C. B. Healthcare v. Union of India - Drug Prosecution

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C. B. Healthcare, Through Its ... vs Union Of India Through Drug Inspector ... on 24 March, 2026

Author: N.J.Jamadar

Bench: N.J.Jamadar

2026:BHC-AS:14013

                                                                                        cri wp 2777 of 2024.doc

                                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                        CRIMINAL APPELLATE JURISDICTION
                                          WRIT PETITION NO.2777 OF 2024

                   M/s. C.B.Healthcare and Ors.                         ...      Petitioners
                         versus
                   Union of India                                       ...        Respondent

                   Mr. Nitin Bhasin with Mr. Vishal N. Nevshe, for Petitioners.
                   Mr. Anilkumar Singh i/by Mr. D.P.Singh, for Respondent - Union of India.
                   Mr. K.C.Shinde, APP for State.

                                           CORAM:       N.J.JAMADAR, J.

                                           RESERVED ON           : 11 DECEMBER 2025
                                           PRONOUNCED ON         : 24 MARCH 2026

                   JUDGMENT : 1.        Rule. Rule made returnable forthwith, and, with the consent of the

                   learned Counsel for the parties, heard finally.

ARUN
RAMCHANDRA
SANKPAL

1.    By this Petition under [Article 227](https://indiankanoon.org/doc/1331149/) of the Constitution of India, the Digitally signed by ARUN RAMCHANDRA SANKPAL Date: 2026.03.24 21:29:55 +0530 Petitioners seek to quash and set aside criminal prosecution initiated against
   
                  the Petitioners in Special Case No.32 of 2021 before the Special Judge,
   
                  Dadra and Nagar Haveli, Silvasa, for an offence punishable under [Section
   
                  27(d)](https://indiankanoon.org/doc/78044864/) of the Drugs & Cosmetics Act, 1940 (the [Drugs Act, 1940](https://indiankanoon.org/doc/1891720/)).
   

2.    The background facts necessary for the determination of this Petition
   
                  can be summerized as under :
   

3.1 The Petitioner No.1 is a Partnership firm. It is engaged in

pharmaceutical manufacturing business. Petitioner Nos.2 to 5 are the SSP/ARS 1/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

partners of Petitioner No.1. The Petitioner No.1 manufactures drugs at Baddi,

District Solan, Himachal Pradesh. The Petitioner No.1 was holding a valid

licence to manufacture FEXINOL-12 - Fexofenadine Hydrochloride Tablets IP.

3.2 Respondent-complainant is a Drugs Inspector appointed under the Drugs Act, 1940. Respondent claimed that, on 29 November 2016, he had

visited and inspected the premises of Vinoba Bhave Civil Hospital's Central

Medical Store at Silvasa, and, drawn a sample of FEXINOL-12, Batch

No.CBT-400/16, manufactured by the Petitioner No.1. The said sample was

purportedly drawn for the purpose of test and analysis by issuing Form No.17.
On 30 November 2016, one portion of the sealed sample was allegedly sent

by the Respondent to Government Analyst, Central Drugs Testing Laboratory,

Mumbai, in Form No.18. The Respondent allegedly received a report in

Form No.13 dated 6 July 2017 from the Government Analyst, opining that the

sample was 'not of standard quality'.

3.3 Thereupon, Respondent issued a show cause notice along with one

sealed portion of the sample, to the Central Medical Store, Civil Hospital,

Silvasa, directing the store to stop usage / distribution and to disclose the

name / address of the firm/ person from whom the said drug was obtained.

3.4 Eventually, the distribution chain of the subject drug was traced back to

Petitioner No.1. A joint investigation was carried out by the Deputy Drugs

Controller (I), CDSCO, Baddi Zone, alongwith State FDI Officials. A joint SSP/ARS 2/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

investigation report dated 4 September 2017 was prepared. Thereafter, on 6

November 2019 sanction to initiate prosecution against the Petitioners was

obtained from the Drugs Controller General of India.

3.5 Armed with the said sanction, the Respondent filed a complaint before

the Special Judge at Silvasa on 28 September 2021. By an order dated 28

September 2021, the learned Special Judge, Dadra and Nagar Haveli,

Silvasa, was persuaded to issue process against the Petitioners for an

offence punishable under Section 27(d) of the Drugs Act, 1940.

1. The Petitioners have assailed the prosecution by raising a slew of

exceptions. Firstly, in clear violation of Rule 45 of the Drugs Rules, 1945,

there was an inordinate and unexplained delay in testing the samples.

Secondly, there was non-compliance of the mandate contained in [Section

23(4)(ii)](https://indiankanoon.org/doc/246919/) of the Drugs Act, 1940, as the Respondent failed to send one portion

of the sealed sample to the Petitioner No.1. Thirdly, on account of the breach

of the provisions contained in Sections 23 and 25 of the Drugs Act, 1940, an

invaluable right of the Petitioner No.1 to have the retesting of the sample was

lost. Fourthly, the impugned order of issuance of process suffers from the

non-application of mind, as the learned Special Judge has issued the process

in a mechanical manner. Fifthly, in any event, the complaint is conspicuously

silent about the specific role of Petitioner Nos.2 to 5 and on the basis of bald

assertions in the complaint, they could not have been roped in by invoking the SSP/ARS 3/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

provisions contained in Section 34 of the Drugs Act, 1940. Sixthly, the

learned Special Judge could have not taken cognizance of the offence directly

in view of the interdict contained in Section 193 of the Code of Criminal

Procedure, 1973. Lastly, it was contended that, the Respondent No.1 being a

Drug Inspector appointed by the Central Government had no authority to

initiate action in view of the jurisdictional limits of the Central Drugs Inspector

under the Drugs Act, 1940, and the Drugs Rules, 1945.

1. The Respondent has resisted the Petition by filing an affidavit in reply.

Each of the contentions on behalf of the Petitioners were sought to be met

point by point. In substance, Respondent has asserted that, there was

neither any jurisdictional transgression nor procedural infraction on the part of

the Respondent in initiating action against the Petitioners.

1. On the aspect of the alleged delay in testing the sample, it was

contended that, since the reference standard and the impurity standard

required to test the sample were not readily available, some time was

consumed in procuring the reference and impurity standard, and, thereafter,

testing the sample.

1. In regard to the alleged non-compliance with the provisions contained

in Section 23(4)(iii) and the loss of right of retesting of the sample, the

Respondent contended that the Petitioners did not avail the opportunity,

despite service of notice under Section 18A, on 26 December 2017. The SSP/ARS 4/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

Petitioners did not intimate that, they intended to adduce evidence in

controversion of the report of the Government analyst within a period of 28

days of the receipt of copy of the report. Thus, it was not open for the

Petitioners to now urge that their right of retesting was lost. The delay in filing

the complaint was also sought to be accounted for by ascribing reasons.

1. In the light of the aforesaid pleadings and the material on record, I have

heard Mr. Bhasin, learned Counsel for the Petitioners, and Mr. D.P.Singh,

learned Special Counsel for the Respondent, at some length. Learned

Counsel took the Court through the material on record.

1. The Petitioners seek quashment of the prosecution by raising multi-fold

grounds, as enumerated above. Those grounds can be broadly classified in

two parts. First, the infraction of the procedural requirements under the [Drugs

Act, 1940](https://indiankanoon.org/doc/1891720/) and the Drugs Rules, 1945, by the Respondent and the other

authorities under the Drugs Act, 1940. Second, the alleged infirmities in the

prosecution, post the stage of the sanction for initiation of the prosecution,

comprising of the lack of adequate averments in the complaint to rope in

Petitioner Nos.2 to 5, the alleged non-application of mind by the learned

Special Judge in issuing the process, and, in taking the cognizance of the

offence directly without the case having been committed to the Special Court.

1. In the context of the challenge, this Court considers it appropriate to

first deal with the grounds premised on the alleged non-compliance of the SSP/ARS 5/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

provisions contained in the Drugs Act, 1940 and the Drugs Rules, 1945, as

that constitutes the substratum of the challenge.

1. To start with the ground of delay in testing the sample, forcefully

canvassed by Mr. Bhasin. On facts, there does not seem much controversy.

The inspection was conducted and the sample was drawn on 29 November

1. One portion of the sample was sent to the CDTL, Mumbai on 30

November 2016. Government Analyst, CDTL, issued a report of analysis in

Form No.13 on 5 July 2017, opining that the sample was 'not of standard

quality'. In the light of these facts, the aspect of consequences of delay in

testing the sample deserves to be appreciated.

1. The Drugs Act, 1940 regulates the import, manufacture, distribution and

sale of the drugs and cosmetics. Chapter IV of the Drugs Act, 1940 contains

a fasciculus of the provisions under the caption 'Manufacture, Sale and

Distribution of Drugs and Cosmetics'. Section 18 of the Drugs Act, 1940

prohibits the manufacture for sale or for distribution or sale or stock or exhibit

or offer for sale or distribute any drug which is not of a standard quality or is

misbranded, adulterated or spurious. Section 21 provides for appointment of

Inspector. Section 23 confers powers on the Inspector, inter alia, to inspect

any premises and take samples of any drugs or cosmetics. The procedure of

Inspectors is regulated by Section 23. Section 25 deals with the analysis of

the sample by the government analyst and the evidentiary value of the reports SSP/ARS 6/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

of the government analyst.

1. Section 27 prescribes penalty for manufacture, sale etc., of the drugs in

contravention of the provisions of Chapter IV. Section 32 of the Drugs Act,

1940 contains provisions in regard to the cognizance of the offences. Sub-

section (2) of Section 32 declares that, save as otherwise provided in the said

Act, no Court inferior to that of a Court of Session shall try an offence

punishable under the said Chapter. Section 33 of the Act, 1940 empowers

the Central Government to make rules for the purpose of giving effect to the

provisions of the said Chapter.

1. In exercise of the powers conferred under Sections 6(2), 12, 33 and 33N of the Drugs Act, 1940, the Central Government has framed Drugs

Rules, 1945. Part V of the said Rules deals with the Government Analysis,

Inspectors, licensing authorities and Controlling Authorities. Rule 45 of the

Drugs Rules, 1945, with which we are primarily concerned, reads as under :

"Duties of Government Analysts
(1) The Government Analyst shall cause to be analysed
or tested such samples of drugs as may be sent to him by
Inspectors or other persons under the provisions of Chapter IV of
the Act and shall furnish reports of the results of test or analysis in
accordance with these Rules within a period of sixty days of the
receipt of the sample :

Provided that where it is not possible to test or
analyse the sample within the specified period, the Government
Analyst shall seek extension of time from the Government giving SSP/ARS 7/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

specific reasons for delay in such testing or analysis.

(2) A Government Analyst shall from time to time forward
to the Government reports giving the result of analytical work and
research with a view to their publication at the discretion of
Government."
15. Under Rule 45, a duty is cast on the Government Analyst to analyse or

cause to be analysed or tested the sample of the drugs and furnish report of

the result of the test or analysis in accordance with the said rules, within a

period of 60 days of the receipt of the sample. The imperativeness of this

duty to analyse or test the samples and furnish report within the stipulated

period is underscored by employing the word 'shall' in the first and second

part of sub-rule (1) of Rule 45. Government Analyst is, thus, enjoined to test

the sample and also furnish report within the stipulated period. On a plain

textual interpretation, time for testing and furnishing the report also appears

peremptory and the only outlet that is available for not adhering to the time-

line is the action as envisaged by the proviso to sub-rule (1). The rule

making authority was, alive to the fact that, in a given case, it may not be

possible to test or analyse the sample within the specified period and, thus,

an outlet was provided to the Government Analyst to seek extension of time

from the Government, giving specific reasons for such testing and analysis.

Again, the mandatory nature of the time limit is emphasisd by employing the

phrase 'shall seek an extension of time', in the proviso to sub-rule (1) of Rule SSP/ARS 8/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

45.

1. The object behind prescribing the time limit for the testing and

furnishing the report of analysis is not far to seek. Delay beyond the specified

period has the propensity to render the report of analysis suspect as the

properties of the drugs may be lost due to the lapse of time rendering the

report unworthy of credence.

1. In the aforesaid context, Mr. Bhasin would submit that, there was a

clear contravention of the provisions of Rule 45, as the report of analysis was

furnished after seven months from the date of receipt of sample. Reliance

was placed on the judgments of this Court in the cases of M/s. Quixotic

Healthcare and Ors. V/s. State of Maharashtra and Ors. 1 and Swapnil and

Ors. V/s. State of Maharashtra2.

1. In the case of M/s. Quixotic Healthcare (supra), a learned Single

Judge of this Court enunciated that, when the sample was tested after the

expiry period, the result is bound to be 'not of standard quality'. There was no

explanation by the laboratory about the delay in testing. Such report cannot

be considered at all. Benefit of such lapse on the part of the laboratory

should be given to the accused.

1. In the case of Swapnil and Ors. (supra), another learned Single Judge

of this Court, after noting the provisions of Rule 45, in the context of the

1 2020 ALL Mr (Cri.) 1880
2 2024 SCC Online Bom 2074 SSP/ARS 9/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

analysis of the sample after one year of its receipt, observed that the analysis

of the sample within a period of 60 days was necessary to ensure the

standard of quality for the purpose of the analysis and an accurate report. The

delay in analysis of the sample violates the right of the accused to get the

sample retested.

1. In opposition to this, Mr. Singh, banking upon the contentions in the

affidavit in reply, sought to explain the delay by asserting that the sample

could not be tested as the reference standard and impurity standard of the

subject drugs were not readily available. Mr. Singh made an endeavour to

salvage the position by canvassing a submission that, in the case of M/s.

Quixotic Healthcare (supra), the sample was analysed after the expiry of the

drugs in question, and that is not the case at hand.

1. I am afraid to accede to this submission. As noted above, the

provisions contained in Rule 45 of the Rules, 1945, are peremptory in nature.

A host of factors come into play, where there is an inordinate delay in testing

sample far beyond the specified period. The properties of the drugs may be

lost. The sample may not be stored in a DTL in the standard condition in

which the particular drug is required to be stored. Delayed analysis of the

sample thus erodes the sanctity of the analysis. It is for this reason, a time

frame has been stipulated for the testing. Had there been such difficulty in the

analysis of the sample, as propounded by the Respondent, the Government SSP/ARS 10/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

Analyst could have resorted to the proviso and sought extension of time. In

the absence thereof, the explanation sought to be offered by the Respondent

by way of an affidavit, is of no avail. The explanation for the delay, if at all

there was any, should have come from the Government Analyst and that too

in the manner envisaged by the proviso to Rule 45(1) and not by way of an

affidavit of the Respondent. Any other interpretation would render the

peremptory nature of sub-Rule (1) and the proviso thereto otiose. Thus, this

Court finds substance in the submissions on behalf of the Petitioners that the

delayed testing of the sample dents the prosecution.

1. This propels me to the non-compliance of the procedure mandated by Section 23 of the Drugs Act, 1940. The provisions of sub-section (3) of Section 23 are of relevance in the determination of the challenge mounted on

behalf of the Petitioners. They read as under :

"23. Procedure of Inspectors
.........

(3) Where an Inspector takes a sample of a drug or
cosmetic for the purpose of test of analysis, he shall intimate such
purpose in writing in the prescribed form to the person from whom
he takes it and, in the presence of such person unless he wilfully
absents himself, shall divide the sample into four portions and
effectively seal and suitably mark the same and permit such
person to add his own seal and mark to all or any of the portions
so sealed and marked:

Provided that where the sample is taken from premises SSP/ARS 11/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

whereon the drug or cosmetic is being manufactured, it shall be
necessary to divide the sample into three portions only :

Provided further that where the drug or cosmetic is made up
in containers of small volume, instead of dividing a sample as
aforesaid, the Inspector may, and if the drug or cosmetic be such
that it is likely to deteriorate or be otherwise damaged by exposure
shall, take three or four, as the case may be, of the said containers
after suitably marking the same and, where necessary, sealing
them.

(4) The Inspector shall restore one portion of a sample so
divided or one container, as the case may be, to the person from
whom he takes it, and shall retain the remainder and dispose of
the same as follows: -

(i) one portion or container he shall forthwith send to the
Government Analyst for test or analysis;

(ii) the second he shall produce to the court before
which proceedings, if any, are instituted in respect of the drug or
cosmetic; and

(iii) the third, where taken, he shall send to the person, if
any, whose name, address and other particulars have been
disclosed under section 18A "
23. Sub-section (3) of Section 23 obligates the Inspector who has collected

sample for the purpose of testing or analysis to divide sample into four

portions and effectively seal and suitably mark the same. However, where the

sample is taken from the place of manufacturer, sample shall be divided into

three portions only. Under sub-section (4) of Section 23, the Inspector is

enjoined to restore one portion of the sample to the person from whom he SSP/ARS 12/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

takes it, send the second to Government Analyst for test and analysis and

produce the third before the Court and send the fourth to the person, if any,

whose name, address and other particulars have been disclosed under section 18A.

1. It would be contextually relevant to note that, under Section 18A, a duty

is cast on every person, not being the manufacturer of a drug or cosmetic or

his agent for the distribution thereof, if so required, to disclose to the Inspector

the name, address and other particulars of the person from whom he acquired

the drug or cosmetic.

1. The aforesaid obligation to send a portion of the sample is of material

significance in the context of the right of the person whose name, address

and other particulars have been disclosed under Section 18A, to notify in

writing the Inspector or the Court that he intends to adduce evidence in

controversion of the report.

1. In the case at hand, the material on record unmistakably indicates that

the portion of the sample was not sent to the Petitioner No.1 - Manufacturer.

From the perusal of the Notice under Section 18A of the Act, 1940, it becomes

abundantly clear that the notice was addressed to M/s. Knoll Healthcare Pvt.

Ltd., being the authorized supplier for the distribution or sale of the subject

drug. A copy of the said notice was indeed marked to the Petitioner No.1 -

M/s. C.B.Healthcare.

SSP/ARS 13/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 :::

cri wp 2777 of 2024.doc

1. In response to the said notice, on 15 January 2018, the Petitioner No.1

called upon the Inspector to forward a sample portion to the Petitioner No.1.

That request was not acceded to. It is not the case that the Drug Inspector

was not aware of the manufacturer of the subject drug. Receipt for sample of

drug under Form No.17A and the intimation to person from whom the sample

was taken, clearly records that M/s. C.B.Healthcare - Petitioner No.1 was the

manufacturer of the subject drug.

1. In the backdrop of aforesaid facts, the question that comes to the fore

is, whether he service of notice on M/s Knoll Healthcare Pvt Ltd, the

distributor alongwith the report of Government Analyst and a portion of the

sample constitutes sufficient compliance of the mandate contained in [Section

23(4)(iii)](https://indiankanoon.org/doc/167229910/) of the Drugs Act, 1940?

1. Mr. Singh asserted that, the Petitioner No.1 was not entitled to seek

reanalysis of the sample, as the Petitioner had not notified the Inspector or

Court that it intended to adduce evidence in controvention of the report. It

was submitted that, in view of the provisions contained in sub-section (3) of Section 25 of the Drugs Act, 1940, a report signed by the Government

Analysts is the conclusive evidence of the facts stated therein, in the absence

of the action as envisaged by sub-section (3). The aforesaid submission, as a

matter of principle of law, cannot be controverted. If a notice is served on the

person whose name is disclosed under Section 18A of the Drugs Act, 1940 SSP/ARS 14/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

and there is a default on the part of such person to notify the Inspector or

Court about his intention to adduce evidence in controversion of the report,

the consequences, as adverted to by Mr. Singh, will entail.

1. In the case of State of Harayana V/s. Brij Lal Mittal and Ors. 3, the

Supreme Court enunciated that, unless the requirement of sub-section (3) of Section 25 is complied with by the concerned person, he cannot avail of his

right under sub-section (4). The observations in paragraph No.5 of the said

judgment, read as under :

"5. From a bare perusal of sub-section (3) it is manifest that the
report of the Government Analyst shall be evidence of the facts
stated therein and such evidence shall be conclusive unless the
person from whom the sample was taken or the person whose
name, address or other particulars have been disclosed under Section 18A (in this case the manufacturers0 has within 28 days of
the receipt of the report notified in writing the Inspector or the Court
before which any proceedings in respect of the sample are pending
that he intends to adduce evidence in controversion of the report.
Sub-section (4) also makes it abundantly clear that the right to get
the sample tested by the Central Government Laboratory (so as to
make its report override the report of the Analyst) through the court
accrues to a person accused in the case only if he had earlier
notified in accordance with sub-section (3) his intention of adducing
evidence in controversion of the report of the Government Analyst.
To put it differently, unless requirement of sub-section (3) is
complied with by the person concerned he cannot avail of his right
under sub-section (4)."
3 (1998) 5 SCC 343 SSP/ARS 15/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

                                               (emphasis supplied)

1. In the case of [Amery Pharmaceuticals And Anr Vs State of

Rajasthan,4](https://indiankanoon.org/doc/1542849/) the Supreme Court, considered the challenge based on non-

compliance with provisions contained in Section 23(4)(iii) of the Drugs Act,

1940, on the premise that the Inspector did not deliver one portion of sample

to the manufacturer-Appellants therein. After considering the provisions of Section 25(2), (3) and (4), Section 23(4) and Section 18A of the Drugs Act,

1940, the Supreme Court held that the obligation of the Inspector is to give

one portion of the sample to the person whose name, etc, have been

disclosed as the person from whom the vendor acquired the drug. The

requirement of the provision would stand complied with when the Inspector

gives one portion of the sample to the person from whom he took the sample,

and forward the second portion to the Government Analyst and the third

portion to the Court (before which the prosecution is pending) and fourth

portion to the person whose name and address, etc, were disclosed by the

vendor. In a case where the drug or medicine has passed from the

manufacturer to wholesaler (a distributor) and then to a retailer, the obligation

of the Inspector (who takes the sample from a retailer) as for giving portions

of the sample would end up by giving it to the retailer and also to the

distributor (from whom the retailer bought the drug).

4 AIR 2001 SC 1303 SSP/ARS 16/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

1. Dealing with the submission on behalf of the manufacturer that, since a

manufacturer is not entitled to get a copy of the report of the Government

Analyst as of right (when the sample was taken from a retailer) the

manufacturer would be disabled from challenging the correctness of the facts

stated in the report and such deprivation would visit him with hard

consequences as the facts stated in the report would become conclusive

evidence against him and such procedure would be unfair and unreasonable

besides being oppressive and in violation of Article 21 of the Constitution, the

Supreme Court resorted to an interpretation of the statutory provisions that

would avert the consequences of depriving an accused of any remedy against

such evidence in the following words.

"25. In our view the court should lean to an interpretation as would
avert the consequences of depriving an accused of any remedy
against such evidence. He must have the right to disprove or
controvert the facts stated in such a document at least at the first tier. It
is possible to interpret the provisions in such a way as to make a
remedy available to him. When so interpreted the position is thus: The
conclusiveness meant in Section 25(3) of the Act need be read in
juxtaposition with the persons referred to in the sub-section. In other
words, if any of the persons who receives a copy of the report of the
Government Analyst fails to notify his intention to adduce evidence in
controversion of the facts stated in the report within a period of 28 days
of the receipt of the report, then such report of the Government Analyst
could become conclusive evidence regarding the facts stated therein
as against such persons. But as for an accused, like the manufacturer SSP/ARS 17/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

in the present case, who is not entitled to be supplied with a copy of
the report of the Government Analyst, he must have the liberty to
challenge the correctness of the facts stated in the report by resorting
to any other modes by which such facts can be disproved. He can also
avail himself of the remedy indicated in sub-section (4) of Section 25 of
the Act by requesting the court to send the other portion of the sample
remaining in the court to be tested at the Central Drugs Laboratory. Of
course, no court is under a compulsion to cause the said sample to be
so tested if the request is made after a long delay. It is for that purpose
that a discretion has been conferred on the court to decide whether
such sample should be sent to the Central Drugs Laboratory on the
strength of such request. However, once the sample is tested at the
Central Drugs Laboratory and a report as envisaged in Section 25(4) of the Act is produced in court the conclusiveness mentioned in that
sub-section would become incontrovertible."
(emphasis supplied)

1. In the facts of the case at hand, even if the Court were to proceed on

the premise that Petitioner No.1, having not resorted to the mechanism of

notifying in writing, the Drug Inspector or the Court that Petitioner No.1

intends to adduce evidence in controversion of the Report, discounting the

fact that the Report of the Government Analyst was not served on Petitioner

No.1, yet, an inference becomes inescapable that Petitioner No.1's remedy to

have the sample of the drug re-tested was lost by sheer delay on the part of

the Respondent in lodging the complaint.

1. The concomitant factors indicate that the right of the Petitioner No.1 to SSP/ARS 18/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

have the sample retested, seems to have been defeated by the delay and

inaction on the part of the Respondent. The subject drug was manufactured in

the year September 2016. The date of expiry was August 2018. The

complaint was lodged by the Respondent on 28 September 2021. By that

time, a period of over three years has elapsed even from the date of expiry of

the subject drug. The Petitioners could not have exercised the right to have

the drug retested, even if the Petitioners wanted to, by requesting the Court to

send the portion of the sample delivered to the Court by the Inspector. By the

time, the complaint was lodged and the cognizance of the offence was taken,

the subject drug had lost shelf life, nay three years ago. Thus, the Court

could not have sent the sample for re-analysis by the Central Laboratory.

1. Reliance placed by Mr. Bhasin on the judgment in the case of Laborate

Pharmaceuticals India Ltd. and Ors. V/s. State of Tamil Nadu 5 appears to

be well founded. In the said case also, one part of the sample was not sent to

the Appellant - Manufacturer and, instead, what was sent was only the report

of the Government Analyst. In the backdrop of such facts, the Supreme Court

enunciated that, when the part of the sample was not sent to the

manufacturer, the manufacturer could not have got the same analysed even if

it wanted to do so and, therefore, it was not in a position to contest the

findings of the Government Analyst.

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1. In the case of Laborate Pharmaceuticals India Ltd. (supra), the

Supreme Court quashed the prosecution observing that the prosecution if

allowed to continue would be a lame prosecution. The observations of the

Supreme Court in paragraph No.8 read as under :

"8. All the aforesaid facts would go to show that the valuable
right of the appellant to have the sample analysed in the Central
Laboratory has been denied by a series of defaults committed by
the prosecution; firstly in not sending to the appellant manufacturer
part of the sample as required under Section 23(4) (iii) of the Act;
and secondly, on the part of the court in taking cognizance of the
complaint on 4 March 2015 though the same was filed on 28
November 2012. the delay on both counts is not attributable to the
appellants and, therefore, the consequences thereof cannot work
adversely to the interest of the appellants. As the valuable right of
the accused for reanalysis vested under the Act appears to have
been violated and having regard to the possible shelf life of the
drug we are of the view that as on date the prosecution, if allowed
to continue, would be a lame prosecution."
(emphasis supplied)

1. A profitable reference can also be made to the judgment of the

Supreme Court in the case of Medipol Pharmaceutical India Pvt. Ltd. V/s.

Post Graduate Institute of Medical Eduation and Research and Anr. 6,

wherein in the context of the provisions contained in the Drugs Act, 1940, as

well as Prevention of Food Adulteration Act, 1954 and the Insecticides Act,

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1968, and after adverting to its previous decisions in relation to the pari

materia provisions, the Supreme Court expounded the purpose behind the

insistence on the timely testing of the sample as the valuable right of the

accused hinges upon the same. The observations in paragraph No.13 read

as under :

"13. Though the aforesaid judgments pertain to criminal
prosecutions under the Drugs and Cosmetics Act, Prevention of
Food Adulteration Act and Insecticides Act, yet, they lay down that
a valuable right is granted to a person who is sought to be
penalized under these Acts to have a sample tested by the
Government Analyst that is found against such person, to be
tested by a superior or appellate authority, namely, the Central
Drugs Laboratory. These judgments lay down that if owing to delay
which is predominantly attributable to the State or any of its
entities, owing to which an article which deteriorates with time is
tested as not containing the requisite standard, any prosecution or
penalty inflictable by virtue of such sample being tested, cannot
then be sustained. We have seen that on the facts of this case, the
sample drawn and analyzed by the Government Analyst was
delayed for a considerable period resulting in the sample being
drawn towards the end of its shelf life. Even insofar as the
samples sent to the Central Drugs Laboratory, there was a
considerable delay which resulted in the sample being sent and
tested 8 months beyond the shelf life of the product in this case. It
is thus clear that the valuable right granted by Section 25 of the
Drugs and Cosmetics Act kicks in on the facts of this case, which
would necessarily render any penalty based upon the said
analysis of the sample as void.
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1. In conclusion, by the time the prosecution came to be initiated, the shelf

life of the subject drug was over long back. Cumulatively, an invaluable right

of the Petitioner No.1 to have the sample retested was defeated by a series of

failures and inactions on the part of the Respondent. Resultantly, I am

persuaded to hold that the continuation of the prosecution in the face of the

aforesaid insurmountable infirmities would be an abuse of the process of the

Court.

1. This takes me to the ground of challenge to the prosecution premised

on the alleged procedural irregularities in the prosecution proceeding and

non-application of mind by the learned Special Judge while issuing the

process. Since this Court has come to the conclusion that there are grave

procedural infirmities on the part of the Respondent on account of the non-

compliance of the provisions of the Drugs Act, 1940 and the Drugs Rules,

1945, an elaborate consideration of the challenges on all these counts does

not seem warranted. Two major points deserve brief consideration. First, the

justifiability of the action of the learned Sessions Judge, to take the

cognizance of the offence, directly. Second, the invocation of the principle of

vicarious liability qua the Petitioner Nos. 2 to 6.

1. In regard to the action of the learned Special Judge of taking

cognizance of the offence directly, there appears substance in the submission

of Mr. Bhasin.
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1. Section 32 of the Drugs Act, 1940 provides for cognizance of offences.

Sub-Section (2) of Section 32 provides that, save as otherwise provided in

that Act, no court inferior to that of a Court of Session shall try an offence

punishable under Chapter IV. Section 193 of the Code of Criminal Procedure,

1973, contains an interdict against the Court of Sessions taking cognizance of

any offence as Court of original jurisdiction unless the case has been

committed to it by a Magistrate under the Code, except as otherwise

expressly provided by that Code or by any other law for the time being force.

Evidently, though sub-Section (2) of Section 32 begins with an inbuilt saving

clause in the form of expression, "save as otherwise provided in this Act" yet,

there is no provision in the Drugs Act 1940 which expressly provides for the

Court of Session taking the cognizance of the offence punishable under the

said Act directly. Nor Section 32(2) contains the usual expression,

"notwithstanding anything contained in the Code of Criminal Procedure,

1973", employed by the legislature where the Court of Session is empowered

to take cognizance of the offences under the special enactments, without the

case having been committed to it by a Magistrate.

1. What sub-Section (2) of Section 32 essentially provides is that, the trial

of an offence under Chapter IV of the Drugs Act 1940 shall be before a Court

not inferior to that of the Court of Session. The necessary corollary flowing

from Section 4 of the Code, is that the rest of the provisions in the Code in SSP/ARS 23/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

regard to taking of the cognizance of the offence, inclusive of the interdict

contained in Section 193 of the Code against the Court of Session taking

cognizance of the offence directly, are clearly attracted.

1. Mr. Singh, the learned Special Counsel for the Respondent, attempted

to wriggle out of the situation by canvassing a submission that the

Administrator of the U.T. of Damand and Diu And Dadra and Nagar Haveli,

has published Notification to designate the "Principal District Judge", Daman

and Diu and Dadra and Nagar Haveli at Silvassa as Special Court and

empowered him to try the case under the Drugs Act, 1940 and the [Code of

Criminal Procedure](https://indiankanoon.org/doc/445276/), 1973, for the area of UT of Daman And Diu And Dadra

And Nagar Haveli. The said Notification, according to Mr. Singh, constitutes

the saving envisaged by the expression, "save as otherwise provided"
contained in sub-Section (2) of Section 32.

1. I find it difficult to accede to the aforesaid submission. I have perused

the said Notification dated 17th June 2010. It is issued under Section 36AB(1) of the Drugs Act 1940 which came to be inserted by Act No. 26 of 2008, to

provide for designation of one or more Special Courts for trial of offence

relating to adulterated drugs or spurious drugs and punishable under clauses

(a) and (b) of Section 13, sub-Section (3) of Section 22, clauses (a) and (c) of Section 27, Section 28, Section 28A, Section 28B and clause (b) of sub-

Section (1) of Section 30 and other offences relating to adulterated drugs or SSP/ARS 24/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

spurious drugs.

1. In the case at hand, the complaint is lodged for the commission of an

offence punishable under Section 27(d) of the Drugs Act, 1940. Secondly, the

said Notification even if the submission on behalf of the Respondent is taken

at par, would not empower the Court of Session to directly take the

cognizance of the offence as there is no provision in the Drugs Act, 1940 which provides for taking of cognizance of offence by the Court of Session

directly.

1. A useful reference in this context can be made to the judgment of the

Supreme Court in the case of Union of India V/s. Ashok Kumar sharma

and Ors.7, wherein the Supreme Court expounded the law, as under :

"49. Section 32 of the Act undoubtedly provides for taking
cognizance of the offence by the court only at the instance of the
four categories mentioned therein. They are: (a) Inspector under the
Act; (b) Any Gazetted Officer empowered by the Central or the State
Government; (c) Aggrieved person; and (d) Voluntary Association. It
is clear that the Legislature has not included the Police Officer as a
person who can move the court. Before the matter reaches the
court, under Section 190 of the CrPC, ordinarily starting with the
lodging of the first information report leading to the registration of the
first information report, investigation is carried out culminating in a
report under Section 173. The Police Report, in fact, is the Report
submitted under Section 173 of the CrPC to the court. Under Section 190 of the CrPC, the court may take cognizance on the

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basis of the police report. Such a procedure is alien to Section 32 of
the Act. In other words, it is not open to the Police Officer to submit
a report under Section 173 of the CrPC in regard to an offence
under Chapter IV of the Act under Section 32. In regard to offences
contemplated under Section 32(3), the Police Officer may have
power as per the concerned provisions. Being a special enactment,
the manner of dealing with the offences under the Act, would be
governed by the provisions of the Act. It is to be noted that Section
32 declares that no court inferior to the Court of Sessions shall try
offence punishable under Chapter IV. We have noticed that under Section 193 of the CrPC, no Court of Sessions can take cognizance
of any offence as a Court of Original Jurisdiction unless the case
has been committed to it by a Magistrate under the CrPC. This is,
undoubtedly, subject to the law providing expressly that that Court of
Sessions may take cognizance of any offence as the Court of
Original Jurisdiction. There is no provision in the Act which expressly
authorises the special court which is the Court of Sessions to take
cognizance of the offence under Chapter IV. This means that the
provisions of Chapters XV and XVI of the CrPC must be followed in
regard to even offences falling under Chapter IV of the Act. Starting
with Section 200 of the Act dealing with taking of cognizance by a
Magistrate on a complaint, including examination of the witnesses
produced by the complainant, the dismissal of an unworthy
complaint under Section 203 and following the procedure under
Section 202 in the case of postponement of issue of process are all
steps to be followed. It is true that when the complaint under Section
32 is filed either by the Inspector or by the Authorised Gazetted
Officer being public servants under Section 200, the Magistrate is
exempted from examining the complainant and witnesses."
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1. Section 34(1) of the Drugs Act, 1940 provides that where an offence

has been committed by a company, every person who at the time of 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.

1. By a catena of decisions especially under the provisions of Section 141 of the NI Act, 1881, the provisions of which are pari materia Section 34 of the

Drugs Act, 1940, it has been held that there is no universal rule that a director

of a company was responsible for its every day affairs. It was necessary to

aver as to how the director of the company was in charge of the day to day

affairs of the company or responsible to affairs of the company. Of course, the

position of the managing director or a joint managing director is materially

distinct. By virtue of the office a managing director or joint managing director

holds, he is supposed to be in charge of the affairs of the company and

responsible for the conduct of the business of the company.

1. In the case of Brij Lal Mittal (Supra), with reference to the provisions

of Section 34 (as it then stood), the Supreme Court observed as under:

"8. .........

It is thus seen that the vicarious liability of a person for being
prosecuted for an offence committed under the Act by a
company arises if at the material time he was in-charge of and SSP/ARS 27/30::: Uploaded on - 24/03/2026 ::: Downloaded on - 25/03/2026 20:53:19 ::: cri wp 2777 of 2024.doc

was also responsible to the company for the conduct of its
business. Simply because a person is a director of the company
it does not necessarily mean that he fulfills both the above
requirements so as to make him liable. Conversely, without being
a director a person can be in- charge of and responsible to the
company for the conduct of its business. From the complaint in
question we, however, find that except a bald statement that the
respondents were directors of the manufacturers, there is no
other allegation to indicate, even prima facie, that they were in-
charge of the company and also responsible to the company for
the conduct of its business.

1. In Municipal Corporation of Delhi Vs Ram Kishan Rohtagi ((1983) 1 SCC 1) while dealing with the applicability of Section 17(1) of the Prevention of the Food Adulteration Act, 1954, which is in pari materia with Section 34(1) of the Act, on similar facts, this Court observed as under:

"15. So far as the Manager is concerned, we are satisfied that
from the very nature of his duties it can be safely inferred that he
would undoubtedly be vicariously liable for the offence, Various
liability being and incident of an offence under the Act. So far as
the Directors are concerned, there is not even a whisper not a
shred of evidence nor anything to show, apart from the
presumption drawn by the complainant, that there is any act
committed by the Directors from which a reasonable inference
can be drawn that they could also be vicariously liable. In these
circumstances, therefore, we find ourselves in complete
agreement with the argument of the High Court that no case
against the Directors (Accused Nos. 4 to 7) has been made out
ex facie on the allegations made in the complaint and the
proceedings against them were rightly quashed."
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1. In Lalankumar Singh and Ors Vs State of Maharashtra, 8 after

adverting to the decision in the aforesaid case of Brij Lal Mittal (Supra) and

the decisions rendered in the context of the provisions contained in [Section

141](https://indiankanoon.org/doc/686130/) of the Negotiable Instruments Act, 1881, the Supreme Court enunciated

that merely reproducing the words of the section without a clear statement of

fact as to how and in what manner a director of the company was responsible

for the conduct of the business of the company, would not ipso facto make the

director vicariously liable.

1. In regard to the invocation of the vicarious liability of Petitioner Nos. 2 to

6 under Section 34, in the complaint, the allegation qua Petitioner Nos. 2 to 6

is that, they were directors of M/s. C.B.Healthcare (P1) and at the time of the

manufacturing of drug in question were responsible to day to day activities of

the business of the firm and release for distribution of the said drug batch

number. In paragraph 19 of the complaint, it is further urged that Accused

Nos. 2 to 6 (P2 to P6) did manufacture the subject drug for sale and

distribution and sold, "not of standard quality" drug and they were in charge of

and responsible to the conduct of the business at the premises of Accused

No.1 at the relevant time when the subject drug was manufactured.

1. The aforesaid averments do not strictly satisfy the requirement of

spelling out the role of the Petitioner Nos.2 to 6; as to how and in what
8 (2023) 236 Comp Cas 741.

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manner the Petitioners Nos.2 to 6 were responsible for the conduct of the

business of the firm. Yet, whether the aforesaid allegations in the complaint

are sufficient to invoke the principle of constructive criminality under [Section

341(1)](https://indiankanoon.org/doc/1891720/) of the Drugs Act, 1940, in the light of the view this Court has taken on

the substantive challenge to the prosecution, need not be answered

definitively. De hors the challenge to the initiation of the prosecution qua

Petitioner Nos. 2 to 6 by invoking the provisions under Section 34(1) of the

Drugs Act, 1940, this Court has come to the conclusion that the prosecution of

Petitioner No.1-firm itself would amount to an abuse of process of the Court.

1.   For the forgoing reasons, the Petition deserves to be allowed.
   

2.   Hence, the following order:
   

ORDER

(i) The Writ Petition stands allowed.

(ii) The impugned order dated 28 September 2021 of issue of

process against the Petitioners for the offence punishable under Section 27(d) of the Drugs Act, 1940 stands quashed and set aside.

(iii) The proceeding in Criminal Complaint, being Special Case

No.32 of 2021, also stands quashed and set aside.
(iv) Rule made absolute to the aforesaid extent.

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