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Criminal Appeal No. 59 of 1981, heard on 15th August, 1984.
‑‑‑Ss. 23, 27 & 32‑‑Substandard drugs‑‑Prosecution‑‑No prosecution launched against company which manufactured drugs in question‑‑Accused not shown to be acting as Agent of company for distribution of sub standard drugs‑‑In absence of company, accused held, could not be prosecuted‑‑Liability of manufacturer of drugs and his agent for distribu tion thereof would be co‑extensive.
---S.34‑‑Substandard drugs‑‑Liability vicarious where person guilty was a Company‑‑Where person guilty of offence was a Company, vicarious liability, held, was imposed on a Director a partner or employer unless they prove that offence was committed without their knowledge.
‑‑‑Ss.23, 27, 32 & 34‑‑Substandard drugs‑‑Manufactured by a Company‑‑Responsibility‑‑Drug Inspector to find out, as to which of Directors, partners or employees etc. were prima facie concerned and responsible for manufacturing substandard drug, and would launch prosecution against such persons alongwith principal accused i.e. Corpo ration, firm or institution.
‑‑‑Ss.23, 27, 32 & 34‑‑Substandard drugs manufactured by a private limited Company and not impleaded as a principal accused alongwith other accused who were directors of Company‑‑Accused acquitted.
Superintendent of Police Federal Investigation Agency v. Akhtar Hussain Bhatti P L D 1978 S C 193 rel.
M. Ashraf Kazi for Appellant No.1.
Makhdoom A . Wali for the State.
Date of hearing: 15th August, 1984.
‑‑In this appeal the appellants have been convicted under section 27(4) of the Drugs Act, 1976 and sentenced each of them to pay fine of Rs. 2,000 or in default to undergo R.I. for one month.
The brief facts of the case are that appellants 1 and 2 are Directors of Eiffel Chem (Pak.) Ltd., whereas the appellant No. 3 was Chief Pharmacist and a consultant chemist of Messrs Eiffel Chem. (Pak) Ltd. On 4‑8‑1976 P.W. Drug Inspector Karachi when he visited the shop of Messrs S.M. Ahmed Katchi Gali No.1, Karachi, He took four injections of Drug namely Chloroquin Phosphate injection 30 ml. batch No. 329, manufactured by Messrs Eiffel Chem (Pak) Ltd. He prepared form No.17 which was produced as Exh. 9. He gave one sample to the shopkeeper and obtained his signatures on the back of Exh. 9.
On 5‑8‑1976 he sent second bottle of the said drug to the Director, Central Laboratories, Karachi, for analysis through letter No.10. He received report dated 16‑10‑1976 of that laboratory. The report of the laboratory indicated that the sample was not of standard quality as defined under the Drugs Act, 1976. The test report was produced as Exh. 11. He referred the matter to the Provincial Quality Control Board by his letter dated 4‑1‑1977 for sanction and prosecution of Messrs Eiffel Chem (Pak) Ltd. The sanction of the Board authorising him to prosecute Messrs Eiffel Chem (Pak) Ltd. is Exh. 18. A complaint was lodged by the Drug Inspector and the appellants were tried for the offence punishable under sections 23(1) (iv), 23(1)(a)(v) read with section 27(4) of the Drugs Act, 1976.
The trial court framed the charge against the appellants only. The charge was that the Drug was adulterated and substandard. After taking the evidence in the case the Drug Court came to the conclusion that the determined acidity of the drug did not comply with B.P.73. It was 6.5 instead of prescribed 3.5 to 4.5 as such the drug was sub standard.
The Drug Court convicted the appellants under section 27(4) of the Act and sentenced each of them to pay fine of Rs. 2,000 or in default to undergo simple imprisonment for one month. The appellants being aggrieved by the above judgment have filed the present appeal.
In support of the above appeal Mr. M. A. Kazi learned counsel for the appellants has urged as follows:‑
(i) That the sanction for prosecution was not proper as it was not obtained against the appellants but was obtained against Messrs Eiffel Chem (Pak) Ltd. which was the Limited Company.
(ii) That if Messrs Eiffel Chem (Pak) Ltd. was a limited Company in terms of section 34 of the Drugs Act, the prosecution should not have proceeded within the absence of the above company being impleaded as an accused.
(iii) That the learned Drug Court erred in applying British Pharmo copia whereas on the product it is clearly written to be a National Formulatory Pharmocopia.
In our view it is not necessry to deal with all the above conten tions, as we are of the view that the contention noted at serial number (i) and (ii) will be sufficient to dispose of the present appeal.
The Drug Inspector obtained the sample from Messrs S.M. Ahmed, Kutchi Gali, Karachi. The Drug Inspector sent the samples to the Central Laboratory, Karachi, for test and report on 5‑8‑1976 The said drug was to be of substandard quality which had been manufactured by Messrs Eiffel Chem (Pak) Ltd., Karachi, of which appellants 1 and 2 are Directors, appellant No.3 used to be Technical Expert of the said company on or before 4‑8‑1976. The complaint was only filed against the appellants and no complaint was filed against Messrs Eiffel Chem (Pak) Limited. It is necessary to reproduce the relevant sections of the Drugs Act which are as follows:‑‑
23. Import, manufacture and sale of drugs'.‑‑(1) No person shall himself or by any other person on his behalf‑‑
(a) export, import or manufacture for sale or sell‑‑
(i) any spurious drug;
(ii) any counterfeit drug;
(iii) any misbranded drug;
(iv) any adulterated drug;
(v) any substandard drug;
(vi) any drug after its expiry date;
(vii) any drug which is not registered or is not in accordance with the conditions of registration;
(viii) any drug which, by means of any statement, design or device accompanying it or by any other means, purports or claims to cure or mitigate any such disease or ailment, or to have any such other effect, as may be prescribed;
(ix) any drug if it is dangerous to health when used in the dosage or with the frequence, or for the duration specified, recommended or suggested in the labelling thereof; or
(x) any drug in contravention of any of the provisions of this Act; or
(b) manufacture for sale any drug except under, and in accordance with the conditions of, a licence issued under this Act;
(c) sell any drug except under, and in accordance with the conditions of a licence issued under this Act;
(d) import or export any drug the import or export of which is prohibited by or under this Act;
(e) import or export any drug for the import or export of which a licence is required, except under, and in accordance with the conditions of, such licence,
(f) supply an incorrect, incomplete or misleading information, when required to furnish any information under this Act or the rules;
(g) peddle, hawk or offer for sale any drug in a park or public street or on a highway, footpath or public transport or conveyance;
(h) import, manufacture for sale, or sell any substance, or mixture of substances, which is not a drug but is presented in a form or manner which is intended or likely to cause the public to believe it to be a drug;
(i) sell any drug without having a warranty in the prescribed form bearing the name and batch number of the drug issued,‑‑
(ii) in the case of a drug manufactured in Pakistan, by the manufacturer holding a valid licence to manufacture drugs and permission to manufacture that drug or by his authorised agent;
(ii) in the case of an imported drug, by the manufacturer or importer of that drug or, if the drug is imported through an indentor by such indentor; and
(j) apply an incorrect batch number to a drug.
(2) Nothing in subsection (1) shall apply to the manufacture or subject to prescribed conditions, of small quantities of any drug for the purpose of clinical trial, examination, test, analysis or personal use;
"32. Pleas‑‑(1) Save as hereafter provided in this section, it shall be no defence in a prosecution under this Act to prove merely that the accused was ignorant of the nature, substance or quality of the drug in respect of which the offence has been committed or of the circumstances of its manufacture or import, or that a purchaser, having only for the purpose of test or analysis has not been prejudiced by the sale.
(2) A drug shall not be deemed to be misbranded or adulterated or substandard only by reason of the fact that there has been added thereto some innocuous substance or ingredient because the same is required for the manufacture or preparation of the drug fit for carriage or consumption and not to increase the bulk, weight or measure of the drug or to conceal its inferior quality or other defect or there is a decomposed substance which is the result of a natural process of decomposition:
Provided that such decomposition is not due to any negligence on the part of the manufacturer of the drug or the dealer thereof and that it does not render the drug injurious to health or does not make it substandard.
(3) A person, not being the manufacturer of a drug or his agent 'for the distribution thereof, shall not be liable for a contravention 'of section 23 if he proves‑‑
(a) that he did not know, and could not with reasonable diligence have ascertained, that the drug in. any way contravened the provision of this Act and that the drug while in his possession remained in the same state as when he acquired it; and
(b) that he acquired the drug from a duly licensed manufacturer his authorised agent or any importer or an indentor resident Pakistan under a written warranty in the prescribed form stating, in particular, the batch number of the drug and signed by such person that the drug does not in any way contravene the provisions of section 23 and that the drug while in his possession was properly stored and remained in the same state as when he acquired it and that the drug has been manufactured by a manufacturer holding a valid licence to manufacture drugs and permission to manufacture that drug:
Provided that a defence under clause (b) shall be open to person only‑‑
(i) if he has, within seven days of the service on him of the summons, sent to the Inspector a copy of warranty with written notice stating that he intends to rely upon it and giving the name and address of the warrantor, and
(ii) if he proves that he has, within the same period, sent written notice of such intention to the said warrantor."
"34. Offences by companies, etc.‑‑Where the person guilty of offence under this Act, is a company, corporation, firm institution, every director, partner and employee of the company, corporation, firm or institution shall, unless he proves that the offence was committed without his knowledge or consent, be guilty of the offence."
In the instant case no prosecution was launched against the company which manufactured the drug in question. The admitted position in this case is that the substandard drug for which the appellant herein were prosecuted and convicted was actually manufactured t, Messrs Eiffel Chem (Pak) Ltd., which being a private limited company would be a person in its own right within the meaning of sections 2. 32 and 34 of the Act. In the absence of the company, the appellants A cannot be prosecuted and under subsection (3) of section 32 the liability of the manufacturer of drug and his agent for the distribution thereof would seem to be co‑extensive. There is nothing on the record of the case to show that the appellants had acted as agents of the company for the distribution of the substandard drug. It may be noticed that section 34 provides that if the person guilty of an offence under the Act is a company, corporation, firm or an institution, every Director, partner and an employee of the company, corporation, firm or institution shall, unless he proves that the offence was committed without his knowledge or consent, be guilty of the offences. In other words, the above section imposes vicarious liability on a director of a company, a g partner of a firm or an employee of a company or firm and unless they prove that the offences were committed without their knowledge. In the present case the appellants were charged as proprietor of Messrs Eiffel Chem (Pak) Ltd., there was sufficient material on the record before the learned Drug Court to conclude that it was a limited company which had actually manufactured the drug. Section 34 of the Act provides that the principal accused has to be a company, corporation, firm or institution. in the case of Superintendent of Police Federal Investigation Agency v. Akhtar Hussain Bhatti P L D 1978 S C 193 the Hon'ble Supreme Court of Pakistan held‑‑
"the principal accused has to be a company, corporation or a firm. But if the prosecution would be disposed to foist the liability also on the director, partner and officer of the said company, corporation or firm, then the burden would lie on it to show that the said offence had been committed within their knowledge and consent."
The principles of law laid down by the Hon'ble Supreme Court in the above case are applicable to the facts in the instant case.
Mr. Abdul Wali the learned counsel for the State has contended that each of the appellant was prosecuted in the instant case. The contention is devoid of force. We are of the opinion that it is the responsibility of the Drug Inspector to find out as to which of the directors, partners or employees etc. are prima facie concerned or C responsible in the manufacture of the drug and will launch prosecution against such directors, partners or employees of the company, firm, corporation or institution alongwith the principal accused the corporation, firm or institution.
In this view of the matter sections 23, 32 and 34 of the Act could be pressed into service. Furthermore Eiffel Chem (Pak) Ltd. is a private limited company, the prosecution would vitiate as admittedly Messrs Eiffel Chem (Pak) Limited was not impleaded as a principal accused.
For these reasons by a short order dated 15‑8‑1984 the appeal was allowed and the appellants were acquitted. The fine, if any recovered, be refunded to the appellants. The bonds stand cancelled.
M.Y.H. Appeal accepted.
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