Summary of the Judgment
Case Name: JM Laboratories & Others v. State of Andhra Pradesh & Another
Case Number: Criminal Appeal No. (Arising out of SLP (Crl.) No. 5067 of 2024)
Judgment Date: 30th January 2025
Judges: Hon'ble Justice B.R. Gavai and Hon'ble Justice Augustine George Masih
Appellant(s): JM Laboratories & Others
Respondent(s): State of Andhra Pradesh & Another
Acts and Sections Involved:
Section 32 of the Drugs and Cosmetics Act, 1940 ("DC Act")
Section 18(a)(i) read with Section 16 of the DC Act
Section 27(d) of the DC Act
Section 482 of the Code of Criminal Procedure, 1973 ("CrPC")
Section 468(2) and Section 202 of CrPC
Cited Precedents:
Pepsi Foods Ltd. & Another v. Special Judicial Magistrate & Others, (1998) 5 SCC 749
Sunil Bharti Mittal v. Central Bureau of Investigation, (2015) 4 SCC 609
Mehmood Ul Rehman v. Khazir Mohammad Tunda & Others, (2015) 12 SCC 420
Krishna Lal Chawla & Others v. State of Uttar Pradesh & Another, (2021) 5 SCC 435
Lalankumar Singh & Others v. State of Maharashtra, 2022 SCC OnLine SC 1383
Introduction
The Supreme Court of India, in JM Laboratories & Others v. State of Andhra Pradesh & Another, examined the issue of procedural irregularities in issuing a summoning order without assigning reasons. The case primarily revolves around the manufacturing and sale of substandard drugs and the procedural lapses by the trial court. The judgment reinforces the principle that summoning an accused in a criminal matter is a serious issue and requires the application of judicial mind.
This case is significant in pharmaceutical law and procedural jurisprudence, as it addresses due process in criminal trials, especially in commercial and regulatory offences. The verdict reiterates the need for reasoned judicial orders and strengthens the legal framework for fair trials in regulatory compliance cases.
Background of the Case
On 29th May 2019, the Drugs Inspector of Kurnool Urban filed a complaint under Section 32 of the DC Act before the Judicial Magistrate of First Class, Kurnool, against JM Laboratories and its partners. The allegations were based on the sampling of MOXIGOLD-CV 625 (Amoxycillin & Potassium Clavulanate Tablets IP) manufactured by JM Laboratories. The sample failed the Dissolution Test for Amoxycillin and Clavulanic Acid, leading to the conclusion that it was “Not of Standard Quality” under the DC Act.
The complaint alleged violations of Section 18(a)(i) read with Section 16 of the DC Act, making the appellants liable under Section 27(d) of the Act. The trial court, on 19th July 2023, issued summoning orders against JM Laboratories and its partners, directing their appearance on 10th August 2023.
Aggrieved by the order, the appellants moved the High Court of Andhra Pradesh under Section 482 of the CrPC, seeking quashing of the criminal proceedings on grounds of procedural irregularities and violation of statutory provisions, including Section 468(2) and Section 202 of the CrPC. However, the High Court dismissed the petition, prompting the appellants to approach the Supreme Court of India.
Key Issues Raised
Whether the summoning order issued by the trial court was legally valid given the absence of assigned reasons?
Whether the delay in filing the complaint violated Section 468(2) of CrPC, making the case time-barred?
Whether the procedural non-compliance under Section 202 of CrPC affected the legitimacy of the proceedings?
Analysis and Observations
1. Absence of Reasons in Summoning Order
The Supreme Court found that the trial court had issued the summoning order without recording any reasons, making it a non-speaking order. Referring to its earlier decisions in Pepsi Foods Ltd. v. Special Judicial Magistrate and Sunil Bharti Mittal v. CBI, the Court reiterated:
“Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto.”
It was held that a judicial order must reflect due application of mind and a mere mechanical issuance of summons violates the principles of natural justice and fair trial.
2. Bar of Limitation under Section 468(2) of CrPC
The appellants contended that the complaint was filed in May 2023, despite the Analytical Report being dated 15th December 2018, which exceeded the three-year limitation period prescribed under Section 468(2) of CrPC. While the Supreme Court did not base its decision on this aspect, it acknowledged that procedural lapses in criminal law must be examined carefully.
3. Non-Compliance with Section 202 of CrPC
Section 202 of CrPC mandates a preliminary inquiry when the accused is residing outside the jurisdiction of the Magistrate before issuing a summons. The Supreme Court found that the trial court did not conduct an inquiry, violating mandatory procedural safeguards. Citing Mehmood Ul Rehman v. Khazir Mohammad Tunda, the Court reaffirmed:
“The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations.”
As the trial court failed to follow due process, the Supreme Court found the proceedings vitiated and unsustainable.
Verdict of the Supreme Court
The Supreme Court allowed the appeal and passed the following orders:
The summoning order dated 19th July 2023 issued by the trial court was quashed.
The High Court’s judgment dated 4th October 2023 was set aside.
All proceedings in C.C. No. 1051 of 2023 were quashed.
In essence, the Supreme Court reaffirmed that a Magistrate must apply judicial mind before summoning an accused, especially in cases involving regulatory compliance.
Implications of the Judgment
1. Strengthening Due Process in Criminal Law
This judgment reaffirms that summoning orders must not be issued mechanically. Courts must provide reasoned orders, ensuring procedural fairness to prevent harassment of businesses and individuals.
2. Implications for the Pharmaceutical Industry
Given the strict regulatory framework governing pharmaceuticals, this judgment highlights the need for timely prosecution and adherence to legal procedures before initiating criminal proceedings against manufacturers.
3. Balancing Consumer Safety and Fair Trials
While ensuring drug quality and consumer safety is essential, procedural compliance cannot be sacrificed for regulatory overreach. The judgment upholds corporate rights against arbitrary prosecution.
Conclusion
The Supreme Court’s decision in JM Laboratories v. State of Andhra Pradesh is a landmark ruling in criminal jurisprudence and regulatory compliance. It upholds the rule of law, procedural fairness, and judicial accountability. This case sets a strong precedent for future cases involving commercial entities facing regulatory prosecutions, reinforcing the need for meticulous legal scrutiny before issuing summons.
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