Allowed

A.K.Kothari v. State of Ap

Andhra Pradesh HC5 Aug 2024CRLP/2928/2019

Case brief

AI extract

What is this about?

The High Court allowed a criminal petition under Section 482 Cr.P.C., quashing proceedings against petitioner/distributors in a drug quality sub-standard case. Ruling that distributors who acquired drugs from licensed manufacturers and stored them properly are exempt from Section 18 liability.

What did the court decide?

The criminal proceedings in C.C. No.68 of 2012 against the petitioners/accused No.4 to 6 were quashed and the miscellaneous applications were closed.

A.K.Kothari Vs State of Ap — Quashing and FIR | Andhra Pradesh HC (2024)

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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

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TUESDAY,THE SIXTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR

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PRESENT

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O
or <br>OJ

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THE HONOURABLE SMT JUSTICE V SUJATHA

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CRIMINAL PETITION NO: 2928 OF 2019

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Between:

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A.K.Kothari. S/o. Late Shankar Rao. Age. 63 years Occ. Retired Senior Manager, Mis. Lupin Limited, Regd. Office Kalpataru Inspire, 3rd floor Off. Western Express Highway, Santacruz East, Mumbai - 400 055.

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Nitesh Goenka,, S/o. Kailash Chandra Goenka Age. 44 years, Occ.

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Business, Authorised Signatory to MIs.Lupin Limited, C/o. Babloo Pharmaceutical Agencies, Goshala Complex, Goshala Road, Naya Bazar, Cuttack 753004, Orissa.

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Sailesh Kumar Gandhi S/o. Late Vrajial P Gandhi, Age. 63 years

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Proprietor, M/s.Gandhi Agencies, Near Glass and Glass, Mahatab

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Raod, Cuttgck 753001, Orissa.

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...PETITIONER/ACCUSEDS 4 to 6

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The State Of AP, Represented by the Public Prosecutor, High Court for

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the State of Andhra Pradesh, Amaravathi Andhra Pradesh.

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The Drug Inspector,, Drugs Control Administration, Visakhapatnam, Visakhapatnam District. Andhra Pradesh.

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...RESPONDENT/DE-FACTO/COMPLAINANTS

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Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court pleased to quash the proceedings in C.C.No.68 of 2012 on the file of the Hon' ble I Addl. Chief Metropolitan Magistrate at Visakhapatnam in so far as the petitioners are concerned, who are arrayed as Accused 4, 5 and 6 in C.C. No.68 of 2012 for the alleged offence under Section 18(a)(i) and punishable under 27(d) of Drugs and Cosmetics Act, 1940

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This Petition coming on for hearing,upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri VIKRAM POOSERLA ,Advocate for the Petitioner and the Public Prosecutor (TG/AP) on behalf of the Respondent.

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The Court made the following ORDER:

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APHC010138272019

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IN THE HIGH COURT OF ANDHRA PRADESH ATAMARAVATI . (Special Original Jurisdiction)

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[3333]

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TUESDAY, THE SIXTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SMT JUSTICE V.SUJATHA

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CRIMINAL PETITION NO: 2928/2019

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Between;

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A.k.kothari and Others

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...PETITIONER/ACCUSED(S)

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AND

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State Of Ap and Others ...RESPONDENT/COMPLAINANT(S)

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Counsel for the Petitioner/accused{S):

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1.D YATHINDRADEV

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2.VIKRAM POOSERLA

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Counsel for the Respondent/complalnant{S);

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1 .PUBLIC PROSECUTOR (AP)

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The Court made the following:

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ORDER

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This Criminal Petition is filed under Section 482 of the Cr.P.C. by the petitioners/accused Nos.4 to 6 to quash the proceedings^{inC.C.No.68of2012} on the file of I Additional Chief Metropolitan Magistrate at Visakhapatnam for the offences punishable under Section 18 (a) (i) and 27(d) of Drugs and Cosmetics Act, 1940 (for short “the Act”).

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Brief facts of the case are that, as part of joint raids of CBI and Drugs Control Administration, Visakhapatnam, on 17.05.2010, the complainant i.e., the Drugs Inspector, Drugs Control Administration, Visakhapatnam, has picked up sample of Pantolup 40, (Pantaprazole Tablets) Batch NO.005F9AGX manufactured by M/s. Akums Drugs and Pharmaceuticals Limited (accused No.1) along with other drugs by following^Section23 of Drugs and Cosemetics Act, 1940 from M/s Medical Stores, East Coast Railway Divisional Hospital, Dondaparthy, Visakhapatnam. The sample was stated to have been stored at appropriate storage conditions. One sealed portion of the said sample was sent to the Director, Central Drugs laboratory, Kolkata, dated 17.05.2010 for analysis. The Government Analyst, Central Drugs Laboratory, Kolkata vide report dated 27.08.2010 has declared the said sample as “Not of Standard Quality” for the reasons that the sample does not confirm to claim with respect to “Disintegration” test.

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Thereupon, the complainant has issued 18-A notice to the Superintendent, East Coast Railway Divisional Hospital, Dondaparthy, Visakhapatnam, dated 09.09.2010 and requested the source of supply and ^ —

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other particulars pertaining to said drug. A reply^{wasreceivedfromtheChief} Medical Superintendent, East Coast Railway Hospital, vide letter dated 15.09.2010, stating that they purchased the said drug from M/s. Gandhi Agencies, near Glass & Glass, Mahatab road, Cuttack, Orissa State vide invoice dated 17.07.2009 and submitted attested copy of the purchase bill. Thereupon, the complainant requested the said M/s. Gandhi Agencies to disclose the source of supply of the drug to them. On receipt of information regarding the source of supply, it is disclosed that^{accusedNos.4to6arethe} distributors of the drug. Accused No.1 firm was issued notices and though accused No.1 firm addressed letters dated 20.12.2010 and 29.01.2011, no documents as required under Section 18-B of the Act were enclosed therewith. After completion of necessary formalities and upon receipt of instructions from the Director General, Drugs and Copyright, DCA, dated 19.09.2008, to file a complaint in the Court of law, the complainant has filed the present complaint against accused No.1 firm, its^{whole-timeDirectors-A2} & A3, who are responsible for the day-to-day affairs of the company, and accused Nos.4 to 6, who are the distributors of the drug, for the offences punishable under Section 18 (a) (i) and 27(d) of Drugs and Cosmetics Act, 1940.

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Learned Assistant Public Prosecutor contended that the alleged acts of the petitioners are sufficient to conclude that the petitionerscommitted offence punishable under Section 18(a)(i) and 27(d) of Drugs and Cosmetics Act, 1940 and requested to dismiss the petition.

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Having heard the submissions made by the learned counsel representing both parties and on perusal of the material available on record, the point that arises for consideration is as follows:

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"Whether the proceedings against the petitioners in C.C.No.68 of 2012 on the file I Additional Chief Metropolitan Magistrate at Visakhapantam are liable to be quashed by exercising jurisdiction under Section 482 of Cr.P.C.?”

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The present petition has been filed under Section 482 of Cr.P.C.

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Section 482 of Cr.P.C saves the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under the Code or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. It is an obvious proposition that when a Court has authority to make an order, it must have also power to carry that order into effect. If an order can lawfully be made, it must be carried out; otherwise it would be useless to make it. The authority of the Court exists for the advancement of justice, and if any attempt is made to abuse that authority so as to produce injustice, the Court must have power to prevent that abuse. In the absence of such power the administration of law would fail to serve the purpose for which alone the Court exists, namely to promote justice and to prevent injustice. Section 482 of Cr.P.C confers no new powers but merely safeguards existing powers possessed by the High Court. Such power has to be exercised sparingly in exceptional cases and this power is external in nature to meet the ends of justice.

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Time and again, the scope of powers of this Court under Section 482 of Cr.P.C. were highlighted by the Apex Court in long line of perspective pronouncements, which are as follows;

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In “R.P. Kapur v. State of Punjab^ ", the Apex Court laid down the following principles;

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(i) Where institution/continuance of criminal proceedings against an accused may amount to the abuse of the process of the court or that the quashing of the impugned proceedings would secure the ends of justice;

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(ii) where it manifestly appears that there is a legal bar against the institution or continuance of the said proceeding, e.g. want of sanction;

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(iii) where the allegations in the First Information Report or the complaint taken at their face value and accepted in their entirety, do not constitute the offence alleged; and

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(iv) where the allegations constitute an offence alleged but there is either no legal evidence adduced or evidence adduced clearly or manifestly fails to prove the charge.

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Section 482 of the Code of Criminal Procedure empowers the High Court to exercise its inherent power to prevent abuse of the process of Court. In proceedings instituted on complaint exercise of the inherent power to quash the proceedings is called for only in cases where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance is taken by the Magistrate it is open to the High Court to quash the same in exercise of the inherent powers under Section 482. It is not, however, necessary that there should be a meticulous analysis of the case, before the trial to find out whether the case would end in conviction or not. The complaint has to be read as a whole. If it appears on a consideration of the allegations, in the light of the statement on oath of the complainant that ingredients of the offence/offences are disclosed, and there is no material to show that the complaint is mala fide, frivolous or vexatious. In that event there would be no justification for interference by the High Court as held by the Apex Court ini ‘Mrs.Dhanalakshmi v. R.Prasanna Kumar^ ”

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ViR 1960 sc 866 ^ AIR 1990 SC 494

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In ‘‘State of Haryana v. Bhajan Laf”' the Apex Court^considered in detail the powers of High Court under Section 482 and the power of the High Court to quash criminal proceedings or FIR. The Apex Court summarized the legal position by laying down the following guidelines to be followed by High Courts in exercise of their inherent powers to quash a criminal complaint:

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(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

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(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

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(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

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(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. Keeping in view the above principles, I would like to examine the case on hand.

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^ 1992 Supp{l) see 335

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Learned counsel appearing for the petitioners would submit that the drug was manufactured by A-1 company and the present petitioners were only distributors and that they acquired the product from a duly licensed manufacturer under bona fide belief that the product met the quality standards as prescribed by the statutory authorities. The role of the distributor is to keep the drug in proper condition, which was followed even according to the report of the Drug Inspector, filed along with the complaint. In the said complaint, it is specifically mentioned that the sample was stored at appropriate storage conditions. Under Section 19 (3) of the Drugs and Cosmetics Act, 1940, if it is shown that the drug while in possession of person not being the manufacturer was properly stored and remained in the same state and acquired it, the person shall not be made liable for contravention of Section 18 of the Act. 11. The learned counsel for the petitioner relied upon the judgment of the Hon’ble Supreme Court in Hasmukhlal D.Vora and Anr. Vs. State of Tamil Nadul^, wherein it was held that while it is true that the quashing of a criminal complaint must be done only in the rarest of rare cases, it is still the duty of the High Court to look into each and every case with great detail to prevent miscarriage of justice.

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He also relied on M.Sujatha v. State of Tamil Nadu^, wherein it is held that a person not being the manufacturer of a drug or cosmetic shall not be

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(2022) see Online Se 1732 " (2022) see Online Mad 4666

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( (

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held liable for contravention of Section if he proves that he acquired the drug or cosmetic from a duly licensed manufacturer, distributor^ordealer.

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He further relied on P.Sukumar v. State of Tamil Nadu^,^wherein it was held that if a person acquires a drug or cosmetic from a duly licensed manufacturer and did not know and could not have ascertained that the drugs were manufactured in the contravention of the provisions of the Act, he cannot be held liable under Sections 18 and 27 of the Act.

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it is not in dispute that the petitioners are not manufacturers of the drug. They are the distributors and the sample of the drug^{wassaidtohavebeen} acquired by them from a licensed manufacturer, for distribution. The sample was admittedly collected from a medical store. It was specifically stated in the complaint that the sample was stored at appropriate storage conditions. That being so and when none of the tablets were found in the premises of the petitioners, the petitioners cannot be held responsible^{forthesubstandard} quality of the drug.

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Section 19(3) of the Drugs and Cosmetics Act, 1940,^{readsasunder:}

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A person, not being the manufacturer of a drug or cosmetic^orhis agent for the distribution thereof, shall not be liable for a contravention of section 18 if he proves-

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{^that he acquired the drug or cosmetic from a duly^licensed manufacturer, distributor or dealer thereof;

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l^that he did not know and could not, with reasonable diligence, have ascertained that the drug or cosmetic in any way^contravened the provisions of that section; and

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® (2009) see Online Mad 1644

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{^thatstored andthe remaineddrug or cosmetic,in the while in his possession M/as properly same state as when he acquired it.

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From the above, it is clear that if a person other than manufacturer proves that the drug was properly stored and acquired from the licensed manufacturer, he cannot be made liable. The manufacturer ISi responsible for the Product. It is not the case of the complainant that these petitioners had knowledge about the drug being not in conformity with standard quality, Further, it is not the case of the complainant that A-1 was not a licensed manufacturer. Since the petitioners are only distributors of the drug and dealing with the same, having acquired the same from a licensed manufacturer, in terms of the provisions of Section 19(3) of the Act, the proceedings against them cannot be permitted to continue for the aforementioned reasons.

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As a result, the proceedings against this petitioner in C.C.No.68 of 2012, on the file of the I Additional Chief Metropolitan Magistrate at Visakhapatnam, are hereby quashed against the petitioners/accused No.4 to 6 only.

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