HC discharges pharma company of criminal liabilities for procedural flaws

The Tripura High Court has quashed criminal proceedings against a Himachal Pradesh-based pharmaceutical company and its directors in a case relating to the manufacturing and distribution of a "not of standard quality" drug, holding that mandatory provisions of the Drugs and Cosmetics Act and Rules were not complied with before launching prosecution.

The High Court single bench headed by Justice Biswajit Palit allowed a criminal petition filed by M/s Innova Captab and its directors, setting aside the order of a Judicial Magistrate First Class, Agartala, dated January 10, 2023, which had taken cognisance of the complaint filed by the Central Drugs Standard Control Organisation (CDSCO).

The case arose after a sample of "Rabeprazole Sodium and Itopride (Sustained Release) Capsules", manufactured by the company, was collected during a joint inspection at a medicine shop in Agartala on January 29, 2021. The Regional Drugs Testing Laboratory, Guwahati, later declared the sample as "not of standard quality" after it failed the assay test.

The court observed that the prosecution failed to comply with the mandatory requirement under Section 23(4)(i) of the Drugs and Cosmetics Act, which requires the sample to be sent "forthwith" to the Government Analyst. The sample was collected on January 29, 2021, but reached the laboratory only on February 1, 2021, with no explanation offered for the delay.

The court further held that Rule 45 of the Drugs and Cosmetics Rules, 1945, which mandates submission of the Government Analyst's report within 60 days of receiving the sample, had also been violated. Although the laboratory received the sample on February 1, 2021, the report was issued only on October 12, 2021, without obtaining any extension from the government as required under the Rules.

Rejecting the Union government's contention that the delay was caused by disruptions during the COVID-19 pandemic and the death of the Government Analyst, the court said the statutory procedure requiring an extension of time had not been followed. It also noted that the Supreme Court's extension of limitation during the pandemic related to filing of cases and not submission of analysts' reports.

The court also found non-compliance with Section 25 of the Act, observing that the accused were not given the statutory opportunity to challenge the Government Analyst's findings before prosecution was launched. It held that this deprived the accused of an important legal safeguard available under the Act.

Referring to decisions of the Supreme Court and various High Courts on similar issues, the court held that mandatory procedural safeguards under the Act had not been followed, rendering the prosecution legally unsustainable.

Allowing the petition, the High Court quashed the complaint pending before the trial court and discharged the petitioners from all criminal liability arising out of the case.