Partly allowed

M/S.Panacea Biotec Limited v. State of Keralae

Kerala HC17 Jun 2011Crl.MC/2551/2009

Case brief

AI extract

What is this about?

The High Court of Kerala quashed criminal proceedings under the Drugs and Cosmetics Act against four petitioners, including the company and its Managing Director, ruling the prosecution barred by limitation. Proceedings against the fourth petitioner (Power of Attorney holder) were quashed as misconceived.

What did the court decide?

Cognizance against the fourth petitioner and limitation-barred petitioners was quashed; Magistrate directed to consider condonation of delay with notice to affected parties.

M/S.Panacea Biotec Limited Vs State of Keralae — Quashing and FIR | Kerala HC (2011)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH

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FRIDAY, THE 17TH JUNE 2011 / 27TH JYAISHTA 1933

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Crl.MC.No. 2551 of 2009() ------------------------CC.20/2009 of CHIEF JUDICIAL MAGISTRATE'S COURT, THRISSUR

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PETITIONER(S): ACCUSED NOS.1 TO 4:

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----------------------------------------------------------1. M/S.PANACEA BIOTEC LIMITED, A-241, OKHLA INDUSTRIAL AREA, NEW DELHI-110 020, REPRESENTED BY SHRI RAVINDER JAIN, MANAGING DIRECTOR, RESIDING AT 18/56, EAST PARK AREA, KAROL BAGH, NEW DELHI-110 005.

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2. SHRI.RAVINDER JAIN, AGED 45 YEARS, MANAGING DIRECTOR, RESIDING AT 18/56, EAST PARK AREA, KAROL BAGH, NEW DELHI-110 005.

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3. PANACEA BIOTEC LTD., 39/3143A, DIWANS ROAD, ERNAKULAM, KOCHI-682 016, REPRESENTED BY POWER OF ATTORNEY HOLDER SHRI BIMALESH KUMAR, RESIDING AT 60/1500, LANE NO.II, HOUSE NO.35, UDAYA NAGAR, KATHRIKKADAVU, ERNAKULAM.

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4. SHRI.BIMALESH KUMAR, AGED 40 YEARS, RESIDING AT 60/1500, LANE NO.II, HOUSE NO.35, UDAYA NAGAR, KATHRIKKADAVU, ERNAKULAM.

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BY ADVS. DR.K.P.SATHEESAN, SRI.K.K.GOPINATHAN NAIR, SRI.M.R.JAYAPRASAD, SRI.P.MOHANDAS (ERNAKULAM), SRI.MATHEW SUNNY.

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RESPONDENT(S): STATE, COMPLAINANT & DEFACTO COMPLAINANT:

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--------------------------------------------------------------------------------------------------------1. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM.

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2. THE DRUGS INSPECTOR (INTELLIGENCE BRANCH), OFFICE OF ASSISTANT DRUGS CONTROLLER, THRISSUR.

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3. MR.JOY MANDI, MANDI HOUSE, KANAKAMALA, THRISSUR DISTRICT.

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R1 & R2 BY PUBLIC PROSECUTOR SRI. K.J.MOHAMMED ANZAR

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THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 17/06/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Kss

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CRMC.NO.2551/2009

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APPENDIX

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PETITIONER'S ANNEXURES:

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ANNEX.1: CERTIFIED COPY OF THE COMPLAINT FILED BY THE 2ND RESPONDENT BEFORE THE CHIEF JUDICIAL MAGISTRATE'S COURT, THRISSUR DTD. 20/01/2009 IN C.C.NO.20/2009.

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RESPONDENT'S ANNEXURES: N I L

/TRUE COPY/

P.A.TO JUDGE

Kss

THOMAS P JOSEPH, J.

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Crl.M.C.No.2551 of 2009

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Dated this 17^th day of June, 2011

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ORDER

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Challenge in this proceeding instituted under Sec.482 of the Code of Criminal Procedure (for short, "the Code”) is to a complaint preferred by the second respondent before the learned Chief Judicial Magistrate, Thrissur (for short, "the CJM”) for offences punishable under Sec.18(a)(i) r/w Sec.17(b) and (c) punishable under sec.27(d) of the Drugs and Cosmetics Act, 1940 (for short, "the Act”) and cognizance taken on the said complaint. Learned CJM took the case on file as C.C.No.20 of 2009 against petitioners/accused 1 to 4 and others. The proceeding against petitioners is sought to be quashed on various grounds such as that complaint does not make out a prima facie case against petitioners to be proceeded against for offences above stated, proceeding initiated by the second respondent is against principles of natural justice and proceeding with case is oppressive, whether second respondent should have initiated prosecution against petitioners/accused 1 to 4 and others or not was not considered at any point of time and at any rate, second respondent had not given notice to the petitioners about the

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proposal to initiate prosecution, there is inordinate delay in filing the complaint which has affected valuable rights of petitioners and destroyed the defence that they could urge before learned CJM, case of respondents 2 and 3 are contradictory and self destructive, at any rate petitioners are not liable to be proceeded against for any of the offence as above stated since so far as manufacturing and testing of the drug in question is concerned there are other persons nominated and responsible for the purpose and lastly, on the ground of limitation under Sec.468 of the Code. It is contended by learned counsel that though learned CJM has taken cognizance without application of mind, the said court cannot review its order and in the circumstance and the only remedy available to the petitioners is to approach this Court under Sec.482 of the Code. Learned counsel has contended that this Court has inherent power to interfere and quash proceeding against petitioners for the ends of justice. Learned counsel has addressed arguments on the above points at depth with the aid of a galaxy of decisions. It is contended by learned counsel that on the above grounds prosecution against petitioners cannot stand. Learned Public Prosecutor has contended that there are sufficient averments in the complaint which make out a prima facie case against petitioners and hence at this stage interference

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under Sec.482 of the Code is not warranted. It is contended that the argument that proceeding of the second respondent and initiation of prosecution are violative of principles of natural justice, oppressive or, there is inordinate delay in prosecution so that right of petitioners are affected cannot stand legal scrutiny. There are no contradictory versions so far as crux of the case is concerned which required the case of prosecution to be thrown out at the threshold, without consideration. On the liability of petitioners it is contended by learned Public Prosecutor that by virtue of Sec.34 of the Act, petitioners being in charge of and responsible to the company for the conduct of its business are liable to be proceeded against along with the company itself. On the question of period of limitation it is argued that the third respondent had preferred a complaint dated 05.01.2006 to the Assistant Drugs Controller, Thrissur which was received by that officer only on 16.01.2006, pursuant to that certain clarifications were asked for by the said officer by letter dated 21.01.2006 and the complaint is filed on 20.01.2009 which is within the period of limitation even if period of limitation in respect of the offences above stated is taken as three years as provided under Sec.468 (2)(c) of the Code. The further contention of learned Public Prosecutor is that at any rate there are sufficient materials on

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record and averred in the complaint as well based on which it was within the power of learned CJM to condone the delay and extent the period of limitation invoking Sec.473 of the Code. Learned Public Prosecutor has placed reliance on the decision in Valsan Vs. State of Kerala (2003(2) KLT 1050) to contend that the decision taken by the learned CJM so far as delay is concerned, is purely adhoc and it is open to the petitioners to raise the contention before learned CJM at any point of time. As such, interference by this Court at this stage is not warranted, it is contended.

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Before dealing with the various contentions raised by the learned counsel, it is apposite to refer to the short facts of the case. A complaint dated 05.01.2006 was preferred by the third respondent to the Assistant Drugs Controller, Thrissur which the latter received on 16.01.2006. In that complaint, the third respondent has stated that his child was being given injection for immunization at the Primary Health Centre for which he, through his friend, Rajan purchased the subject drug. The Medical Officer of the Primary Health Centre on 21.10.2005 informed the third respondent about the discrepancy in the label as well as contents of the subject drug. On getting information about that, officers of the first petitioner, company met the third respondent

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several times in a bid to avoid any unpleasant situation. The third respondent had not obtained any bill for purchase of the subject drug as the said Rajan was employed with the medical store wherefrom the subject drug was purchased. The third respondent spurned offers made by the officials of first petitioner, decided to go forward and accordingly submitted complaint dated 05.01.2006 to the Assistant Drugs Controller. It is not disputed that on 16.01.2006 the said officer received that complaint addressed a letter to the third respondent seeking certain clarifications to which the third respondent gave a reply on 21.01.2006. In the letter dated 16.01.2006 the Drugs Inspector informed the third respondent that there is no such shop as “M/s.Meenakshi Medical Store (Thrissur)” from where the third respondent is said to have purchased the subject drug through Rajan. On 21.01.2006 the Drugs Inspector inspected premises of “M/s.Meenakshi Medical Agencies, Thrissur”, wherefrom the subject drug is said to be purchased and effected seizure of certain documents including original invoices for purchase of the subject drug by M/s.Meenakshi Medical Agencies from the fifth accused, carbon copies of invoices and credit notes for return of the drug by M/s.Meenakshi Medical Agencies to the fifth accused (on receipt of complaint about misbranding). In the

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complaint preferred by the second respondent before learned CJM, it is stated that there was improper labelling of the subject drug. The label described the drug as Easyfive vaccine, Batch No.PO-124/SBPC with manufacturing date as 14.08.2004 and expiry date on 13.08.2006 and manufactured by M/s.Panacea Biotec Limited (first petitioner). It is further stated that one vial along with packing with the subject drug kept by the third respondent was also given to the Drugs Inspector. The Drug Inspector verified the vial produced by the third respondent and found that it was packed in a carton labelled “Easyfive Pentavallant Vaccine B.No.PO/124/SBPC, manufacturing date 14.08.2004 and expiry date 13.08.2006”. On the seal cap, the label read “Pentavallant vaccine Easyfive, B.No.PO-124/SBPC with manufacturing date 14.08.2004 and expiry date 30.08.2006”. On the vial, the label affixed read “Tetravalent vaccine Easyfour, B.No.TO-124/SBC with manufacturing date 29.08.2004 and expiry date 28.08.2006”. As per the label of the outer carton Easyfive Pentavallant Vaccine is a combination of five different vaccines including HbSAg.10mcg while the label claim of the inner vial was Easyfour Tetravalent Vaccine which is a combination of only four different vaccines and it did not contain HbSAg 10mcg. Thus, it is alleged that the subject drug

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manufactured by the first petitioner and distributed through M/s.Meenakshi Medical Agencies (which also is an accused in the case) was misbranded and that amounted to violation of Sec.17 (b) of the Act which is made applicable under Sec.27(d) of the said Act. On the said allegations learned CJM took cognizance on 29.01.2009. The order of the learned CJM read as follows:

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“Taken on file as C.C.No.20/2009 under Sec.32 of the Drugs and Cosmetics Act. Issue summons to the accused. Posted to 24.03.2009.”

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It is argued by the learned counsel that there is no prima facie case made out against petitioners and that second respondent has not acted in a fair manner on the question whether petitioners are to be prosecuted or not. It is pointed out that before deciding to prosecute the petitioners, no notice was given to the petitioners. According to the learned counsel, proceeding of the second respondent are oppressive in that petitioners did not get the opportunity to show before the second respondent that they are not liable to be prosecuted.

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So far as the contention regarding prima facie case is concerned, I have referred to the allegations made by the second respondent in the complaint. In short, the allegation is of misbranding of the subject drug. Sec.17(b) of the Act deals with misbranding of the drug. Here, the case set up by the second

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respondent in the complaint is that the vial produced by the third respondent was packed in a carton labelled as Easyfive, Pentavallant vaccine, seal cap also contained a similar label but the label on the vial read as Tetravalent vaccine Easyfour. It is further stated in the complaint the components of Easyfive and Easyfour, the former being a combination of five different vaccines including HbSAg 10mcg while the latter, Easyfour Tetravalent vaccine is a combination of only four different vaccines and did not contain HbSAg.10mcg. Other allegations in the complaint regarding difference in the manufacturing and expiry dates are also mentioned above. It is not as if averments in the complaint do not make out a prima facie case.

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It is not pointed out to me any provision in the Act or Rules which required that before the second respondent decided to prosecute petitioners and others it was necessary to give notice of such intention to them so that, it could be said that failure of the second respondent to give such notice was oppressive. True, learned counsel has a contention that as per the relevant Rules petitioners were required to maintain the relevant registers and other records only for a period of two years, the complaint was filed even much later, petitioners had already destroyed their records after the prescribed period and

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that has affected petitioners as they are not able to make good their defence before learned CJM. I will advert to that contention a bit later. On going through the records I find myself unable to accept the contention that no prima facie case is made out and that failure to give notice to the petitioners before second respondent decided to initiate prosecution is in any way illegal, irregular or oppressive.

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Next argument is regarding the inordinate delay where, learned counsel contended that even as per the version of the third respondent, the commission of offence was known to him even as on 21.10.2005, complaint which the third respondent addressed to the second respondent is dated 05.01.2006, the same was received by the Assistant Drugs Controller on 16.01.2006 but the second respondent has preferred the complaint before learned CJM only on 21.01.2009. It is pointed out by learned counsel that as per Rule 78 of the Rules, petitioners were required to maintain the relevant documents, registers etc only for a period of two years, on the expiry of the said period those records were destroyed and the prosecution having been launched much after the said period, petitioners have lost their valuable defence before the learned CJM. In support of that contention, reliance is placed on the decisions in

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M/s.Medicamen Biotech Lts & Anr. Vs. Rubina Bose, Drug Inspector (AIR 2008 SC 1939), Northern Mineral Limited VS. Union of India & Anr. (2010(3)SCC (Crl)513), Gupta Chemicals Private Ltd. Vs. State of Rajasthan & Anr. (2010 (7) SCC 735), Kishan Singh (D) through L.Rs Vs. Gurpal Singh & Ors (2010(8) AD(SC) 550) , Sahib Singh Vs. State of Haryana (AIR 1997 SC 3247) , Pankaj Kumar Vs. State of Maharashtra (AIR 2008 SC 3077) and Baijnath Jha Vs. Sita Ram and Anr. (AIR 2008 SC 2778). In these decisions, having regard to the particular facts and circumstances of the case when there was inordinate delay in the conduct of investigation, the Supreme Court interfered and stopped further proceeding.

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Having gone through the said decision, I am persuaded to think that there could be no straight jacketed principle in this regard. It is not as if whenever there is some delay the case should end up in a premature termination. That depends on the facts and circumstances of each case. Here, according to the petitioners and as Sec.18B of the Act r/w Rule 78 of the Rules say they were required to preserve their documents only for a period of two years. True, it is not shown that at any point of time after the complaint from third

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respondent was received, the second respondent had given intimation to the petitioners about the complaint of the third respondent or, proceedings which culminated in the filing of the complaint. But, I must bear in mind that the allegation here is one of misbranding for which, as seen from the complaint the second respondent has seized relevant records from M/s.Meenakshi Medical Agencies. The question whether complaint would stand or fall on the materials that the second respondent has produced is a matter which the trial court has to decide. The question whether inability (if any) of petitioners to produce documents on their side would prejudice their defence before the learned CJM is also a matter which has to come out in the trial, bearing in mind the nature of offence and the materials, which second respondent may produce in support of allegations in the complaint. Petitioners will have the opportunity to raise the plea in the trial court. It is not as if this Court should go into the question in this proceeding, find that because the second respondent did not give notice to the petitioners they did not or could not maintain relevant records, that has prejudiced petitioners and hence the complaint has to be thrown out. The question of prejudice, if any has to be decided on the facts of the case. I must also bear in mind that it is not as if the statute

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required the second respondent to give notice of proceeding to the petitioners. I make it clear that it is for the trial court to decide having regard to the facts of the case whether inability, if any on the part of petitioners to maintain relevant records even after the statutory period of two years on account of their being not intimated about the proposed action affect them prejudicially.

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It is further contended by the learned counsel that there are contradictory versions in the complaint of the second respondent and the complaints of the third respondent. I referred to the complaint dated 05.01.2006 preferred by the third respondent to the Assistant Drugs Controller and the complaint dated 21.01.2009 preferred by the second respondent before the learned CJM. The contradiction that learned counsel would point out is that while at one stage the third respondent stated that he got the subject drug purchased through his friend 'Rajan', at another stage he would say, it was purchased through his friend 'Rejendran'. It is further stated that the third respondent had not obtained any bill for purchase of the subject drug. It is also pointed out that as per the version of the third respondent, he is not aware of whereabouts of the said Rajan or Rajendran (as the case may be). On going through the records, what I can understand from the complaint of the third respondent is that the

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said Rajan (or Rajendran as the case may be) was working in the medical store wherefrom the third respondent is said to have obtained the subject drug through the said Rajan on the latter making an offer that third respondent would get the subject drug at a lesser cost as it is being purchased from the store. The question is not whether it was through Rajan or Rajendran that third respondent had purchased the drug but whether the subject drug was manufactured by the first petitioner, it was sold through M/s.Meenakshi Medical Agencies and it was misbranded as alleged. I do not forget that so far as the said establishment is concerned, third respondent had initially stated that it is 'M/s.Meenakshi Medical Stores' where as, the Drug Inspector after necessary enquiry informed the third respondent that there is no such medical store, it is 'M/s.Meenakshi Medical Agencies'. I must bear in mind that the place of location of the medical 'store' or 'Agency' as the case may be as reported by the third respondent is the same, the discrepancy being only in the name (“store” or “agency”). The above discrepancies are not in relation to the core of allegation regarding the subject drug allegedly manufactured by the first petitioner being misbranded in the manner I have referred above. At any rate, how the discrepancies or contradictions pointed out by petitioners affected the

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prosecution case is still a matter which the trial court has to decide.

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It is contended for petitioners that the third respondent himself was running a medical store. Essentially, it is the responsibility of the second respondent to prove the allegations in the complaint that the subject drug was manufactured by the first petitioner and it was purchased from M/s.Meenakshi Medial Agencies. This Court cannot form any opinion in this proceeding that the subject drug was collected from the medical store which third respondent is said to conduct in view of the allegation that the third respondent purchased from M/s.Meenakshi Medical Agencies.

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Yet another argument of petitioners is that at any rate petitioners 2 to 4 are not liable to be prosecuted. It is submitted by learned counsel that as in the case of the Prevention of Food Adulteration Act (for short, "the PFA Act”) and similar statutes which are pari materia with the Act, there is nomination of persons who are responsible for manufacture and testing of the drug having regard to the licenses issued and the relevant Rules and hence petitioners 1 to 4 cannot be proceeded against. Learned counsel argued that the principle of reading down into the statute has to be applied. Reliance is placed on the decisions

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in Godawat Pan Masala Products I.P.Ltd and Anr. Vs. Union of India and Ors. (AIR 2004 SC 4057), Bank of India Vs. Ketan Parekh and Ors. (AIR 2008 SC 2361), Venkatesan Vs. State of Tamil Nadu (AIR 2008 SC 2369), The Belsund Sugar Co.Ltd. Vs. The State of Bihar and Ors. (AIR 1999 SC 3125), J.K.Industries Ltd and Anr. Vs. Union of India and Ors. ((2007)13 SCC 673), Municipal Corporation of Delhi VS. Ram Kishan Rohtagi and Ors.(AIR 1983 SC 67), State (Delhi Admn.) Vs. L.K.Nangia and Anr. (1980(1) FAC 1), R.Banerjee and Ors. Vs. H.D.Dubey and Ors. (1992 CRI.L.J. 1523), Perfetti India Ltd and Anr. Vs. Food Inspector, Kottayam and Anr. (1999 CRI.L.J.223), State of Haryana Vs. Brij Lal Mittal & Ors. (JT 1998(3) SC 584), Gujarat Assembly Eelction Matter in the Matter of Special Reference NO.1 of 2002 ((2002)8 SCC 237), In re Presidential Poll (1974(2) SCC 33) and State of Rajasthan and Anr. Vs. Shamsher Singh (1985 SCC (Crl) 421) . These decisions concerned various other statutes which dealt with nomination of person under provisions of those statutes and who is otherwise liable to be prosecuted for the offence committed by the company. In the present case argument is based on Sec.34 of the Act r/w Rule 76 of the Rules and Form No.28 and 28B in

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which the license is issued to the company (first petitioner).

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Sec.34 of the Act deals with offences by companies

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and States states:

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“where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly; provided that nothing contained in this subsec. shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.”

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Rule 76 of the Rules deals with Forms of licenses to manufacture drugs specified in Schedule C and C(1) . My attention is drawn to the license issued to the first petitioner in Form No.28-D. Clause 3 reads as under:

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(3) Name(s) of the competent technical staff.

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(a)responsible for manufacturing (b) responsible for testing 1. - - - - - - - - - - - 1. - - - - - - - - - - - 2. - - - - - - - - - - - 2. - - - - - - - - - - - 3. - - - - - - - - - - - 3. - - - - - - - - - - -

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(names of the persons stated)

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Learned counsel would contend that this Court should read

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Sec.34 of the Act along with Rule 76 and the license issued in Form 28-D with specific reference to clause (3) of the license which I have extracted above. It is pointed out from Rule 76(i) of the Rules that manufacture and testing of the drug are to be conducted under the active direction and personal supervision of competent technical staff of the qualification mentioned therein. According to the learned counsel the persons who are responsible for manufacturing and testing the drug are those mentioned in clause 3(a) and (b) of the license issued in Form No.28-D. It is argued that the above said persons are responsible for manufacturing and for testing of the drug manufactured by the first petitioner.

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I am afraid, that argument cannot be accepted. Reason is that Sec.34 of the Act is clear that when an offence under the Act is committed by a company, the person who are liable to be prosecuted, apart from the company is every person who, at the time the offence was committed,

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“was in charge of and was responsible to the company for the conduct of the business of the company”.

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It is not as if the statute says the persons liable to be prosecuted are those who are responsible for the manufacturing and testing of the drug. The principle of vicarious liability cannot be

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extended to penal law. No person can be held liable in penal law on the principle of vicarious liability unless the statute so specifically says. It is not as if somebody can, by an interpretation or reading down the statute be made liable under a penal statute. May be, the persons who are responsible for manufacturing and testing of the drug are responsible to the company and the company may proceed against such persons. But, for the purpose of prosecution under Sec.34 of the Act, it is not those who manufacture or test the drug who are liable, but every person who, at the time the offence was committed was in charge offence of and responsible to the company for the conduct of business of the company. A distinction has to be drawn between persons who are in charge of and responsible to the company for the conduct of its business and those persons employed by the company for the manufacture and testing of the drug. By any implication or reading down as learned counsel has contended, persons who are employed by the company for manufacture and testing of the drug, in the absence of any provision in the Act cannot proceeded against as if they are the persons who are in charge of and responsible for the company for the conduct of its business. The contention has to be rejected.

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It is necessary to refer to the designation of the petitioners 2 to 4 also to decide whether prima facie all or any of them are liable to be prosecuted. For that purpose, I have to refer to the complaint itself. The first petitioner is the company itself which, going by Sec.34 of the Act is liable for the offence proved to be committed under the Act. Second petitioner is the Managing Director while the third petitioner is a branch of the first petitioner, company at Ernakulam. The fourth petitioner is described as the power of holder of the branch of the company at Ernakulam.

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So far as petitioners 1 and 3 are concerned, it is the company itself and squarely come under Sec.34 of the Act. So far second petitioner is concerned, he is the 'Managing Director' of the Company. It is pointed out by learned counsel that there is no mention in the complaint that the second petitioner was at the relevant time in charge of and responsible to the company for the conduct of its business. But, by the very designation second petitioner is a Director who is managing the company. This Court and the Supreme Court while dealing with Sec.141 of the Negotiable Instruments Act has held in Karunanithi Vs. BSNL (2007(1) KLT SN.No.78) and National Small Industries Corporation Ltd. Vs. Harmeet Singh Paintal ((2010)3 SCC

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330) that while in the case of a Director, the complaint should specifically aver that he at the relevant time was in charge of and responsible to the company for the conduct of its business, such an averment is not absolutely necessary in the case of a 'Managing Director' or 'Joint Managing Director'. The reason is that Managing Director or Joint Managing Director is a Director who is in management of the affairs and business of the company. Therefore, even in the absence of a specific averment regarding the second petitioner being in charge of and responsible to the company for conduct of its business, he is prima facie liable if the prosecution is able to prove the offence attributed to the company.

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But position of the fourth petitioner stand on a different pedestal. There is no case that he is a Director or other official of the company. On the other hand, he is described as a power of attorney holder of the third petitioner, branch of company at Ernakulam. I have gone through the photocopy of power of attorney made available by learned counsel for perusal. That power of attorney is executed by the company in favour of fourth petitioner authorising him to appear before the drug licensing authority to represent the company for obtaining drug license and for connected activities. I am unable to understand

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how fourth petitioner who was appointed as a power of attorney holder to represent the branch of the company at Ernakulam for a particular purpose, ie, for renewal of drug license could be said to be in charge of and responsible for conduct of business of the company so that he could be roped in by virtue of Sec.34 of the Act. In my view prosecution against fourth petitioner is misconceived and is liable to be quashed.

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The last point urged is regarding limitation for the complaint. Reference is made to Secs.468 and 469 of the Code. Sec.468 of the Code deals with the period of limitation and bar of taking cognizance after the lapse of such period. It is not disputed that the offences attributed to the petitioners are punishable with imprisonment for not less than one year and not exceeding two years. If that be so, by virtue of subsec.2(c) of Sec.468, period of limitation must be three years.

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Under Sec.469 of the Code,

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(1) the period of limitation in relation to an offender shall commence;-

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(a) on the date of the offence; or

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(b) where the commission of the offence was not known to the person aggrieved by the offence or to any police officer, the first day on which such offence comes to the knowledge of such person or to any police officer, whichever is earlier; or

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(c) where it is not known by whom the offence was committed, the first day on which the identity of the offender is known to the person aggrieved by the offence or to the police officer making investigation into the offence, whichever is earlier. (2) In computing the period, the day from which such period is to be computed shall be excluded.

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I referred to the various incidents which allegedly

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occurred from 21.10.2005 onwards. Going by the case of third respondent he was aware of the alleged misbranding etc even as on 21.10.2005 and claims to have been discussing the matter with officials of the company until he decided to prefer complaint to the Assistant Drugs Controller on 05.01.2006. Third respondent appears to have been aware of alleged commission of the offence by the first petitioner, company even as on 21.10.2005. The complaint he preferred to the second respondent is dated 05.01.2006 and that complaint was received by the Assistant Drugs Controller on 16.01.2006. Assuming that the period of limitation commenced on 16.01.2006, even excluding the day from which the said period is to be reckoned, the period expired by 16.01.2009 whereas the complaint is presented before the learned CJM only on 21.01.2009 ie, beyond the period of limitation.

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Crl.M.C.No.2551 of 2009

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-: 23 :-

¶127

Learned counsel has referred to the various authorities on the point to contend that there could be no condonation of delay under Sec.473 by implication and at any rate, there is no question of condoning the delay after cognizance is taken. Learned counsel, referring to the various authorities, contend that the power to condone delay is something which the Magistrate taking cognizance has to exercise before deciding to take cognizance. Learned counsel contended that once cognizance is taken, it cannot be said that by implication the Magistrate has decided to condone the delay.

¶128

On the above principle, I am inclined to agree with the learned counsel for petitioners. There could be no condonation of delay by implication. To condone the delay, the Magistrate has to apply his mind to the factual situation and in express terms do that. Learned Judge of this Court in Valsan Vs. State of Kerala (supra) has held that it is advisable that before the Magistrate exercises the power to condone the delay notice of the same is given to the affected party. Learned Judge further held that even if without notice to the accused the delay is condoned, the same is to be treated as a finding ex parte or an adhoc order and the accused cannot be expected to wait until culmination of the proceeding. The accused on appearance before Court pursuant

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Crl.M.C.No.2551 of 2009

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-: 24 :-

¶131

to the summons is entitled to contend that delay ought not to have been condoned and if such contention is raised learned Magistrate has to consider whether delay could have been condoned, treating the order already passed condoning the delay as ad hoc in nature. I must also refer to the decision of the Supreme Court in Ratilal Bhanji Vs. State of Maharashtra (AIR 1979 SC 94) where, in paragraph 26B it is held that except where the prosecution must fail for a fundamental defect such as want of sanction, an order of acquittal must be based upon a finding of not guilty turning on the merits of the case and the appreciation of evidence at the conclusion of trial. In other words if the prosecution has to fail for a fundamental defect such as want of sanction, it is open to the Court to drop the proceeding. If in spite of the prosecution being time barred cognizance is taken, I think, it is a fundamental defect which goes to the root of the case and as held in Valsan Vs. State of Kerala (supra) even if the decision to take cognizance condoning the delay is taken in the absence of the accused, if the accused on appearance pointed out that delay could not and ought not have been condoned it is within the power of the Magistrate to consider that question and if the contention is upheld, to drop proceeding. But, the proper course is to give

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Crl.M.C.No.2551 of 2009

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-: 25 :-

¶134

notice to the accused before the Magistrate decided to condone the delay.

¶135

I stated that going by Secs.468 and 469 of the Code and having regard to the facts of the case, at any rate by 16.01.2009 period of limitation prescribed by the Code for filing the complaint stood expired. Therefore, the cognizance taken by the learned CJM on 21.01.2009 is illegal.

¶136

But, that cannot be the end of the matter. The prosecution must get an opportunity to request that the delay on facts of the case is to be condoned in exercise of power under sec.473 of the Code. I must bear in mind that to condone the delay is the power of the Court and that power could be exercised on the materials on record if the Magistrate is of the opinion that the delay has been properly explained or that it is necessary so to do in the interest of justice. Even in the absence of separate application filed by the prosecution to condone delay it is within the power of Magistrate to exercise that power under Sec.473 of the Code on the materials on record. I also find some statement in the opening portion of the complaint where it is stated about transfer of officers. Whether that is sufficient to condone the delay or, there are other reasons justifying condonation of delay are matters which learned CJM has to decid. Having regard to

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Crl.M.C.No.2551 of 2009

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-: 26 :-

¶139

the nature of allegations made, I am inclined to think that the prosecution must be given an opportunity to plead for condonation of delay as provided under Sec.473 of the Code but, the exercise of that power by the learned CJM has to be with notice to the persons affected as well.

¶140

It is true that only petitioners 1 to 4 (accused 1 to 4) have come before me challenging the cognizance taken. But, there is no reason why the benefit of my finding regarding limitation should not go to the remaining accused as well. Therefore I hold that the cognizance taken against the remaining accused also is bad in law on the finding regarding limitation.

¶141

The result of my above discussion is that prosecution launched and the cognizance taken against the fourth petitioner/fourth accused being misconceived, is bad in law, cannot stand and is liable to be quashed. Cognizance taken against petitioners 1 to 3 and accused 5 onwards cannot stand and is liable to be set aside on the ground of limitation. But, the question whether delay in launching prosecution has to be condoned is a matter which learned CJM has to decide with notice to petitioners 1 to 3 and accused 5 onwards.

¶142

Resultantly this criminal miscellaneous case is decided in the following lines:

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(i) Prosecution launched and cognizance

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Crl.M.C.No.2551 of 2009

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-: 27 :-

¶146

taken against fourth petitioner/fourth accused is quashed.

¶147

(ii) Cognizance taken against petitioners 1 to 3/accused 1 to 3 and accused 5 to 8 is quashed holding that the complaint is preferred beyond the period of limitation prescribed under Secs.468(2)(c) and 469 of the Code.

¶148

(iii) Learned Chief Judicial Magistrate, Thrissur is directed to consider the question whether delay in launching prosecution against petitioners 1 to 3/accused 1 to 3 and accused 5 to 8 could be condoned, on the materials on record or the further materials if any supplied by the prosecution having regard to the principles laid down in Sec.473 of the Code with notice to petitioners 1 to 3/accused 1 to 3 and accused 5 to 8.

¶149

(iv) It is made clear that petitioners can agitate other contentions raised and discussed above (except the contention regarding nomination under Sec.34 of the Act r/w Rule 76 of the Rules) in the trial court in case learned CJM decides to condone the delay and take cognizance.

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(THOMAS P JOSEPH, JUDGE)

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Sbna/-

M/S.Panacea Biotec Limited v. State of Keralae

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M/S.Panacea Biotec Limited v. State of Keralae

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