Deepak Shanti Lal Parekh @ Deepak ... vs The State Of Bihar
2023 Latest Caselaw 5227 Patna

     IN THE HIGH COURT OF JUDICATURE AT PATNA
             CRIMINAL MISCELLANEOUS No.28899 of 2017
  Arising Out of PS. Case No.-732 Year-2004 Thana- GOVERNMENT OFFICIAL COMP.
                                    District- Saharsa
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Deepak Shanti Lal Parekh @ Deepak Parekh, Son of Sri Shanti Lal Parekh,

The Ex-Chairman and Now Executive 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 14.07.2004 passed in

Complaint Case No. 732(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 for violating the provisions of Sections 18(a)

(i), 18(a)(iv), 18(b) and 18(c) of the Act, 1940. Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

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.

4. It is next submitted that the complainant alleges that

on 07.07.2003 the premise of M/s Shivshakti Medical Agency,

Bangaon Road, Saharsa was inspected and disposal of drugs

manufactured by Meghdoot Chemicals Limited and marketed by

M/s Glaxo Smithkline Pharmaceuticals Limited (hereinafter

referred to as the 'GSK') along with other drugs was stopped by

issuing Form 15 for the irregularity mentioned in the inspection

note. The drugs were found to be purchased by GSK, Patna. It is

alleged that premise of M/s Shivshakti Medical Agency was again

inspected and minimum quantities of drugs in question along with

other drugs were seized. It is next alleged that Biduret tablets,

Batch No. ME 106, Exp. Date Feb. - 2005 were seized. The tablet

is manufactured by Meghdoot Chemicals Limited and marketed by

GSK after purchasing the drugs on wholesale licence from the

manufacturer. Further the name and logo of GSK are printed on

the label of drug and cartoon of drug which is in breach of the

Drugs and Cosmetics Rules, 1945 (hereinafter referred to as 'the

1945 Rules'). Accordingly, GSK by letter dated 15.07.2003 was

requested to furnish relevant information on which GSK furnished Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

clarification by its letter dated 20.08.2003 clarifying that Biduret

tablets were being manufactured by Croydon Chemical Works

Limited (in short 'CCWL') and marketed by Biddle Sawyer

Limited (in short 'BSL'). Further, CCWL was a 100% subsidiary

of GSK and later merged with GSK and thus all the trade marks of

CCWL have vested in and are now the property of GSK, thus, the

owner of the brand name Biduret is now GSK and for operational

convenience GSK entered into an arrangement with Meghdoot

Chemicals Limited for manufacturing Biduret and, therefore, name

of Meghdoot Chemicals Limited appears as manufacturer of the

product since GSK is marketing the product as such by way of

additional information the customers are informed that Biduret is

GSK product. Further, logo of GSK appears on the label of the

drug as the product is being marketed by GSK and Rules 96 and

97 of the 1945 Rules mandates labelling. After seeking

clarification, it is alleged that GSK is purchaser and not

manufacturer of the drug and labelling of drug is covered under

Rules 96 and 97 of the 1945 Rules and labelling comes within the

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

Cosmetics Act, 1940, thus, Rules 96 and 97 concern the

manufacturer and not the purchaser, hence, the name and logo of

purchaser should not appear on the label of the drug purchased. It Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

is next alleged that the same violates Rules 96 and 97 of the 1945

Rules and thus Section 17(b) of the Drugs and Cosmetics Act,

1940 gets attracted. Further, the Doctors prescribes the medicine

and purchaser who purchases the medicine are misled that the drug

is manufactured by GSK which attracts violation of Section 17(c)

of the Drugs and Cosmetics Act, 1940, thus, accused no. 1 to 11

have manufactured, distributed and sold misbranded drug by

violating Rule 75A (Loan Licence), Rules 96 and 97 of the 1945

Rules which are prohibited under Sections 18(a)(i), 18(a)(iv),

18(b) and 18(c) of the 1940 Act.

5. Learned counsel for the petitioner submits that in

nutshell the allegation against the petitioner is that petitioner being

purchaser of Biduret tablets is marketing the same which is being

manufactured by Meghdoot Chemicals Limited. The petitioner in

course of his business is also using his name and logo on the

product which according to the complainant is in violation of

Rules 96 and 97 of the 1945 Rules. It is further submitted that

Rules 96 and 97 of the 1945 Rules mandates labelling and in the

event if labelling had not been done, in that view of the matter an

offence would have been committed. It is next submitted that GSK

is a reputed British Company and a company of repute will never

bring any disrepute to its brand by indulging in misbranding. It is Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

submitted that the Biduret tablets which are sold in the market

clearly records that the same is manufactured by Meghdoot

Chemicals Limited and marketed by GSK. It is, thus, submitted

that since the name and logo of GSK which is there on the Biduret

tablet is only to keep the faith of its customer intact that GSK will

never indulge in any misbranding of any product and would

always maintain the high quality and standard which they

maintain. It is next submitted that since the labelling clearly

records that the product is being marketed by GSK as such it

cannot be construed that the Doctors and the intended purchasers

would be misled by thinking that the product is being

manufactured by GSK.

6. Learned counsel for the petitioner submits that the

petitioner in the present application is a Non-executive Director of

GSK and does not participate in day-to-day functioning of the

company and, therefore, is not responsible for the affairs of the

company and thus will not come within the purview of Section 43

of the Drugs and Cosmetics Act, 1940. It is further submitted that

petitioner has no role to play in manufacturing activities of the

company when Section 27(d) of the Drugs and Cosmetics Act,

1940 clearly mandates that --- whoever, himself or by any other

person on his behalf, manufactures for sale or for distribution, or Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

sells, or stocks or exhibits or offers for sale or distributes, --- any

drug other than a drug referred to in clause (a)(b) or (c), in

contravention of any other provision of this Chapter on any rule

made therein shall be punishable with imprisonment for a term

which shall not be less than one year but which may extend to two

years.

7. Learned counsel for the petitioner submits that in

order to make any officials or the Director of the company liable

under Section 27(d) of the Drugs and Cosmetics Act, the necessary

avermments have to be pleaded in the complaint with regard to the

role of the person acting on behalf of the company. It is further

submitted that this petitioner being a Non-executive Director is

completely excluded from the purview of the company with regard

to its business as the petitioner has no role to play in day-to-day

activities of the company.

8. Learned counsel for the petitioner next submits that

even from perusal of the complaint, it would manifest that the

complainant does not allege anything about the petitioner that the

petitioner at the time when the occurrence was committed was

involved with the day-to-day affairs of the company.

9. Learned counsel for the petitioner further submits that

though the petitioner being Non Executive Director of the Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

company is not associated with the day-to-day affairs of the

company but then it is also submitted that Rules 96 and 97 of the

1945 Rules do not bar a company which markets the product from

labelling. It is thus submitted that if labelling by a company which

markets the products was not mandated as per Rules 96 and 97 of

the 1945 Rules in that event perhaps it could have been alleged

that the company violated the provisions of the Drugs and

Cosmetics Act, 1945 but then that is not the case of the

complainant as would manifest from the allegation itself.

10. Learned counsel for the petitioner next relies on an

order of the learned Coordinate Bench of this Court dated

08.12.2022 in Cr. Misc. No. 30453 of 2017 (Deepak Shanti Lal

Parekh @ Deepak Parekh Vs. The State of Bihar) wherein on

similar allegation the order of cognizance dated 08.10.2004 in

Complaint Case No. 1198C/2004 where cognizance was taken

under Section 27(d) of the Drugs and Cosmetics Act, 1940 was

quashed on the ground that it was necessary for the complainant to

aver in the complaint that at the time of commission of offence, the

accused was in-charge of, or responsible for the conduct of the

business of the company and in the case in hand there is no

whisper in the entire complaint regarding the act on the part of the

present petitioner. As such, merely the averment in the complaint Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

that the petitioner was Director of the Company at the relevant

time, will not ipso facto hold him responsible for the alleged

offence.

11. Learned counsel for the petitioner submits that

several cases came to be instituted against GSK and its Director

and also against the manufacturers of different medicines and one

of the cases was Complaint Case No. 1198C/2004 in which this

Hon'ble Court interfered and quashed the order of cognizance.

12. Learned counsel for the petitioner, thus, submits that

the allegation in the present complaint case is similar to the

allegation which were alleged in Complaint Case No. 1198C/2004.

In the present complaint case also there is averment regarding the

petitioner about his involvement in the occurrence i.e. the

complainant in the complaint does not specifically allege that

petitioner at the time of commission of offence was in-charge of,

or responsible for the conduct of the business of the company.

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

application.

14. Considering the submissions made by the learned

counsel for the petitioner as recorded hereinabove and also the fact

that the complainant in the complaint petition does not allege

specifically that the petitioner was in-charge of, or responsible for Patna High Court CR. MISC. No.28899 of 2017 dt.10-10-2023

the conduct of the business of the company when the occurrence is

alleged to have taken place, the order dated 14.07.2004 passed in

Complaint Case No. 732(C) of 2004 by the learned Chief Judicial

Magistrate, Saharsa whereby cognizance has been taken agaist the

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

Cosmetics Act, 1940 for violating the provisions of Sections 18(a)

(i), 18(a)(iv), 18(b) and 18(c) of the Act, 1940 is hereby quashed.

15. 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