THE HON’BLE SRI JUSTICE K.G. SHANKAR Crl.Petition No.7206 of 2008 Date: 01.04.2011 Between: N. Sreedhar and another … Petitioners/ A.3 and A.4 AND The State of A.P., through Drugs Inspector, Visakhapatnam, rep.by the Public Prosecutor … Respondents THE HON’BLE SRI JUSTICE K.G. SHANKAR Crl. Petition No.7206 of 2008 ORDER: The petitioners are A.3 and A.4 in C.C.No.106 of 2008 on the file of the II Additional Chief Metropolitan Magistrate, Visakhapatnam. Along with A.1 and A.2, A.3 and A.4 were also charged under Section 18 (c) of the Drugs and Cosmetics Act, 1940 (‘the Act’ for short) for violation of the Rules 65, 65 (3), 65 (4)(3), 65 (5)(1), 65 (6) and 65 (9) of the Drugs and Cosmetics Rules, 1945 (‘the Rules’ for short) read with Section 18 (a)(vi) of the Act. A.3 and A.4 seek for quashing of the proceedings against them. It may be made clear at the out set that A.1 and A.2 have not approached the Court for quashing of the proceedings against them. 2. All the four accused are either individual concerns or partnership firms. The first accused is one K. Venkat Reddy, who is the proprietor of M/s. Arjuna Medical Stores. A.2 is M/s. Arjuna Pharmaceuticals of which K. Venkat Reddy is the Managing Partner. The third accused is the proprietor of M/s. Sree Vamsi Pharma New. The fourth accused is the competent person on behalf of M/s. Mayur drugs. M/s. Vamsi Pharma New and M/s. Mayur Drugs are located at Vijayawada, whereas M/s. Arjuna Medical Stores and M/s. Arjuna Pharmaceuticals as well as K. Venkat Reddy are the residents of Dwarkanagar, Visakhapatnam. 3. It may be noticed that the residential address of M/s. Arjuna Medical Stores bears Door No.47-7-29/1 and the Door Number of M/s.Arjuna Pharmaceuticals is 47-14-2/1. While so, the licence under Form No.21-C of the Act described the address of M/s. Arjuna Medical Stores as 42-14-2/1 and the licence in Form 21-B of M/s. Arjuna Pharmaceuticals described the address as bearing Door No.47-7-29/1. 4. Sri T. Balireddy, learned senior counsel representing the petitioners pointed out that the door numbers of M/s. Arjuna Medical Stores and M/s. Arjuna Pharmaceuticals are merely swapped in the sense the door numbers of M/s. Arjuna Medical Stores and M/s. Arjuna Pharmaceuticals were incorrectly described in the licences as one door number of one firm was noted as the door number of the other firm and vice versa. 5. It became necessary to refer to the door numbers of the two concerns at Visakhapatnam, since the Drugs Inspector inter alia contended that A.1 and A.2 have been conducting business without licence. It may be noticed that M/s. Arjuna Pharmaceuticals as well as M/s.Arjuna Medical Stores are owned by K. Venkat Reddy. Thus, for both the firms, K. Venkat Reddy is either the sole proprietor or one of the partners. Both the premises are situate at Dwaraka Nagar, Visakhapatnam. The door numbers, however, vary in the sense the door number of M/s. Arjuna Pharmaceuticals as shown in Form.21-B licence is indeed the Door number from which M/s. Arjuna Medical Stores has been conducting business and the door number of M/s. Arjuna Medical Stores as shown in the Form.21-C is the premises from which M/s. Aruna Pharmaceuticals has been conducting business. 6. However, A.1 and A.2 are not before me. They have not filed any petition to quash the proceedings against them. Therefore, whether the licence in Form.21-B and Form.21-C are valid or otherwise is not strictly relevant. 7. However, the learned senior counsel submitted that the door numbers of the premises of A.1 and A.2 are relevant for the purpose of the liability of A.3 and A.4 in supplying drugs to the firms. The whole controversy is with reference to a drug by name Rexcof Syrup. As the name of the drug suggests, it is a cough syrup. One of the contents of the drug is codeine phosphate. Admittedly, codeine phosphate is a narcotic drug which has habit forming characteristics. Consequently, Rexcof syrup becomes an important drug to be taken care of. It is not a drug which can be sold like any other cough syrup for the asking in view of its habit forming character and narcotic drug content. Hence, it becomes important to examine whether the licence to deal with the drug was in accordance with the rules and whether the supply of the drug was in accordance with the provisions of the Act and the Rules. 8. The Drugs Inspector surprised the premises of A.1 and A.2 on 23.01.2007. He claimed that K. Venkat Reddy, who was transacting business, was not able to produce the licence for A.2 firm and assumed that A.2 had no licence to conduct business. The petitioners have produced Form 21-B licence relating to A.2 showing that the licence was in force from 19.02.2003 till 18.02.2008. When the inspection was conducted by the Drugs Inspector on 23.01.2007, the second accused had indeed licence to indulge in the business of cosmetics and drugs. The claim of the Drugs Inspector that the second accused had no licence to run the business, in fact, is incorrect. The first accused possessed Form No.21-C licence from 18.10.2006 till 17.10.2011. Thus, on the date of the inspection on 23.01.2007, A.1 and A.2 possessed validity licence to transact business in drugs and cosmetics. 9. Whether A.3 and A.4 possesses licence to run business in drugs is not the issue. A.3 and A.4 are claimed to be wholesale dealers of various drugs including the drugs relating to M/s. Cipla Limited. 10. The allegation against A.3 and A.4 is that they have supplied Rexcof syrup to A.1 and A.2 while A.1 and A.2 did not hold valid licence to indulge in the Drugs business. The learned senior counsel for the petitioners has drawn my attention to how the business is transacted by the petitioners 1 and 2. 11. It is the case of the petitioners that various drugs are entrusted to the seasoned boys. The boys carry the drugs in packs and hand them over to the retail dealers including A.1 and A.2 against sale bills. They collect cash and return the same to A.3 and A.4. This is the process in which the petitioners 1 and 2 claim that the drugs are distributed by them to the retail dealers. 12. At any rate, when the Drugs Inspector inspected the premises of A.1 and A.2, K. Venkat Reddy made statements on behalf of M/s. Arjuna Medical Stores as well as on behalf of M/s. Arjuna Pharmaceuticals. In both the statements, K. Venkat Reddy admitted that he received Rexcof syrup from the petitioners under sale bills and that the stock available with him was the stock after the sale of the drugs to various customers. The petitioners have filed the statements of K. Venkat Reddy made on behalf of A.1 and A.2. The copies of the licence of A.1 and A.2 coupled with the statements of A.1 and A.2 shown that A.1 and A.2 were authorized to transact business in drugs and cosmetics including Rexcof syrup. When A.1 and A.2 were authorized to deal with Rexcof syrup, the supply of the same by the wholesale dealers viz., the petitioners-A.3 and A.4 is not violation of any of the provisions of the Act and the Rules. 13. In this background, I wholly agree with the contention of the learned counsel for the petitioners that absolutely no prima facie case is made out against the petitioners where the supply of the drug by the petitioners was in terms of the Act and the Rules therein. The prosecution of A.3 and A.4 for various violations of the Act and the Rules punishable u/s.18 (c) of the Act is bad and is liable to be quashed. 14. The Criminal Petition is, accordingly, allowed. The proceedings in C.C.No.106 of 2008 on the file of the II Additional Chief Metropolitan Magistrate, Visakhapatnam, as against the petitioners-A.3 and A.4 are quashed in respect of the prosecution u/s.18 (c) of the Act for violation of Rules 65, 65 (3), 65 (4)(3), 65 (5)(1), 65 (6) and 65 (9) of the Rules read with Section 18 (a)(6) of the Act. _______________ K.G. SHANKAR, J Date: 01.04.2011 Isn