M/S. Alkem Laboratories Ltd. vs The State Of Madhya Pradesh

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. OF 2019 (arising out of S.L.P. (Criminal) No. 3995 of 2018)

M/s Alkem Laboratories Ltd. ...Appellant

Versus

State of Madhya Pradesh and Anr. …Respondents

JUDGMENT

MOHAN M. SHANTANAGOUDAR, J.

1. Leave granted.

2. This appeal by special leave arises out of judgment dated

11.04.2018 of the High Court of Madhya Pradesh at Jabalpur,

dismissing the Appellant’s application under Section 482 of the Signature Not Verified Digitally signed by ASHWANI KUMAR Date: 2019.11.30 10:22:42 IST Criminal Procedure Code (‘CrPC’) for quashing of order dated Reason:

01.09.2015 of the Special Magistrate (Prevention of Food Adulteration 2

Act), Bhopal.

3. The facts giving rise to this appeal are as follows: The Appellant

was the marketer of packed food article ‘Orange Tammy Sugarless

Jelly’ (‘Jelly’). The Jelly was manufactured separately by one Cachet

Pharmaceuticals Private Limited (‘Manufacturer’), which is not

connected to the Appellant entity. On 3.10.2008, Respondent No. 2

Food Inspector, (from the Food and Drugs Administration, Bhopal

District), conducted inspection in Valecha Enterprises in Bhopal, the

proprietor of which is one Mr. Dinesh Valecha (‘Retailer’). Respondent

No. 2 purchased three company packed jars of the Jelly, weighing 350

grams each, from the Retailer and the said samples were deposited

with the State Food Testing Laboratory (‘State Laboratory’) and the

Local Health Authority, Bhopal for the purpose of testing. At this

stage, the Retailer did not have receipt of purchase from the

Appellant/marketer and stated that they would produce it before

Respondent No. 2 at a later stage.

The Local Health Authority by letter dated 26.11.2008 informed

Respondent No. 2 that the Report of the Public Analyst, State

Laboratory had found ‘sugar’ in the Jelly sample, hence the Jelly was

misbranded. Notably, it was pursuant to this letter that, Respondent

No. 2 made further query and the Retailer produced a receipt showing 3

that the Jelly was purchased from the Appellant. Respondent No. 2

sent a letter to the Local Health Authority and to the Indore branch of

the Appellant company, for information as regards the

Manager/Director/Partner or nominee of the Appellant. However, as

the Respondents claim, the Appellant did not respond to this query

and the letter was received back. The attempts of Respondent No. 2 to

obtain information about the Appellant from the Office of the Deputy

Director, Food and Drugs Administration and the Commissioner,

Nagar Nigam, Indore also failed.

Consequently, Respondent No. 2 filed a complaint in the Court of

the Judicial Magistrate, First Class, Bhopal for the offence of selling a

misbranded food article under Section 16(1)(a)(ii) read with Sections

2(ix)(g) and 7(ii) of the Prevention of Food Adulteration Act, 1954

(‘1954 Act’). During the course of the trial, after the closing of the

prosecution evidence, the Retailer examined himself as a witness for

the defence under Section 315 of the CrPC. Subsequently on

26.8.2014, the Retailer moved an application under Section 20A of the

1954 Act for impleading the Appellant as an accused, which was

allowed by the Special Magistrate (Prevention of Food Adulteration

Act), Bhopal by order dated 1.9.2015. Hence the Appellant approached

the High Court under Section 482 of the CrPC for quashing the said 4

order.

The High Court in the impugned judgment held that firstly, mens

rea was not an ingredient of the offence under Section 7 of the 1954

Act. Therefore the Appellant could not avail of the defense that since

they were only the marketer of the Jelly, they were not privy to the

ingredients thereof. Secondly, that the Appellant could not have

availed of the right to get the sample re­tested by the Central Food

Laboratory (‘Central Laboratory’) under Section 13(2) of the 1954 Act

as the same was only available to the vendor of an ‘adulterated’ food

article and not a ‘misbranded’ one. Hence the denial of the said right

would not prejudice the case against the Appellant.

Thirdly, that the delay of 5 years in arraying the Appellant as co­

accused would also not be fatal inasmuch as Respondent No. 2 had

made best attempts to contact the Appellant, and the Appellant’s

name was probably omitted to avoid delay in filing the complaint.

Lastly, that the application under Section 20A was maintainable as

the Court may be satisfied on the basis of evidence adduced by either

of the parties, including the prosecution, that the distributor/dealer of

a food article is also concerned with the offence and such evidence

need not be adduced by the applicant only. In any case the

applicant/Retailer had given his evidence prior to impleadment. Hence 5

the High Court declined to exercise its inherent powers under Section

482 of CrPC and quash the impleadment order dated 01.09.2015.

However, this Court has directed stay of proceedings before the trial

court against the Appellant during pendency of this appeal.

4. Learned senior counsel for the Appellant, Mr. C.U. Singh argued

that the application for impleadment under Section 20A was not

maintainable at the outset as such an application can only be made

by a person who is not the ‘manufacturer, distributor or dealer’ of the

food article, and the Retailer would be included in the phrase

‘manufacturer, distributor or dealer’. That in any case, as a catena of

decisions dealing with the 1954 Act as well as similar legislations such

as the Seeds Act, 1966 and the Insecticides Act, 1968 have held,

where an accused is denied their statutory right to get a sample re­

tested by a Central testing laboratory on account of delay, such denial

will render prosecution of the offence futile. He argued that the right

under Section 13(2) of the 1954 Act is not restricted to cases of

‘adulterated’ food articles but applies to testing of samples for other

offences under the 1954 Act as well; hence the order impleading the

Appellant is liable to be quashed.

Further, that the delay in impleading the Appellant was

attributable to the Respondents’ negligence as the label on the 6

packaging of the Jelly clearly stated that their registered office was in

Mumbai whereas the Respondents’ communications were addressed to

their Indore branch which is an old address.

Per contra, learned counsel for the Respondents stressed that a

plain reading of Section 13(2) shows that the right available

thereunder is only in respect of ‘adulterated’ food samples. Whereas in

other provisions of the 1954 Act, where a provision is meant to be

additionally applicable to misbranded food articles, the word

‘misbranded’ has been separately mentioned after ‘adulterated’. Hence,

the legislative intent to exclude misbranding from the purview of re­

testing by the Central Laboratory is clear. Further that though the

packaging on the Jelly stated that the Appellant had their office in

Mumbai, the food license produced by the Retailer before Respondent

No.2/Food Inspector showed that their address was in Indore and the

cause title of the Appellant’s application under Section 482, CrPC

states that their branch office/manufacturing unit is located at Indore;

hence they cannot be blamed for the delay in impleading the

Appellant. In any case, the High Court’s powers under Section 482

against an interlocutory order are to be exercised sparingly, and it was

open to the Appellant to prove their innocence at the stage of trial.

5. At the outset, it must be noted that the Appellant’s contention 7

that an application under Section 20A could not have been made by a

retailer is misguided. The provisions of the 1954 Act clearly

distinguish between a ‘vendor’ and ‘manufacturer’ of a food article.

The very purpose of Section 20A is to enable the Court to implead the

manufacturer or distributor during the trial of the vendor of the food

article, so as to detect and punish adulteration at all stages of the

supply chain. Admittedly, the prosecution may have to prove, for the

purpose of trying the Retailer and the Appellant in a joint trial, that

they shared a common object that the misbranded Jelly should reach

consumers as food, as per this Court’s decision in Bhagwan Das

Jagdish Chander v. Delhi Administration, (1975) 1 SCC 866.

However, we find that this question need not be looked into at the

stage of mere impleadment of the Appellant for the offence of

misbranding.

It is pertinent to note that in Bhagwan Das Jagdish Chander,

M.H. Beg J. in his majority opinion directed quashing of charge

against the Appellant distributor on the ground that on account of

long passage of time since the initiation of prosecution, it would be

difficult for the Appellant to challenge the correctness of the Public

Analyst’s Report. Hence the primary issue which arises for our

consideration is whether the denial of the right to get the Jelly sample 8

tested by the Central Laboratory, under Section 13(2) of the 1954 Act,

would entitle quashing of proceedings against the Appellant for the

offence of ‘misbranding’?

6. Before we turn to the substantial question of law involved in the

appeal, it may be useful to refer to the relevant provisions of the 1954

Act. It is explained in the Statement of Objects and Reasons of the

1954 Act that prior to its enactment, there were numerous State

legislations on the subject of prevention of adulteration of food­stuffs

but these lacked uniformity. Hence the need for a Central legislation

was felt which could inter alia, provide for a uniform procedure and

the constitution of ‘a Central Food Laboratory to which food samples

can be referred to for final opinion in disputed cases.’

Section 8 of the 1954 Act provides for the appointment of Public

Analysts by the Central or the State Government as the case may be,

for the purpose of carrying out analysis and testing of food samples in

a given local area. Section 9 provides for the appointment of Food

Inspectors for the purpose of inter alia, carrying out inspection of

establishments where food articles are manufactured or sold, and

seizing food articles which require analysis. Section 14A mandates

vendors of food articles to disclose the name and other particulars of

the person from whom the food article was purchased, if the Food 9

Inspector so requires.

Section 11 stipulates the procedure to be followed by Food

Inspectors while taking food samples for analysis. It is important to

note that the first step of the procedure is to immediately notify on the

spot, not only the vendor but also the person whose particulars are

disclosed under Section 14A (which would include a

distributor/marketer such as the Appellant), that a sample is being

sent for analysis. The sample is then divided into three parts­while the

first part is sent to the Public Analyst, the other two are deposited with

the Local Health Authority as a contingency in case the first part is

lost or damaged.

It is this backdrop that Section 13 of the 1954 Act prescribes the

subsequent procedure to be followed after the Public Analyst prepares

their report:

“(1) The public analyst shall deliver, in such form as may be prescribed, a report to the Local (Health) Authority of the result of the analysis of any article of food submitted to him for analysis.

(2) On receipt of the report of the result of the analysis under sub­section (1) to the effect that the article of food is adulterated, the Local (Health) Authority shall, after the institution of prosecution against the persons from whom the sample of the article of food was taken and the person, if any, whose name, address and other particulars have been disclosed under section 14A, forward, in such manner as may be prescribed, a copy of the report of the result of 10

the analysis to such person or persons, as the case may be, informing such person or persons that if it is so desired, either or both of them may make an application to the court within a period of ten days from the date of receipt of the copy of the report to get the sample of the article of food kept by the Local (Health) Authority analysed by the Central Food Laboratory.

(2B) On receipt of the part or parts of the sample from the Local (Health) Authority under sub­section (2A), the court shall first ascertain that the mark and seal or fastening as provided in clause (b) of sub­section (1) of section 11 are intact and the signature or thumb impression, as the case may be, is not tampered with, and despatch the part or, as the case may be, one of the parts of the sample under its own seal to the Director of the Central Food Laboratory who shall thereupon send a certificate to the court in the prescribed form within one month from the date of receipt of the part of the sample specifying the result of the analysis.

… (3) The certificate issued by the Director of the Central Food Laboratory under sub­section (2B) shall supersede the report given by the public analyst under sub­section (1).”

Therefore the purpose of Section 13 is to give a second

opportunity to accused persons, against whom prosecution is initiated

under the 1954 Act based on the Public Analyst’s report, to get the

relevant food sample tested again by the Central Laboratory. Since the

Central Laboratory’s report will have precedence over that of the

Public Analyst, this is a valuable opportunity for accused persons to

claim exoneration from criminal proceedings.

7. It can be seen from the above­mentioned provisions that under 11

the scheme of the 1954 Act, the accused has to be given prior notice,

as provided under Section 11, that samples of a food article

manufactured and/or sold by them have been sent for analysis, before

the Public Analyst prepares their report. The 1954 Act does not

envisage a situation such as the present case where the sample is sent

for analysis, and the Public Analyst’s report is also prepared, but the

marketer is informed several years later that prosecution is sought to

be instituted against them. During such period, the food article being

perishable in nature would most probably be incapable of being sent

for re­testing to the Central Laboratory.

Thus, it has been settled by this Court in Municipal

Corporation of Delhi v. Ghisa Ram, AIR 1967 SC 970, that where

inordinate delay in instituting prosecution has resulted in denial of the

right under Section 13(2), it is deemed to have caused serious

prejudice to the accused such that their conviction on the basis of the

Public Analyst’s report cannot be upheld. In Girishbhai Dahyabhai

Shah v. C.C. Jani, (2009) 15 SCC 64, this Court affirmed that a delay

in sending a report of the Public Analyst to the accused, such that he

is no longer in a position to apply for re­testing under Section 13(2) of

the 1954 Act, would entitle quashing of criminal proceedings under

Section 482 of the CrPC. However the above­mentioned decisions dealt

with the offence of adulteration simplicitor and did not touch upon the 12

question of the consequence of non­compliance with Section 13(2) in

cases involving other offences.

However, upon a comparison of Section 2(ia) of the 1954 Act

which defines ‘adulterated’ and Section 2(ix) which defines

‘misbranded’, we find that there is an overlap between the two

provisions. Section 2(ia)(a) includes within the definition of

‘adulterated’ a case where a food article is ‘not of the nature,

substance, or quality which it purports or is represented to be.’

Whereas Section 2(i)(ix)(g) includes within the definition of

‘misbranded’ the following:

“if the package containing it, or the label on the package bears any statement, design or device regarding the ingredients or the substances contained therein, which is false or misleading in any material particular; or if the package is otherwise deceptive with respect to its contents.”

Therefore for example, in cases where it is found that a food

article contains an additional ingredient which is not advertised on its

packaging, or vice versa, where a food article is found to be missing an

ingredient which is purported to be included in the contents thereof in

the labelling/packaging of the article; or where the food article has

used an inferior quality substitute but the labelling purports to use

the superior quality original ingredient, it would be a case of both

adulteration and misbranding.

13 This is not an exhaustive list of examples, but it suffices to say

that in certain situations, even for the purpose of proving the offence

of ‘misbranding’, samples of the article would have to be taken

according to the procedure prescribed under Sections 11­13 of the

1954 Act. This is because in such cases it would not be possible to

conclude whether or not the manufacturer, marketer or vendor has

put a deceptive label/package on the food article, without making a

finding as to whether there has been any adulteration in the contents

thereof.

8. The question which arises then is, what is the procedure to be

followed in cases where proving ‘misbranding’ requires testing of the

relevant food samples, but the corresponding charge of ‘adulteration’

has not been made? Section 13(2) is unfortunately silent in this

regard. It is a settled principle of statutory interpretation that any

ambiguity in a penal statute has to be interpreted in favour of the

accused. It would be absurd and discriminatory for the prosecution to,

on one hand, rely on the report of the Public Analyst under Section

13(1) for proving the offence of ‘misbranding’, and on the other hand,

claim that the accused cannot avail of their right to challenge the said

report as per Sections 13(2) and 13(3) because it is not a case of

‘adulteration’. In such a scenario, the word ‘adulterated’ in Section 14 13(2) would have to be read as including ‘misbranded’ in so far as it

relates to the ingredients of the concerned food article, and the

relevant clauses of Section 13 have to be complied with in their

entirety.

Hence we are of the considered opinion that where examination

of the contents/ingredients of the food article is integral to proving the

offence ‘misbranding’, the procedure prescribed under Sections 11­13

of the 1954 Act has to be complied with, regardless of whether

‘adulteration’ is alleged or not. This includes the right to obtain a

second opinion from the Central Laboratory under Section 13(2). The

same test would apply in respect of any other offence for which

penalty is prescribed under the 1954 Act.

It is needless to say that this rule would not apply if proving the

offence does not necessarily require sampling of the food article. For

example, if the offence is one of ‘bearing the name of a fictitious

individual or company as the manufacturer or producer of the article’

under Section 2(ix)(h) it may not be necessary to analyse the contents

of the food article to prove the offence so long as the prosecution is

able to establish that the real manufacturer has deceptively concealed

their identity.

9. Applying the above­mentioned test to the present case, it has to

be seen whether first, the Appellant was entitled to apply for testing of

the Jelly by the Central Laboratory under Section 13(2); second, 15

whether the denial of the right was the Respondents’ fault and third,

whether such denial is prejudicial to the Appellant’s case. With respect

to the first point, the Respondents have relied upon the Public

Analyst’s Report which states that the Jelly contains ‘sugar/sucrose’,

so as to institute a complaint for misbranding under Section 2(ix)(g) of

the 1954 Act. This is because the label on the packaging claims that

the Jelly is ‘sugarless’. Hence, the Public Analyst’s finding on whether

‘sugar’ as an ingredient is present in the Jelly sample is crucial to

proving the offence of ‘misbranding’ against the Appellant. Thus, the

Appellant ought to have had the opportunity to make an application

under Section 13(2) for a second opinion from the Central Laboratory

on the contents of the Jelly sample.

With respect to the second point, we are of the view that

Respondent No. 2 erred in not making query to the Retailer, at the

first instance, about the marketer of the Jelly, as she was empowered

to do under Section 14A of the 1954 Act. If she had done so, the

Appellant could have been notified in 2008 itself that the Jelly is being

taken for analysis. Even if this lapse is condoned, once the Retailer

had intimated the Respondents that the Appellant was the marketer of

the Jelly, they ought to have made more efforts in notifying the

Appellant of the alleged irregularity found in the Jelly sample, as per 16 Section 13(2). We do not find merit in the Respondents’ submission

that the delay in informing the Appellant was because the Appellant

was deliberately avoiding service of notice. Even if the address

produced by the Retailer was of the Appellant’s Indore Branch, the

label on the packaging of the Jelly clearly indicated that the official

address for communication would be “Alkem House, Senapati Bapat

Marg, Lower Parel, Mumbai­400013”. Hence even if no response was

being received from the Indore branch, the Respondents could have

attempted to send the details of the Public Analyst’s Report to the

Appellant’s Mumbai address. Thus it is clear that the Appellant lost

their chance to get the Jelly sample re­tested under Section 13(2) on

account of the Respondents’ negligence.

Finally, with regard to the third point, it is true that non­

compliance with Section 13(2) would not be fatal in every case, if it is

found that the sample is still fit for analysis (T. V. Usman v. Food

Inspector, Tellicherry Municipality, Tellicherry, (1994) 1 SCC

754). However the Respondents have not disputed that the shelf life of

the Jelly sample would have, in all probability, expired at this stage.

Hence we find that this is a fit case for quashing of proceedings

against the Appellant on account of denial of their valuable right

under Section 13(2).

17

10. The appeal is allowed, and the impugned judgment dated

11.04.2018 and the impleadment order dated 01.09.2015 are set

aside, in the above terms.

…..…………................................J. (MOHAN M. SHANTANAGOUDAR)

….…………………………...............J. (KRISHNA MURARI) New Delhi;

November 29, 2019