Karnataka High Court
Shri Basudeo Narain Singh vs The Drugs Inspector on 29 October, 2018
Author: P.S.Dinesh Kumar
Bench: P.S. Dinesh Kumar
1
Crl.P.No.4310/2012
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29th DAY OF OCTOBER, 2018
BEFORE
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
CRIMINAL PETITION No.4310 OF 2012
BETWEEN:
Shri Basudeo Narain Singh
Managing Director of M/s. Alkem
Laboratories Limited, Buddha Colony
Boring Canal Road, PATNA-800 001
Bihar State. ... Petitioner
(By Shri. K.G. Raghavan, Senior Counsel for
Shri Amarchand & Mangaldas, advocate)
AND:
1. The Drugs Inspector
Represented by Smt. C. Manjula
Drugs Price Control Cell, Drugs
Control Department, Palace Road
Bangalore-560 001.
2. The State of Karnataka
Drugs Control Department
Palace Road
Bangalore-560 001. ... Respondents
(By Shri. S. Rachaiah, HCGP)
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Crl.P.No.4310/2012
This Criminal Petition is filed under Section 482 of
Cr.P.C., praying to set aside the order dated 02.07.2012
passed by learned FTC II, Hassan in Crl.R.P.No.36/2010
and the order dated 07.07.2007 passed by the Learned II
Addl. Civil Judge and JMFC, Hassan in C.C.No.272/2007 in
so far as the petitioner is concerned pending on the file of
the II Addl. Civil Judge and JMFC, Hassan.
This Criminal Petition coming on for Admission this
day, the Court made the following:
ORDER
Heard Shri K.G. Raghavan, learned Senior Advocate for the petitioner and Shri S. Rachaiah, learned HCGP for the State.
2. Petitioner is the Managing Director of a Pharmaceutical company called M/s.Alkem Laboratories Limited ('Company' for short), which was manufacturing a drug called Famotidine and selling it as 'Faltidin' tablets of 40mg and 20mg strength respectively. The National Pharmaceutical Pricing Authority ('NPPA' for short) had issued a notification 3 Crl.P.No.4310/2012 on 29.06.2001 notifying the maximum retail price of the said tablets.
3. On 23.12.2002, NPPA issued a notice as per Annexure-D2 calling upon the petitioner to explain as to why the Company had not complied with the ceiling on prices. The Company submitted a reply on 29.12.2003. After exchange of some correspondence, a personal hearing was provided by the NPPA on 19.08.2004. Thereafter, by it's letter dated 2.9.2004 the Company regretted that labels of seven batches of 20 mg tablets of which, 6 batches were manufactured in August 2001 and 3 batches of 40 mg of which 2 batches were manufactured in August 2001 and one batch in May 2002 carried printed MRP higher than the MRP fixed under notification dated 29.06.2001. The Company also quantified the quantum of sale proceeds in excess of MRP fixed by the authorities at Rs.5,64,118/- and tendered the said amount through 4 Crl.P.No.4310/2012 a cheque dated 31.08.2004. By a communication dated 13.10.2004 as per Annexure-G, NPPA exercising provisions of Para-13 of Drugs (Price Control) Order'95 ("DPCO'95" for short), directed the manufacturer to deposit a sum of Rs.8,04,600/- (Rs.5,64,118/- towards the overcharged amount and Rs.2,40,482/- towards interest). There was some exchange of correspondence and the Company complied with the said direction and paid the remaining sum of Rs.2,40,482/- under protest on 20.08.2009.
4. In the meanwhile, on 23.03.2007, Drugs Inspector, Drugs Price Control Cell, Bangalore, filed a private complaint under Section 200 of Cr.P.C, alleging violation of DPCO'95. The relevant portion of the complaint reads as follows:
"a)'Para 14(1)' by not carrying in to effect the prices fixed and notified by NPPA 5 Crl.P.No.4310/2012 within 15 days from the date of notification dated 29.6.2001 "32. The accused have also violated:
b)'Para 14(2)' by not displaying in indelible print mark and the label of the container of the drugs with the notified retail prices notified by the NPPA in notification dated 29.6.2001.
c) "Para 14(3)' by not issuing the Price List and the Supplementary Price List in Form-V to the Dealers as well as to the State Drugs Controller indicating the notified prices.
30.The violations of Ceiling Price Notifications notified under 'Para 9' violations of 'Paras 14(1), 14(2) and 14(3) 'of the Order' mentioned above are violations which are punishable under section 7(1)(a)(ii) of 'E.C. Act'.
31.Therefore the accused have violated the provisions of 'Paras(9), 14(1), 14(2), and 14(3)' punishable under Section 7(1)(a)(ii) of 'E.C. Act' and therefore they may be dealt with according to law." [sic] 6 Crl.P.No.4310/2012
5. Learned Magistrate took cognizance of offences and ordered issuance of process by his order dated 07.07.2007. The petitioner, who is accused No.2 in the proceedings before the Trial Court, challenged the order passed by the learned Magistrate before the learned Sessions Judge, Hassan in Criminal Revision Petition No.36/2010. By order dated 02.07.2012, the learned Sessions Judge dismissed the criminal revision petition. Feeling aggrieved by the same, petitioner is before this Court.
6. Shri Raghavan, learned Senior Advocate assailing both orders passed by the learned Magistrate as also the learned Sessions Judge, urged following contentions:
• that pursuant to the show-cause notice issued by the authorities, the Company while expressing its regret voluntarily calculated the quantum of money collected in excess of MRP 7 Crl.P.No.4310/2012 fixed by NPPA and tendered the same as early as on 2.9.2004;
• that as per the direction of NPPA, the petitioner has deposited the interest amount also;
• that though the Company has paid the interest amount under protest, it waives it's right to seek refund;
• that NPPA exercising powers under the policy, has collected the excess amount and interest.
Therefore, NPPA could not have proceeded further and initiated criminal proceedings; and • that there is an inordinate delay in filing the complaint.
7. Shri Raghavan placed reliance on State of Karnataka v. L. Muniswamy and others1. Adverting to Paragraph No.7 thereof, he argued that the case on 1 AIR 1977 SC 1489 8 Crl.P.No.4310/2012 hand is a fit case to exercise powers under Section 482 Cr.P.C, to prevent abuse of process of Court.
8. Shri S. Rachaiah, learned HCGP argued in support of the complainant.
9. I have carefully considered the submissions made on behalf of the petitioner and the State.
10. The conspectus of facts of this case show that MRP was fixed by NPPA as per Notification dated 29.06.2001.
11. In substance, the allegation is that the petitioner had sold the drug at a price higher than what was fixed by NPPA.
12. By exercising powers under the DPCO'95, the authorities thought it appropriate to demand and accept the excess amount and the interest. As submitted by Shri Raghavan, the Company has waived 9 Crl.P.No.4310/2012 it's right to seek refund of interest amount, which was paid under protest and thus conceded to the demand made by the NPPA.
13. In the authority cited by Shri Raghavan, Supreme Court of India has held as follows:-
"In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters, is designed to achieve a salutary public purpose which is that a Court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice. The ends of justice are higher than the ends of mere law though 10 Crl.P.No.4310/2012 justice has got to be administered according to laws made by the legislature. The compelling necessity for making these observations is that without a proper realization of the object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice, between the State and its subjects, it would be impossible to appreciate the width and contours of that salient jurisdiction."
14. As per the policy, the NPPA/UOI have admittedly levied and collected the excess amount and the interest. The excess amount was tendered in 2004. Drug Inspector has filed the complaint in 2007. No satisfactory explanation is forthcoming on behalf of the authorities for filing the belated complaint. Further, the manufacture of the drug in question has been discontinued for over a decade. Nearly fourteen years have elapsed from the date of collecting excess amount and eleven years from the date of launching prosecution. The petitioner is now aged about 77 11 Crl.P.No.4310/2012 years. In the circumstances, I am of the view, ends of justice would be met in giving quietus to the entire proceedings by exercising the power under Section 482 of Cr.P.C.
15. Resultantly, this petition is allowed. The order dated 2.7.2012 passed by the Fast Track Court-II, Hassan in Crl.R.P.No.36/2010 and order dated 7.7.2007 passed by the II Additional Civil Judge and JMFC, Hassan, and all further proceedings in C.C.No.272/2007 pending on the file of II Additional Civil Judge and JMFC, Hassan, are quashed insofar as the petitioner is concerned.
No costs.
Sd/-
JUDGE *alb/-.