Case Name: Inox Products Ltd & Anr Vs State Of Andhra Pradesh
Case Number: SLP (Crl.) No. 2345 of 2024
Date: January 30, 2025
Quorum: Hon’ble Mr. Justice B.R. Gavai, Hon’ble Mr. Justice Augustine George Masih
and Hon’ble Mr. Justice K. Vinod Chandran.
FACTS OF THE CASE
This case involves INOX Air Products Limited and its Managing Director, Pavan Kumar Jain, have been accused of irregularities in the sale of Nitrous Oxide I.P. The controversy started when the officials found that RIMS General Hospital, Kadapa, had purchased the gas from a supplier called Varasi Oxygen Firm that did not possess the license to do so.
The investigation went on to discover a chain of supply involving a series of companies and INOX Air Products as the original manufacturer. Though INOX did grant its manufacturing and sales licenses subsequently, the Trial Court did accept the case and issued summons. The appellants then filed a petition before the High Court to quash, was dismissed on January 12, 2024. Aggrieved, filed an appeal.
ISSUE OF THE CASE
The present appeal challenges the judgment and order dated 12th January 2024 passed by the High Court of Andhra Pradesh at Amravati, whereby they dismissed the Criminal Petition No. 4148 of 2018 filed by the appellants herein under Section 482 of the Code of Criminal Procedure, 1973 thereby praying for calling of the records pertaining to C.C. No. 71 of 2018 on the file of the First Additional Judicial Magistrate of First Class, Kadapa and to quash the same against the appellants herein, who are arraigned as Accused Nos. 5 and 6.
LEGAL PROVISIONS
- Section 482 of the Code of Criminal Procedure, 1973: Saving of inherent powers of High Court.
- Section 18(a)(vi) of the Drugs and Cosmetics Act, 1940: Prohibition of manufacture and sale of certain drugs and cosmetics.
- Section 27(d) of the Drugs and Cosmetics Rules, 1945: Penalty for manufacture, sale, etc., of drugs in contravention of this Chapter.
- Section 3(f) of the Drugs and Cosmetics Rules, 1945: Definition of “Manufacturer”.
ARGUMENTS
Arguments of the Appellant:
The appellants, through counsel submitted that the manufacturing process described under Section 3(f) of the Drugs & Cosmetics Act is not specific and that the activities carried out by Accused No. 3 consisted of refilling and testing of Nitrous Oxide I.P. Also, Appellant No. 1 had already appointed a responsible person to take care of legal compliance, and Appellant No. 2, at 73 years of age, was a Mumbai resident with no direct involvement. They argued that the complaint should be quashed as no specific allegations against Appellant No. 2.
The Respondent-State, appearing through Smt. Prerna Singh, urged that both Accused No. 3 and Appellant No. 1 were without a license as per Form 20B and hence liable under Section 27(d) of the Drugs & Cosmetics Act in view of Section 18(c). The major accusation against the appellants is that they sold Nitrous Oxide I.P. to an unlicensed firm, that is Accused No. 3, thereby contravening Rule 65(5)(1)(b) and making the present case.
Arguments by the Respondent:
Dr. Singhvi submitted that the process of Accused No. 3 falls within the definition of “manufacture” under Section 3(f) of the Drugs & Cosmetics Act. He submitted that Form 20B and Rule 65(5) apply only to wholesale sales and not to manufacture and that wholesale sales require drugs to be sold without any change. Since the sale from INOX (Accused No. 5) to Accused No. 3 was between manufacturers, it did not require a wholesale license. He further submitted that Accused No. 3 was issued a manufacturing license (Form 25) without the need for a Form 20B license, which rendered the prosecution legally defective. He also submitted that the order of the Magistrate taking cognizance of the complaint was not based on any reason and should be set aside on the principle of precedent.
Ms. Prerna Singh for the State argued that a Form 25 license is subordinate to a Form 20B license, and its absence was a violation under Section 18(a)(vi) of the Act. However, the prosecution failed to prove any specific violations of Form 20B conditions by the appellants.
ANALYSIS
The case revolved around the complaint filed by the Drug Inspector alleging that the Appellant No. 1, being Accused No. 5, and Appellant No. 2, being Accused No. 6, sold Nitrous Oxide I.P. to an unlicensed entity Accused No. 3 contravention to Section 18(a)(vi) of the Drugs and Cosmetics Act, 1940, punishable u/s 27(d). The court examined the definition of “manufacture” under Section 3(f), which broadly encompasses various processes related to drugs. Section 18 prohibits the sale or distribution of drugs in contravention of the Act, while Section 27 prescribes penalties. The court further threw a question to the magistrate order that issued process, making the case of the prosecution untenable and dismissed charges.
JUDGEMENT
The court quashed the charges against the appellants, holding that the sale of Nitrous Oxide I.P. by Appellant No. 1 to Accused No. 3 did not violate the Drugs and Cosmetics Act, 1940. Both the appellants and Accused No. 3 were licensed under Form 25 to manufacture, alter, repack, and distribute the drug. The court concluded that no offense had been committed since Accused No. 3 had the requisite license to sell and distribute further. Furthermore, procedural grounds in the order of the Magistrate led to discharge.
CONCLUSION
The court, thus, in the end, gave a judgment in favor of the appellants by quashing the charges against them. The court found that the sale of Nitrous Oxide I.P. from INOX (Appellant No. 1) to Accused No. 3 was legally permissible, as both the entities had valid licenses under Form 25 for manufacturing, altering, repacking, and distributing the drug. The requirement of form 20B, which formed the prosecution argument, was ruled irrelevant, with the view that form 25 was adequate enough for the undertakings it was associated with. Secondly, procedural improprieties on the order issued by the Magistrate included lack of reasons why he was compelled to issue process resulted in dismissal.
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WRITTEN BY SHIVRANJNI
