Calcutta High Court (Appellete Side)

M/S Celebrity Biopharma Limited & ... vs Union Of India on 6 September, 2022

                 IN THE HIGH COURT AT CALCUTTA
                CRIMINAL REVISIONAL JURISDICTION
                          APPELLATE SIDE


The Hon'ble JUSTICE BIBEK CHAUDHURI


                             IA No.:CRAN/1/2021
                                      In
                               CRR 553 of 2021

               M/s Celebrity Biopharma Limited & Ors.
                                      -Vs-
                               Union of India

      For the Petitioners:      Mr. Anirban Dutta, Adv.,
                                Mr. Sumit Biswas, Adv.,
                                Mr. Sarangam Chakraborty, Adv.,
                                Mr. Shashwat Nayak, Adv.,
                                Ms. Rajashree Bhowmick, Adv.

      For the Union of India: Mr. Rajdeep Mazumder, Adv.,
                                Mr. Pritam Roy, Adv.

Heard on: 22 June & 30 June, 2022.
Judgment on: 06, September, 2022.

BIBEK CHAUDHURI, J. : -


1.

Petitioner No.2 to 6 are directors of petitioner No.1 company under

the name and style of M/s. Celebrity Biopharma Limited. Petitioner No.7

is the Deputy Manager, quality assurance of the petitioner No.1 company.

The petitioners have prayed for quashing of proceeding in connection with

Complaint Case No.C-156 of 2020 pending before the learned

Metropolitan Magistrate, 13th Court, Calcutta whereby, the petitioner has

been charged for violation of Section 18(a)(i) and Section 27 of the Drugs

and Cosmetics Act, 1940 and all orders passed in the aforesaid complaint

case including order dated 28th January, 2020 passed by the learned

Magistrate.

2. The petitioner No.1/company is engaged in manufacturing and

distribution of pharmaceutical medicines through various supply chain.

Petitioner Nos.2 to 6 being the director of the said company are not

engaged in manufacturing and distribution process of drugs. However,

they are involved in overall administration and finance of the said

company. Petitioner No.7 is the Deputy Manager of the quality assurance

team of the said company which consists of appointees by the Drug

Controller cum license authority for quality assurance, formulation,

process validation and various declarations which are required in terms

of the Drugs and Cosmetics Act, 1940 (hereafter described as the said

Act). The quality assurance team of the said company consists of officers

having various designations and they are responsible for formulation of

Drug and/or declaration which are to be made in respect of specific drug.

Manufacturing and distribution of any drug go through a rigorous

process, viz.,

(i) Conceptualization of a drug leading to formulation and/or

preparation of analytical method, validation of protocol cum

report.

(ii) Disclosure of the formulae and the process through which a

drug is to be made.

(iii) Formulation standard operating procedure for every batch

which will be manufactured followed by a certificate of

analyses for every batch.

(iv) Preparation of finished products specification reports, testing

and verification by the quality control team of the company.

      (v)     Finalization of all such records.

      (vi)     Procurement      of    drug   license    from   the     State   Drug

              Controller/licensing authority and lastly,

(vii) Preparation of stability study report by the quality control

team after the drug is released in the market.

3. On compliance of all the above measures, the petitioner

No.1/company had got approval from the Health and Welfare Department

of Baddi, Himachal Pradesh for manufacturing of a drug in the name and

style of "Aceclofenac and Paracetamol Suspension" on and from 1st

December 2015 to 11th February, 2018. After complying of all the process

as aforesaid, the company started production of the said drug. Certificate

of analysis for the said drug was prepared by the quality team based on

specifications which have been approved by the Drug Controlling

Authority while issuance of the drug license. However, the specifications

are not a stipulated declaration as per any Rules or Regulations, but

these are the declaration of the range within which a result should lie.

The concerned test results in respect of a particular batch of medicine is

reflected on the certificate of analysis under result column and are final

outcome of the tests which is conducted by the quality team of the

petitioner/company. Pursuant to manufacturing testing and dispatch of a

particular batch, it is up to the suppliers who use various modes and

transportation to transfer a medicine to the retail chain.

4. It is alleged by the petitioners that the company received a letter

dated 2nd April, 2018 from the office of the Drug Inspector, CDSCO (East

Zone) Kolkata wherein the petitioner/company was directed to show

cause and also to stop manufacturing and distribution of "Ashycloflam P",

on the ground that the drug was reported to be of non-standard quality

with respect to batch number CPAO 610026 manufactured by the

petitioner No.1 company. Along with the said letter the

petitioner/company was served with a Government Analyst Report dated

27th February, 2018. The petitioner/company sent a reply in writing on

19th May, 2018 disputing the contention of the Drug Inspector, CDSCO

(East Zone), Kolkata and denying the product to be of non-standard

quality. The opposite party No.2 in turn sent a letter dated 13th June,

2018 requiring the petitioner/company for testing of the drug in question

by a Government Analyst. The petitioner/company however denied the

drug to be tested by the Government Analyst on the ground that

certificate of analysis was duly prepared in respect of every batch. Under

the direction of the Deputy Drug Controller, India, the Drug Inspector,

CDSCO Sub-Zone Baddi and the Drug Inspector, Baddi, Himachal

Pradesh inspected the company premises and the process of

manufacturing of the said drug control in question. On conclusion of

investigation it was observed, "On the basis of the above observation and

documents furnished by the firm, inspecting team is of the opinion that

the firm has added the required quantity of bulk drug. In the Government

Analyst Report as per the specification, pH limit is mentioned as 5.5 to 6.

However, in the finished products of COA of the manufacturer, the

specification is mentioned as 5.0 to 6.5." Subsequently, on or about 13th

March, 2020 the petitioners received summons from the court of the

learned Metropolitan Magistrate, 13th Court, Calcutta directing them to

appear before the said court for violation of the provision of Section

18(a)(i) and Section 27 of the said Act. The petitioners subsequently came

to know that upon a complaint filed by the opposite party No.2, the

learned Chief Metropolitan Magistrate, Calcutta took cognizance of the

offence under Section 27 of the Act for violation of Section 18(a)(i) of the

said Act on 18th January, 2020. It is urged by the petitioners that the

petitioner/company did not commit any offence under the said Act and

complaint under Section 27 is not maintainable against them. It is also

contended on behalf of the petitioners that the learned Chief Metropolitan

Magistrate, Calcutta, took cognizance of the offence against the

petitioners without following the mandatory provision of Section 202 of

the Cr.P.C.

5. Under such circumstances, the petitioners have prayed for

quashing of the complaint filed against them.

6. Mr. Rajdeep Mazumder, learned Advocate for the opposite party

submits that under Chapter (iv) of the Drugs and Cosmetics Act the

manufacturer of a drug has the bounden duty to comply with the

standard set out in the second schedule of the Act. It is also submitted by

him that the standard of qualities are fixed by the government after due

deliberation and after consulting a committee of competent persons. It is

for them to give due allowance for probable errors before fixing a

standard. When a standard has been fixed, it is to be observed strictly. If

the manufacturer fails to observe the standard quality, while

manufacturing a drug, the same will fall under the category of

misbranded drug within the meaning of Section 17 of the said Act and the

manufacturer is liable for penal action under Section 18(a)(i) of the said

Act. In the instant case pH limit as per the Government Analyst Report of

the seized drugs in question ought to have been 5.5 to 6. However, in the

finished product of COA of the manufacturer, the specification was

mentioned as 5.0 to 6.5. Thus, manufacturer's COA was not in conformity

with the COA of the Government Analyst Report with regard to pH

percentage of the drug. It is also submitted by Mr. Mazumder that it is

immaterial as to whether pH factor of the drug in question was within the

limit of the Government Analyst Report or not. As soon as pH specification

mentioned in the COA of the manufacturer varies from the Government

Analyst Report, Section 18(a)(i) attracts and the petitioner cannot escape

from facing trial for violation of specific provisions of the said Act in

relation to "misbranded drugs".

7. The learned Advocate for the petitioner, on the other hand,

contended that pH factor of the drug was found to be 5.8 which is within

the normal limit of Government Analyst Report. Therefore, consumption

of the said drug would not be fatal for any patient who might be

prescribed to take the said drug. As pH factor of the drug was within the

limit of the Government Analyst Report the petitioners cannot be held

liable for prosecution under Section 18(a)(i) of the said Act.

8. It is also urged by the learned Advocate for the petitioners that

indisputably the petitioners carry on business of manufacturing drugs

outside the jurisdiction of the learned Chief Metropolitan Magistrate,

Kolkata. Therefore, it was the bounden duty of the learned Magistrate,

where the accused is residing at a place beyond the area in which he

exercises his jurisdiction, to postpone the issue of process against the

accused, and either inquire into the case himself or direct an investigation

to be made by a Police Officer or by such other person as he thinks fit, for

the purpose of deciding whether or not there is sufficient ground for

proceeding. In the instant case before issuance of process the learned

Magistrate did not take recourse to Section 202 of the Code of Criminal

Procedure. Therefore, issuance of process against the petitioners without

complying with the provisions of Section 202 of the Cr.P.C is bad in law

and liable to be quashed.

9. I have duly considered submission made by the learned Counsels

for the parties in support of their cases.

10. In Sri Kamalesh Purkait & Anr. vs. Sri. Sambhunath Dey, Drug

Inspector & Anr. reported in (2000) 3 Cal LT 424 a question came up

before a Coordinate Bench as to whether a proceeding under Sections

23(4)(iii), 27 and 28A of the Drugs and Cosmetics Act is liable to be

quashed for non compliance of mandatory provision regarding disposal of

the portions of sample.

11. The Bench while replying the issue in affirmative held that Sub-

Section (4) of Section 23 of the said Act directs Drugs Inspector the

manner in which he is to dispose of the portions of sample taken by him

and Clause (iii) of Sub-Section (4) of Section 23 of the Act in specific terms

provides that the Drug Inspector is to send the third portion of the sample

to the manufacturer. When the statute has directed that the portions of

sample are to be disposed of in a particular way, the Drug Inspector has

to follow the said directions and he cannot act in a different way.

Therefore, the Drug Inspector in not complying with the said procedure

violated the mandatory provisions of law and thereby causing serious

prejudice to the accused vitiating the entire proceeding.

12. It is also not out of place to mention that petitioner No.1 is a private

limited company of which petitioners No.2-6 are the Directors and

petitioner No.7 is the Deputy Manager, quality assurance of the said

company. It is avert by the petitioners that they are not engaged in

manufacturing process of drugs manufactured in the said company. They

are only responsible for the administrative job. In Sham Sunder & Ors

vs. State of Haryana reported in (1989) 4 SCC 630, the Hon'ble

Supreme Court was pleased to hold that before impleading the Directors

of a company or partners of a partnership firm in a criminal case, it is the

duty of the learned Magistrate to consider as to whether they are really

involved in the process of commission of offence. There may be a sleeping

partner or a Director of a company without taking part in manufacturing

process of the material. In such a case it would be a travesty of justice to

prosecute such partner or director and ask them to prove that the alleged

offence was committed without their knowledge. In other words, in the

absence of specific averment in the petition of complaint, criminal liability

against the petitioners cannot be presumed. In a subsequent decision in

State of Haryana vs. Brij Lal Mittal & Ors. reported in (1998) 5 SCC

343, the Hon'ble Supreme Court was pleased to hold that on the

allegation of commission of offence by the company the directors cannot

be made vicariously liable.

13. Coming to the factual aspect of the case it is not disputed that the

drug in question was within the specific limit as to the pH factor because

on scientific examination it was found that the said drug contains pH 5.8,

while the government's specification is 5.5 to 6. Under such

circumstances, the said drug cannot be disqualified under the banner of

"misbranded drug". On non compliance of Section 202 of the Cr.P.C, I like

to record that in Vijay Dhanuka & Ors. vs. Najima Mamtaj & Ors.

reported in AIR 2014 SC (Supp) 756, the Hon'ble Supreme Court was

pleased to hold that Section 202 contemplates postponement of the issue

of the process in a case where the accused is residing at a place beyond

the area in which he exercises his jurisdiction and thereafter to either

inquire into the case by himself or direct an investigation to be made by a

Police Officer or by such other person as he thinks fit. The word "shall", in

a case where the accused is residing at a place beyond the area in which

he exercises his jurisdiction makes the provision mandatory and the

learned Magistrate cannot issue any process without such inquiry. The

above decision was followed in the following subsequent decisions:-

i) Udai Shankar Awasthi V. State of U.P & Anr : (2013)

2 SCC 435.

            ii)     National Bank of Oman vs. Marakara Abdul Aziz &

                    Anr. : (2013) 2 SCC 488.

            iii)    Abhijit Pawar vs. Hemant Madhukar Nimbalkar &

                    Anr. : (2017) 3 SCC 528.

            iv)     Shyamal Kanti Goswami vs. Ashim Mukherjee :

                    (2014) 2 CHN 136.

            v)      Trend Bags & Anr. vs. State of Bengal & Anr. :

                    (2017) 1 CCrLr (Cal) 60.

            vi)     S.S Binu vs. State of West Bengal : (2018) SCC

                    OnLine Cal 1741.

            vii)    Birla   Corporation   Ltd.   Adventz   Investments   &

                    Holdings Ltd. & Ors : (2019) 16 SCC 610.