Directors of Corona Remedies Pvt. Ltd. to Face Trial for Allegedly Manufacturing Sub-standard Drugs, Court Emphasizes Evidence-Based Adjudication
In a significant ruling, the Jammu & Kashmir and Ladakh High Court, under the judgment of Justice Wasim Sadiq Nargal, has dismissed the petition filed by the directors of Corona Remedies Pvt. Ltd., seeking to quash criminal proceedings initiated against them under the Drugs and Cosmetics Act, 1940. The directors were implicated in a case concerning the manufacture of "Locipil Tablets," which were found to be "Not of Standard Quality" by the Government Analyst.
The case arose when a drug sample collected by the Drugs Inspector was tested and declared sub-standard. The petitioners, including directors Ankur Kirtikumar Mehta and others, claimed they were not involved in the manufacturing process and sought to quash the proceedings on these grounds. However, the court held that the determination of their involvement and responsibility is a matter of evidence to be adjudicated during the trial.
Highlighting the statutory framework, the court noted that under Section 34 of the Drugs and Cosmetics Act, directors could be held liable if they were in charge of and responsible for the conduct of the company's business. The court emphasized that issues such as the directors' knowledge of the manufacturing process and their exercise of due diligence are factual matters best resolved during the trial.
The court also addressed the petitioners' argument regarding procedural lapses in the drug testing process under Sections 23 and 25 of the Act. It ruled that alleged procedural non-compliance does not justify quashing the proceedings at this stage and should be examined by the trial court.
Furthermore, the court observed that the directors' acceptance of the findings communicated by the Drug Inspector and their subsequent request for leniency precluded them from challenging the findings later. The doctrine of estoppel by conduct was applied, preventing the petitioners from taking inconsistent positions.
The judgment underscores the importance of allowing the trial to proceed to determine the facts and responsibilities, especially in cases impacting public health. The court reiterated that its inherent powers must be exercised with caution and only in cases of clear illegality or abuse of the process.
This decision reaffirms the judiciary's stance on ensuring accountability in the pharmaceutical industry, particularly concerning drugs' quality and safety, which directly affect public health.
Bottom Line :
Allegations against company directors for the manufacture of "Not of Standard Quality" drugs under the Drugs and Cosmetics Act, 1940 cannot be quashed at the threshold. The question of their involvement and responsibility requires evidence-based adjudication during the trial.
Statutory provision(s): Drugs and Cosmetics Act, 1940 Sections 18(a)(i), 23, 25, 27(d), 34; Section 561A CrPC (akin to Section 482 CrPC 1973 and Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023).
