The High Court of Karnataka dismissed the criminal appeal filed by the State against the acquittal of a branch in-charge. The Court held that the prosecution failed to prove the drugs were stocked for sale and did not establish the accused was in overall control of the firm.
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.
IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
DATED THIS THE 20TH DAY OF JUNE, 2019
BEFORE
THE HON’BLE MR.JUSTICE B.A.PATIL
CRIMINAL APPEAL NO.100084/2019
BETWEEN:
STATE OF KARNTAKA, REPTD. BY ASSISTANT DRUGS CONTROLLER, UTTARA KANNADA CIRCLE, KARWAR, THROUGH THE ADDL. STATE PUBLIC PROSECUTOR, ADVOCATEO GENERAL OFFICE, HIGH COURT OF KARNATAKA, DHARWAD BENCH.
….APPELLANT
(SRI. PRAVEEN K. UPPAR, ADVOCATE)
AND:
SMT. FATIMABI M. SHAIKH, D/O. M.A.SHAIKH, BRANCH IN-CHARGE, M/S. BHAWAR INC CORPORATION, KARWAR MAIN WARE HOUSE, NEAR GREEN STREET, BEHIND HOTEL PREMIER, KARWAR, R/O. H.NO.408, NEW KHB COLONY, HABBUWAD, KARWAR.
…RESPONDENT
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(1) & (3) OF CR.P.C. PRAYING TO (A) GRANT SPECIAL LEAVE TO APPEAL AGAINST THE JUDGMENT AND ORDER OF ACQUITTAL
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DTD. 06.09.2018 PASSED BY THE 2ND JMFC KARWAR, IN C.C.NO.377/2019, (B) TO SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 06.09.2018 PASSED BY THE 2ND JMFC, KARWAR IN C.C.NO.377/2009 AND (C) CONVICT THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 27(B)(II) OF DRUGS AND COSMETICS ACT, 1940.
THIS APPEAL COMING ON FOR ORDERS THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Heard the learned HCGP on I.A.No.1/2019. The
said application has been filed under Section 5 of the Limitation Act to condone the delay. With the consent of the learned HCGP, the same is taken up for final disposal.
the complainant is a Drug Officer. He received a credible information that the accused No.1 – partnership firm running in the name of M/s. Bhawar Inc Corporation. Accused Nos.2 – 5 are the partners of the firm. Accused No.6 is the partnership firm and the accused No.7 is the Branch in-charge of the said office. They are dealing
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with the Drugs without there being any valid and effective license. On 07.03.2016, he accompanied with two witnesses visited the accused-firm. At that time the accused No.7 was present. There they found stocked Vicks Action 500 plus bearing Batch No.602005623037 without license. The said tablets have been seized by drawing a mahazar and sent them for analysis test. After receiving the report and after obtaining necessary permission from the Government, the complaint has been filed on 18.03.2019. After filing of the charge sheet the accused No.7 appeared and insofar as in respect of the other accused persons, the case was split up. After following the procedure the plea of the accused No.7 was recorded. He pleaded not guilty and claims to be tried.
has got examined 17 witnesses and got marked 36 documents and also MO’s 1 to 5. Thereafter, the accused was came to be examined under Section 313 of
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Cr.P.C. The accused led her evidence as DW-1 and got marked 2 documents as Ex.D1 & D2. After hearing both the parties, the impugned order was came to be passed acquitting the accused No.7. Assailing the same, the State is before this Court.
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appeal by admitting the same and notice be issued to the respondent.
the submissions made by the leaned HCGP and perused the records.
Drugs in question and drawn Mahazar. In his evidence, he has deposed that they visited accused No.6 firm and there accused No.7 and another lady were present and they also noticed Vicks Action 500 plus tables and she had no license to store the same. The said tablets have been seized and a chemical analysis was also obtained. The said witness has been cross-examined in length. In his evidence, he has admitted the fact that the said punchas are not from the said locality and accused No.7 was working in the said firm as a Computer System Operator. But the said suggestion has been denied and it has been answered and he do not know in what
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capacity she was working. He further admitted that in the appointment letter of the accused No.7 there is no discussion that the accused No.7 is the in-charge of the accused No.6 firm. PW-2 is the Chief Scientific Officer. He has deposed that he has issued the analysis test report and as per the test report the seized tablets were of good quality drugs and he has given the report as per Ex.P-13. This witness has not been cross examined by the accused. PW-3 is Punch witness. He has also reiterated the evidence of PW-1 and admits the fact that MOs-1 to 5 were seized in his presence. PW-4 is Assistant Drug Controller. He visited the firm of the accused and at that time accused No.4 was present. He gave notice to him. He produced the same as per Ex.P18. A reply has been produced at Ex.P-19. It has came in the evidence that he visited the firm and he has issued the notice and got the reply. PW-5 is another Punch witness to Ex.P-25. He has also reiterated the evidence of PW-1. But in his evidence, he has deposed
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that he do not know anything about the present case or
Ex.P-25 or Ex.P-26. He has been treated as hostile and even during the course of cross-examination nothing has been elicited to substantiate the case of the prosecution. PWs-6 and 7 are the Assistant and Deputy Drug Controllers. They have given the letter to him requesting him to furnish papers pertaining to the accused No.1 firm and accordingly they have furnished the information. During the course of crossexamination, nothing has been elicited in this behalf. After closure of the evidence of the prosecution, accused got examined herself as DW-1. In her evidence, she has deposed that she is doing the work of billing and entering as a computer operator and she does not know anything about the stock and other aspects. During the course of cross-examination, nothing has been elicited so as to discard her evidence.
accused-firm has violated the provisions of Section 18
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(c) of the Drugs and Cosmetics Act, 1940 and it was not having any valid license and stocked Vicks Action 500 plus tablets. Section 18(c) of the aforesaid Act, reads as under:
“18. Prohibition of manufacture and sale of certain drugs and cosmetics- From such date as may be fixed by the State Government by notification in the Official Gazette in this behalf, no person shall himself or by any other person on his behalf-
(a) xxxx
(b) xxxx
(c) [manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale,] or distribute any drug [or cosmetic], except under and in accordance with the conditions of, a license issued for such purpose under this Chapter.
Provided that nothing in this section shall apply to the manufacture, subject to prescribed conditions, of small quantities of any drug for the purpose of examination, test or analysis:
Provided further that the (Central Government) may, after consultation with the Board, by notification in the Official Gazette, permit, subject to any conditions specified in the notification, the [manufacture for sale or for distribution, sale, stocking or exhibiting or
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offering for sale] or distribution of any drug or class of drugs not being of standard quality.”
under Section 18, the prosecution has to prove that the accused has possessed the drug for the purpose of selling and mere possession of the said drug without there being any evidence to show that it has been stocked and stored with an intention to sell the same is not an offence. This proposition of law has been laid down by the Co-ordinate Bench of this Court in the case
of State of Karnataka Vs. Channakeshawa Medicals
reported in ILR 1992 KAR 3004 , wherein at paragraph 2 of the said Judgment, it is observed as under:
“The Supreme Court held that Section 27 postulates three separate categories of cases and no other: (1) manufacture for scale; (2) actual sale; (3) stocking or exhibiting for sale or distribution of any drugs. The absence of any comma after the word 'stocks' clearly indicates that the clause 'stocks or exhibits for sale' is one indivisible whole and it contemplates not merely stocking the drugs but stocking the drugs for the purpose of sale and unless all the ingredients of this category are
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satisfied, Section 27 of the Act would not be attracted. Thus before a person can be liable for prosecution or conviction under Section 27(a)(i)(ii) read with Section 18(c) of the Act, it must be proved by the prosecution affirmatively that he was manufacturing the drugs for sale or was selling the same or had stocked them or exhibited the articles for sale. The Supreme Court emphatically ruled that the possession simpliciter of the articles does not appear to be punishable under any of the provisions of the Act. If, therefore, the essential ingredients of Section 27 are not satisfied the plea of guilty cannot lead the Court to convict the accused. It appears in that case there was a plea of guilt. In respect of a firm or company the Supreme Court in the case of STATE OF KARNATAKA v. PRATAP CHAND AND ORS., 1981 Crl. L.J. 595 ruled that where the partnership firm was' charged for the offences under Section 18(a)(ii) and (c) the partner of the firm who was in the overall control of the day to day business of the firm would alone be liable to be convicted and the partner who was not in such control could not be proceeded against merely because he had the right to participate in the business of the firm under the terms of partnership deed. In the instant case the Partnership Deed is not produced to show how many partners the firm consisted of. The licence Ex. P-15 does not make mention of the partners of the firm but it only states that accused Nos. 2 and 3 were "qualified" persons incharge of the firm. Therefore, there is deficiency in evidence with regard to the actual participation of any of the partners and the control of the day to day work of the
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firm. Our attention was drawn by the State Prosecutor to the evidence in this behalf of P.W.1 and P.W.2 while P.W.1 the Drugs Inspector stated that both the accused were looking after the 'wahivat', P.W.2 stated that it was accused No. 3 who was looking after the shop. Neither of them has at any stage given evidence that these two items were stocked for sale. Accused No. 2 is said to be the medical practitioner and perhaps, according to him, he was not looking after the shop. As in our view the possession of item Nos.2 and 3 does not satisfy the requirement of the Decision of the Supreme Court in the case of Mohamad Shabbir cited supra, on this ground alone this Appeal should fail. We do not find any reasons or grounds to interfere with the Judgement of acquittal rendered by the trial Court. The appeal has to fail and the same is dismissed.”
makes it clear that the prosecution has to prove that the said firm was either manufacturing the said prohibited drug or the drug which was in possession was stored for selling the same. It is also further observed that the possession simpliciter of the articles does not appear to be punishable under any of the provisions of the said Act. It is essential ingredients of Section 27 that the accused firm was intending to sell the same and in that
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light the evidence has to be produced by the prosecution. But as could be seen from the evidence, nowhere the witnesses have deposed before the Court below the said fact and have not specifically stated that the said firm has stocked Vicks Action 500 plus tablets for the purpose of selling. Though the prosecution has proved that the said stock was there in the said partnership firm but the material evidence that was initiated to be sold is not forthcoming. Under such circumstances, the accused No.7 cannot be held guilty for the said defence.
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what capacity the accused No.7 was working in the said firm. When accused No.7 has been cross-examined and
she has come up with the version that she was not incharge and she was not knowing anything about the transaction of the said firm. Under such circumstances, the prosecution has to establish that the accused No.7 was the in-charge of the firm and was responsible for its day to day affairs. In the absence of such material, the prosecution has failed to prove its case in this behalf. This proposition of law has been laid down by the Hon’ble Apex Court in the case of State of Karnataka
Vs. Pratap Chand and others reported in 1981(2) SCC 335 , wherein at paragraph 7 & 8, it has been observed as under:
“7. It is seen that the partner of a firm is also liable to be convicted for an offence committed by the firm if he was in charge of, and was responsible to, the firm for the conduct of the business of the firm or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any neglect
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on the part of the partner concerned. In the present case the second respondent was sought to be made liable on the ground that he along with the first respondent was in charge of the conduct of the business of the firm. Section 23-C of the Foreign Exchange Regulation Act 1947 which was identically the same as section 34 of the Drugs and Cosmetics Act came up for interpretation in G. L. Gupta v. D. H. Mehta where it was observed as follows:
What then does the expression "a person in charge and responsible for the conduct of the affairs of a company” means? It will be noticed that the word 'company' includes a firm or other association and the same test must apply to a director in-charge and a partner of a firm incharge of a business. It seems to us that in the context a person 'in charge' must mean that the person should be in over all control of the day to day business of the company or firm. This inference follows from the wording of S. 23C(2). It mentions director, who may be a party to the policy being followed by a company and yet not be in charge of the business of the company. Further it mentions manager, who usually is in charge of the business but not in over-all-charge. Similarly the other officers may be in charge of only some part of business."
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8. The evidence in the present case shows that it was respondent No. 1 and not respondent No. 2 who was in over all control of the day to day business of the firm. The second respondent is not liable to be convicted merely because he had the right to participate in the business of the firm under the terms of the Partnership Deed.”
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Since the main appeal itself is dismissed, pending
I.A., does not survive for consideration.
Sd/JUDGE
*Svh/-
3 issues framed by the court
Whether the prosecution proved that the accused stock drugs for the purpose of sale under Section 18(c) of the Drugs and Cosmetics Act.
Whether the accused, working as a computer operator, was in charge and responsible for the conduct of the business firm under Section 27(B)(II).
Whether the high conviction appeal against acquittal should be allowed or dismissed.
Colour shows how this judgement treated each authority
State of Karnataka Vs. Channakeshawa MedicalsRelied on¶53
ILR 1992 KAR 3004 · Who else cites this
State of Karnataka v. Pratap Chand and Ors.Relied on¶57
1981 Crl. L.J. 595
State of Karnataka Vs. Pratap Chand and othersRelied on¶68
1981(2) SCC 335 · Who else cites this
G. L. Gupta v. D. H. MehtaExplained¶72
G. L. Gupta v. D. H. Mehta
3 provisions across 2 enactments
State of Karnataka
Fatimabi M. Shaikh
B.A. Patil
As recorded by the court registry
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