Court’s decision
The Gujarat High Court allowed the criminal petition and quashed the FIR and all consequential proceedings initiated against the petitioner pharmaceutical company and its officials. The Court held that continuation of criminal prosecution would amount to abuse of the process of law when the competent statutory authorities under the Drugs and Cosmetics Act had themselves concluded that no offence was made out.
The Court observed that the very foundation of the criminal case stood demolished once the Drugs Inspector and appellate authorities failed to establish violation of statutory standards. In such circumstances, permitting the criminal prosecution to continue would be oppressive, unjust, and contrary to settled principles governing exercise of inherent jurisdiction.
Accordingly, the Court exercised its powers to prevent misuse of criminal law and brought the proceedings to an end.
Facts
The petitioner was a well-known pharmaceutical company engaged in manufacture and distribution of medicinal products. A complaint was lodged alleging that certain drugs manufactured by the petitioner were not of standard quality and violated provisions of the Drugs and Cosmetics Act.
Based on these allegations, samples were drawn and proceedings were initiated under the Drugs and Cosmetics Act. Simultaneously, a criminal FIR was registered invoking penal provisions on the premise that sub-standard drugs had been manufactured and supplied.
However, during statutory proceedings, the competent authorities found that the drugs in question met prescribed standards and that no violation of the Act was established. Despite this, the criminal proceedings continued, prompting the petitioner to approach the High Court seeking quashing of the FIR.
Issues
Whether criminal prosecution can survive when statutory proceedings conclude that no offence is made out.
Whether continuation of FIR amounts to abuse of process when foundational facts collapse.
Whether inherent jurisdiction can be exercised to quash prosecution against a pharmaceutical company.
Whether parallel criminal proceedings can continue independent of Drugs Act adjudication.
Petitioner’s Arguments
The petitioner contended that the entire criminal prosecution was founded on allegations of violation of the Drugs and Cosmetics Act, which were conclusively negatived by the competent statutory authorities. It was argued that once the expert regulatory mechanism failed to establish any offence, criminal prosecution could not be sustained.
The petitioner submitted that allowing the FIR to continue would expose it to unwarranted criminal trial despite absence of any statutory breach. It was further argued that criminal law cannot be invoked mechanically when the special statute itself provides a complete adjudicatory framework.
The petitioner relied on settled jurisprudence holding that criminal proceedings must be quashed when their continuation would be oppressive and purposeless.
Respondent’s Arguments
The State contended that criminal proceedings are independent and can continue notwithstanding the outcome of statutory proceedings. It was argued that the FIR disclosed cognizable offences and that the High Court should not interfere at the investigation stage.
The respondents submitted that disputed questions of fact ought to be examined during trial and not at the stage of quashing. They sought to justify continuation of prosecution on the ground that criminal liability operates in a separate domain.
Analysis of the law
The High Court analysed the scheme of the Drugs and Cosmetics Act and emphasised that it is a self-contained code providing specialised machinery for testing, certification, and adjudication of drug quality issues. Findings of such expert statutory authorities carry significant weight.
The Court reiterated that while criminal law and statutory proceedings may sometimes coexist, criminal prosecution cannot be permitted to continue when the very factual basis of the alleged offence has been conclusively negated by the competent authority.
The Court further held that inherent powers exist to prevent abuse of process and to secure ends of justice, particularly where prosecution would serve no legitimate purpose.
Precedent Analysis
The Court relied on Supreme Court decisions holding that criminal proceedings deserve to be quashed where continuation would be futile or oppressive. Precedents recognising primacy of expert statutory findings in specialised regulatory fields were applied.
Judgments clarifying that criminal law should not be used vindictively or mechanically, especially against regulated industries, were relied upon to justify intervention.
These precedents squarely applied to the facts of the present case.
Court’s Reasoning
The Court found that the statutory authorities under the Drugs and Cosmetics Act had not found any deficiency in the drugs manufactured by the petitioner. Once this expert determination was reached, the essential ingredients of the alleged offences ceased to exist.
The Court rejected the argument that criminal proceedings could continue in a vacuum, divorced from statutory findings. It held that such an approach would lead to harassment and undermine certainty in regulatory compliance.
Accordingly, the Court concluded that allowing the FIR to proceed would be an abuse of the process of law.
Conclusion
The Gujarat High Court quashed the FIR and all consequential criminal proceedings against the petitioner. It held that criminal prosecution cannot be sustained when statutory authorities themselves find no offence.
Implications
This judgment provides significant protection to pharmaceutical companies and regulated industries from unwarranted criminal prosecution. It reinforces the principle that criminal law cannot outlive the collapse of its statutory foundation.
The ruling promotes regulatory certainty and prevents misuse of criminal process in technical and specialised domains.
