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Serdia Pharmaceuticals (India) Private Limited v/s Union of India

    Criminal Petition No. 919 of 2020

    Decided On, 24 March 2021

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE H.P. SANDESH

    For the Appellant: S.S. Nagananda, Senior Counsel, S. Sriranga, Advocate. For the Respondent: Madhukar Deshpande, CGSSC.



Judgment Text

1. This petition is filed under Section 482 of Cr.P.C. praying this Court to quash the entire proceedings pending before the Special Court for Economic Offences at Bengaluru in Criminal Case No.189/2019 issuing summons against the petitioner/ accused No.8 and grant such other relief as deems fit in the circumstances of the case.

2. The factual matrix of the case is that the prosecution filed a complaint under Section 200 of Cr.P.C. against accused Nos.1 to 9 for the offences punishable under Section 27(d) of the Drugs and Cosmetics Act, 1940 CD & C Act' for short). On that basis, criminal case was registered. The accused have challenged the registration of the case earlier before this Court in Crl.P.No.6324/2015. This Court vide order dated 01.07.2019, quashed the proceedings and remitted the matter to consider the complaint afresh from the stage of receiving it from the respondent and proceed thereafter in accordance with law.

3. The complainant who has invoked Section 200 of Cr.P.C. is a public servant and in the complaint an allegation is made that accused No.1 is the manufacturing unit run under the name and style of M/s. Altra Pharmaceuticals Ltd., engaged in manufacturing and sale of drugs. Accused Nos.2 to 4 are the Directors. Accused No.5 is the Managing Director of accused No.1 and are responsible for day to day business of the Company and have been responsible for the offence committed. Accused No.6 is the Production Manager of accused No.1 and he was responsible for manufacturing of the not of standard quality drug DEAMICRON. Accused No.7 is the Quality Control Manager of accused No.1 and she was responsible for manufacturing of No.1 standard quality drug DEAMICRON. Accused No.8 is M/s. Serdia Pharmaceuticals (India) Private Limited holding loan licence in Form No.25A bearing No.25A-AD/145-A granted on 17.07.2001 and renewed in Form No.26A valid upto 31.12.2017 and responsible for manufacturing of not of standard quality drug at accused No.1. Accused No.9 is the Director of accused No.8 and he is responsible for day to day business of the Company and thereby responsible for the offences committed.

4. The learned Magistrate considered the material averments made in the complaint, particularly paragraph No.34 wherein it is stated that accused have committed the offence punishable under Section 27(d) of the D & C Act. But in the prayer column it is stated that the accused committed the offence under Section 27(b)(ii) and 27(d) of the D & C Act. There is no averment in the complaint that the drug in question was manufactured without valid licence. Thus, the ingredients to constitute the offence punishable under Section 27(b)(ii) of D & C Act are existing. It is also observed that the complaint averments coupled with the documents produced along with complaint prima facie discloses that the accused committed the offence under Section 27(d) of D & C Act. Hence, issued process against accused Nos.1 to 9. Accused No.8 M/s. Serdia Pharmaceuticals (India) Private Limited has approached this Court questioning the order of taking cognizance and issuance of process against it.

5. The main contention of the petitioner herein is that no enquiry as mandated under Section 202 of Cr.P.C. is conducted and without conducting the enquiry as mandated before summoning the accused who resides beyond his jurisdiction, to make the necessary enquiries into the case himself or direct an investigation to be made by the police officer or by such person as he thinks fit, for finding out whether or not there was sufficient ground to proceed against the accused is erroneous. In support of his contentions, he relied upon the judgment of the Apex Court in the case of VIJAY DHANUKA AND OTHERS v. NAJIMA MAMTAJ AND OTHERS reported in (2014) 14 SCC 638.

6. The other count of argument is that under the provisions of Section 22(2) of D & C Act, the provisions of Cr.P.C. are applicable to all searches and seizures which are conducted under the provisions of Chapter IV of the D & C Act, as they apply to any search or seizure made under the authority of a warrant issued under the provisions of Section 94 of the Cr.P.C. The search and seizure are made by the officers, who are not authorized to conduct such search seizure. They failed to produce any document evidencing that any attempt was made by the Drugs Inspector to call upon two independent and respectable persons whether from the locality or not for the purposes of witnessing the search which the Drugs Inspector conducted of the premises of the said Wellness Centre in respect of the drug. The Drugs Inspector has failed to comply with the criteria laid down by the High of Bombay in the case of STATE OF GOA v. TEJPAL PANDIA passed in Crl.A.No.52/2002, wherein the High Court observed that at the time of dividing the drug sample into portions as required under Section 23(3) of D & C Act, the Drugs Inspector must draw a panchanama expressly stating the procedure followed while dividing the samples into portions. It is also contended that there was a delay in getting the report and the same amounts to gross abuse of process of law and grave injustice to the petitioner and also non-compliance of the special provisions enumerated under the law. The Drugs Inspector has also violated the mandatory provisions of the 25(3) of D & C Act by failing to have the said drug re-tested by the Central Drugs Laboratory in accordance with the provisions of Section 25 of D & C Act. The petitioner had also subjected the same for test and the report which has been submitted was ignored by the Drugs Inspector. The learned Magistrate while considering the complaint, committed an error in not considering the aspect that the Drugs Inspector have also deprived the petitioner of his valuable right under the provisions of Section 25(4) of the D & C Act to approach the Court and request the Court to have a portion of the sample of the said drug re-tested by the Central Drugs Laboratory.

7. The learned counsel would also vehemently contend that the persons who have conducted the search and seizure are not authorized and also second sample report has not been verified and hence it requires interference of this Court and quash the proceedings initiated against the petitioner.

8. The learned counsel referring the judgment of the Apex Court in the case of Vijay Dhanuka (supra), brought to the notice of this Court paragraph No. 12 with regard to compliance of Section 202 of Cr.P.C. and the use of the word 'shall' in all circumstances is not decisive. The legislature intention is to prevent innocent persons from harassment by unscrupulous persons from false complaints and hence the word is used as 'shall'. The learned counsel also brought to the notice of this Court the judgment of the Apex Court in the case of 705 regarding scope of Section 202 of Cr.P.C. ANIL KUMAR AND OTHERS v. M.K. AIYAPPA AND ANOTHER reported in (2013) 10 SCC

9. The learned counsel also relied upon the judgment of the Andhra Pradesh High Court in the case of M/s. JOHNSON AND JOHNSON LIMITED AND OTHERS v. STATE OF ANDHRA PRADESH passed in Crl.P.No.2277/2012, wherein it is held that if the expiry date of the sample was not relevant, there was no reason why in the form prescribed for submission of the report by the Insecticide Analyst, the date of manufacture of the article and the expiry date are mentioned.

10. The learned counsel also relied upon the judgment of the Apex Court in the case of MEDICAMEN BIOTECH LIMITED AND ANOTHER v. RUBINA BOSE, DRUG INSPECTOR reported in (2008) 7 SCC 196, wherein the Apex Court discussed with regard to the loss of right under Section 25(3) and 25(4) of D & C Act for re-testing of drug with regard to the delay in getting the report and causing show cause notice and there was a delay in lodging the complaint as a result, rights under Section 25(3) and 25(4) lost due to delay in filing the complaint and therefore the complaint be quashed by exercising the power under Section 482 of Cr.P.C.

11. The learned counsel relied upon the judgment of this Court in the case of SAN JAY G. REVANKAR v. STATE BY DRUG INSPECTOR reported in ILR 2002 KAR 475 wherein it is held that there must be specific averment in the complaint about their being responsible for day to day affairs.

12. Per contra, the learned counsel for the respondent would contend that the documents produced as Ex.R1 and Ex.R2 are authorized for conducting search and inspection and these two documents clearly discloses that the persons who have conducted the inspection and seized the sub standard drugs are having authority to search and seizure. Before filing the complaint, the seized drugs was sent to test and report was collected in terms of Ex.R5. After sending the sample and obtaining the report, the complaint is filed, that too by public servant.

13. The learned counsel with regard to the compliance of Section 202 of Cr.P.C. would contend that the complainant is a public servant and statute based investigation was conducted and the report is also filed in the prescribed form and the complaint is also filed before the Court. When the complaint is filed by the public servant, compliance of Section 202 Cr.P.C. does not arise. Section 200(a) of Cr.P.C. is specific that if the complainant is a public servant, there is no need to examine the complainant. The very object of dispensing the examination of the public servant, who had filed the complaint is that no public servant will make any false allegation or files false complaint and hence immunity is given in respect of public servant who lodges the complaint. Though Section 202 of Cr.P.C. is amended in 2005, which came into effect in 2006, the same is only to protect the persons, who are residing outside the jurisdiction of the Court that innocent persons should not be dragged for criminal proceedings. In the case on hand, statute based investigation was conducted and after obtaining the report, the proceedings has been initiated and hence it cannot be contended that without holding an enquiry under Section 202 of Cr.P.C, the proceedings initiated against the petitioner is bad in law.

14. The learned counsel in support of his contentions relied upon the judgment of the Punjab and Haryana High Court in the case of CHEMINOVA INDIA LIMITED AND OTHERS v. STATE OF PUNJAB AND ANOTHER reported in 2020 SCC Online P & H 609 and brought to the notice of this Court paragraph Nos.1, 7 and 23 to 25 wherein it is discussed in detail with regard to the enquiry as contemplated under Section 202(1) of Cr.P.C. The learned counsel brought to the notice of this Court paragraph Nos.26 to 28 wherein in detail discussed with regard to using of the word 'shall' and also in paragraph Nos.31 and 34. Paragraph No.34 is an ultimate conclusion arrived by the Punjab and Haryana High Court with regard to exercising the powers under Section 200 and 293 of Cr.P.C. The Punjab and Haryana High Court held that the object and purpose of Section 202(1) of Cr.P.C. having been achieved in the present circumstances, there is no need to record the statement of the 'public servant' and of the expert for the purpose of holding an enquiry as envisaged by Section 202 of Cr.P.C. Needless to mention, if in some case, the Magistrate is not satisfied with the contents of the complaint and the accompanying documents or the report of some Government Expert, it would always be open to him to record a statement or take any evidence for the purpose of satisfying himself as to whether or not there exists any ground to proceed further against the accused. In other words, there is no bar on the Magistrate to inquire into the matter in case he is not satisfied with the evidence put forth along with the complaint, even if filed by a 'public servant'. Answering this, the submission of the counsel that non-examination of public servant cannot be accepted.

15. Having heard the learned counsel for the petitioner and the learned counsel for the respondent and also on perusal of the material available on record, the questions that would arise for the consideration of this Court are:

(i) Whether non-compliance of Section 202 of Cr.P.C. vitiates taking of cognizance against the petitioner herein even though complainant is a public servant who has been exempted under Section 200 of Cr.P.C?

(ii) Whether the other grounds urged before the Court comes to the aid of the petitioner herein to quash the proceedings as sought?

16. The first contention raised by the learned counsel for the petitioner is that a private complaint is filed against the petitioner herein, who is residing outside the jurisdiction of the Court which has taken the cognizance against the petitioner. Hence, non-compliance of Section 202 of Cr.P.C. would invalidate the proceedings initiated against the petitioner. In support of his contentions, the learned counsel relied upon the judgment of the Apex Court in the case of Vijay Dhanuka (supra), wherein the Apex Court had come to the conclusion that it is mandatory on the part of the learned Magistrate to examine the witnesses when the accused is residing outside the jurisdiction of the Court. The principles laid down in the judgment in the case of Vijay Dhanuka (supra), is not in dispute.

17. This Court in Crl.P.No.1097/2020 dated 02.03.2021 where similar contentions were raised, discussed in detail with regard to compliance of Section 202 of Cr.P.C. In the said judgment, having discussed the scope of Sections 200 and 202 of Cr.P.C, this Court held that it is mandatory to hold an enquiry under Section 202 of Cr.P.C. referring the judgment of the Apex Court in the case of Abhijit Pawar v. Hemant Madhukar Nimbalkar and Another reported in (2017) 3 SCC 528. In paragraph Nos.23 and 25 of the said judgment, the Apex Court extracted paragraph Nos.20 and 22 of the judgment in the case of Mehmood Ul Rehman v. Khazir Mohammad Tunda reported in (2015) 12 SCC 420. This Court also discussed the judgment of the Apex Court in the case of Vijay Dhanuka(supra) referring paragraph No. 14 of the judgment so also the enquiry as defined under Section 2(g) of the Code and comes to the conclusion that Section 202 of Cr.P.C. contemplates with regard to the word "shall" in case where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, it is mandatory on the part of the Magistrate to conduct an enquiry or investigation before issuing the process.

18. In the case on hand, the material discloses that the complaint is filed by the Union of India represented by its Drugs Inspector and the offences invoked in the complaint is under Section 27(b)(ii) and 27(d) of the D & C Act. The complaint is filed under Section 200 of Cr.P.C. read with Section 32(1) of the D & C Act for an offence under Section 18(a)(i) of the D & C Act, punishable under Section 27(d) of D & C Act. Hence, it is clear that the prosecution is launched under Section 32(1) of the D & C Act.

19. Having perused the complaint, it is not in dispute that the complaint is filed by the Government represented by its Drugs Inspector. Now the question before this Court is when the complaint is filed by the public servant, whether the complainant has to be examined before the Court. Having perused the Cr.P.C, a special provision is made under Section 200(a) of Cr.P.C. In a case of complaint filed by the public servant acting or purporting to act in the discharge of his official duties or a Court has made the complaint, need not examine the complainant and the witnesses.

20. The main contention of the learned counsel for the petitioner is that when the accused is residing at a place beyond the area in which he exercised his jurisdiction, either enquire into the case himself or direct an investigation to be made by a police officer or by such other person for the purpose of deciding whether or not there is sufficient ground for proceeding. The moot question before this Court is whether the proviso to Section 202(1) of Cr.P.C. takes away Section 200(a) of Cr.P.C. Whether it is mandatory on the part of the Court to examine the complainant and the witnesses as contended by the learned counsel for the petitioner.

21. The learned counsel for the respondent would vehemently contend that Section 202(1) of Cr.P.C. will not come in the way of examining the witnesses when the complaint is filed by public servant. In the case on hand, it is not in dispute that the complaint is filed by the Union of India represented by its authorized person - Drugs Inspector. The High Court of Punjab and Haryana in the case of Cheminova (supra), dealt with the similar circumstances in paragraph No.34 of the judgment after analyzing the material on record. It is held that in a case instituted by public servant in discharge of his official duties where apart from the complaint, other material evidence being relied upon by the complainant is also before the Court, as in the present case where report of Government experts which are both per-se admissible have been annexed, and the Magistrate upon perusal of the complaint and the documents as annexed therewith is satisfied that sufficient grounds do exist for proceeding against the accused, the requirement of adjourning the matter for taking evidence is virtually rendered redundant as neither the public servant nor the Government expert are required to be examined by virtue of proviso to Section 200 and 293 of Cr.P.C. It is further observed that the manufacturing firm, in any case, is not disputing the factum of it having manufactured the insecticide in question. Consequently, the object and purpose of Section 202(1) of Cr.P.C. having been achieved in the present circumstances, there is no need to record the statement of the 'public servant' and of the expert for the purpose of holding an enquiry as envisaged by Section 202 of Cr.P.C.

22. This Court would also like to refer to the judgment of the Apex Court in the case of UNION OF INDIA v. ASHOK KUMAR SHARMA AND OTHERS reported in AIR 2020 SC 5274. The Apex Court in paragraph No.40 of the said judgment held that when the complaint under Section 32 of the D & C Act is filed either by the Inspector or by authorized gazetted officer being public servant under Section 200 of Cr.P.C, the Magistrate is exempted from examining the complainant and the witnesses. Hence, it is clear that when the complaint is filed by the Drugs Inspector invoking Section 32 of the D & C Act, the Magistrate is exempted from examining the complainant and the witnesses. Hence, the very contention of the learned counsel for the petitioner cannot be accepted for the reason that in the present case, the complaint is filed by the Union of India represented by the Drugs Inspector. Hence, I answer point No.(i) as negative.

23. The other contention of the petitioner before this Court is that the learned Magistrate while issuing the process has not applied the mind and erroneously issued the process. Having considered the contention of the learned counsel for the petitioner, this Court has to consider the material available on record i.e., the complaint filed by the public servant before the Court wherein in paragraph Nos.9 and 10 of the complaint, specific allegations are made against the petitioner herein. In paragraph No.12 an allegation is made that on 26.06.2013, the Drugs Inspector received test report in Form No. 13 from Government Analyst, CDL, Kolkata vide his letter dated 18.06.2013 declared the subject drug as a not of standard quality for the reason the sample does not conform to IP with respect to the test for 'Dissolution'. In paragraph No. 17 of the complaint, it is specifically mentioned that vide letter dated 25.07.2013, notice was served against the petitioner not to distribute the subject matter of the drug and recall all the supply made from the market and also to submit the details as mentioned in the notice within ten days. The said document is produced as Annexure-C. It is also important to note that in response to Annexure-C, the petitioner herein has issued Annexure-D and replied to the Drugs Inspector. In paragraph No.3 of the letter dated 06.08.2013 (Annexure-D) it is stated that as per the directions, the said product batch is now recalled and no more stocks are being billed for the same, as on date. The recall letter in this regard has been forwarded to all their distributors and stockiest, instructing them to not distribute and sale the said product batch and to recall the goods of the same from the market up to the retail level immediately. Hence, it is clear that in pursuance of the Annexure-C, the petitioner herein has also acted upon in terms of Annexure-D.

24. Having perused the order passed by the learned Magistrate while taking the cognizance, this Court has to look into whether he has applied the mind or not. The learned Magistrate has taken note of the fact that the complaint is filed by a public servant and also discussed that accused No.8 i.e., the petitioner herein holding loan licence in Form No.25A bearing No.25A-AD/145-A granted on 17.07.2001 and renewed in Form No.26A valid upto 31.12.2017 and responsible for manufacturing of not of standard quality drug at accused No.1. Accused No.9 is the Director of accused No.8 and he is responsible for day to day business of the Company and thereby responsible for the offences committed. The learned Magistrate having taken note of the averments made in the complaint and also the documents produced along with the complaint and also having taken note of the earlier order passed by this Court in Crl.P.No.6324/2015, applied his judicious mind and issued the process against the petitioner herein. Hence, the very contention of the learned counsel for the petitioner that the learned Magistrate has not applied his judicious mind while issuing the process cannot be accepted.

25. The learned counsel for the petitioner in the petit

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ion invoked various grounds for quashing of the impugned order and also the issuance of process wherein specific contention was taken that while making the search and seizure, the Drugs Inspector ought to have complied with the applicable mandatory provisions of Cr.P.C, which pertains to conducting of search and seizure that, ought to have called independent and respectable inhabitants of the locality. It is also contended that the second sample of the drug was not sent for examination and opportunity has not been given to the petitioner and the persons who have conducted the search and seizure are not having authority to conduct the search and seizure. 26. Repelling this argument, the learned counsel for the respondent relied upon the documents before the Court with regard to authorization given to the Drugs Inspector to conduct the search and seizure. The learned counsel mainly relies upon the documents Anenxures-R1 and R2 gazette notifications showing appointment of Drugs Inspectors, Sri Rajshekhar and Sri Mahesh Nagadasanahalli Anjinappa. It is also important to note that the test report in Form No.13 dated 18.06.2013 issued by the Central Drugs Laboratory is also produced as Annexure-R6 and thereafter notices are exchanged between the petitioner and the complainant vide Annexures-R7 to 17. The investigation report dated 06.08.2014 is produced as Annexure-R18. Having perused the material available on record, the Drugs Inspectors are notified and appointed by issuing gazette notification. Form No.13 report which is produced discloses that the sample which have been collected contains the sub-standard drugs. I have already pointed out that Annexure-C discloses that direction was given not to supply the said drug and in terms of Annexure-Dreply was given recalling drugs which was in the market. When all these materials are placed before the Court, the other contentions raised by the petitioner before this Court are the disputed facts and the defences would have been raised before the Trial Court during the course of trial. Hence, the very contention of the petitioner before this Court that the very initiation of the proceedings initiated against the petitioner is erroneous, cannot be accepted. I do not find any merit in the petition to quash the proceedings. Hence, I answer point No.2 as negative. 27. In view of the discussions made above, I pass the following: ORDER The petition is dismissed.
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