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 Case Digest

Drugs and Cosmetics Act, 1940
Section 27-Penalty for manufacture, Sale etc., of drugs in contravention to Chapter IV of Act
Section 27-Penalty for manufacture, Sale etc., of drugs in contravention to Chapter IV of Act
Neither the trial Court nor the appellate court have given any reasons for imposing the sentence of one month - As the provisions of law stand term of imprisonment cannot be reduced to fine only.
Ram Shankar Misra vs. State of U.P., SUPREME COURT OF INDIA, 2003 Drugs Cases 285
Section 27-Penalty for manufacture, Sale etc., of drugs in contravention to Chapter IV of Act
Fine in lieu of imprisonment - Two questions for consideration arose in Criminal Appeal before the Apex Court (i) Whether a company can be attributed with mens rea on the basis that those who work or are working for it have committed a crime and can be convicted in a criminal case? (ii) Whether a company is liable for punishment of fine if the provision of law contemplates punishment by way of imprisonment only or a minimum period of punishment by imprisonment plus fine whether fine alone can be imposed? For the first question, three-judge Bench of Apex Court was of the opinion that mens rea involves positive act of commision or omission and since company is a juristic person the proposition of 'punishing a company' cannot be accepted. It could neither be imprisoned, nor be asked to pay a fine. However, the ruling does not apply to a company's directors and employees, who can be punished with imprisonment or imprisonment and fine. Since the punishment prescribed under other economic laws are similar, the ruling can be extended to legislation on wealth Tax Act, Employees Provident Fund and Miscellaneous Provisions Act, Negotiable Instruments Act, Drugs and Cosmetics Act, Essential Commodities Act, Indian Merchandise Act, Narcotic Drugs and Psychotropic Substances Act, Prevention of Food Adulteration Act. As regards the second question, Apex Court held that under the present Indian law it is difficult to impose fine in lieu of imprisonment. Further the Hon'ble Court held that under those sections where imprisonment has been made compulsory for an offence, it is not open to a Court to impose a sentence of fine only and not to award any substantive sentence if the Court finds a company guilty under the Section. If the Court does so, it would be altering the very scheme of the Act and usurping the legislative function. To bring such a fundamental change in criminal jurisprudence is a legislative function. Only Parliament can do it. Corporate criminal liability cannot be imposed without making corresponding legislative changes.
Supreme Court of India, Criminal Appeal No. 142 of 1994,The Assistant Commissioner, Assessment-II, Bangalore and Ors. Vs.M/s Velliappa Textiles Ltd. and Ors., decided on 16.9.2003


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