Introduction:

The Jammu and Kashmir High Court, in the case of M/S Nava Healthcare Pvt. Ltd. v. UT of J&K, reaffirmed the necessity of conducting a preliminary inquiry before issuing a process in cases where the accused resides beyond the territorial jurisdiction of the Magistrate. Justice Sanjay Dhar observed that the Magistrate failed to comply with the mandatory provisions of Section 202(1) of the CrPC, rendering the impugned order unsustainable. The case arose from a complaint filed by the Drug Control Inspector against the petitioner company and its directors for allegedly manufacturing and marketing a sub-standard drug. The High Court not only quashed the order of the Magistrate but also directed the trial court to conduct a preliminary inquiry before proceeding further. Furthermore, it was held that a director of a company cannot be prosecuted personally unless specific allegations are made regarding their direct responsibility for the business operations.

Arguments:

The petitioners contended that the Magistrate had issued the process without following the mandatory procedure under the Drugs and Cosmetics Act, 1940, and the Code of Criminal Procedure, 1973. It was argued that Section 202(1) CrPC explicitly requires an inquiry when the accused resides outside the court’s jurisdiction, which was not followed. The petitioners also challenged the veracity of the test reports on which the complaint was based, asserting that the drugs were not conclusively sub-standard. Additionally, they argued that the directors could not be held personally liable as there were no specific allegations regarding their involvement in the manufacturing process. The prosecution, on the other hand, maintained that the test reports from both the Government Analyst and the Central Drugs Laboratory confirmed the sub-standard nature of the drugs. They further contended that the provisions of the Drugs and Cosmetics Act did not preclude the Magistrate from taking cognizance before committing the case to the Sessions Court. Moreover, they asserted that the reliability of the test reports could only be scrutinized during the trial, not at the pre-trial stage.

Court’s Judgment:

The High Court, after examining the arguments and legal provisions, held that the Magistrate had failed to adhere to the mandatory requirement of a preliminary inquiry before issuing the process. The Court relied on precedents emphasizing the necessity of conducting an inquiry under Section 202(1) CrPC when the accused is beyond the court’s jurisdiction. Consequently, the impugned order was quashed, and the matter was remanded to the trial court for fresh consideration with a direction to hold a preliminary inquiry. Additionally, the Court clarified that the personal liability of directors could not be assumed unless specific allegations were made regarding their involvement in the company’s business operations. Regarding the reliability of the test reports, the Court ruled that such matters were to be determined during the trial and could not form the basis for quashing the complaint at the preliminary stage. While recognizing that certain provisions of the Drugs and Cosmetics Act necessitate trial before a Sessions Court, the Court held that this does not bar the Magistrate from taking cognizance before committing the matter for further proceedings.