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2024 Supreme(Kar) 302

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
N S Sanjay Gowda, J.
M/S Zim Laboratories Ltd., And Ors. - Petitioners
Versus
Union Of India, Ministry Of Health And Family - Respondent
Criminal Petition No. 8341 OF 2018
Decided On : 30-08-2024

Advocates:
Advocate Appeared:
For the Petitioner:Sri. Desu Reddy.G., Advocate
For the Respondent: Sri. Madhukar Deshpande, Senior CGSC

The prosecution of drug quality violations is unsustainable when testing delays invalidate the accused's rights to challenge the results, highlighting the need for timely compliance under the Drugs and Cosmetics Act.

Headnote:(A) Drugs and Cosmetics Act, 1940 - Section 27D - Criminal proceedings initiated against petitioners due to drug samples declared 'Not of Standard Quality' - Delay in testing leading to expiration of shelf-life and denial of right to challenge the report is a ground for quashing the proceedings. (Paras 56, 61, 64)

(B) Legal responsibility of directors - Complaint must specify involvement in wrongful conduct, failure to do so renders prosecution unsustainable. (Paras 72, 97)

Facts of the case:
The petitioners challenged proceedings initiated under Section 27D of the Drugs and Cosmetics Act, asserting that an unreasonable delay in testing drug samples forfeited their right to contest the results, which originated from tests conducted after the drugs had expired.

Findings of Court:
The delay in testing both drug samples violated the petitioners' rights, nullifying the prosecution's basis.

Issues: Whether the delay in testing affects the validity of the drug quality claims and the requirements for proper legal complaints against corporate officers.

Ratio Decidendi: Statutory right to contest test results is crucial; delays in testing violate legislative intent, impairing the accused's ability to mount a defense.

Result: Proceedings against petitioners quashed.

Table of Content
1. overview of the criminal proceedings background (Para 1 , 3 , 4)
2. criminal proceedings cannot proceed without timely testing of drug samples. (Para 2)
3. petitioners' contentions for quashing (Para 5 , 6)
4. overview of relevant drug and cosmetics act provisions (Para 7 , 9)
5. timeliness in testing of drug samples is crucial (Para 30 , 31)
6. delay in testing violates manufacturers' rights (Para 56 , 57 , 58)
7. conclusion on the futility of prosecution (Para 66 , 67)
8. final order to quash proceedings (Para 106 , 107)
9. directions for timely execution of drug tests (Para 109 , 110)
10. compliance and future steps ordered (Para 119 , 121 , 123)

ORDER :

N S Sanjay Gowda, J.

1. This criminal petition is filed opposing the criminal proceedings initiated against the petitioners — for the offence punishable under Section 27D of the Drugs and Cosmetics Act, 1940 (“the Act”) — in Criminal Case No.273 of 2016, relatable to the subject samples of a drug called “Regunac Na+ SR 100 (Slow Diclofenac Tablets B.P. 100 mg)” [referred to as “Regunac” or “the drug sample” or “the subject drug”] which was termed as being – “Not of Standard Quality (NSQ)”.

2. For ease of reference, this order has been indexed as follows:

Sl. No.

Particulars

Page Nos.

I.

Brief facts

05

A. Re: 1st sample [Batch No.F957 G220]

05

B. Re: 2nd sample [Batch No.F957 C404]

11

II.

Counsels’ submissions

19

III.

Overview of the Act and the Rules

22

IV.

Application of the law to the facts of this case

43

V.

Conclusion

68

VI.

Directions

69

I. BRIEF FACTS:

3. The facts leading to the filing of this petition, in respect of the two samples in question, are as under:

    A. RE: First Sample [Batch No.F957 G220]:

    (a) On 28.02.2013, the Drugs Inspector (India), Central Drugs Standard Control Organization (CDSCO), Sub-Zone Office of the Drugs Controller for State of Karnataka, Bengaluru, (“the Drugs Inspector”) took the samples of the subject drug–Regunac from the Employees’ State Insurance (“ESI”) Hospital in Mangalore. This drug was manufactured under Batch No.F957 G220.

    (b) The date of manufacture of the subject drug was July, 2012 and the date of its expiry was June, 2015.

    (c) The Drugs Inspector divided the sample into four equal parts, out of which he gave one portion to the Pharmacist of the said ESI Hospital and sent another portion of the sample to the Director, Central Drugs Laboratory, Kolkota (“the CDL”), i.e., the Government Analyst. This sample was sent to the Government Analyst on 04.03.2013.

    (d) On 11.03.2013, the drug sample was received by the Government Analyst for test/analysis, as contemplated under Section 23 (4) of the Act. Though the Government Analyst received the drug sample on 11.03.2013, the test was conducted only between 10.11.2014 and 12.11.2014, i.e., nearly 20 months after the drug sample was received.

    (e) About six months thereafter, the Government Analyst furnished the Test Report in triplicate to the Drugs Inspector by his Memorandum dated 05.05.2015. In this Certificate of test/analysis, he stated that the sample given to him did not pass the “Drug Release Test” and he concluded that the sample was “not of standard quality”.

    (f) The Drugs Inspector, thereafter, by his letter dated 14.05.2015, called upon the Pharmacist of the ESI Hospital, Mangalore (from whom he had secured the drug samples) to furnish the name and address of the person from whom he had acquired the subject drug along with a copy of the invoice and the quantity received, while informing the Pharmacist that the drug sample that he had collected did not conform to the test for drug release and, therefore, he declared the drug sample as “not of standard quality”.

    (g) He also alerted the Drugs Controller, Karnataka on the movements of the drug and for initiation of action as provided under the provisions of the Act.

    (h) The notice was re-sent to the Medical Superintendent / Pharmacist, ESI Hospital, Mangalore on 1

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