M/S. Usv Private Limited Formerly ... vs The State Of Telangana And Another
2022 Latest Caselaw 2397 Tel

           HON'BLE SRI JUSTICE K. LAKSHMAN

           CRIMINAL PETITION No.1154 OF 2020

ORDER:

The present Criminal Petition is filed under Section - 482 of

the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.'), to

quash the proceedings in C.C. No.16 of 2019 pending on the file of

I Additional District and Sessions Judge, Karimnagar.

2. The petitioners herein are arraigned as accused Nos.1 and

2 in the said C.C. The offence alleged against them is under

Section - 27 (d) of the Drugs and Cosmetics Act, 1940.

3. Heard Ms. Shireen Sethna Baria, learned counsel for the

petitioners and learned Assistant Public Prosecutor appearing on

behalf of respondent No.2. Despite service of notice, there was no

representation on behalf of respondent No.1.

4. The allegations made against the petitioners herein in the

complaint filed under Section - 32 of the Drugs and Cosmetics Act,

1940 (for short 'Act, 1940') are as under:

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i) On 22.09.2015, the complainant (LW.1) - Drugs

Inspector, Jagtial along with Drugs Inspector, Adilabad (LW.2) and

panch witnesses (LWs.3 and 4) inspected the premises of M/s.

Gangothri Pharma Distributors, situated at D.No.5-4-21, Shutter

Nos.3, 4, 5 and 6, Gunj Road, Jagtial.

ii) At that time, Mr. V. Satyanarayana, Partner - cum -

Competitive Person of the aforesaid Firm was present and

conducting t he business.

iii) After introducing themselves to the aforesaid Partner,

the complainant inspected the said premises in the presence of

panch witnesses and found stocked ANOVATE Cream 20 gm.

Batch No.15001423, manufactured date July-2015, Expiry date

June-2017, manufactured by M/s. USV Limited, B.S.D. Marg,

Govandi, Mumbai and violated the provisions of Section - 18 (a)

(iv) read with Rule 106 and Serial No.42 of the Schedule - J of the

Act, 1940 and the Rules made there-under by mentioning on the

label of the cream as 'for treatment of external and internal Piles'.

KL,J Crl.P. No.1154 of 2020

iv) Then, the complainant seized the stock of Anovate

Cream 6 x 20 gm. By listing them in receipt of seizure of stock of

drugs in the presences of the witnesses under a cover of

panchanama and copies thereof were also served on LW.5 with a

request to disclose the names and address of the persons or firm

from whom he acquired the said batch drug, and also requested to

furnish the details of purchase of the seized drugs along with self

attested copies of invoices/bills.

v) On 23.09.2015, LW.1, as required under Section - 23 (5)

(b) of the Act, 1940, informed the above seizure to the concerned

Magistrate Court and deposited the seized property.

vi) On 03.10.2015, LW.1 received reply from LW.5 stating

that he has purchased the said drug from petitioner No.1 vide

invoice No.1009136421, dated 05.08.2015.

vii) On 13.10.2015, LW.1 addressed a letter to petitioner

No.1 with a request to furnish the following information on the

subject drug:

KL,J Crl.P. No.1154 of 2020

a) Confirmation of the sale of the drug to LW.5 and also to

furnish the self attested copies of the invoices issued to

the firm;

b) Self attested copy of the drug licenses held and

constitution details of the firm;

c) Name and address of the person who is responsible for

the day to day activities of the firm. Reminders on

13.11.2015 and 03.03.2016.

viii) On 28.10.2015, 07.12.2015 and 14.03.2016, LW.1

received reply letters from petitioner No.1 confirming the

manufacture and sale of the said drug to LW.5 along with copy of

drug license held by the firm and also stated that petitioner No.2 is

the Executive Director and COO of the Company who is the

responsible person for the manufacture of the said drug.

ix) Thus, it is evident that petitioner No.1 represented by

petitioner No.2 manufactured the aforesaid cream and thereby

violated the provisions of Section - 18 (a) (iv) read with Rule 106

and Serial No.42 of the Schedule - J of the Act, 1940 and Rules

made there-under by mentioning on the label of the cream as 'for KL,J Crl.P. No.1154 of 2020

treatment of external and internal piles'. Thus, the petitioners

herein have committed the aforesaid offences.

5. After filing the aforesaid complaint with the above

allegations, the learned I Additional Sessions Judge, Karimnagar,

has taken the cognizance for the offence under Section - 18 (a) (iv)

read with Rule 106 and Serial No.42 of the Schedule - J of the Act,

1940 and Rules made there-under punishable under Section - 27 (d)

of the Act, 1940 on 08.07.2019 in C.C. No.16 of 2019 and issued

summons to the petitioners herein.

6. The petitioners herein have filed the present Criminal

Petition to quash the proceedings in the aforesaid C.C.

7. Learned counsel for the petitioners has made the

following submissions to quash the proceedings against the

petitioners:

i) The learned Judge without going through the material

and in a routine manner and without application of

mind has taken the cognizance against the petitioners

herein;

KL,J Crl.P. No.1154 of 2020

ii) The proceedings in the aforesaid C.C. are illegal in the

teeth of the Act, 1940 and the Rules framed there-

under;

iii) The complaint is bereft of reasons for the delay in

filing the complaint in the year 2019 in respect of an

alleged offence committed in 2015;

iv) Prima facie, the complaint lacks the offences alleged

against the petitioners herein;

v) The only allegation against the petitioners is that

petitioner No.1 has violated the provisions of Section -

18 (a) (iv) of the Act, 1940 read with Rule 106 (1) of

the Rules framed there-under, whereas the label

contained on the seized Anovate Cream contains the

words "for treatment of external and internal Piles".

Thus, usage of the word "treatment" is not prohibited

as such under Section - 18 (a) (iv) of the Act, 1940,

and it only refers to the words "to prevent, cure or

mitigate'. The word 'treatment' means a method, a

technique or a process and not a 'cure'. A "treatment"

KL,J Crl.P. No.1154 of 2020

in relation to disease includes anything done or

provided for alleviating the effects of the disease,

whether it is done or provided by way of 'cure' or not.

Therefore, the word 'treatment' has been left out by

the Legislation from Section - 18 (a) (iv) of the Act,

1940. Even Rule - 106 denotes 'diseases which a drug

may not purport to prevent or cure'. In view of the

same, the use of word 'treatment' with the word

'piles' did not constitute any offence or violation of

any prescribed provisions of law;

vi) Further, Petitioner No.1 Company held various

licenses including the loan license bearing Nos.28-

A/KD-1201KD1335-A on 07.09.2021 in the

prescribed Form 28A of the Rules for manufacturing

of the drugs listed under Schedules C and C1

excluding the drugs listed under Schedule - X of the

Act read with Rules framed there-under. The said

loan license was renewed vide certificate of renewal of

loan license dated 26.03.2013 from 01.01.2013 to KL,J Crl.P. No.1154 of 2020

31.12.2017 and further renewed up to 01.11.2020 vide

Certificate of renewal of loan license dated 10.02.2016

which is valid and in force as on the date of criminal

case.

vii) Further, the complainant failed to observe that

petitioner No.1 on the outer panel of artwork of

product clearly stated that the product is to "used only

under Medical Supervision". Therefore, it is not

possible to misuse it for self-medication or self-

treatment and there is no harm that could be perceived

to public health;

viii) As far as petitioner No.2 is concerned, he is the former

Executive Director and Chief Operating Officer of

petitioner No.1 Company, and he left the services of

the Company in the year 2016 itself;

ix) Petitioner No.1 Company has submitted detailed

explanation to the notice issued by respondent No.1,

but without considering the same, filed the complaint;

and KL,J Crl.P. No.1154 of 2020

x) In similar circumstances, this Court vide order dated

29.11.2018 in Crl.P. No.1128 of 2018, has quashed

the proceedings in C.C. No.934 of 2017 on the file of

the X Additional Chief Metropolitan Magistrate,

Secunderabad, against petitioner No.1 Company and

another for the very same offences and on the very

same allegations. The petitioners herein are entitled

for the same relief in the present petition also.

With the aforesaid grounds / submissions, learned counsel sought

to quash the proceedings in the subject C.C. against the petitioners

herein.

8. On the other hand, learned Assistant Public Prosecutor

would contend that there are specific allegations against the

petitioners herein. Petitioner No.1 company has violated the

provisions of the Act, 1940 and, therefore, it is liable for

punishment and so also petitioner No.2 being the In-charge of the

said company during the relevant point of time. If at all the

petitioner are innocent of the offences alleged, they can prove the KL,J Crl.P. No.1154 of 2020

same during trial, but it is not a stage to consider the same, that too

in a petition under Section - 482 of the Cr.P.C. He would further

submit that the learned Sessions Judge having gone through the

entire material only has taken the cognizance against the petitioners

herein and, therefore, there was no error in taking the cognizance.

With the aforesaid contentions, he sought to dismiss the present

petition.

9. In view of the above said rival submissions, the

undisputed facts are that petitioner No.1 Company engages in the

business of manufacturing of drugs and pharmaceutical products,

and its Head Office is at Mumbai. Petitioner No.2 worked as

Executive Director and Chief Operating Office of petitioner No.1

Company. Petitioner No.1 Company is the manufacturer and

supplier of Anovate, Anti-haemorrhoidal Cream and that it is

distributing the same in the State of Telangana. The complainant

(LW.1) inspected the premises of LW.5 and seized the stock of

Anovate Cream with the help of another Drug Inspector in the

presence of panch witnesses. Pursuant to the said inspection, the

complainant has issued notice to petitioner No.1 Company and KL,J Crl.P. No.1154 of 2020

submitting reply by it. Having dissatisfied with the explanation

offered by petitioner No.1, the complainant filed the complaint

before the Court below who in turn has taken cognizance for the

aforesaid offence on 08.07.2019 in C.C. No.16 of 2019.

10. While so, learned counsel for the petitioners drew the

attention of this Court to the order dated 29.11.2018, passed by the

High Court of Judicature at Hyderabad for the States of Telangana

and Andhra Pradesh in Crl.P. No.1128 of 2018, and would submit

that in similar circumstances, this Court quashed the proceedings

against petitioner No.1 herein in C.C. No.934 of 2017 registered

for the very same offence on the very same allegations and

accordingly requested to quash the proceedings against the

petitioners herein.

11. In view of the same, it is apposite to extract the relevant

paragraphs of the said judgment which are as under:

"5. Undisputedly the ointment 'Anovate' mentions on the label and on the cover as 'for the treatment of external and internal piles'. Schedule 'J' as per Rule 106 of the Rules in the Act, 1945, item No.42 speaks all piles and fistulae. Rule 106(1) reads that no drug may KL,J Crl.P. No.1154 of 2020

purport or claim to prevent or cure or may convey to the intending user thereof any idea that it may prevent or cure, one or more of the diseases or ailments specified in Schedule 'J'. Sub-rule (2) speaks that no drug may purport or claim to procure or assist to procure, or may convey to the intending user thereof any idea that it may procure or assist to procure, miscarriage in women.

6. The core issue is whether the use of the words for the treatment of external and internal piles is covered by Rule 106(1) of the Rules in the statutory violation defined in Section 18 clause (a) (iv). For more clarity, the relevant portion of the section reads that from such date as may be fixed by the State Government by notification in the official Gazette in this behalf, (notified w.e.f. April, 1947) no person shall himself or by any other person on his behalf give any drug which by means of any statement design or device accompanying it or by any other means, purports or claims to prevent, cure or mitigate any such 3 disease or ailment, or to have any such other effect as may be prescribed.

7. Clause (iv) of sub-section (a) of 18 and clause (1) of Rule 106 no way used the word treatment conspicuously and undisputedly. The starting word of Section 18(a)(iv) uses any drug which by means............ Now coming to the definition of drug under Section 3 clause (b) it is an inclusive definition, which says drug includes all KL,J Crl.P. No.1154 of 2020

medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes ..............................

8. The definition of drug supra provides as an inclusive one for use of human being or animal and all substances used for or in the either diagnosis or treatment or mitigation or prevention of any disease or disorder. It, itself clarifies though not by any specific words the difference between mitigation and treatment, which are different and not one and the same. From this what Section 18(a) clause (iv) r/w Rule 106(1) speaks is prohibition of any statement design or device accompanying it or by any other means, purports or claims either to prevent or to cure or to mitigate any such disease. Thus, once prevention cure mitigation and treatment are different, though the very definition of drug includes treatment, what is prohibited in the advertisement is not any statement of treatment but statement 4 of cure or mitigation. A treatment may mitigate, may not mitigate, may cure, may prevent some other disease being caused in future. Thereby, it is having a wider meaning and not confined to either cure or mitigation or prevention. In this context, if one refers KL,J Crl.P. No.1154 of 2020

to page No.4762 of P.Ramanatha Aiyar's Advanced Law Lexicon, 3rd Edition, the definition of treatment, in relation to disease, includes anything done or provided for alleviating the effects of the disease, whether it is done or provided by way of cure or not. Thus, what is the contention of the learned Public Prosecutor on behalf of the Drug Inspector/1st respondent of the mitigation includes the treatment and it is prohibited by the statutory provision, liable for penal consequence and thereby there are no grounds to quash the post cognizance proceedings for the above reasons is not tenable to accept.

9. Having regard to the above, the cognizance order of the learned Magistrate is unsustainable and the Criminal Petition is allowed by quashing the proceedings against the petitioners/A1 and A2 in C.C.No.934 of 2017 on the file of the X Additional Chief Metropolitan Magistrate, Criminal Courts at Secunderabad."

12. In view of the observation made in the above judgment,

nothing more requires to discuss herein. To maintain parity, the

petitioners herein are also entitled for the very same relief. Thus,

the proceedings in C.C. No.16 of 2019 are also liable to be quashed

against the petitioners herein.

KL,J Crl.P. No.1154 of 2020

13. The present Criminal Petition is allowed and the

proceedings in C.C. No.16 of 2019 pending on the file of

I Additional District and Sessions Judge, Karimnagar, are hereby

quashed against the petitioners herein - accused Nos.1 and 2 in

terms of the order dated 29.11.2018 passed by this Court in Crl.P.

No.1128 of 2018.

As a sequel, miscellaneous petitions, if any, pending in the

criminal petition shall stand closed.

                                             ____________________
7th June, 2022                            K. LAKSHMAN, J
Mgr