Bangalore District Court
Union Of India vs M/S. Manish Medi Innovation on 2 April, 2018
1 CC.No.167-17
BEFORE THE SPECIAL COURT FOR ECONOMIC
OFFENCES AT: BANGALORE.
Dated this the 2nd day April 2018
: Present:
Sri. SHANTHANNA ALVA M., B.A., LL.B.,
Presiding Officer, Special Court
for Economic Offences, Bangalore.
CC. No. 167-2017
Complainant: Union of India, Ministry of Health and Family
Welfare, O/o. the Central Drugs Standard
Control Organization, Directorate General
of Health Services situated at 2nd Floor,
O/o. Drugs Controller for the State of
Karnataka, Place Road, Bangalore, rep. by
Sri. N.K. Jayasenthil, Drugs Inspector,
CDSCO, Sub-zone, Bangalore.
(By Sri. A.M. Surya Prakash, Advocate)
.Vs.
Accused: 1. M/s. Manish Medi Innovation,
No.10/9, 24th Cross, Sri Krishna Layout,
Hulimavu, B.G.Road, Bangalore-76.
Rep by A-2-K.M.Nirmal Kumar, Partner
2. K.M. Nirmal Kumar, Partner,
S/o. K. Manikyam, 38 Years,
M/s. Manish Medi Innovation, No.10/9,
24th Cross, Krishna Layout, Hulimavu,
B.G.Road, Bangalore-76.
3. Mrs. Kokila Nirmal Kumar, Partner,
W/o. K.M. Nirmal Kumar, 36 Years,
M/s. Manish Medi Innovation, No.10/9,
24th Cross, Krishna Layout, Hulimavu,
B.G.Road, Bangalore-76.
2 CC.No.167-17
4. M/s. SAR Healthline (P) Ltd.,
Ram's Villa Apartments, Subbamma Circle,
Sarakki 1st Main Road, J.P. Nagar, 1st Phase,
Bangalore-78.
Rep. by A.5-Sunny V. Ephram, Mg. Director.
5. Sunny V. Ephram, Managing Director,
S/o. V.K. Ephram, 47 Years,
M/s. SAR Healthline (P) Ltd.,
Ram's Villa Apartments, Subbamma Circle,
Sarakki 1st Main Road, J.P. Nagar, 1st Phase,
Bangalore-78.
6. Anup Sreedharan, Marketing Director,
S/o. A.V. Sreedharan, 49 Years,
M/s. SAR Healthline (P) Ltd.,
Ram's Villa Apartments, Subbamma Circle,
Sarakki 1st Main Road, J.P. Nagar, 1st Phase,
Bangalore-78.
(By A.1 to 3 Sri. D.S., & A.4 to 6 Sri. G. Desu Reddy. Adv.,)
JUDGMENT
1. The complainant/Union of India, Ministry of Health and Family Welfare, O/o. the Central Drugs Standard Control Organization, Directorate General of Health Services, represented by the Drugs Inspector, CDSCO, Sub-Zone, Bangalore; filed the complaint u/s. 200 of Cr.P.C., alleging that the accused persons have committed the offence u/s.18©, 18(b), Sec.18(a)(i), R/w. 3 CC.No.167-17 Sec.17(b) which are punishable u/s.27(b)(ii) and 27(d) of the Drugs and Cosmetics Act, 1940. (Herein after referred as "the Act")
2. The complainant's case in brief is that product named as "SUNN IUI Catheter" is a Medical Device and it is notified as a drug under Sec.3 (b) (IV) of the Act; vide Government of India Gazette Notification No. S. O. 1468(E) dated: 06.10.2005. The DDC(I), CDSCO, South Zone, Chennai sent the report stating that the premises of M/s. SAR Healthline Pvt., Ltd., situated at No.48/1, G- 1, Serenity Place, New Avadi Road, Kilpauk, Chennai-10 was inspected and found that "SUNN IUI Catheters"
were not labeled in the manner prescribed under Rule-96 of the Drugs and Cosmetics Rules. (Herein after referred as "the Rules"). It is further sated that the product was bearing only the labeling particular as "Mkd by M/s. SAR Healthline (P) Ltd., New Bombay-400703, Tel.-022- 27848240 email: [email protected]. Website: www. Starhealth.com" and it not contains other mandatory 4 CC.No.167-17 particulars. As per Rules.96 (1)(i), (iv), (vi) and (vii) of the Rules, it is required to be printed on the label of every outer cover of the product, the proper name of the product, Name and Address of the Manufacturer, Manufacturing License Number and Date of Manufacture. It was also informed that the products were distributed by accused No.4. The DDC(1), CDSCO, Sub- zone, Bangalore also received the report from CDSCO, West Zone, Mumbai stating that "SUNN IUI Catheters"
found at M/s.SAR Healthline (P) Ltd., Ghatkopar, Mumbai, were not labeled in the manner prescribed under Rule. 96 and that they were manufactured by accused No.1 and sold by accused No.4. Then, the complainant on 02.03.2016 along with Drug Inspector carried out the investigation at the premises of accused No.4 and found the stock of different sizes of "SUNN IUI Catheters", which were not labeled in the manner prescribed under Rule. 96 of the Rules and therefore, they are the "Misbranded Drugs" as defined u/s.17(b) of 5 CC.No.167-17 the Act, The stocks of "SUNN IUI Catheters" had only the labeling particulars "Mkd by M/s. SAR Healthline (P) Ltd., New Bombay-400703, Tel.-022-27848240 email:
[email protected]. Website: www. Starhealth.com"
and it is not contained other mandatory particulars. Then on 08.03.2016, all the above stocks were seized from the premises of accused No.4 in the presence of two independent witnesses. The complainant issued the notice dated:15.03.2016 to the Mr. Vijeesh K.P., Branch Executive of accused No.4 company u/s.18A and 22(1)(cca) of the Act and in response to that he produced the Memorandum of Association, sale licence of accused No.4, purchase Invoices and stock transfer invoices regarding the supply made to the various branches. Then on 17.03.2016, the complainant along with Drug Inspector carried out the investigation at accused No.1 premises. The investigation revealed that the accused No.1 Company is having the licence in Form No.28 to manufacture various types of Catheters like Ureteral 6 CC.No.167-17 Catheter, Percutaneous Nephrostomy Drinage Catheter, Naso Biliary Drainage Catheter, Foleys Catheter etc., However, the accused No.1 had no licence to manufacture "SUNN IUI Catheters". The Managing Director of accused No.1 company submitted the letter stating that the seized product were manufactured by accused No.1 for accused No.4 and submitted the batch records of seized stock of "SUNN IUI Catheters" and invoices for having purchased the syringes and plastics granules which are used as raw materials for the manufacture of the product "SUNN IUI Catheters". It is alleged that accused No.1 company manufactured "SUNN IUI Catheters" for sale without a licence to manufacture in violation of Sec.18© of the Act and thereby committed the offence punishable u/s.27(b)(ii) of the Act. Accused No.1 manufactured and sold "Misbranded SUNN IUI Catheters" in violation of Sec.18
(b), 18(a)(i), R/w.Sec.17(b) of the Act and thereby committed the offence punishable u/s.27(d) of the Act.7 CC.No.167-17
The accused No.4 have stocked and distributed "SUNN IUI Catheters" manufactured by accused No.1 violation of Sec.18(b), 18(a)(i), R/w.17(b) of the Act and thereby committed the offence punishable u/s.27(d) of the Act. The complainant filed the complaint after getting approval from the Drugs Controller General (India), Central Drugs Standard Control Organization, Head Quarter, Directorate General of Health Services, New Delhi, hence the complaint.
3. On filing of the complaint, cognizance was taken and case was registered against the accused persons for the offence punishable u/s. 27 (b) (ii) and 27(d) of the Act, and Rules framed there under.
4. The accused persons appeared through their counsels and got enlarged on bail. Copies of the complaint and other documents were furnished to them. Then evidence before charge was recorded as required u/s. 244 of Cr.P.C. and then on hearing the Ld Counsel of the complainant and the accused, charge was framed 8 CC.No.167-17 against accused persons for the offences alleged in the complaint and read over to them. Accused persons pleaded not guilty and claimed to be tried.
5. To prove the charge leveled against the accused persons, the complainant got examined as P.w.1 and got exhibited the documents marked as Ex.p.1 to 24 and material objects as Mo.1.
6. After closure of complainant's side evidence, the statements of accused persons were recorded as provided u/s. 313 of Cr.P.C. The accused persons denied incriminatory evidence found against them. The accused persons not chosen to lead either oral or documentary evidence.
7. Heard the arguments of the learned counsels. The points that arise for my consideration are :
Point No.1: Whether the Drug Inspector who investigated the matter had no jurisdiction and the complaint is bad for not having valid sanction?
Point No.2: Whether the complainant has proved that "SUNN IUI Catheters" is misbranded product manufactured by 9 CC.No.167-17 accused No.1 company and sold them and in violation of Sec.18(a)(i),18(b), R/w. Sec.17(b) of the Act and thereby committed the offence punishable u/s.27(d) of the Drugs and Cosmetics Act, 1940. ?
Point No.3: Whether the complainant has proved that the accused No.1 company no manufactured "SUNN IUI Catheters" for sale without licence in violation of Sec.18© of the Act and thereby committed the offence punishable u/s.27 (b)(ii) of the Drugs and Cosmetics Act, 1940. ?
Point No.4: Whether the prosecution has proved that the accused No.4 stocked and distributed the "SUNN IUI Catheters" manufactured without licence and misbranded, in violation of Sec.18(b), Sec.18(a)(i) and R/w. Sec.17(b) of the Act and thereby committed the offence punishable u/s. 27(d) of the Act ?
Point No.5: Whether the court proves that the accused No.2 and 3 and accused No.5 and 6 have to be held liable for the offence committed accused No.1 and 4 by virtue of section 32(1) of the Act?
Point No.6: What order?10 CC.No.167-17
8. My findings on the above said points are as under:
Point No.1: In the Negative;
Point No.2: In the Affirmative, Point No.3: In the Negative, Point No.4: In the Negative, Point No.5: In the Negative Point No.6: As per the Final orders for the following:
REASONS
9. Point No.1: Accused persons taken up the contention that the Drug Inspector who investigated the matter had no jurisdiction to seize the alleged drugs, investigate the matter and to file the complaint. Perusal of Section. 21 of the Act and the various rulings rendered by our Hon'ble High Court and other High Courts makes it clear that only the person appointed as Drug Inspector through notification published in the Official Gazette is empowered to investigate the matter relating to the contravention of the provisions of the Act. Here, the 11 CC.No.167-17 accused persons not taken up the specific contention that the Drug Inspector who investigation the matter is not the Drug Inspector appointed through a notification. Mere, suggestion that the Drug Inspector had no jurisdiction is not sufficient. Even otherwise, the copy of the notification produced by the complainant disclose that he is the Drug Inspectors legally appointed and had the jurisdiction over the area where the drugs were seized.
10. The second contention is taken that there is no proper sanction to prosecute the accused person. Ex.p.23 is the sanction dated: 07.12.2016 given the Drug Controller General. Perusal of the sanction order discloses the lack of required ingredients to constitute valid sanction. It is not stated what are the evidence pursued to confirm the existence of prima facie evidence, thus, it cannot be considered as valid sanction. This becomes valid defence for the accused only if the sanction is mandatory to launch the criminal 12 CC.No.167-17 case for contraventions of the provision envisaged under Chapter-IV of the Act.
11. The learned counsel of the accused relied upon the number of rulings and argued that the sanction is mandatory. Chapter-IV of the Act deals with the manufacturing, selling and distribution of drugs and cosmetics. Chapter-IV-A deals with provision relating to deals with taking cognizance of offences relating of Ayurvedic, Siddha and Unani drugs. Sec. 32 of Chapter- IV deals with taking of cognizance and it no where says that there must be sanction from the higher authority to initiate the prosecution under that Chapter. Rule.51 (5) of the Act says that the inspector subject to the instructions of the controlling authority shall initiate any complaint in writing which may be made to him. The reading of the section and rule referred above, it can be very well inferred that what required is only the instruction from the controlling authority and not the sanction. As argued by the learned complainant counsel, only Section. 33(m) of 13 CC.No.167-17 the Act mandates the sanction to file the case for contravention of the provisions under Chapter-IVA of the Act. The Hon'ble Apex Court, in the case of Drugs Inspector & Another Vs, Fizekem Laboratories (P) Ltd., and other, reported in (2008) 4 SCC 784, held that "sanction is required only if proceedings are initiated under Chapter-IV-A of the Act. Thus, the contentions of the learned counsel of the accused persons that the complaint is not maintainable in view of not carrying the investigation by the competent officer and for not of having valid sanction, are not sustainable. Thus, consequential answer for this point is negative.
12. Point No.2: The complainant come up with the case that "SUNN IUI Catheters" is a Medical Device and it was notified as a drug under Sec.3 (b)(iv) of the Act vide Government of India Gazette Notification No. S.O. 1468(E) dated: 06.10.2005. Ex.p.2 is the notification and wherein at Sl.No. (iii) Catheters is shown as drug. Accused No.1 is the manufacturer of "SUNN IUI 14 CC.No.167-17 Catheters". The complainant case is that he along with Drug Inspector visited the premises of accused No.4 and found different sizes of catheters and in the label required information were not found.
13. The complainant examined as P.w.1 deposed in this regard and produced the letter with investigation report received from the Deputy Drugs Controller (India), CDSCO, South Zone is marked as Ex.p.3, where under request was made to investigate at accused No.1 and 4 in view of seizure of "SUNN IUI Catheters" from the premises of M/s. SAR Healthline (P) Ltd., No.222, Commodity Exchange, Sector-19, Vashi, Navi Mumbai and Ghatkopar and found the stock of "SUNN IUI Catheters" without having required information in the label.
14. Ex.p.5 is the letter dated:17.02.2016 addressed by the Deputy Drugs Controller asking the Drugs Controller to hold Joint Investigation along with complaint. EX.p.6 is the Joint Investigation Report and wherein, it is stated 15 CC.No.167-17 that the complainant along with Drug Inspector, State Control Department visited the premises of accused No.4 for investigation. In the report, it is stated that the labels not contains the required information and the stock found there was acquired from accused No.1. Ex.p.7 is the Form No.16, where under different catheters were seized. Ex.p.8 is the mahazar. Ex.p.9 is the permission obtained from the court to retain the seized drugs.
15. The above referred documents coupled with oral evidence disclose that the complainant seized "SUNN IUI Catheters" of various types from the premises of accused No.4. The seized catheters were identified as Mo.1. In fact, the seizure of Mo.1 from the premises of accused No.4 is not disputed. Ex.p.10 is the copy of the notice u/s.18A and 22(1) (cca) of the Act issued to the Branch Executive of accused No.4 company. Ex.p.11 is the reply given by accused No.4. In the reply, it was informed that the seized catheters were manufactured by 16 CC.No.167-17 accused No.1 and 4 are having the whole sale licences under Form No.20B and 21B. The supplied catheters being sold to use the same as in the laboratory for transferring medium for laboratory application only. The product is not used for medical use through it is sold by Manish Medi Innovation as a catheters. Ex.p.12 is the licence in Form No.28 issued to accused No.1 firm and where under permission is given on to manufacture of "IUI Catheter" of a size 6/8 Fr, having length of 11Cm and 17Cm. Ex.p.14 is the reply given by the accused No.1 by admitting the manufacturing and supply of "SUNN IUI Catheters".
16. Perusal of Mo.1 and the investigation report discloses that the name and address of the manufacturer, manufacturing license, date of manufacture are not mentioned in the labels of "SUNN IUI Catheters". Rule.96 deals with manner of labeling. Perusal of the label discloses that the information stated in Rule.96 (1)(i), (iv), (vi) and (vii) of the Act and Rules 17 CC.No.167-17 are not there. Sec.17 (b) of the Act says that the drug shall be deemed to be misbranded, if it is not labeled in the prescribed manner. The learned counsel of the accused argued that the manufactured catheters were not meant for sale and they were manufactured for the use in laboratory, hence, the rule is not applicable. Learned counsel argued that the drug falls under Schedule-K, hence the provision referred in Chapter-IV is not applicable and Rule.123 of Rules provides exemption.
17. In the cover of seized catheters, it is mentioned that it is for lab purpose. However, there is no evidence to the effect that catheters were sold with condition that they should be used for lab purpose only. Rule.123 says that the drugs specified in Schedule-K are exempted from the provisions of Chapter-IV of the Act and Rules made there under to the extent and subject to the conditions specified in the schedule. In Schedule-K, Class of the Drugs and Extent and Conditions of 18 CC.No.167-17 Exemptions are dealt with. At Sl.No.1, it is stated that all the provisions of Chapter-IV of the Act and the Rules there under, subject to the conditions that the drug is not sold for medicinal use or for use in the manufacturer of medicines and that each container labeled conspicuously with the words "NOT FOR MEDICINAL USE". In the label of the seized drugs, it is not mentioned so. It is only, stated that "Lab Purpose". These two words not sufficient to put the seized drugs in the category of exempted list. Thus, the defence No.1 set up by accused is not legally sustainable and consequently, it has to be held that the seized catheters manufactured by accused No.1, is misbranded drugs and thereby contravened Sec.18(a)(i) of the Act, which is punishable u/s.27(d) of the Act. Accordingly, this point is answered in affirmative.
18. Point No.3: The complainant alleged that the accused No.1 is not having licence to manufacture the seized "SUNN IUI Catheters" from the premises of accused No.4. At Para No.16 of the complaint, it is 19 CC.No.167-17 averred that accused No.1 manufactured ""SUNN IUI Catheters" for sale without licence to manufacturer. The complainant produced the copy of the licence is marked as Ex.p.12. Perusal of the licence discloses that the licence valid up to 03.06.2018 was issued to accused No.1 firm to manufacture the drugs as per approved list of drugs. At Sl.No.10 and 11 of the approved list i.e., "IUI Catheter" of a size 6/8 Fr having length of 11Cm and "IUI Catheter" of a size 6/8 Fr having length of 17Cm are mentioned. The seized catheters are 11Cm and 17Cm having lateral opening and curve.
19. The complainant in the cross examination admitted that the accused No.1 is having the licence to manufacture catheters. The complainant further stated that the accused No.1 is not having the licence to manufacture "SUNN IUI Catheters". The "SUNN IUI" is the brand name and complainant has admitted that aspect. The complainant admitted that there is no necessity of obtaining the licence to use the brand name. 20 CC.No.167-17 From this, it is clear that the accused No.1 had the licence to manufacture the seized catheters from the premises. Thus, the question of accused No.1 committing the offence punishable u/s.27 (b)(ii) of the Act not arises. Accordingly, this point is answered in negative.
20. Point No.4 : Accused No.4 is the distributor of the drugs manufactured by accused No.1 and having the licence in Form No.20B and 21B valid up to 02.08.2017. The complainant failed to prove that the accused No.1 had no licence to manufacture the catheters seized from the possession of accused No.1. This being the case, the contention of the court is that the accused No.4 stocked and distributed the catheters manufactured without licence and it resulted in violation of Sec.18 (b) of the Act and thereby committed the offence punishable u/s.27 (d) of the Act not arises.
21. It is alleged that the accused No.4 stocked and distributed the misbranded "SUNN IUI Catheters". The 21 CC.No.167-17 complainant proved that "SUNN IUI Catheters" are misbranded drugs. The accused No.1 taken up the contention that it purchased from the licensed manufacturer, hence, protected u/s.19 (3)(b) of the At. The learned counsel referred Sec.19 (3) of the Drugs & Cosmetics Act, 1940 and relied upon the ruling rendered by the Hon'ble Punjab and Haryana High Court in the case of Radhey Sham Vs. State of Punjab reported in 2015(1) Drugs Cases (DC) 306 wherein it is held that "in a case where the drug in question is purchased from licensed dealer/distributor, the petitioner is entitled to claim the protection under Sec.19(3) of the Drugs & Cosmetics Act, 1940". In the case of Madan Lal Vs. The State of Punjab and others reported in 1981 Drugs Cases 31, in the case of Sate Vs. Romesh Chander, reported in 1980 Drugs Cases 77, the similar ratio being laid down
22. The accused No.4 is the company having the licence in Form No.20B and 21B licensed to sell, stock, 22 CC.No.167-17 or exhibit ( or offer ) for sale, or distribute by whole sale drugs other than those specified in (Schedule - C.C.(1) and X) on the premises mentioned therein. It is not stated that the accused is the agent for the distribution of the drugs manufactured by accused No.1. Accused No.4 purchased the Drugs in question from the accused No.1 and it is having the license to manufacture the purchased Drugs. Either in the complaint or in the evidence stated that the accused No.4 had knowledge that the seized drug is misbranded drugs. Sec.19 (3) of the Act, reads as :
(3) A person, not being the manufacturer if a drug or cosmetic or his agent for distribution thereof, shall not be liable for a contravention of section.18 if he proves:
a) That he acquired the drug or cosmetic from a duly licensed manufacturer, distributor or dealer thereof;
b) That he did not know that the drug or cosmetic in any way contravened the provisions of that section and
c) That drug or cosmetic, while in his possession, was properly stored and remained in the same stated as when he acquire it.23 CC.No.167-17
23. In the rulings relied by the learned counsel of the accused No.4, it has been reiterated that if the drugs is purchased from the licensed manufacture, then case cannot be filed to the effect that purchaser contravened Sec.18 of the Drugs & Cosmetics Act, 1940. Learned counsel for complainant argued that accused No.4 not produced the evidence to the effect that it made required enquiring before the purchase. The law not mandates such verification is required and purchase of the drug and cosmetic from the licensed manufacture, distributor or dealer thereof is sufficient. In the case of Veera Swamy Vs Drug Inspector reported in 2002 Cr.L.J 3210, the Division Bench of Andhra Pradesh High Court held that " 'A' person selling in stock or in retail any drug which is spurious or sub standard is liable to be punished under the Act, and plead that he acquired those drugs from a duly licensed manufacturer, distributor or dealer thereof." Even otherwise, the alleged differences are not visible to bare eye. There is no 24 CC.No.167-17 evidence to the effect that reasonable diligence could have disclosed that the drug in question is misbranded. Here the accused No. 4 proved that it purchased the drug in question from the licensed manufacture. Thus, it cannot be held that Accused No. 4 contravened the Section. 18(a)(i) of the Drugs & Cosmetics Act. Accordingly, this point is answered in negative.
24. Point No.5: In this case, it is proved that accused No.1 committed the offence punishable u/s.27 (d) of the Act. The accused No.1 is the partnership firm. Accused No.2 and 3 are the partners. Accused No.4 is the company, accused No.5 is the Managing Director and accused No.6 is Marketing Director. The partners of the firm or directors of the company can be tried and sentenced for the offence committed by the firm or company only, if it is proved that he/was in charge of day to day affairs of the company at the relevant period. In the complaint it not averred that accused No.2 and 3 were in charge of day to day affairs of accused No.1 25 CC.No.167-17 including the manufacturing process. It is same in respect of accused No.5 and 6 also. The learned counsel of the accused relied upon the rulings rendered in the case of Ashok Kumar Tyagi Vs. State of H.P., reported in 2015 (1) Drugs Cases (DC) 185. The Hon'ble Madhya Pradesh High Court, in the case of Venkateshwaran Narayanan Ayyar Vs. State of M.P., reported in 2006 Drugs Cases (DC) 532. The Hon'ble Supreme Court of India, in the case of State of Karnataka Vs. Pratap Chand and others, reported in 1981 Drugs Cases, (DC) 1 SC. The Hon'ble Allahabad High Court, in the case of R. K. Khandelwal and another, Vs. State, reported in 1983 Drugs Cases. The Hon'ble Madhya Pradesh High Court, in the case of Kishan Gopal Vassal and others, Vs. State of M.P., reported in 2008 Drugs Cases (DC) 584. In these rulings, it has been held that there must be averment to the effect that the directors or other officers who arrayed as accused was in charge and was responsible for the 26 CC.No.167-17 conduct of the business of the firm at the time of the commission of the offence.
25. In the ruling reported in 1983 Drug Cases 14, wherein it is held that "where the offence is committed by a company Sec.34 comes into operation and an provided in Sub-Section.(1) not only the company, but also every person in charge of and responsible to the company for the conduct of the business of the company shall be deemed to be guilty of the offences." Similarly, under Sub-Section.(2) of the Sec.34, director, manager, secretary or other officers of the company can also be deemed to be guilty, if it is proved that the offence was committed with his consent or connivance or is attributable by any neglect or his part, no director or partner of a company can be convicted of the offence u/s.27 of the Act, unless it is proved that the sub- standard drug was sold with his consent or connivance or was attributable to any neglect on his part, or it is proved that he was a person in charge of, and 27 CC.No.167-17 responsible to the company for the conduct of the business of the company. There are neither averments nor evidence to the effect that the accused No.2 & 3 were in charge of day to day affairs of accused No.1 firm and misbranded drug was manufactured with consent or connivance or was attributable to any neglect on their part.
26. The learned counsel for the complainant argued that it is for the accused No.2 and 3 to prove that they were not in charge of accused No.1 firm. Only on proving the requirement envisaged u/s.34 (1) of the Act, the burden of proving the fact rested on the partners came into picture. In the case of M.N.A. Aramugha Perumal and others Vs. State, reported in 1986 (11) PAC-2, wherein, it is held that "the burden of proving that the offence was committed without their knowledge and they had exercised all due care and diligence shifts on the accused only when it is shown by the prosecution that 28 CC.No.167-17 the accused were in over all control of the business of the company."
27. Thus, on appreciation of evidence on record, I hold that the complainant has failed to prove the accused No.2 and 3 were in charge of day to day affairs of accused No.1 firm, so they have to be held guilty for the offence committed by accused No.1. Thus, Court is of the considered view that accused No.2 and 3 are not liable to under go punishment for the offence committed by accused No.1. The complainant failed to prove that the accused No.4 committed the alleged offence. Even, if it is held that accused No.4 committed the alleged offences, accused No.5 and 6 wouldn't have become liable for the committed offences for the reasons stated above. Accordingly, this point is answered in Negative.
28. Point No.6: The complainant succeeded only in proving that the accused No.1 committed the offence punishable u/s.27 (d) of the Act and failed to prove the other charge leveled against the accused No.1. The 29 CC.No.167-17 complainant failed to prove all the charges leveled against accused No.2 to 6. Thus, I proceed to pass the following:
ORDER By exercising the power conferred u/s. 248 (1) of Cr.P.C, accused No.2 to 6 are acquitted from the offences punishable u/s.27 (b)(ii) and 27(d) of the Drugs & Cosmetics Act, 1940 and Rules 1945. Accused No.1 is acquitted from the offence punishable u/s.27 (b)(ii) of the Drugs & Cosmetics Act, 1940 and Rules 1945.
By exercising the power conferred u/s. 248 (2) of Cr.P.C. accused No.1 company is convicted from the offence punishable u/s. 27(d) of the Drugs & Cosmetics Act, 1940 and Rules 1945.
To hear regarding sentence on accused No.1. (Dictated to the Stenographer, directly on computer, typed by her corrected and then pronounced by me, in open court on this the 2nd day of April - 2018.) PRESIDING OFFICER.30 CC.No.167-17
ORDER ON SENTENCE
29. Heard the Ld counsels of A.1 and the complainant.
30. On behalf of A-1, it is submitted that by oversight some of the information is left out in the label and they were rectified. It is submitted that there was no intention of cheating or making unlawful gain. The firm is employing about 70 persons and now it being run as per license conditions. With that submission prayed to impose minimum fine amount.
31. The learned counsel of the complainant argued that maximum fine may be imposed, so that it would be a lesson for the like offenders.
32. A.1 is a firm, thus only fine can be imposed. It is not the case of the complainant that in order to make any unlawful gain, A.1 had not mentioned required information in the label of the drugs. A.1 firm is still having the licence and running the manufacturing activities and it is not the case of the complainant that 31 CC.No.167-17 A.1 is continuing the manufacturing of misbranded drugs. It is submitted that the firm is employing more than 70 persons. Considering all these aspects, the court is of the considered view that the minimum possible fine as to be imposed. Accordingly, I proceed to pass the following:
ORDER The accused No.1 firm is sentenced to pay fine of Rs. 20,000/-, for having committed the offence punishable u/s.27(d) of the Drugs & Cosmetic Act, 1940.
Accused No.2 is directed to pay fine on behalf of accused No.1 company.
Bail bonds of the accused persons stand canceled. The sample identified as Mo.1 is to be returned to the complainant to dispose off the same in accordance with law, after expiry of appeal period. (Dictated to the Stenographer, directly on computer, typed by her corrected and then nd pronounced by me, in open court on this the 2 day of April - 2018.) PRESIDING OFFICER.32 CC.No.167-17
ANNEXURE:
ON BEHALF OF THE COMPLAINANT:
WITNESSES:
P.w.1 - N.K.Jayasenthil.
DOCUMENTS:
Ex.p.1 - Gazette Notification, Ex.p.2 - Gazette Notification, Ex.p.3 - Letter dated:21.12.2015, Ex.p.4 - Letter dated:09.12.2015, Ex.p.5 - O/c of Letter dated:17.02.2016, Ex.p.6 - Joint Inspection Report dated:02.03.2016, Ex.p.7 - Form No.16, Ex.p.7 - (a) Sig. of P.w.1, Ex.p.8 - Mahazar, Ex.p.8 - (a) Sig. of P.w.1, Ex.p.9 - Permission Letter, Ex.p.10 - O/c of Notice dated:15.03.2016, Ex.p.11 - Reply dated:21.03.2016, Ex.p.12 - O/c of Form No.28, Ex.p.13 - List of Products, Ex.p.14 - Undertaking Letter dated:17.03.2016, Ex.p.15 - Batch Manufacturing Records, Ex.p.16 - Batch Manufacturing Records, Ex.p.17 - Batch Manufacturing Records, Ex.p.18 - Batch Manufacturing Records, Ex.p.19 - Batch Manufacturing Records, Ex.p.20 - Invoices of Plastics & Raw materials, And B.D. Syringe, Ex.p.21 - Purchase & Sales invoices, Ex.p.22 - Joint Investigation Report dated: 17.03.2016, Ex.p.23 - Permission given by Dy. Drug Controller, Ex.p.24 - Office Order.33 CC.No.167-17
MATERIAL OBJECTS:
Mo.1 - One carton box with wax seal.
ON BEHALF OF THE ACCUSED:
Witnesses & Documents: Nil.
(SHANTHANNA ALVA M.) PRESIDING OFFICER, SPL.COURT FOR ECONOMIC OFFENCES, BANGALORE.34 CC.No.167-17
02.04.2018 Complt.,- Central Drugs, A.1 Co., rep. by A.2, A.2 & 3 - D.S., A.4 Co., rep. by A.5, A.5 & 6 - G.D.R., For Judgment.
(Judgment pronounced in open court vide separate order) ORDER By exercising the power conferred u/s. 248 (1) of Cr.P.C, accused No.2 to 6 are acquitted from the offences punishable u/s.27 (b)(ii) and 27(d) of the Drugs & Cosmetics Act, 1940 and Rules 1945. Accused No.1 is acquitted from the offence punishable u/s.27 (b)(ii) of the Drugs & Cosmetics Act, 1940 and Rules 1945.
By exercising the power conferred u/s. 248 (2) of Cr.P.C. accused No.1 company is convicted from the offence punishable u/s. 27(d) of the Drugs & Cosmetics Act, 1940 and Rules 1945.
To hear regarding sentence on accused No.1.
Presiding officer.
35 CC.No.167-1702.04.2018 (Orders regarding sentence pronounced in open court vide separate order) ORDER The accused No.1 firm is sentenced to pay fine of Rs.20,000/-, for having committed the offence punishable u/s.27(d) of the Drugs & Cosmetic Act, 1940.
Accused No.2 is directed to pay fine on behalf of accused No.1 company.
Bail bonds of the accused persons stand canceled.
The sample identified as Mo.1 is to be returned to the complainant to dispose off the same in accordance with law, after expiry of appeal period.
Presiding officer.