Spurious Drug Case: Karnataka High Court Says Firm Partner’s Defence Of Non-Involvement In Manufacture Of Drugs Can Be Considered Only In Trial

Justice K Natarajan refused relief to M/s Hindustan Medical Products and its partner Pawan Kumar Loharuka, who had contended that he is only partner and he is not responsible and liable for prosecution. It is only the technical staff who are responsible for the manufacture of drugs, he had argued.

The bench said it is well settled, and as per the definition and explanation to the Section 34 of the Act, that Company means the firm and Director including the partners.

"Normally, as per the definition of Partnership Act, they are individually called as partners and collectively they are called as firm. Therefore, it cannot be said the partners are not responsible for the day to day affairs of the firm," it added.

The accused are facing proceedings under Sections 18(a)(i) read with 17B (d) and 27(d), 27(c) of the Act before the trial court. Hindusthan Medical Product is a partnership firm possessing licence for manufacture and sale of HIMOXONA Inj I.P. (Dexamethasone Sodium Phosphate Inj I.P) 30 ml. Two other accused are partners of the firm.

On 12.10.2009, the Drug Inspector inspected at Ranga Medicals, BH. Road, Nelamangala , Bangalore Rural District, drew a sample and sent the portion of the drug to the Government Analyst, Drug Testing Laboratory, Bangalore for the test analysis. A report was received that the drug was not of standard quality as it does not conform to IP Standards.

Later the Drug Inspector on 31.7.2010 requested the permission from the Drug Controller for State of Karnataka for holding investigation and obtained the investigation permission. He then visited the company's manufacturing unit at Patna Bihar and later a private complaint was filed for the offences.

The prosecution opposed the plea saying the petitioners are the partners of the company and they are liable for prosecution as where partners of a firm are equally responsible. The petitioners are required to prove that they are not responsible for the manufacture of drugs only during the trial, the State said.

The court said the petitioners have not produced any document before it regarding who is in incharge of the firm for the purpose of the manufacturing of the drugs which was declared as spurious or substandard.

“The petitioner has not produced any document to show who is the actual chemist or technical staff at the time of manufacture. If they want to take any contention, that somebody else is responsible and not this petitioner, then they are exempted from punishment as per Section 34 of the Companies act, but that contention requires to be taken by the petitioners only during the trial and it cannot be considered under Section 482 of Cr.P.C," said the court

The court also said that partners of the firm are directly involved in the manufacturing of the drugs and responsible for the day to day affairs of the firm.

"Therefore, at this stage the criminal proceedings cannot be quashed against them until they face the trial and take the defence, as they are not responsible at the time of manufacturing the spurious or substandard drugs,” it said.

Case Title: M/s Hindustan Medical Products And State of Karnataka

Case No: CRIMINAL PETITION NO.6743 OF 2020

Citation: 2023 LiveLaw (Kar) 59

Appearance: Desu Reddy G, Advocate for petitioners.

B.J. Rohit, HCGP for respondent.