This criminal original petition is filed by the petitioners seeking quashment of the case in STC No.207 of 2018 on the file of the Judicial Magistrate, Boothapandy.
2.The case of the prosecution is that the complaint was lodged under section 32 of the Drugs and Cosmetics Act, 1940. On 20/02/2017, a sample of drug called 'AMIKACIN SULPHATE INJECTION' was drawn for analysis from the Medical Stores, Government Hospital, Boothapandy, Kanyakumari District. One portion of the sample was sent for analysis to Government Analyst Drugs Special, Guindy, Chennai. A report was received, on 11/07/2017 stating that it is not a standard quality, since it does not satisfy the requirement of BET as per the Indian Pharmacopoeia 2014. Notice was issued to the Medical Officer to disclose the name and address of the manufacturer. He informed that it was acquired from the District Drugs Warehouse, Tamil Nadu Medical Services Corporation Limited, Asaripallam, 2/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 Kanyakumari District. Further notice was issued seeking further particulars. Show cause notice was issued to M/s.Nandani Medical Laboratories Pvt., Limited, Indore calling for explanation for the contravention of
section 18(a)(i) of Drugs and Cosmetics Act, 1940. A reply was received from the above said M/s.Nandani Medical Laboratories Pvt. Limited to send the drugs to the Director, Central Drugs Laboratory, Kolkatta. The reply that was sent by the manufacturer company was not satisfactory. After completing the formalities of sanction order, the case has been registered stating that they are punishable under section 27(d) for the contravention of
section 18(a)(i) of Drugs and Cosmetics Act, 1940.
3.Now seeking quashment of the same, this petition has been filed by A3 and A4, who are the Directors of M/s.Nandani Medical Laboratories Private Limited, Indore, on the ground that the petitioners are noway responsible for the day today affairs of the shop. The second accused was appointed as a Technical person to look after the activities of the first accused company and the factory premises. These petitioners are not involved in the production activity. Proper information was also furnished to the complaint. A2 is the proper person, who was in 3/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 charge of the above said day today activities. Being the Directors of the Nandani Medical Laboratories Private Limited, they are not criminally held responsible.
4.Heard both sides.
5.As mentioned earlier, a simple ground on which this petition came to be filed by the petitioners, who are Directors and the manufacturers, who are involved in the day today activities and they are not responsible for the production of the unsafe drugs.
6.Only for that purpose, they would rely upon the explanation that was offered by them, by a letter, dated 20/09/2017 in response to the show cause notice issued, dated 28/08/2017, whereby it has been disclosed to the effect that A2 is responsible for the day today activities as per Section 34 of the Drugs and Cosmetics Act 1940. So it has been contended that as per section 34 of the Drugs and Cosmetics Act, 1940, imposes liability only upon the person, who is charge of the day today activities. 4/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019
7.Per contra, a simple contention has been raised on the part of the respondent to the effect under the provisions of section 34 of the Drugs and Cosmetic Act 1940. Section 34 of the Drugs and Cosmetic Act 1940 reads as follows:-
“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 committed without his knowledge or that he exercised all due diligence to prevent the commission 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 proved that the offence has been 5/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 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.
8.The learned counsel appearing for the petitioners would rely upon the judgment of this court, which was subsequently over-ruled by the Hon'ble Supreme Court in the case of Dr.Swati Ajay Piramal Vs. State of Tamil Nadu 2022(1) MWN (Cr.) 116. So, while exercising the jurisdiction under
section 482 Cr.P.C, the coordinate Bench of this court was of the view that section 34(2) of the Drugs and Cosmetics Act, is a matter for consideration at the time of trial and they must prove their innocence at the time of trial only. The role of the Directors, as found in section 141 of the Negotiable Instruments Act cannot be 6/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 equated with that of the Directors of the company, who engaged in manufacturing under Drugs and Cosmetics Act. The Hon'ble Supreme Court was of the considered view that the complaint was not filed within a stipulated period of limitation and it was filed beyond the shelf life period of drugs. So on that ground, it was allowed. But so far as section 34(2) of the Drugs and Cosmetics Act is concerned, there was no discussion considering and finding. So that judgment will not help the case of the petitioners herein.
9.As rightly pointed by the respondent herein, the document, which relied upon by the petitioners to show that A2 is responsible for the day today affairs of the company is not the admitted document by the respondent. It is the document, which was made within the company for regulating the business, which requires proper proof through evidence. If the petitioners are able to prove that the day today affairs was entrusted to A2 without their knowledge and consent, such a sub-standard drug has been manufactured , then only they can walk scot free.
10.It is the further contention that noway in the complaint, it has been stated by the complaint to the effect that the petitioners are responsible for the day 7/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 today affairs of the company. So according to him, in the absence of any such specific averment, they cannot be held personally responsible. So it has been stated that all the persons contravened the
section 18(a) of the Drugs and Cosmetics Act. Even though the specific role that has been played by each individual, immediately the explanation offered by A2 was also taken into account. So the plea that the petitioners were also responsible for the day today affairs of the company is not specifically mentioned. But it has been mentioned that they are also responsible for the same. So this ground is also not available for the petitioners now. It is a matter for evidence.
11.Similarly, there is no question of limitation and loss of life period. As per the information furnished in the sample, the date of expiry is stated as 09/11/2018. But the complaint has been lodged on 14/12/2017 itself and cognizance was taken on 27/02/2018. So the question of limitation and loss of shelf life period does not arise.
12.The learned counsel appearing for the petitioners further relied upon the order passed by this court in Crl.OP Nos.3906 and 3908 of 2020, dated 17/08/2020 (M/s.Medplus Pharmacy, Unit of Optival Health Solutions 8/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 Private Limited and others Vs. State of Tamil Nadu rep. By the Drugs Inspector, Chennai, supporting the point of argument to the effect that based upon the judgment of the Hon'ble Supreme Court in the case of Pepsico India Holding Pvt. Ltd., Vs. Food Inspector [2011(1) SCC 176] and the case was decided in further in the decision reported in the case of Dr.Swati Ajay Piramal Vs. State of Tamil Nadu [2022(1) MWN (Cr.) 116 and in the case of Sambasivan and others Vs. State of Kerala [1998 SCC(Cr) 1320].
13.Now let us go into the observation of the Hon'ble Supreme Court in the case of Pepsico India Holdings Pvt. Ltd., Vs. Food Inspector and another [2010(3) MWN Cr.) 412 (SC). The relevant portion is extracted hereunder:-
“50......It is now well established that in a Complaint against a Company and its Directors, the Complainant has to indicate in the Complaint itself as to whether the Directors concerned where either in charge of or responsible to the Company for its day-to-day management, or whether they were responsible to the Company for the conduct of its business. A mere bald statement that a person was a Director of the Company against, which 9/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 certain allegations had been made is not sufficient to make such Director liable in the absence of any specific allegations regarding his role in the management of the Company.”
14.So when we look into the allegation made in the complaint, as stated above, only bald allegation has been made to the effect the petitioners are also responsible for the manufacturer. But the allegation against the petitioners does not satisfy the requirement of the law as set out in Pepsico's case. On that sole ground, the petition is liable to be allowed and the prosecution against the petitioners is liable to be quashed.
15.In the result, this criminal original petition is allowed. The impugned proceedings in STC No.207 of 2018 on the file of the Judicial Magistrate, Boothapandi is hereby quashed against the petitioners. Consequently, connected Miscellaneous Petitions are closed.
08.08.2022 Internet:Yes/No Index:Yes/No er 10/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 Note: In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned.
To,
1.The Drugs Inspector, Marthandam Range, O/o.The Drugs Inspector, 23G/2F, Hindu College Road, Nagercoil-629 002.
2.The Judicial Magistrate, Boothapandy, Kanyakumari District.
3.The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai.
11/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)No.14521 of 2019 G.ILANGOVAN,J., er Crl.O.P.(MD)No.14521 of 2019 08/08/2022 12/12 https://www.mhc.tn.gov.in/judis