IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :-25.10.2010 Coram The HONOURABLE MR.M.Y.EQBAL THE CHIEF JUSTICE and The HONOURABLE MR. JUSTICE T.S.SIVAGNANAM W.P.No.19925 of 2010 Dr.C.Anbarasu, Chairman Para Medical Wing, Indian Medical Association, Tamilnadu State Branch, 304B, Koonur High Road, Aynavaram, Chennai – 600 023. ... Petitioner vs. 1. Union of India, Ministry of Health and Family Welfare, New Delhi. 2. Joint Director, Central Bureau of Investigation(CBI) Head of Zone, 3rd Floor, E.V.K. Sampath Building, College Road, Chennai – 600 006. 3. State of Tamilnadu Rep. by its Principal Secretary, Fort St. George, Secretariat, Chennai. 4. Deputy Inspector General of Police, Crime Branch, Criminal Investigation Department (CBCID) 3rd Block, Sidco Electronic Complex, Thiru.Ve.Ka Industrial Estate, Guindy, Chennai 600 032. 5.Central Drugs Standard Control Organisation, Rep. by its Director, Directorate General of Health Services, Ministry of Health and family Welfare, Government of India, FDA Bhawan, ITO, Kotia Road, New Delhi 110 002. https://hcservices.ecourts.gov.in/hcservices/ 6. Assistant Drug Controller, Central Drugs Standard Control Organisation, No.26, Haddows Road, Sastri Bhavan, 2nd Floor, Annex Building, Nungambakkam, Chennai – 600 006. 7. Tamilnadu Bio Medical Rep by its Proprietor Subiksha Apartments Flat No.AF2, 42/6, Kannagi Road, Avvai Nagar, Chennai – 600 094. ... Respondents PRAYER : This writ petition is filed under Article 226 of the Constitution of India to issue a writ of Mandamus to direct the second respondent to take up the case relating to production supply of fake malarial detection kits by the 7th respondent and to investigate and submit a report before this Hon'ble Court within a stipulated time as fixed by this Hon'ble Court. For petitioner : Mr.T.K.S.Gandhi For Respondents : Mr.J.Ravindran Asst. Solicitor General of India for RR1, 2, 5 & 6 Mr.J.Raja Kalifulla Govt. Pleader for RR3-4 Mr.R.Singaravelan for R7 ***** O R D E R THE HON'BLE THE CHIEF JUSTICE & T.S.SIVAGNANAM, J. In this writ petition, by way of public interest litigation, the petitioner has sought for a direction upon the second respondent to take up the case relating to production and supply of fake malarial detection kits by the seventh respondent and to investigate the matter. 2. The petitioner claims to be the Chairman of the Para Medical Wing of the Indian Medical Association, Tamil Nadu State Branch and a qualified Allopathic Doctor and owning a hospital at Ayanavaram, Chennai – 600023. It is stated that the petitioner invited quotations from various suppliers for supply of Malaria Detection Kits. The seventh respondent submitted his quotation dated 28.05.2010 for supply of Fluorex Venous Malaria Detection Test packs and Fluorex Capillary Malaria Detection Test packs, (hereinafter referred to as the 'Kits') which are imported from Denmark. The petitioner is stated to have placed orders with the seventh respondent for supply of 200 numbers of such kits. On receiving the product, the petitioner found that the kits did not have import and repacking licence number, lot number and the expiry date and https://hcservices.ecourts.gov.in/hcservices/ reference number were hand written, which gave room for suspicion as regards the genuinety of the product. The petitioner has further stated that he had used the kits for testing persons, who were infected with the Malaria as well as those, who are uninfected and the results in both cases were positive. Therefore, it is contended that based on wrong test results if a normal person is administered anti malarial treatment, it may lead to dangerous consequences and the doctors are exposed to risk of being sued. Hence, the petitioner submitted representation to the fifth and sixth respondent as well as to the fourth respondent, the DIG of Police (CBCID), calling upon them to initiate action and since there was no response to such petitions/representations, the petitioner has approached this Court by way of this writ petition. 3. When the writ petition came up for admission on 31.08.2010, we took note of a newspaper report in the "Deccan Chronicle" dated 20.08.2010, stating that the CBCID has initiated investigation in the matter. Therefore, we directed the the learned Government Pleader to seek instructions and inform this Court with regard to the stage of the investigation and the result therein. Subsequently, the matter was heard on various dates and the respondents 4 to 7 have filed their respective counter affidavits. 4. From the counter affidavit filed by the seventh respondent, it appears that the seventh respondent is a proprietorship concern and Mr.P.R.Magesh is it proprietor, who is engineer by qualification and has worked with medical diagnostic companies. That the seventh respondent had valid Import Export Code issued by the Joint Director General of Foreign Trade, dated 17.04.2003, by virtue of which the seventh respondent was entitled to import the Kits. That the firm is registered as a small scale industry and possess registration under the Tamil Nadu General Sales Tax Act, Central Sales Tax Act and Tamil Nadu Value Added Tax. Further, it is stated that the supplier from Denmark M/s.Vitrex Medical, is a World renowned manufacturer of kits and the products, which were repacked in proper manner and taking note of the climatic condition prevailing here the seventh respondent fixed the expiry date as six months from date of repacking, though the foreign manufacturer has given the expiry date as three years. Further, in the counter affidavit, it has been stated how these kits have to be used and the equipment used for the purpose of obtaining the required results. In paragraphs 13 to 15 of the counter affidavit, the seventh respondent has made allegations of malafide against the writ petitioner and stated that on account of certain matrimonial issues between the seventh respondent's cousin brother and his wife, they were certain criminal proceedings pending against his cousin and in view of their acquaintance with the writ petitioner, the present writ petition has been filed with a view to wreak vengeance and it is not a public interest litigation, but motivated on account of malafides. https://hcservices.ecourts.gov.in/hcservices/ 5. The respondents 1, 5 and 6 through the Assistant Drugs Controller of India in the Central Drug Standard Control Organisation have filed their counter affidavit, inter alia stating that they have not issued any import licence in form No.10 to the seventh respondent for import of these kits and that the label of the imported kits should comply with the Rule 96 of the Drugs and Cosmetics Rules, 1945, (hereinafter referred to as the 'Rules') which lays down detailed procedure relating to the labeling requirements. Further, it has been stated that a complaint received from the Manager of the writ petitioner's hospital, action was initiated and investigation was conducted on various dates and the out come of the investigation revealed that the seventh respondent did not hold any licence under the Drug and Cosmetics Act, 1940, (hereinafter referred to as the 'Act') for manufacture, stock, sale or import of drugs. Further, it has been stated that the seventh respondent had imported 50,000 capillary glass tubes from Denmark, which were coated with 0.5% acridine orange solution purchased from a company at Bangalore, dried at room temperature and packed in a plastic tubes with silicon cap and then packed in a card-board boxes. The boxes were affixed with locally printed label, showing details as "Fluorex Venous Blood Test Pack, manufactured by Fluorex Medical Denmark", imported and repacked by the seventh respondent, the stock of the kits were not available with the seventh respondent at the time of investigation nor available in the whole sale market. The report of the preliminary investigation was forwarded to the fifth respondent and the fifth respondent by communication dated 07.09.2010 directed the sixth respondent to reinvestigate the matter for further necessary action. Accordingly, reinvestigation was undertaken and a joint inspection was conducted by Senior Drug Inspectors from the office of the Director of Drugs Control, Tamilnadu and Drug Inspectors from the Central Drug Standard Control Organisation and the inspection was completed on 01.10.2010. The out come of the reinvestigation was submitted in the form of report before this Court. 6. During the course of hearing of the writ petition, the learned Assistant Solicitor General produced copy of the communication dated 16.10.2010 from the fifth respondent to the sixth respondent, wherein the fifth respondent has directed to initiate the legal action against the seventh respondent under the provisions of the Act and Rules. We granted an opportunity to the seventh respondent to submit their objections if any to the report submitted by the respondents 5 and 6. Pursuant to which, the seventh respondent filed an additional counter affidavit contending that licence is not required under the provisions of the Drugs and Cosmetics Act and Rules, since as per the Import Export Policy -ITC (HS) Classification of Export and Import, the kits imported by the seventh respondent are not prohibited or restricted items and as per the policy guidelines, they are freely importable. It is further contended that as per the original pack imported from Denmark, the expiry date is three years, but the seventh respondent has given only https://hcservices.ecourts.gov.in/hcservices/ six months as the date of expiry, from the date of repacking and this has been done in public interest. Further, it is contended that the seventh respondent has closed down the business in June 2009 and they have not made any imports thereafter. It is further stated that if the seventh respondent decides to continue the business, he undertakes to obtain licence. 7. The petitioner has filed a reply affidavit denying the allegations of malafide attributed by the seventh respondent in his counter affidavit. 8. We have considered the submissions of the learned counsel appearing for the parties and perused the materials on record including the sample kits, which were produced by the petitioner as well as by the seventh respondent. 9. The complaint of the petitioner is that the seventh respondent did not possess a valid licence under the Drugs and Cosmetics Act for the purpose of repacking and sale of the Malaria Detection Kits, which are said to have been imported by the seventh respondent from Denmark; that the products which was sold by the seventh respondent were made locally by purchasing material from the local market and the seventh respondent himself had hand written the date of expiry on the packing, which was locally made. Therefore, it is contended that the public at large have been put at a peril on account of these kits sold by the seventh respondent, which are fake kits and therefore the matter requires to be investigated. 10. Per contra, the learned counsel appearing for the seventh respondent would contend that the provisions of the Act and Rules are not applicable to the product repacked and sold by the seventh respondent and that no licence is required for the import of these products, in terms of the Import Export Policy, as they are freely importable under the policy guidelines. 11. The learned counsel appearing for the respondents 1,2,5 & 6 relied upon the reinvestigation report, the relevant portion of which reads as follows:- 1. The firm has imported 67,000 (500X20 packs) QBC venous blood tubes in total for malarial parasite detection from M/s.Vitrex Medical A/s. (formerly Fluorex Medicals A/s, a subsidiary of Modulohm A/S) Denmark between 2005-2009. And one consignment of 37,000 venous blood tubes were rejected and destroyed by him. 2. The firm used to repack 200 QBC venous blood tubes (10X20 vials) per carton box with equival no. of closure caps and polystyrene floats. Each vial and box were labelled and the labels were printed locally and contains following details:- https://hcservices.ecourts.gov.in/hcservices/ i) Flourex, IVD, Venous Blood Test Pack, ii) Reagents per tube (maximum): Acridine Orange (15.5ug), Potassium Oxalate (0.9mg), and stabilizers. iii) Lot No. and Expiry date iv)Manufactured by: Fluorex Medical A/S Herlev, Copenhagen, Denmark. v)Imported & repacked by:Tamilnad Bio Medicals, Chennai, India. 3. The firm has used Lot no. of venous blood tubes of M/s.Vitrex Medicals A/S, Denmark on the label of repacked box of FluorexTM, IVD, Venous Blood Text Pack. The Expiry date was decided by him from the date of packing and date of manufacture was not mentioned on the repacked box of Fluorex TM, IVD, Venous Blood Test Pack. 4. The firm was importing QBC Blood venous tubes coated with Acridine orange (0.5%), Potassium oxalate, EDTA & stabilizers (coating density – 0.02mm) from M/s.Vitrex Medical A/S but after repacking label shows only coatings of Acridine Orange (15.5ug) Potassium Oxalate (0.9mg), and stabilizers. 5. The firm does not hold manufacturing or sale license under Drugs & Cosmetics Act 1940. 6. Since no stocks of QBC venous blood tubes for MP/MF detection imported from M/s. Vitrex Medical A/S, Denmark and “Fluorex TM” - Venous blood text pack, repacked by Tamilnad Bio Medicals, Tamilnadu were available in the said premises, sample could not be drawn for analysis. 7. As per his statement he has submitted most of the records of purchase and sales before the Court of Law. 8. The firm has not obtained any import licence under Drugs & Cosmetics Act 1940 from the DCG (I) New Delhi. 12. To decide the controversy, it would be necessary to look into certain provisions of the Act and Rules. 13. The Hon'ble Supreme Court in Chimanlal Jagivandas Sheth vs. State of Maharashtra, AIR 1963 SC 665, considered the object of the Act and held that the main object of the Act is to prevent sub- standards in drugs, presumably for maintaining high standards of medical treatment. That would certainly be defeated if the necessary concomitants of medical or surgical treatment were allowed to be diluted; the very same evil which the Act intends to eradicate would continue to subsist. 14. The Act was intended to regulate the import, manufacture, distribution and sale of drugs and cosmetics. Section 3(b) defines https://hcservices.ecourts.gov.in/hcservices/ 'drug' and for the purpose of this case clauses (i) and (iv) of Section 3(b) would be relevant, which are reproduced hereunder:- (i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes; (iv) such devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board.” 15. Section 3(f) defines 'manufacture' in relation to any drug or cosmetic to include any process or part of a process for making, altering, packing, labeling, etc., or otherwise treating or adopting any drug or cosmetic with a view to its sale or distribution of any drug or packing of any drug or cosmetic in the ordinary course of retail business. 16. In terms of Section 17 a drug shall be deemed to be misbranded, if its label or container bears any statement, which makes any false claim for the drug, which is false or misleading in any particular. As per Section 17A (f), a drug shall be deemed to be adulterated, if any substance has been mixed therewith so as to reduce its quality or strength. In terms of Clause (e) of Section 17B a drug shall be deemed to be a spurious, if it purports to be a product of a manufacturer of whom it is not truly a product. In terms of Section 18, there is prohibition of manufacture and sale of certain drugs and cosmetics except in accordance with the conditions of the licence issued for such purpose. 17. Rule 21(a) of the Rules defines 'Import licence' to mean either a licence in Form 10 to import drugs excluding those specified in Schedule X, or a licence in Form 10-A to import drugs specified in Schedule X and in terms of Rule 23, import licence is required in Form 10 for import of drugs excluding those specified in Schedule X. The application for grant of import licence should be in the Form and manner prescribed in Rule 24 and the licensing authority on being satisfied that, if granted, the condition of the licence would be observed, issue a import licence in Form 10 by exercising power under Rule 27. Further, the rules provide for elaborate procedure for cancellation or suspension of such licenses granted. 18. Thus on a conjoint reading of the provision of the Act and the Rules, it could hardly be stated that the product, which was imported by the seventh respondent is not a "drug", as could be seen from the definition of the term "drug" Section 3(b), even a device https://hcservices.ecourts.gov.in/hcservices/ intended for internal and external use in the diagnosis or treatment is a "drug". The Hon'ble Supreme Court in the case of Chimanlal Jagivandas Sheth, referred supra considered the scope of the definition of the Section 3(b) held as hereunder:- 3. Though an attempt was made to argue that the said articles were had been proved to be below the prescribed standard, it was subsequently given up. The only question that was argued is whether the said articles are drugs within the meaning of Section 3(b) of the Act. The said section reads: “ ‘drug’ includes: (i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals other than medicines and substances exclusively used or prepared for use in accordance with the Ayurvedic or Unani systems of medicine, and (ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermins or insects which cause disease in human beings on animals as may be specified from time to time by the Central Government by notification in the Official Gazette.” The said definition of “drugs” is comprehensive enough to take in not only medicines but also substances intended to be used for or in the treatment of diseases of human beings or animals. This artificial definition introduces a distinction between medicines and substances which are not medicines strictly so-called. The expression “substances”, therefore, must be something other than medicines but which are used for treatment. The part of the definition which is material for the present case is “substances intended to be used for or in the treatment”. The appropriate meaning of the expression “substances” in the section is “things”’. It cannot be disputed, and indeed it is not disputed, that absorbent cotton wool, roller bandages and gauze are “substances” within the meaning of the said expression. If so, the next question is whether they are used for or in “treatment”. The said articles are sterilized or otherwise treated to make them disinfectant and then used for surgical dressing; they are essential materials for treatment in surgical cases. Besides being aseptic these articles have to possess those qualities which are utilized in the treatment of diseases. Thus for instance, in the case of guaze-one of the articles concerned in this appeal — it has to conform to a standard of absorbency in order that it might serve its purpose: otherwise the fluid which oozes is left to https://hcservices.ecourts.gov.in/hcservices/ accumulate at the site of the wound or sore. The legislature designedly extended the definition of “drug” so as to take in substances which are necessary aids for treating surgical or other cases. The main object of the Act is to prevent sub-standards in drugs, presumably for maintaining high standards of medical treatment. That would certainly be defeated if the necessary concomitants of medical or surgical treatment were allowed to be diluted: the very same evil which the Act intends to eradicate would continue to subsist. Learned Counsel submitted that surgical instrument would not fall within the definition and that guaze and lint would fall within the same class. It is not necessary for the purpose of this appeal to definie exhaustively “the substances” falling within the definition of “drugs”; and we consider that whether or not surgical instruments are “drugs”, the articles concerned in this case are. Learned counsel for the appellant sought to rely upon a report of a high powered committee consisting of expert doctors, who expressed the opinion in the report that as the surgical dressings did not come under the purview of the Drugs Act, no control on their quality was being exercised. Obviously, the opinion of the medical experts would not help us in the construing a statutory provision. We, therefore, hold, agreeing with the High Court, that the said articles are substances used for or in the “treatment” within the meaning of Section 3(b) of the Act. 19. It is seen from the broachers filed in the typed set of papers that it is the coated capillary tubes in the Malaria Detection Kits are used to draw blood samples from the patients and comes into contact directly with the patient's body (finger) and therefore, it cannot be stated that it is not a "drug". 20. In view of what has been stated above, we are unable to accept the contention raised by the learned counsel appearing for the seventh respondent that the Malaria Detection Kits are not "drugs" as defined under Section 3(b) of the Act. Therefore, we hold Malaria Detection Kits are "drugs" within the meaning of Section 3(b) of the Act. It is stated that the seventh respondent imported the kits from Denmark through known channels and in terms of the Import-Export Policy guidelines, no import license is required for the import of such kits as they have been classified as diagnosis instruments and apparatus. The scope of the Import Export Policy guidelines operate in a different field in contra distinction to the field occupied by the Drug and Cosmetics Act and Rules framed thereunder. The policy guidelines only stipulates that the diagnostic instruments are freely importable, and such is referable to the licence required under the provisions of the Foreign Trade Development and Regulation Act and to the Customs Tariff Act. However, on import, such goods are subject to examination and the customs authorities would render a finding as https://hcservices.ecourts.gov.in/hcservices/ regards the classification and as to whether the import manifest presented by the importer has correctly classified the product, which was imported, and whether it did not require on import licence. 21. We have seen that for import of drugs a licence is required under provisions of the Drugs and Cosmetics Act and Rules in Form No.10 and admittedly, the seventh respondent did not possess any such licence and this prima facie appears to be a violation of provisions of the Act and the Rules. 22. The next contention raised by the seventh respondent that process of repacking and labeling does not amount to manufacture under the Act, is without any basis. We have seen the definition of term "manufacture" as defined Section 3(f), which includes any process or part of process of packing of a "drug" with a view to sale, would fall within the ambit of the term "manufacture". Thus the exercise undertaken by the seventh respondent, namely that of repacking and labeling would squarely fall within the definition of 3 (f) of the Act and amount to manufacture. 23. Though elaborate submissions were made by the learned counsel for the seventh respondent stating that the writ petition itself is motivated on account of mala fide intention, we are not inclined to go into the said aspect in view of the factual finding recorded by us in the preceding paragraphs to the effect that the seventh respondent carried on an activity without obtaining the requisite licence. It is the case of the seventh respondent that on and after June 2009, he has not been making any imports. The allegation against the seventh respondent that what has been repacked and sold are not, the products which had been imported from Denmark. If the out come of the