IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10^TH DAY OF MARCH, 2026 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ CRIMINAL PETITION NO. 9113 OF 2018 BETWEEN:

1. M/S. MERCURY LABORATORIES LIMITED UNIT-I, 2/13-14 GORWA INDUSTRIAL ESTATE, GORWA, DISTRICT VADODARA GUJARAT - 390016 REPRESENTED BY ITS MANAGING DIRECTOR MR. RAJENDRA RAMANLAL SHAH

2. MR. RAJENDRA RAMANLAL SHAH AGED ABOUT 67 YEARS S/O. RAMANLAL SHAH, MANAGING DIRECTOR OF PETITIONER NO.1 COMPANY, "KUSURAM"

NEAR SEVASI BUS STOP AT AND PO SEVASI, DISTRICT VADODARA - 391101 GUJARAT Digitally signed by …PETITIONERS SUMA Location: (BY SRI. DESU REDDY G., ADVOCATE)

HIGH COURT OF KARNATAKA AND:

UNION OF INDIA MINISTRY OF HEALTH AND FAMILY WELFARE O/O THE CENTRAL DRUGS STANDARD CONTROL ORGANISATION, DIRECTORATE GENERAL OF HEALTH SERVICES O/O OF ASSISTANT DRUGS CONTROLLER (I), 2^ND FLOOR, O/O DRUGS CONTROLLER FOR THE STATE OF KARNATAKA PALACE ROAD, BENGALURU - 560001 REPRESENTED BY THE DRUGS INSPECTOR CDSCO, SUB-ZONE, BENGALURU - 560001 REPRESENTED BY CENTRAL GOVERNMENT PUBLIC PROSECUTOR HIGH COURT BUILDINGS, AMBEDKAR VEEDHI BENGALURU - 560001 …RESPONDENT (BY SRI. THIMANNA BHAT, CENTRAL GOVERNMENT COUNSEL) THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.167/2018 ON THE FILE OF THE LEARNED PRESIDING OFFICER, SPECIAL COURT FOR ECONOMIC OFFENCES AT BENGALURU.

THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE R. NATARAJ

ORAL ORDER

The petitioners have challenged the prosecution launched against them by the respondents in C.C No.167/2018 for an offence punishable under Section 27(d) of the Drugs and Cosmetics Act, 1940 (henceforth referred to as 'Act, 1940' for short).

2. (i) The petitioner No.1 claims that it is a Public Limited Company incorporated under the Companies Act, 1956 and is represented by accused No.2/petitioner No.2 and accused Nos.3, 4 and 6 are the Directors of the Company, while accused No.5 is an Additional Director. Accused No.7 is stated to be the authorized person responsible for the day to day activities of the company. Petitioner No.1 further claims that it is engaged in the manufacture and sale of drugs and pharmaceuticals in terms of a valid licence granted in Form No.28.

(ii) The petitioners contend that the Drugs Inspector, Central Drugs Standard Control Organization (CDSCO), drew samples of a drug, named, STAT injection (Tranexamic Acid Injection BP), Batch No.15302016, manufactured by petitioner No.1, from Dr. Ramesh, Store Manager, ESIC, Model Hospital and MC-PGIMSR, Rajajinagar, Bengaluru in Forms No.17 and 17-A for the purpose of testing. The samples were drawn in four portions. On 18.02.2016, one portion of the sample was forwarded for analysis to the Government Analyst, Central Drugs Laboratory (CDL) Chennai.

(iii) On 11.04.2016, the Drugs Inspector received the signed Test Report in Form-13 (in triplicate) from Government Analyst of the CDL, Chennai, vide report dated 23.03.2016, wherein it was stated that the drug seized was 'Not of Standard Quality (NSQ)' and that the sample did not conform to the BP standards with respect to 'Test for Sterility'. Thereafter, the Drugs Inspector issued a notice dated 15.04.2016 to Dr. Ramesh calling upon him to disclose the names and particulars of the supplier of T-Stat injection (Tranexamic Acid Injunction BP). Dr. Ramesh, in terms of his reply dated 15.04.2016, disclosed that his organization had acquired the incriminating drug from the petitioner No.1. Subsequently, on 18.04.2016, the Drugs Inspector addressed a notice to petitioner No.1 directing it to forthwith stop the distribution/sale of the drug and to withdraw supply of all drugs of the same batch. Along with the said notice, the Test Report in Form-13 and one sealed portion of the subject drug were also forwarded.

(iv) On 25.04.2016, the Drugs Inspector served an alert notice to the Drug Controller, State Drug Contro