The Supreme Court has ruled that when a criminal complaint under the Drugs and Cosmetics Act is filed by a public servant in discharge of official duty, the Magistrate is not mandatorily required to conduct an inquiry under Section 202 of the Code of Criminal Procedure before issuing process against accused persons residing outside the territorial jurisdiction.
Supreme Court Restores Misbranding Prosecution Against Panacea Biotec
- Case Title: The State of Kerala & Anr. v. M/s Panacea Biotec Ltd. & Anr.
- Connected Matters: Criminal Appeals arising out of SLP (Crl.) No. 4524/2023; Diary No. 18999/2023; SLP (Crl.) No. 8867/2023
- Court: Supreme Court of India
- Bench: Justice Ahsanuddin Amanullah and Justice S.V.N. Bhatti
- Date of Judgment: February 26, 2026
- Citation: 2026 INSC 200
In a significant pronouncement clarifying the scope of Section 202 of the Code of Criminal Procedure (CrPC), the Supreme Court set aside the Kerala High Court’s order quashing criminal proceedings against M/s Panacea Biotec Ltd. in a case alleging misbranding of vaccines under the Drugs and Cosmetics Act, 1940.
The ruling addresses two key legal issues: limitation under Sections 468 and 469 CrPC, and the mandatory nature of inquiry under Section 202 CrPC when the complaint is filed by a public servant.
Background: Alleged Misbranding of ‘Easy Five’ Vaccine
The case originated from a complaint dated January 5, 2006, filed by one Joy Mandi, alleging a discrepancy in the labeling of a vaccine purchased for the immunization of his child.
The outer carton described the product as “Easy Five Pentavalent Vaccine,” while the vial inside bore the label “Tetravalent Vaccine Easy Four.”
The Drugs Inspector (Intelligence Branch), Thrissur, initiated an inquiry on receipt of the complaint. Investigation revealed that certain vials were allegedly wrongly labelled and that stocks were returned due to improper labeling.
Statements of distributors and sales representatives were recorded, and documentary evidence, including invoices and credit notes, was seized.
On January 20, 2009, a formal complaint was filed before the Chief Judicial Magistrate, Thrissur, alleging offences under Sections 18(a)(i), 17(b), and 17(c) of the Drugs and Cosmetics Act read with Rule 96 of the Rules, punishable under Section 27(d).
The CJM condoned the delay under Section 473 CrPC and issued a summons. However, the Kerala High Court quashed proceedings against the company and its Managing Director on the ground that the Magistrate had not conducted a mandatory inquiry under Section 202 CrPC, as the accused resided outside the territorial jurisdiction.
Limitation Under Sections 468 and 469 CrPC
The Supreme Court first examined whether the prosecution was barred by limitation.
Under Section 468(2)(c) CrPC, offences punishable with imprisonment exceeding one year but not exceeding three years carry a limitation period of three years.
Section 469(1)(c) provides that the limitation begins from the first day on which the identity of the offender becomes known.
The Court held that though the initial complaint was received on January 5, 2006, the identity of all accused persons was established only on April 18, 2006, after completion of verification and inspection exercises.
The Court observed:
“Section 469(1)(c) of the Code clearly contemplates that the identity of the offender may emerge during ‘investigation into the offence’… the time for making a complaint to the Court would start ticking only therefrom.”
Since the complaint was filed on January 20, 2009, within three years of April 18, 2006, the bar under Section 468 did not apply.
The Court held unequivocally in favour of the State on the issue of limitation.
Section 202 CrPC: Is Inquiry Mandatory When Complaint is by Public Servant?
The central issue concerned whether the Magistrate was bound to conduct an inquiry under Section 202 CrPC before issuing a summons to the accused residing outside the jurisdiction.
The High Court had quashed the complaint solely on this ground.
The Supreme Court undertook a harmonious reading of Sections 200 and 202 CrPC. It noted that under the proviso to Section 200, when a complaint is made in writing by a public servant acting in discharge of official duties, the Magistrate need not examine the complainant on oath.
Relying on its earlier decision in Cheminova India Limited v State of Punjab, the Court reiterated:
“The legislature in its wisdom has itself placed the public servant on a different pedestal… By virtue of the proviso to Section 200 of the Code of Criminal Procedure, the Magistrate, while taking cognizance, need not record a statement of such public servant…”
The Bench rejected the argument that the 2005 amendment to Section 202 made inquiry mandatory in all cases without exception.
It held that where a complaint is filed by a duly authorized public servant in discharge of official duties, the object of Section 202, to prevent harassment of innocent persons, is sufficiently safeguarded.
Accordingly, the High Court’s order quashing proceedings for non-compliance with Section 202 CrPC was set aside.
Substitution of the Deceased Managing Director
During the pendency of the proceedings, the original Managing Director (arrayed as accused) had passed away.
The Court directed that the prosecution may move an appropriate application before the trial court to substitute the person(s) who were in charge of the company’s affairs at the relevant time.
Fresh summons were directed to be issued accordingly.
Appeal by Accused on Limitation Dismissed
In a connected appeal filed by the accused challenging the limitation, the Supreme Court dismissed the plea, reiterating that the complaint was filed within the permissible three-year window under Section 469(1)(c) CrPC.
Separate Appeal: “Not of Standard Quality” Syringe Case Restored
In another connected matter, the Court dealt with prosecution against directors of Veekay Surgicals Pvt. Ltd., where hypodermic syringes were declared “not of standard quality” by a Government Analyst for failing sterility tests.
The Kerala High Court had quashed proceedings, citing non-compliance with Section 202 CrPC and inadequate averments under Section 34 of the Drugs and Cosmetics Act.
The Supreme Court restored prosecution, holding that:
- The Section 202 issue was concluded in light of its findings in the Panacea Biotec appeal.
- The High Court’s view that averments under Section 34 were insufficient was premature.
The Court observed:
“Whether or not, they were ‘in charge of’ and ‘responsible to the company for the conduct of the business of the company’ are questions of fact… best left to be determined by the Trial Court, at the appropriate stage.”
Observational Clarification
The Bench clarified that its findings were confined to the legal questions raised in the appeals and should not be construed as final adjudication on the merits of the underlying complaint cases.
Trial courts were directed to issue fresh summons and proceed strictly in accordance with the law.
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