On an application to quash proceedings under Article 226 and Section 482 CrPC against company directors for manufacturing defective drugs, the High Court held that issues of responsibility are factual and must be tried.
Criminal Petition No.608 of 2024 dismissed. Miscellaneous petitions stand closed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI
WEDNESDAY ,THE TWENTY SEVENTH DAY OF MARCH
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE K SREENIVASA REDDY
CRIMINAL PETITION NO: 608 OF 2024
Between:
■T>'
...RESPONDENTS/COMPLAINANTS
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 may be pleased tc quash the proceedings in PRC No. 177/2022onthe file of Chief Metropolitan Magistrate, Visakhapatnam against petitioners/AccusedNo.Ito3.
I.A. NO: 1 OF 2024
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 may be pleased to grant stay of all further proceedings including appearance of the petitioners/accused No.1 to 3 in PRC No. 177/2022 on the file of Chief Metropolitan Magistrate, Visakhapatnam, pending disposal of the Criminal Petition.
This Petition coming on for hearing, upon perusingtheMemorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri N N SOMENDRA REDDY ,Advocate for the Petitioner and thePublicProsecutoron behalf of the Ftespondent.
The Court made the following:
IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI
WEDNESDAY, THE TWENTY SEVENTH DAY OF MARCH TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE K. SREENIVASA REDDY
CRIMINAL PETITION NO:608 OF 2024
Between:
| 1. | M/s. La Chemico Private Limited, Taki Road, Kadambagchi, Barasat, 24-Parganas (North), Pin- 743221 (W.B), represented by its Director, Suyash Agarwal. |
|---|---|
| 2. | Sushil Kumar Agarwal, S/o. Ramawatar Agarwal, 54 years, Occ: Business, Taki Road, Kadambagchi, Barasat, 24- Parganas (North), Pin-743221 (W.B). |
| 3. | Suyash Agarwal, S/o. Sushil Kumar Agarwal, 26 years, Occ: Business, Taki Road, Kadambagchi, Barasat, 24- Parganas (North), Pin-743221 (W.B). ... Petitioners/Al to A3 And |
| 1. | The State of Andhra Pradesh, through Public Prosecutor, High Court of Andhra Pradesh, Amaravati. |
| 2. | The State of Andhra Pradesh, represented by Drugs Inspector, Visakhapatnam (Sales), Visakhapatnam District. ... Respondents |
| The Court made the following: | |
| ORDER This Criminal Petition, under Section 482 Cr.P.C., has been filed |
|
| on b | ehalf of the petitioners herein/Al to A3, to quash the proceedings |
| inP | RCNo.177of2022pendingonthefileoftheChiefMetropolitan |
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Magistrate Court, Visakhapatnam, registered for violation of Sections 18 (a) (i) read with Section 16 (1) (a) and 22 (1) (cca) of the Drugs and Cosmetics Act, 1940 punishable under Sections 27 (d) and 22 (3) of the Drugs and Cosmetics Act, 1940.
- A private complaint has been presented by the respondent No.2/ Drug Inspector against the petitioners herein/Al to A3 for causing violation of Sections 18 (a) (i) read with Section 16 (1) (a) and 22 (1) (cca) of the Drugs and Cosmetics Act, 1940 punishable under Sections 27 (d) and 22 (3) of the Drugs and Cosmetics Act, 1940 and it is pending on the file of the Chief Metropolitan Magistrate Court, Visakhapatnam.
- Brief allegations of the complaint are that, on 13.04.2018 L.W.2/K.Indira Bharathi, Drugs Inspector, Visakhapatnam (Sales) was requested through letter vide Rc.No.5006/MSII/2017, dated 12.04.2018 by the Superintendent, King George Hospital, Visakhapatnam, to lift sample for quality analysis, as they received certain quality related complaints on 'Sodium Valproate Tablets I.P. 200 mg' Batch No:SV1709, Mfg Dt; May-2017, Exp Dt: Apr-2019, Mfd by: M/s.La Chemico Private Limited, Taki Road, Kadambagachi, Barasat, 24-Parganas (North), Pin-743221 (W.B). Accordingly, on 20.04.2018 the Drug Inspector lifted sample and sent the sealed portion of sample drug to the Government Analyst, Drugs Control Laboratory, Vijayawada
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vide Form-18 bearing Memorandum No.20/SA/G/DI/VSP(Sales)/2018, dated 20.04.2018, for analysis. On 13.07.2018 the Government Analyst, Drugs Control Laboratory, Vijayawada issued Analytical Report vide Form-13 bearing No.l211/APDCL/2018, dated 22.06.2018 declaring the sample as not of standard quality as the sample fails to meet the general requirements mentioned under tablets as per IP mentioned under the tablets. A1 is the manufacturing unit, A2 and A3 are alleged to be the Directors of A1 firm.
- Learned counsel for the petitioners herein/Al to A3submitsthat petitioners are not the Directors who are responsible for preparation of the drug. According to him, in the list of Directors,whereinnamesof the persons responsible for manufacturing of the drug are shown. names of the petitioners herein/Al to A3 are not shown.
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manufacture drug Sodium Valproate Tablets I.P. 200 mg and other products vide list of products approved by the Director of Drugs control, Government of West Bengal. A2 is alleged to be the Director of A1 firm and is responsible for manufacturing and supply of said Not of Standard Quality Drug i.e., Sodium Valproate Tablets I.P. 200 mg. A3 is one Suyash Agarwal, Director of A1 firm and is alleged to be responsible for manufacturing and supply of said Not of Standard Quality drug.
- The record further discloses that on 13.04.2018 L.W.2/Drugs Inspector received a letter from the Superintendent, King George Hospital, Visakhapatnam informing that they received certain quality related complaints on Sodium Valproate Tablets I.P. 200 mg Batch No:SV1709, Mfg Dt: May-2017, Exp Dt: Apr-2019, Mfd by: M/s. La Chemico Private Limited. On such complaint, the Drugs Inspector, on 20.04.2018 visited King George Hospital, Maharanipeta, Visakhapatnam and had taken the subject drug in the presence of L.W.l/G.Sudharani, Pharmacist by following the procedure as contemplated under Section 23 of the Drugs and Cosmetics Act, 1940. The sealed sample portion of the subject drug was sent to the Government Analyst separately by registered post as per the provisions of Section 23 (4) (1) read with Rule 57 of the Drugs and Cosmetics Act, 1940 for want of analysis.
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- The record discloses that the Government Analyst, Drugs Control Laboratory, Vijayawada declared the sample as Not of Standard Quality, for the reason that the sample fails to meet the general requirements mentioned under tablets as per IP mentioned under tablets vide Report in Form-13 bearing No.l211/APDCL/2018, dated 22.06.2018. After complying with the procedure as contemplated under the Act, a complaint has been filed.
- The only contention that has been raised by the petitioners herein/Al to A3 is that the petitioners 2 and 3 herein/A2 and A3 are not the Directors who are responsible for manufacturing and supply of the subject drug and has given list of Directors, who according to them, are the persons responsible for the manufacturing and supply of the subject drug.
- Learned counsel for the petitioners herein/Al to A3 would contend that accused No.l company manufactured the subject drug at Kolkata and sold the same to APMSIDC, Koti, Hyderabad and the invoices issued at Kolkata and entire sale transaction completed at Kolkata, as such the Courts at Visakhapatnam does not have jurisdiction as per Section 177 CrPC. He placed reliance on the
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Judgment of the High Court of Telangana, HyderabadinTheStateof Telangana Vs. M/s. Sri Agpa Pharmaceuticals and others^.
- A perusal of the Judgment relied upon by the learnedcounsel, this Court is of the opinion that the said Judgment is not applicable to the facts of the present petition on hand, for thereason that the accused therein are acquitted by the trial Court on the ground that sale was completed at Madras and aggrieved by that Judgment,theState preferred appeal before the High Court of Telangana, Hyderabad, but the said appeal was dismissed. The present case onhand is under PRC stage and it is yet to be committed to the Court of Session for conducting trial to adjudicate the merits of the case,which involve mixed questions of fact and law.
the relevant portion of the said Judgment is as under:
T. The present appeal challenges the order of the High Court whereby the petition under Section 482 Cr.P.C. filed by the company and its directors (appellants herein) was dismissed by the High Court. The High Court took the view that the directorsare responsible for the affairs of the company and, therefore, when a drug manufactured by the company was found to be defective,all the directors could be prosecuted. The High Court, however, left it to the concerned parties to prove before the Trial Court that they were not in any way responsible for the manufacture process. The High Court proceeded on the basis of specific language of Section 34(2)
' Criminal Appeal No. 1467 of 2009, dated 18.07.2022.
^ (2010) 11 Supreme Court Cases 125.
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of the Drugs & Cosmetics Act, 1940 (for short "the Act") and proceeded to hold that the complaint filed againstthedirectorscould not be disposed of under Section 482 Cr.P.C. as it required appreciation of the facts on the basis of the evidence to be led before the Trial Court. 7. In our opinion, the factual situation in both the matters is quite different which is apparent from thefactthatfirstly the controversy of the complaint not having any necessary averments was not present before the High Court inthereported decision. Secondl,y In that case, there was only abaldstatement that the respondents were directors of the manufacturers. In the present matter, however, the respondents were not arrayedonly because they were the directors. That is certainly one reason. However, In addition to that, a statement has beenmade In paragraph 6 of the complaint that by manufacturing of the concerned medicine for sale, the company and its directorshad committed the breach of the Act. Thus, there was an allegation that the directors were privy to the manufacturing of medicine bythe company. 8. In our opinion, the averments in paras 4, 5, 6 and8 of the complaint cannot be described as the bald statements. The emphasized portion In para 6 of the complaint suggests manufacturing of the medicine by the company and itsdirectors. The averments in all these paras would have to be readtogether and the para 6 of the complaint would have to be readInthelightof the other averments. It seems that In the reporteddecisioninthe complaint, there was no link pleaded In the directorsand the manufacturing process. That is not the situation here. This was the case of the manufacture of the drug for human consumptionand, after it was tested in laboratory, was found to bedefectivesince there was a growth of fungus, which is a very seriousmatterrelated to public health.
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- Under the peculiar circumstances of this case and realizing the seriousness of the allegations, we wouidnottakea technical view based on pleadings in the complaint Mr. Raichura contended that as per the settied iaw by this Courtincomplaints under Section 138 of the Negotiable Instruments Act against company and directors also specific averment abouttheactiverole of directors in running the company has to be made,faiiingwhich the directors cannot be proceeded against Same logicshouldapply even In the present case. We cannot agree. Firstly,thelanguageof Section 34 (2) of the Act substantially differs fromthelanguageof Section 141 of the Negotiable Instruments Act. Secondly,herewe are dealing with the offence which has the direct impactonthe public health. We, therefore, would choose not to Interferewiththe order of the High Court. It will be open for the directorstoshowto the Trial Court that they had nothing to do with themanufacture process and, therefore, they shouid not be heid iiableunderSection 34 (2) of the Act."
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- Apparently, a perusal of the material averments goes to show that the petition involves mixed questions of fact that have to be decided during the course of trial. In a petition under Section 482 CrPC, this Court cannot conduct a roving enquiry to decide whether the petitioners 2 and 3 herein/A2 and A3 are Directors responsible or not. These are all questions of fact which have to be raised during the course of trial. Prima facie there is absolutely no authenticity with regard to the documents filed by the petitioners herein/Al to A3. In view of the aforesaid reason, when there are disputed questions of fact, in a petition filed under Section 482 CrPC, this Court cannot look into the same at this stage. In view of the aforesaid reasons, this Court is not inclined to quash the proceedings against the petitioners herein/Al to A3.
- In the result, the Criminal Petition No.608 of 2024 is Dismissed, As a sequel thereto, the miscellaneous petitions, if any, pending in this Criminal Petition shall stand closed.
Sd/- M. PRABHAKAR RAO ASSISTANT REGISTRAR
//TRUE COPY//
To,
SECTION OFFICER
AL
RDB
HIGH COURT
DATED:27/03/2024
ORDER
CRLP.No.608 of 2024
CRIMINAL PETITION IS DISMISSED
V >
3 issues framed by the court
Whether the High Court can quash proceedings against directors under Section 482 Cr.P.C. when there are questions of fact regarding their responsibility for manufacturing.
Whether jurisdiction lies with Visakhapatnam courts despite manufacturing taking place in Kolkata.
Whether mixed questions of fact and law preclude quashing at the private complaint stage.
Colour shows how this judgement treated each authority
The State of Telangana Vs. M/s. Sri Agpa Pharmaceuticals and othersDistinguished¶48
The State of Telangana Vs. M/s. Sri Agpa Pharmaceuticals and others
Dinesh B.Patel and others Vs. State of GujaratExplained¶49
Dinesh B.Patel and others Vs. State of Gujarat
3 provisions across 2 enactments
M/s. La Chemico Pvt. Ltd
Sushil Kumar Agarwai
Suyash Agarwai
The State of Andhra Pradesh, through Public Prosecutor
Drugs Inspector Visakhapatnam
K SREENIVASA REDDY
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
