Madras High Court
Unknown vs Union Of India on 2 August, 2023
Crl.O.P No.2547 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 02.08.2023
CORAM
THE HONOURABLE MR. JUSTICE N. ANAND VENKATESH
Crl.O.P No.2547 of 2022
and
Crl.M.P.No.1167 of 2022
1.Crescent Therapeutics Limited
(Presently known as Sanctus Global Formulations Ltd.)
Through its Directors
Factory at Khasra No.587/588, Village Kunjhal,
Beside Jharmajri,
Baddi, Solan District, Tehsil, Nalagarh,
Himachal Pradesh – 173 205.
2.Vijay Kumar Joshi
Director, Crescent Therapeutics Limited
(Presently known as Sanctus Global Formulations Ltd.)
Through its Directors
Factory at Khasra No.587/588, Village Kunjhal,
Beside Jharmajri,
Baddi, Solan District, Tehsil, Nalagarh,
Himachal Pradesh – 173 205.
3.Vinod Kumar Joshi
Director, Crescent Therapeutics Limited
(Presently known as Sanctus Global Formulations Ltd.)
Through its Directors
Factory at Khasra No.587/588, Village Kunjhal,
Beside Jharmajri,
Baddi, Solan District, Tehsil, Nalagarh,
Himachal Pradesh – 173 205.
1/14
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Crl.O.P No.2547 of 2022
4.Sahil Joshi
Director, Crescent Therapeutics Limited
(Presently known as Sanctus Global Formulations Ltd.)
Through its Directors
Factory at Khasra No.587/588, Village Kunjhal,
Beside Jharmajri,
Baddi, Solan District, Tehsil, Nalagarh,
Himachal Pradesh – 173 205. ... Petitioners
vs.
Union of India,
represented by
Drugs Inspector,
Office of the Deputy Drugs Controller (India),
Central Drugs Standard Control Organization,
2nd Floor, Shastri Bawan, Annexe,
26, Haddows Road,
South Zone, Chennai – 600 006. ... Respondent
PRAYER: Criminal Original Petition filed under Section 482 of the Code of
Criminal Procedure, to call for the records of the proceedings in C.C.No.343
of 2021 on the file of the XV Metropolitan Magistrate's Court, George Town,
Chennai and to quash the same as illegal.
For Petitioners : Mr.Sarath Chandran
for Ms.Aditi Ashok
For Respondent : Mr.M.Karthikeyan
2/14
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Crl.O.P No.2547 of 2022
ORDER
This petition has been filed challenging the proceedings pending in
C.C.No.343 of 2021, on the file of the XV Metropolitan Magistrate Court,
George Town, Chennai.
2. The respondent has filed a complaint before the Court below against
the accused persons (A1 to A4) for contravention of Section 18(a)(i) r/w
Section 16 and Section 18-B of the Drugs and Cosmetics At, 1940
(hereinafter referred to as 'the Act') punishable under Sections 27(d) and
28-A of the Act.
3. The sum and substance of the complaint given by the respondent is
that the company is manufacturing drugs of substandard quality and hence,
the company and its directors have contravened the provisions of the Act and
consequently they are punishable for the said contravention.
4. Heard the learned counsel for the petitioners and the learned
Standing counsel appearing on behalf of respondent.
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Crl.O.P No.2547 of 2022
5. Even though the quash petition has been filed by all the four accused
persons, the learned counsel for the petitioners submitted that he is confining
his arguments only insofar as the petitioners 2 to 4 (A2 to A4).
6. It was submitted that the complaint filed by the respondent
completely lacks any specific allegations against A2 to A4, which is
mandatory under Section 34 of the Act. It was further submitted that the
license that was issued by the designated authority for manufacture and sale /
distribution of drugs specifically gives the names of persons who are involved
in the manufacturing and testing. To substantiate the same, Form 28 and
Form 26 that were issued in favour of A1-Company was brought to the notice
of this Court and it was further informed by virtue of the communication
dated 26.06.2018, that the license was extended from 20.06.2018 to
19.06.2023. Such extension was made by taking into consideration the earlier
license issued under Form 26 which specifically names the persons who are
responsible for manufacturing and testing. The learned counsel submitted
that the persons on whom the responsibility has been placed under the license
are the persons who are incharge of manufacturing and testing of drugs and
they are the ones who should be made as accused persons. It was further
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Crl.O.P No.2547 of 2022
contended that if the Director is made as an accused, the requirement under
Section 34 of the Act must be satisfied.
7. Per contra, Mr.M.Karthikeyan, learned Standing counsel appearing
on behalf of the respondent submitted that sufficient averments were made in
the complaint as against the accused persons. That apart, learned counsel by
pointing out to paragraph 13 of the complaint submitted that the investigation
team was not able to gather the particulars and the same has been specifically
mentioned in the complaint. In view of the same, it was contended that the
mandate under Section 34 of the Act has been fulfilled and that the accused
persons must face the trial before the Court below.
8. The allegations made against the petitioners in the complaint is as
follows:
“4. The complaint further submits that the 1 st Accused is
manufacturer of the drug Telmisartan Tablets IP 40 mg (Telmiral
40) Batch No.: 78TML18002, Manufacturing Date: NOV. 2018,
Expiry Date: JUN. 2020 running under the name and style of
M/s.Crescent Therapeutics Ltd., Khasra No.587/588, Beside
Jharmajri, Village Kunjhal, Baddi, Tehsil Nalagarh, Distt. Solan –
173 205, Himachal Pradesh.
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Crl.O.P No.2547 of 2022
5. The complainant further submits that, 2 nd accused Shri.
Vijay Kumar Joshi Director of M/s.Crescent Therapeutics Ltd.,
(presently known as M/s.Sanctus Global Formulations Ltd.,),
Khasra No.587/588, Beside Jharmajri, Village Kunjhal, Baddi,
Tehsil Nalagarh, Distt. Solan – 173 205, Himachal Pradesh, 3 rd
Accused, Shri.Vinod Kumar Joshi Director of M/s.Crescent
Therapeutics Ltd., (presently known as M/s.Sanctus Global
Formulations Ltd.,), Khosra No.587/588, Beside Jharmajri, Village
Kunjhal, Baddi, Tehsil Nalagarh, Distt. Solan – 173 205, Himachal
Pradesh, 4th accused, Shri.Sahil Joshi, M/s.Crescent Therapeutics
Ltd., (presently known as M/s.Sanctus Global Formulations Ltd.,),
Khasra No.587/588, Beside Jharmajri, Village Kunjhal, Baddi,
Tehsil Nalagarh, Distt. Solan – 173 205, Himachal Pradesh. Above
said directors of M/s.Crescent Therapeutics Ltd., (presently known
as M/s.Sanctus Global Formulations Ltd.,), Khasra No.587/588,
Beside Jharmajri, Village Kunjhal, Baddi, Tehsil Nalagarh, Distt.
Solan – 173 205, Himachal Pradesh are responsible persons for
the manufacturing and conduct of business of the Accused No.1 at
the time when the drug in question was manufactured, i.e. Month
of November 2018. (Copy of letter received from Deputy Registrar
of Companies Punjab and Chandigarh along with its enclosers is
enclosed as Annexure-3)”
9. Insofar as the first petitioner (A1) is concerned, the proceedings will
have to go on and there is no scope for interfering with the proceedings. The
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Crl.O.P No.2547 of 2022
only issue to be considered is as to whether A2 to A4 will have to undergo the
trial before the Court below.
10. The averments made in the complaint and which has been
extracted supra, shows that the mandate under Section 34 of the Act has not
been fulfilled. The complaint does not state as to how A2 to A4 are incharge
and responsible for running the day-to-day affairs of A1-Company.
11. The recent judgment of this Court in Crl.O.P.No.11184 of 2019,
dated 12.10.2022 was brought to the notice of this Court. Learned Single
Judge of this Court had an occasion to deal with the scope of Section 34 of
the Act. The learned Single Judge after considering the law and issue came to
the following conclusion:
“24. The offences and the offenders in the case of this
nature is manufacturing and distribution of sub-standard drugs by
a Company which is managed by its Board of Directors. The
decision to manufacture the drugs is the collective decision of the
Board of Directors. Therefore, the Directors cannot claim that
they are not directly involved in the product of the drugs, when the
decision to produce the drugs itself is the out come of their
decision. Therefore, the case of Directors signing the cheque on
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Crl.O.P No.2547 of 2022
behalf the Company and the case of Directors participating in the
decision to produce sub-standard drugs are not one and the same
to hold that these petitioners are not involved in day-to-day affairs
of the Company.”
12. It is also brought to the notice of this Court that there is a recent
judgment of the Hon’ble Apex Court on this issue in the case of Lalankumar
Singh and Others vs. State of Maharashtra reported in 2022 SCC OnLine
SC 1383 and the relevant portions are extracted hereunder:
“33. It can thus be seen that there are no specific
averments insofar as the present appellants are concerned. It is
further to be noted that the present appellants are neither the
managing director nor the whole-time directors of the accused
company.
34. It is further to be noted that, in accordance with the
provisions of Rule 76 of the said Rules read with Form 28, the
Accused Nos.9 and 10 have specifically been approved by the
licensing authority in Form 28, Accused No.9 was approved as a
person under whose active direction and personal supervision
the manufacture would be conducted as required under sub-rule
(1) of Rule 76 of the said Rules. Similarly, Accused No.10, who
was approved as a head of the testing unit, was to be in-charge
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Crl.O.P No.2547 of 2022
for carrying out the test of the strength, quality and purity of the
substances as may be required under the provisions of Part X of
the said Rules. We are therefore of the considered view that the
complaint is totally lacking the requirement of Section 34 of the
said Act.”
13. The Apex Court while dealing with the scope on Section 34 of the
Act has rendered the following finding:
“28. It could thus clearly be seen that this Court has held
that merely reproducing the words of the section without a clear
statement of fact as to how and in what manner a director of the
company was responsible for the conduct of the business of the
company, would not ipso facto make the director vicariously
liable.”
14. In terms of the above finding, the Apex Court applied the facts of
that case and came to a conclusion that there are no specific averments
against the Directors as mandated under Section 34 of the Act.
15. The above judgment of the Hon’ble Apex Court is binding on this
Court. Therefore, the judgment of the learned Single Judge in
Crl.O.P.No.11184 of 2019, dated 12.10.2022 cannot be pressed into
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Crl.O.P No.2547 of 2022
operation, in the light of the judgment of the Hon'ble Apex Court referred to
supra.
16. It is apparent from the above judgment that the Hon’ble Apex
Court has also considered the relevant Form that is issued at the time of
granting license to the company and has dealt with the same in paragraph 34
of the judgment. The Hon'ble Apex Court has held that the person whose
name has been approved under the relevant Form must be the person who is
incharge for carrying out the test of the strength, quality and purity of the
drug as required under the relevant Rules. The Hon'ble Apex Court held that
the same was lacking in the said case and hence the requirement under
Section 34 of the Act was not fulfilled.
17. In the instant case, the license that was given to A1-company under
Form 28 on 20.06.2008 specifically names the technical staff who are
incharge of the manufacturing and testing of drugs. This license was valid
upto 2013. Thereafter, the license was renewed under Form 26 on
11.07.2013 and even in the said Form, the competent technical staff
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Crl.O.P No.2547 of 2022
responsible for manufacturing and testing have been named. This renewal of
license was given till 2018 and thereafter it was extended upto 19.06.2023.
18. It is clear from the above that the approved technical staff has
already been fixed under the relevant Form and it is quite surprising that the
respondent did not add them as accused persons in the complaint. The
Hon'ble Apex Court in the above judgment has made it very clear that it is
these technical staff who have been identified, must be incharge of carrying
on the test and ensuring the quality maintained in the drugs.
19. The respondent has mechanically added A2 to A4 as accused
persons. A2 to A4 are not the persons who have been named in the license
that was given to A1-company and that position continues even when it was
renewed from time to time. That apart, there are no sufficient allegations
against A2 to A4 in the complaint as mandated under Section 34 of the Act.
The Hon'ble Apex Court has held that a mere reproduction of the words
found in Section 34 of the Act, without a clear statement as to how and in
what manner A2 to A4 were responsible for the conduct of the business of the
A1-company, is not enough to rope in them as accused persons.
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Crl.O.P No.2547 of 2022
20. In the light of the above discussions, continuation of the
proceedings as against the petitioners 2 to 4 (A2 to A4) will amount to abuse
of process of Court, which requires the interference of this Court in exercise
of its jurisdiction under Section 482 of Cr.P.C.
21. In the result, this Criminal Original Petition is partly allowed and
the proceedings as against the petitioners 2 to 4 (A2 to A4) in C.C.No.343 of
2021 on the file of the XV Metropolitan Magistrate Court, George Town,
Chennai are hereby quashed. The proceedings as against A1 shall go on and
the Court below shall complete the proceedings within a period of three
months from the date of receipt of a copy of this order. Consequently,
connected miscellaneous petition is closed.
02.08.2023
Index : Yes
Internet : Yes
Speaking Order/Non-Speaking Order
rsi
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Crl.O.P No.2547 of 2022
To
1.The Drugs Inspector,
Union of India,
Office of the Deputy Drugs Controller (India),
Central Drugs Standard Control Organization,
2nd Floor, Shastri Bawan, Annexe,
26, Haddows Road,
South Zone, Chennai – 600 006.
2.The Public Prosecutor,
High Court, Madras.
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Crl.O.P No.2547 of 2022
N. ANAND VENKATESH, J.
rsi
Crl.O.P No.2547 of 2022
and
Crl.M.P.No.1167 of 2022
02.08.2023
https://www.mhc.tn.gov.in/judis
