Chambers of Ishaan Garg
Ch. No. 217, Western Wing, District & Sessions Court, Tis Hazari, New Delhi, Delhi 110054
+91 8851742417, +91 8800386163
Setting aside the proceedings against two pharmaceutical companies accused of manufacturing and marketing substandard drugs the Jammu and Kashmir and Ladakh High Court has clarified that while the trial of offences under Chapter IV of the Drugs and Cosmetics Act must be conducted by a Court of Sessions, there is no bar on a Magistrate taking cognizance of such offences.
However, Justice Sanjay Dhar emphasised that the trial Magistrate failed to conduct a mandatory preliminary inquiry under Section 202 of the Criminal Procedure Code (CrPC) before issuing process against the accused, who reside outside its territorial jurisdiction.
Explaining the mandate of Sec 32 of the Act Justice Dhar observed,
“.. The expression used under subsection (2) of Section 32 is “try any offence”, meaning thereby that trial of the offence under Chapter IV of the Act could be held by a court inferior to the Court of Sessions. What is barred under Section 32(2) of the Act, is trial of the offences under Chapter IV of the Act and not taking of cognizance of such offences”
The case arose from a complaint filed by the Drug Control Officer, Anantnag, against M/S Nava Healthcare Pvt. Ltd and M/S Mancare Laboratories Pvt. Ltd, alleging that the drug "Tab Pantolid" manufactured by Mancare and marketed by Nava Healthcare did not meet the quality standards prescribed under the Indian Pharmacopoeia (IP).
Based on these reports, the Drug Control Officer filed a complaint against these companies and their directors, under Sections 18(a)(1), 18A, 27(d), and 28 of the Drugs and Cosmetics Act. The Chief Judicial Magistrate, Anantnag, took cognizance of the offences and issued process against the accused.
The petitioners, represented by Advocate Sikander Hayat Khan, challenged the complaint and the trial court's order on multiple grounds. He argued that the procedure under Section 23 of the Drugs and Cosmetics Act was not followed, and the test reports were unreliable as they did not conform to the rules framed under the Act. He also contended that the sample was not stored properly, away from moisture and sunlight, which could have compromised the test results.
The respondents, represented by Deputy Advocate General Syed Musaib, defended the complaint and the trial court's order, arguing that the petitioners were involved in the manufacture and marketing of the substandard drug and that the test reports were conclusive evidence of the violation.
The Court noted that while directors of a company cannot be prosecuted without specific allegations of their involvement in the company's conduct, the present petitions were filed by the companies themselves, not the directors.
“It is true that Director of a company cannot be roped in a prosecution against the company unless it is specifically pleaded that the said Director is incharge of and responsible for business of the company but in the instant case, the challenge to the impugned complaint has not been laid by the Directors”, the court remarked.
The Court found that there were specific allegations against the companies, with M/S Nava Healthcare being the marketer and M/S Mancare Laboratories being the manufacturer of the drug in question. Therefore, the challenge to the complaint by the companies was not tenable, the court underscored.
The Court observed that the test report from the Central Drugs Laboratory, Kolkata, complied with Rule 46 of the Drugs and Cosmetics Rules, as it referenced the IP 2018 standards and the specific tests conducted. However, the Court noted that the petitioners' contention regarding the storage of the sample could only be decided during the trial after cross-examination of the witnesses.
The Court clarified that while certain offences under the Drugs and Cosmetics Act are triable by a Court of Sessions, there is no bar on a Magistrate taking cognizance of such offences. The Court cited Section 32 of the Act, which only bars the trial of offences by a court inferior to the Sessions Court, not the taking of cognizance. The Magistrate can take cognizance and then commit the case to the Sessions Court for trial under Section 209 of the CrPC, the bench emphasised.
Emphasized that under Section 202(1) of the CrPC, a Magistrate is required to conduct a preliminary inquiry or direct an investigation before issuing process against an accused residing outside their territorial jurisdiction, the Court noted that in the present case, the trial court had failed to conduct such an inquiry, rendering the issuance of process against the petitioners unsustainable.
In light of these observations, the High Court allowed the petitions and set aside the trial court's order issuing process against the petitioners. The Court directed the trial court to conduct a preliminary inquiry under Section 202(1) of the CrPC and then proceed afresh in accordance with the law.
Case Title: M/S NAVA HEALTHCARE PVT. LTD M/S MANCARE LABORATORIES PVT. LTD Vs UT OF J&K
Citation: 2025 LiveLaw (JKL)
