The Rajasthan High Court recently quashed a complaint filed under the Drugs & Cosmetics Act, 1940, emphasizing that a failed dissolution test does not justify prosecution when the drug’s active pharmaceutical ingredient (API) is within standard limits. The court found multiple procedural lapses and observed that such a defect is classified as minor, as per guidelines issued under Section 33-P of the Act.

Read also: Rajasthan High Court Directs Appointment of ASHA Worker, Stresses Eligibility Check at Threshold

The case involved a 2017 complaint against a pharmaceutical company after a 2013 drug sample analysis reported non-conformity with the dissolution test. Despite this, the active ingredient was found within the acceptable range, leading the court to conclude that criminal proceedings were unwarranted.

Justice Farjand Ali noted:

"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)."

Read also: Rajasthan High Court Gets Four New Judges as Centre Approves Appointments

The court referred to the Supreme Court’s ruling in Laborate Pharmaceuticals India Ltd. v. State of Tamil Nadu, (2018) 15 SCC 93, which held that prosecution cannot be initiated for minor defects in drug composition.

The court highlighted several crucial points regarding dissolution rates and drug efficacy:

• Delayed dissolution does not make a drug ineffective but only means the release of the active ingredient is slower.
• Therapeutic efficacy remains intact as long as the active component is present in the required amount.
• Several factors can impact dissolution rates, such as excipients' quality, storage conditions, and manufacturing processes.
• Declaring the drug spurious or substandard on these grounds is scientifically and legally unjustifiable.

The prosecution's approach was criticized as mechanical and arbitrary, disregarding the minor nature of the defect.

Read also: Rajasthan High Court: Compensation Under MV Act Payable to Siblings Along with Parents

Background of the Case

The matter originated from an inspection conducted in 2012, during which a sample drug was collected for analysis. In 2013, the government laboratory declared the sample "not of standard quality" due to its failure in the dissolution test. However, the active ingredient was within permissible limits.

Despite this, in 2017, the authorities filed a criminal complaint against multiple pharmaceutical companies and their directors, leading to a legal challenge in the Rajasthan High Court.

1. Failure to Send Sample for Reanalysis

As per Section 25(3) of the Drugs & Cosmetics Act, when a drug sample test result is disputed, a portion of the sample must be sent to the manufacturer for reanalysis. However, this was not done in this case.

The court cited the Supreme Court ruling in Medicamen Biotech Ltd. v. Rubina Bose, (2008) 7 SCC 196, which held that:

"Non-compliance with this statutory mandate vitiates the entire prosecution."

The prosecution's failure to follow this procedure was a serious lapse, leading the court to question the very foundation of the case.

2. Non-Executive Directors Wrongly Prosecuted

The principle of vicarious liability under Section 34 of the Act applies only to those who were actively in charge of the business during the time of the alleged offence.

The court observed that:

"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."

Since these directors were not responsible for manufacturing at the time, the case against them lacked merit.

3. Complaint Filed After Expiry of Drug’s Shelf Life

The complaint was filed long after the drug's shelf life expired, which denied the accused their legal right to retesting.

Referring to State of Haryana v. Brij Lal Mittal & State of Haryana v. Unique Farmaid (P) Ltd., the court ruled:

"When the right to retesting is denied due to the expiry of the drug, the prosecution is rendered null and void."

Thus, the case was legally untenable due to the delay in filing the complaint.

4. Violation of the Statutory Limitation Period

The alleged offence was detected in 2013, but the complaint was only filed in 2017. Under Section 468 of the Cr.P.C., prosecution for offences under the Act must be initiated within three years.

Citing Cheminova (India) Ltd. v. State of Punjab, (2021), the court noted:

"Prosecution beyond the statutory limitation period is barred."

Since the case fell beyond the permissible time limit, the entire proceedings stood invalid.

After reviewing the facts, the Rajasthan High Court quashed the entire prosecution due to multiple legal infirmities. The court held that allowing the case to continue would be an abuse of the legal process.

Additionally, the quashing was extended to all similarly placed individuals, even those who had not approached the High Court, ensuring a blanket closure of the case.

Case Title: Ganesh Narayan Nayak & Anr. v State of Rajasthan & Anr., and other connected petitions