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2004 Supreme(Kar) 249

Karnataka High Court
Medreich Sterilab Ltd. - Appellant
Versus
Union of India - Respondent
Decided On : 03-30-04
W.P. : 40227 of 2003

Advocates:
B.V.ACHARYA, M.DODDAMANI, N.DEVDAS, SATISH

The report of the Government Analyst is conclusive evidence only against specific persons mentioned in the Act, and the manufacturer has the liberty to challenge the correctness of the facts stated in the report through other means.

Headnote:

Drugs and Cosmetics Act - Constitutional Validity of Section 25 - Summary of the Acts and Sections Referenced: Companies Act, 1956; Drugs and Cosmetics Act, 1940; Drugs and Cosmetics Rules, 1945 - The court considered the constitutional validity of Section 25 of the Drugs and Cosmetics Act, 1940, and its implications on the rights of the manufacturer in the case. The court upheld the validity of Section 25 and clarified that the report of the Government Analyst is conclusive evidence only against specific persons mentioned in the Act, and the manufacturer has the liberty to challenge the correctness of the facts stated in the report through other means. The court also directed the respondent to consider the preliminary and additional objections filed by the petitioner to the show cause notice in accordance with the law.

Fact of the Case:

The petitioner, a pharmaceutical company, approached the court in response to a show cause notice issued by the Drug Controller licensing Authority, challenging the notice and seeking various reliefs, including the declaration of the constitutional validity of Section 25 of the Drugs and Cosmetics Act, 1940.

Finding of the Court:

The court rejected the petitioner's challenge to the constitutional validity of Section 25 of the Act, upholding its legality and clarifying the rights of the manufacturer to challenge the report of the Government Analyst through other means. The court also directed the respondent to consider the objections filed by the petitioner to the show cause notice in accordance with the law.

Issues: The issues before the court included the constitutional validity of Section 25 of the Drugs and Cosmetics Act, 1940, and the legality of the show cause notice issued by the Drug Controller licensing Authority.

Ratio Decidendi: The court held that the report of the Government Analyst is conclusive evidence only against specific persons mentioned in the Act, and the manufacturer has the liberty to challenge the correctness of the facts stated in the report through other means. The court also directed the respondent to consider the objections filed by the petitioner to the show cause notice in accordance with the law.

Final Decision: The court rejected the petitioner's challenge to the constitutional validity of Section 25 of the Act, upheld its legality, and directed the respondent to consider the objections filed by the petitioner to the show cause notice in accordance with the law.

H. L. DATTU, J.

( 1 ) PETITIONER is a company incorporated under the provisions of Companies Act, 1956 and is engaged in the manufacture of various Pharmaceuticals preparations

( 2 ) THE second respondent-Drug Controller licensing Authority, is the competent authority to issue licence under the provisions of Drugs and Cosmetics Act, 1940 ('the act 'for short) and the Rules framed thereunder. He has issued a licence to the petitioner company for manufacture of pharmaceutical preparations, apart from others, a drug formulation by trade name "augmentin duo Syrup" (Amoxicillian and Clavulanic acid) and the said licence is renewed from time to time. It is the claim of the petitioner company that the Augmentin range of preparations manufactured by the petitioner-company is sold all over the country.

( 3 ) THE cause of action pleaded in the petition for the petitioner-company to approach this Court is the show cause notice issued by the second respondent to the petitioner -company dated 7-12-2002 under rule 85 (2) of Drugs and Cosmetics Rules, ('rules' for short) inter alia directing it to show cause, why action as per law should not be taken against it, to cancel, suspend or revoke the licence granted, on the ground that "augmentin Duo Syrup" batch No. 1017 date of manufacture June, 2001 date of expiry May, 2003 has been declared as 'not of standard quality' by the Government analyst, Drug Testing Laboratory, New delhi, vide test report dated 24-10-2002 and along with the show cause notice the report of the Govt. Analyst was also enclosed. The petitioner-company was also directed to appear on 18-12-2002 and to produce the records of production, test and analysis in support of its defence and to adduce evidence, if any, controverting the report.

( 4 ) PETITIONER-COMPANY through its representative has appeared before the second respondent and has filed its preliminary objections on 18-12-2002 and has sought for some time to file its detailed reply. In the preliminary objections, apart from pointing out certain irregularities in the report, petitioner company has also brought to the notice of the second respondent, that, it has not been served with sealed portion of the sample and thereby it is prevented from contesting the correctness of the report of the govt. Analyst and further to request the competent authority to send the sample to the Central Drugs Laboratory and so that the report obtained thereof would be conclusive evidence of the facts stated therein against the petitioner-company also. Even before the second respondent could react to the preliminary objections filed, the petitioner company has rushed to this Court inter alia seeking the following reliefs. They are :"i. To declare Section 25 of the Drugs and Cosmetics Act, 1940 is illegal, void and opposed to certain provisions of Constitution of India and in particular to Articles 14, 19 and 21 of the Constitution. II. To quash by issuing an appropriate writ, the report of the Government Analyst dated 24-10-2002 insofar as petitioner is concerned. III. To quash by Issuing an appropriate writ, the proceedings initiated by the second respondent for cancellation of licence granted in favour of the petitioner-company by the impugned show cause notice dated 7-12-2002. "

( 5 ) BEFORE I refer to the submissions of the learned Senior Counsel, let me first notice some more facts, which has prompted the petitioner-company to approach this court at a very preliminary stage. I say preliminary stage, only because, we are still at the stage of show cause notice issued by the second respondent, who intends to take certain action, based on the report of Govt. Analyst as provided under the provisions of drugs and Cosmetics Rules against the petitioner company. The Drugs Inspector, drugs Control Department, New Delhi, who has been arrayed as fifth respondent in the writ petition, it appears, on 29-4-2001 had taken six bottles of the preparations referred to earlier (Augmentin Duo Syrup) as samp




















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