Kal Sundaran vs The State Of Bihar
2023 Latest Caselaw 5226 Patna

     IN THE HIGH COURT OF JUDICATURE AT PATNA
             CRIMINAL MISCELLANEOUS No.72370 of 2018
   Arising Out of PS. Case No.-1005 Year-2004 Thana- SAHARSA COMPLAINT CASE
                                    District- Saharsa
======================================================

Kal Sundaran, Son of N. Iyer Subramanian, the then Managing Director of M/S Glaxo Smithkline Pharmaceuticals Limited, having its registered office at M/S 252, Dr. Annie Basant Road, Police Station - Worli, Mumbai - 400026, Maharashtra.

... ... Petitioner/s Versus The State of Bihar ... ... Opposite Party/s ====================================================== Appearance :

For the Petitioner/s : Mr. Ansul, Advocate Mr. Sanjeev Kumar, Advocate Mr. Rajeev Shekhar, Advocate Mr. Prabho Shankar Mishra, Advocate Mr. Akash Pratap Singh, Advocate For the Opposite Party/s : Mr. Sujit Kumar Singh, A.P.P. ====================================================== CORAM: HONOURABLE MR. JUSTICE SATYAVRAT VERMA ORAL JUDGMENT Date : 10-10-2023

Heard learned counsel for the petitioner and learned

A.P.P. for the State.

2. The present quashing application has been filed

seeking quashing of the order dated 27.08.2004 passed in

Complaint Case No. 1005(C) of 2004 whereby the learned Chief

Judicial Magistrate, Saharsa has taken cognizance against the

petitioner of the offence under Section 27(d) of the Drugs and

Cosmetics Act, 1940.

3. Learned counsel for the petitioner submits that in the

nature of allegation as alleged in the complaint, prima facie, it

would manifest that no offence, against the petitioner, is made out. Patna High Court CR. MISC. No.72370 of 2018 dt.10-10-2023

4. Learned counsel for the petitioner submits that the

complainant alleges that on 12.06.2003 the premises of M/s

Popular Agencies, Mahavir Chowk, Saharsa, who holds valid

Drugs Wholesale Licence, was inspected and disposal of drugs

manufactured by Dr. Reddy's Laboratories Ltd. (in short 'Dr.

Reddy') and marketed by M/s Glaxo Smithkline Pharmaceuticals

Limited (in short 'GSK') along with other drugs was stopped by

issuing Form 15 for the irregularities committed as mentioned in

the inspection note. The premise of M/s Popular Agencies was

again inspected on 29.01.2004 and minimum quantity of drug in

question along with other drugs were seized. On 07.07.2003, the

complainant inspected the premises of M/s Shivshakti Medical

Agency, Bangaon Road, Saharsa and disposal of drugs

manufactured by Dr. Reddy and marketed by GSK along with

other drugs was stopped by issuing Form 15. The premises of M/s

Shivshakti Medical Agency, Bangaon Road, Saharsa was again

inspected on 28.01.2004 and minimum quantity of drug in

question along with other drugs were seized. It is next alleged that

the drug, namely, Stibs manufactured by Dr. Reddy and marketed

by GSK were found in the premise of Popular Agencies and

Shivshakti Medical Agency and the expiry date of the drugs were

in between August and September, 2004. Further, alleges that the Patna High Court CR. MISC. No.72370 of 2018 dt.10-10-2023

name and logo of GSK are printed on the label of the drug when

GSK is purchaser and not manufacturer thus the same is in breach

of Drugs and Cosmetics Rules, 1945 (hereinafter referred to as

'the 1945 Rules'). Accordingly, clarification was sought from GSK

by letter dated 15.07.2003, thereafter GSK furnished no

clarification by its letter dated 19.07.2003 with regard to the issue

in question but subsequently furnished clarification by letter dated

20.08.2003 stating that logo of GSK appears on labels of drugs

manufactured by other companies because the product is marketed

by GSK and labelling is mandated as per Rules 96 and 97 of the

1945 Rules. Further, by logo additional information is furnished to

the customers that product is marketed by GSK manufactured by a

company other than GSK under a third party manufacturing

agreement but the product continues to be of the same high quality

and standard that our customers used to. After seeking

clarification, it is alleged that by this act of the GSK and other

companies there is loss to government revenue, as, when they

manufactured drug in their own licence factory or get their product

manufactured in other licencee's factory under loan licence they

have to deposit prescribed amount under the Drugs and Cosmetics

Act, 1940 and Rules 1945 in government account towards licence

fee, inspection fee and additional product approval fee but under Patna High Court CR. MISC. No.72370 of 2018 dt.10-10-2023

third party manufacturing agreement government gets no fee.

Further, when drug is manufactured in their own licence factory

they have certain legal obligation and responsibility but when they

get their product manufactured under third party manufacturing

agreement they are free from those legal obligations thus GSK has

probably resorted to the unfair practice of third party

manufacturing. Further, there is no provision in the 1945 Rules

where name and logo of intended purchaser could appear on

purchased drug, thus Rules 96 and 97 of the 1945 Rules stand

violated which mandates labelling of drugs but label comes within

the purview of manufacture as per Section 3(f) of the Drugs and

Cosmetics Act, 1940 but then GSK is not manufacturer of drug in

question. Further, by labelling it the Doctors and customers get

misled that drug is being manufactured by GSK which violates

Section 17(c) of the Drugs and Cosmetics Act, 1940. Further, GSK

also availed the manufacturing facility of Dr. Reddy to get their

product manufactured under third party manufacturing agreement

but without any legal obligation under 1945 Rules.

5. Learned counsel for the petitioner submits that from

bare perusal of the allegation as alleged in the complaint, it would

manifest that the allegation hinges around the fact that GSK being

purchaser of medicine from Dr. Reddy Laboratories is using its Patna High Court CR. MISC. No.72370 of 2018 dt.10-10-2023

name and logo on the label which is an offence under Rules 96 and

97 of the 1945 Rules, further by this act of GSK the government is

put to loss in terms of revenue, the Doctors and the intending

customers are misled thinking that the drug in question is being

manufactured by GSK when it is not the case and labelling as

incorporated under Rules 96 and 97 of the 1945 Rules comes

within the definition of manufacture as per Section 3(f) of the

Drugs and Cosmetics Act, 1940 when GSK is not the manufacturer

of the drug in question.

6. Learned counsel for the petitioner submits that it

absolutely does not stand to reason that on what basis it is being

alleged in the complaint that the government is put to loss when

the manufacturer of the drug is paying all the requisite fee in terms

of the Act and the Rules. It is further submitted that for the same

drug the government cannot charge twice i.e. once from Dr. Reddy

and thereafter by GSK. It is next submitted that the label on the

drug is clear that the product is being manufactured by Dr. Reddy

Laboratories and is being marked by GSK. It is thus submitted that

it cannot be alleged that the labelling of the drug by using the

name and logo of GSK is being done in order to mislead the

Doctors and the intending customers. It is submitted that GSK is a

very reputed British Company and has its brand name world over Patna High Court CR. MISC. No.72370 of 2018 dt.10-10-2023

and thus would not indulge in any act which would bring disrepute

to the brand. It is further submitted that the logo and the name of

GSK is being used by way of additional information to the

customers that they be sure of the fact that though the drug is

being manufactured by some other company but since it is being

marketed by GSK as such the drug is maintaining the high quality

which is required.

7. Learned counsel for the petitioner submits that the

petitioner in the present application is the Managing Director of

GSK and is not responsible for the day-to-day affairs of the

company. It is further submitted that even the complaint petition

does not specifically allege with regard to the role of the petitioner

in the company at the time of the alleged occurrence as such rigors

of Section 34 of the Drugs and Cosmetics Act, 1940 will not apply,

which is with respect to the offences by companies.

8. Learned counsel for the petitioner next relies on an

order passed by this Court in Cr. Misc. No. 30516 of 2017

(Deepak Shanti Lal Parekh @ Deepak Parekh Vs. The State of

Bihar) to submit that the present case is also similar to the case of

Deepak Shanti Lal Parekh who had moved before this Court in Cr.

Misc. No. 30516 of 2017 and the Court after recording in detail the

submissions of the learned counsel for the petitioner quashed the Patna High Court CR. MISC. No.72370 of 2018 dt.10-10-2023

order of cognizance. It is thus submitted that the submissions made

in Cr. Misc. No. 30516 of 2017 is adopted in the present case also.

9. Learned A.P.P. for the State opposes the present

application.

10. Considering the submissions made by the learned

counsel for the petitioner and taking into consideration the order

dated 10.10.2023 in Cr. Misc. No. 30516 of 2017 and the fact that

in the complaint petition there is no specific allegation with respect

to the petitioner alleging his role in the company at the time of the

occurrence, the order dated 27.08.2004 passed in Complaint Case

No. 1005(C) of 2004 by the learned Chief Judicial Magistrate,

Saharsa whereby cognizance of the offence against the petitioner

has been taken under Section 27(d) of the Drugs and Cosmetics

Act, 1940, is hereby quashed.

11. Accordingly, this application is allowed.

(Satyavrat Verma, J)

Kundan/-

AFR/NAFR                N.A.
CAV DATE                N.A.
Uploading Date          13.10.2023
Transmission Date       13.10.2023