JAMMU AND KASHMIR HIGH COURT BENCH AT JAMMU
Sanjay Dhar, J.
Cadila Pharmaceuticals Limited & Ors. – Appellants
Versus
Drug Inspector, Kathua & Ors. – Respondents
CRMC No. 110 of 2014
Decided On : 22-09-2022
Drugs and Cosmetics Act - Prosecution of Company without Directors - Section 8(a)(i) read with Section 27 (d) of the Drugs and Cosmetics Act, 1940 - [Section 34 of the Drugs and Cosmetics Act] - Summary of Acts and Sections: The court discussed the provisions of Section 34 of the Drugs and Cosmetics Act, which holds both the company and the persons responsible for conducting its business guilty of an offence committed by the company. The court interpreted the expression 'as well as the company' to mean that the company can be prosecuted without impleading its Directors or persons responsible for conducting its business. The judgment also highlighted the liability of the company to be prosecuted for offences carrying imprisonment sentences, with the court having the discretion to impose a fine in such cases.
Fact of the Case:
The petitioners challenged a complaint filed by the Drugs Inspector, alleging offences under Section 8(a)(i) read with Section 27 (d) of the Drugs and Cosmetics Act, 1940. The complaint pertained to the quality of a drug supplied by the petitioners, leading to prosecution against them.
Finding of the Court:
The court found that the company could be prosecuted without impleading its Directors or persons responsible for conducting its business. It also held that the company could be sentenced to a fine for offences carrying imprisonment sentences.
Issues: The main issues were the prosecution of the company without impleading its Directors and the application of pharmacopoeia tests for the analysis of the drug in question.
Ratio Decidendi: The court interpreted Section 34 of the Drugs and Cosmetics Act to allow the prosecution of the company without impleading its Directors. It also held that the company could be sentenced to a fine for offences carrying imprisonment sentences. The court emphasized that the application of pharmacopoeia tests for the analysis of the drug would be determined during trial.
Final Decision: The petition was dismissed, and the record of the trial Magistrate was sent back along with a copy of the order.
JUDGMENT
1. Through the medium of instant petition, the petitioners have challenged the complaint filed by respondent No.1/Drugs Inspector, Kathua against the petitioners and proforma respondent alleging commission of offences under Section 8(a)(i) read with Section 27 (d) of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as the 'Act of 1940'). Challenge has also been thrown to order dated 09.08.2012 passed by the learned District Judicial Mobile Magistrate (T), Kathua (hereinafter referred to as the 'trial Magistrate') whereby the learned Magistrate has opined that, prima facie, offences under Section 8(a)(i) read with Section 27 (d) of the Act of 1940 are made out against the accused and the process has been issued against them.
2. Record shows that respondent No.1/Drugs Inspector has lodged the impugned complaint against the petitioners and co-accused before the trial Magistrate. As per the complaint, on 24.11.2011, the complainant conducted a routine inspection of the premises of M/S Shivam Pharmaceutical and sample of the drug 'Trulax, Batch No. 9003, manufacturing date 07/2009, expiry date 06/2012' was collected from the said premises. The said sample, upon analysis by the Government Analyst, was found to be not of standard quality. During investigation, it was found that the drug in question was supplied by petitioner No.2, whereas the same was manufactured by petitioner No.1/M/S Cadila Pharmaceutical Ltd. Thus, petitioner No.1 happens to be the manufacturer and petitioner No.2 happens to be the distributor of the drug in question. At the instance of petitioner No.1/the manufacturing company, the sample was sent to Central Drug Laboratory, Kolkata for reanalysis. After reanalysis of the sample, it was reported by the CDL, Kolkata that the sample was not of standard quality. Accordingly, the prosecution was launched against the petitioners and the other co-accused.
3. The petitioners have raised a number of grounds to challenge the impugned complaint and the proceedings emanating therefrom, but the main grounds that have prevailed during the course of arguments are that the prosecution against the petitioner Company without impleading its Directors or office bearers, who were responsible for conduct of day to day business of the company, cannot proceed. It has also been contended that the drug in question is a proprietary medicine, as such, the tests applied for its analysis and reanalysis by the Government Analyst and CDL, Kolkata are not in accordance with the Drugs and Cosmetics Rules, 1945 (hereinafter referred to as the 'Rules of 1945') which has resulted in incorrect test results.
4. Respondent No.1/complainant has filed his reply to the petition. In his reply, the allegations made in the impugned complaint have been reiterated and it has been contended that the scope of jurisdiction of this Court under Section 482 of Cr.P.C is very limited and it cannot be exercised as a matter of course. It has also been contended that the Court should keep in mind the interest of the public health while adjudicating the instant matter and that it is open to the petitioners to raise the aforesaid contentions before the trial Magistrate during trial of the impugned complaint.
5. Heard learned counsel for the parties and perused the material on record including the trial Court record.
6. As already noted, the first contention raised by learned Senior Counsel, appearing for the petitioners, is that, without impleading Directors/office bearers responsible for conducting day to day business of the company, the proceedings against the said company, cannot sustain. It has been contended that the Company is a juristic person and it has to be represented by its office bearers or Directors while launching prosecution against it and in view of Section 34 of the Drugs and Cosmetics Act, both the company as well as the persons responsible for conducting its day to day business are the necessary parties to the proceedings. On this ground
The judgment established the principle that a company can be prosecuted without impleading its Directors or persons responsible for conducting its business, and can be sentenced to a fine for offence....
The main legal point established in the judgment is the need for specific allegations to establish vicarious liability and the importance of following mandatory provisions before launching prosecutio....
Prosecution quashed for delay in sample testing beyond 60 days without extension under Rule 45 and failure to send sample to manufacturer under Section 23(4)(iii), depriving re-analysis right post sh....
Point of Law - In fact, there is no bar to sending a sample of drug for test/analysis directly to CDL without first sending to the Government Analyst. This is clear from the bare language of the Sect....
Partners cannot be prosecuted under the Drugs and Cosmetics Act without the firm being charged as an accused, emphasizing the necessity of vicarious liability in criminal proceedings.
Under Section 34 Drugs and Cosmetics Act, company offence liability presumes against nominated responsible person and firm; other officers require specific role allegations, not mere designations.
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