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Case Law Database
Falsified medical products

Details:
Kranzox tabs of substandard quality.

Sri G Ramesh Reddy vs The State By Drugs

Inspector
India UNODC No.: INDx019
Fact Summary
The allegations made are that the respondent took samples of Kranzox tabs, manufactured by
Pioneer Pharma, along with two other drugs for the test and analysis by drawing from M/s. D.P.
Pharma. The samples drawn and seized were sent for analysis and the report of the analysis
revealed that the said drugs are not up to the standard quality. Thereafter, during enquiry it was
revealed that the drugs were manufactured by M/s. B.L Pharma Ltd.
Commentary and Significant Features

The present case is of interest given its discussion about the liability of legal persons as per
legislation that seeks to guarantee the safety and quality of medicines. In particular, the judge
discussed the requisite level of involvement of company directors in crimes allegedly committed
by a company.
The judge in the present case upheld decisions in previous cases of a similar nature – being that
a director may not be concerned with day-to-day working of a company. As such, the director –
only because of his holding of position – cannot be straightaway arrayed as accused
unless prima facie there is averment to clearly indicate the exact role played by such director
which resulted in the commission of the offence.
Cross Cutting
Liability
... for
• completed offence
... as involves
• principal offender(s)
• legal persons (corporations)
Procedural Information
Legal System: Common Law
Latest Court Ruling: Supreme Court

Proceeding #1:
 Stage: first trial
 Official Case Reference: C.C. No.220/2008
Court
Court Title: Special Court for Economic Offences

Location
 City/Town: Bangalore
Outcome
 Verdict:Other
Other Outcome: The learned Magistrate before whom the complaint was presented, took
cognizance of the offence alleged and issued summons to the persons arraigned as accused.

Proceeding #2:
 Stage: other
 Official Case Reference: Criminal Petition No.5468 of 2009
Court
Court Title: Karnataka High Court

Description: The petitioners presented a petition, inter alia, on the ground that the learned
Magistrate could not have taken cognizance of the offence alleged. This inability so stated was
said to be due to the absence of any specific averments to the effect that the two petitioners, as
directors of the company said to have manufactured the substandard drugs, were in charge of
and were responsible for the conduct of the business of the company, as required by Section
34(1) of the Drugs and Cosmetics Act.
The judge made reference to Section 34 of the Drugs and Cosmetics Act that deals with offences
by companies:
"34. Offences by companies:
(1) Where an offence under this Act has been committed by a company, every person who at the
time of offence was committed, was in charge of and was responsible to the company for the
conduct of the business of the company, as well as the company shallbe deemed to be guilty of
the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section render any such person liable to any
punishment provided in the Act if he proves that the offence was committed without his
knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has
been committed by a company and it is proved that the offence has been committed with the
consent or connivance of, or is attributable to any neglect on the part of, any director, manager,
secretary or other officer of the company, such director, manager, secretary or other officer, shall
also be deemed to be guilty of that offence and shall be liable to be proceeded against and
punished accordingly.
Explanation: For the purpose of this section -
(a) "company" means a body corporate, and includes a firm or other association of individuals;
and
(b) "director" in relation to a firm means a partner in the firm."
With this, the judge noted that Section 34 makes it clear that if the offence is committed by the
company, in addition to the company, the other categories of persons enumerated therein can
also be prosecuted, if it is shown that such person was in charge of and was responsible to the
company for the conduct of the business of the company. Therefore, to prosecute the other
categories of persons as enumerated under Section 34 of the Act, the condition precedent is that
such person must have been in charge of, and was responsible to the Company for the conduct
of the business of the Company. For that purpose, there should be specific averments made in
the complaint.
On the basis of the facts of the case on hand, the judge found that there were no averments to
show that these two petitioners were in charge and were responsible to the company for the
conduct of the business of the company. Thus, there is no compliance of the requirement of
Section 34(1) of the Act. In the absence of any such averments as required by Section 34(1) of
the Act, the High Court found that the learned Magistrate could not have taken cognizance of the
offences alleged against these petitioners.

Outcome
 Verdict: Other
Other Outcome: The prosecution launched against these petitioners, in the absence of any
averments in the complaint as required by Section 34(1) of the Act, was not sustained. The
petition was allowed, and the prosecution launched against these petitioners as Directors of the
Company was quashed.

Defendants / Respondents in the first

instance
Defendant: Sri G Ramesh Reddy
Gender: Male
Age: 45
The petitioners were arraigned as accused Nos. 2 & 3 in C.C.No.220/2008 on the file of the
Special Court for the Economic Offences, Bangalore, registered for the violation of Section 18(a)
(i) of the Drugs and Cosmetics Act, 1940 which is punishable under Section 27(d) of the Act.
The two petitioners who are husband and wife were sought to be prosecuted on the ground that
they are the Directors of M/s.B.L Pharma Ltd., which is said to be the manufacturer of sub-
standard drugs.
Charges / Claims / Decisions

Defendant: Sri G Ramesh Reddy
Statute: Drugs and Cosmetics Act, 1940 Section 18(a)(i), in association with Sections 27(d) and
34(1)
Manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale, or
distribute any drug which is not of a standard quality, or is misbranded, adulterated or spurious.
Court
High Court of Karnataka
Sources / Citations
Please note that the present case was read together with Manoj Drugs House vs. State of
Karnataka, Cri. A.No. 96 of 1975.
Attachments
 Sri_G_Ramesh_Reddy_vs_The_State_By_Drugs_Inspector.pdf
build 464 2020-06-18T11:08:48.883+02:00
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Falsified medical products

Sri G Ramesh Reddy vs The State By Drugs

Commentary and Significant Features

Defendants / Respondents in the first

Charges / Claims / Decisions

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