THE STATE OF KERALA v. M/S PANACEA BIOTEC LTD.
Mandatory Inquiry under Section 202 CrPC for Out-of-Jurisdiction Accused is Not Required in Complaints Filed by Public Servants; Clarification on Limitation and Corporate Vicarious Liability.
Court: Supreme Court of India
Citation: 2026 INSC 200
Decision Date: 26-02-2026
List of Laws
The Drugs and Cosmetics Act, 1940; The Code of Criminal Procedure, 1973; Section 202 - Postponement of issue of process; Section 200 - Examination of complainant; Section 468 & 469 - Limitation for taking cognizance; Section 34 - Offences by Companies
- Facts: The Drugs Inspector, Kerala, initiated a complaint against M/s. Panacea Biotec Ltd. and its directors for alleged misbranding under the Drugs & Cosmetics Act, 1940. The discrepancy involved vaccine vials where the outer carton claimed a pentavalent combination, while the inner vial label indicated a tetravalent vaccine. A second similar appeal involved Veekay Surgicals regarding syringes of substandard quality. In the primary case, the complaint was filed in 2009 for an issue reported in 2006. The High Court quashed the proceedings on the grounds that the Magistrate failed to conduct the mandatory inquiry under Section 202 of the Code of Criminal Procedure, 1973 (CrPC) for accused residing outside his jurisdiction and further questioned the limitation period.
- Procedural Posture: The State of Kerala and the Drugs Inspector filed these criminal appeals before the Supreme Court challenging the High Court of Kerala's orders which had quashed the summoning orders and the underlying complaint cases.
- Issue: (i) Whether the mandatory inquiry under Section 202 of the CrPC for out-of-jurisdiction accused applies to complaints filed by public servants; and (ii) whether the complaint was barred by the three-year limitation period under Section 468 of the CrPC.
- Holding: The Supreme Court allowed the appeals by the State, set aside the High Court's judgments, and restored the summoning orders. It held that the inquiry under Section 202 is not a bar to proceeding when the complainant is a public servant, and the limitation period begins from the date the identity of the offender is established.
- Reasoning: The Court reasoned that Section 200 CrPC exempts public servants from being examined on oath; therefore, Section 202 must be construed harmoniously with this exemption. Relying on "Cheminova India Limited v State of Punjab", the Court affirmed that public servants stand on a "different pedestal", and the object of Section 202 (preventing harassment) is satisfied by the official nature of the complaint. On limitation, the Court applied Section 469(1)(c) of the CrPC, stating that the clock starts ticking when the identity of the offender is known to the authority. Since the investigation to identify the responsible directors concluded in April 2006, the complaint filed in January 2009 was within the three-year limit. Regarding vicarious liability under Section 34 of the Act, the Court held that whether a director is "in charge" is a question of fact to be decided during the trial, not at the quashing stage.
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