Delhi High Court Quashes FIR Under D&C Act and IPC: Police Lack Jurisdiction for Drug Adulteration Cases

From Business Dispute to Criminal Case: High Court Clears Manufacturer in Pharma Row

In a significant ruling for the pharmaceutical industry, the Delhi High Court has set aside an FIR involving allegations of drug adulteration, emphasizing strict boundaries regarding criminal investigation procedures. Justice Neena Bansal Krishna presided over the case of Revacure Lifesciences LLP vs. State Govt of NCT Delhi , which centered on the misuse of criminal machinery to settle a commercial dispute.

The Anatomy of the Dispute

The conflict arose from a "Loan License Agreement" between Revacure Lifesciences (Petitioner) and Bhardwaj India Private Limited (Respondent). Under this arrangement, Revacure provided its manufacturing facility and staff in Jabalpur, while Bhardwaj India marketed the products.

Tensions boiled over when the Respondent defaulted on payments, leading the Petitioner to demand the balance. The relationship soured into a criminal complaint after Bhardwaj India alleged that the medicines supplied—Docetaxel 20 mg—contained broken glass and foreign particles. This led the Magistrate to direct the registration of an FIR for adulteration under the Drugs and Cosmetics Act , 1940 and the Indian Penal Code (IPC).

Arguments Across the Aisle

The Petitioner argued that the relationship was essentially one of landlord and tenant regarding manufacturing facilities. They contended that Bhardwaj India, as the Loan Licensee, held sole responsibility for product quality. Furthermore, the Petitioner highlighted that multiple quality control inspections, including one by a Joint Inspection Team, had absolved them of any wrongdoing, proving the samples were unadulterated at the time of dispatch.

The Respondent maintained that the Petitioner had supplied sub-standard drugs, citing test reports from Karnataka as evidence. They argued that the Petitioner failed to meet GMP (Good Manufacturing Practices) and was attempting to evade legal liability under the guise of an agreement.

Procedural Missteps and Legal Analysis

The Court’s analysis rested on two foundational pillars: statutory jurisdiction and the threshold for criminal offenses.

Citing the precedent Ashok Kumar Sharma vs. Union of India , the Court reaffirmed that police lack the mandate to register FIRs for offenses under the Drugs and Cosmetics Act . This authority is exclusively vested in designated Drug Inspectors.

Regarding the IPC charges under Sections 274 and 275 (adulteration and sale of adulterated drugs), Justice Krishna noted that there was no evidence that the drugs were sold in the market. Additionally, the Court observed that the FIR had been pending investigation for nearly six years without reaching a chargesheet, making it "hopelessly barred by limitation" under Section 468 CrPC .

Key Observations

The High Court’s ruling included several piercing observations:

• "The police officer cannot register an FIR under Section 154 Cr.P.C, in regard to cognizable offences under Chapter IV of the [Drugs and Cosmetics] Act and he cannot investigate such offences under the provisions of Cr.P.C."
• "From this Report [of the Joint Inspection Team], it is evident that the drug was found to be in conformity with the prescribed standards and there were no suspended particles/adulteration noticed in the control samples taken from the premises of the Petitioner."
• "Clearly a loan licensee being a manufacturer will certainly have to be held to be in sole authority over the quality of the drugs manufactured under its supervision."
• "It is not expedient or in the interest of justice to let the investigations be continued in such a case which is hopelessly barred by limitation."

Final Verdict: A Lesson in Due Process

The Court allowed the petition, quashing FIR No. 053/2019. This judgment serves as a vital reminder that commercial disputes should not be elevated to criminal cases without substantial evidence. By enforcing strict adherence to the Drugs and Cosmetics Act and the limitation periods prescribed by the CrPC , the Delhi High Court has provided a shield for manufacturers against the strategic exploitation of criminal law. This decision is poised to dictate how future pharmaceutical disputes involving loan licenses are handled, ensuring that regulatory enforcement remains in the hands of competent authorities.