In a significant ruling on criminal procedure and drug regulation, the Supreme Court has restored prosecution proceedings against Panacea Biotec Ltd. and others in a misbranding case under the Drugs and Cosmetics Act.
A Bench of Justice Ahsanuddin Amanullah and Justice S.V.N. Bhatti set aside the Kerala High Court’s order that had quashed the complaint on procedural grounds. The Court held that when a complaint is filed by a public servant in discharge of official duty, strict compliance with Section 202 of the Code of Criminal Procedure (CrPC) is not mandatory.
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Background of the Case
The case dates back to January 2006, when a complaint was made alleging discrepancies in the labeling of a vaccine manufactured by Panacea Biotec.
According to the Drugs Inspector’s complaint, the outer carton of the vaccine was labeled as “Easy Five Pentavalent Vaccine,” claiming protection against five diseases including Hepatitis B. However, the vial inside allegedly bore the label “Tetravalent Vaccine Easy Four,” which did not contain the Hepatitis B component.
The Drugs Inspector conducted inspections, seized invoices, and recorded statements from distributors and sellers. A formal complaint was eventually filed before the Chief Judicial Magistrate, Thrissur, in January 2009 for offences under Sections 18(a)(i), 17(b), and 17(c) of the Drugs and Cosmetics Act, read with Rule 96 and punishable under Section 27(d).
The Magistrate took cognizance and issued summons.
However, the Kerala High Court later quashed the proceedings on the ground that since the accused were residing outside the Magistrate’s jurisdiction, a mandatory inquiry under Section 202 CrPC should have been conducted before issuing summons.
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Issue of Limitation
The accused also argued that the complaint was barred by limitation.
The Supreme Court examined Sections 468 and 469 of the CrPC, which prescribe time limits for taking cognizance. Since the offence was punishable with imprisonment up to two years, the limitation period was three years.
The Bench held that the limitation period began not from the initial complaint in January 2006, but from April 18, 2006 - the date when the identity of all accused became known after investigation.
“The limitation period would run out only on 17.04.2009,” the Court observed, noting that the complaint filed on 20.01.2009 was within time.
Thus, the High Court’s earlier approach to limitation was found to be incorrect.
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Section 202 CrPC: Is Inquiry Mandatory?
The central question was whether a Magistrate must conduct a preliminary inquiry under Section 202 CrPC before issuing summons to accused persons residing outside territorial jurisdiction.
The Supreme Court referred to the proviso to Section 200 CrPC, which exempts examination of a complainant if the complaint is made by a public servant in official capacity.
Relying on earlier precedent, the Bench held that public servants stand “on a different pedestal.”
The Court quoted with approval that, “The legislature in its wisdom has itself placed the public servant on a different pedestal,” and emphasized that the purpose of Section 202 is to prevent harassment of innocent persons - not to create technical hurdles where official complaints are involved.
The Bench concluded that the High Court erred in quashing the complaint solely for non-compliance with Section 202.
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Vicarious Liability of Company Officials
In connected appeals, the Court also addressed the liability of company directors under Section 34 of the Drugs and Cosmetics Act.
The High Court had quashed proceedings against directors on the ground that the complaint contained only general statements.
The Supreme Court disagreed, holding that whether directors were “in charge of” and “responsible for” the conduct of business is a matter of evidence to be tested during trial.
Such findings, the Court said, cannot be conclusively determined at the stage of quashing.
Court’s Decision
Allowing the State’s appeal, the Supreme Court set aside the Kerala High Court’s order and restored the Magistrate’s order issuing summons.
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The appeal filed by the accused challenging limitation was dismissed.
In the related appeal concerning syringes declared “not of standard quality,” the Court also set aside the High Court’s quashing order and restored prosecution proceedings.
The Court clarified that its observations are limited to deciding procedural questions and shall not affect the merits of the trial. Fresh summons are to be issued, and the matters will proceed in accordance with law.
The appeals were accordingly disposed of.
Case Title: The State of Kerala & Anr. v. M/s Panacea Biotec Ltd. & Anr.
Case No.: Criminal Appeal of 2026 (Arising out of SLP (Crl.) No. 4524 of 2023)
Decision Date: February 26, 2026
