IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 17TH JUNE 2011 / 27TH JYAISHTA 1933 Crl.MC.No. 2551 of 2009() ------------------------- CC.20/2009 of CHIEF JUDICIAL MAGISTRATE'S COURT, THRISSUR .................... PETITIONER(S): ACCUSED NOS.1 TO 4: ----------------------------------------------------------- 1. M/S.PANACEA BIOTEC LIMITED, A-241, OKHLA INDUSTRIAL AREA, NEW DELHI-110 020, REPRESENTED BY SHRI RAVINDER JAIN, MANAGING DIRECTOR, RESIDING AT 18/56, EAST PARK AREA, KAROL BAGH, NEW DELHI-110 005. 2. SHRI.RAVINDER JAIN, AGED 45 YEARS, MANAGING DIRECTOR, RESIDING AT 18/56, EAST PARK AREA, KAROL BAGH, NEW DELHI-110 005. 3. PANACEA BIOTEC LTD., 39/3143A, DIWANS ROAD, ERNAKULAM, KOCHI-682 016, REPRESENTED BY POWER OF ATTORNEY HOLDER SHRI BIMALESH KUMAR, RESIDING AT 60/1500, LANE NO.II, HOUSE NO.35, UDAYA NAGAR, KATHRIKKADAVU, ERNAKULAM. 4. SHRI.BIMALESH KUMAR, AGED 40 YEARS, RESIDING AT 60/1500, LANE NO.II, HOUSE NO.35, UDAYA NAGAR, KATHRIKKADAVU, ERNAKULAM. BY ADVS. DR.K.P.SATHEESAN, SRI.K.K.GOPINATHAN NAIR, SRI.M.R.JAYAPRASAD, SRI.P.MOHANDAS (ERNAKULAM), SRI.MATHEW SUNNY. RESPONDENT(S): STATE, COMPLAINANT & DEFACTO COMPLAINANT: --------------------------------------------------------------------------------------------------------- 1. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM. 2. THE DRUGS INSPECTOR (INTELLIGENCE BRANCH), OFFICE OF ASSISTANT DRUGS CONTROLLER, THRISSUR. 3. MR.JOY MANDI, MANDI HOUSE, KANAKAMALA, THRISSUR DISTRICT. R1 & R2 BY PUBLIC PROSECUTOR SRI. K.J.MOHAMMED ANZAR THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 17/06/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Kss CRMC.NO.2551/2009 APPENDIX PETITIONER'S ANNEXURES: ANNEX.1: CERTIFIED COPY OF THE COMPLAINT FILED BY THE 2ND RESPONDENT BEFORE THE CHIEF JUDICIAL MAGISTRATE'S COURT, THRISSUR DTD. 20/01/2009 IN C.C.NO.20/2009. RESPONDENT'S ANNEXURES: N I L /TRUE COPY/ P.A.TO JUDGE Kss THOMAS P JOSEPH, J. ---------------------------------------- Crl.M.C.No.2551 of 2009 --------------------------------------- Dated this 17th day of June, 2011 ORDER Challenge in this proceeding instituted under Sec.482 of the Code of Criminal Procedure (for short, "the Code”) is to a complaint preferred by the second respondent before the learned Chief Judicial Magistrate, Thrissur (for short, "the CJM”) for offences punishable under Sec.18(a)(i) r/w Sec.17(b) and (c) punishable under sec.27(d) of the Drugs and Cosmetics Act, 1940 (for short, "the Act”) and cognizance taken on the said complaint. Learned CJM took the case on file as C.C.No.20 of 2009 against petitioners/accused 1 to 4 and others. The proceeding against petitioners is sought to be quashed on various grounds such as that complaint does not make out a prima facie case against petitioners to be proceeded against for offences above stated, proceeding initiated by the second respondent is against principles of natural justice and proceeding with case is oppressive, whether second respondent should have initiated prosecution against petitioners/accused 1 to 4 and others or not was not considered at any point of time and at any rate, second respondent had not given notice to the petitioners about the Crl.M.C.No.2551 of 2009 -: 2 :- proposal to initiate prosecution, there is inordinate delay in filing the complaint which has affected valuable rights of petitioners and destroyed the defence that they could urge before learned CJM, case of respondents 2 and 3 are contradictory and self destructive, at any rate petitioners are not liable to be proceeded against for any of the offence as above stated since so far as manufacturing and testing of the drug in question is concerned there are other persons nominated and responsible for the purpose and lastly, on the ground of limitation under Sec.468 of the Code. It is contended by learned counsel that though learned CJM has taken cognizance without application of mind, the said court cannot review its order and in the circumstance and the only remedy available to the petitioners is to approach this Court under Sec.482 of the Code. Learned counsel has contended that this Court has inherent power to interfere and quash proceeding against petitioners for the ends of justice. Learned counsel has addressed arguments on the above points at depth with the aid of a galaxy of decisions. It is contended by learned counsel that on the above grounds prosecution against petitioners cannot stand. Learned Public Prosecutor has contended that there are sufficient averments in the complaint which make out a prima facie case against petitioners and hence at this stage interference Crl.M.C.No.2551 of 2009 -: 3 :- under Sec.482 of the Code is not warranted. It is contended that the argument that proceeding of the second respondent and initiation of prosecution are violative of principles of natural justice, oppressive or, there is inordinate delay in prosecution so that right of petitioners are affected cannot stand legal scrutiny. There are no contradictory versions so far as crux of the case is concerned which required the case of prosecution to be thrown out at the threshold, without consideration. On the liability of petitioners it is contended by learned Public Prosecutor that by virtue of Sec.34 of the Act, petitioners being in charge of and responsible to the company for the conduct of its business are liable to be proceeded against along with the company itself. On the question of period of limitation it is argued that the third respondent had preferred a complaint dated 05.01.2006 to the Assistant Drugs Controller, Thrissur which was received by that officer only on 16.01.2006, pursuant to that certain clarifications were asked for by the said officer by letter dated 21.01.2006 and the complaint is filed on 20.01.2009 which is within the period of limitation even if period of limitation in respect of the offences above stated is taken as three years as provided under Sec.468 (2)(c) of the Code. The further contention of learned Public Prosecutor is that at any rate there are sufficient materials on Crl.M.C.No.2551 of 2009 -: 4 :- record and averred in the complaint as well based on which it was within the power of learned CJM to condone the delay and extent the period of limitation invoking Sec.473 of the Code. Learned Public Prosecutor has placed reliance on the decision in Valsan Vs. State of Kerala (2003(2) KLT 1050) to contend that the decision taken by the learned CJM so far as delay is concerned, is purely adhoc and it is open to the petitioners to raise the contention before learned CJM at any point of time. As such, interference by this Court at this stage is not warranted, it is contended. 2. Before dealing with the various contentions raised by the learned counsel, it is apposite to refer to the short facts of the case. A complaint dated 05.01.2006 was preferred by the third respondent to the Assistant Drugs Controller, Thrissur which the latter received on 16.01.2006. In that complaint, the third respondent has stated that his child was being given injection for immunization at the Primary Health Centre for which he, through his friend, Rajan purchased the subject drug. The Medical Officer of the Primary Health Centre on 21.10.2005 informed the third respondent about the discrepancy in the label as well as contents of the subject drug. On getting information about that, officers of the first petitioner, company met the third respondent Crl.M.C.No.2551 of 2009 -: 5 :- several times in a bid to avoid any unpleasant situation. The third respondent had not obtained any bill for purchase of the subject drug as the said Rajan was employed with the medical store wherefrom the subject drug was purchased. The third respondent spurned offers made by the officials of first petitioner, decided to go forward and accordingly submitted complaint dated 05.01.2006 to the Assistant Drugs Controller. It is not disputed that on 16.01.2006 the said officer received that complaint addressed a letter to the third respondent seeking certain clarifications to which the third respondent gave a reply on 21.01.2006. In the letter dated 16.01.2006 the Drugs Inspector informed the third respondent that there is no such shop as “M/s.Meenakshi Medical Store (Thrissur)” from where the third respondent is said to have purchased the subject drug through Rajan. On 21.01.2006 the Drugs Inspector inspected premises of “M/s.Meenakshi Medical Agencies, Thrissur”, wherefrom the subject drug is said to be purchased and effected seizure of certain documents including original invoices for purchase of the subject drug by M/s.Meenakshi Medical Agencies from the fifth accused, carbon copies of invoices and credit notes for return of the drug by M/s.Meenakshi Medical Agencies to the fifth accused (on receipt of complaint about misbranding). In the Crl.M.C.No.2551 of 2009 -: 6 :- complaint preferred by the second respondent before learned CJM, it is stated that there was improper labelling of the subject drug. The label described the drug as Easyfive vaccine, Batch No.PO-124/SBPC with manufacturing date as 14.08.2004 and expiry date on 13.08.2006 and manufactured by M/s.Panacea Biotec Limited (first petitioner). It is further stated that one vial along with packing with the subject drug kept by the third respondent was also given to the Drugs Inspector. The Drug Inspector verified the vial produced by the third respondent and found that it was packed in a carton labelled “Easyfive Pentavallant Vaccine B.No.PO/124/SBPC, manufacturing date 14.08.2004 and expiry date 13.08.2006”. On the seal cap, the label read “Pentavallant vaccine Easyfive, B.No.PO-124/SBPC with manufacturing date 14.08.2004 and expiry date 30.08.2006”. On the vial, the label affixed read “Tetravalent vaccine Easyfour, B.No.TO-124/SBC with manufacturing date 29.08.2004 and expiry date 28.08.2006”. As per the label of the outer carton Easyfive Pentavallant Vaccine is a combination of five different vaccines including HbSAg.10mcg while the label claim of the inner vial was Easyfour Tetravalent Vaccine which is a combination of only four different vaccines and it did not contain HbSAg 10mcg. Thus, it is alleged that the subject drug Crl.M.C.No.2551 of 2009 -: 7 :- manufactured by the first petitioner and distributed through M/s.Meenakshi Medical Agencies (which also is an accused in the case) was misbranded and that amounted to violation of Sec.17 (b) of the Act which is made applicable under Sec.27(d) of the said Act. On the said allegations learned CJM took cognizance on 29.01.2009. The order of the learned CJM read as follows: “Taken on file as C.C.No.20/2009 under Sec.32 of the Drugs and Cosmetics Act. Issue summons to the accused. Posted to 24.03.2009.” 3. It is argued by the learned counsel that there is no prima facie case made out against petitioners and that second respondent has not acted in a fair manner on the question whether petitioners are to be prosecuted or not. It is pointed out that before deciding to prosecute the petitioners, no notice was given to the petitioners. According to the learned counsel, proceeding of the second respondent are oppressive in that petitioners did not get the opportunity to show before the second respondent that they are not liable to be prosecuted. 4. So far as the contention regarding prima facie case is concerned, I have referred to the allegations made by the second respondent in the complaint. In short, the allegation is of misbranding of the subject drug. Sec.17(b) of the Act deals with misbranding of the drug. Here, the case set up by the second Crl.M.C.No.2551 of 2009 -: 8 :- respondent in the complaint is that the vial produced by the third respondent was packed in a carton labelled as Easyfive, Pentavallant vaccine, seal cap also contained a similar label but the label on the vial read as Tetravalent vaccine Easyfour. It is further stated in the complaint the components of Easyfive and Easyfour, the former being a combination of five different vaccines including HbSAg 10mcg while the latter, Easyfour Tetravalent vaccine is a combination of only four different vaccines and did not contain HbSAg.10mcg. Other allegations in the complaint regarding difference in the manufacturing and expiry dates are also mentioned above. It is not as if averments in the complaint do not make out a prima facie case. 5. It is not pointed out to me any provision in the Act or Rules which required that before the second respondent decided to prosecute petitioners and others it was necessary to give notice of such intention to them so that, it could be said that failure of the second respondent to give such notice was oppressive. True, learned counsel has a contention that as per the relevant Rules petitioners were required to maintain the relevant registers and other records only for a period of two years, the complaint was filed even much later, petitioners had already destroyed their records after the prescribed period and Crl.M.C.No.2551 of 2009 -: 9 :- that has affected petitioners as they are not able to make good their defence before learned CJM. I will advert to that contention a bit later. On going through the records I find myself unable to accept the contention that no prima facie case is made out and that failure to give notice to the petitioners before second respondent decided to initiate prosecution is in any way illegal, irregular or oppressive. 6. Next argument is regarding the inordinate delay where, learned counsel contended that even as per the version of the third respondent, the commission of offence was known to him even as on 21.10.2005, complaint which the third respondent addressed to the second respondent is dated 05.01.2006, the same was received by the Assistant Drugs Controller on 16.01.2006 but the second respondent has preferred the complaint before learned CJM only on 21.01.2009. It is pointed out by learned counsel that as per Rule 78 of the Rules, petitioners were required to maintain the relevant documents, registers etc only for a period of two years, on the expiry of the said period those records were destroyed and the prosecution having been launched much after the said period, petitioners have lost their valuable defence before the learned CJM. In support of that contention, reliance is placed on the decisions in Crl.M.C.No.2551 of 2009 -: 10 :- M/s.Medicamen Biotech Lts & Anr. Vs. Rubina Bose, Drug Inspector (AIR 2008 SC 1939), Northern Mineral Limited VS. Union of India & Anr. (2010(3)SCC (Crl)513), Gupta Chemicals Private Ltd. Vs. State of Rajasthan & Anr. (2010 (7) SCC 735), Kishan Singh (D) through L.Rs Vs. Gurpal Singh & Ors (2010(8) AD(SC) 550), Sahib Singh Vs. State of Haryana (AIR 1997 SC 3247), Pankaj Kumar Vs. State of Maharashtra (AIR 2008 SC 3077) and Baijnath Jha Vs. Sita Ram and Anr. (AIR 2008 SC 2778). In these decisions, having regard to the particular facts and circumstances of the case when there was inordinate delay in the conduct of investigation, the Supreme Court interfered and stopped further proceeding. 7. Having gone through the said decision, I am persuaded to think that there could be no straight jacketed principle in this regard. It is not as if whenever there is some delay the case should end up in a premature termination. That depends on the facts and circumstances of each case. Here, according to the petitioners and as Sec.18B of the Act r/w Rule 78 of the Rules say they were required to preserve their documents only for a period of two years. True, it is not shown that at any point of time after the complaint from third Crl.M.C.No.2551 of 2009 -: 11 :- respondent was received, the second respondent had given intimation to the petitioners about the complaint of the third respondent or, proceedings which culminated in the filing of the complaint. But, I must bear in mind that the allegation here is one of misbranding for which, as seen from the complaint the second respondent has seized relevant records from M/s.Meenakshi Medical Agencies. The question whether complaint would stand or fall on the materials that the second respondent has produced is a matter which the trial court has to decide. The question whether inability (if any) of petitioners to produce documents on their side would prejudice their defence before the learned CJM is also a matter which has to come out in the trial, bearing in mind the nature of offence and the materials, which second respondent may produce in support of allegations in the complaint. Petitioners will have the opportunity to raise the plea in the trial court. It is not as if this Court should go into the question in this proceeding, find that because the second respondent did not give notice to the petitioners they did not or could not maintain relevant records, that has prejudiced petitioners and hence the complaint has to be thrown out. The question of prejudice, if any has to be decided on the facts of the case. I must also bear in mind that it is not as if the statute Crl.M.C.No.2551 of 2009 -: 12 :- required the second respondent to give notice of proceeding to the petitioners. I make it clear that it is for the trial court to decide having regard to the facts of the case whether inability, if any on the part of petitioners to maintain relevant records even after the statutory period of two years on account of their being not intimated about the proposed action affect them prejudicially. 8. It is further contended by the learned counsel that there are contradictory versions in the complaint of the second respondent and the complaints of the third respondent. I referred to the complaint dated 05.01.2006 preferred by the third respondent to the Assistant Drugs Controller and the complaint dated 21.01.2009 preferred by the second respondent before the learned CJM. The contradiction that learned counsel would point out is that while at one stage the third respondent stated that he got the subject drug purchased through his friend 'Rajan', at another stage he would say, it was purchased through his friend 'Rejendran'. It is further stated that the third respondent had not obtained any bill for purchase of the subject drug. It is also pointed out that as per the version of the third respondent, he is not aware of whereabouts of the said Rajan or Rajendran (as the case may be). On going through the records, what I can understand from the complaint of the third respondent is that the Crl.M.C.No.2551 of 2009 -: 13 :- said Rajan (or Rajendran as the case may be) was working in the medical store wherefrom the third respondent is said to have obtained the subject drug through the said Rajan on the latter making an offer that third respondent would get the subject drug at a lesser cost as it is being purchased from the store. The question is not whether it was through Rajan or Rajendran that third respondent had purchased the drug but whether the subject drug was manufactured by the first petitioner, it was sold through M/s.Meenakshi Medical Agencies and it was misbranded as alleged. I do not forget that so far as the said establishment is concerned, third respondent had initially stated that it is 'M/s.Meenakshi Medical Stores' where as, the Drug Inspector after necessary enquiry informed the third respondent that there is no such medical store, it is 'M/s.Meenakshi Medical Agencies'. I must bear in mind that the place of location of the medical 'store' or 'Agency' as the case may be as reported by the third respondent is the same, the discrepancy being only in the name (“store” or “agency”). The above discrepancies are not in relation to the core of allegation regarding the subject drug allegedly manufactured by the first petitioner being misbranded in the manner I have referred above. At any rate, how the discrepancies or contradictions pointed out by petitioners affected the Crl.M.C.No.2551 of 2009 -: 14 :- prosecution case is still a matter which the trial court has to decide. 9. It is contended for petitioners that the third respondent himself was running a medical store. Essentially, it is the responsibility of the second respondent to prove the allegations in the complaint that the subject drug was manufactured by the first petitioner and it was purchased from M/s.Meenakshi Medial Agencies. This Court cannot form any opinion in this proceeding that the subject drug was collected from the medical store which third respondent is said to conduct in view of the allegation that the third respondent purchased from M/s.Meenakshi Medical Agencies. 10. Yet another argument of petitioners is that at any rate petitioners 2 to 4 are not liable to be prosecuted. It is submitted by learned counsel that as in the case of the Prevention of Food Adulteration Act (for short, "the PFA Act”) and similar statutes which are pari materia with the Act, there is nomination of persons who are responsible for manufacture and testing of the drug having regard to the licenses issued and the relevant Rules and hence petitioners 1 to 4 cannot be proceeded against. Learned counsel argued that the principle of reading down into the statute has to be applied. Reliance is placed on the decisions Crl.M.C.No.2551 of 2009 -: 15 :- in Godawat Pan Masala Products I.P.Ltd and Anr. Vs. Union of India and Ors. (AIR 2004 SC 4057), Bank of India Vs. Ketan Parekh and Ors. (AIR 2008 SC 2361), Venkatesan Vs. State of Tamil Nadu (AIR 2008 SC 2369), The Belsund Sugar Co.Ltd. Vs. The State of Bihar and Ors. (AIR 1999 SC 3125), J.K.Industries Ltd and Anr. Vs. Union of India and Ors. ((2007)13 SCC 673), Municipal Corporation of Delhi VS. Ram Kishan Rohtagi and Ors.(AIR 1983 SC 67), State (Delhi Admn.) Vs. L.K.Nangia and Anr. (1980(1) FAC 1), R.Banerjee and Ors. Vs. H.D.Dubey and Ors. (1992 CRI.L.J. 1523), Perfetti India Ltd and Anr. Vs. Food Inspector, Kottayam and Anr. (1999 CRI.L.J.223), State of Haryana Vs. Brij Lal Mittal & Ors. (JT 1998(3) SC 584), Gujarat Assembly Eelction Matter in the Matter of Special Reference NO.1 of 2002 ((2002)8 SCC 237), In re Presidential Poll (1974(2) SCC 33) and State of Rajasthan and Anr. Vs. Shamsher Singh (1985 SCC (Crl) 421). These decisions concerned various other statutes which dealt with nomination of person under provisions of those statutes and who is otherwise liable to be prosecuted for the offence committed by the company. In the present case argument is based on Sec.34 of the Act r/w Rule 76 of the Rules and Form No.28 and 28B in Crl.M.C.No.2551 of 2009 -: 16 :- which the license is issued to the company (first petitioner). 11. Sec.34 of the Act deals with offences by companies and States states: “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 subsec. 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.” Rule 76 of the Rules deals with Forms of licenses to manufacture drugs specified in Schedule C and C(1) . My attention is drawn to the license issued to the first petitioner in Form No.28-D. Clause 3 reads as under: (3) Name(s) of the competent technical staff. (a)responsible for manufacturing (b) responsible for testing 1. - - - - - - - - - - - 1. - - - - - - - - - - - 2. - - - - - - - - - - - 2. - - - - - - - - - - - 3. - - - - - - - - - - - 3. - - - - - - - - - - - (names of the persons stated) Learned counsel would contend that this Court should read Crl.M.C.No.2551 of 2009 -: 17 :- Sec.34 of the Act along with Rule 76 and the license issued in Form 28-D with specific reference to clause (3) of the license which I have extracted above. It is pointed out from Rule 76(i) of the Rules that manufacture and testing of the drug are to be conducted under the active direction and personal