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CASE NO.: Appeal (crl.)  533 of 2008

PETITIONER: Drugs Inspector & Anr.

RESPONDENT: Fizikem Laboratories Pvt. Ltd.& Anr.

DATE OF JUDGMENT: 24/03/2008

BENCH: A.K.MATHUR & ALTAMAS KABIR

JUDGMENT: J U D G M E N T (Arising out of S.L.P.(Crl.)No.5961 of  2006) A.K. MATHUR, J.

1.      Leave granted.

2.      This appeal is directed against the order passed by learned Single  Judge of the Andhra Pradesh High Court in a batch of petitions under  Section 482 of the Code of Criminal Procedure (hereinafter to be  referred to as \023the CrPC\024) whereby the learned Single Judge has held   that the Drugs Inspector appointed under Section 21 of the Drugs and  Cosmetics Act, 1940 (hereinafter to be referred to as \023the Act\024) had no  jurisdiction to launch prosecution under Section 32 of the Act for  alleged offences said to have been committed under this Act in  connection with manufacture and sale of Ayurvedic drugs Ozomen capsules  and Ozomen forte.

3.              The brief facts which are necessary for disposal of this  appeal are that the Inspector of Drugs inspected some of the business  premises  of these respondents where Ozomen capsules and Ozomen forte  were available for sale.  He took the samples and after taking the  sample he sent the same to the Government Analyst, Hyderabad for  analysis.  The Government Analyst submitted his report declaring that  Ozomen capsules under different batches  contained 45.2 mg of sildenafil  citrate per capsule.  The persons from whom the samples were taken were  called upon to disclose the name of manufacturer and on disclosure  of  the name of manufacturer, prosecution was launched against the  respondents for contravention of Sections 18), 18(a) (i) read with  Section 17B(d) of the Act  namely, prohibition of manufacture and sale  of certain drugs  and cosmetics which are misbranded, spurious and  substituted  wholly or in part by another drug or substance and the  Central Government prohibited manufacturer etc. of the drugs and  cosmetics in public interest under notification issued under Section 26- A, vide notification No.GSR 577(e) dated 23.7.1983 punishable under  Sections 27(b)(ii), 27(c), 27(d) and 28-B of the Act.  It is this action  initiated by the Drugs Inspector which was challenged. The respondents  were arrayed as accused for the aforesaid offences  because they had no  licence for the manufacture of Ayurvedic drug sildenafil citrate  and  they were mislabeling  the Ayurvedic drugs. The sildenafil citrate is a  new drug and  it is patent and proprietary medicine. It is an allopathic  drug used for erectile dysfunction. The respondent-accused company was  holding Allopathic as well as Ayurvedic licence but the company does not  hold the licence to manufacture sildenafil citrate.  The information was  received by the Drugs Inspector that sildenafil citrate manufactured by  these companies for various medical establishments in the State of  Andhra Pradesh had no licence to manufacture  sildenafil citrate. Ozomen   forte capsule contained 33.9 mg to 46.82 mg of sildenafil citrate per  capsule. Therefore, the question was whether the respondent- company  

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which are manufacturing Ayurvedic drug  and had no licence for  manufacturing sildanefil forte  could be prosecuted under Chapter IV or  not.  

4.              Before the Learned Single Judge it was submitted that since  the respondents are being prosecuted for contravention of Section 18,  Section 19(a) (i) read with section 17B (d) and Section 17(b) of the Act  the accused had no licence for manufacture of the sildenafil  forte  which is one of ingredient of Ozomen forte i.e. Ayurvedic drug,  therefore, the respondent can be prosecuted under this section or not.   The submission of the respondents was that they have been holding  licence for the Ayurvedic preparation and for any Ayurvedic preparation  of spurious or misbranded nature, the Inspector appointed under Chapter  IVA alone is competent to launch prosecution and not Inspector appointed  under Chapter IV.  

5.              In order to appreciate the contention raised by learned  counsel for the parties, it will be appropriate to refer to relevant  provisions of the Act. The Act defines Ayurveducm Siddha  or Unani drug   under Section 3(a) which reads as under :

               \023 (a)        \023Ayurvedic, Siddha or Unani drug\024  includes all medicines intended for internal  or  external use for or in the diagnosis, treatment,  mitigation or prevention of disease or disorder in  human beings or animals, and manufactured exclusively  in accordance with the formulae described in, the  authoritative books of Ayurvedic, Siddha and Unani  Tibb system of medicine, specified in the First  Schedule;\024

Section 3(e) defines Inspector which reads as under :

               \023 (e) \023Inspector\024 means \026 (i)     in relation to Ayurvedic, Siddha or  Unani drug, an Inspector appointed by the Central  Government or a State Government under section 33G;  and (ii)    in relation to any other drug or  cosmetic, an Inspector appointed by the Central  Government or a State Government under section 21;\024

Section 3(h) defines patent and proprietary medicine which reads as  under:

\023(h) \023patent or proprietary medicine\024 means,- (i)     in relation to Ayurvedic, Siddha or Unani  Tibb systems of medicine all formulations containing  only such ingredients mentioned in the formulae  described in the authoritative books of Ayurveda,  Siddha or Unani Tibb systems of medicine specified in  the First Schedule, but does not include a medicine  which is administered by parenteral route and also a  formulation included in the authoritative books as  specified in clause (a); (ii)    in relation to any other systems of  medicine, a drug which is a remedy or prescription  presented in a form ready for internal or external  administration of human beings or animals and which is  not included in the edition of the Indian  Pharmacopoeia for the time being or any other  Pharmacopoeia authorized in this behalf by the Central  Government  after consultation with the Drugs  Technical Advisory Board constituted under section 5;\024

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Section 13 deals with offences. Chapter IV deals with Manufacture, sale  and distribution of drugs and cosmetics. Section 16 under this Chapter  deals with standard and quality. As per Section 16, all  drugs complies  with the standard  set out in the second schedule.  Section 17 deals  with misbranded drugs which reads as under:

               \023 17. Misbranded drugs.- For the purposes of this Chapter a  drug shall be deemed to be misbranded,- (a)     if it is so coloured, coated, powered or polished that  damage is concealed or if it is made to appear  or  better or greater therapeutic value than it really is;  or (b)     if it is not labeled in the prescribed manner; or (c)     if it is label or container  or anything accompanying  the drug bears any statement, design or device which  makes any false claim for the drug or which is false or  misleading in any particular.

Section 17A deals with adulterated drugs which reads as under : \02317A. Adulterated drugs- For the purposes of this Chapter, a  drug shall be deemed to be adulterated,- (a)     if it consists in whole or in part, of any filthy, putrid  or decomposed substance; or (b)     if it has been prepared, packed or stored under  insanitary conditions whereby it may have been  contaminated with filth or whereby it may have been  rendered injurious to health; or (c)     if its container is composed, in whole or in part, of any  poisonous or deleterious substance which may render the  contents injurious to health; or (d)     if it bears or contains, for purposes of colouring only,  a colour other than one which is prescribed; or (e)     if it contains any harmful or toxic substance which may  render it injurious to health; or (f)     if any substance has been mixed therewith so as to reduce  its quality or strength.\024 Section 17B deals with spurious drugs, Section 17C deals with misbranded  cosmetics and Section 17D deals with spurious cosmetics. Section 18  which deals with prohibition of manufacture and sale of certain drugs  and cosmetics,  is relevant for our purpose and reads as under :

               \023 18. Prohibition of manufacture and sale of  certain drugs and cosmetics. From such date as may be  fixed by the State Government by notification in the  Official Gazette in this behalf, no person shall himself  or by any other person on his behalf- (a)     manufacture for sale or for distribution, or sell, or  stock or exhibit or offer for sale, or distribute- (i)     any drug which is not of a standard quality, or is  misbranded, adulterated or spurious; (ii)    any cosmetic which is not of a standard quality or  is misbranded or spurious; (iii)   any patent or proprietary medicine, unless there is   displayed in the prescribed manner on the label or  container thereof the true formula or list of active  ingredients contained in it together with the quantities,  thereof; (iv)    any drug which by means of any statement, design or  device accompanying it or by any other means, purports or  claims to prevent, cure or mitigate any such disease or  ailment, or to have any such other effect as may be  prescribed; (v)     any cosmetic containing any ingredient which may  render it unsafe or harmful for use under the directions  indicated or recommended;

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(vi)    any drug or cosmetic in contravention of any of the  provisions of this Chapter or any rule made thereunder; (b)     sell, or stock or exhibit or offer for sale, or  distribute any drug or cosmetic which has been imported  or manufactured in contravention of any of the provisions  of this Act or any rule made thereunder; (c)     manufacture for sale or for distribution, or sell, or  stock or exhibit or offer for sale, or distribute any  drug or cosmetic, except under, and in accordance with  the conditions of, a licence issued for such purpose  under this Chapter;

Provided that nothing in this section shall apply to the  manufacture, subject to prescribed conditions, of small  quantities of any drug for the purpose of examination,  test or analysis; Provided further that the Central Government may, after  consultation with the Board, by notification in the  Official Gazette, permit, subject to any conditions  specified in the notification, the manufacture for sale  or for distribution, sale, stocking or exhibiting or  offering for sale or distribution of any drug or class of  drugs not being of standard quality.\024

Section 18  prohibits any person from manufacturing for sale  or for  distribution  or sell 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 18 ) says that no person  shall himself  or by any other person on his behalf manufacture for sale or for  distribution, or sell or stock or exhibit or offer for sale or  distribute any drug or cosmetic, except under, and in accordance with  the conditions of, a licence issued  for such purpose under this  Chapter. Section 21 deals with Inspectors.  The Inspectors can be  appointed by the Central Government or the State Government  by  notification in the Official Gazette  having the prescribed  qualifications and they may perform such duties for drugs or classes of  drugs,or cosmetics or classes of cosmetics and they shall be public  servant within the meaning of Section 21 of the Indian Penal Code.  Section 22 lays down the powers of the Inspectors. The Inspector has  power to inspect any premises wherein any drug or cosmetic is being  manufactured. He has the power for testing the drugs or cosmetics. He  has also power to search and such other powers which are necessary for  enforcement of the provisions of the Act. Section 23 deals with  procedure which is to be employed by the Inspectors.  After taking all  necessary samples and obtaining report from the Drugs Analyst he can  also launch prosecution with the previous sanction. Punishment has been  prescribed under Section 27. Any person who manufactures for himself or   by any other person on his behalf, manufactures for sale or for  distribution, or sells or stocks or exhibits or offers for sale or  distributes any adulterated, spurious or misbranded drugs then he shall  be punished under Section 27. Chapter IVA which was introduced   with  effect from 1.2.1969 deals with provisions relating to Ayurvedic, Siddha  and Unani drugs.  Here also identical provisions are there. Section 33E  deals with misbranded drugs, Section 33 EE deals with adulterated drugs  and Section 33EEA deals with spurious drugs and it is punishable under  Section 33-I.  Section 33 G deals with the Inspectors which says that  the Central Government or a State Government may, by notification in the  Official Gazette, appoint such persons as it thinks fit, having  certain   prescribed qualifications and it has laid down their duties, functions   who could launch prosecution for breach of any of the provisions.  

6.              The provisions in Chapter IV and Chapter IVA are almost  identical. Chapter IVA deals with special branch of medicines like,  Ayurvedic, Siddha and Unani drugs whereas Chapter IV deals with branches   other than Chapter IVA. Learned Single Judge has taken the view that

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since Ozomen capsules had a component like sildenafil citrate,  therefore, they may be misbranded, spurious or adulterated for which the  prosecution could only be launched by the Inspector authoricsed under  Chapter IVA. But the prosecution in this case was launched under Chapter  IV. Therefore, learned Single Judge came to the conclusion that the  Inspector under Chapter IV had no jurisdiction to launch the prosecution  and it is only the Inspector who has been appointed under Chapter IVA  could have launched the prosecution against the accused for breach of  the provisions of the Act for adulteration, misbranding in the Ayurvedic  drugs.

7.              Learned counsel for the appellants submitted that it is not  the case that only Chapter IVA is involved but the offence has also been  committed under Chapter IV also. Learned counsel for the appellants  submitted that  Ozomen capsules  and Ozomen forte had a component of  sildenafil citrate and  this medicine does not fall under Chapter IVA.  Therefore, learned counsel for the appellants submitted that use of this  medicine in the Ayurvedic medicines is also punishable under Chapter IV  as accused has no licence to deal with this drug. The accused had to mix  this drug with other Ayurvedic  drugs, therefore, the accused can also  be prosecuted for selling Allopathic drug like sildanefil citrate when  licence is required under Section 18. Learned counsel for the appellants  submitted that sildenafil citrate is a new drug and it is an Allopathic  drug. This cannot be used for the Ayurvedic medicines without displaying  in the prescribed manner on the label or container thereof or list of  active ingredients contained in it together with the quantities thereof.  It is also punishable under Section 18 (a)(iii) read with Section 27 (d)  of the Act.  Learned counsel for the appellants also pointed out that  the respondents also manufactured and sold this spurious Ozomen capsules   containing sildenafil citrate violating section 18(a)  which is  punishable under Section 27(d) of the Act.  The sum total of the  submission of learned counsel for the appellants was that the very fact  of dealing with sildenafil citrate  drug and distributing the same after  making a different component of Ayurvedic drug  itself constitutes an  offence. Therefore, it is erroneous to say that since the accused is  dealing with Ayurvedic drugs therefore,  only the Inspector who is  authorized under Chapter IVA  could launch the prosecution and not the  Inspectors appointed under Chapter IV. The accused has used sildenafil  citrate which  is an allopathic drug. Sildenafil citrate is a white to  off-white crystalline power with a solubility of 3.5 mg/ml in water and  molecular weight of 666.7 . Viagra (sildenafil citrate ) is formulated  as blue, film-coated rounded-diamond shaped tablets equivalent to 25mg,  50 mg and 100 mg of sidenafil for oral administration.  In addition to  the active ingredient, sildenafil citrate, each tablet contains the  following inactive ingredients; microcrystalline cellulose, anhydrous  dibasic calcium phosphate, croscarmellose sodium, magnesium stearate,  hypromellose, titanium dioxide,lactose, triacetin and FD & C Blue No.2  aluminum lake. The brand name is Viagra and generic name is sildenafil  citrate.  This is an allopathic drug and by no stretch of imagination   it can be said as an Ayurvedic drug. Therefore, learned counsel for the  appellants appears to be justified that since it is an allopathic drug  and it cannot be used by anybody else unless a person who holds the  licence for it. It is an admitted position that the accused does not   possess the licence. Therefore,  the very fact of selling this drug as  one of the ingredients in the Ozomen capsule and not displaying the name  in the prescribed manner  in the drugs will also constitute an offence  under Section 18 (a), (b) & (c) punishable under Section 27(b) (ii). The  submission of learned counsel for the appellants is justified and we are  of opinion that the view taken by learned Single Judge of the High Court  is not correct and the High Court should not have proceeded to quash   the  whole proceedings under Section 482 of the Code of Criminal  Procedure when serious issues were involved in the matter.

8.              In the result, we allow this appeal and set aside the order  passed by the High Court and direct that the Inspector appointed under

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Chapter IV is competent to launch prosecution for the aforesaid sections  against the accused. We have also been informed in the alternative  prosecution has also been launched against the accused under Chapter  IVA. Both the prosecution can be tagged together and the learned trial  court should proceed with the matter. However, any observations made by  us in disposing this appeal will not prejudice the rights of either  parties.