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2023 Supreme(P&H) 3261

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
SANDEEP MOUDGIL, J.
Sunita Dhawan & Anr. – Petitioners
Versus
UOI – Respondents
CRM-M-15224 of 2023
Decided On : 11-07-2023

Advocates Appeared:
For the Petitioners:Mr. Keshav Pratap Singh, Advocate
For UOI : Ms. Gurmeet Kaur Gill, Sr.Panel Counsel

Headnote:(A) Drugs and Cosmetics Act, 1940 - Sections 32, 16, 17-A(f), 17-B(d), 18(a)(i), 18(a)(vi), 18(c), 27(b)(1), 27(c), 27(d), 36-AC - Anticipatory bail application for petitioners charged with manufacturing and distributing sub-standard drugs - Allegations include presence of methanol in products, failing to comply with quality standards - Petitioners argue lack of involvement in operations and managerial conduct. (Paras 1-8, 10, 14, 25-29)

(B) Legal responsibility of company directors - To establish culpability, complaint must specify director's role in day-to-day management - Mere title as director insufficient for liability without specific allegations of involvement. (Paras 6, 9, 21-23)

Facts of the case:
The petitioners sought anticipatory bail against allegations of producing a hand sanitizer not of standard quality, containing harmful methanol. The trial court rejected their bail application, leading to the current petition.

Findings of Court:
The court found sufficient grounds for charges against the petitioners, indicating their responsibility in the company and the severity of the allegations.

Issues: Whether the petitioners were responsible for managing the firm and liable under Drug Act, and if anticipatory bail is warranted.

Ratio Decidendi: Directors must have a specified role in operations to be held liable; however, the evidence suggested the petitioners’ direct involvement in creating substandard products.

Result: Petition for anticipatory bail dismissed.

Table of Content
1. overview of case and charges against petitioners. (Para 1 , 2 , 3)
2. defenses based on lack of direct involvement. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10)
3. prosecution's arguments on liability and malpractice. (Para 11 , 12 , 13 , 14 , 15)
4. liability under the drugs and cosmetics act. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24)
5. analysis leading to rejection of bail application. (Para 25 , 26 , 27 , 28 , 29)
6. final decision on the anticipatory bail application. (Para 30 , 31)

JUDGMENT

Sandeep Moudgil, J.

The petitioners seek grant of anticipatory bail in complaint No.1 dated 03.03.2022 (Annexure P1), under Sections 32 /16/17-A(f)/17- B(d)/18(a)(i)/ 18(a)(vi) & 18(c) of Drugs and Cosmetics Act, 1940 read with Sections 27 (b)(1), 27(c), 27(d), 36-AC of the said Act.

2. Brief facts of the case are that the complainant-Drug Inspector on the directions of Deputy Drugs Controller (I) Sub Zone Baddi vide letter No.NZ/BD-SZO/PUN/OFOR/2019-20/467-469 dated 18.6.2020 for necessary sampling of sanitizer for the testing and analysis from various area of Punjab viz. Mohali, Kharar and Zirakpur on 18.6.2020 constituted a team comprising two drugs Inspectors of CDSCO-Sub Zone Baddi i.e. the present complainant and Mr. Sanjay Aggarwal along-with Ms. Manpreet Kaur, DCO (Mohali-I) Punjab who visited the site of M/s Gupta Medical Hall, situated at SCO 32, Phase 1 Mohali on 18.6.2020 for necessary sampling to ensure the quality of the available stock of Sanitizers at the level of end user. Accordingly, the complainant had drawn the samples of the Sanitizer/Handrub from M/S Gupta Medical Hall, which was manufactured by the petitioner-firm i.e. M/s Dr.Edwin Lab Plot No.517, Industrial Area Phase IX SAS Nagar Mohali. Further as per the allegations made against the petitioners in this complaint and the documents attached therewith, the petitioners were involved in manufacturing, sale and distributing the drugs, which have been found to be not of standard quality as per the report of Government Analyst. It has also been reported that the sample does not conform to claim as per IP 2018 with respect to the "identification" and the "Assay of Isopropyl Alcohol" and "sample contains 77.43% v/v Methanol, while the label claim is Isopropyl Alcohol IP 70 w/v".

3. The complainant issued notice dated 14.8.2020 to firm M/s Gupta Medical Hall and in reply, said firm has disclosed the said batch was procured from M/s Shelom Pharma SCF-9 Phase 6 Mohali vide invoice No.346 dated 18.6.2020 and that the drug/product in question was sold out to the end user. Then, complainant issued notice to the representative of M/s Shelom Pharma and in reply, the said firm disclosed that it was procured from the petitioner-firm M/s Edwin Lab and thereafter, complainant issued notice dated 11.9.2020 to petitioner-firm M/s Dr. Edwin Lab, but the said firm did not respond or submit any reply to the notice. Thereafter, the petitioners approached the trial court seeking anticipatory bail however, the same has been rejected by the trial court vide orders dated 17.02.2023.

4. Learned counsel for the petitioners contended that the petitioners had sent a communication to State Drugs Controlling-cum-Licensing Authority on 24.07.2018 specifying that full authority was given to one Shailendra Mishra, Approved Manufacturing Chemist to take all decisions regarding production/manufacturing of medicine who even accepts his liability. Therefore, it is clear that the petitioners were not in-charge or responsible for the conduct of the business of the firm and as such they have no role in the preparation and manufacture of the drugs which is against the law laid down in Sri Sushil Goel v. State at the instance of Drugs Inspector .

5. It is averred that the petitioners had no personal knowledge in respect of alleged seizure of sample of pure handrub/sanitizer as no search/seizure of alleged samples were made from the premises of the petitioners. None of the petitioners were presen

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