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2023 Supreme(Mad) 3173

IN THE HIGH COURT OF JUDICATURE AT MADRAS
G.K. ILANTHIRAIYAN, J.
M/s. Adsila Organics Pvt.Ltd., Represented by its person in charge of day to day affairs Gautam Singh, Bhalgarh & Ors. - Appellants
Versus
State represented by The Drugs Inspector, Coimbatore - Respondent
CRL. O.P. Nos. 23142 & 23148 of 2019 & Crl. M.P. Nos.1 2138 & 12149 of 2019
Decided On : 20-11-2023

Advocates appeared:For the Petitioners:Abdu Kumar Rajarathinam, Senior Counsel, C. Deepak Kumar, Advocate. For the Respondent:L. Baskaran, Government Advocate.

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 prosecution. The court also emphasized the doctrine of proportionality and the necessity to restrict the citizen's freedom in light of the object sought to be achieved.

Headnote:

Drugs and Cosmetics Act - Prosecution under Sections 27(d), 28, 28A - Summary of Acts and Sections: The court discussed the liability of the petitioners under Sections 18(a)(i), 18A, 18B of the Drugs and Cosmetics Act, 1940 and their vicarious liability for the contravention of the said offences. The court also examined the validity of the test report submitted by the Central Laboratory and the compliance with mandatory provisions before launching prosecution. The court emphasized the need for the sanction authority to apply its mind and follow the guidelines issued by the Union of India. The court also considered the doctrine of proportionality and the necessity to restrict the citizen's freedom in light of the object sought to be achieved.

Fact of the Case:

The respondent lodged a complaint for the contravention of Sections 18(a)(i), 18A, 18B of the Drugs and Cosmetics Act, 1940 against the petitioners for manufacturing and selling a drug not of standard quality. The petitioners contested the validity of the test report and the prosecution's compliance with mandatory provisions.

Finding of the Court:

The court found that the petitioners were not in charge of the day-to-day affairs of the company and that the prosecution failed to establish their vicarious liability for the contravention of the said offences. The court also held that the test report submitted by the Central Laboratory was prepared after the expiry of the drug's life, causing prejudice to the petitioners. Additionally, the court found that the initiation of prosecution against the petitioners was disproportionate for the contravention committed by them.

Issues: (i) Whether the petitioners are liable to be punished under the Drugs and Cosmetics Act when the complaint itself is bereft of specific overt act as against them? (ii) Whether the petitioners are vicariously liable to be punished for contravention of Section 18(a)(i), 18A, 18B of the Act when they are not involved in the day to day affairs of the company and manufacturing of the subject drug? (iii) Whether the test report submitted by the Central Laboratory belatedly from the testing caused any prejudice to the petitioners? (iv) Whether the respondent followed the mandatory provisions before launching prosecution? (v) Whether the sanction authority applied its mind while according sanction to prosecute the petitioners? (vi) Whether the trial court had applied its mind while taking cognizance for the offences under Section 27(d), 28 and 28A of the Act as against the petitioners?

Ratio Decidendi: The court emphasized the need for specific allegations to establish vicarious liability and the importance of following mandatory provisions before launching prosecution. The court also highlighted the doctrine of proportionality and the necessity to restrict the citizen's freedom in light of the object sought to be achieved.

Final Decision: The court quashed the entire proceedings in CC.No.718 of 2017 on the file of the learned Judicial Magistrate No.II, Coimbatore as against the petitioners alone and allowed both the criminal original petitions.

JUDGMENT

(Prayer: Criminal Original petition is filed under Section 482 of Criminal Procedure Code, to call for the records in CC.No.718 of 2017 on the file of the learned Judicial Magistrate No.II, Coimbatore and to quash the proceedings. Criminal Original petition is filed under Section 482 of Criminal Procedure Code, to call for the records in CC.No.718 of 2017 on the file of the learned Judicial Magistrate No.II, Coimbatore and to quash the proceedings.)

Common Order

1. Both the criminal original petitions have been filed to quash the proceedings in CC.No.718 of 2017 on the file of the learned Judicial Magistrate No.II, Coimbatore, thereby taken cognizance for the offence punishable under Sections 27(d), 28 and 28A of the Drugs and Cosmetics Act, 1940 as against the petitioners.

2. In both the criminal original petitions, the petitioners are arrayed as A1 to A3. The respondent lodged complaint for the contravention of Sections 18(a)(i), 18A, 18B of the Drugs and Cosmetics Act, 1940 (hereinafter called as 'the Act') punishable under Sections 27(d), 28 and 28A of the Act. There are totally 13 accused. On inspection, from M/s.BVV Pharmaceuticals Coimbatore, the respondent had drawn sample of the drug 'Zipcold-DX' and sent for analysis. It was tested and reported as not of standard quality by the Government Analyst(Drugs), Drugs Testing Laboratory, Chennai. The sample does not conform to label claim with respect to the content of Dextromethorphan Hydrochloride, Chlorpheniramine Maleate and Phenylephrine Hydrochloride. Therefore, show cause notice was issued on 28.04.2017. On receipt of the same, the pharmaceuticals replied that the said drug was purchased from accused 5 to 9. Therefore, another show cause notice was sent to accused 5 to 9. They replied that the said drug was purchased from accused 10 to 13 . They were also issued show cause notice on 08.06.2017. They replied that the said drug was purchased from M/s.Singhal Traders, Delhi. Accused 1 to 3 failed to furnish any documents / records as required by the respondent. Therefore, they had contravened the provision under Section 18(a)(i) of the Act for having manufactured for sale and sold the subject drug not of standard quality which is punishable under Section 27(d) of the Act. They had also contravened the provision under Section 18B of the Act for having not furnished the records, registers and documents demanded by the complainant which is punishable under Section 28A of the Act. Hence, the complaint. On receipt of the same, the trial court had taken cognizance and issued summons to the accused.

3. Mr.Abdu Kumar Rajarathinam, the learned Senior Counsel appearing for the petitioners submitted that the trial court ought not to have taken cognizance since there are absolutely no material as against the petitioners to take cognizance for the alleged offence. The respondent failed to follow the procedures laid down under the Act and Rules while sending the samples to the Government Analyst. On objection, to confirm its report, the sample was sent to Central Drugs Laboratory. Though the samples were tested on 25.01.2018, the report was sent in Form-2 only on 04.05.2018 i.e. after the life of the drug had already expired. Therefore, the report is not proper and valid and it cannot be relied upon by the prosecution to conclude that the drug is not of standard quality.

3.1 He further submitted that the petitioners are not in charge of the day to day affairs of the company and no specific allegations made as against the petitioners with regards to their participation in the day to day affairs of the company i.e. manufacturing of the subject drug. The sample was seized and sent to analyst on 22.02.2017. The report shows that the sample of the drug was received by the Government analyst only on 03.03.2017. The respondent accorded sanction under Section 33P of the Act to prosecute the petitioners. The guidelines contemplated under Section 33P of the Act is not at all fo

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