Crl.O.P.No.19581 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 06.09.2022
CORAM:
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
Crl.O.P.No.19581 of 2022
and Crl.M.P.Nos.12863 & 12865 of 2022
K.S.Muralikrishna,
Former Director of M/s.Medplus Pharmacy,
M/s. Optival Health Solutions Pvt. Ltc.,
No.12, Ground Floor,
Anna Street, Chitlapakkam,
Chennai – 600 064. ...Petitioner
Vs.
The State of Tamil Nadu,
Rep. by the Drugs Inspector,
Chrompet Range i/c.,
Office of Assistant Director
of Drugs Control,
DMS Campus,
Teynampet, Chennai-600 006. ...Respondent
PRAYER : Criminal Original Petition filed under Section 482 of Cr.P.C.,
to call for the records in the case in C.C.No.494 of 2022 on the file of the
learned Chief Judicial Magistrate Court, Chengalpattu and to quash the
proceedings as far as this petitioner concerned.
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Crl.O.P.No.19581 of 2022
For Petitioner : Mr.M.Mohammed Rafi
For Respondent : Mr.E.Raj Thilak
Additional Public Prosecutor
ORDER
This Criminal Original Petition has been filed to quash the proceedings in C.C.No.494 of 2022 on the file of the learned Chief Judicial Magistrate Court, Chengalpattu, thereby taken cognizance for the contravention under Sections 18(c) of the Drugs and Cosmetics Act, 1940 (herein after referred to as “the Act”) r/w. Rule 65(2), 65(3)(1), 65(4)(3)(i) and 65(9)(a) of the Drugs and Cosmetics Rules, 1945 (herein after referred to as “the Rule”) punishable under Section 27(d) of the Act.
2. The learned counsel appearing for the petitioner submitted that the the petitioner is arrayed as A2 and he was the Director of M/s.Medplus Pharmacny, a unit of Optival Health Solutions Pvt. Ltd. Company registered under the Companies Act and passed a resolution and executed power of attorney in favour of the third accused to obtain drug licences from the authorities concerned as required under the Act. Page 2 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022 Accordingly, he obtained licence to sell, stock to exhibit for sale or distribute by retail drugs.
2.1. He further submitted that on 23.09.2019, the respondent inspected the premises of M/s. Medplus Pharmacy, unit of Optival Health Solutions Pvt. Ltd., situated at No.12, Ground Floor, Anna Street, Chitlapakkam, Chennai and the said shop was holding valid drug license. During the inspection it was noticed that the endorsed registered pharmacist was not present but the sales of the drugs were effected without the supervision of the registered pharmacist. Further, on verification of the prescription registered, it was not maintained with signature of pharmacist for certain period. It was contravention of Section 18(c) of the Act r/w Rule 65(9)(a) of the Drugs and Cosmetics Rules, 1945 (herein after referred to as “the Rule”).
2.2. Hence, a show cause memo dated 09.12.2019 was sent by the respondent and the same was replied by the person in charge of M/s.Medplus Pharmacy, by the reply dated 28.01.2020. Without Page 3 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022 application of mind and without considering the explanation submitted by the person in charge, the respondent mechanically lodged complaint as against the petitioner under Section 18 (c ) of the Act, 1940 read with Rules 65(2), 65(3)(1), 65(4)(3)(i) and 65(9)(a) of the Rule, punishable under Section 27 (d) of the Act.
2.3. He further submitted that under Section 34(1) of the Act, the persons in charge of at the time of offence was committed, are responsible and the company shall be deemed to be guilty of the offence. But the petitioner was the Director of the company and he had no knowledge about the day to day affairs of the company, which is having various branches in South India. Insofar as the petitioner is concerned, he was the Director of the company and he never dealt with policy of the other accused. Therefore, he is not responsible for the conduct of the day of day affairs of the other accused. To support of his contention, the learned counsel has relied upon the judgment of the Hon'ble Supreme Court reported in 2011 (1) SCC 176 in the case of Pepsi Co Oncia Holding Pvt. Ltd. Vs. Food Inspector.
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3. Per contra, learned Additional Public Prosecutor appearing for the respondent would submit that during the course of inspection, one Vinoth Kumar, was not present who is the endorsed registered pharmacist having registration No.48790 A2. Without his personal supervision, sales were done, which is in contravention of Section 18(c) of the Act, read with Rule 65(2) of the Rule. Further he submitted that on verification of the prescription register, it was found that the sales of the drugs effected from bill No.192004890023785 dated 18.09.2019 to bill No.192004890023882 dated 18.09.2012 and from bill No. 192004890023938 dated 19.09.2019 to bill No.192004890024409 dated 22.09.2019 were not maintained properly in the prescription register, which is in contravention of Section 18(c) of the Act r/w Rule 65(3) (l) of the Rule.
3.1. He further submitted that on verification of the purchase, sales records and physical stocks for certain drugs, it was found that the firm has supplied those drugs without issuing cash/credit memos by way of retail and the same was in contravention under Section 18(c) of the Page 5 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022 Act, r/w Rule 65(4)(3)(i) of the Rule and the detail is given as follows :-
Name of Batch Purchased from Quantity Stock Quantity Quantity
the Drug number whom, invoice purchased in sold with sold
(Brand number and date hand bill without
Name) bill
Ativan AK4047 OTNTO1901591863 2X30's (60 Nil 10 tablets 50 tablets
1 mg dated 05.08.2019 tablets)
Optival Health
Solutions Pvt. Ltd.,
Chennai-122.
Ativan AK4047 OTNTO1901699744 2X30's (60 Nil 10 tablets 50 tablets
1 mg dated 05.08.2019 tablets)
Optival Health
Solutions Pvt. Ltd.,
Chennai-122.
Restyl 0.5 SB9023 OTNTO190189665 10X15's Nil 80 tablets 70 tablets
9 dated 28.08.2019 (150
Optival Health tablets)
Solutions Pvt. Ltd.,
Chennai-122.
3.2. He further submitted that on verification of prescription register, it was ascertained that certain drugs were sold without the prescription of a Registered Medical Practitioners as follows :-
Sl. Name of the Drug Batch number Bill No. with date Quantity
No. (in Brand Name)
1 Zytanix 2.5 mg 1901528 192004890023756 10 tablets
Lasix 40 mg 9NA0023 17.09.2019 15 tablets
Aldactone 25 mg 02A19007 15 tablets
2. Ganaton OD 150 mg PRB0011 192004890023754 10 capsules
Rablft 20 mg RB190102 17.09.2019 15 tablets
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Crl.O.P.No.19581 of 2022
Sl. Name of the Drug Batch number Bill No. with date Quantity
No. (in Brand Name)
3. Voglinac 0.2mg KVB901A 192004890021936 10 tablets
Crestor 5 mg CLM001 04.09.2019 30 tablets
Nebula 2.5 mg BFU1441 10 tablets
Okacet N380611 10 tablets
4. Glycomet 850 mg 48012209 192004890023449 10 tablets
15.09.2019
5. Lipikind F E2IAS005 192004890022843 20 tablets
Metpure XL 25 mg E16ER19010 10.09.2019 20 tablets
Ecosprin 75 mg 23002172 14 tablets
Ibugesic plus F380312 03 tablets
Storvag 20 mg EMU1004 15 tablets
Restyl 0.5 SB90239 15 tablets
Therefore, the petitioner committed offence under the Act and prayed for dismissal of this quash petition.
4. Heard, Mr.M.Mohammed Rafi, the learned counsel for the petitioner and Mr.E.Raj Thilak, learned Additional Public Prosecutor appearing for the respondent.
5. On perusal of records revealed that the petitioner is arrayed as A2. According to the complaint, the first accused is the company, and the second and third accused are the Director & person in charge. Insofar as the allegations as against the petitioner is concerned, being the Page 7 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022 director, he has been impleaded as accused. On inspection of the Drug Inspector, it was found irregularities and issued show cause notice dated 09.12.2019. By the reply dated 28.01.2020, third accused submitted the explanation and denied the allegations made in the show cause notice.
6. The point for consideration is that whether the complaint is sustainable as against the petitioner?
7. It is seen from the entire complaint, the third accused was authorised to make necessary applications to the authorities concerned to obtain licence under the Act, and the first accused authorised and also executed power of attorney in his favour. Therefore, the first accused is the company and petitioner is the Director of the first accused company. It is relevant to extract Section 34(1) of Act, as follows:
“...34. Offences by Companies – (1) Where an offence under this Act has been committed by a Company, every person who at the time of offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, Page 8 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022 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.”
8. It is seen from the complaint, the petitioner being the Director of the first accused, has no direct knowledge in respect of the licence and sales by the third accused. He also never involved in day to day affairs of the company, since the first accused company is having various branches in South India. There is no specific allegations as against the petitioner as that he was in charge of the company and also responsible to the company for the conduct of its day to day business affairs except vague and bald statement against him. Therefore, the entire proceedings is vitiated as against the petitioner herein.
9. In this regard, the Judgment rendered by the Hon'ble Supreme Court relied upon by the learned counsel for the petitioners in the case of Pepsi Co Oncia Holding Pvt. Ltd. Vs. Food Inspector reported in 2011 (1) SCC 176, is extracted hereunder: Page 9 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022 “...50...It is now well established that in a complaint against a company and its Directors, the complainant has to indicate in the complaint itself as to whether the Directors concerned were either in charge off or responsible to the company for its day to day management, or whether they were responsible to the company for the conduct of its business. A merely bald statement that a person was a Director of the company against which certain allegations had been made is not sufficient to make such a Director liable to in the absence of any specific allegations regarding his role in the management of the company”.
10. In the case on hand, the petitioner being the Director of the company, has not involved in the day to day affairs of the company. Further there is no averment in the complaint that the petitioner involved in the business transaction. Therefore, he is not responsible for the company for the conduct of its business. As such, the above judgment of the Hon'ble Supreme Court of India is squarely applicable to this case and the present complaint cannot be sustained as against the petitioner. Page 10 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022
11. In view of the above discussions, this Criminal Original Petition is allowed and the proceedings in C.C.No.494 of 2022 on the file of the learned Chief Judicial Magistrate Court, Chengalpattu, is hereby quashed as against the petitioner alone. Consequently, connected miscellaneous petitions are closed.
06.09.2022 Internet: Yes Index : Yes/No Speaking/Non speaking order rts To
1. The Chief Judicial Magistrate Court, Chengalpattu
2. The Drugs Inspector, Chrompet Range i/c., Office of Assistant Director of Drugs Control, DMS Campus, Teynampet, Chennai-600 006.
3.The Public Prosecutor, High Court, Madras.
Page 11 of 12 https://www.mhc.tn.gov.in/judis Crl.O.P.No.19581 of 2022 G.K.ILANTHIRAIYAN. J, rts Crl.O.P.No.19581 of 2022 and Crl.M.P.No.12863 & 12865 of 2022 06.09.2022 Page 12 of 12 https://www.mhc.tn.gov.in/judis