Rajasthan High Court - Jaipur
Cadila Health Care Ltd. And Ors. vs The State Of Rajasthan And Ors. on 18 December, 2006
Equivalent citations: 2007CRILJ1899
Author: Prem Shanker Asopa
Bench: Prem Shanker Asopa
JUDGMENT Prem Shanker Asopa, J.
1. By this writ petition, petitioners have challenged the complaint, criminal proceedings and the order of issuance of process passed by the Chief Judicial Magistrate taking cognizance of the offences against any and/or all of the accused in criminal case No. 468/2002 pending before the Chief Judicial Magistrate, Bundi. Petitioners have further prayed that the provisions of Section 34, 34(1) and 34(1) of the Drugs and Cosmetics Act, 1940 (in short 'the Act of 1940') be declared to be unconstitutional and ultra vires Articles 14, 19 and 21 of the Constitution of India.
2. At the outset, counsel for the petitioners submitted that they do not press challenge to the vires of Section 34, 34(1) and 34(2) of the Act of 1940 and the said issue may be left open. We have recorded statement of the counsel for the petitioner and granted liberty to challenge the vires of the aforesaid provisions at appropriate stage. Therefore, we are proceeding on the basis of the provisions of the Act of 1940 as it is.
3. Briefly stated, relevant facts of the case are that petitioner No. 1 is a public limited company engaged in the manufacture, marketing, selling, distributing and research of pharmaceutical products. Petitioners Nos. 2 and 3 (accused No. 3 and 4) are Directors of the Company whereas petitioners No. 4 to 8 (accused Nos. 5, 6, 7 and 8) were power of attorney holders of the company at the relevant time. The dispute leading to filing of the complaint and the present writ petition relates to Dexona Injection 2 ml Batch No. 8358 indicating that "the sample is of standard quality...", the manufacturing date of which was 09/98 and expiry date being 02/2000. On 27-8-1998, M/s. Sriram Medicals, Bundi, accused No. 13, purchased Dexona Inj. 2 ml from M/s. Sind Medical Stores (Agencies). On 31-12-1998, the Drug Inspector, Bundi carried out inspection of the shop of M/s. Sriram Medical, Bundi (accused No. 13 in the complaint) in presence of its partner Kunj Behari Billya (accused No. 14 in the complaint) and purchased sample of Injection Dexona 2 ml Batch No. 8358. The sample was divided into four parts and sealed. Kunj Behari Billya, accused No. 14, partner of M/s. Sriram Medical was given one sample. On 31-12-1998, the Drug Inspector sent one sample to the Government Analyst, Central Indian Pharmacopoeia Laboratory, Ghaziabad by registered post. On 20-1-99 the sample was received by the Government Analyst and the report of which was sent on 24-6-1999 with the remarks "The sample does not conform to the claim in respect of assay", as defined in the Act and rules therein. On 9-7-99, a copy of the report and portion of the sample was given by the Drug Inspector to Kunj Behari Billya (accused No. 14) partner of M/s. Sriram Medicals (accused No. 13) who informed that the drug was purchased from M/s. Sind Medical Stores (Agencies), Kota (accused No. 11). M/s. Sind Medical Stores (Agencies) (accused No 11) was also supplied one portion of the sample and report of Government Analyst, under Section 18-A of the Act of 1940 but no portion of the sample was supplied to the manufacturer company or Director or the power of attorney holders of the manufacturer company.
4. In pursuance of letter dated 12-7-99 written by the Drug Inspector to the Assistant Controller of Drugs, Kota, inspection of M/s. Sind Medical Stores (Agencies) accused No. 11 was carried out by the complaint with Devendra Kumar Garg, Assistant Controller of Drugs, Kota and gave letter dated 12-7-1999 along with the copy of report and sealed sample portion to accused No. 12 Harish Lalwani, partner of M/s. Sind Medical Stores (Agencies). It is stated in the petition that the said sealed sample portion was given to accused No. 12 as per the requirement of Section 18A of the Act of 1940 being not the manufacturer of the drug or cosmetic and further to disclose to the Inspector name, address and other particulars of the person from whom he acquired the drug or the cosmetic. Up to June, 2002, correspondence had taken place between the Drug Inspector, power of attorney holders of the petitioner company, drug authorities of Gujarat and Rajasthan. Ultimately, the complaint was filed on 5-7-2002 after expiry of shelf life of Injection Dexona Batch No. 8358 which expired in February, 2000. It is further stated in the writ petition that the allegations made in the complaint do not in law constitute or spell out any offence against the petitioners. Petitioners have further submitted that there are no allegations and averments that petitioners No. 2 to 7 were 'in charge of and 'responsible to the company for the conduct of business of the company'. Merely being Director of the company and power of attorney holder of the company, they will not be covered by the said Act of 1940.
5. It is further stated that filing of the complaint on 5-7-2002 i.e. after 2 years and half of the expiry of shelf life of the drug i.e. February, 2000 deprived the petitioners to apply for re-testing of the drug by the Central Drug Laboratory as given in Section 25(4) of the Act of 1940.
6. Respondents have filed reply to the writ petition mentioning herein that Directors/ Officers of the company have been implicated as per the information (Annexure R-2) supplied by the power of attorney holder of the company and the facts regarding "in charge of and "responsible for the conduct of business of the company" have been detailed out in Para 18(a) and (b) of the complaint. Although there is no requirement of law under Section 25(3) of the Act of 1940-to send a copy of the same to the petitioner company or its Directors but still copy was given to them and there was a lot of correspondence on the issue of testing the sample by the Central Drugs Laboratory before filing the complaint. It is also stated in the reply that there are sufficient allegations and averments with regard to the petitioners being 'in charge of and 'responsible for the conduct of business of the company' which manufactured the drug which does not conform to the claim in respect of Assay and standard set forth under Second Schedule appended to the Act of 1940, and the complaint clearly constitute offence under the Act of 1940 and therefore, challenge to the complaint is not maintainable. As regards averments with regard to Section 25(4) it is stated by the respondents that Section 25(3) and (4) have to be read together and if read together, it is clear that the opportunity available under Section 25(3) was not availed of by them and therefore, Section 25(4) will not apply. It is also stated in the reply that the order of cognizance is subject to revision but no such revision has been filed. Therefore, the writ petition is liable to be dismissed on the ground of availability of alternative remedy.
7. Counsel for the petitioners urged two grounds for quashing of the complaint namely-
(i) As per Section 34 of the Act of 1940 it is the mandatory requirement that complaint must necessarily aver that the accused was 'in charge of and 'responsible to the company for the conduct of business of the company' but no averment in this behalf has been made. In support of the first contention, following judgments have been cited:
(1) Municipal Corporation of Delhi v. 'Ram Kishan Rohtagi and Ors.
(2) Bharat Insecticides Ltd. and Ors. v. State of Rajasthan and Ors. 1996 (1) Raj LR 349 (3) Katta Sujatha (Smt) v. Fertilizers and Chemicals Travancore Ltd. and Anr.
(4) K. P. G. Nair v. Jindal Menthol India Ltd. 2000 JT (Suppl) (SC) 519 (5) Monaben Kelanbhai Shah and Anr. v. State of Gujarat and Ors.
(6) Drugs Inspector v. Dr. B. K. Krishnalah and Anr. .
(ii) Section 25(4) gave the accused right to apply to the Court to produce evidence in controversion of the Government Analyst report. The Court may, by its own motion or in its discretion on application cause the sample of the drug to be sent for testing to the Director, Central Drugs Laboratory and such report shall be conclusive evidence of the facts stated therein. The said right of applying has been lost on account of the fact that shelf life of the drug had expired in February, 2000 much before filing the complaint on 5-7-2002. In support of the second contention, following decisions have been referred:
(1) Bharat Insecticides Ltd. and Ors. v. State of Rajasthan and Ors. 1996 (1) Raj LR 349 (2) Amery Pharmaceuticals and Anr. v. State of Rajasthan (2001) 4 SCC 3824 : 2001 Cri LJ 1686 (3) State of Punjab v. National Organic Chemical Industries Ltd.
(4) Calcutta Municipal Corporation v. Pawan Kumar Saraf and Anr.
(5) State of Haryana v. Unique Farmaid P. Ltd. and Ors. 2000 Cri LJ 2962 (SC) (6) Manager, Medico Pharmaceutical Processors v. State of H. P. and Ors. 1983 Cri LJ 67 (HP) (7) Gupta Chemicals Pvt. Ltd. and Ors. v. State of Rajasthan and anr. Criminal No. 591/2002 reported in 2002 (4) Crimes 33(SC).
8. First contention of the petitioners is that the allegations against petitioners Nos. 2 to 8 that they were 'in charge of and 'responsible to the company for the conduct of the business of the company' are lacking in the complaint and that vague reference of the responsibilities is not the sufficient compliance of the aforesaid mandatory provisions of Section 34(1) of the Act of 1940.
9. It has also been submitted by the petitioners that petitioner No. 1 is a public limited company and petitioners No. 2 and 3 are its Directors whereas petitioners No. 5, 6, 7 and 8 are the power of attorney holders but merely referring their names in the complaint without specifying their responsibility for stock, sale and distribution of alleged mis-branded, adulterated and spurious drags in substance fulfil the requirement of ingredients of Section 34(1) of the Act of 1940.
10. Per contra, submission of the learned Addl. A. G. is that the officers/directors of the Company have been impleaded as per the information supplied by power of attorney holder of the company through Annexure-R/2. As regards second contention, submission of the learned Addl. AG is that Sec, 25(3) and (4) of the Act of 1940 have to be read together. Sufficient opportunity was available to the petitioner company, its directors and officers to get the sample re-tested but they have not availed the same arid therefore, they are not entitled to submit that they have lost their right to get it re-tested by the Central Drug Laboratory, as required under See. 25. In support of the aforesaid contention, Addl, AG cited the following two judgments:
i) Drugs Inspector v. Dr. S.K. Krishnalah and Anr.
(ii) Manager, Medico Pharmaceutical Processors v. State of H.P. and Ors. 1983 Cri LJ 67 (HP).
11. We have gone through the record of the writ petition and further considered rival submissions of the parties.
12. It would be worthwhile to quote relevant provisions of Section 18A, 23(3), 25(2), 25(3) and 25(4), 32A and 34 of the Act of 1940 which read as under:
18-A. Disclosure of the name of the manufacturer, etc. Every person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof, shall, if so required, disclose to the Inspector the name, address and other particulars of the person from whom he acquired the drug or cosmetic.
23. Procedure of Inspectors.-
(1) and (2)....
(3) Where an Inspector takes any sample of a drug or cosmetic for the purpose of test or analysis, he shall intimate such purpose in writing in the prescribed form to the person from whom he takes it and, in the presence of such person unless he wilfully absent himself, shall divide the Sample into four portions and effectively seal and suitably mark the same and permit such person to add his own seal and mark to all or any of the portions so sealed and marked:
Provided that where the sample is taken from premises whereon the drug or cosmetic is being manufactured, it shall be necessary to divide the sample into three portions only:
25. Reports of Government Analysts.-
(1)...
(2) The Inspector on receipt thereof shall deliver one copy of the report to the person from whom the sample was taken and an-other copy to the person, if any, whose name, address and other particulars have been disclosed under Section 18A and shall retain the third copy for use in any prosecution in respect of the sample.
(3) Any document purporting to be a re-port signed by a Government Analyst under this Chapter shall be evidence of the facts stated therein, and such evidence shall be conclusive unless the person from whom the sample was taken or the person whose name, address and other particulars have been disclosed under Section 18A has within twenty-eight days of the receipt of a copy of the report, notified in writing the Inspector or the Court before which any proceedings in respect of the sample are pending that he Intends to adduce evidence in contravention of the report. (Emphasis supplied) (4) Unless the sample has already been tested or analysed in the Central Drugs Laboratory, where a person has under Sub-section (3) notified his intention of adducing evidence in controversion of a Government Analyst's report, the court may of its own motion or in its discretion at the request either of the complainant or the accused; cause the sample of the drug or cosmetic produced before the Magistrate under Sub-section (4) of Section 23 to be sent for test or analysis to the said Laboratory, which shall make the test or analysis and report in writing signed by or under the authority of, the Director of the Central Drugs Laboratory the result thereof, and such report shall be conclusive evidence of the facts stated therein.
32A. Power of Court to implead the manufacturer, etc.- Where, at any time during the trial of any offence under this chapter alleged to have been committed by any person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof the Court is satisfied, on the evidence adduced before it, that such manufacturer or agent is also concerned in that offence, then, the Court may notwithstanding anything contained in Sub-sections (1), (2) and (3) of Section 319 of the Code of Criminal Procedure. 1973 (2 of 1974). proceed against him as though a prosecution had been instituted against him under Section 32.
34. Offences by companies,- (1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act if he proves that the offence was exercised all due diligence to prevent the com-mission of such offence.
(2) Notwithstanding anything contained in Sub-section (1), where an offence under this Act has been committed by a company and it is provided that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.- For the purposes of this section -
(a) "company" means a body corporate, and includes a firm or other association of individuals; and
(b) "director" in relation to a firm means a partner in the firm.
13. In Municipal Corporation of Delhi v. Ram Kishan Rohtagi and Ors. wherein it has been held that the test of taking the allegations the complaint is that they should be taken as they are without adding or subtracting anything and if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under Section 482, Cr. P. C. Para 10 of the aforesaid decision reads as under:
10. It is, therefore, manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then the High Court will be Justified in quashing the proceedings in exercise of its power under Section 482 of the present Code.
14. In Municipal Corporation of Delhi v. Ram Kishan Rohtagi and Ors. (supra) wherein it has been held that in ease on the face of it, there is no clear allegation against the Man-aging Directors that they are responsible to the company for the conduct of Business of the company, the proceedings against them are liable to be quashed.
15. The decision in Bharat Insecticides Ltd. and Ors. v. State of Rajasthan and Ors. 1996 (1) Raj LR 341 is on both the point but here we are referring the same only on the point of allegations made in the complaint and will further refer the same at appropriate place on the issue of right to apply for getting the sample re-tested in the Central Drug Laboratory. After considering and referring various Judgments of the Supreme Court and High Courts, in Para 21 and 31 of the Judgment, it has been held as under:
21. The burden to prove the charge of an offence always lies upon the prosecution unless under some provision of law it is made for the accused to satisfy the Court that the offence was committed without his knowledge or with his consent or connivance; or it was not attributable to any neglect on his part.
In companies, there could be directors who are not in charge of and responsible to the Company for the conduct of the business of the company. There can be directors who merely lay with the day-to-day working of the company. Consequently, the mere fact that the accused person happens to be director of the company shall not make him criminally liable for the offence committed by the company unless the other ingredients are established which make him criminally liable. To put it differently, no director of the company can be prosecuted and convicted for the offence under Section 29 of the Act unless it is proved that the sub-standard or misbranded insecticide was manufactured or sold with his consent or connivance or was attributable to any neglect on his part or it is proved that he was a person incharge of or responsible to the company for the conduct of the business of the company.
31. The argument made by the learned Public Prosecutor that the proviso to Sub-section (1) of Section 33 of the Act places burden on the accused to prove that the offence was committed without his knowledge or that he exercised all due diligence to prevent commission of such offence, is fallacious as the proviso applies only when the requisite condition mentioned in Sub-section (1) is established. The requisite condition is that as directors of the company they were in charge of or were responsible for the conduct of business of the company during the relevant time. The responsibility of the accused to prove that they had taken the steps to prevent the contravention or that the offence was committed without their knowledge would arise only if the prosecution first establishes that the conditions mentioned in Sub-section (1) exist in the case.
16. In Katta Sujatah (Smt) v. Fertilizers and Chemicals Travancore Ltd. and Anr. in para 4 it has been held that in case there is no allegation in the complaint that the said partner was in charge of and responsible to the company for conduct of business of the company no case is made out against the said partner and the complaint was found to be not maintainable.
Para 4 of the judgment reads as under:
The trial Court having proceeded with the matter, a petition was filed under Section 182, C.P.C. for quashing the complaint. The said petition having been dismissed this appeal is filed by special leave. It is necessary to state that the special leave petition filed by others has been dismissed by our order dated 15-2 2002. In contention urged before the High Court was that all of them are not responsible for the conduct of the business of the firm and only T. Satyanarana, 3rd accused was in charge of the firm, first accused. Whether it is so or not, is not for us to examine at this stage of the matter. However, one thing is clear that the appellant was in no way involved in any of the transactions referred to in the complaint and it was not stated that she was in charge of the business and was responsible for the conduct of the business of the firm in terms of Section 141 of the Act nor was there any other allegation made against the appellant that she had connived with any other partner in the matter of issue of cheque. In these circumstances the High Court ought to have examined the matter from this angle but on the other hand, the High Court merely stated that all the accused are not only in charge but are responsible for the conduct of the business of the firm. Indeed the same question has come up before this Court for examination in State of Karnataka v. Pratap Chand wherein the question as who is a "person in charge" of the business of a firm in the context of Section 18-A, Drugs and Cosmetics Act, 1940 was considered by this Court. This Court explained the meaning by observing that the term "person in charge" must mean that the person should be in overall control of the day-to-day business of the company or firm. The person should (sic may) be a party to the policy being followed by a company and yet not be in charge of the business of the company or may be in charge of but not in overall charge or may be in charge of only some part of the business.
17. In K. P. G. Nair v. Jindal Menthol India Ltd. 2000 JT (Suppl) (SC) 519 it has been held that a person other than the company could be proceeded against under those provisions only if that person was 'in charge of and 'responsible to the company for conduct of business of the company'. Supreme Court has further held that the words mentioned in Section 14 Negotiable Instruments Act are not the magic words which have to be incorporated in the complaint. It cannot also be disputed that substance of the allegation read as a whole should answer and fulfil requirement of the ingredients of said provision. Paras 8 and 9 of the judgment read as under:
8. From a perusal of Section 141, it is evident that in a case where a company committed offence under Section 138, then not only the Company but also every person who at the time when the offence was committed, was in charge of and was responsible to the Company for the conduct of the business of the Company shall be deemed to be guilty of the offence and liable to be proceeded against and punished accordingly. It follows that a person other than the Company can be proceeded against under those provisions, only if that person was in charge of and was responsible to the Company for the conduct of its business.
9. It is true, as submitted by Mr. Arora that the words of Section 141(1) need not be incorporated in a complaint as magic words but it cannot also be disputed that substance of the allegations read as a whole should answer and fulfill the requirements of the ingredients of the said provision (for being proceeded against for an offence which he is alleged to have committed) on the above premise, it is clear that the allegations made in the complaint do not, either in express words or with reference to the allegations contained therein, make out a case that at the time of commission of the offence, the appellant was in charge of and was responsible to the Company for the conduct of its business.
18. In Monaben Ketanbhai Shah and Anr. v. State of Gujarat and Ors. it has been held that it is the primary responsibility of the complainant to make necessary averments in the complaint and establish the fact that when the offence was committed accused persons were 'in charge of and 'responsible to the company for conduct of the company'. Paras 6, 7 and 8 of the decision read as under:
6. From the above, it is evident that in the complaint there are no averments against the appellants except stating in the title that they are partners of the firm. Learned Counsel for the respondent complainants contended that a copy of the partnership deed was also filed which would show that the appellants were active in the business. No such document was filed with the complaint or made part thereof. The filing of the partnership deed later is of no consequence for determining the point in issue. Section 141 does not make all partners liable for the offence. The criminal liability has been fastened on those, who, at the time of the commission of the offence, were in charge of an were responsible to the firm for the conduct of the business of the firm. These may be sleeping partners who are not required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The obligation of the appellants to prove that at the time the offence was committed they were not in charge of and were not responsible to the firm for the conduct of the business of the firm, would arise only when first the complainant makes necessary averments in the complaint and establishes that fact. The present case is of total absence of requisite averments in the complaint.
7. In K. P. G. Nair v. Jindal Menthol India Ltd. 2000 JT (Supp) (SC) 519, this Court held that the substance of allegations read as a whole should answer and fulfil the requirements of the ingredients of Section 141. The criminal complaint was quashed in Katta Sujatha v. Fertilizers and Chemicals Travancore Ltd. , since in the complaint it was not stated that the accused was in charge of the business and was responsible for the conduct of the business of the firm nor was there any other allegation that she had connived with any other partner in the matter of issue of cheque.
8. Under the aforesaid circumstances, we set aside the impugned judgment of the High Court and restore the order of the Magistrate discharging the appellants. The appeal is allowed accordingly.
19. Mr. R. S. Rathore, Addl. AG cited judgment of the Supreme Court in Drugs Inspector v. Dr. B.K. Krishanaiah and Anr. wherein it has been held that where the Magistrate found that the allegations made in the complaint did make out a prima facie offence and that all the accused persons were responsible for carrying on the business of the partnership firm prima facie committed the offence, the High Court erred in quashing the proceedings. In the said case, partnership deed was considered by the Magistrate and on the basis of which, process was issued but effect of the complaint was not considered. In para 6, it has been held as under:
6. The only question for consideration for the High Court in this case was whether the accused or any of them were liable. In paragraph 17 of the complaint petition the complainant quoted the provisions of the Act. In addition, he cited the names of witnesses, submitted a list of documents including a copy of the partnership deed at Item 13 of the list of documents. The learned Magistrate perused the partnership deed and prima facie found that the respondents as well as the deceased accused were liable for the offence and proceeded for trial. The learned High Court committed an error in holding that there was no allegation that the respondents were not (sic) responsible for the management and conduct of the firm. The extent of their liability would be established by evidence during trial. In our opinion the judgment of the learned High Court is erroneous and is liable to be set aside.
20. We have considered the submissions and further gone through the judgments.
21. The crucial test which has been laid down by the Hon'ble Supreme Court on the issue of Director being 'in charge of and 'responsible to the company for the conduct of business of the company' as required under Section 34 of the Act is that the Director is concerned with the day-to-day working of the Company, or in other words, for over all control of the day-to-day business of the company or firm which excludes Directors connected with policy of the Company. The Director may not be in charge of business of the company or may be in charge of business of the company but not over all in charge or may be in charge of only some part of business and further test as regards averments/allegations made in the complaint, the Supreme Court has laid down that words mentioned in the Section are not the magic words but the substance of the allegations be read as a whole.
22. We have considered the entire complaint but there are no averments in substance that the petitioners are 'in charge of and 'responsible to the company for the conduct of business of the company' for day to day business or having over all control over the business of the company which makes them vicariously liable. Therefore, the writ petition is liable to succeed on the first point but second contention is also equally important therefore, we are dealing with the same.
23. As regards second contention of statutory right of the company and its Director (manufacturer) to apply to the Court for re-testing of the sample from the Central Drugs Laboratory in controversion of Government Analyst report which has been lost on account of filing of the complaint much after expiry of the shelf life of the drug is concerned, we would like to refer to the following Judgments cited by both the sides.
24. This Court in Bharat Insecticides Ltd. and Ors. v. State of Rajasthan and Ors. 1996 (1) Raj LR 349 (supra) has also considered the effect of filing of the complaint after expiry of shelf life period of the insecticide and its effect on the accused company and its Director who had no occasion to request the Court to get another sample tested in Central Insecticides Laboratory. The Court held that they have been deprived of their valuable right under Section 24(4) of the Insecticides Act, 1968 and ultimately, criminal proceeding was quashed on this ground. Relevant paras 13, 15 and 17 of this Judgment read as follows:
13. Sub-section (2) of Section 24 enjoins an obligation on the Insecticide Inspector to deliver one copy of the report to the person from whom the sample is taken by him and Sub-section (3) also states that the report of Insecticide Analyst shall become conclusive unless the person from whom the sample was taken within 28 days of the receipt of a copy of the report, notified in writing to Insecticide Inspector or the Court his intention to adduce evidence in contravention of the report. The above provisions, no doubt, do not make it obligatory for the Insecticide Inspector to deliver a copy of the Analyst's report to all the accused against whom it is sought to be used, but Sub-section (4) provides an opportunity to a person accused in the case to have the sample tested or analysed in the CIL. The word 'accused' used in Sub-section (1) is wide and comprehensive and would include all persons against whom cognizance is taken and process is issued by the concerned Magistrate. Thus, other persons, other than the person from whom the sample has been taken may also be the accused, for example, the manufacturer, the distributors etc. as in the present case. The intention of the Legislature cannot be to provide the benefit of re-testing or re-analysing by the CIL only to the person from whom the sample is taken and to deprive others of such benefit. To give such interpretation would be discriminatory and violative of the fundamental principles of natural justice also. The report of Insecticide Analyst is admissible in evidence against all the accused as the said report is sought to be used against every accused. Hence, interpretation of Sub-sections (2), (3) and (4) of Section 24 should be given in such manner which would lead to Justice. In order to enable every accused to challenge the correctness and authenticity of report of Insecticide Analyst it is necessary that Analyst's report should be made available to all of them. It is, therefore, implicit in Section 24(2) of the Act, having regard to the intendment of the Legislature expressed in Sub-section (4), that a copy of the report of the Insecticide Analyst should be delivered to or served upon all the accused against whom it is sought to be used. It may be however, observed that failure to furnish a copy of the report to all the accused persons would not by itself vitiate the prosecution unless prejudice is occasioned to the accused persons for not supplying them a copy of the Analyst's report.
15. The above interpretation to Section 24 would be harmonious and in consonance to the principles of natural justice. Applying the aforesaid guidelines in the instant case, it transpires that the Company M/s. Bharat Insecticides Ltd. and its Directors, who are accused in the case, were not delivered a copy of Insecticide Analyst's report, even then in his reply dated 11-11 -93 to the show cause notice dated 27-10-93 of the Insecticide Inspector the Manager (Quality Control) of the Company had requested the Insecticide Inspector to get the second sample of the insecticide re-tested in the CIL, but no steps were taken by him in this direction. The complaint in the case was filed in Court on 18-10-94 i.e. after the expiry of shelf-life period of the insecticide. The cognizance as taken by the Chief Judicial Magistrate on 18-10-94 and process was issued on the same day, with the result the company and its Directors had no occasion to make a request to the Court to get another sample tested in the CIL and as such, they have been deprived of their valuable right under Sub-section (4) of Section 24 of the Act. The argument of the learned Public Prosecutor that even after the expiry of shelf-life period of the insecticide, another sample could have been sent to the CIL for analysis cannot be accepted. It is not disputed that pesticide in the instant case was effective for a maximum period of one year from the date of its manufacture. It was effective up to April, 1994 while the complaint itself was filed on 18th October, 1994.
17. In S. K. Ahuja v. State of Rajasthan and Ors. (1990) 1 Raj LR 504, U.S. Madan v. State (1991 Cr LR (Raj) 799), Artee Minerals and Anr. v. State and Anr. 1992 Cri LR (Raj) 59; Agrawal Khad Bhandar v. State of Rajasthan 1993 Cr LR (Raj) 510; Hindustan Ciba Geigy Ltd. and Ors. v. State of Rajasthan and Ors. 1994 (2) Raj LR 514 : 1995 Cri LJ 618; this Court has quashed criminal proceedings under Section 29 of the Act on the ground of delay in launching prosecution thereby depriving valuable right to the accused to get another sample re-analysed in the CIL. Similar view has been taken by the Punjab and Haryana High Court in Mr. H. Lang v. State of Punjab and Ors. 1986 (1) PLR Vol. 89 p. 263. The crux of these judgments is that if the conduct of the prosecution has resulted in denial to the accused of an opportunity to controvert correctness of the report of the Insecticide Analyst on which the prosecution is based, the prosecution stands vitiated and the proceedings can be quashed by this Court in exercise of power under Section 482, Cr. P. C. to prevent abuse of the process of the Court and also to secure the ends of justice.
25. In Amery Pharmaceuticals and Anr. v. State of Rajasthan Supreme Court has considered Sees. 18A and 23 of the Act of 1940 and concluded in para 16 that in case sample of the drug has been taken from the retailer, then portion of the sample would be given to the retailer and also to the distributor whose name is disclosed under Section 18A of the Act of 1940 and there is no duty to give the sample to the manufacturer. In this case also, no portion of the sample was given to the Company (manufacturer) or its Director or power of attorney holder and further the valuable right of the manufacturer to request the Court for re-testing of the sample by the Central Drugs Laboratory which cannot be denied when other persons have been provided the sample. Sections 18, 25 and 32-A were thoroughly considered in paras 14, 15, 16, 17, 21, 22, 23,24 and in para 25 it has been concluded that a manufacturer can also avail himself of the remedy indicated in Sub-section (4) of Section 25 of the Act by requesting the Court to send other portion of the sample remaining in Court to be tested in the Central Drugs Laboratory, with further observation that no Court is under compulsion to cause the said sample to be so tested if the request is made after long delay. Paras 14, 15, 16, 17, 21, 22, 23, 24 and 25 of the aforesaid decision read as under:
14. In this context it is necessary to extract Section 18-A of the Act also which is as under:
18-A. Disclosure of the name of the manufacturer, etc. Every person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof, shall, if so required, disclose to the Inspector the name, address and other particulars of the person from whom he acquired the drug or cosmetic.
15. Thus, the obligation of the Inspector is to give one portion of the sample to the person whose name, etc. have been disclosed as the person from whom the vendor acquired the drug. The requirement of the provision would stand complied with when the Inspector gives one portion of the sample to the person from whom he took the sample, and forward the second portion to the Government Analyst and the third portion to the Court (before which the prosecution is pending) and the fourth portion to the person whose name and address, etc. were disclosed by the vendor. This position is made very clear as can be seen from the first proviso to Sub-section (3) of Section 23 of the Act. That proviso says that "where the sample is taken from premises whereon the drug or cosmetic is being manufactured, it shall be necessary to divide the sample into three portions only" (Emphasis supplied). In such case one portion shall be given to the manufacturer and the remaining two portions are to be dealt with in accordance with Clause (i) and Clause (ii) of Sub-section (4), i.e. one portion to be sent to the Government Analyst and the second to be produced before the Court. In such a case, there is no utility for Clause (iii) of the sub-section. This aspect of non-utility of the third clause in such a situation is amplified by the words employed in that clause itself, (i.e. "where taken"). In other words, where it is not taken, that clause has no utility.
16. Thus, in a case where the drug or medicine has passed from the manufacturer to a wholesaler (a distributor) and then to a retailer, the obligation of the Inspector (who takes the sample from a retailer) as for giving portions of the sample would end up by giving it to the retailer and also to the distributor (from whom the retailer bought the drug).
17. It was contended that since a manufacturer is not entitled to get a copy of the report of the Government Analyst of right (when the sample was taken from a retailer) the manufacturer would be disabled from challenging the correctness of the facts stated in the report and such deprivation would visit him with hard consequences as the facts stated in the report would become conclusive evidence against him. Learned Counsel submitted that such a provision which disables an accused from disproving the correctness of the facts contained in a document which would nail him down, is unfair and unreasonable besides being oppressive. This amounts to violation of the fundamental right enshrined in Article 21 of the Constitution, according to the learned Counsel.
"21. Section 25(3) of the Act says that any document purporting to be a report signed by a Government Analyst shall be evidence of the fact stated therein "and such evidence shall be conclusive". The only exception provided in the sub-section is, if the person from whom the sample was taken or the person whose name, etc. has been disclosed under Section 18-A, gives notice in writing that he intends to adduce evidence in controversion of the report he has the liberty to disprove it. Of course there is a time limit fixed for giving such notice. According to the provision, such notice shall be given within 28 days of receipt of a copy of the report.
22. When a manufacturer in a given situation is not entitled to get a copy of the report of the Government Analyst as of right, as happened in this case, what can he do for the purpose of challenging the report? There is yet another situation when a manufacturer can be arraigned in the case. It is envisaged in Section 32-A of the Act. It reads thus:
32-A. Power of Court to implead the manufacturer etc.- Where at any time during the trial of any offence under this chapter alleged to have been committed by any person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof, the Court is satisfied, on the evidence adduced before it, that such manufacturer or agent is also concerned in that offence, then, the Court may, notwithstanding anything contained in Sub-sections (1), (2) and (3) of Section 319 of the Code of Criminal Procedure, 1973 proceed against him as though a prosecution had been instituted against him under Section 32.
23. What would such a manufacturer, who is impleaded as per the above provision do when he too is not entitled to be supplied with either a portion of the sample or even a copy of the report of the Government Analyst?
24. The extent of the implication of the words "such evidence shall be conclusive" as employed in Section 25(3) of the Act has to be understood now. Section 4 of the Evidence Act says that when one fact is declared by the said Act to be conclusive proof of another "the Court shall, on proof of one fact, regard the other as proved, and shall not allow evidence to be given for the purpose of disproving it." The expression "conclusive evidence" employed in Section 25(3) of the Act cannot have a different implication as the legislative intention cannot be different. Such an import as for the word "conclusive" in the interpretation of statutory provisions was now come to stay. If so, what would happen if the manufacturer is disabled from challenging the facts contained in the document which would visit him with drastic consequences when he is arraigned in a trial? Any legal provision which snarls at an indicated person without affording any remedy to him to disprove an item of evidence which could nail him down cannot be approved as consistent with the philosophy enshrined in Article 21 of the Constitution. The first effort which Courts should embark upon in such a situation is to use the power of interpretation to dilute it to make the provision amenable to Article 21.
25. In our view the Court should lean to an interpretation as would avert the consequences of depriving an accused of any remedy against such evidence. He must have the right to disprove or controvert the facts stated in such a document at least at the first tier. It is possible to interpret the provisions in such a way as to make a remedy available to him. When so interpreted the position is thus : the conclusiveness meant in Section 25(3) of the Act need be read in juxtaposition with the persons referred to in the sub-section. In other words, if any of the persons who receives a copy of the report of the Government Analyst fails to notify his intention to adduce evidence in controversion of the facts staled in the report within a period of 28 days of the receipt of the report, then such report of the Government Analyst could become conclusive evidence regarding the facts stated therein as against such persons. But as for an accused, like the manufacturer in the present case, who is not entitled to be supplied with a copy of the report of the Government Analyst, he must have the liberty to challenge the correctness of the facts stated in the report by resorting to any other mode by which such facts can be disproved. He can also avail himself of the remedy indicated in Sub-section (4) of Section 25 of the Act by requesting the Court to send the other portion of the sample remaining in the Court to be tested at the Central Drugs Laboratory. Of course, no Court is under a compulsion to cause the said sample to be so tested if the request is made after a long delay. It is for that purpose that a discretion has been conferred on the Court to decide whether such sample should be sent to the Central Drugs Laboratory on the strength of such request. However, once the sample is tested at the Central Drugs Laboratory and a report as envisaged in Section 25(4) of the Act is produced in the Court the conclusiveness mentioned in that sub-section would become incontrovertible.
26. In State of Punjab v. National Organic Chemical Industries Ltd. Supreme Court has laid emphasis on the utmost despatch so that the accused may opt to avail the statutory defence. In the said case also, the sample was not provided to the manufacturer whose factory premises were visited by the respondents and the sample was taken.
27. In Calcutta Municipal Corporation v. Pawan Kumar Saraf and Anr. conclusive proof of the re-testing report of the laboratory has been discussed with reference to Section 4 of the Evidence Act. Paras 11 to 15 of the aforesaid decision read as under:
11. In the above context, the proviso to Sub-section (5) can also be looked at which deals with the evidentiary value of such certificate. The material portion of the proviso is quoted below:
Provided that any document purporting to be a certificate signed by the Director of the Central Food Laboratory... shall be final and conclusive evidence of the facts stated therein.
12. If a fact is declared by a statute as final and conclusive, its impact is crucial because no party can then give evidence for the purpose of disproving that fact. This is the import of Section 4 of the Evidence Act, 1872 which defines three kinds of presumptions among which the last is "conclusive proof:
When one fact is declared by this Act to be conclusive proof of another, the Court shall, on proof of the one fact, regard the other as proved, and shall not allow evidence to be given for the purpose of disproving it.
13. Thus the legal impact of a certificate of the Director of the Central Food Laboratory is threefold. It annuls or replaces the report of the Public Analyst, it gains finality regarding the quality and standard of the food article involved in the case and it becomes irrefutable so far as the facts stated therein are concerned.
14. If the argument of the learned Counsel for the Corporation is upheld and the certificate of the Director of the Central Food Laboratory is sidelined as pleaded by him, the consequence is that there will not be anything surviving to show the quality or standard of the food articles involved in the case. Even that apart, the accused will be deprived of his statutory right to disprove the report of the Public analyst.
15. The aforesaid position has been delineated by this Court in two decisions. In Municipal Corpn. of Delhi v. Ghisa Ram 1967 Cri LJ 939 the Director of the Central Food Laboratory reported to the Court that the part of the sample sent to him became highly decomposed and hence no analysis was possible. The accused was thereupon acquitted and the acquittal was challenged on the contention that in the absence of a certificate of the Director of the Central Food Laboratory, for any reason whatsoever, the report of the Public Analyst will stand and the Court can act on it. This Court has observed that the right of the accused to have the sample analysed by the Director of the Central Food Laboratory is a valuable one and such right has been given "in order that, for his satisfaction and proper defence, he should be able to have the sample... analysed by a greater expert whose certificate is to be accepted by Court as conclusive evidence.
28. In State of Haryana v. Unique Farmaid P. Ltd., 2000 Cri LJ 2962 the Supreme Court has held that in case shelf life of the sample had already expired by the time accused were asked to appear in the Court to stand their trial. The accused will be deprived of valuable right to apply for getting the sample re-tested. Paras 11 and 12 of the judgment read as follows:
11. Sub-section (1) of Section 30 which appears to be relevant only prescribes in effect that ignorance would be no defence but that does not mean that if there are contraventions of other mandatory provisions of the Act, the accused have no remedy. Procedure for testing the sample is prescribed and if it is contravened to the prejudice of the accused, he certainly has right to seek dismissal of the complaint. There cannot be two opinions about that. Then in order to safeguard the right of the accused to have the sample tested from Central Insecticides Laboratory, it is incumbent on the prosecution to file the complaint expeditiously to that the right to the accused Is not lost. In the present case, by the time the respondents were asked to appear before the Court, expiry date of the insecticide was already over and sending of sample to the Central Insecticides Laboratory at that late stage would be of no consequence. This issue is no longer res integra. In State of Punjab v. National Organic Chemical Industries Ltd., this Court in somewhat similar circumstances said that the procedure laid down under Section 24 of the Act deprived the accused to have sample tested by the Central Insecticides Laboratory and adduce evidence of the report so given in his defence. This Court stressed the need to lodge the complaint with utmost dispatch so that the accused may opt to avail the statutory defence. The Court held that the accused) had been deprived of a valuable right statutorily available to him. On this view of the matter, the Court did not allow the criminal complaint to proceed against the accused. We have cases under the Drugs and Cosmetics Act, 1940 and the Prevention of Food Adulteration Act, 1954 involving the same question. In this connection reference be made to decision of this Court in State of Haryana v. Brij Lal Mittal under the Drugs and Cosmetics Act, 1940; Municipal Corporation of Delhi v. Ghisa Ram, ; Chetumal v. State of Madhya Pradesh and Calcutta Municipal Corporation v. Pawan Kumar Saraf all under the Prevention of Food Adulteration Act, 1954. (Emphasis supplied) 12. It cannot be gainsaid, therefore, that the respondents in these appeals have been deprived of their valuable right to have the sample tested from the Central Insecticides Laboratory under Sub-section (4) of Section 24 of the Act. Under Sub-section (3) of Section 24 report signed by the Insecticide analyst shall be evidence of the facts stated therein and shall be conclusive evidence against the accused only if the accused do not, within 28 days of the receipt of the report, notify in writing to the Insecticides Inspector or the Court before which proceedings are pending that they Intend to adduce evidence to controvert the report. In the present cases Insecticide Inspector was notified that the accused intended to adduce evidence to controvert the report. By the time the matter reached the Court, shelf life of the sample had already expired and no purpose would have been served informing the Court of such an intention. The report of the Insecticide Analyst was, therefore, not conclusive. A valuable right had been conferred on the accused to have the sample tested from the Central Insecticides Laboratory and in the circumstances of the cases accused have been deprived of that right, thus, prejudicing them in their defence.
29. While discussing the issue in the said case relating to Insecticides Act, in para 11 the Supreme Court has placed reliance on the case of Drug and Cosmetics Act and Prevention of Food Adulteration Act which clearly reveal that the said right is available to the manufacturer in the aforesaid corresponding enactments also.
30. In an unreported judgment in Gupta Chemicals Pvt. Ltd. and Ors. v. State of Rajasthan And anr. Criminal No. 591/2002 (2002 (4) Crimes 33), Supreme Court has held that a valuable right of the appellant to move the Magistrate for appropriate order for the purpose of re-testing from Central Insecticides Laboratory is lost on account of filing complaint after expiry of the shelf life. Relevant observations of the Supreme Court are as under:
As noted earlier, in the present case, the appellants had intimated the Insecticides Inspector their intention to have the sample tested in the Central Insecticides Laboratory within the prescribed period of 28 days of the receipt of the copy of the State Analyst; report, yet no step was taken by the Inspector either to send the sample to the Central Insecticides Laboratory or to file the complaint in the Court with promptitude in which case the appellants would have moved the Magistrate for appropriate order for the purpose. The resultant position is that due to sheer inaction on the part of the Inspector, it has not been possible for the appellants to have the sample examined by the Central Insecticides Laboratory and in the meantime, the shelf-life of the sample of insecticide seized had expired and for that reason no further step could be taken for its examination. In the circumstances, we are of the view that continuing this criminal prosecution against the appellant will be a futile exercise and abuse of the process of Court. The High Court was not right in dismissing the petition filed under Section 482 of the Cr. P. C. Accordingly, the appeals are allowed. The orders passed by the High Court are set aside and the prosecution alleged against the appellants are quashed.
31. Learned Addl. AG placed reliance on a decision of the Himachal Pradesh High Court in Manager, Medico Pharmaceutical Processors v. State of H.P. and Ors. 1983 Cri LJ 67 wherein it has been held that the manufacturer could not claim that though his name had not been disclosed in terms of Section 18A he was still entitled to copy of the Analyst's report and portion of the sample. It could not therefore be said that his right to get sample or copy of the report has been lost. This judgment cited by Mr. Rathore, Addl. AG is not applicable to the facts and circumstances of the present case because the said information of purchase of disputed medicine from M/s. Sind Medical Store was disclosed under Section 18A by M/s. Sriram Medicals, Bundi and not of manufacturer. Otherwise also, said section is not applicable to the manufacturer. Therefore, Section 25(3) would not apply and the limited right has been given to the manufacturer under Section 25(4) as held by the Supreme Court in the aforesaid case.
32. Adverting to the facts of this case, before filing the complaint on 5-7-2002, the sample expired in February, 2000 and therefore, the petitioner company and its Directors (manufacturer) lost the right to even apply to the Court, for re-testing of the sample which is a valuable right under Section 25(4) of the Act of 1940 as well as right flowing from Article 21 of the Constitution of India.
33. In view of the above, filing of the complaint without unnecessary averment/allegation of the fact of 'in charge of and 'responsible to the company for conduct of business of the company' and further, filing of the complaint after expiry of the shelf life of the drug resulted in denial of right to the company and its Directors (manufacturer) to apply to the Court for re-testing is violative of Section 34(1) and 25(4) of the Act of 1940, therefore, in case the complaint is allowed to stand against the present petitioners, the same would result in failure of justice.
34. Before parting with the judgment, we would like to draw attention of the State Government that in this case, complaint was filed on 5-7-2002 whereas Government Analyst gave his report on 24-6-1999. On 8-7-1999 the report was received but still no complaint was lodged and thereafter, the same was lodged on 5-7-2002 after expiry of two years and half of the shelf life of drug in February, 2000. But on raising query to the counsel for the respondents, the only reply was given that the procedure was lengthy. We are not impressed by the said reply. In our opinion, it is subject matter of enquiry by the State Government as to under what circumstances the complaint was lodged after 2 years and half of the expiry of the shelf life of drug.
35. Resultantly, the writ petition is allowed and the complaint and further proceedings in Case No. 468/2002 pending in the Court of Chief Judicial Magistrate, Bundi are quashed as against the petitioners.
36. A copy of this order be sent to the Principal Secretary to Government, Medical Department, Govt. of Rajasthan, Jaipur for enquires in the matter.