1) By this application under section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code"), the applicants seek quashing of Criminal Case No.564 of 2007, pending in the court of the learned Judicial Magistrate First Class, Gandhinagar as well as the process issued in respect of the present applicants vide order dated 19.1.2007.
2) The respondent No.2-Senior Drugs Inspector lodged a complaint in the Court of the learned Judicial Magistrate First Class, Gandhinagar being Criminal Case No.564 of 2007 under the provisions of the Drugs & Cosmetics Act, 1940 (hereinafter referred to as "the Act") and the rules framed there under, alleging commission of the offence punishable under sections 18(c) and 18(a)(i) read with section 27 of the said Act. According to the complainant, he had obtained sample of a drug Methyl Ergometrine Injection I.P., Brand Ergomycin, Batch No. M.E.-509, Date of Manufacture 7/2005, Expiry Date 6/2007 from the Director, Central Medical Stores Organization, Gandhinagar, which was sent for analysis to the Government Analyst on 06.08.2005 under the provisions of section 23(4)(i) of the Act. The Government Analyst sent his report on 23.6.2006. As per the said report, the main ingredient, namely, Methyl Ergometrine Maleate was totally absent. It was further alleged in the complaint that the complainant had obtained the details as regards the persons in- charge of the affairs of the Company from the Director, Central Medical Stores Organization (C.M.S.O), who had furnished the names of the applicants as being the persons who were directors at the relevant time when the tender was submitted by the company, which was valid from 14.3.2005 to 31.1.2006. It is in the light of the aforesaid facts as well as the report of the Public Analyst that the above referred complaint has been lodged alleging commission of the offence punishable under section 27 of the Act.
3) Mr.
Pratik Barot, learned advocate for the applicants invited the attention of the court to the allegations made in the complaint to submit that there are no allegations to the effect that the applicants herein were in-charge of and responsible to the company for the conduct of the business of the company on the date when the offence is alleged to have been committed. Reliance was placed upon the decision of the Bombay High Court in the case of Ramprakash Gulati & Anr. v. State, 2010 (Criminal Law Journal) 1492, wherein the court, after placing reliance upon various decisions of the Supreme Court viz. Monaben Ketanbhai Shah v. State of Gujarat, AIR 2004 SC 4274, S.M.S.
Pharmaceuticals Limited v. Neeta Bhalla & Anr., AIR 2005 SC 3512, Sabitha Ramamurthy & Anr. v. R.B.S. Channabasavaradhya, 2006(10) SCC 581, N.K.Wahi v. Shekhar Singh & Ors., 2007(9) SCC 481, Saroj Kumar Poddar v. State (NCT of Delhi) & Anr., AIR 2007 SC 912, observed that it was an admitted position that there were no averments in the complaint that the applicants/accused therein were in-charge and responsible for the conduct of the business of the company at the time of commission of the alleged offence. The court, accordingly, quashed the complaint against the said applicant. It was further pointed out that apart from the fact that the necessary averments are missing in the complaint, the applicant No.1 herein was not a director of the company at the relevant point of time inasmuch as he had resigned from directorship on 11.7.2005. In support of the said submission, reference was made to Form No.32 filed before the Registrar of Companies, a copy whereof has been annexed along with the application. Insofar as the applicants No.2 and 3 are concerned, it was submitted that they were non-functional directors and not responsible for the conduct of the business of the company. In support thereof, reliance was placed upon the minutes of the meeting of the Board held on 10.7.2005, a copy whereof has been placed on record. It was submitted that thus, the applicants No.2 and 3, being non-functional directors and not being responsible for conduct of the business of the company, cannot be held liable for the alleged offence.
3.1 It was further submitted that in any case, the company had appointed one Mr. Sachindra Kumar as Manufacturing Chemist and overall in-charge of the Plant and responsible person under section 34 of the Act with effect from 16.06.2005 and, as such, it would be only the said person who ought to have been arraigned as an accused and that none of the directors should have been arraigned as accused in the present case. Reliance was also placed upon the affidavit made by the said Shri Sachindra Kumar, a copy whereof has been annexed along with the application, wherein he has categorically stated that he is in-charge of M/s. Halcyon Pharmaceuticals Limited for the manufacturing of all category of pharmaceuticals products and for the sale and distribution of such drugs. It was submitted that in the light of the overwhelming documentary evidence in favour of the applicants, the complaint which does not disclose commission of the offence alleged insofar as the applicants herein are concerned, deserves to be quashed and set aside.
4) On the other hand, Mr. K.P. Raval, learned Additional Public Prosecutor appearing on behalf of the respondents opposed the application. It was submitted that the offence alleged in the present case is a serious offence relating to pharmaceutical products, namely, drugs. It was submitted that the averments made in the complaint, do constitute the ingredients of offence alleged and, as such, there is no warrant for exercise of powers under section 482 of the Code.
5) The facts emerging from the record show that the respondent No.2, Senior Drugs Inspector obtained a sample of Methyl Ergometrine Inj. I.P., Brand Ergomycin, manufactured by M/s. Halcyon Pharmaceuticals Limited, Loharu, Hariyana. After following due procedure in accordance with the provisions of the Act, the Drugs Inspector forwarded a sample thereof to the Government Analyst on 06.08.2005. The Government Analyst, after analysis of the said sample, forwarded his report on 28th June 2006.
A perusal of the said report shows that the sample does not comply with the test for identification and that the Methyl Ergometrine Maleate content is nil. The report indicates that the I.P. 1996 limits for Methyl Ergometrine Maleate Injection is, it should contain not less than 90.0 percent and not more than 110.0 percent of the stated amount of Methyl Ergometrine Maleate. From the complaint, it appears that Methyl Ergometrine Maleate is the active ingredient of the said medicine. Thus, it is in the light of the aforesaid report that a breach of the provisions of section 18(c) and 18(a)(i) of the Act has been alleged, which constitutes an offence under section 27 of the Act.
6) Section 34 of the Act makes provision for "Offence by companies" and provides that where an offence under the 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.
7) The contention raised by the learned advocate for the applicants are required to be examined in the light of the aforesaid provisions. Strong reliance has been placed by the learned advocate for the applicants upon the decision of the Bombay High Court in the case of Ramprakash Gulati & Anr. v. State (supra) for the purpose of contending that in the absence of averments in the complaint to the effect that the applicants were responsible for and were in-charge of the conduct of the business of the company, the complaint is required to be quashed as no offence can be said to have been committed by them. In this regard, it may be germane to refer to the decision of the Supreme Court in the case of Dinesh B. Patel & Ors. v. State of Gujarat & Anr., (2010) 11 SCC 125, wherein similar submissions had been made before the Supreme Court. Reliance had been placed on behalf of the appellants therein on the decision of the Supreme Court in the case of State of Haryana Vs. Brijlal Mittal, (1998) 5 SCC 343, wherein the court had observed that from the complaint in question, except for a bald statement that the respondents were directors of the company, there was no allegation to indicate, even prima facie, that they were in-charge of the company and also responsible to the company for the conduct of its business. The Supreme Court in Dinesh B. Patel Vs. State of Gujarat (supra) held that the factual situation in both the matters was quite different which is apparent from the fact that firstly, the controversy of the complaint not having any necessary averments was not present before the High Court in the reported decision. Secondly, in that case, there was only a bald statement that the respondents were directors of the manufacturers. The court observed that in the case before it, the respondents were not arrayed only because they were the directors. That was certainly one reason. However, in addition to that, a statement has been made in paragraph-6 of the complaint that by manufacturing of the medicine concerned for sale, the company and its directors had committed a breach of the Act. Thus, there was an allegation that the directors were privy to the manufacturing of medicine by the Company.
8) Examining the facts of the present case, in the light of the aforesaid decisions, a perusal of the complaint shows that in paragraph-4 thereof, it has been stated by the complainant that he had obtained the details regarding the directors etc., of the company from the Director, Central Medical Stores Organisation from the tender submitted by the Company to the C.M.S.O for supply of drugs. In paragraph-8 of the complaint, it is stated that the Company and the applicants herein by manufacturing and selling the spurious drugs, have committed breach of sections 18(c) and 18(a)(i) of the Act and have, accordingly, committed the offence punishable under section 27 of the Act.
Thus, it is apparent that there is an allegation in the complaint to the effect that the applicants herein were manufacturing and selling of the spurious drugs, in other words, they were responsible for the manufacture and sale of the spurious drugs. Under the circumstances, the decision of the Supreme Court in the case of Dinesh B. Patel v. State of Gujarat (supra) would be directly applicable to the facts of the present case inasmuch as it cannot be said that the averments made in the complaint are merely in the nature of bald statements. The averments made in paragraph-8 of the complaint, clearly suggests manufacture and sale of the medicine by the Company and its directors. Besides, this is a case of manufacture of drugs for human consumption, which after it was tested in the laboratory, was found to be defective, namely, that the active therapeutic ingredient was totally absent.
9) Insofar as the submission regarding the applicant No.1 herein, not being a director at the relevant time, as he had been submitted his resignation prior to the date of commission of the offence is concerned, it is always open for the said applicant to lead evidence in that regard before the trial court. Insofar as the applicants No.2 and 3, being nonfunctional directors and, therefore, not responsible for the conduct of the business of the company is concerned, the same is a question of fact which cannot be decided in an application under section 482 of the Code. The said fact has to be pleaded and proved before the trial court. Under the circumstances, the contention that in the light of the fact that the applicants herein were non-functional directors, the alleged offence cannot be said to be constituted, does not merit acceptance.
10) In the facts of the present case, following the above referred decision of the Supreme Court in the case of Dinesh B. Patel v. State of Gujarat (supra), realizing the seriousness of the allegations, viz., the therapeutic ingredient of the drug is question is found to be totally absent; the names of the applicants as being the persons who were directors at the relevant time were submitted by the Company at the time of submission of the tender for supply of the drug in question to the Director, C.M.S.O., which tender was valid from 14.3.2005 to 31.1.2006, the court is not inclined to take a technical view based on the pleadings in the complaint. Under the circumstances, no case is made out for invocation of the inherent jurisdiction of this court under section 482 of the Code.
11) For the foregoing reasons, the application fails and is, accordingly, rejected. Rule is discharged. The interim relief granted earlier stands vacated.
(HARSHA DEVANI, J.) Vahid Top