Karnataka High Court
Mr Sankalp Kumar Dixit vs Union Of India on 23 September, 2022
Author: Hemant Chandangoudar
Bench: Hemant Chandangoudar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR
CRIMINAL PETITION NO.7294/2017
BETWEEN:
1. MR. SANKALP KUMAR DIXIT
S/O MR. RAMBABOO DIXIT
AGED ABOUT 52 YEARS
PRESENTLY RESIDINT AT:
BLOCK B1, FLAT NO.0704
L & T SOUTH CITY APARTMENTS
BANGALORE-560 076.
2. MR. PRABHAKAR BHAT
S/O MR. PARAMESHWARA BHAT
AGED ABOUT 47 YEARS
PRESENTLY RESIDING AT:
NO.3, 42/2, PLOT NO.7
NANJAPPA LAYOUT, ARAKERE
BANNERGHATTA ROAD
BANGALORE-560 076.
3. MR. LAKSHAMAN K
S/O MR. L. KUZHANTHAI VEL
AGED ABOUT 43 YEARS
PRESENTLY RESIDING AT
NO.2, MOTHAM AGRAHARAM
ESI RING ROAD, HOSUR-635 126.
4. MR. GURURAJA K
S/O MR. KARUPPASAMY
AGED ABOUT 38 YEARS
PRESENTLY RESIDING AT:
NO.381/N11, 2ND CROSS
2
SHIVAJI NAGAR, MOOKANDAPALLI
HOSUR-635 126.
5. MR. SADANAND VIRAKTAMATH
S/O SRI VISHWANATH S
AGED ABOUT 45 YEARS
PRESENTLY RESIDING AT:
BLUE RIDGE, B40109, PHASE I
HINJEWADI, PUNE.
6. MR. SANTOSH S
S/O SRI A.G. SANKARAN
AGED ABOUT 35 YEARS
PRESENTLY RESIDING AT: FLAT NO.410
AASHRAYAA SERENITY APARTMENT
NYNAPPANAHALLI, BEGUR HOBLI
BANGALORE-560 068.
...PETITIONERS
(BY SRI UDAYA HOLLA, SENIOR COUNSEL FOR
SMT. MEENA V., ADVOCATE)
AND:
UNION OF INDIA
REPRESENTED BY DRUGS INSPECTOR
OFFICE OF ASSISTANT DRUGS CONTROLLER (1)
CENTRAL DRUGS STANDARD CONTROL ORGANIZATION
SUB ZONE, 2ND FLOOR, PALACE ROAD
BANGALORE-560 001.
...RESPONDENT
(BY SRI GOWTHAMDEV C. ULLAL, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
THE CODE OF CRIMINAL PROCEDURE, PRAYING TO QUASH THE
COMPLAINT AT ANNEXURE-A FILED BY RESPONDENT IN
C.C.NO.349/2014 PENDING BEFORE THE SPECIAL COURT FOR
ECONOMIC OFFENCES, BENGALURU, FOR THE OFFENCES UNDER
SECTION 18(c) & PUNISHABLE UNDER SECTION 27(b)(ii) OF DRUGS
AND COSMETICS ACT, 1940, AGAINST THE PETITIONERS HEREIN.
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THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED ON 06.07.2022 FOR ORDERS AND COMING ON FOR
PRONOUNCEMENT OF ORDERS THIS DAY, THE COURT MADE THE
FOLLOWING
ORDER
The respondent has filed a complaint under Section 32 of Drugs and Cosmetics Act, 1940 for the contravention of Section 18(c) of the Drugs and Cosmetics Act, 1940 (for brevity, 'the Act') and punishable under Section 27(b)(ii) of the Act alleging that the petitioners were granted with licence to manufacture Epirubicin Hydrochloride injection 2mg/ml. However, the petitioners - accused manufactured the said drug weighing 200mg/100ml. and exported 369 vials of Batch No. 7801012 and 105 vials of Batch No. 7801013 of the drug weighing 2mg. per 100 ml. without licence in Form 28D as per The Drugs and Cosmetics Rules, 1945.
2. The learned Magistrate after perusing the complaint and the documents annexed to the complaint took cognizance of the offences punishable under Section 18(c) and Section 27(b)
(ii) of the Act. Taking exception of this, this petition is filed. 4
3. Shri Uday Holla, learned counsel appearing for the petitioners submits that the drug was manufactured only for the purpose of export and not for the purpose of selling the same within India, which is evident from the licence granted by the Licencing Authority. He further submits that Form 28D was issued in favour of the petitioner - Company to manufacture and for distribution of HydroChloride injection 2mg. per ml. (100ml.). He submits that in the absence of any contravention of the provisions of the Act, the registration of the complaint against the petitioners is impermissible. He further submits that the drug which was seized from the petitioners was not meant for sale in India, but it was meant only for export to another country, and therefore, the provisions of the Act are not applicable. In support, he has placed reliance on the decision of the Bombay High Court in the case of STATE OF MAHARASHTRA vs. GHANSHYAM K. ZAVERI AND ANOTHER reported in 2001 Cri.L.J. 1629. He further submits that in the absence of any specific allegation that the petitioners - accused were actively involved in the affairs of the Company, the 5 registration of the complaint against the petitioners - accused is impermissible as specified under Section 34 of the Act.
4. On the other hand, the learned counsel appearing for the respondent would submit that the said drug was manufactured by the petitioner - Company in violation of Section 18(c) read with Section 27(b)(ii) of the Act.
5. He further submits that specific allegations are made in the complaint that the petitioners - accused were actively involved in the affairs of the Company and as such the complaint is not hit by Section 34 of the Act. He further submits that at this stage this Court in exercise of power under Section 482 of the Criminal Procedure Code cannot interfere with the cognizance taken by the learned Magistrate and the various contentions raised by the petitioners can be considered after full fledged trial. In support of his contention, he placed reliance on the decision of the Hon'ble Supreme Court in the case of STATE OF KERALA vs. ORISON J. FRANCIS AND ANOTHER, reported in AIR 2009 SC 500.
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6. I have examined the submissions of the learned counsel for the parties.
7. The Drugs and Cosmetics Act, 1940 was enacted to regulate the import, manufacture, distribution and sale of drugs (and cosmetics). Section 18 of the Act deals with prohibition of manufacture and sale of certain drugs and cosmetics. Section 18(c) of the Act specifies that no person shall himself or by any other person on his behalf manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale or distribute any drug (or cosmetic), except under, and in accordance with the conditions of, a license issued for such purpose under this Chapter.
8. A conjoint reading of the statement of objects and reasons for enacting the Act and also Section 18 of the Act would indicate that the provision of the Act applies only to drugs and cosmetics which are manufactured and offered for sale in India and the provisions of the Act are not applicable to the drugs and cosmetics which are manufactured in India, but are meant for export to other countries. The High Court of Mumbai in the case 7 of State of Maharashtra -vs- Ghanshyam K Zaveri and another reported in 2001 Crl.LJ 1629 relying on the decision of the Hon'ble Supreme Court in the case of Municipal Corporation of Delhi -vs- Laxmi Narain Tandon reported in AIR 1976 SC 621 held that the statement of objects and reasons of the prevention of Food Adulteration Act is in pari materia with the statement of objects and reasons of the Act and at para-12 has held as under:
"12. Thus, it is very clear from the judgment of the apex Court that the respondents must be shown to have stocked the drug in question for sale. The question then arises whether the drug meant for exporting and consequently for sale in the foreign country would amount to contravention of the provisions of Section 18(c) of the Act. It cannot be doubted that the provisions of the Act in question are applicable in India. Secondly, the drug seized from the AirPort meant for export to a foreign country cannot be said to have been stored for immediate sale. Thirdly, the sale of that drug was not banned in the foreign country to which it was meant for export. Fourthly, it is not in dispute that the Central Government had given permission for export of that drug abroad as the Central Government had given NOC to manufacture the said drug for the purpose of export. There is no specific prohibition for manufacture of the drug in question for export abroad, on the contrary the Central Government had given NOC on that behalf and it is not the case of the prosecution that the tablets in question were meant for sale in India. Moreover, it is stated by Mr.Sawant appearing for the respondents that after the said seizure the respondents - accused 8 themselves had closed down their trading and export business.
9. The allegation in the complaint is that the petitioners
- accused manufactured the subject drug in contravention of Section 18(1)(c) of the Act and exported the same without license in Form 28-D as per the Drugs and Cosmetics Rules, 1940. To constitute an offence punishable under Section 27(d) of the Act for contravention of Section 18(c) of the Act, a person must have manufactured the drug and offered for sale within India in accordance with the conditions of a license issued for such purpose under Chapter-IV. The allegation that the petitioners have manufactured the subject drug in violation of the conditions imposed in the license and exported the same to foreign countries is not a contravention as specified under Section 18(c) of the Act since it applies only to drugs which are manufactured in violation of the conditions of license and offered for sale in India. Hence, the complaint filed against the petitioners - accused for alleged contravention of Section 18(c) of the Act is held to be not maintainable.
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10. The accused No.1 - company was granted with license in Form 28 for manufacturing the following drug:
Sl.No. Name of the product Composition
1 Epirubicin Hydrochloride Each ml contains:
Injection 2 mg/ml Epirubicin Hydrochloride 2
mg.
11. The allegation in the complaint is that the subject drug was manufactured by the 1st accused which is the company and the 2nd accused who is the director of the Company without license in Form 28. The subject drug is alleged to have been manufactured on 05/2013 and 06/2013.
12. The petitioners are arrayed as accused Nos.10, 11, 12 and 13 and accused No. 8 in the complaint respectively. In the complaint, it is alleged that accused Nos.7 to 8 are the Manufacturing Chemists of the Company, accused No.9 is the Senior Director, Quality Assurance of the Company and accused Nos.10 to 12 are Quality Control Chemists of the Company. There is no specific allegation in the complaint that the petitioners - accused are responsible for manufacturing of the subject drug without valid license.
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13. Section 34 of the Act specifies that an offence is committed by the Company, every person who at the time the offence was committed, was incharge 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 and punished accordingly. The accused Nos.2 to 4 who were arrayed as accused as Directors of the Company had filed Crl.P No.310/2015 and this Court by order dated 7.8.2018 held that there is no averment that the accused Nos.2 to 4 participated in the business of the company and as such, the said accused cannot be held to be guilty and also that the said accused were inducted as directors of the company after inspection of the manufacture unit seizing the subject drug. The petitioners -accused in the absence of any specific averment that the petitioners - accused were responsible for the day to day affairs of the company as on the date of alleged contravention of Section 18(c) of the Act, the petitioners cannot be held vicariously guilty of the offences alleged against them.
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14. The license in Form 28-D was issued on 6.2.2014 to manufacture the following drug:
Sl.No. Name of the Product Composition
1 Epirubicin Hydrochloride Each ml. contains:
Injection 2mg/ml (100 ml) Epirubicin Hydrochloride
2mg inactives:
Sodium Chloride 9 mg,
Hydrochloric acid q.s. to
adjust pH to 3.0 Water for
Injection q.s to 100 ml.
15. A perusal of Form 28-D would indicate that the petitioner Nos.5 and 6 i.e. accused Nos.8 and 9 are the competent technical staff for manufacturing of the subject drug and petitioners No.2 to 4 i.e. accused Nos.11 to 13 are the competent technical staff for testing of the subject drug. The license was valid from 28.10.2013 to 28.10.2018. The allegation in the complaint is that the petitioners - accused manufactured 2 mg./100 ml. and sold the same in 369 vials in Batch No.7801013 and 105 vials in Batch No. No.7801012 and exported the same without license in Form 28-D and the subject drug was manufactured on 05/2013 and 06/2013. Hence, there is no specific allegation or material that the petitioners were 12 actively involved or responsible for the affairs of the company as on the date of commission of the offence. The petitioners - accused are shown as Competent Technical Staff for manufacture and testing of the drug in Form 28-D issued on 6.2.2014 and not as Competent Technical Staff as on the date of the commission of the offence i.e. 05/2013 and 06/2013. Hence, in the absence of any specific averment that the petitioners - accused were competent technical staff for manufacturing and testing the subject drug manufactured on 05/2013 and 06/2013, the decision of the coordinate Bench of this Court in the case of Sanjay G Revankar -vs- State of Drug Inspector, Uttar Kannada District, Karwar reported in ILR 2002 Kar. 575 is not applicable.
16. In view of the preceding analysis, I am of the considered view that the continuation of the impugned criminal proceeding will be an abuse of process law, since the probability of conviction of these Petitioners is remote and bleak. Accordingly, I pass the following:
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ORDER
i) Criminal petition is allowed:
ii) The impugned proceeding in CC No.349/2014 pending on the file of the Special Court for Economic Offence, Bangalore, insofar as it relates to the petitioners - accused Nos.10. 11, 12, 13, 8, and 9, is hereby quashed.
Sd/-
JUDGE bkm