2002 (9) TMI 306 - SC - Customs

Prosecution of dealer- The respondents herein were prosecuted in Criminal Case. In exercise of the powers under Section 482 of the Code of Criminal Procedure by the impugned order the learned Single Judge of the High Court of Andhra Pradesh has quashed the criminal proceedings instituted against the respondents. Aggrieved by the impugned order of quashing of the criminal proceedings the State of Andhra Pradesh has preferred this appeal. High Court holding respondent dealer cannot be prosecuted without manufacturer of drugs being made co accused. Defence plea of ignorance denied as per provisions. Held that- no prosecution in drugs and cosmetic act, 1940 to prosecute dealer for sale of spurious drug or drug of below standard quality without manufacturer being made co-accused. Impugned High Court order set aside. Trial judge to proceed as per law.

Summary

Issues:
- Interpretation of provisions of the Drugs and Cosmetics Act, 1940 regarding prosecution of dealers under Sections 17-B, 18(b) and (c).
- Misunderstanding of the Act by the High Court leading to quashing of criminal proceedings.
- Applicability of defence provisions under Section 19 of the Act to accused dealers.

Analysis:

The Supreme Court granted leave to appeal in a case where respondents were prosecuted under the Drugs and Cosmetics Act, 1940 for alleged offences. The High Court of Andhra Pradesh had quashed the criminal proceedings, leading to an appeal by the State. The State argued that the High Court misunderstood the Act and wrongly relied on a previous Division Bench decision. The Single Judge had held that dealers cannot be prosecuted without the manufacturer being accused. The Division Bench decision mentioned emphasized that dealers cannot be held liable if they purchased the drugs from valid distributors without knowledge of any contravention. The Supreme Court found the Single Judge's order overlooked the Act's provisions and the defence available to accused dealers under Section 19(3) of the Act.

The Supreme Court analyzed the relevant sections of the Act, including Section 17-B on spurious drugs and Section 18 on the prohibition of manufacturing and sale of drugs. The Court highlighted that the defence available to accused dealers is outlined in Section 19(3), which requires them to prove lack of knowledge of any contravention despite reasonable diligence. The Court emphasized that the Act does not prohibit the prosecution of dealers without involving the manufacturer as a co-accused. The High Court's decision failed to consider the specific provisions of the Act that deny the defence plea based on ignorance of the drug's nature or quality.

In conclusion, the Supreme Court allowed the appeal, setting aside the High Court's order and directing the trial court to proceed with the criminal case against the respondents. The Court clarified that the defence available to accused dealers should be considered after the prosecution presents its evidence, as per the provisions of the Act. The judgment emphasized the importance of interpreting the Act's provisions accurately and ensuring that all relevant legal defenses are applied appropriately during criminal proceedings.