Sample Failed to Reach Lab for 8 Years, HC Quashes NSQ Drug Case Against Pharma Firm

The dispute arose from the testing of ADIS Needles, Batch No. 4752, manufactured by Albert David Limited. The matter began with a routine inspection conducted by the Drugs Inspector, Kathua, on April 27, 2011, at the premises of M/s Hare Rama Hare Krishna, a chemist/drug outlet in Kathua. During the inspection, samples of four products were collected, including ADIS needles manufactured by Albert David. The sample carried manufacturing date 2007/08 and an expiry date of July 2012. It was divided into four portions and sealed in accordance with the statutory procedure. One portion was subsequently forwarded to the Government Analyst, CFDL, Kathua, for testing.

The Government Analyst issued a report dated November 30, 2011, declaring the ADIS needle sample “not of standard quality” because it had failed the sterility test. Following the report, the Drugs Inspector traced the supply chain and sought purchase, stock and distribution records from the concerned dealer and wholesalers. The chain ultimately led back to Albert David Limited, following which the company was asked to furnish its manufacturing, testing, stock, purchase and sale records relating to the product.

The Drugs and Food Control Organization's Screening Committee subsequently recommended that the sample be sent to the Central Drugs Laboratory, Kolkata, for re-analysis. The complaint was filed before the Chief Judicial Magistrate, Kathua, on May 14, 2012, under Section 18(a)(i) read with Section 27(d) of the Drugs and Cosmetics Act, 1940. The complainant also sought re-analysis of the sample under Section 25 of the Act.

However, the re-testing exercise never reached its intended conclusion. The trial court record indicated that the sample had been sent to the Central Drugs Laboratory, Kolkata, but in a communication dated October 25, 2016, the Director-in-Charge of the laboratory informed the court that its records showed that no such sample had been received from the Chief Judicial Magistrate, Kathua. Despite this, the matter remained pending. The trial court eventually took cognizance on February 18, 2020—almost eight years after the complaint was instituted—and proceeded on the basis of the earlier Government Analyst's report, even though the Central Drugs Laboratory had never issued a re-testing report.

The problem was further aggravated by the fact that the sample had an expiry date of July 2012. Thus, by the time cognizance was taken in February 2020, the sample had been expired for several years and could no longer be meaningfully re-tested. The High Court noted that the statutory mechanism designed to protect the company's right to challenge the Government Analyst's report had consequently become incapable of completion.

Albert David's principal argument was that it had exercised its statutory right under Section 25(3) within the prescribed 28-day period and had expressly informed the Drugs Inspector that it intended to challenge the Government Analyst's findings and obtain re-testing through the Director, Central Drugs Laboratory, Kolkata. The company maintained that this was not merely a general denial of the test result but a specific invocation of the statutory mechanism provided under Section 25 of the Drugs and Cosmetics Act.

The company further argued that its own Quality Assurance Department had tested its control samples and found them compliant with the sterility requirement. It therefore disputed the Government Analyst's finding and sought an independent statutory re-analysis. According to the petitioner, once it had exercised this right, the sample was required to be sent to the Central Drugs Laboratory so that the report of the superior laboratory could determine the controversy in accordance with Section 25(4).

A central plank of Albert David's case was that the sample was never received by the Central Drugs Laboratory. The company relied on the laboratory's October 25, 2016 communication confirming that no such sample had been received from the trial court. It argued that the failure to complete the re-testing deprived it of a valuable statutory right and seriously prejudiced its defence.

The company also highlighted the extraordinary delay. The complaint had been filed in 2012, but cognizance was taken only in February 2020, despite the absence of any Central Drugs Laboratory report. By then, the sample had expired in July 2012. Albert David therefore contended that meaningful re-testing was no longer possible and that allowing the prosecution to continue on the basis of the earlier Government Analyst's report would effectively defeat the statutory protection provided to it under Section 25.

The petitioner consequently argued that continuation of the proceedings amounted to an abuse of the process of law and sought quashing of the complaint, the 2020 cognizance order and the subsequent proceedings, including the April 27, 2024 order through which the trial court had accepted the company's personal bond but also issued warrants of arrest against it.

The official respondent, represented by the learned Additional Advocate General, opposed the petition and sought continuation of the prosecution. The State argued that the complaint had been instituted on the basis of the Government Analyst's report, which had declared the drug sample not of standard quality because it had failed the sterility test. According to the official respondent, the allegations prima facie disclosed the commission of offences under the Drugs and Cosmetics Act.

The State further argued that the case concerned the manufacture, sale and distribution of a drug allegedly failing prescribed standards and therefore involved an issue of public health. It contended that Albert David had raised disputed questions of fact which should not be determined in proceedings invoking the High Court's inherent jurisdiction. According to the respondent, those issues were matters for determination by the trial court during the course of the criminal trial.

On the re-testing issue, the official respondent submitted that the sample portion had been produced before the Magistrate along with the complaint and that the complainant had specifically requested that it be sent to the Central Drugs Laboratory, Kolkata. The State relied on Section 25(4), arguing that the provision vested discretion in the court to send the sample for testing or analysis.

The State also contended that Albert David had not appeared before the Magistrate after institution of the complaint and had allegedly failed to respond to communications from the Drugs Inspector seeking manufacturing, stock, purchase and sale records. It further argued that the Central Drugs Laboratory's October 25, 2016 communication stating that the sample had not been received was allegedly not received by the complainant's office. On this basis, the State maintained that the proceedings should not be quashed merely on the petitioner's assertions, particularly because the allegations involved public health.

The High Court's analysis centred on Section 25 of the Drugs and Cosmetics Act, 1940, which establishes the evidentiary status of a Government Analyst's report and provides a statutory mechanism for challenging that report. The Court explained that when the person concerned notifies the authorities within 28 days of receiving the Government Analyst's report that they intend to controvert it, the report does not attain conclusiveness in the ordinary manner. The statute provides for re-testing or re-analysis by the Central Drugs Laboratory, whose report carries conclusive evidentiary value under Section 25(4). The Court characterised this protection as a substantive statutory safeguard rather than a mere procedural formality.

The Court found that Albert David had clearly exercised this statutory right. It noted that the company had communicated its intention to challenge the Government Analyst's report on February 21, 2012, within the prescribed 28-day period, and had specifically sought re-testing through the Director, Central Drugs Laboratory. The Court therefore answered the first issue in favour of the petitioner, holding that the company's statutory right had been invoked in accordance with law but was subsequently frustrated because the re-testing process was never completed.

Importantly, the High Court held that once the petitioner had invoked the statutory re-testing mechanism, the trial court could not simply revert to the original Government Analyst's report after the Central Drugs Laboratory report failed to materialise. The Court observed that the earlier report could not be treated as a substitute for the statutory re-analysis, particularly after the sample had become incapable of meaningful re-testing.

The Court was particularly critical of the failure to ensure that the sample actually reached the Central Drugs Laboratory. It held that the responsibility did not end with merely recording that the sample had been dispatched. The court, the Drugs Inspector and the concerned administrative machinery were required to ensure that the sample reached the laboratory and was analysed while its shelf life remained valid. According to the High Court, the statutory procedure could not be reduced to a paper exercise involving years of reminders while the sample's shelf life expired.

The shelf-life issue was equally significant. The sample expired in July 2012, yet the trial court did not take cognizance until February 2020. The High Court held that the statutory right to re-analysis could not be preserved merely on paper when the physical sample had ceased to be capable of meaningful testing. Relying on the Supreme Court's decision in Laborate Pharmaceuticals India Ltd. v. State of Tamil Nadu, the Court noted that where the accused's statutory right to re-analysis is lost because of delays not attributable to the accused, continuation of the prosecution may become legally unsustainable.

The High Court also examined the prolonged delay from the perspective of the fairness of criminal proceedings. It found that after the Central Drugs Laboratory informed the trial court in 2016 that it had not received the sample, the Magistrate merely directed the Drugs Inspector to take necessary steps. No effective inquiry was undertaken into where the sample had gone, why it had not reached the laboratory or who was responsible for the failure. The matter then remained substantially inactive until cognizance was taken in 2020.

In one of the strongest observations in the judgment, the High Court described the case as “a rare case which shocks the judicial conscience of this Court”, noting that the sample had allegedly been sent to the Central Drugs Laboratory but was not received there for almost eight years, while the trial court continued to await the report without taking effective measures to determine what had happened.

The Court concluded that continuing the prosecution would require Albert David to face criminal proceedings even though the statutory mechanism for testing the disputed sample had never been effectively completed and the possibility of such testing had subsequently been lost through circumstances not attributable to the company. It therefore held that interference under the High Court's inherent jurisdiction was warranted to prevent abuse of the process of law and secure the ends of justice.

The committee was directed to examine the lapses, fix responsibility for any negligence on the part of the Drugs Inspector or other officials, and ascertain why the sample dispatched by the competent court never reached the Central Drugs Laboratory, Kolkata. Significantly, the committee was also directed to examine whether there had been any mischief or involvement of any official of the petitioner-company in manipulating the record with the intention of preventing the sample from reaching the Central Drugs Laboratory, while giving all stakeholders an opportunity of being heard. The inquiry was to be completed within four weeks of constitution of the committee, with the Drug Controller required to submit its report in a sealed cover.