IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Cr. Appeal No. 418/2004 Date of decision: 31.8.2011 State of H.P. …..Appellant Versus Shri Nand Kishore and others. ……Respondents Coram: The Hon’ble Mr. Justice Surinder Singh, J. Whether approved for reporting ?1 yes For the Appellant: Mr. P.M. Negi, Deputy Advocate General. For the respondent : Mr. Nishant Ravi, vice counsel for respondent No. 1. Mr. Neeraj Gupta, Advocate, for respondent No. 2. Mr. Raman Sethi, Advocate, for respondents No. 3 and 4. Surinder Singh, J. (Oral) Respondents faced trial before the learned trial Magistrate in criminal case No. 60/4 of 1999 for the offence punishable under Section 27 (d) of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as ‘the Act’) for allegedly selling spurious ‘CIPROMAC’ (Ciprofloxacin Suspension) Batch No. 1 Whether the reporters of Local Papers may be allowed to see the judgment ?. yes - 2 - 28898 manufactured by ‘M/s Torque Pharmaceuticals Pvt. Ltd.’ (respondents No. 4 and 5). At the end of trial, respondents were acquitted vide judgment dated 31.5.2004 which has been challenged in the present appeal by the State. 2. In short, the respondents were tried on the allegations that on 3.2.1999 PW1 Shri R.K. Chaudhary, Drug Inspector intercepted the premises of ‘M/s Aman Medical Store’ Shri Nand Kishore (respondent No. 1) and picked-up the sample by purchasing four cipromac vials 30 ml. each, the expiry date whereof was July, 1999. All the four viols were sealed as per procedure and marked as sample No.HMR/98/74. (ii) One of the samples thereof was handed over to respondent Nand Kishore the Proprietor of M/s Aman Medical Store. In turn he informed in writing that ‘M/s Torque Pharmaceuticals Pvt. Ltd.’ Issapur-Dappar its manufacturers. (iii) Second sample was sent to the Government analyst C.T.L. Kandaghat for its analysis, vide memorandum Ext. PW1/D. One of the copy of the said form was also enclosed along with sample container and another was sent separately through registered post. - 3 - (iv) The Laboratory (CTL Kandaghat) vide its report Ext. PW1/G dated 20.5.1999 found the said drug not of a standard quality for the reasons that the ciprofloxacin 5ml was containing 73 mg against the declared value of 125 mg/ 5mg. 3. Respondent No. 1 was duly informed by the Drug Inspector of the report of the analysis vide letter Ext. PW1/H. The copy of the analysis report was sent along with said letter. Thereafter respondent No. 1 produced the invoice No. 000130 dated 18.6.1998 Mark-1 pertaining to ‘M/s Bharat Medical Store Pharmaceutical’ its Distributors situated at Purana Bazar, Sundaarnager, H.P. (respondent No. 2 and 3). 4. Respondents No. 2 and 3 were given notice by the Drug Inspector for the contravention under Section 18 (a) (i) of the Act calling upon as to why legal action be not initiated against them. They were also informed that in case, they intend to adduce evidence in controversion of the analysis report Ext. PW1/I they can notify in writing to him within 28 days of the receipt of the report of the Government analysis. In response respondents No. 2 and 3 enclosed five copies of invoice and correction-copy of batch number issued by respondents No. 4 and 5. Since item was registered - 4 - in September, 1998, there was no stock with them accordingly they informed that they were writing to the retailers to whom the earlier stock was sold to return the same and the quantity received from the market would be sent to the Drug Inspector in due course. 5. The Drug Inspector aforesaid sent a similar letter to respondents No. 4 and 5 along with III sealed sample and the copy of the analysis report on 1.6.1999. The said respondent-Company vide their letter Ext. PW1/N-1 dated 12.6.1999 informed the Drug Inspector that Ciprofloxacin Hcl, being a very bitter salt has been manufactured in the form of suspension by reacting it with the Rasin Indion-234. Further that the drug having the Cationic moiety gets exchanged with the rasin without effecting the bioavailability of the product in presence of weak acid cation exchangers, which makes the drug tasteless in the suspension but the particle size is of less then 100 BSS mesh, still remaining un-exchanged hence masking the taste of the drug to a greater extent. They also informed that if the Preparation is tested for assay without getting it released from the cationic Ion Exchange rasins the assay turns out to be 70.68 mg/5 ml as per report enclosed, but if it is - 5 - treated with 0.1N Hcl and allow it to rest for 4-6 hour with intermittent shaking the resinate thus received after shaking is tested by U.V. Spectrophotometeric method it shall give you 100% results, i.e., 126. 08 mg/ 5 ml. Their lab report was also annexed with their above reply, Ext. PW1/N-1 making request to get the sample re-tested in the manner as mentioned above, hopping to get the same result. 6. The Drug Inspector did not respond to the letter of respondents No. 4 and 5. However, he sought prosecution sanction from the Licensing Authority-cum- Drug Controller, H.P. against them which was accorded vide letter Ext. PW1/S to launch the proceedings against respondents No. 4 and 5. 7. On 13.7.1999, the Drug Inspector moved an application in the trial Court under Section 29 of the Act for re-testing the second part of the sample from Central Drugs Laboratory Calcutta vide his application Ext. PW1/U, along with report of CTL Kandaghat and the copy of above letter Ext. PW1/N-1. The request of the Drug Inspector was allowed by the learned trial Court vide order dated 14.7.1999. 8. Thereafter the complaint was presented in the court on 8.9.1999 by the Drug Inspector. The - 6 - accused persons were summoned for 11.8.1999, thereafter they furnished their bail bonds. It is evident from the zimini order that on 23.2.2000, report of the Director Central Drugs Laboratory was not received and the learned trial Court issued reminder. The report was ultimately received by the learned Chief Judicial Magistrate vide letter No. 2- 1/2000-P&P/537 dated 25.4.2000 from the Director Central Drugs Laboratory. 9. Respondents No. 4 and 5 applied for their discharge on the ground that the sample was not matching with the invoice dated 8.6.1998. The application was allowed vide order dated 3.1.2001. They were discharged but other accused/respondents No. 2 and 3 filed revision against the said order which was set aside by the learned Sessions Judge on 24.1.2003 against which respondents No. 4 and 5 filed Criminal Revision in the High Court which was dismissed and the said respondents were directed to face trial. 10. All the respondents were accordingly chargesheeted for the offence aforesaid and put on trial. 11. At the end of the trial, respondents were acquitted on the grounds that the report of the - 7 - Central Drug Laboratory was unsigned photocopy hence not proved in accordance with law, the procedure for analysis and taking of the sample, as required under the Act was not followed, as admitted by PW1 Drug Inspector in his cross- examination. Respondent No. 2 had died during the trial, hence proceedings abated against him and respondent No. 3 was not proved to be the partner of ‘M/s Bharat Medical Store’. Further, except respondent No. 5, prosecution sanction was not obtained against the other respondents. 12. Shri P.M. Negi, learned Deputy Advocate General argued that the learned trial Court had set unrealistic standard to evaluate the evidence on record and that the batch No. etc. stand fully connected with the invoice of manufacturers, i.e., respondent No. 4 and 5 and also that in case, there was no authentic report of the Director Central Drugs Laboratory, Court should have taken report of the Public analyst into consideration. 13. The learned counsel for the respondents have controverted the aforesaid arguments and submitted that once the second sample was sent for analysis to the Director, Central Drugs Laboratory and analyzed by the Director, it supersedes the - 8 - report of the Public Analyst which looses its importance. To be precise they supported the grounds of acquittal. 14. I have given my thoughtful consideration to the rival contentions of the parties and have carefully and meticulously examined the record. 15. At the very out set, I would like to say that no prosecution sanction was required in the facts and circumstances aforesaid to launch prosecution as the requirement thereof is only applicable to the kind of case mentioned in Chapter IV and the offence charged does not fall under the second Chapter of the Act. 16. Admittedly, the drug in question was purchased for analysis by PW1 Drug Inspector Sh. R.K. Chaudhary on 3.2.1999. It contained four vials of 30 ml each pertaining to Batch No. 28898 manufactured by respondents No. 4 and 5, as stated above. Its expiry date was July, 1999. This fact has also been mentioned in Form No. 17 Ext. PW1/B. One sample thereof was handed over to respondent No. 1 from whom the sample was picked-up. The notice was also issued to respondents No. 4 and 5 the manufacturers and they clearly informed by their letter Ext. PW1/N-1 along with its annexures - 9 - referred to above that the protocol which is required for testing was something else then as applied by the Public Analyst CTL Kandaghat. The whole procedure by them was mentioned in the said letter. It was in that context the Drug Inspector produced the second sample before the learned trial Court and moved an application for its analysis by the Central Drugs Laboratory, Calcutta which was also necessitated for the reasons that the name of the drug in question does not find mention in the Indian Pharmacopial 1996 wherein protocol for its testing is provided. Therefore, vide Rule 46 (4) of the Rules framed under the Act for patent or proprietary medicines for which no pharmaceuticals tests or methods of analysis are available or can be applied but for which tests or methods of analysis given in standard books or journals are followed, a description of such tests or methods of analysis applied together with the reference to the relevant books or journals from which the tests or methods of analysis have been adopted, is to be given in the report. 17. There is nothing on record to show that annexures which were sent by respondents No. 4 and 5 vide letter Ext. PW1/N-1 referred to above with - 10 - report of the quality Control Department of the respondents along with protocol which was to be applied for testing the drug, as indicated by Ion Exchange Ext. PW1/N-4 and N-5 were not sent along with sample to the Central Drugs Laboratory for re- test to apply the said protocol and there was no reason either with the Drug-Inspector or the learned trial Court to differ with it nor there is any material in the Central Drugs Laboratory report whether such a protocol was applied to it. 18. Further, the report of the Central Drugs Laboratory alleged to have been received by the Court below vide letter dated 25.4.2000 is photocopy of analysis which is not even signed by the Director, Central Drugs Laboratory in order to rely upon it in view of Section 294 of the Code of Criminal Procedure read with Rule 8 of the Drugs and Cosmetics Rules, 1945 which mandates the signing of the said report by the Director. 19. In my opinion, once the drug is analyzed by the Central Drugs Laboratory and the photocopy of the report is placed on record, and its original is not produced, in that event, the Court cannot fall back on the report of the Public Analyst. It was incumbent upon the complainant to place on - 11 - record the original report of the certificate of test issued by the Director of the Central Drugs Laboratory and such a report under the law is only conclusive evidence of the facts stated therein. The photocopy of the unsigned report, as aforesaid cannot be relied upon for two reasons; (i) it is not original report (ii) also it does not specify the protocol applied for test in view of the contention raised by respondents No. 4 and 5. 20. Further, respondents No. 2 and 3 are alleged to be the partners of M/s Bhart Medical Store Pharmaceuticals Pvt. Ltd. who were stated to be the distributors of the said drugs whereas respondents No.4 and 5 are the Managing Directors and Executive Directors respectively of M/s Torque Pharmaceuticals Pvt. Ltd. Section 34 of the Act reads as under:- “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 - 12 - 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 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.” 21. A perusal of the complaint does not show that the aforesaid person(s) arrayed as the accused are the ‘Incharge of’ and ‘responsible to the company for the conduct of the business of the company’ as contemplated in sub-section (1) of Section 34 ibid and the said person(s) must be a person/persons in over all control of the day to day control of business of the company or firm. If a partner of a firm, is not in such over all control, he cannot be liable to be convicted merely because - 13 - he had a right to participate in the business of the firm under the terms of the partnership deed. 22. In the instant case, neither the partnership deed of the firm nor Memorandum of Association of the Company have been placed on record and in absence of the allegations, as aforesaid made in the complaint even the oral testimony of the complainant/Drug Inspector cannot be relied upon. [please see: State of Karnataka v. Pratap Chand and others (1981) 2 SCC 335 and State of Haryana v. Brij Lal Mtital and others (1998) 5 SCC 343. 23. It is thus seen that the vicarious liability of a person for being prosecuted for an offence committed under this Act by a company or firm arises if at the material time the person arrayed as the accused was ‘incharge of’ and was ‘responsible to the company for the conduct of its business.’ Simply because a person is Director of the Company, does not necessarily mean that he fulfils both the above requirement so as to make him liable. Conversely, without being a Director, a person can be incharge of and responsible to the Company for the conduct of its business. 24. As already stated above, there is no such averment made in the complaint and a bald - 14 - statement of the Drug Inspector is of no consequence. Reliance can also be put on the judgment of the apex Court rendered in Dinesh B. Patel and others vs. State of Gujrat and another (2010) 11 SCC 125. 25. Another glaring feature in the instant case is that the expiry date of the drug was July, 1999. The second sample for analysis was sent in the Month of July 1999 itself, therefore, the report of the Central Drugs Laboratory even if photocopy is to be believed even then the sample had expired by that time. 26. Therefore, for the foregoing reasons, the acquittal of the respondents passed by the learned trial Court cannot be interfered with. As such the appeal sans merit and is accordingly dismissed. 27. The respondents are discharged of their bail bonds entered upon by them, at any time during the proceedings of this case. August 31, 2011 (Surinder Singh), (cm) Judge.