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Drugs Inspector, Palace Road, Bangalore v. Dr B.K Krishnaiah And Another
Factual and Procedural Background
The appellant, a Drugs Inspector (complainant), filed a criminal complaint before the Chief Metropolitan Magistrate, Bangalore, against a partnership firm, M/s Ashok Sharma (Accused 1), and three partners for alleged violations of the Drugs and Cosmetics Act, 1940. The two respondents and one Dr. T. Krishnamurty (since deceased) were partners; Dr. Krishnamurty was a qualified medical practitioner and the managing partner. The firm dealt in drugs.
The allegation was that the accused stocked drugs whose potency had expired and sold such drugs to the complainant, constituting an offence under Section 18(a)(vi) of the Act read with the Drugs Rules, 1945, punishable under Sections 28 and 27(b) of the Act. The Magistrate took cognizance and issued process against all accused. During the pendency, Dr. Krishnamurty died on August 8, 1974.
The respondents contended before the Magistrate that the case did not survive against them because the managing partner had died. The Magistrate rejected this, noting that the partnership deed (filed as Item 13 in the list of documents) showed all partners were responsible for carrying on the business, and fixed the matter for evidence on January 10, 1975.
That order was challenged before the High Court of Karnataka. The High Court, referring to Section 34(1) of the Act, held that the complainant had not made out that Accused 2 and 4 (the respondents) were in charge of and responsible to the firm for the conduct of its business. In the present appeal by special leave, the Supreme Court examined whether the complaint disclosed a prima facie case and whether the respondents could be proceeded against.
Legal Issues Presented
- Whether, at the quashing stage, the allegations in the complaint (along with the documents submitted, including the partnership deed) disclosed a prima facie offence under Section 18(a)(vi) of the Drugs and Cosmetics Act, 1940, read with Rule 65(17) of the Drugs Rules, 1945.
- Whether, in light of Section 34(1) of the Act, the complaint sufficiently alleged that the respondents, as partners, were in charge of and responsible to the firm for the conduct of its business so as to justify continuation of the prosecution against them.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court articulated the governing standard for quashing proceedings: the High Court must assess whether the allegations in the complaint, if proved, would make out a prima facie offence and that the accused have prima facie committed it.
Applying this standard, the Court observed that a perusal of the complaint disclosed a prima facie case under Section 18(a)(vi) of the Act read with Rule 65(17) of the Drugs Rules, 1945. Rule 65(17) prohibits a licensee from selling or stocking any drug after the expiration of potency recorded on its container, label, or wrapper, or in violation of any directions recorded thereon. The complaint specifically alleged the stocking and sale of expired-potency drugs.
The Court identified the key question before the High Court as whether the accused, or any of them, were liable. It noted that the complaint cited relevant statutory provisions (including in paragraph 17), listed witnesses, and annexed documents, including the partnership deed (Item 13). The Magistrate had perused the partnership deed and, on that basis, prima facie found that the respondents as well as the deceased accused were liable, and proceeded to trial.
The Supreme Court held that the High Court erred in concluding that there was no allegation that the respondents were responsible for the management and conduct of the firm's business. The materials accompanying the complaint—particularly the partnership deed—were sufficient at the threshold to justify proceeding to trial. The Court emphasized that the extent of each accused's liability is a matter for determination on evidence at trial, not at the quashing stage.
Holding and Implications
HOLDING: The appeal is allowed; the judgment of the High Court is set aside. The case is remanded to the Magistrate for trial in accordance with law.
Implications: The prosecution against the firm and its partners, including the respondents, will proceed to trial. The decision underscores that, at the quashing stage, courts should not evaluate the merits but should examine whether the complaint and accompanying materials disclose a prima facie offence and a basis to proceed against the accused under Section 34(1). The ruling has a direct procedural effect on the parties and does not purport to set any broader precedent beyond affirming the threshold standard for quashing.
Baharul Islam, J.— This appeal by special leave by the complainant, (the appellant before us) is directed against the judgment and order of the High Court of Karnataka refusing to quash the complaint filed by the appellant against the respondents for prosecution for offences under Section 18(a)(vi) of the Drugs and Cosmetics Act of 1940 (hereinafter “the Act”) filed before the Chief Metropolitan Magistrate, Bangalore.
2. The petitioner's case was that the Drugs Inspector (the appellant before us) filed a criminal case against a firm, M/s Ashok Sharma and three of its partners for violation of the Act. The first accused is a partnership firm. The two respondents and one T. Krishnamurty, since dead, were partners, of whom the third accused was a qualified medical practitioner and was the managing partner of the firm. The firm was dealing in drugs. The allegation was that the accused had stocked drugs the potency of which had expired and had sold such drugs to the complainant. The complainant then lodged the complaint against the accused for the offence under Section 18(a)(vi) of the Act and the Rules thereunder, punishable under Section 28 and 27(b) of the Act. The Magistrate took cognizance of the offence and issued process against all the accused persons. Meanwhile, as stated above, accused Krishnamurty, died on August 8, 1974.
3. It was then contended by the respondents before the Magistrate, that the criminal case no longer survived against them as the only person who was managing the firm had expired. The Magistrate overruled the contention. He held “further the partnership (meaning the partnership deed as the partnership deed was filed before him, as it appears from Item 13, p. 20 of the paper-book) shows that all the partners are responsible for carrying on the business”. He fixed January 10, 1975 for evidence.
4. This order of the Magistrate was challenged before the High Court. The High Court considered Section 34(1) of the Act and held that the complainant “has not complained against Accused 2 and 4, the petitioners in this case making out that they were, in any manner, in charge of and responsible to the firm, namely, Accused 1 for the conduct of the business of the firm, namely, Accused 1.”
5. In a quashing proceeding, the High Court has to see whether the allegations made in the complaint petition, if proved, make out a prima facie offence and that the accused has prima facie committed the offence. In the instant case a perusal of the complaint petition shows that a prima facie case has been made out for an offence under Section 18(a)(vi) of the Act 1940 read with Rule 65(17) of Drugs Rules, 1945 which reads as follows:
“No drug shall be sold or stocked by the licensee after the date of expiration of potency recorded on its container, label or wrapper, or in violation of any statement or direction recorded on such container, label or wrapper.”
6. The only question for consideration for the High Court in this case was whether the accused or any of them were liable. In para 17 of the complaint petition the complainant quoted the provisions of the Act. In addition, he cited the names of witnesses, submitted a list of documents including a copy of the partnership deed at Item 13 of the list of documents. The learned Magistrate perused the partnership deed and prima facie found that the respondents as well as the deceased accused were liable for the offence and proceeded for trial. The learned High Court committed an error in holding that there was no allegation that the respondents were not (sic) responsible for the management and conduct of the firm. The extent of their liability would be established by evidence during trial. In our opinion the judgment of the learned High Court is erroneous and is liable to be set aside.
7. In the result we allow the appeal and set aside the judgment of the High Court. The case is sent back to the Magistrate for trial in accordance with law.
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