M/S Nava Healthcare Pvt. Ltd vs Ut Of J&K
2025 Latest Caselaw 789 J&K/2

Jammu & Kashmir High Court - Srinagar Bench

M/S Nava Healthcare Pvt. Ltd vs Ut Of J&K on 21 February, 2025

Author: Sanjay Dhar

Bench: Sanjay Dhar

      IN THE HIGH COURT OF JAMMU & KASHMIR AND
                  LADAKH AT SRINAGAR
                                                   Reserved on: 12.02.2025
                                                  Pronounced on: 21.02.2025

                           CRM(M) No.453/2022
                                 c/w
                           CRM(M) No.454/2022

M/S NAVA HEALTHCARE PVT. LTD
M/S MANCARE LABORATORIES PVT. LTD.
                                                 ... PETITIONER(S)
                     Through: - Mr. Sikander Hayat Khan, Advocate.
Vs.

UT OF J&K                                         ...RESPONDENT(S)
                     Through: - Mr. Syed Musaib, Dy. AG.

CORAM: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE

                                  JUDGMENT

1) Through the medium of present judgment, the afore-

titled two petitions arising out of the same complaint filed by

the respondent against the petitioners and co-accused before

the Court of Chief Judicial Magistrate, Anantnag, are proposed

to be disposed of.

2) The petitioners, who happen to be the accused in the

impugned complaint, have challenged the complaint filed by

the respondent against them before the trial Magistrate. By

virtue of the impugned complaint, prosecution for offences

under Section18(a)(1) read with Section 27(d), Section 18A

read with Section 28 of the Drugs and Cosmetics Act has been

launched against the petitioners and the co-accused.

Challenge has also been thrown by the petitioners to the order

passed by the learned trial Magistrate whereby cognizance of

offences has been taken and the process has been issued

against the petitioners.

3) It appears that the respondent Drug Control Officer,

Anantnag, filed a complaint against the petitioners as also

against their Directors and three more accused persons before

the trial Magistrate. As per contents of the complaint, the

respondent visited the premises of accused M/S Three Star

Medical Agency on 09.01.2020 for inspection and lifted sample

of drug "Tab Pantolid" manufactured by petitioner Mancare

Laboratories Pvt. Ltd. The sample was divided into four equal

portions and sealed by following the procedure prescribed

under law. One portion of the sample was handed over to the

proprietor of accused M/S Three Star Medical Agency against

proper receipt, another portion of the sample was sent to the

Government Analyst in terms of memorandum dated

09.01.2020. As per test report submitted by the Government

Analyst, the sample was found not of standard quality as the

same was not complying to IP requirement with respect to

disintegration test. In this regard, the Government Analyst

furnished his report dated 30.05.2020. A copy of the said

report was furnished to proprietor of accused M/S Three Star

Agency and it was directed to submit the

procurement/purchase records as also the distribution

pattern of drug in question. The available quantity of tablets of

"Pantolid" was seized and kept in safe custody after obtaining

permission from the Chief Judicial Magistrate, Anantnag.

4) It is further averred in the impugned complaint that as

per the information furnished by accused M/S Star Medical

Agency, the drug in question had been purchased from

accused M/S J. S. Traders, Anantnag. Accordingly, the details

were sought from M/S J. S. Trader with regard to the supplier

of the drug. Vide communication dated 1st June, 2020,

accused M/S J. S. Traders disclosed the name of M/S Rather

Traders, Srinagar, accused No.4, as supplier of the drug. M/S

Rather Traders, in turn, disclosed that it had purchased the

said drug from petitioner M/S Nava Health Care Private

Limited, New Delhi, vide invoice dated 03.04.2019. The original

copy of the test report along with portion of drug sample was

forwarded to the manufacturer petitioner M/S Mancare

Laboratories Limited and information was sought from the said

petitioner. Vide communication dated 02.06.2020, petitioner

M/S Mancare Laboratories desired re-testing of the drug

sample and to adduce evidence in controversion of the report

of the Government Analyst.

5) In terms of the order of the Chief Judicial Magistrate,

Anantnag, the sample of drug was sent to Director, Central

Drugs Laboratory, Kolkata, for re-testing and vide report dated

23.09.2020, of the said Laboratory it was declared that the

drug in question is not of a standard quality as the sample

does not conform to claim with respect to "disintegration".

6) On the basis of the aforesaid allegations, it has been

stated in the impugned complaint that the petitioner M/S

Mancare Laboratories Pvt. Ltd. being the manufacturer and

the petitioner M/S Nava Healthcare Pvt. Ltd being the

marketer of the drug in question, are liable to be prosecuted

for having committed offences under Section 18(a)(1) and 18A

punishable under Sections 27(d) and 28 of the Drugs and

Cosmetics Act and the rules framed thereunder. The impugned

complaint has been lodged by the respondent after obtaining

the requisite sanction.

7) The petitioners have challenged the impugned complaint

and the impugned order whereby cognizance of the offences

has been taken and process has been issued against the

petitioners on the grounds that the procedure prescribed

under Section 23 of the Drugs and Cosmetics Act has not been

followed by the respondent in the present case. It has been

further contended that the report of the Laboratory relating to

the test of the sample of the drug is not specific and in tune

with the rules framed under the Drugs and Cosmetics Act. It

has also been contended that there is noting on record to show

that the sample of the drug in question was kept in a cool and

dry place and away from moisture and sun light, as such, the

test report cannot be relied upon. It has also been contended

that the learned trial court has issued the process without

there being any specific role having been attributed to the

Directors of the petitioner companies. It has been contended

that that simply because a person is Director of a company

does not necessarily mean that he is to be prosecuted unless

it is shown that he was incharge of and responsible to the

company for the conduct of business and in the absence of

specific averments in the impugned complaint, no prosecution

could have been launched against the Directors. It has also

been contended that both the petitioner companies are located

outside the territorial jurisdiction of the trial Magistrate, as

such, it was incumbent upon the learned Magistrate to

undertake a preliminary enquiry in terms of Section 202 of the

Cr. P. C before issuing process against the petitioners.

8) I have heard learned counsel for the parties and I have

also gone through the grounds urges in the petitions, the

impugned complaint and the documents available on the

record of the trial court

9) The first ground on which much emphasis has been laid

by learned counsel for the petitioners is that in the impugned

complaint no specific role has been attributed to the Directors

of the petitioner companies, as such, it was not open to the

learned trial court to issue process against the Directors of the

petitioner companies and, in fact, the impugned complaint in

the present form is not maintainable against the Directors of

the petitioner companies. The learned counsel, to support his

contention has relied upon the judgment of a Coordinate

Bench of this Court in the case of Reema Arora and Ors. vs.

Department of Agriculture (CRM(M) No.156/2021 decided on

10.03.2023). He has also relied upon the judgments of the

Supreme Court in the case of Aneeta Hada vs. Godfather

Travels and Tours Pvt. Ltd, (2012) 5 SCC 611, Maksud

Saiya vs. State of Gujarat, (2008) 5 SCC 668, and Sunil

Bharti Mittal vs. Central Bureau of Investigation, AIR 2015

SC 923, to support his aforesaid contention.

10) The argument raised by learned counsel for the

petitioners may be available to the Directors of the petitioner

companies but the present petitions have not been filed by the

Directors in their individual capacity but the same have been

filed by the petitioner/accused companies through their

Directors. So far as petitioner M/S Nava Healthcare Pvt. Ltd is

concerned, there is a specific allegation in the impugned

complaint that it is involved in the marketing of the drug in

question and this information was provided to the respondent

by accused M/S Rather Traders. Copies of the invoices in this

regard form part of the trial court record being annexures to

the impugned complaint. Therefore, it cannot be stated that

there is no specific allegation against petitioner M/S Nava

Health Care Pvt. Ltd to proceed against it. Similarly, so far as

petitioner M/S Mancare Laboratories Pvt. Ltd is concerned, it

is specifically pleaded in the impugned complaint that the said

company is the manufacturer of the drug in question.

11) It is true that Director of a company cannot be roped in a

prosecution against the company unless it is specifically

pleaded that the said Director is incharge of and responsible

for business of the company but in the instant case, the

challenge to the impugned complaint has not been laid by the

Directors. We are only dealing with the challenge to the

impugned complaint by the companies themselves. Therefore,

the ratio laid down by this Court and the Supreme Court in

the judgments referred to by the learned counsel for the

petitioners does not apply to the facts of the instant case.

12) Another contention raised by learned counsel for the

petitioners is that the test report on which respondent has

placed reliance for launching prosecution against the

petitioners is not reliable, inasmuch as it does not conform to

the requirements of the rules framed under the Drugs and

Cosmetics Act and that the sample was not kept in safe

custody away from moisture and sun light etc.

13) In the above context, it we have a look at Explanation (1)

to Rule 46 of the Drugs and Cosmetics Rules, it provides that

for pharmacopeial drug, where the tests or methods of analysis

prescribed in the official pharmacopoeia are followed,

references to the specific tests or analysis in the

pharmacopoeias are to be given in the report. A perusal of the

report furnished by Central Drugs Laboratory, Kolkata, which

has been relied upon by the respondent while launching

prosecution against the petitioners, reveals that it is recorded

therein that the test has been carried out as per the method

laid down in I.P. under "General requirements for Enteric

Coated Tablets" and that the sample does not conform to IP

with respect to test for dissolution. The report also bears

reference to the method as I.P. 2018. Thus, prima facie, it

cannot be stated that the test report relied upon by the

respondent does not conform to Rule 46 of the Rules. In any

case contention of the petitioners in this regard can be decided

and determined after the author of the test report is examined

and cross-examined during the trial of the case. Similarly, the

question whether the samples were kept in a proper and secure

place is also a matter of trial and cannot be decided at this

stage.

14) During the course of arguments, learned counsel for the

petitioners has contended that in view of the provisions of

Section 32 of the Drugs and Cosmetics Act, it was not open to

the learned trial Magistrate to take cognizance of the offences

and issue process against the petitioners as the offences are

triable by a Court of Sessions.

15) In the above context, it is necessary to notice the

provisions of Section 32 of the Drugs and Cosmetics Act. It

reads as under:

32. Cognizance of offences--(1) No prosecution under this Chapter shall be instituted except by--

(a) an Inspector; or

(b) any gazetted officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government or a State Government or by a general or special order made in this behalf by that Government; or

(c) the person aggrieved; or

(d) a recognised consumer association whether such person is a member of that association or not. (2) Save as otherwise provided in this Act, no court inferior to that of a Court of Session shall try an offence punishable under this Chapter.

(3) Nothing contained in this Chapter shall be deemed to prevent any person from being prosecuted under any other law for any act or omission which constitutes an offence against this Chapter.

16) From a perusal of the aforesaid provision, it is clear that

certain offences under the Act are triable by a Court of

Sessions but the provision does not bar the cognizance of the

offences by a Magistrate. The expression used under sub-

section (2) of Section 32 is "try any offence", meaning thereby

that trial of the offence under Chapter IV of the Act could be

held by a court inferior to the Court of Sessions. What is barred

under Section 32(2) of the Act, is trial of the offences under

Chapter IV of the Act and not taking of cognizance of such

offences. In terms of Section 193 of Cr. P. C, a Sessions Court

cannot take cognizance of any offence unless expressly

provided for . Section 32(2) of the Act only provides for trial of

cases by Sessions Court and not for taking of cognizance of

offences by the said Court. Therefore, it is open to a Judicial

Magistrate to take cognizance of offences under Chapter IV of

the Act and thereafter commit the case for trial to the Sessions

Court in terms of Section 209 of the Cr. P. C. This is the only

possible interpretation of the provisions contained in Section

32 of the Act read with the relevant provisions of the Cr. P. C.

Thus, the contention of the learned counsel for the petitioner

is without any merit.

17) That takes us to the last ground urged by the petitioners

which relates to non-compliance with the requirements of

Section 202 of the Cr. P. C. If we have a look at the provisions

contained in sub-section (1) of Section 202 of the Cr. P. C, it

provides that a Magistrate taking cognizance of an offence may,

if he thinks fit and shall, in a case where the accused is

residing at a place beyond the area in which he exercises his

jurisdiction, postpone the issue of process against the accused

and either enquire 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. From this it is

clear that in a case where the accused is residing at a place

beyond the territorial jurisdiction of a Magistrate, the

Magistrate has to undertake a preliminary enquiry before

proceeding to decide whether or not there is sufficient ground

for issuing process against the accused whereas in other cases

the discretion lies with the Magistrate to undertake or not to

undertake any such exercise.

18) The Supreme Court in the case of Vijay Dhanuka and

Ors. vs. Najima Mamtaz, (2014) 14 SCC 638, while

interpreting the provisions contained in Section 202 of Cr.P.C,

held that the requirement to conduct enquiry or direct

investigation before issuing process where accused is residing

beyond territorial jurisdiction of Magistrate concerned is

mandatory. In the same case, the Supreme Corut has observed

that in the enquiry envisaged under Section 202, the witnesses

are examined whereas under Section 200, examination of the

complainant only is necessary with the option of examining

witnesses, if any. It has been further held that the exercise by

the Magistrate for the purpose of deciding whether or not there

is sufficient ground for proceeding against the accused is

nothing but an enquiry envisaged under Section 202.

19) The aforesaid view has been reiterated and reaffirmed by

the Supreme Court in its subsequent judgments in the cases

of Abhijit Pawar vs. Hemant Madhukar Nimbalkar & Anr.,

(2017) 3 SCC 538 and, Odi Jerang vs. Naba Jyoti Baruah &

20) In view of the aforesaid legal position, it is clear that

undertaking an enquiry under Section 202(1) of the Cr. P. C

before issuing process against the accused in a case where the

accused is residing beyond the territorial jurisdiction of the

Magistrate is an absolute necessity. In the present case,

admittedly, the learned trial Magistrate has not conducted any

preliminary enquiry under Section 202(1) of Cr. P. C nor any

investigation has been directed in terms of the said provision.

Therefore, the impugned order whereby process has been

issued against the petitioners is not sustainable in law.

21) For what has been discussed hereinabove, both the

petitions are allowed and the impugned order passed by the

learned Chief Judicial Magistrate, Anantnag, whereby the

process has been issued against the petitioners, is set aside,

and a direction is issued to the learned trial court to hold a

preliminary enquiry in terms of Section 202(1) of Cr. P. C and

thereafter proceed afresh in the matter in accordance with the

law.

22) A copy of this order be sent to the learned trial court for

information and compliance.

(Sanjay Dhar) Judge Srinagar, 21.02.2025 "Bhat Altaf-Secy"

                                       Whether the order is speaking:     Yes/No
                                       Whether the order is reportable:   Yes/No

Mohammad Altaf Bhat    CRM(M) No.454/2022