M RAMANUJAN v. STATE OF KERALA — 1987 DIGILAW 617 (KER)

Judgment :- 1. This appeal is directed against the conviction and sentence against the appellant under S.7(i) (a) (ii) of the Essential Commodities Act, 1955 read with S.3 of the said Act and Clause.24 of the Drugs (Prices Control) 0.1979. The appellant has been sentenced to undergo simple imprisonment for a period of 3 months and to pay a fine of Rs. 1000/- and in default of payment of fine to undergo simple imprisonment for a further period of one month 2. P.W. 2, the Drugs Inspector, Intelligence Branch, Quilon inspected the shop of the accused on 10-4-1985 at about 12.30 p.m. The accused is a wholesale dealer in drugs having his place of business at Alleppey in the name and style M/ s. Padma Pharmaceuticals Distributors. On verification of the records relating to the supply of drugs to retail dealers it was found that the accused sold 10 packets of Baroline (an antiseptic perfumed cream) manufactured by G D. Pharmaceuticals, Calcutta to S.N. Drugs House, Ettumannur at the rate of Rs. 3.50/- plus local taxes per tube. The accused had also sold these drugs to various ether customers. The retail price shown in the packet was Rs. 3.65/- and according to the Drugs Inspector it should have been sold to the retailer for Rs. 3.29/- per tube and therefore violated S.24(2)(b) of the Drugs (Prices Control) Order, 1979. 3. A case was registered against the accused and some of the relevant records kept in the business premises of the accused were seized. The accused when questioned under S.313 Cr.P.C. admitted that he was the owner of Padma Pharmaceuticals Distributors, Alleppey. He only pleaded that there was some bona fide mistake in preparing the bills. 4. The court below accepted the prosecution case and held that the accused has violated Clause.24 (2) (b) of the Drugs (Prices Control) Order, 1979 and convicted and sentenced aforesaid. 5. Learned counsel for the appellant contended that the conviction entered against the appellant is not sustainable for the reason that there is no tangible evidence to show the retail price of Baroline. These type of medicines come within Item No. 15 of category III of the Third schedule annexed to the Order. Relevant portion of Clause.24 (2) of Drugs (Prices Control) Order. 1979 reads as follows: "24. Price to the wholesaler and retailer. (2) No manufacturer. importer. These type of medicines come within Item No. 15 of category III of the Third schedule annexed to the Order. Relevant portion of Clause.24 (2) of Drugs (Prices Control) Order. 1979 reads as follows: "24. Price to the wholesaler and retailer. (2) No manufacturer. importer. distributor or wholesaler shall sell a formulation to a retailer unless otherwise permitted under the provisions of this Order or any other order made thereunder. at a price higher than: (a) the retail price minus 12 per cent thereof. in the case of ethical drugs. and (b) the retail price minus 10 per cent thereof. in the case of non-ethical drugs". The drug. Baroline is a non-ethical drug. Therefore. Clause.24 (2) (b) is applicable. 6. The important question that arises for consideration is as to what is the retail price of this drug. The retail price has been defined in Clause.2 (r) of the Order as follows. 2(r). "retail price" means the retail price of a drug arrived at or fixed In accordance with the provisions of this Order and includes a leader price." Clause 10 of the Drugs (Prices Control) Order gives the manner in which retail price is to be fixed and Clause.13 of the Order states that the Government may. from time to time. by order. fix the retail pries of a formulation specified in Category III of the Third Schedule in accordance with the provisions of Para.10 and 11. So. on reading the provisions of Drugs (Prices Control) Order. 1979 it is clear that the Government has to fix the retail price of the drug specified in category III of the Third Schedule applying Clause.10 and 11 of the Order. In the case of formulation like Baroline also the Government might have fixed some retail price applying these principles. Absolutely there is no evidence to show as to what is the price fixed for this antiseptic cream. What has been produced and marked in this case is Ext.P 17 which is a copy of the price list published by the G.D. Pharmaceuticals Ltd.. manufacturer of Baroline. 7. It is true. that in Ext.P17 it has been stated that the price list is issued in accordance with the Drugs (Prices Control) Order. 1979. What has been produced and marked in this case is Ext.P 17 which is a copy of the price list published by the G.D. Pharmaceuticals Ltd.. manufacturer of Baroline. 7. It is true. that in Ext.P17 it has been stated that the price list is issued in accordance with the Drugs (Prices Control) Order. 1979. But the price given in the packet or wrapper need not be the retail price fixed by the Government in accordance with the provisions of the Drugs (Prices Control) Order. It may be that the price shown in the list would be within the retail price fixed by the Government for this formulation. Under Clause.24 (2) (b) of the Order the wholesaler is prohibited from selling article in excess of the retail price minus 10 per cent thereof in the case of non-ethical drugs. So long as the retail price is not known or in a case where relevant notification. fixing the retail price is not produced the accused is entitled to get the benefit of doubt. especially when the alleged difference in price is only 11 paise. Drugs Inspector who was examined as PW.1 has not explained this fact. It is also strange to note that the bill books produced in this case show that innumerable items of costly drugs have been sold by the accused to various retailers and the Drugs Inspector has chosen to lay his hands only on this inexpensive variety. Therefore. the conviction as well as the sentence entered against the appellant under Clause.24 (2) (b) of the Drugs (Prices Control) Order. 1979 is not sustainable and the appellant is acquitted of all the charges framed against him. The bail bond executed by the appellant will stand cancelled.