Serdia Pharmaceuticals (India) ... vs Union Of India
2021 Latest Caselaw 1820 Kant

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       IN THE HIGH COURT OF KARNATAKA AT BENGALURU          R
           DATED THIS THE 24th DAY OF MARCH, 2021

                          BEFORE

           THE HON'BLE MR. JUSTICE H.P. SANDESH

               CRIMINAL PETITION NO.919/2020


BETWEEN:

SERDIA PHARMACEUTICALS (INDIA) PRIVATE LIMITED,
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT
PARINEECRESCENZO, 1703, 17TH FLOOR,
'B' WING, PLOT NOS.C38/39, 'G' BLOCK,
BEHIND MCA, BKC, BANDRA (EAST),
MUMBAI-400051.
REPRESENTED BY ITS HEAD MANUFACTURING
SERVICES AND PRODUCT DEVELOPMENT
SHRI SRINIVAS KULKARNI.                      ... PETITIONER

        [BY SRI S.S. NAGANANDA, SENIOR COUNSEL FOR
         SRI S. SRIRANGA, ADVOCATE (THROUGH V.C.)]

AND:

UNION OF INDIA,
REPRESENTED BY DRUGS INSPECTOR ,
O/O DRUG CONTROLLER FOR
THE STATE OF KARNATAKA,
CDSCO, SUB ZONE,
2ND FLOOR, PALACE ROAD,
BENGALURU-560 001.                          ... RESPONDENT

            [BY SRI MADHUKAR DESHPANDE, CGSSC]

      THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS PENDING
BEFORE THE SPL.COURT FOR ECONOMIC OFFENCES AT
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BENGALURU IN CRL.CASE NO.189/2019 AND GRANT COSTS OF
THESE PROCEEDINGS.

     THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 03.03.2021, THIS DAY THE COURT
PRONOUNCED THE FOLLOWING:

                                ORDER

This petition is filed under Section 482 of Cr.P.C. praying

this Court to quash the entire proceedings pending before the

Special Court for Economic Offences at Bengaluru in Criminal

Case No.189/2019 issuing summons against the petitioner/

accused No.8 and grant such other relief as deems fit in the

circumstances of the case.

2. The factual matrix of the case is that the prosecution

filed a complaint under Section 200 of Cr.P.C. against accused

Nos.1 to 9 for the offences punishable under Section 27(d) of the

Drugs and Cosmetics Act, 1940 ('D & C Act' for short). On that

basis, criminal case was registered. The accused have

challenged the registration of the case earlier before this Court in

Crl.P.No.6324/2015. This Court vide order dated 01.07.2019,

quashed the proceedings and remitted the matter to consider

the complaint afresh from the stage of receiving it from the

respondent and proceed thereafter in accordance with law.

3. The complainant who has invoked Section 200 of

Cr.P.C. is a public servant and in the complaint an allegation is

made that accused No.1 is the manufacturing unit run under the

name and style of M/s. Altra Pharmaceuticals Ltd., engaged in

manufacturing and sale of drugs. Accused Nos.2 to 4 are the

Directors. Accused No.5 is the Managing Director of accused

No.1 and are responsible for day to day business of the

Company and have been responsible for the offence committed.

Accused No.6 is the Production Manager of accused No.1 and he

was responsible for manufacturing of the not of standard quality

drug DEAMICRON. Accused No.7 is the Quality Control Manager

of accused No.1 and she was responsible for manufacturing of

No.1 standard quality drug DEAMICRON. Accused No.8 is M/s.

Serdia Pharmaceuticals (India) Private Limited holding loan

licence in Form No.25A bearing No.25A-AD/145-A granted on

17.07.2001 and renewed in Form No.26A valid upto 31.12.2017

and responsible for manufacturing of not of standard quality

drug at accused No.1. Accused No.9 is the Director of accused

No.8 and he is responsible for day to day business of the

Company and thereby responsible for the offences committed.

4. The learned Magistrate considered the material

averments made in the complaint, particularly paragraph No.34

wherein it is stated that accused have committed the offence

punishable under Section 27(d) of the D & C Act. But in the

prayer column it is stated that the accused committed the

offence under Section 27(b)(ii) and 27(d) of the D & C Act.

There is no averment in the complaint that the drug in question

was manufactured without valid licence. Thus, the ingredients to

constitute the offence punishable under Section 27(b)(ii) of D &

C Act are existing. It is also observed that the complaint

averments coupled with the documents produced along with

complaint prima facie discloses that the accused committed the

offence under Section 27(d) of D & C Act. Hence, issued process

against accused Nos.1 to 9. Accused No.8 M/s. Serdia

Pharmaceuticals (India) Private Limited has approached this

Court questioning the order of taking cognizance and issuance of

process against it.

5. The main contention of the petitioner herein is that

no enquiry as mandated under Section 202 of Cr.P.C. is

conducted and without conducting the enquiry as mandated

before summoning the accused who resides beyond his

jurisdiction, to make the necessary enquiries into the case

himself or direct an investigation to be made by the police officer

or by such person as he thinks fit, for finding out whether or not

there was sufficient ground to proceed against the accused is

erroneous. In support of his contentions, he relied upon the

judgment of the Apex Court in the case of VIJAY DHANUKA

AND OTHERS v. NAJIMA MAMTAJ AND OTHERS reported in

(2014) 14 SCC 638.

6. The other count of argument is that under the

provisions of Section 22(2) of D & C Act, the provisions of

Cr.P.C. are applicable to all searches and seizures which are

conducted under the provisions of Chapter IV of the D & C Act,

as they apply to any search or seizure made under the authority

of a warrant issued under the provisions of Section 94 of the

Cr.P.C. The search and seizure are made by the officers, who

are not authorized to conduct such search seizure. They failed

to produce any document evidencing that any attempt was made

by the Drugs Inspector to call upon two independent and

respectable persons whether from the locality or not for the

purposes of witnessing the search which the Drugs Inspector

conducted of the premises of the said Wellness Centre in respect

of the drug. The Drugs Inspector has failed to comply with the

criteria laid down by the High of Bombay in the case of STATE

OF GOA v. TEJPAL PANDIA passed in Crl.A.No.52/2002,

wherein the High Court observed that at the time of dividing the

drug sample into portions as required under Section 23(3) of D &

C Act, the Drugs Inspector must draw a panchanama expressly

stating the procedure followed while dividing the samples into

portions. It is also contended that there was a delay in getting

the report and the same amounts to gross abuse of process of

law and grave injustice to the petitioner and also non-compliance

of the special provisions enumerated under the law. The Drugs

Inspector has also violated the mandatory provisions of the

25(3) of D & C Act by failing to have the said drug re-tested by

the Central Drugs Laboratory in accordance with the provisions

of Section 25 of D & C Act. The petitioner had also subjected the

same for test and the report which has been submitted was

ignored by the Drugs Inspector. The learned Magistrate while

considering the complaint, committed an error in not considering

the aspect that the Drugs Inspector have also deprived the

petitioner of his valuable right under the provisions of Section

25(4) of the D & C Act to approach the Court and request the

Court to have a portion of the sample of the said drug re-tested

by the Central Drugs Laboratory.

7. The learned counsel would also vehemently contend

that the persons who have conducted the search and seizure are

not authorized and also second sample report has not been

verified and hence it requires interference of this Court and

quash the proceedings initiated against the petitioner.

8. The learned counsel referring the judgment of the

Apex Court in the case of Vijay Dhanuka (supra), brought to

the notice of this Court paragraph No.12 with regard to

compliance of Section 202 of Cr.P.C. and the use of the word

'shall' in all circumstances is not decisive. The legislature

intention is to prevent innocent persons from harassment by

unscrupulous persons from false complaints and hence the word

is used as 'shall'. The learned counsel also brought to the notice

of this Court the judgment of the Apex Court in the case of ANIL

KUMAR AND OTHERS v. M.K. AIYAPPA AND ANOTHER

reported in (2013) 10 SCC 705 regarding scope of Section 202

of Cr.P.C.

9. The learned counsel also relied upon the judgment of

the Andhra Pradesh High Court in the case of M/s. JOHNSON

AND JOHNSON LIMITED AND OTHERS v. STATE OF

ANDHRA PRADESH passed in Crl.P.No.2277/2012, wherein it

is held that if the expiry date of the sample was not relevant,

there was no reason why in the form prescribed for submission

of the report by the Insecticide Analyst, the date of manufacture

of the article and the expiry date are mentioned.

10. The learned counsel also relied upon the judgment of

the Apex Court in the case of MEDICAMEN BIOTECH LIMITED

AND ANOTHER v. RUBINA BOSE, DRUG INSPECTOR

reported in (2008) 7 SCC 196, wherein the Apex Court

discussed with regard to the loss of right under Section 25(3)

and 25(4) of D & C Act for re-testing of drug with regard to the

delay in getting the report and causing show cause notice and

there was a delay in lodging the complaint as a result, rights

under Section 25(3) and 25(4) lost due to delay in filing the

complaint and therefore the complaint be quashed by exercising

the power under Section 482 of Cr.P.C.

11. The learned counsel relied upon the judgment of this

Court in the case of SANJAY G. REVANKAR v. STATE BY

DRUG INSPECTOR reported in ILR 2002 KAR 475 wherein it

is held that there must be specific averment in the complaint

about their being responsible for day to day affairs.

12. Per contra, the learned counsel for the respondent

would contend that the documents produced as Ex.R1 and Ex.R2

are authorized for conducting search and inspection and these

two documents clearly discloses that the persons who have

conducted the inspection and seized the sub standard drugs are

having authority to search and seizure. Before filing the

complaint, the seized drugs was sent to test and report was

collected in terms of Ex.R5. After sending the sample and

obtaining the report, the complaint is filed, that too by public

servant.

13. The learned counsel with regard to the compliance of

Section 202 of Cr.P.C. would contend that the complainant is a

public servant and statute based investigation was conducted

and the report is also filed in the prescribed form and the

complaint is also filed before the Court. When the complaint is

filed by the public servant, compliance of Section 202 Cr.P.C.

does not arise. Section 200(a) of Cr.P.C. is specific that if the

complainant is a public servant, there is no need to examine the

complainant. The very object of dispensing the examination of

the public servant, who had filed the complaint is that no public

servant will make any false allegation or files false complaint and

hence immunity is given in respect of public servant who lodges

the complaint. Though Section 202 of Cr.P.C. is amended in

2005, which came into effect in 2006, the same is only to

protect the persons, who are residing outside the jurisdiction of

the Court that innocent persons should not be dragged for

criminal proceedings. In the case on hand, statute based

investigation was conducted and after obtaining the report, the

proceedings has been initiated and hence it cannot be contended

that without holding an enquiry under Section 202 of Cr.P.C., the

proceedings initiated against the petitioner is bad in law.

14. The learned counsel in support of his contentions

relied upon the judgment of the Punjab and Haryana High Court

in the case of CHEMINOVA INDIA LIMITED AND OTHERS v.

STATE OF PUNJAB AND ANOTHER reported in 2020 SCC

Online P & H 609 and brought to the notice of this Court

paragraph Nos.1, 7 and 23 to 25 wherein it is discussed in detail

with regard to the enquiry as contemplated under Section

202(1) of Cr.P.C. The learned counsel brought to the notice of

this Court paragraph Nos.26 to 28 wherein in detail discussed

with regard to using of the word 'shall' and also in paragraph

Nos.31 and 34. Paragraph No.34 is an ultimate conclusion

arrived by the Punjab and Haryana High Court with regard to

exercising the powers under Section 200 and 293 of Cr.P.C. The

Punjab and Haryana High Court held that the object and purpose

of Section 202(1) of Cr.P.C. having been achieved in the present

circumstances, there is no need to record the statement of the

'public servant' and of the expert for the purpose of holding an

enquiry as envisaged by Section 202 of Cr.P.C. Needless to

mention, if in some case, the Magistrate is not satisfied with the

contents of the complaint and the accompanying documents or

the report of some Government Expert, it would always be open

to him to record a statement or take any evidence for the

purpose of satisfying himself as to whether or not there exists

any ground to proceed further against the accused. In other

words, there is no bar on the Magistrate to inquire into the

matter in case he is not satisfied with the evidence put forth

along with the complaint, even if filed by a 'public servant'.

Answering this, the submission of the counsel that non-

examination of public servant cannot be accepted.

15. Having heard the learned counsel for the petitioner

and the learned counsel for the respondent and also on perusal

of the material available on record, the questions that would

arise for the consideration of this Court are:

(i) Whether non-compliance of Section 202 of Cr.P.C. vitiates taking of cognizance against the petitioner herein even though complainant is a public servant who has been exempted under Section 200 of Cr.P.C.?

(ii) Whether the other grounds urged before the Court comes to the aid of the petitioner herein to quash the proceedings as sought?

16. The first contention raised by the learned counsel for

the petitioner is that a private complaint is filed against the

petitioner herein, who is residing outside the jurisdiction of the

Court which has taken the cognizance against the petitioner.

Hence, non-compliance of Section 202 of Cr.P.C. would

invalidate the proceedings initiated against the petitioner. In

support of his contentions, the learned counsel relied upon the

judgment of the Apex Court in the case of Vijay Dhanuka

(supra), wherein the Apex Court had come to the conclusion that

it is mandatory on the part of the learned Magistrate to examine

the witnesses when the accused is residing outside the

jurisdiction of the Court. The principles laid down in the

judgment in the case of Vijay Dhanuka (supra), is not in

dispute.

17. This Court in Crl.P.No.1097/2020 dated 02.03.2021

where similar contentions were raised, discussed in detail with

regard to compliance of Section 202 of Cr.P.C. In the said

judgment, having discussed the scope of Sections 200 and 202

of Cr.P.C., this Court held that it is mandatory to hold an enquiry

under Section 202 of Cr.P.C. referring the judgment of the Apex

Court in the case of Abhijit Pawar v. Hemant Madhukar

Nimbalkar and Another reported in (2017) 3 SCC 528. In

paragraph Nos.23 and 25 of the said judgment, the Apex Court

extracted paragraph Nos.20 and 22 of the judgment in the case

of Mehmood Ul Rehman v. Khazir Mohammad Tunda

reported in (2015) 12 SCC 420. This Court also discussed the

judgment of the Apex Court in the case of Vijay Dhanuka

(supra) referring paragraph No.14 of the judgment so also the

enquiry as defined under Section 2(g) of the Code and comes to

the conclusion that Section 202 of Cr.P.C. contemplates with

regard to the word "shall" in case where the accused is residing

at a place beyond the area in which the Magistrate exercises his

jurisdiction, it is mandatory on the part of the Magistrate to

conduct an enquiry or investigation before issuing the process.

18. In the case on hand, the material discloses that the

complaint is filed by the Union of India represented by its Drugs

Inspector and the offences invoked in the complaint is under

Section 27(b)(ii) and 27(d) of the D & C Act. The complaint is

filed under Section 200 of Cr.P.C. read with Section 32(1) of the

D & C Act for an offence under Section 18(a)(i) of the D & C Act,

punishable under Section 27(d) of D & C Act. Hence, it is clear

that the prosecution is launched under Section 32(1) of the D &

C Act.

19. Having perused the complaint, it is not in dispute

that the complaint is filed by the Government represented by its

Drugs Inspector. Now the question before this Court is when the

complaint is filed by the public servant, whether the complainant

has to be examined before the Court. Having perused the

Cr.P.C., a special provision is made under Section 200(a) of

Cr.P.C. In a case of complaint filed by the public servant acting

or purporting to act in the discharge of his official duties or a

Court has made the complaint, need not examine the

complainant and the witnesses.

20. The main contention of the learned counsel for the

petitioner is that when the accused is residing at a place beyond

the area in which he exercised his jurisdiction, either enquire

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

police officer or by such other person for the purpose of deciding

whether or not there is sufficient ground for proceeding. The

moot question before this Court is whether the proviso to

Section 202(1) of Cr.P.C. takes away Section 200(a) of Cr.P.C.

Whether it is mandatory on the part of the Court to examine the

complainant and the witnesses as contended by the learned

counsel for the petitioner.

21. The learned counsel for the respondent would

vehemently contend that Section 202(1) of Cr.P.C. will not come

in the way of examining the witnesses when the complaint is

filed by public servant. In the case on hand, it is not in dispute

that the complaint is filed by the Union of India represented by

its authorized person - Drugs Inspector. The High Court of

Punjab and Haryana in the case of Cheminova (supra), dealt

with the similar circumstances in paragraph No.34 of the

judgment after analyzing the material on record. It is held that

in a case instituted by public servant in discharge of his official

duties where apart from the complaint, other material evidence

being relied upon by the complainant is also before the Court, as

in the present case where report of Government experts which

are both per-se admissible have been annexed, and the

Magistrate upon perusal of the complaint and the documents as

annexed therewith is satisfied that sufficient grounds do exist for

proceeding against the accused, the requirement of adjourning

the matter for taking evidence is virtually rendered redundant as

neither the public servant nor the Government expert are

required to be examined by virtue of proviso to Section 200 and

293 of Cr.P.C. It is further observed that the manufacturing

firm, in any case, is not disputing the factum of it having

manufactured the insecticide in question. Consequently, the

object and purpose of Section 202(1) of Cr.P.C. having been

achieved in the present circumstances, there is no need to

record the statement of the 'public servant' and of the expert for

the purpose of holding an enquiry as envisaged by Section 202

of Cr.P.C.

22. This Court would also like to refer to the judgment of

the Apex Court in the case of UNION OF INDIA v. ASHOK

KUMAR SHARMA AND OTHERS reported in AIR 2020 SC

5274. The Apex Court in paragraph No.40 of the said judgment

held that when the complaint under Section 32 of the D & C Act

is filed either by the Inspector or by authorized gazetted officer

being public servant under Section 200 of Cr.P.C., the Magistrate

is exempted from examining the complainant and the witnesses.

Hence, it is clear that when the complaint is filed by the Drugs

Inspector invoking Section 32 of the D & C Act, the Magistrate is

exempted from examining the complainant and the witnesses.

Hence, the very contention of the learned counsel for the

petitioner cannot be accepted for the reason that in the present

case, the complaint is filed by the Union of India represented by

the Drugs Inspector. Hence, I answer point No.(i) as negative.

23. The other contention of the petitioner before this

Court is that the learned Magistrate while issuing the process

has not applied the mind and erroneously issued the process.

Having considered the contention of the learned counsel for the

petitioner, this Court has to consider the material available on

record i.e., the complaint filed by the public servant before the

Court wherein in paragraph Nos.9 and 10 of the complaint,

specific allegations are made against the petitioner herein. In

paragraph No.12 an allegation is made that on 26.06.2013, the

Drugs Inspector received test report in Form No.13 from

Government Analyst, CDL, Kolkata vide his letter dated

18.06.2013 declared the subject drug as a not of standard

quality for the reason the sample does not conform to IP with

respect to the test for 'Dissolution'. In paragraph No.17 of the

complaint, it is specifically mentioned that vide letter dated

25.07.2013, notice was served against the petitioner not to

distribute the subject matter of the drug and recall all the supply

made from the market and also to submit the details as

mentioned in the notice within ten days. The said document is

produced as Annexure-C. It is also important to note that in

response to Annexure-C, the petitioner herein has issued

Annexure-D and replied to the Drugs Inspector. In paragraph

No.3 of the letter dated 06.08.2013 (Annexure-D) it is stated

that as per the directions, the said product batch is now recalled

and no more stocks are being billed for the same, as on date.

The recall letter in this regard has been forwarded to all their

distributors and stockists, instructing them to not distribute and

sale the said product batch and to recall the goods of the same

from the market up to the retail level immediately. Hence, it is

clear that in pursuance of the Annexure-C, the petitioner herein

has also acted upon in terms of Annexure-D.

24. Having perused the order passed by the learned

Magistrate while taking the cognizance, this Court has to look

into whether he has applied the mind or not. The learned

Magistrate has taken note of the fact that the complaint is filed

by a public servant and also discussed that accused No.8 i.e.,

the petitioner herein holding loan licence in Form No.25A bearing

No.25A-AD/145-A granted on 17.07.2001 and renewed in Form

No.26A valid upto 31.12.2017 and responsible for manufacturing

of not of standard quality drug at accused No.1. Accused No.9 is

the Director of accused No.8 and he is responsible for day to day

business of the Company and thereby responsible for the

offences committed. The learned Magistrate having taken note

of the averments made in the complaint and also the documents

produced along with the complaint and also having taken note of

the earlier order passed by this Court in Crl.P.No.6324/2015,

applied his judicious mind and issued the process against the

petitioner herein. Hence, the very contention of the learned

counsel for the petitioner that the learned Magistrate has not

applied his judicious mind while issuing the process cannot be

accepted.

25. The learned counsel for the petitioner in the petition

invoked various grounds for quashing of the impugned order and

also the issuance of process wherein specific contention was

taken that while making the search and seizure, the Drugs

Inspector ought to have complied with the applicable mandatory

provisions of Cr.P.C., which pertains to conducting of search and

seizure that, ought to have called independent and respectable

inhabitants of the locality. It is also contended that the second

sample of the drug was not sent for examination and opportunity

has not been given to the petitioner and the persons who have

conducted the search and seizure are not having authority to

conduct the search and seizure.

26. Repelling this argument, the learned counsel for the

respondent relied upon the documents before the Court with

regard to authorization given to the Drugs Inspector to conduct

the search and seizure. The learned counsel mainly relies upon

the documents Anenxures-R1 and R2 gazette notifications

showing appointment of Drugs Inspectors, Sri Rajshekhar and

Sri Mahesh Nagadasanahalli Anjinappa. It is also important to

note that the test report in Form No.13 dated 18.06.2013 issued

by the Central Drugs Laboratory is also produced as Annexure-

R6 and thereafter notices are exchanged between the petitioner

and the complainant vide Annexures-R7 to 17. The investigation

report dated 06.08.2014 is produced as Annexure-R18. Having

perused the material available on record, the Drugs Inspectors

are notified and appointed by issuing gazette notification. Form

No.13 report which is produced discloses that the sample which

have been collected contains the sub-standard drugs. I have

already pointed out that Annexure-C discloses that direction was

given not to supply the said drug and in terms of Annexure-D

reply was given recalling drugs which was in the market. When

all these materials are placed before the Court, the other

contentions raised by the petitioner before this Court are the

disputed facts and the defences would have been raised before

the Trial Court during the course of trial. Hence, the very

contention of the petitioner before this Court that the very

initiation of the proceedings initiated against the petitioner is

erroneous, cannot be accepted. I do not find any merit in the

petition to quash the proceedings. Hence, I answer point No.2 as

negative.

27. In view of the discussions made above, I pass the

following:

ORDER

The petition is dismissed.

Sd/-

JUDGE

MD