Madras High Court
M/S.Lark Laboratories (India) Ltd vs Http://Www.Judis.Nic.In on 3 September, 2020
Author: M.Nirmal Kumar
Bench: M.Nirmal Kumar
CRL.O.P.No.8139 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 31.08.2020
PRONOUNCED ON : 03.09.2020
CORAM:
THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR
CRL.O.P.No.8139 of 2015
M.P.Nos.1 & 2 of 2015
1.M/s.Lark Laboratories (India) Ltd.,
SP-1192E, Phase IV, RIICO, Industrial Area,
Bhiwadi, Rajasthan-301 019
rep.by its Managing Director,
Thiru Aprajita Takiar and
Joint Managing Director
Thiru Vijay Kumar Gupta.
2.Thiru Aprajita Takiar,
D/o.Thiru.D.D.Anand,
Managing Director of
M/s.Lark Laboratories (India) Ltd,
SP-1192E, Phase IV, RIICO,
Industrial Area,
Bhiwadi, Rajasthan-301 019.
3.Thiru Vijay Kumar Gupta,
S/o.Thiru.R.P.Gupta,
Joint Managing Director of
M/s.Lark Laboratories (India) Ltd,
SP-1192E, Phase IV, RIICO, Industrial Area,
Bhiwadi, Rajasthan-301 019. ... petitioners
Vs.
http://www.judis.nic.in
CRL.O.P.No.8139 of 2015
State rep.by
Drugs Inspector,
Kanchipuram I Range,
Kanchipuram Zone,
Chennai-6. ... Respondent
Prayer : Criminal Original Petition filed under Section 482 of Cr.P.C., to call for
the records in P.R.C.No.2 of 2014 on the file of the Chief Judicial Magistrate,
Chengelput and quash the same.
For Petitioners : Mr.R.Karthikeyan
Ramesh Venkatachalapathy
For Respondent : Mr.C.Iyyappa Raj
Additional Public Prosecutor
ORDER
The petitioners herein, who are the accused A1 to A3 in P.R.C.No.2 of 2014 for contravention of Section 18(a)(i) r/w Section 17-B(d) of the Drugs and Cosmetics Act 1940 (hereinafter referred to as “Act” for brevity) and Rules 1945 punishable under Section 27(c) of the said Act, have filed this quash petition.
2. The case of the prosecution is that on 15.07.2013, the respondent conducted inspection at M/s.District Drug Warehouse, TNMSC Limited, Karapettai, Kancheepuram, took samples of Bettamethasone Valerate Ointment. Date of manufacture is 13.07.2012 and the expiry is 24 months from the date of manufacture, the ointment was kept for distribution. The samples were taken as http://www.judis.nic.in CRL.O.P.No.8139 of 2015 per law and one portion of the sample was forwarded to the Government Analyst on the same day. The Government Analyst gave a report on 09.12.2013 stating that the Betamethasone Valerate Ointment is not of standard quality. Thereafter, on 18.12.2013, the Drugs Inspector directed the WareHouse Incharge, TNMSC Limited, Kancheepuram, to disclose the name and address of the person from whom the said drug was acquired under Section 18A of the Act. The respondent searched the premises of M/s.District Drug Warehouse, TNMSC Limited, Karapettai, Kancheepuram, seized the spurious drug stocked in racks for distribution, which is in violation of the Act. A stock of 7462X15 gms of Betamethasone Valerate Ointment was seized in presence of Thiru.M.Karthikeyan viz., (PW3) and two independent witnesses and the photostat copy of the invoice of the petitioner company dated 05.02.2013.
3. On 23.12.2013, show cause notice was issued to the petitioner with the Analyst report and a sample portion was sent to them on the same day. Later, Reminder was sent on 28.01.2014. On 05.02.2014, the first petitioner sent a reply stating that “we at the outset reject the allegation. The sale/distribution of the Subject product on 15.07.2013, the day of sample has been made by TNMSC at Kanchipuram is in complete disregard of our letter http://www.judis.nic.in CRL.O.P.No.8139 of 2015 No.LL1175/2013-14 dated 6th June 2013 and also of TNMSC letter No.QCF052/TNMS/QC/2012-13 dated 20.05.2013 copy of which has been sent to in-charge of warehouse”. Though the reply was submitted by the first petitioner, it was not to the satisfaction of the respondent/Drugs Inspector. Hence, the Drug Inspector submitted a detailed proposal to the Director of Drugs Control, Chennai-6 to accord necessary sanction. After obtaining sanction, the complaint came to be filed for contravention of the above mentioned offence. In the complaint, L.W.1 to L.W.5 were listed and the documents L.D1 to L.D15 filed along with the complaint.
4. The learned counsel for the petitioners submitted that the first petitioner is the Company, the second petitioner is the Managing Director, and the third petitioner is the Joint Managing Director. The petitioners are manufacturers of Pharmaceutical products for more than 30 years, they are regular suppliers of Pharmaceutical products including various government Corporations like Tamil Nadu Medical Services Corporation (TNMSC). The dispute in this case, is for supply made against contract dated 27.01.2012 in tender No.001/MPTNSMC/Dny/2012 whereby Betamethasone Valerate Ointment were supplied to various consignees of TNMSC. The TNMSC had conducted test and found that the sample was not of perfect quality. Therefore, http://www.judis.nic.in CRL.O.P.No.8139 of 2015 the TNMSC had informed the petitioners by show cause letter dated 20.05.2013 stating that the said drug in product Batch No.13 against P.O.No.E0654 dated 27.06.2012, had failed the test performed by them. The petitioners, by letter dated 31.05.2013, had repudiated. Thereafter, the petitioners had taken cognizance of the issue and sent a letter to all the Warehouses of the TNMSC on 06.06.2013 stating that the said product have to be returned to the petitioners and the stock received back shall be replaced with fresh stock for free of costs. Thus, on 06.06.2013, the petitioners had clearly informed the TNMSC to return the ointments. Thereafter, on 15.07.2013, the respondent inspected the Warehouse Incharge, TNMSC and took samples of ointment, which was not meant for display, sale or distribution. The letter of the petitioner dated 06.06.2013 was received by the Warehouse Incharge on 08.06.2013. The petitioners received a show cause notice on 26.12.2013 from the respondent, which was duly replied on 28.01.2014, annexing the earlier letter of the petitioner dated 06.06.2013, for recalling the entire stocks. Not satisfied with the reply of the petitioners, the respondent submitted a proposal to the Director of Drugs Control, Chennai on 06.02.2014 to grant sanction for prosecution and the Directorate accorded sanction on 21.02.2014. Even before obtaining sanction, the complaint was filed before the learned Chief Judicial Magistrate, Chengalpet on 18.02.2014, which is http://www.judis.nic.in CRL.O.P.No.8139 of 2015 in violation of the Act and Rules. In view of the letter of the petitioner dated 06.06.2013, “possession simplicoter” will not prove the ingredients of Section 18[a] and the respondent failed to prove the samples were meant for sale, display and distribution. Though the petitioners recalled the ointments supplied, the Warehouse Incharge failed to return the ointments and retained the same, from which, the samples were taken. The petitioners further submitted that as per the purchase order, 7500 tubes X15 grams Betamethasone Valerate Ointment were supplied under invoice of 1227, dated 07.09.2012. The entire quality was received on 05.02.2013. In this case, on 19.12.2013, 7462 tubes were seized. Hence, on the date of seizure, 38 ointment tubes were shown as utilized, out of which, it could be seen that on 05.02.2013, four number of tubes were sent to empanelled lab and on 22.02.2013, 14 tubes were sent to R.K.Pet Primary Health Centre. On 25.02.2013, four tubes were sent to Government Lab and on 15.07.2013, when the respondent conducted inspection, 16 tubes were taken. Hence, 38 tubes are accounted. It is seen that except 14 tubes which was sent to R.K.Pet Primary Health Centre, balance 24 tubes were utilized only for the purpose of testing. He further submitted that as per the condition No.15 of the tender, it is clearly stated that “samples of supplies in each batch will be chosen at the point of supply and same will be sent to different laboratories including http://www.judis.nic.in CRL.O.P.No.8139 of 2015 Government Drugs Testing Laboratory/King Institute for testing as decided by the Tender inviting Authority”. It is mentioned that if the samples did not confirm to the statutory standard, the entire stock in such batch shall be taken by the tenderer within a period of 30 days from the date of letter of the Tender Inviting Authority. In this case, the petitioner, by letter dated 06.06.2013, had requested to return the unconsumed stocks and at their own costs, they shall replace with fresh stock. The copy of the letter was also given to the respondent. On receipt of the letter, TNMSC ought to have sent the drugs back to the petitioner or destroy the same. Further, it is seen that except for 14 tubes which was sent to R.K.Primary Health Centre, remaining 24 tubes were utilized for analysis and the balance 7462 tubes have been seized. Further, he submitted that the drug was not kept for sale, display or distribution on the date of inspection on 15.07.2013 and on the date of seizure on 09.12.2013.
5. The petitioners relied upon the decision of the Hon'ble Apex Court in the case of MOHAMMED SHABIR vs. STATE OF MAHARASHTRA reported in 1979 1SCC 568, which was followed by this Court in the cases of V.LOGANATHAN vs. STATE BY DRUG INSPECTOR, CHENGALPUT RANGE, KANCHEEPURAM reported in CDJ 1991 MHC 786, STATE REP.BY THE DRUG INSPECTOR, MADURAI CIRCLE, MADURAI vs. http://www.judis.nic.in CRL.O.P.No.8139 of 2015 DR.ANURADHA RAMNATH reported in CDJ 2002 MHC 1128, wherein it is clearly stated that the possession simplicater alone is not sufficient and the prosecution has to prove that the drug was kept for sale, display or distribution. The relevant paragraph No.8 from V.LOGANATHAN vs. STATE BY DRUG INSPECTOR, CHENGALPUT RANGE, KANCHEEPURAM, is extracted hereunder:
“ 8. Learned counsel for the petitioner relied upon a judgment reported in Mohd. Shabbir v. State of Maharashtra Mohd. Shabbir v. State of Maharashtra, 1979 MLJ. Crl. 448. That was a case decided for violation of Sec.18(c) punishable under Sec.27 of the Drugs and Cosmetics Act. Their Lordships of the Supreme Court observed that before a person can be made liable for prosecution or conviction under Sec.27(a)(i) or (ii) read with Sec.18(c), it must be proved by the prosecution affirmatively that he was manufacturing the drugs for sale or was selling the same or had stocked them or exhibited the articles for sale. The possession simpliciter of the articles does not appear to be punishable under any of the provisions of the Act and therefore, the essential ingredients of Sec.27 are not satisfied, a plea of guilty of the accused cannot lead to the court to convict him. Unfortunately the Drugs Inspector P.W.1 even though he received a report, as soon as the child expired after treatment by the petitioner on 21.3.1985, or immediately thereafter, had inspected the premises only on 7.8.1985. It is not the case of the Drugs Inspector that the petitioner http://www.judis.nic.in CRL.O.P.No.8139 of 2015 was selling or distributing the drugs to anybody else at the time when he visited the clinic of the petitioner. The complaint before this Court as filed by the Drugs Inspector reads that the accused/petitioner did not possess requisite qualification to practise allopathic system of medicine as required under Rule 2(ee) of the Rules and also he was found to have stocked several allopathic drugs for distribution to his patients at his clinic without a valid drug licence and unable to produce the purchase records for the drugs as require d under the Drugs and Cosmetics Act, 1940 and the Rules thereunder. The explanation given by the accused appears to have not been considered n the proper perspective and the Drugs Inspector has failed to consider the reply of the petitioner on the ground that the same was found to be unsatisfactory. Therefore, as per the ratio decided by the Supreme Court in the abovesaid judgment, mere possession simpliciter of the medicines does not appear to be punishable under any of the provisions of the Act and something should be shown by the Drugs Inspector that the petitioner had stocked them or exhibited them for sale or distribution. The Supreme Court in the abovesaid judgment observed as follows:
'On an interpretation of Sec.27, it seems to us that the argument of Mr.Singh is well-founded and must prevail. The words used in Sec.27, namely, 'Manufacture for sale, sells' have a comma after each clause but there is no comma after the clause 'stocks or exhibits for sale'. Thus the Section postulates three separate http://www.judis.nic.in CRL.O.P.No.8139 of 2015 categories of cases and no other: (1) manufacture for sale; (2) actual sale (3) stocking or exhibiting for sale or distribution of any drugs. The absence of any comma after the word 'stocks' clearly indicates that the clause 'stocks or exhibits for sale' is one indivisible whole and it contemplates not merely stocking the drugs but stocking the drugs for the purpose of sale and unless all the ingredients of this category are satisfied, Sec.27 of the Act would not be attracted. In the present case, there if no evidence to show that the appellant had either got these tablets for sale or was selling them or had stocked them for sale. Mr.Khanna appearing for the State, however, contended that the word 'stock' used in the Section is wide enough to include the possession of a person with the tablets and where such a person is in the possession of tablets of a very huge quantity, a presumption should be drawn that they were meant for sale or for distribution. In our opinion, the contention is wholly untenable and must be rejected. The interpretation sought to be placed by Shri Khanna does not flow from a true and proper interpretation of Sec.27. We, therefore, hold that before a person can be made liable for prosecution or conviction under Sec.27(a),(i),(ii), read with Sec. 18(c) of the Act, it must be proved by the prosecution affirmatively that he was manufacturing the drugs for sale or was selling the same or had stocked them or exhibited the articles for sale. The possession simpliciter of the articles does not appear to be punishable under any of the provisions of the Act. If, therefore, the essential ingredients of Sec.27 are not satisfied the plea of guilty cannot lead the court to http://www.judis.nic.in CRL.O.P.No.8139 of 2015 convict the appellant.'
6. In the absence of any such material to prove that the articles were kept for sale or distribution, the possession simplicater of the article does not appear to be punishable under any provisions of the Act. In this case, the petitioner had already sent a letter for returning the unconsumed stocks. Further, there is no specific averments against the petitioners that they were incharge and responsible for the conduct of the business of the company. The respondent had taken the samples of already frozen drugs, for which, the petitioners cannot be prosecuted. Hence, they prayed for quashing of the complaint.
7. The learned Additional Public Prosecutor filed a counter and submitted that in this case, the Drug Inspector conducted inspection on 15.07.2013. During the inspection, the ointment of Betamethasone Valerate supplied by the petitioners was taken for test. Thereafter, the samples were sent to the Government Analyst. The Government Analyst, by his report dated 09.12.2013, found that the drugs supplied by the petitioner were not of standard quality. After getting particulars of supplier of drugs, as per Section 18A, a show cause notice along with portion of the sample were sent to the petitioners. Initially, the petitioners denied the same and later, they sent a reply dated http://www.judis.nic.in CRL.O.P.No.8139 of 2015 31.01.2014 enclosing the letter dated 06.06.2013 to the Warehouse of TNMSC asking them to send back the unconsumed stocks and given a undertaking to replace the same as per the tender condition. However, the respondent was not satisfied with the reply sent by the petitioner. In the meanwhile, the entire stock available of 7462 stocks were seized and produced before the Chief Judicial Magistrate Court, Chengalpet on 19.12.2013. Thereafter, after getting sanction from the Director of Drugs Control, Chennai, a complaint was lodged. Immediately, on receipt of summons, the petitioner had filed this quash petition. Hence, he opposed for quash petition.
8. Considering the rival submissions and on perusal of the materials, it is seen that the petitioner company was given Order No.E0654 dated 27.06.2012 for supply of 7500 tubes X 15 grams ointment of Betamethasone Valerate and the same was received by the Warehouse Incharge, TNMSC on 05.02.2013. On 19.12.2013, the respondent had seized 7462 tubes. Totally 38 tubes were supplied and taken for test, out of which, four tubes were sent to empanelled lab and four tubes were sent to Government lab and 16 tubes were taken by the respondent herein on 15.07.2013, 14 tubes were sent to R.K.Pet Primary Health Center on 22.02.2013. This was sent even before the quality test conducted and http://www.judis.nic.in CRL.O.P.No.8139 of 2015 confirmed to the standard of the TNMSC, which is clearly in violation of the tender condition. As per the tender condition, the quality test has to be conducted. Thereafter, the drugs received ought to be sent for distribution. If the samples were not found as per the specification and quality, the drugs ought to be rejected. In this case, even before the quality test could be done, 14 tubes were sent to R.K.Pet Primary Health Centre, for which, the petitioners could not be held responsible. Further, the petitioner sent a letter on 06.06.2013 to the Warehouse Incharge, TNMSC, for returning the unconsumed stocks. Thus, as per the tender condition, it is seen that the drug was not found as per specification. In view of the same, the inspection conducted by the respondent on 15.07.2013 is un-called. Since the stocks available on that day was already frozen and not kept for sale, display and distribution, the respondent had taken samples and forwarded the same to the Analyst. In this regard, the petitioners relied upon the judgment of the Hon'ble Apex Court (cited supra), in which, it is clearly held that the possession simplicater of the articles does not appear to be punishable under any provisions of the Act, in the absence of positive and affirmative material to show that the drugs were meant for display, sale and distribution. This principle was consistently followed by this Court. In view of the same, this Court finds that the continuance of the proceedings against the http://www.judis.nic.in CRL.O.P.No.8139 of 2015 petitioners would amount to abuse of process of law.
9. Accordingly, the Criminal Original petition is allowed and the proceedings in P.R.C.No.2 of 2014 on the file of the Chief Judicial Magistrate, Chengalpet is quashed against the petitioners. Consequently, connected miscellaneous petitions are also closed.
03.09.2020 ssb Index:Yes/No Internet:Yes/No Speaking Order/Non-speaking Order To
1.Drugs Inspector, Kanchipuram I Range, Kanchipuram Zone, Chennai-6.
2.The Public Prosecutor, High Court, Madras.
http://www.judis.nic.in CRL.O.P.No.8139 of 2015 M.NIRMAL KUMAR, J.
ssb PRE-DELIVERY JUDGMENT IN CRL.O.P.No.8139 of 2015 M.P.Nos.1 & 2 of 2015 03.09.2020 http://www.judis.nic.in