Case Note & Summary
The criminal petition under Section 482 of the Code of Criminal Procedure, 1973, was filed by M/s Zim Laboratories Ltd. and its officers (the manufacturer and its directors and chemists) seeking quashing of proceedings in C.C.No.273/2016 pending before the Special Court for Economic Offences, Bengaluru, for the offence under Section 27D of the Drugs and Cosmetics Act, 1940, alleging that the drug 'Regunac Na+ SR 100' was Not of Standard Quality. Two samples were drawn from ESI Hospital, Mangalore (Batch F957 G220, manufactured in July 2012, expiry June 2015) on 28.02.2013 and from Regional Drug Store, ESI Directorate, Bangalore (Batch F957 C404) on 12.06.2014. The samples were sent to the Government Analyst, who received them on 11.03.2013 and 17.06.2014 respectively. The Government Analyst conducted the test for the first sample only between 10.11.2014 and 12.11.2014—nearly 20 months after receipt—and issued a report on 05.05.2015 declaring it NSQ. The second sample was tested on the same dates (10.11.2014–12.11.2014), five months after receipt, and the report was issued on 15.07.2015. By the time of testing, the first sample had expired in June 2015, and the second sample was about to expire. The manufacturer was informed and objected to the reports, contending that the delay vitiated the testing and that their own analysis showed compliance. They requested sending the remaining sample to CDL, Kolkata, but the sealed sample had also expired or was close to expiry. The prosecution was launched after the samples had expired. The High Court examined the scheme of the Act, particularly Sections 23(4) and 25, and held that the Act mandates prompt testing after seizure. The unexplained delay in testing, especially when the drug’s shelf life expired before analysis, rendered the test reports unreliable. The right of the accused under Section 25(3) to challenge the Government Analyst's report by getting the sealed sample tested by CDL was a valuable right, and the delay extinguished that right because the sealed sample also expired. The Court relied on Supreme Court decisions in Medicamen Biotech Limited v. Rubina Bose and State of Haryana v. Unique Farmaid (P) Ltd. to conclude that such delay causes serious prejudice and the continuation of proceedings would be an abuse of process. The petition was allowed, and the entire proceedings in C.C.No.273/2016 were quashed.
Headnote
A) Drugs and Cosmetics Act, 1940 - Section 23(4) - Test and Analysis - Promptness Requirement - The Government Analyst is required to conduct test/analysis of the drug sample promptly after receipt; an unexplained and inordinate delay of 20 months and 5 months respectively in testing the samples after receipt, especially when the drug’s shelf life had already expired at the time of testing, rendered the test reports unreliable and vitiated the foundation of the prosecution. Held that the test was not conducted “forthwith” as mandated by the Act. (Paras 22-42, 43-67) B) Drugs and Cosmetics Act, 1940 - Section 25(3) - Right to Challenge Analyst’s Report - Prejudice from Delay - The manufacturer’s statutory right to challenge the Government Analyst's report by sending the sealed sample to the Central Drugs Laboratory is a valuable right. Where the delay in testing resulted in the sample retaining only 2–4 months of shelf life by the time of notification, the manufacturer was effectively deprived of a meaningful opportunity to exercise this right, as the drug would have expired before reanalysis. This caused serious prejudice and violated the right under Section 25(3). Held that proceedings cannot continue when the right is rendered nugatory. (Paras 47-56, 62-66) C) Criminal Procedure Code, 1973 - Section 482 - Inherent Powers - Quashing of Proceedings - Abuse of Process - When the accused is deprived of a statutory safeguard due to prosecutorial delay and the continuation of proceedings would cause grave injustice, it amounts to abuse of process of court. The High Court can exercise inherent powers under Section 482 Cr.P.C. to quash such proceedings. Held that the criminal case in C.C.No.273/2016 was quashed. (Paras 67-69) D) Drugs and Cosmetics Act, 1940 - Section 27D - Offence of Not of Standard Quality - Shelf Life and Retesting - A drug that has crossed its expiry date when tested cannot form the basis for a prosecution for being NSQ, as the deterioration may be due to age. The prosecution must establish that the sample tested was within shelf life and the testing was done without delay. Held that the proceedings were vitiated as the drug sample had expired before analysis. (Paras 43-48, 57-60) E) Drugs and Cosmetics Act, 1940 - Section 25(4) - Right to Retest - Sealed Sample Integrity - The right to request analysis of the sealed sample by the Central Drugs Laboratory is meaningless if the sealed sample also has expired by the time the accused is notified. The expiry of the sealed sample due to delay extinguishes the right under Section 25(4). Held that proceedings cannot be sustained. (Paras 58-61)
Issue of Consideration
Whether the criminal proceedings initiated under Section 27D of the Drugs and Cosmetics Act, 1940, for the subject drug being 'not of standard quality' are liable to be quashed due to inordinate delay in testing the samples, which resulted in the expiry of the drug before analysis and deprived the petitioners of their right to challenge the Government Analyst's report under Section 25(3) of the Act
Final Decision
The High Court allowed the criminal petition and quashed the entire proceedings in C.C.No.273/2016 pending on the file of the Presiding Officer, Special Court for Economic Offences, Bengaluru. The Court held that the inordinate delay in testing the drug samples after seizure, which resulted in the expiry of the drug before analysis, rendered the Government Analyst's report unreliable and deprived the petitioners of their valuable right to challenge the report under Section 25(3) of the Drugs and Cosmetics Act, 1940. The continuation of proceedings would be an abuse of the process of court.
Law Points
- Prompt testing of drug samples after seizure is mandatory under Section 23(4) of the Drugs and Cosmetics Act
- 1940
- unreasonable delay vitiates the prosecution
- expiry of shelf life before testing renders the sample unreliable
- the accused's right to challenge the Government Analyst's report under Section 25(3) is a valuable right that cannot be nullified by prosecutorial delay
- proceedings under Section 27D are liable to be quashed under Section 482 Cr.P.C. when delay causes serious prejudice and abuse of process
