Kal Sundaran vs The State Of Bihar
2023 Latest Caselaw 5228 Patna

     IN THE HIGH COURT OF JUDICATURE AT PATNA
              CRIMINAL MISCELLANEOUS No.9153 of 2019
   Arising Out of PS. Case No.-1197 Year-2004 Thana- SAHARSA COMPLAINT CASE
                                    District- Saharsa
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Kal Sundaran S/o N. Iyer Subramanian, the then Managing Director of M/s Glaxo Smithkline Pharmaceuticals Ltd., having its registered office at M/s 252, Dr. Annie Basant Road, P.S - 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 08.10.2004 passed in

Complaint Case No. 1197(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 and subsequent amendment read with

Sections 17(b), 17(c), 18(a)(i), 18(a)(iv), 18(b) and 18(c) of the

Drugs and Cosmetics Act, 1940.

Patna High Court CR. MISC. No.9153 of 2019 dt.10-10-2023

3. Learned counsel for the petitioner submits that the

complainant alleges that on 07.07.2003 the premises of M/s

Shivshakti Medical Agency, Bangaon Road, Saharsa who holds

valid Drug Wholesale Licence was inspected when disposal of

drugs manufactured by M/s Remidex Pharma Pvt. Ltd. (in short

'Ramidex') 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 mentioned in

the inspection note. It is further alleged that when the premises

was again inspected on 28.01.2004 minimum quantity of drug in

question along with other drugs were seized. The drugs

manufactured by Remidex and marketed by GSK seized were

Dependal M Tablet, Dependal M Suspension 60 ml. three in

numbers having expiry in between March, 2006 to January, 2007.

It is next alleged that the name and logo of GSK are printed on the

label of the drug which was in breach of the Drugs and Cosmetics

Rules, 1945 (hereinafter referred to as '1945 Rules') as it breaches

Rule 96 and 97 of the 1945 Rules. Further, GSK clarified on query

that logo of GSK appearing on the bottle cap is only to inform its

customers that a product which they are familiar with but which is

manufactured by a company other than GSK under a third party

manufacturing agreement continues to be of the same high quality Patna High Court CR. MISC. No.9153 of 2019 dt.10-10-2023

and standards which our customers used and thus has not violated

any provisions of the Drugs and Cosmetics Act, 1940 or the 1945

Rules. It is alleged that the Remidex also furnished clarification

that Dependal is manufactured by them and logo of GSK appears

as GSK markets the product also that the name of the

manufacturer is clearly visible on the packaging of the product and

thus consumer will not be misled into believing that the product is

manufactured by GSK. After seeking clarification, it is alleged that

in 1945 Rules, there is no provision under which the name and

logo of intended purchaser who purchases drugs from the

manufacturer could appear on the purchased drug. Further, the

labelling of drugs is covered under Rules 96 and 97 of 1945 Rules

and labelling comes within the definition of manufacture as per

Section 3(f) of the Drugs and Cosmetics Act, 1940, hence, Rules

96 and 97 of 1945 Rules concern the manufacturer of the drug and

not the purchaser, thus, label by GSK violates Rules 96 and 97 of

1945 Rules and thus attracts provision of Section 17(b) of the 1940

Act. Further, labelling also violates Section 17(c) of the Drugs and

Cosmetics Act, 1940 as the Doctors and the customers are misled

into believing that these are the products of GSK. Further, there is

no provision in the 1945 Rules permitting third party

manufacturing agreement. Further, when the product is Patna High Court CR. MISC. No.9153 of 2019 dt.10-10-2023

manufactured under third party manufacturing agreement

bypassing the provision of loan licences the government is put to

revenue loss, next alleges that when drugs are manufactured in

their own licenced factory or get their products manufactured in

other licencee's factory under loan licence, they have certain legal

obligations and responsibilities under 1945 Rules but there is no

such responsibility when the product is manufactured under third

party manufacturing agreement.

4. Learned counsel for the petitioner submits that from

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

manifest that prima facie no offence is made out against the

petitioner and in sum and substance the allegation against the

company GSK is that drug Dependal is being manufactured by

Remidex and is being marketed by GSK but then GSK is using its

name and logo on the drug which violates Rules 96 and 97 of the

1945 Rules. Further, according to Section 3(f) of the Drugs and

Cosmetics Act, 1940 labelling comes within the purview of

manufacture as such whenever any labelling is done on a drug it is

presumed that it is by the manufacturer but then in the present case

the GSK uses its name and logo as label on the product creating an

impression that the drug is being manufactured by GSK when it is

not the case. Further that by indulging in such act the government Patna High Court CR. MISC. No.9153 of 2019 dt.10-10-2023

is put to revenue loss and at the same time Doctors and the

intending purchasers of the medicine are also misled to believe

that the medicine they prescribe and purchase is being

manufactured by GSK.

5. Learned counsel for the petitioner submits that GSK

is a reputed British Company and will not indulge in any activity

which would bring disrepute to the brand. It is further submitted

that the medicine on which the name and logo of GSK is being

used merely records that it is being marketed by GSK whereas the

name of the manufacturer is also recorded, as such, it cannot be

alleged that merely using the logo and name of GSK the Doctors

and the intended customer would be misled to believe that the

medicine has been manufactured by GSK. It is next submitted that

there is no question of putting government to any revenue loss as

whatever medicine is being manufactured by Remidex for that

Remidex is paying all the fee required under the Act and the Rules

to the Government. It is submitted that Rules 96 and 97 of the

1945 Rules mandates labelling but then neither the Drugs and

Cosmetics Act nor 1945 Rules prohibit marketing by a company of

a product of another company. It is further submitted that since

GSK is marketing the product of Remidex and if GSK would not

have used its logo and name showing that the product is being Patna High Court CR. MISC. No.9153 of 2019 dt.10-10-2023

marketed by GSK then perhaps the same would have been offence

under Rules 96 and 97 of the 1945 Rules.

6. Learned counsel for the petitioner next submits that

the sole ground on which this application can be allowed is that the

petitioner being the Managing Director of the Company is not

alleged in the complaint petition that he was responsible for the

affair of the company on day-to-day basis to attract the rigors of

Section 34 of the Drugs and Cosmetics Act, 1940 which relates to

offences by companies. It is further submitted that the complainant

also in the complaint petition does not allege that petitioner being

the Managing Director is responsible for the affairs of the

company on day-to-day basis. Learned counsel next submits that

even Section 27(d) of the Drugs and Cosmetics Act, 1940 in the

nature of the allegation as alleged in the complaint petition is not

made out against the petitioner.

7. Learned counsel for the petitioner next relies on a

judgment of the Hon'ble Supreme Court in the case of State of

Haryana Vs. Brij Lal Mittal & Ors. reported in 1998 Cri LJ

13287 whereas the Hon'ble Supreme Court had held that

"...vicarious liability of a person for being prosecuted for an

offence committed under the Act by a company arises if at the

material time he was in-charge of and was also responsible to the Patna High Court CR. MISC. No.9153 of 2019 dt.10-10-2023

company for the conduct of its business. Simply because a person

is a director of the company it does not necessarily mean that he

fulfills both the above requirements so as to make him liable.

Conversely, without being a director a person can be in-charge of

and responsible to the company for the conduct of its business....."

8. Learned counsel for the petitioner next relies on an

order of this Court dated 10.10.2023 in Cr. Misc. No. 30516 of

2017 (Deepak Shanti Lal Parekh @ Deepak Parekh Vs. The State

of Bihar) to submit that in the said case also the allegations were

similar and the cognizance order was quashed.

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

application.

10. Considering the submissions made by the learned

counsel for the petitioner as recorded hereinabove and the fact that

the allegation as alleged in the complaint petition does not

specifically allege against the petitioner about his role in the

company, the order dated 08.10.2004 passed in Complaint Case

No. 1197(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 and subsequent amendment read with Sections 17(b), 17(c), Patna High Court CR. MISC. No.9153 of 2019 dt.10-10-2023

18(a)(i), 18(a)(iv), 18(b) and 18(c) 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