1. Heard Mrs. Pinto, learned Additional Public Prosecutor appearing on behalf of the State and Mr. Usgaonkar, learned Counsel appearing on behalf of the respondent no. 5.

2. This is a State appeal against acquittal of respondents no. 1 and 5 above-named, vide judgment and order dated 24.01.2012, passed by the learned Judicial Magistrate, First Class at Mapusa (J.M.F.C., for short) in O. A. Criminal Case No. 10/1997 (old) : O. A. Criminal Case No. 250/1999/D (new).

3. For convenience, the parties shall hereinafter be referred to as arrayed before the Magistrate.

4. The State, through the Drugs Inspector namely Mr. Raghuvir D. Bhise, had lodged the complaint before the Judicial Magistrate First Class, at Mapusa against five accused persons for offences under Section 18(a)(i) read with Section 16(1)(a), sub-section (c) of Section 17 and subsection (d) of Section 17-B, punishable under Section 27(c) of the Drugs and Cosmetics Act, 1940 ('the Act', for short), which came to be registered as O. A. Criminal case No. 10/1997 and again as O. A. Criminal Case No. 250/1999.

5. The case of the complainant, in short, was as follows : The accused no.1 was a Partnership Firm having manufacturing premises at Shirali, 581 354 Uttar Kannada and was engaged in drug manufacturing activity at its factory and held drug manufacturing licence No. KTK/28/265/94 for manufacturing of drugs for sale under the provisions of the Drugs and Cosmetics Rules, 1945 ('the Rules', for short). Under the said licence, the accused no. 1 along with its partners were permitted to manufacture for sale a drug formulation in ointment form (external preparation) Framycetin Sulphate Cream under the brand name “Fratouch” the composition of which was Framycetin Sulphate 1% W/W Cream base …. Q.S.. On 28/06/1995, the complainant visited the premises of M/s. G. N. Agencies situated at 1st floor, Shivsagar Appartment, near Maruti Temple, Bardez, Mapusa-Goa, a licenced dealer holding drug licences no. 1101/F20B and 1102/F21B to sell drugs by way of whole sale. Shri Govind Ramnath Naik, proprietor-cum-competent person of the said drug store was present there at that time. Large number of drugs for sale which included 'Framycetin Sulphate Cream' under the brand name 'Fratouch' manufactured by M/s. Shivani Laboratories (accused no.1) were found. The complainant drew samples in quantities 4x1 x 15 gms. of Framycetin Sulphate Cream (Fratouch) having batch no. 507, Date of Mfg. 4/95, Date of Expiry 3/97, Mfg. Licence No. KTK/28/265/94, manufactured by accused no. 1, for test analysis by following the procedure prescribed under Section 23 of the Act. Intimation was given to said proprietor, in prescribed form 17. All the four portions of the said samples were sealed and marked in the presence of said proprietor. One sealed portion of the sample was given to the said proprietor, under Section 23(4) of the Act. The credit invoice no. 650 was issued by the owner towards the costs of the drugs, which amount was paid by cheque. One of the said samples was sent for analysis to the Government Analyst, Goa at Bombay and the Government analyst declared that the said sample was not of standard quality vide his report dated 11/12/1995, for the reason that the sample did not conform to the standards for Framycetin Sulphate as the contents of Neomycin 'C' in the sample were 21.09% which was more than the standard limit (not more than 3.0%). A copy of the test report was sent to M/s. G. N. Agencies, Mapusa-Goa along with show cause notice dated 29.12.95 directing to stop sale of the said drug, etc.. During the inquiry, it was reported by M/s. G. N. Agencies that the drugs were supplied to them by M/s. Shivani Pharmatech Pvt. Ltd., Bangalore. A sealed portion of the drug sample along with the copy of the test report, was then sent to M/s. Shivani Pharmatech Pvt. Ltd., Bangalore which in turn disclosed that the said drugs were purchased from M/s. Shivani Laboratories, Shirali (accused no.1),