SCA/12033/2000 1/14 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 12033 of 2000 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= VVF LTD & 2 - Petitioner(s) Versus STATE OF GUJARAT & 1 - Respondent(s) ========================================================= Appearance : MR P.C. KAVINA SR. ADVOCATE WITH MS. MANISHA NARSINGHANI for petitioners. MR. KETAN J DWIVEDI AGP for respondent Nos.1 and 2. ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA Date : 03/12/2008 ORAL JUDGMENT 1. This petition challenges order dated 17.10.2000 made by the first respondent confirming the order SCA/12033/2000 2/14 JUDGMENT dated 1.8.2000 made by respondent No.2 under the provisions of the Drugs and Cosmetics Act, 1940 ('the Act') and the Drugs and Cosmetics Rules, 1945 ('the Rules'). 2. The petitioner company is manufacturing certain soaps known as NEKO Soap, Dettol Soap and Johnson's Baby Soap under the licence issued to the petitioner company under the Rules on 6.6.1990. The petitioner received five show cause notices on 20.5.1999, 5.12.1999 and 12.1.2000 having identical contents and alleging that the cakes of soaps referred to in each of the show cause notices were found to be below the net average weight of the respective soaps when compared to the net weight stated on the packaging. That the petitioner was, therefore, selling misbranded product in violation of rule 148 (2) of the Rules. The reply tendered by the petitioner company was considered and respondent No.2 authority passed an order on 1.8.2000 holding that the petitioner had committed breach of the Rules and hence the petitioner was directed to discontinue production for one day i.e., 28.8.2000. SCA/12033/2000 3/14 JUDGMENT 3. The petitioner carried the matter in appeal and the appeal came to be dismissed vide impugned order dated 17.10.2000. Before the appellate authority the petitioner had placed reliance on the fact that the samples of the soaps had been taken and tested six to ten months after the date of packing of the product and because of loss of moisture content due to evaporation in the intervening period, there would be loss of weight as a consequence to loss of moisture content. In support of the contention made, reliance was placed on the provisions of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 with special reference to rule 2 (i), rule 5, rule 11 (4) and Schedules I, II, III and IV of the said Packaged Commodities Rules. 4. The appellate authority came to the conclusion that the consumer is not getting value for money because even after paying the full price the consumer receives the product having less weight. That the reference to the Packaged Commodities Rules and the reliance thereon by the petitioner was not warranted SCA/12033/2000 4/14 JUDGMENT because the petitioner had been granted licence under the Act and the Rules. Therefore, the matter had to be processed under the Act and the Rules and the provisions thereof were required to be implemented. That there was no dispute that when tested in the Laboratory the product samples had failed the test as the product was found to be weighing less than the weight published on the label. The order made by respondent No.2 authority was, therefore, confirmed by the appellate authority. 5. On behalf of the petitioners, learned Senior Advocate made reference to the provisions of the Standards of Weights and Measures Act, 1976 and the Packaged Commodities Rules, 1977 to urge that under the said provisions the Legislature had provided for the limits of permissible error specified in First and Second Schedule of Packaged Commodities Rules. That rule 11 (4) of the Packaged Commodities Rules was an exception to the general provisions preceding the said rule. In a case, where there is significant variation in weight on account of environmental or other conditions, the packaging which contained the SCA/12033/2000 5/14 JUDGMENT requisite information including weight may be qualified by the words “when packed”. That the petitioner had complied with the said statutory provisions and thus had not committed any breach of the said provisions. 6. It was further submitted that under the Act and the Rules the only prescription was under rule 148 (2) of the Rules to declare on the outer label the net contents expressed in terms of weight which the petitioner had complied with. That though the show cause notice did not refer to Section 17C (b) yet the appellate authority had referred to the said provision for holding that there was misbranding. However, on facts there was no misbranding because it was not the case of the authority that the product was not labelled in the prescribed manner or that the label contained any statement which was false or misleading in any particulars. Referring to provisions of rule 150A of the Rules which deals with Standards for Cosmetics, it was contended that the requirement was that the standard for cosmetics shall be as may be prescribed in Schedule S of the Rules. SCA/12033/2000 6/14 JUDGMENT That Schedule S in the opening portion only specifies that the stipulated cosmetics in finished form shall conform to the Bureau of Indian Standards specifications laid down from time to time. The petitioner had conformed the said requirement and for this purpose reliance was placed on Exh. K which is the Indian Standards Specification for toilet soap published by Bureau of Indian Standards. Specific reference was made to paragraph No.4.4.1 to submit that the Bureau itself envisaged that toilet soap is liable to lose moisture on keeping. Referring to the paragraph relating to packing and marking, it was submitted that in paragraph 5.2 (d) the requirement was to show on the packaging “net mass when packed”. Therefore, it was submitted that not only there was no violation of any of the provisions of the Act or the Rules but in absence of any provision in the Act or the Rules with regard to the contents of a package matching or not matching the declared information on the label, the petitioner could not be visited with any penalty. In contrast, it was pointed out that such a provision existed under the Standards of Weights and Measures (Packaged Commodities) Rules, SCA/12033/2000 7/14 JUDGMENT 1977 providing for a discrepancy between declared weight and actual weight, but under the Act or the Rules such a discrepancy cannot be termed to be a breach of any of the provisions of the Act or the Rules. 7. On behalf of the respondent authority it was submitted that the licence of the petitioner was suspended only for a day and considering the quantum of penalty no interference was warranted, the authority having already taken a very lenient view. Referring to the provisions of rule 148 (2) of the Rules, it was stated that the requirement was to state net weight on the label and there was no provision for using the words “when packed” in the said rule. Therefore, the petitioner cannot be permitted to take recourse to the use of the said words. That the petitioner was bound to take sufficient care while packing the toilet soaps so that the net contents as stated on the label are found to be available at a subsequent point of time. To provide for loss of moisture during storage by way of a compensatory measure the petitioner could fix SCA/12033/2000 8/14 JUDGMENT the net content in excess at the time of manufacture and packing. In support of the submission, reference was made to certain drugs where to compensate for the likely loss of certain ingredients, the manufacturer adds certain percentage of such ingredients. That the authorities having acted on the report of the Government analyst nothing further was required to be proved by the authority. Lastly it was submitted that provisions of rule 148 (2) of the Rules and Section 17C of the Act permitted the authority to take penal action against the petitioner. 8. Having heard the learned advocates for the respective parties it is apparent that the impugned orders made by the respondent authorities cannot be sustained. Under the Act, Section 17C relates to misbranded Cosmetics and appears in Chapter IV relating to manufacture, sale and distribution of drugs and Cosmetics. The said Section states that a cosmetic shall be deemed to be misbranded,-- (a) if it contains a colour which is not prescribed; or (b) if it is not labelled in the prescribed manner; SCA/12033/2000 9/14 JUDGMENT or (c) if the label or container or anything accompanying the cosmetic bears any statement which is false or misleading in any particular. Admittedly, first of the three requirements cannot be pressed into service in the facts of the case the dispute being in relation to the discrepancy between weight found at the time of testing and the weight printed on the packaging. Therefore, the case has to fall either under contingency (b) or contingency (c) envisaged by Section 17C of the Act. It is not the case of the authority that the product is not labelled in the prescribed manner. Thus contingency (b) is also ruled out leaving only contingency (c). The said provision also stipulates that a product shall be deemed to be misbranded if the label bears any statement which is false or misleading in any particular. To ascertain whether a false or misleading statement is made on the label, one may consider Part XV of the Rules which pertains to labelling, packing and standards of cosmetics. Rule 148 of the Rules provides for manner of labelling and stipulates that subject to other provisions of the SCA/12033/2000 10/14 JUDGMENT rules, the cosmetic shall carry on the outer label a declaration of the net contents expressed in terms of weight for solids. In the present case, it is not necessary to deal with other sub-rules of rule 148 of the Rules. Rule 150A provides for standards for cosmetics and stipulates that same shall be such as may be prescribed in Schedule S. As already recorded, on behalf of the petitioner it has specifically been submitted that the only requirement was, for any one of the cosmetics enumerated in the said Schedule, that it conforms to the specifications laid down by the Bureau of Indian Standards. The authority has not disputed that the said requirement is fulfilled when one considers the extract from the Indian Standards specification for toilet soap appearing at Exh.K. The package has been marked with the net mass when packed i.e., net weight when packed. 9. In the circumstances, the reasoning of the authority that the words “when packed” cannot absolve the petitioner cannot be sustained. The petitioner has complied with the requirement of rule 148(2) read with rule 150A of the Rules and the requirement of SCA/12033/2000 11/14 JUDGMENT Schedule S of the Rules. Therefore, it is not possible to state that the product was not labelled in the prescribed manner. 10. Whether in the aforesaid set of facts and circumstances it can be stated that the label contained a statement which is false or misleading in any particular; in other words, the particulars prescribed by the relevant rules. In fact the petitioner has complied with rule 148(2) of the Rules read with rule 150A and Schedule S thereunder of the Rules. Hence it is not possible to hold that the statement on the label is false or misleading in any particular. Merely because subsequent to the point of time of packing a product loses weight that by itself cannot bring the case of the petitioner within the requirement of Section 17C (c) of the Act. 11. Considering the issue from a slightly different angle, if one examines Form 34 which is the prescribed Form for issuing certificate of tests or analysis of cosmetics by the Central Drugs Laboratory or the Government Analyst, a plain reading of the SCA/12033/2000 12/14 JUDGMENT said form shows that none of the seven columns provided for any weighment and any discrepancy qua weight printed on the label. Column 7 which talks of rules of test or analysis provides for four requirements and the nearest one that one can see is (c) which talks of conforms/does not conform to claims made on the label as to the nature and quality of the cosmetic, thus indicating that the requirement as to weight as printed on label cannot be a subject matter of testing or analyzing the product. In fact when one goes through four specifications in which result of test or analysis is to be certified, each one of them indicates that the provision is primarily for ensuring that the quality of the product is to be tested and certified. The concept of weight cannot be treated as a relevant factor for the purpose of quality. The same would fall within the meaning of the term “quantity”. Therefore, the reliance by the respondent authorities on the report of the Government analyst also cannot take the case of the respondent authority any further. 12. Hence in the facts and circumstances of the SCA/12033/2000 13/14 JUDGMENT case, there is no violation or breach of any of the provisions of the Act or the Rules so as to penalize the petitioner company. In juxtaposition, when one considers the relevant provisions of the Standards of Weights and Measures Act, 1976 and the Packaged Commodities Rules, 1977, it becomes clear that for the said purpose i.e., checking veracity of the quantity content of a product, a specific statute has been enacted by the Legislature providing for permissible error, negligible or significant variation of a product due to environmental conditions. The respondent authority, therefore, though rightly came to the conclusion that the provisions of any other statute could not be considered for the present purpose, has erred in coming to the conclusion that there is breach of any provision of the Act or the Rules. 13. The petition is allowed accordingly. The impugned orders dated 1.8.2000 and 17.10.2000 are quashed and set aside. Rule is made absolute with no order as to costs. SCA/12033/2000 14/14 JUDGMENT (D.A. Mehta, J.) ... (karan)