distributor.
Subsequently, a complaint was filed before the Metropolitan Magistrate, Mazgaon, naming multiple parties, including local distributors, Akums Drugs, P&G Ltd., and Singh. The magistrate took cognizance and issued process against all accused for violations under Sections 18B, 18(a)(vi), and 22(1)(cca) of the Drugs and Cosmetics Act, 1940, which are punishable under Sections 28A and 27(d).
Singh challenged the summoning order before the Bombay High Court under Section 482 CrPC, but his plea was dismissed in April 2023. He then approached the Supreme Court by way of appeal.
In its ruling, the apex court emphasized that under Section 34 of the Drugs and Cosmetics Act, only those directors who are directly responsible for the day to day affairs of a company, or whose consent or neglect led to the offense, can be held vicariously liable.
The court noted that Singh was a Non-Executive Director and there were no specific allegations or material linking him to the alleged offence.
The bench comprising Justices Vikram Nath and Sandeep Mehta held that the High Court erred in assuming Singh’s role in distribution of the drugs without supporting material. The Supreme Court observed that “bald and omnibus allegations” are insufficient to summon a director without evidence of active involvement.
The court, therefore, quashed the summoning order and all criminal proceedings against Singh but clarified that the trial would continue against the other accused, including P&G Ltd. and Akums Drugs.
The court noted;
"We conclude that prosecution of the appellant herein on the anvil of vicarious liability simply for 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 dated 12th 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."
To view the official order, click the link below:
Next Story