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S. Mohan (Dr). & Anr. v. State Of Rajasthan

Rajasthan High Court
May 28, 2008
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Factual and Procedural Background

This criminal revision petition challenges two judicial orders: the judgment dated 12/2/2007 by the Chief Judicial Magistrate, Dausa, committing the case to the Court of Sessions, and the order dated 7/11/2007 by the Additional District & Sessions Judge (Fast Track), Bandikui, framing charges against petitioners under various sections of the Drugs and Cosmetics Act, 1940. The petitioners were proprietors of a pharmaceutical firm who transferred their business to other parties in 1991. The prosecution alleges offences relating to manufacture and sale of sub-standard drugs, some of which were produced before the business transfer.

Legal Issues Presented

  1. Whether under Section 32(2) of the Drugs and Cosmetics Act, 1940, only a Metropolitan Magistrate or Judicial Magistrate of First Class has jurisdiction to try offences punishable under the Act, thereby excluding the jurisdiction of the Additional Sessions Judge to frame charges and try the case.
  2. Whether the petitioners can be held liable for offences relating to sub-standard drugs manufactured prior to the transfer of the business, despite an agreement absolving them of responsibility post-transfer.

Arguments of the Parties

Petitioners' Arguments

  • Section 32(2) of the Act restricts trial of offences to a Magistrate of First Class, thus the Additional Sessions Judge lacks jurisdiction to frame charges.
  • The question of committing the case to the Sessions Court should arise only at sentencing, not at the stage of cognizance or charge framing.
  • The petitioners were proprietors of the firm but had transferred the business before the alleged offences occurred, supported by an agreement absolving them of responsibility for manufacturing lapses after transfer.
  • No allegations indicate that petitioners were overall in charge or responsible for the company's conduct at the time of the offences.

Respondent's Arguments

  • Some seized drugs were manufactured prior to the business transfer, implying petitioners’ liability.
  • Section 32(2) of the Act is subject to Section 4 of the Code of Criminal Procedure, 1973, which permits trial by higher courts where the offence carries severe punishment.
  • The Magistrate of First Class is not competent to try offences punishable with life imprisonment; hence, the case was rightly committed to the Sessions Court.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Borige Sambhamurthy v. Drugs Inspector, Srikakulam (1969 Cr. L.J 538) Jurisdiction and stage at which case can be committed to Court of Sessions under Drugs and Cosmetics Act. Referenced by petitioners to argue that commitment to Sessions Court should not occur at charge framing but only at sentencing stage; court did not uphold this view.
Ashok H. Maheshwari v. State of Rajasthan, 2004 (2) Cr. L.R (Raj.) 1627 Responsibility of company officers for offences under the Act. Petitioners relied on this precedent to claim lack of evidence showing their responsibility for company’s business conduct; court rejected this argument based on facts.

Court's Reasoning and Analysis

The Court analyzed the jurisdictional question by interpreting Section 32(2) of the Drugs and Cosmetics Act in conjunction with Section 4 of the Code of Criminal Procedure, 1973. It held that the statutory provision limiting trial to a Magistrate of First Class does not oust the jurisdiction of higher courts, especially where offences carry severe punishments such as life imprisonment. The Court emphasized that the general criminal procedural provisions regarding trial competence apply to offences under the Act.

Regarding the petitioners’ claim of exemption based on the transfer agreement, the Court found that some seized drugs were manufactured before the transfer date. Hence, the petitioners remained liable for offences committed during their proprietorship. The Court rejected the argument that liability could be avoided due to contractual stipulations post-transfer.

Consequently, the Court found no merit in the petitioners’ contentions and dismissed the revision petition.

Holding and Implications

The Court DISMISSED the criminal revision petition.

This decision confirms that the jurisdiction of higher courts to try offences punishable by life imprisonment under the Drugs and Cosmetics Act is not excluded by Section 32(2) of the Act. It also establishes that proprietors remain liable for offences committed during their control of the business, notwithstanding subsequent contractual agreements transferring responsibility. No new precedent was established; the ruling applies the existing legal framework to the facts of this case, directly affecting the parties by upholding the framing of charges and trial by the Sessions Court.

Show all summary ...

Mohammad Rafiq, J.:— Heard learned counsel for the parties.

2. This criminal revision petition is directed against the judgment dated 12/2/2007 passed by learned Chief Judicial Magistrate Dausa, District Dausa whereby he committed the case to the Court of Sessions and the order dated 7/11/2007 passed by the learned Additional District & Sessions Judge (Fast Track), Bandikui whereby, charges against petitioner No. 1 for offence u/S. 17B read with Section 27(A) and petitioner No. 2 for offence under Sections 18A, 18B read with Sections 28 and 28A and 17B read with Section 27(A) of the Drugs and Cosmetics Act, 1940 (for short the “Act”), have been framed.

3. Learned counsel for the petitioners has argued that Section 32(2) of the Act provides that no Court inferior to that of a Metropolitan Magistrate or of a Judicial Magistrate of Ist Class, shall try an offence punishable under this Act. It is only Judicial Magistrate of Ist Class who has the jurisdiction to try the offence and not the Additional Sessions Judge. The learned Sessions Judge has committed an error by framing charge against the petitioners for the aforesaid offences. Even if the Additional Sessions Judge is the higher court, then also, jurisdiction of the Magistrate cannot be ousted. It is argued that since remedy of appeal is available to the accused in the event of his conviction by the Court of Magistrate to the Court of Sessions Judge/Additional Sessions Judge, now when the matter has been transferred to the court of Additional Sessions Judge, right of appeal of the accused would be curtailed in the sense that he would have the remedy of appeal only before this Court though otherwise, he would be filing as revision petition against the order of eventual dismissal of appeal by the Sessions Judge/Additional Sessions Judge. In support of his argument, learned counsel for the petitioners has relied on the judgment of Andhra Pradesh High Court in Borige Sambhamurthy v. Drugs Inspector, Srikakulam: 1969 Cr. L.J 538. He has argued that the question of case being committed to the Court of Sessions did not arise at the stage of cognizance and that this question would be relevant only at the stage of awarding punishment. Learned counsel for the petitioners also relied on the judgment of this Court in Ashok H. Maheshwari v. State of Rajasthan: 2004 (2) Cr. L.R (Raj.) 1627 and on the strength of that judgment argued that there was nothing on record to show that petitioners were over all in-charge of business of company. There is no allegation in the complaint that offence was committed with consent of Director, Manager, Secretary, Partner or any other Officer of the Company. There is also no allegation in the complaint that petitioners were responsible for conduct of business of the Company. The order framing charges against the petitioners is therefore bad in law and liable to be quashed.

4. Learned counsel for the petitioners further argued that petitioners were running a factory in the name and style of NEPRA Pharmaceuticals & Chemical Industries and Lepra Labs which was situated at Palam Dabri Road, Mahavir Enclave, New Delhi. It was a proprietorship firm owned by the petitioners jointly. The petitioners were holding valid license granted in their name on 27/2/1984 which was valid upto 31/12/1993. As the firm was going in losses, the petitioners transferred the complete factory to Dr. J.M.S Parwal, Dr. Sunil Daussa and Dr. Rohtas on 8/11/1991 and agreement to this effect was executed between petitioner No. 1 as first party and Dr. J.M.S Parwal, Dr. Sunil Daussa and Dr. Rohtas as second party. Clause K of the said agreement stipulated that the second party would be responsible for any lapses in manufacturing of the pharmaceutical products and the consequences thereof and the first party will not be responsible. Therefore, the charge for offence under Section 27(A) of the Act which is punishable with imprisonment for a term which shall not be less than five years but which may extend to a term of life imprisonment and with fine, which shall not be less than ten thousand rupees, could not be framed against the petitioners.

5. Shri B.S Chhaba, learned Public Prosecutor has opposed the revision petition and has submitted that some of the drugs which were seized by the Drug Inspector on 18/12/1993 were manufactured even prior to the date of transfer of the business and execution of the agreement. The petitioners therefore cannot escape from their liability in any manner and, therefore, no case for quashing the charge is made out. It was argued that even if Section 32(2) of the Act provides that the case is triable by a Magistrate of Ist Class, the said provision would always be subject to the general provisions contained in Section 4 of the Code of Criminal Procedure, 1973 according to which, provisions of the Code would be applicable even for trial of such offence. Since the offence under Section 27(A) of the Act is punishable by maximum sentence of imprisonment of life, the Court of learned Magistrate of Ist Class was not competent to try such offence and, therefore, matter has rightly been committed to the Court of Sessions.

6. I have given my anxious consideration to the rival submissions made by the learned counsel for the parties at the bar.

7. As regards the first argument of the learned counsel for the petitioners that it is only the Court of Magistrate of Ist Class which is competent to try offences punishable under the Act, the provision of the said Act cannot be interpreted so as to completely oust the jurisdiction of a superior court even if the offence for which a cognizance has been taken against the accused or charge is punishable by 7 years or more or even imprisonment of life which according to the provisions contained in List-II of the Second Schedule is triable by the Court of Sessions. I am not inclined to uphold the argument that such question should be allowed to be left open to be raised for the petitioners at the time of imposing sentence. The provision as contained in Section 4 of the Cr. P.C inter-alia provides as under:—

“4. Trial of offences under the Indian Penal Code and other laws.-(1) All offences under the Indian Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.

(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.”

8. In view of this, general provision to the competence of the Magistrate of Ist Class and that of the higher courts based on the quantum of sentence would nevertheless apply to the trial of offences under the provisions of Drugs and Cosmetics Act, 1940. Whatever jurisdiction is vested in a Court of Magistrate of Ist Class, would necessarily be possessed by the higher court of the Court of Sessions or Additional Sessions Judge.

9. I am also not inclined to uphold the second argument that accused petitioners would stand absolved from their liability because there was stipulation in the agreement executed by them with the parties to whom the business was sold that only second party would be responsible for any lapses in manufacturing of the pharmaceutical products and consequences thereof in case the drug was found of sub-standard quality and spurious. The evidence that has come on record clearly proves that some of the drugs which were found of sub-standard quality and spurious, were manufactured prior to the date of transfer of business. It is therefore clear that petitioners would be liable to be proceeded for such an offence because the drugs were manufactured at the time when they were the proprietors of the firm manufacturing such products.

In view of above, I do not find any merit in this revision petition, which is accordingly dismissed.