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Rajasthan High Court – Jodhpur
M/S Health Boitech Ltd And Ors vs State on 9 April, 2025
Author: Farjand Ali
Bench: Farjand Ali
[2025:RJ-JD:17719]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc(Pet.) No. 859/2015
1. Sh. Ranu Bhargav 9/0 SH. Amerjeet Bhargav, Director M/s
Health Biotech Ltd, Nalagarh Road, Baddi Dist Solan (H.P),
Resident Panora Mohalla Nawan Sahar Punjab.
2. Sh. Pridman Krishan Ganju S/o Sh. Ragunath Gunju Director
M/s Health Biotech Ltd, Nalagarh Road, Baddi Dist Solan (H.P)
Chandigarh Resident 2434 sector 37-C.
----Petitioner
Versus
State Of Rajasthan, through drugs Controller Officer, Bhilwara,
Rajasthan
----Respondent
Connected With
S.B. Criminal Misc(Pet.) No. 977/2016
1. M/s Health Biotech Ltd, NalaGarh Road Baddi, 173205,
through Hari Ram Goel S/o Gianchand Goel Authorized
Signatory,
2. M/s Rescure life sciences Ltd. 131-132 EPIP Phase 1,
Jharmajhari, Baddi District Solan, through Rohini Raman Pathak
S/o Navonath Pathak, authorized representative.
3. ParamJeet Arora S/o Iqbal Singh, Director M/s Health Biotech
Ltd, Nalagarh Road, Baddi, Resident of 2113 Sector 38 C
Chandigarh.
4. Smt Reenu Arora S/o ParamJeet Arora Resident of 2113
Sector 38 C Chandigarh.
5. Gourav Chawala S/o Sh. DeshRaj Chawla, Director M/s Health
Biotech Ltd, Nalagarh Road, Baddi, Resident 1018 sector 37-C
Chandigarh.
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[2025:RJ-JD:17719] (2 of 10) [CRLMP-859/2015]
----Petitioner
Versus
State Of Rajasthan, through Drugs Controller Officer, Bhilwara,
Rajasthan
----Respondent
For Petitioner(s) : Mr. Sanjay Jain
Mr. Akshay Jain
Mr. Pankaj Gupta
For Respondent(s) : Mr. Vikram Singh Rajpurohit, Dy.G.A.
Mr. R.S. Bhati, AGA
HON'BLE MR. JUSTICE FARJAND ALI
Order
Judgement Pronounced On ::: 09/04/2025
Judgement Reserved On ::: 21/03/2025
1. The petitions have the following prayer:
Quash and set aside the order dated 12.01.2013 passed by
the learned Chief Judicial Magistrate, Bhilwara, in Criminal
Case No. 30/2013, whereby cognizance has been taken
against the petitioner for the alleged offences under Sections
16(1)(a), 17(6), 18(a)(xi), 18(a)(vi), and 18(c) read with
Rules 96 and 12(2), and punishable under Sections 27(b)(ii)
and 27(d) of the Drugs and Cosmetics Act, 1940; the case
presently pending before the Court of Additional Chief
Judicial Magistrate No. 2, Bhilwara, as Criminal Regular Case
No. 378/2013.
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2. These are the grounds raised in relation to Section 34 of the
Drugs and Cosmetics Act, 1940, inter alia:
That the impugned order dated 12.01.2013 is vitiated by
non-application of judicial mind and suffers from a
mechanical, cyclostyled approach devoid of analytical
reasoning, being predicated on conjecture and surmise
rather than cogent facts or the settled legal position. It is
further contended that the complaint and annexed
documents, even upon a prima facie examination, fail to
disclose the essential ingredients necessary to attract
criminal liability under Section 34 of the Act. The petitioners
had ceased to be Directors of M/s Health Biotech Ltd. prior to
the year 2003, as substantiated by Form No. 32 under the
Companies Act, 1956, and thus could not be saddled with
vicarious liability for the alleged offences which pertain to the
year 2010. Moreover, there is a categorical absence of any
material implicating the petitioners in the manufacturing,
distribution, or sale of the impugned drugs, and no evidence
exists indicating that they were responsible for the day-to-
day affairs of the company at the relevant time. The
complaint even fails to establish that the alleged
manufacturer, M/s Savani (Formulation Division), or
marketer, M/s Rescuer Life Sciences, had any legally
attributable connection to the petitioners that would warrant
invocation of criminal liability. Additionally, the provisions of
Section 19 of the Act, which serve as a safeguard prior to
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[2025:RJ-JD:17719] (4 of 10) [CRLMP-859/2015]prosecuting marketing entities, were not complied with.
Thus, the very foundation of cognizance is flawed and
amounts to a gross abuse of the process of law, warranting
quashment of the proceedings qua the petitioners.
3. A detailed judgement has been passed by this court after
eloborated discussion in the case of Ganesh Narayan
Nayak v. State of Rajasthan (S.B. Criminal Misc(Pet.)
No. 6621/2023 ), the same has been reproduced
hereinbelow for ready reference-
1. These criminal miscellaneous petitions under Section 482
read with Section 483 of the Code of Criminal Procedure,
1973 (Cr.P.C.), have been filed by the respective
petitioners seeking quashing of Complaint No. 158/2017
dated 06.02.2017, titled State of Rajasthan through Drug
Control Officer vs. M/s Life Line Fluid and Drug Store,
Rajsamand and Others, along with all subsequent
proceedings arising therefrom, pending before the learned
Chief Judicial Magistrate, Rajsamand, Rajasthan, on the
ground that the same is illegal and amounts to an abuse of
the process of law.
2. Given the similar nature of allegations, legal issues, and
prayers involved in all the petitions, they are being decided
together through this consolidated order.
3. The origin of the dispute dates back to an inspection
conducted on 30.11.2012 by the Drugs Control Officer
(respondent No. 2) at the premises of M/s Life Line Fluid
and Drug Store, Rajsamand. During the said inspection, a
sample of the drug “Tab. Glimp-2” (Batch No. BD-11374),
manufactured by M/s Skymap Pharmaceuticals, was
collected for analysis. The Government Analyst, Jaipur,
vide report dated 15.01.2013, declared the sample as not
of standard quality due to non-conformity with the
dissolution test.
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4. The distribution chain of the subject drug was traced back
through intermediary distributors, eventually leading to M/
s Biochem Pharmaceuticals Industries Limited (now
amalgamated with M/s Zydus Healthcare Limited), which
marketed the product, and M/s MKS Pharma Limited, a
wholesale license holder. Despite this tracing, the Drugs
Control Officer did not follow the statutory requirement of
sending the sample to the manufacturer for reanalysis
under Section 25(3) of the Drugs and Cosmetics Act, 1940
(hereinafter “the 1940 Act”).
5. The prosecution proceeded to file Complaint No. 158/2017
on 09.01.2017 before the learned Chief Judicial Magistrate,
Rajsamand, under Sections 18(a)(i), 18(a)(vi) read with
Sections 16(i)(a) and 17A, punishable under Section 27(b)
(i) of the 1940 Act. Cognizance was taken vide order dated
06.02.2017.
6. The petitioners before this Court include the following:
CRLMP No. 6621/2023: M/s Biochem Pharmaceuticals
Industries Limited – Additional Directors (Non-Executive),
and others.
CRLMP No. 6626/2023: M/s Biochem Pharmaceuticals
Industries Limited, its Directors, competent persons, M/s
MKS Pharma Limited, and its Directors.
CRLMP No. 108/2024: M/s Skymap Pharmaceuticals, its
partners, manufacturing chemists, and analytical chemists.
7. This Court has heard the learned counsels present for the
parties, meticulously perused the records and given its
thoughtful consideration to the facts of the case, the legal
provisions involved, and the judgments cited. The
fundamental issue at hand pertains to the legality of the
complaint and the subsequent proceedings, keeping in view
the statutory provisions under the Drugs and Cosmetics
Act, 1940, and the Code of Criminal Procedure, 1973.
8. A comprehensive review of the complaint and the
attendant circumstances reveals a glaring procedural lapse,
which vitiates the very foundation of the prosecution. The
principle of vicarious liability, as embodied under Section
34 of the Drugs and Cosmetics Act, 1940, fastens liability
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[2025:RJ-JD:17719] (6 of 10) [CRLMP-859/2015]
only upon those individuals who were in charge of and
responsible for the conduct of the business at the time of
the alleged offence. In the present case, the petitioners,
who were appointed as Additional Directors (Non-
Executive) much after the relevant period, cannot be
saddled with criminal liability merely by virtue of their
designation. The Hon’ble Supreme Court, in Gunmala
Sales (P) Ltd. v. Anu Mehta, (2015) 1 SCC 103, has
enunciated the principle that unimpeachable documents,
such as Form-32 and board resolutions, can be relied upon
for quashing criminal proceedings under Section 482
Cr.P.C. The present case falls squarely within the ambit of
this settled legal proposition, as the documents on record
unequivocally establish that the petitioners had no nexus
with the affairs of the company at the time of the alleged
offence.
9. Further, the Hon’ble Supreme Court in Sunil Bharti Mittal
v. CBI, (2015) 4 SCC 609, held that non-executive
directors cannot be held vicariously liable in the absence of
specific allegations regarding their role in the offence. The
same principle was reiterated in Sunita Palita v.
Panchami Stone Quarry, (2022) 10 SCC 152. In the
instant matter, the complaint merely mentions the
petitioners as directors of the company but does not
establish their involvement in the alleged offence. The
absence of any substantive allegation or material indicating
their active participation renders the prosecution
unsustainable in law.
10. Additionally, the limitation aspect cannot be ignored.
The alleged offence was detected on 15.01.2013, yet the
complaint was filed only on 09.01.2017, beyond the three-
year statutory limitation prescribed under Section 468
Cr.P.C. for offences punishable under Section 27(d) of the
1940 Act. The Hon’ble Supreme Court, in Cheminova
(India) Ltd. v. State of Punjab, (2021) 8 SCC 818,
while dealing with the Insecticides Act (a statute pari
materia to the Drugs and Cosmetics Act, 1940), held that
prosecution beyond the limitation period is barred. The
present case falls squarely within this legal framework,
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rendering the continuation of the proceedings against the
petitioners legally untenable.
11. Another critical aspect pertains to the failure of the
Drugs Control Officer to comply with the statutory
requirement under Section 25(3) of the 1940 Act, which
mandates sending a portion of the sample to the
manufacturer for reanalysis in case of a disputed report.
The Hon’ble Supreme Court in Medicamen Biotech Ltd.
v. Rubina Bose, (2008) 7 SCC 196, categorically held
that non-compliance with this statutory mandate vitiates
the entire prosecution. In the present case, despite
procedural irregularities and non-adherence to mandatory
requirements, the complaint was filed and cognizance was
taken, which is a serious lapse on the part of the
prosecution.
12. Moreover, the statutory protection under Section
19(3) of the 1940 Act, which absolves persons other than
the manufacturer from liability if the drug was purchased
from a duly licensed entity and stored in the same
condition, has been disregarded. The Hon’ble Supreme
Court in Kisan Beej Bhandar v. Chief Agricultural
Officer, 1990 Supp SCC 111, while interpreting a pari
materia provision under the Insecticides Act, reiterated this
protection for wholesalers and retailers. The petitioners,
being mere marketers and distributors, fall within the
purview of this statutory safeguard. Thus, their prosecution
is not only unwarranted but also a clear abuse of the
process of law.
13. Furthermore, it is evident from the record that the
learned Magistrate failed to conduct a mandatory inquiry
under Section 202 Cr.P.C. before issuing process, despite
the petitioners residing outside the court’s jurisdiction. The
Hon’ble Supreme Court in National Bank of Oman v.
Barakara Abdul Aziz, (2013) 2 SCC 488, and Abhijit
Pawar v. Hemant Madhukar Nimbalkar, (2017) 3 SCC
528, has emphasized that an inquiry under Section 202
Cr.P.C. is imperative in such cases. The failure of the
learned Magistrate to adhere to this mandatory
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requirement renders the summoning order legally
unsustainable.
14. Additionally, the Government Analyst’s report itself
indicates that the drug in question failed the dissolution
test but had an active ingredient within the standard limits.
The Guidelines issued by the Central Government under
Section 33-P of the 1940 Act classify such defects as
minor, which do not warrant prosecution under Section
27(b)(i). The Hon’ble Supreme Court in Laborate
Pharmaceuticals India Ltd. v. State of Tamil Nadu,
(2018) 15 SCC 93, has held that where minor defects are
noted, initiation of prosecution is impermissible.
15. In the present case, the drug’s active pharmaceutical
ingredient (API) was found to be within the prescribed
standards, and the only deviation was in the dissolution
rate. A delayed dissolution does not render the drug
spurious or useless; it merely implies a slower release of
the active content, which still remains effective. The
therapeutic efficacy of the drug is not entirely negated by
such a delay. Dissolution rates can be influenced by several
factors, including the quality of excipients, manufacturing
processes, temperature control, and climatic conditions
during production and storage. The presence of the correct
active ingredient in the specified quantity is the primary
factor in determining a drug’s standard quality. If the core
content of the drug remains intact and effective, classifying
it as substandard, spurious, or useless would be legally and
scientifically untenable.
16. The mechanical approach of the prosecution in filing
the complaint, without considering the nature of the defect
and its actual impact on drug efficacy, further substantiates
the contention that the proceedings are an abuse of the
process of law.
17. The complaint was filed much after the expiry of the
shelf life of the drug, thereby frustrating the valuable right
of the petitioners under Sections 25(3) and 25(4) of the
1940 Act to seek retesting. The Hon’ble Supreme Court in
State of Haryana v. Brij Lal Mittal, (1998) 5 SCC 343,
and State of Haryana v. Unique Farmaid (P) Ltd.,
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(1999) 8 SCC 190, has consistently held that when the
right to retesting is denied due to the expiry of the drug,
the prosecution is rendered null and void. The present case
is no exception, as the petitioners have been deprived of
their statutory right due to an unjustifiable delay in filing
the complaint.
18. In light of the aforesaid discussion, this Court finds
that the entire prosecution is vitiated by multiple legal
infirmities, including non-compliance with mandatory
procedural safeguards, lack of vicarious liability, expiry of
limitation, and statutory protection available to distributors
and marketers. The continuation of the proceedings would,
therefore, amount to a gross abuse of the process of law.
19. Accordingly, the present petitions are allowed.
20. Furthermore, it is imperative to clarify that the
quashing of proceedings is not limited to the petitioners
before this Court but shall also extend to all those who are
similarly placed but have not approached this Court. It
would be an exercise in futility to require such individuals
to separately seek the same relief when the legal
infirmities affecting the complaint are identical in their case
as well. Judicial propriety demands that similarly situated
persons should not be subjected to unnecessary litigation
and procedural rigmarole when the very foundation of the
prosecution is untenable.
21. The prosecution cannot be permitted to proceed
selectively against some individuals while awaiting others
to approach the Court for relief. Such an approach would
lead to unnecessary harassment and prolonged legal
proceedings, compelling individuals to endure procedural
hardships despite the evident illegality in the complaint.
The Court cannot allow a scenario where individuals, facing
the same legal infirmity, are left with no choice but to
initiate fresh litigation, engage legal counsel, and await
case listings merely to obtain an order identical to the
present one. Justice must be dispensed in a manner that
prevents such avoidable hardship and ensures uniform
application of legal principles.
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22. The essence of justice lies in ensuring that
individuals are not subjected to unwarranted litigation,
compelling them to engage in avoidable legal battles. The
legal system exists to dispense justice, not to create a
situation where litigants are burdened with repeated
procedural hurdles. Accordingly, all proceedings arising
from Complaint No. 158/2017, pending before the learned
Chief Judicial Magistrate, Rajsamand, stand quashed in
their entirety, leaving no scope for further continuation
against any individual.
23. In view of the above, the learned Trial Court shall
treat the proceedings as quashed and formally close the
case. No further steps shall be taken in pursuance of the
quashed complaint. The file shall be consigned to the
record.
24. The stay petitions and all pending applications, if
any, stand disposed of accordingly.”
4. The facts and circumstances of the case are squarely
covered with judgement refer supra. Thus the present
petitions are allowed in light of the above. The order dated
12.01.2013 passed by the learned Chief Judicial Magistrate,
Bhilwara, in Criminal Case No. 30/2013, is quashed and set
aside. Further, all consequential proceedings are quashed
and petitioners are exonerated from the charges.
5. The stay petitions are disposed of.
(FARJAND ALI),J
2-Mamta/-
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