Section 27 Of The Drugs And Cosmetics Act Prohibits Police From Conducting Investigations And Filing Formal Complaints For Offenses: Punjab & Haryana High Court

CASE TITLE:

GAURAV CHAWLA VS STATE OF U.T. CHANDIGARH

DATE OF ORDER:

7^th Decemeber,2023

BENCH:

HON’BLE MR. JUSTICE MANJARI NEHRU KAUL

PARTIES:

Plaintiff: GAURAV CHAWLA

Respondent: STATE OF U.T. CHANDIGARH

            SUBJECT:

5. In order to have the FIR No. 56, dated April 18, 2021, registered at Police Station Sector 17, Chandigarh, under Sections 420, 120-B of the IPC, Section 7 of the Essential Commodities Act, and Section 27 of the Drugs and Cosmetics Act, as well as all related proceedings, quashed, the petitioner, Gaurav Chawla has invoked the inherent jurisdiction of this Court under Section 482 Cr.P.C.

OVERVIEW:

5. The petitioner in this case was the director of M/s Health Biotech Limited, located in Baddi, Himachal Pradesh. The company was accused of shipping 11,000 injections.
5. During the police raid at the Hotel Taj in Chandigarh, they took one injection vial from a man named Abhishek. Furthermore, 3000 additional injections were given after that.
5. Following a raid on the premises, the police seized the purported injections. This resulted in the filing of a formal complaint (FIR) against the petitioner, who held the position of director at the company producing the injections, and other co-accused individuals.
5. In the particular case, the petitioner, was charged under the Drugs and Cosmetics Act for allegedly offering to sell Remdesivir injections without the necessary license, at a price higher than the regulated rate.

           ARGUMENTS ADVANCED BY THE PETITIONER

5. The following claims have been made, among other things, by knowledgeable senior counsel representing the petitioner. Those were:
5. Despite not being mentioned in the relevant FIR and not being present during the police raid at Hotel Taj, Sector-17, Chandigarh, the petitioner has been wrongly linked to the case. Only in his capacity as a Director of M/s Health Biotech Limited, Baddi, Himachal Pradesh (henceforth referred to as the "company") was he arraigned as an accused.
5. Since there was no claim made in the FIR against the petitioner that they had delivered any property or used deception on anyone, the requirements necessary to establish the offence of cheating under Section 420 of the IPC are not met. Section 420 of the Indian Penal Code does not apply to the possession of a request letter addressed to the Government of Himachal Pradesh, requesting permission to sell Remdesivir injections (henceforth referred to as "injections") on the domestic market.
5. Allegedly on April 16, 2021, the company shipped 11,000 injections to Hindaz Corporation in Thane, Maharashtra, in violation of an export prohibition put in place by the Indian government. But the company had already been producing these injections before the government was notified. They were sent back to the company and never made it to their intended location because of the government-imposed ban. In support, learned senior counsel has further brought Annexure P-15 to the Court's attention and stated that the prosecution's claim that these injections were intended for export out of India was untrue.
5. During the raid at the Hotel Taj in Chandigarh, the police are said to have taken one injection vial from a man named Abhishek. After that, 3000 more injections were taken from the business's Baddi factory. Section 22 of The Drugs and Cosmetics Act, 1940 (henceforth referred to as "the Act") gave the Drug Inspector the exclusive authority to carry out any search or seizure. Only the Drug Inspector's complaint could have served as the basis for any prospective prosecution of an accused party or petitioner. However, given the bar of Section 32 of the Act, a FIR that had been filed in accordance with the Act was inherently unmaintainable. Because of this, the entire search and seizure procedure was unlawful.
5. The police lacked the authority to seize any drugs, not even for offenses under the Essential Commodities Act. The Essential Commodities Act's general provisions would be superseded by the Drugs and Cosmetics Act, which was a special law that only gave the Drug Inspector the authority to seize items. Learned senior counsel has cited Atul Garg v. State of Punjab 2012 (3) R.C.R. (Crl.) 936 as support.
5. Even in the event that there had been no breach of the Drugs and Cosmetics Act or the Essential Commodities Act, the State had utterly failed to prove it, since Annexure P-4 made it clear that the company had a valid license to manufacture and store the injections. Moreover, the prosecution did not even claim that the petitioner had sold the injections in the domestic market; rather, the criminal case against the petitioner was brought about by the police raid on the grounds that the injections, which were seized, might have been sold domestically in the future without a license.

            ARGUMENTS ON BEHALF OF THE RESPONDENT:

5. In response to the petitioner's learned senior counsel's submissions, learned counsel for the respondent, U.T. Chandigarh, has contended that all of the accused conspired to lure Pushkar Chander Kant and Pankaj Sharma with the promise of injections for sale, despite the company's lack of a legitimate license or permit to sell the injections in the local market. The State has also highlighted the fact that this was not an isolated incident; on April 16, 2021, the company shipped 11,000 injections to Hindaz Corporation in Thane, Maharashtra, despite the fact that the Indian government had prohibited the export of these injections five days earlier, on April 11, 2021. It was also documented that on April 12, 2021, the company received an advance payment of Rs. 10 lakhs for the consignment of the aforementioned injections that were scheduled to be shipped to Hindaz Corporation in Thane, Maharashtra.
5. The State counsel has further claimed that after receiving specific confidential information, a raid was conducted at the Hotel Taj in Chandigarh, where all of the accused were caught red-handed trying to complete the sale of injections without the necessary licence or permit to sell in the domestic market. The State's attorney has argued that during the raid, a box containing four vials of white powder and a request letter from the company were found on one Sunil Kumar. From these, it was clear that all of the accused were in the process of concluding an illegal agreement regarding the injections that were prohibited.
5. The State counsel has further argued that while the petitioner and co-accused were undoubtedly not present at Hotel Taj on April 18, 2021, given that the petitioner was a Director of the company and 3000 injections were recovered from their factory premises in Baddi, it is highly likely that the seized injections would have been sold on the domestic market without the necessary authorization if the police had not arrived at the location, the Hotel Taj in Chandigarh, and arrested the accused.
5. Finally, it has been strongly argued that the inherent jurisdiction of this Court under Section 482 Cr.P.C. cannot be used at this stage, especially when the challenge is presented, to determine whether or not the allegations made in the FIR in question are true. Rather, the petitioner's case will be heard during trial when both sides will present evidence, which will then be tested through cross-examination.
5. As the counsel concluded the submissions, State counsel vehemently reiterated the allegations made in the FIR against the petitioner and claimed that a simple review of the allegations made therein prima facie made out a case against the petitioner, indicating that he had every intention of selling the injections deceptively, knowing full well that it was illegal to do so. As a result, the petitioner was found to be in violation of not only Section 420 of the IPC, but also Section 7 of the Essential Commodities Act and Section 27 of the Drugs and Cosmetics Act, among other offenses.

 JUDGEMENT ANALYSIS:

5. "It is evident that the police had no authority to inspect the premises and confiscate the injections as had been done in the present case," Justice Manjari Nehru Kaul stressed in dismissing the FIR and citing Section 22 of the Drugs and Cosmetics Act.
5. Being a special enactment, the Drugs and Cosmetics Act supersedes the Essential Commodities Act and the Cr.P.C., making it impossible for the police to usurp the authority of a Drugs Inspector by hiding behind these laws.
5. These remarks were made during the hearing of a plea by M/s Health Biotech Limited's director, Gaurav Chawla, to set aside the Chandigarh FIR filed in violation of Sections 420 and 120-B of the IPC, Section 7 of the Essential Commodities Act, and Section 27 of the Drugs and Cosmetics Act.
5. The Court took the submissions under consideration and acknowledged that the elements of cheating by inducing someone through false claims—specifically, making a deliberate false representation, knowing that the representation is false, and intending to deceive—are necessary for the offense under Section 420 of the IPC. It is essential that transactions involve dishonest intent and fraudulent intentions.
5. The petitioner and the other co-accused, according to the court, attempted to deceive and make a large profit by offering to sell injections at prices higher than the regulated rate without the necessary license. The court did note, however, that it was clear that the necessary components were missing for the offense to be classified as a violation of Section 420 of the IPC.
5. The court cited Section 22, "Powers of Inspectors," of the Drugs and Cosmetics Act in addressing the question of whether the police had the authority to seize the injections and look into offenses under Chapter IV of the Act, read with Section 7 of the Essential Commodities Act.
5. The Court came to the conclusion that the police lacked the right to search the property or seize the injections.
5. The Union of India v. Ashok Kumar Sharma and others established a precedent, according to which a police officer is not permitted to file a formal complaint or look into allegations made under Chapter IV of the Drugs and Cosmetics Act. This was cited by the Court.
5. Consequently, the Court held that the FIR could not have been filed in accordance with Section 27 of The Drugs and Cosmetics Act since the police lacked the authority to look into offenses under that section.
5. Ultimately, the Court dismissed the FIR, upholding the notion that the Drugs Inspector is the only person authorized to carry out searches and seizures in accordance with the Drugs and Cosmetics Act.

            CONCLUSION:

5. The Court will not be hesitant to dismiss the FIR in question against the petitioner by invoking its inherent jurisdiction under Section 482 of the Cr.P.C.
5. The petition is therefore granted, and all related proceedings are quashed against the petitioner, along with FIR No.56, dated April 18, 2021, filed at Police Station Sector 17, Chandigarh, under Sections 420, 120-B of the IPC, Section 7 of the Essential Commodities Act, and Section 27 of the Drugs and Cosmetics Act.