Dismissed

Gvml Prasada Rao, v. The State of A.P.

Telangana HC19 Dec 2011CRLP/7905/2009

Case brief

AI extract

What is this about?

The High Court declined to quash criminal proceedings against drug distributors under the Drugs and Cosmetics Act. The court held that ignorance and possession of licenses are no defense under Section 19(1), and the prima facie guilt determined under Section 18 must be adjudicated by the trial court based on evidence regarding Section 19(3) defenses, rather than by this court in a quash petition.

What did the court decide?

The petition for quashing of proceedings under Section 482 Cr.P.C. is dismissed; the matter must be tried on merits in the trial court.

Gvml Prasada Rao, Vs The State of A.P. — Narcotics (NDPS) | Telangana HC (2011)

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THE HON’BLE SRI JUSTICE N. RAVISHANKAR

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CRIMINAL PETITION No.7905 of 2009

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ORDER:

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Heard Sri T.Ramakoteswara Rao, the learned counsel for petitioners and the learned Additional Public Prosecutor.

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2. The petitioners herein are accused Nos.1 to 3 in C.C.No.557 of 2005 on the file of the Court of IV Additional Judicial First Class Magistrate, Guntur (trial court). They filed this petition under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.) for quashing the proceedings in the above case insofar as they are concerned.

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3. The matter arises under the Drugs and Cosmetics Act, 1940 (for short Act). There are altogether five accused in the case but accused Nos.1 to 3 in the above case have come up with this petition. The offence in substance pertains to the distribution and sale of Cifran tablets showing that they were manufactured by the drug manufacturer M/s.Ranbaxy Laboratories Limited while in fact they were found to be spurious as contemplated under Section 17 B (e) of the Act. Section 17 B (e) of the Act says that a drug can be said to be spurious if it purports to be the product of a manufacturer of whom it is not truly a product.

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4. The drug sample in question is said to have been lifted by the concerned Drug Inspector on 6.12.2002 from the shop of accused No.1 who is a wholesaler at Guntur and he in turn is said to have purchased the stock from accused No.2 which is a firm at Narasaraopet of which accused No.3 is stated to be the managing partner. Accused Nos.2 and 3 are said to have disclosed that they obtained the stocks from another firm M/s.Singaravelan Enterprises which is accused No.4 located at

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Chennai and accused No.5 Singaravelan Srinivasan is stated to the managing partner of the accused No.4 firm. Both accused Nos.4 and 5 are said to have obtained the stocks from another concern called M/s.G.R.Agencies, Chennai and this G.R.Agencies is said to have obtained the stocks from M/s.Ranbaxy Laboratories Limited, Chennai i.e. the manufacturer. The batch number of the drug Cifran tablets is stated to be 1176150 manufactured in January, 2002 with expiry date of December, 2004 and purports to have been manufactured by M/s.Ranbaxy Laboratories Limited, Plot No.B2, Mercain Industrial Estate Ponda, Goa.

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5. The Drug Inspector’s version in the complaint is that his enquiries and investigation into the matter disclosed that accused Nos.4 and 5 no doubt purchased the genuine drug i.e. Cifran tablets with the above batch number manufactured by M/s.Ranbaxy Laboratories Limited, Chennai but they sold away the drug so purchased in Chennai itself. It is alleged by the Drug Inspector that subsequently accused No.4 M/s.Singaravelan Enterprises firm purchased the present spurious Cifran tablets in question found at the shop of accused No.1 and also accused Nos.2 and 3 from an unknown source with the same batch number 1176150 showing them as manufactured by M/s.Ranbaxy Laboratories Limited and distributed it for sale through accused No.1 at Guntur and accused Nos.2 and 3 at Narasaraopet. This drug is stated to be a spurious one as it was not manufactured by M/s.Ranbaxy Laboratories Limited.

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6. It is thus stated that accused Nos.1 to 3 and also accused Nos.4 and 5 are liable for punishment under Section 18 (a) (i) read with Section 27 (c) of the Act for distributing and selling spurious drug. Further accused Nos.2 and 3 are also alleged to have committed offence punishable under Section 18 (c) read with Section 27 (d) of the Act for not producing the proper receipts and the relevant offences are

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mentioned. The main contention of accused Nos.1 to 3 is that they are doing business with valid licenses and that they purchased the drug Cifran tablets in question which was found to be spurious from another licensed distributor i.e. accused No.4 and therefore they are not aware of the fact whether the drug in question is a spurious one or not and consequently they cannot be fastened with any criminal liability under the Act.

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7. It should also be noted here that in the complaint it is mentioned that on 27.8.2003 the Drug Inspector received the Analyst report bearing No.811/DCL/2003 showing that the Cifran tablets in question are of standard quality and this report pertains to the samples lifted from the shop of accused No.1. Basing upon this report also Sri T.Ramakoteswara Rao, learned counsel for the petitioners, argued that the petitioners cannot be prosecuted and therefore the criminal proceedings against them should be quashed. He also relied upon certain decisions which I shall refer to a little later.

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8. On the other hand the leaned Additional Public Prosecutor pointed out that the spurious drug in the present case means a drug as defined in Section 17 B (E) of the Act and the mere fact that the Analyst report says that the said drug is of standard quality cannot be a ground in favour of the petitioners. He says that a spurious drug may also conform to the quality prescribed under the Act but once it is shown that the drug in question purports to be manufactured by concern which has not manufactured it then it has to be treated as a spurious drug. He then argued that the allegations against the petitioners are that they along with accused Nos.4 and 5 are in the business of distributing and selling spurious drugs and therefore whether the petitioners are innocent or not is a question of fact which has to be decided by the trial court on evidence and consequently this Court should not interfere in the matter.

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9. In the light of the above contentions it has to be now seen whether there are grounds to quash the case against the petitioners on the pleas urged by them.

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10. The circumstances which led to filing of this petition and the pleas of the petitioners have already been set out supra. The complaint no doubt discloses that accused No.2 firm of which accused No.3 is managing partner obtained the alleged spurious Cifran tablets from accused Nos.4 and 5, and accused No.1 got supply of the same from accused No.2. Section 18 (a) (i) of the Act would show that not only the manufacturer but also a person who sells or stocks or exhibits or offers for sale a spurious drug shall also be liable for the offence under that provision. Thus accused Nos.1 to 3 being the distributors and sellers would fall under the above clause not withstanding the fact that they possess licenses. In such a situation they are liable to be prosecuted for the offence in question.

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11. It may also be noted that sub-Section 1 and 3 of Section 19 of the Act which would be relevant here and read as follows.

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“19. Pleas:- (1) Save as hereinafter provided in this section, it shall be no defence in a prosecution under this Chapter to prove merely that the accused was ignorant of the nature, substance or quality of the drug 4[ or cosmetic] in respect of which the offence has been committed or of the circumstances of its manufacture or import, or that a purchaser, having bought only for the purpose of test or analysis, has not been prejudiced by the sale.

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[(3) A person, not being the manufacturer of a drug or cosmetic or his agent for the distribution thereof, shall not be liable for a contravention of section 18 if he proves—

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

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(b) 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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(c) that the drug or cosmetic, while in his possession, was properly stored and remained in the same state as when he acquired it.]

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12. A perusal of Section 19(1) would show that it specifically lays down that it shall be no defence in a prosecution for the offence under Section 18 to prove merely that the accused was ignorant of the nature, substance or quality of the drug in respect of which the offence has been committed. This provision which is very stringent, it is clear, has been deliberately designed by the Parliament to curb the trade in spurious drugs which is harmful to the society. Thus mere plea of the petitioners that they have licences to deal in drugs and therefore since they purchased the drug from accused Nos.4 and 5 who are also licence holders cannot be a ground for quashing the proceedings.

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13. It may however be noted that Section 19 (3) of the Act which is already extracted supra would show that a person who is not a manufacturer of a drug shall not be liable for the contravention of Section 18 if he proves that he acquired the drug from a duly licensed manufacturer, distributor or dealer and that he did not know and could not with reasonable diligence ascertain about the quality of the drug and that he properly stored the drug. Thus according to Section 19(1) and 19(3) it follows that once a dealer or retailer is found selling a spurious drug he is prima facie guilty of the offence but he can take the above defence and prove his innocence. The dealer or retailer can prove his innocence only by evidence and thus it becomes a disputed question of fact which has to be decided only in the trial as it is a matter of evidence.

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14. In fact a Division Bench of this Court was dealing with the same question in a quash petition in Veera Swamy v. Drug Inspector^[1] . The Division Bench answered the said question observing as follows.

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“Even when a person who is dealing with the drugs as distributor or dealer which is found to be spurious or substandard in terms of Section 18 of the Act, prima facie he is guilty, but in order to prove that he was innocent, he can take certain pleas which are available to him under Section 19 of the Act. One of the pleas available was that he had acquired the drug from a duly licensed manufacturer, distributor or dealer thereof. However, this is a matter of trial as to whether a dealer of a distributor had purchased the drug from a manufacturer and defences were available to him under Section 19(3) of the Act.”

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15. Thus the wording of Section 19(1) and Section 19(3) would show that the plea of the petitioners cannot be accepted in this quash petition as it is a matter of evidence. Sri T.Ramakoteswara Rao on the other hand placed reliance upon another Division Bench decision of this court given in P.Subba Rao v. State of A.P.^[2] which also dealt with various offences under the Act. In that case the Division Bench was not dealing with the defence of the accused in a quash petition but it arose out of dismissal of criminal appeals of the accused following his conviction and it considered the plea of the accused under Section 19(3) of the Act. Thus that was a matter which arose after trial was held. Hence that decision cannot help the petitioners.

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16. Sri T.Ramakoteswara Rao then relied upon another decision of this Court rendered by a Single Judge given in Crl.P.No.1798 of 2009 dated 15.7.2009 (Sri V.Chinna Kasi Rao v. State of A.P.). In this case no doubt the learned Single Judge quashed the proceedings against the retailer in a case relating to a spurious drug on the ground that he purchased the drug from the licensed dealer and therefore he cannot be attributed with the knowledge that he was dealing with a spurious drug. The learned Additional Public Prosecutor argued about the correctness of the said judgment in view of Section 19(3) of the Act which is already mentioned supra. It is not necessary to go into that aspect. It would be sufficient to note that in the above criminal petition the Division Bench

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decision of this Court in Veera Swamy’s case (1 supra) was not taken to the notice of the learned Single Judge.

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17. As this Court is bound by the Division Bench decision of this Court in Veera Swamy’s Court (1 supra) which is given after considering the language of Section 19(3) of the Act which is already extracted, it follows that the decision in Crl.P.No.1798 of 2009 dated 15.7.2009 cannot help the petitioner.

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18. Sri T.Ramakoteswara Rao then argued that since the Analyst report shows that the drug in question conforms to standard quality that is a good ground by itself for quashing the case. There is no force in this contention also, though the Analyst report shows that the drug is of standard quality according to the Act. It should be noted, as pointed out rightly by the Additional Public Prosecutor, Section 17B which speaks of spurious drugs does not say that a drug which is spurious ceases to be spurious if it conforms to the quality prescribed by the Act and Rules or the pharmacopoeia.

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19. Parliament has enacted Section 17B, Section 18 and Section 19 of the Act with a purpose of dealing stringently with those who deal in spurious drugs as manufacture of or trade in spurious drugs is dangerous to the society and therefore to prevent such activity in the interests of society. Having regard to the above object the relevant provisions in the Act dealing with spurious drugs cannot be whittled down merely because a spurious drug conforms to the quality. Thus the mere fact that the accused is a licence holder or the spurious drug dealt with by him conforms to the quality is no ground to quash the case against him having regard to the provisions of the Act. It is not necessary to elaborate on this aspect.

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20. To sum up, for the aforesaid reasons, it follows that the petitioners

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have to workout their remedies only in the trial court and this court cannot interfere in this matter under Section 482 Cr.P.C. Accordingly this petition is dismissed.

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_____________________ N. RAVISHANKAR, J

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December 2011 TJMR/CVRK

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[1] 2002 Crl.L.J.3218

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[2] 2009-ALD(Cri)-2-708

Gvml Prasada Rao, v. The State of A.P.

Case brief

What is this about?

What did the court decide?

Gvml Prasada Rao, v. The State of A.P.

Case brief

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