M/S. R.P.G. Life Sciences Ltd. & Ors vs State Of Tamil Nadu

M/S. RPG LIFE SCIENCES LTD. & ANR. Appellants

VERSUS

STATE OF TAMIL NADU Respondent

WITH

CRIMINAL APPEAL NO. 1034 OF 2002 M/S. SRI MAHAVEER PHARMA AGENCIES & ORS. Appellants

VERSUS

STATE OF TAMIL NADU Respondent

J U D G M E N T

Dalveer Bhandari, J.

1. These appeals have been preferred by the

appellants against the judgment and order dated

7.6.2002 passed by the High Court of Judicature at

Madras in Criminal Appeal No.149 of 1996 and Criminal

R.C. No. 155 of 1996, whereby the High Court has

confirmed the order of conviction and sentence of the

appellants passed by the Trial Court.

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2. We have heard the learned counsel for the

parties.

3. We propose to dispose of both these appeals by

this Judgment.

4. Brief facts which are necessary to dispose of

these appeals are recapitulated as under:-

On 29.11.1985, the then Drugs Inspector, Park

Town, II Range, Office of the Assistant State Drugs

Controller Zone-1, inspected the premises of M/s. Sri

Mahaveer Pharma Agencies (appellant no. 1 in Crl. A.

No. 1034 of 2002) and found 68 bottles containing 100

Tablets each of Haloperidol, 5 Mg. Tablets, B.P. Lot

060, which was manufactured in March 1985 by M/s.

Searle India Limited (now M/s. RPG Life Sciences Ltd.).

He also found that the bottles do not contain the

labels indicating the maximum retail price of the Drug

as contemplated under the Drugs (Prices Control) Order,

1979 (hereinafter referred to as 'DPCO 1979'). The said

bottles were frozen on 29.11.1985 and at the same time,

he also found that there were no purchase details for

the purchase of the said bottles. Acknowledging the

same, Padamchand Chordia, partner of the firm M/s. Sri

Mahaveer Pharma Agencies, submitted a letter (Ex.P1)

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stating that the labels do not indicate the maximum

retail price and they agreed to furnish the purchase

and sale details of Haloperidol 5 Mg. Tablets. On

2.12.1985, the Drugs Inspector drew samples from the

bottles under Form No.17, marked as Ex.P.-3 and

attested by P.W.3. Based on the above, show cause

notices were sent to the respective firms and on the

replies from the accused and the reports from the

analyst, a complaint was filed by the Drugs Inspector

against seven accused persons.

5. First accused is M/s. Searle India Limited,

Bombay which is the manufacturing firm of the Drug

Heloperidol Tablet;

Second accused is Dr. K.K. Maheshwari,

Production Manager of M/s. Searle India Limited,

Bombay;

Third accused is the firm by name M/s. Sri

Mahaveer Pharma Agencies, who had purchased, sold and

stocked the drug Haloperidol Tablets manufactured by A-

1 Company;

Fourth accused is the partner by name

Padamchand Chordia representing the accused firm M/s.

Sri Mahaveer Pharma Agencies;

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Fifth accused is the firm by name M/s. Sri

Mahaveer Pharma Distributors who purchased, sold and

stocked Haloperidol Tablet;

Sixth accused is the partner by name Padamchand

Chordia of M/s. Mahaveer Pharma Distributors (A-5) who

purchased, sold and stocked the drug Haloperidol; and

Seventh accused by name, Raghavan, is the

Proprietor of the firm M/s. Sripathy Distributors

Madras, who purchased and sold Haloperidol Tablet.

6. The above seven accused were charged for

violation of para 20 of the DPCO 1979 punishable under

Section 7(1)(a)(ii) of the Essential Commodities Act,

1955 read with Section 3(2)(c) of the said Act. The

Special Judge, Essential Commodities Act, Madras tried

the charges and found the accused appellants guilty of

the charges and convicted all of them under Section

7(1)(a)(ii) of the Essential Commodities Act, 1955 read

with Section 3(2)(c) of the said Act and sentenced them

as follows:

7. Accused No.1 - M/s. Searle India Limited was

directed to pay a fine Rs.10,000/-. Accused No.2 - K.K.

Maheshwari was sentenced to undergo rigorous

imprisonment for three months. Accused No.3 was

directed to pay fine of Rs.5,000/-. Accused No. 4 was

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sentenced to rigorous imprisonment for three months and

to pay a fine of Rs.3,000/-. Accused No.5 was directed

to pay a fine of Rs.5,000/-. Accused No.6 was sentenced

to rigorous imprisonment for three months and to a fine

of Rs.3,000/-. Accused No.7 was sentenced to rigorous

imprisonment for three months and to a fine of

Rs.5,000/-. In default of payment of fine, they were

directed to undergo further imprisonment for two

months. Since accused Nos. 4 and 6 are the same, he

has to undergo the punishment in the same period.

8. Against the order of conviction and sentence

dated 31.1.1996 passed by the Special Judge, Essential

Commodities Act, Madras, accused Nos. 1 & 2 preferred

appeal before the High Court while accused Nos.3 to 7

preferred revisions against the said judgment. The High

Court confirmed the conviction and sentence of the

appellants and dismissed their appeal and revisions.

9. Six of the accused have preferred appeals, by

special leave, before this Court. Mr. Raghavan, who

was the proprietor of M/s. Sripathy Distributor, has

not filed any appeal before this Court.

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10. To establish the guilt of the accused, the

prosecution had examined 4 witnesses on its side and

mark Ex.P-1 to Ex.P-25. The evidence of the Drug

Inspector, P.W.1 is that he visited the premises of A-3

on 29.11.1985 and found 68 bottles of Haloperidol 5 Mg.

tablet containing about 100 Tablets each, without the

label which indicates the maximum retail price. With

regard to the same, a letter was given by A-4, the

Partner of A-3 Firm, marked as Ex.P-1, admitting the

fact that maximum retail price column has not been

furnished on the label of the bottle and the details

regarding the purchase of the bottles will be

furnished. Hence, P.W.1 had frozen the articles and

had given Ex.-2, giving out the details about the

consignment. In continuation of his inspection made on

29.11.1985, he again inspected the premises of A-3 firm

on 2.12.1985 at about 9.30 a.m. and after observing all

the formalities, seized the samples of Haloperidol

Tablet under Ex.P-3, attested by P.W.3, Ex.P-4 is the

list detailing about the price of 4 bottles of

Haloperidol obtained from A-3 firm. M.O.1 series (68

bottles of Haloperidol) had been recovered under

Mahazar Ex.P-5, attested by P.W.4.

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11. The Delivery Challan/Invoice for the goods

delivered from A-1 firm to A-3 firm containing the

product namely Haloperidol was recovered under Ex.P.-6.

The recovered articles were sent to the Court with the

requisition under Ex.P-7 to keep them in safe custody.

He also made arrangements to send the M.O.2 Series (2

bottles of Haloperidol Tablet) for analysis through

Form No.18, marked as Ex.P-8. Show cause notices were

sent to A-1 and A-3 firm under Ex.P-9 and Ex.P-10

respectively. A-4 on behalf of A-3 had sent a letter

dated 3.12.1985 about the purchase details with regard

to 30 bottles of Haloperidol Tablet, marked as Ex.P-11.

Apart from the above, A-4 on behalf of A-3 had also

sent a reply to the show cause notice, marked as Ex.P-

12, wherein A-4 had stated that they expressed their

regrets and that by mistake they have not noticed the

label of the drug, which does not show the maximum

retail price and requested P.W.1 to kindly condone the

mistake and oblige. Thereafter, P.W.1 having come to

know that A-5 firm was also involved in the purchase

and sale of Haloperidol, issued a show cause notice

under Ex.P-13 dated 10.1.1986 and A-5 sent a reply of

which Ex.P-15 is the verbatim copy of Ex.P.12,

admitting that they had not noticed the absence of

maximum retail price in the bottle and requested him to

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condone the mistake and oblige. He had also come to

know by virtue of Ex.P-15 that 15 bottles had been sold

to A-7 and on the basis of Ex.P-16, the copy of the

bill, show cause notice was issued to A-7, marked as

Ex.P-17. Ex.P-18 is the reply sent by A-7 and in

addition to his notice, had also supplied the bills, on

the basis of which he had purchased Haloperidol from A-

3. After receiving the replies from the respective

accused and after obtaining the sanction, P.W.1 had

filed the complaint.

12. It is an undisputed fact that the recoveries

have been made at the respective firms and hence it may

not be necessary to dwell upon the issue. However, the

specific case of the accused is that Haloperidol is

available in its generic sense and when it is sealed,

packed and distributed in the brand name, it is named

as Serenas Tablets. In other words, according to the

accused, it is not the case of the prosecution that the

tablet was either misbranded or does not conform with

the quality prescribed, but the only infringement is

that the maximum retail price has not been printed on

the bottle. They would further claim that the Drug had

been marketed and sold in the generic name Haloperidol,

exclusively for hospital supplies and the cost of it

has been printed in the price list. The same product

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is marked as Sarenas by its brand name for retailers in

strips of 10 in Aluminium foil. Hence, in short, their

claim is that the bottle need not contain the maximum

retail price, if the Tablets in generic form, namely as

Haloperidol had been supplied to hospitals and only in

the case of the Drug being sold in the trade name

Serenas, the maximum retail price should be mentioned.

This appears to be the substratum of the argument of

the learned counsel appearing for all the accused.

13. In order to substantiate the above, the learned

counsel for the accused had drawn our attention to the

answers given by P.W.1 in cross examination, wherein

according to Pharmacopea, Haloperidol is the generic

name and the Trade Name is Serenas. Ex.P-21-A is the

price list in which the price of Seranas 5 Mg. has been

marked. The price relates to 10 tables and the price

of which is Rs.21.14.

14. Para 20 of the DPCO, 1979 reads as under:-

"Retail price to be displayed on label of containers. Every manufacturer or distributor of a formulation intended for sale shall display in indelible print mark on the label of the container of the formulation or the minimum pack thereof offered for retail sale, the maximum/retail price of that formulation with the words "retail price not to exceed" preceding it, and "local taxes extra" succeeding it."

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15. According to para 20 of DPCO, 1979 either the

manufacturer or the distributor of a specific medicine

has to print that the medicine is for sale on the

bottle and also the maximum retail price has to be

mentioned. Hence in this case the accused come under

punishable offence as per para 20 of DPCO 1979. Hence

as per the arguments of the counsel for the accused

that Haloperidol is not meant for retail sale and

therefore not covered by para 20 of DPCO 1979, does not

have any basis.

16. The accused appellants were convicted under

para 20 of DPCO 1979 and were punished by the Special

Judge under the Essential Commodities Act, 1955

sentencing them to three months' imprisonment and fine,

as indicated in the preceding paragraphs.

17. In the present case, the incident is of

31.5.1985 and in the peculiar facts of this case it may

not be desirable to send the appellants to jail after a

lapse of about 25 years.

18. In the facts and circumstances of this case, we

are of the considered view that ends of justice would

meet if while maintaining the conviction of the

appellants, instead of sending them to serve out three

months of imprisonment, the sentence of fine is

substantially increased.

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19. We, therefore, direct Appellant No.1 Company to

pay a fine Rs.2 lakhs, instead of Rs.10,000/-, as

directed by the Trial Court and confirmed by the High

court. Other appellants i.e accused Nos.2 to 6 are

directed to pay a fine Rs.25,000/- each. We extend this

order to one Mr. Raghavan (accused No.7) who has not

filed an appeal before this Court. The accused are

directed to pay the said amount of fine within a period

of six weeks from today. In case the aforesaid amount

of fine is not paid within six weeks, this order would

not be of any avail to the accused and they will have

to serve out the sentences as directed by the Trial

Court and confirmed by the High Court.

20. With this modification of the Trial Court order

as affirmed by the High Court, these appeals are

disposed of in the aforementioned terms.

......................J. (Dalveer Bhandari)

......................J. (Aftab Alam) New Delhi;

May 11, 2010.