Delhi High Court Issues Favourable Order To Sanofi In A Litigation Against Drug Regulator

New Delhi : The Delhi High Court has issued an order quashing the criminal complaint registered by the drug regulator against pharma major Sanofi India Ltd and its former director, and resultant orders in connection with an alleged not-of-standard quality drug sample as the action was not taken within the stipulated period.

The order is in connection with the result of tests conducted on the samples of a batch of Sanofi’s Combiflam drawn by the Central Drugs Standard Control Organisation (CDSCO). The samples were drawn in February, 2016 and it was announced as not of standard quality in April, after tests being conducted in the Regional Drugs Testing Lab, Chandigarh. The company said that the samples of the same batch, which it had tested in two labs were found to be duly complying with the disintegration test parameters.

The CDSCO issued a Show Cause Notice in May, 2016 and the company filed a detailed reply in the same month. At the same time, another Show Cause Notice was issued to the company’s managing director during the period, Rangaswamy Rathakrishnan Iyer, wh ceased to be the managing director from December 31, 2017.

Though the company conducted a recall process of the batch, in March, 2017, a license suspension order was issued by the State drug regulator against the company for three days from April 24 to 26, 2017. The Drugs Controller General (India) granted permission to launch prosecution on June 25, 2019 and a complaint was filed against the company in New Delhi.

The Trial Court issued a summoning order on September 30, 2019 and another one on January 13, 2020 on the ground that the previous summons had not been received. The Trial Court then issued a notice against the company on January 16, 2021, following which the company approached the High Court seeking quashing of the orders.

Dayan Krishnan, Senior Counsel appearing for the petitioners argued that the orders should be set aside as the proceedings has been initiated against the petitioners for the batch in question after three years, which is beyond the prescribed period.

The prescribed period for limitation for launching of prosecution relating to the alleged offences is three years, if the offence is punishable for a term exceeding one year, but not exceeding three years. The Counsel argued that in this case, the complaint alleges commission of offences which according to the relevant sections of the Drugs and Cosmetics Act, 1940, punishable with imprisonment of up to two years. Therefore, the prosecution could only be launched within three years from the date of offence or the date on which the concerned officer came to know about the commission of that offence.

The Trial Court could have taken cognizance of this question of limitation, but it has not indicated whether the Metropolitan Magistrate had satisfied herself that the complaint was not barred by limitation. Krishnan also argued that Iyer is an independent director and he is not liable for any of the actions of the company.

The Central Government Standing Counsel Amrita Prakash argued that the complaint being barred by limitation is not applicable, as the regulator has issued the proposal for prosecution in February 6, 2019, to the DCGI, but received the approval only on July 10, 2019 and unless authorisation is not given by the Central Government to the State Government, the complaint could not have been filed.

Hearing both sides, Justice Subramonium Prasad in his order dated November 30, 2021, said that the reason given by the CGSC that the complaints can be instituted only after getting the authority from the State under the Act cannot be accepted in this case for the reason that no sanction is required for instituting a complaint in an offence under Chapter IV of the Drugs and Cosmetics Act, 1940. There is no material on record to show that the Trial Court sought any reasons for condoning the delay and there is nothing to show that the State has made any endeavour to explain the delay in filing the complaint, added the order.

“A reading of the impugned orders of the learned Trial Court in conjunction with the law of limitation reveals to this Court that the learned Trial Court has erred in taking cognizance of Criminal Complaint … and that the imputed order dated September 30, 2019 fails to justify as to why the issue of limitation was not raised in the impugned order,” said the order. The Judge quashed the criminal complaint, set aside the impugned orders of the Trial Court, allowing the writ petitions filed by the company.

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