Matrix Cellular (International) Services Limited v. State (NCT of Delhi)

14. Further in Karam Chand Ganga Parsad And Another vs Union of India 1970(3) SCC 694 the Supreme Court held:- “3.The principal questions that arose for decision before the High Court were - Was the ban on export lifted by the State Government? If it did lift the ban was it competent to do so? If the ban is held to have been validly lifted it follows as a necessary corollary that the refusal on the part of the railways to deliver the maize exported is illegal and the authorities were not competent to seize or forfeit the Maize exported. Further the prosecutions launched would become unsustainable.

4. A Division Bench of the Delhi High Court after elaborately hearing the arguments advanced in the case on the various issues arising for decision in the case rejected the writ petitions on the sole ground that in view of the pendency of the criminal proceedings before some Courts in the State of West Bengal, it is inappropriate for the High Court to pronounce on the questions arising for decision in the writ petitions. In our opinion the High Court seriously erred in coming to this conclusion. If the appellants are able to establish their case that the ban on export of maize from the State of Haryana had been validly lifted all the proceedings taken against those who exported the Maize automatically fall to the ground. Their maintainability depends on the assumption that the exports were made without the authority of law. It is a well-established principle of law that the decisions of the civil courts are binding on the criminal courts. The converse is not true. The High Court after entertaining the writ petitions and hearing arguments on the merits of the case should not have dismissed the petitions merely because certain consequential proceedings had been taken on the basis that the exports in question were illegal. For the decision of the controversy between the parties to the writ petitions neither the presence of the State of West Bengal nor the authorities who took penal action was necessary. The validity of the steps taken by them, as mentioned earlier, would depend upon the validity or otherwise of the export in question.”

15. Thus, it was argued only if the State had regulated the import and capped the price of concentrators only then these could have been seized; hence without any order under Essential Commodities Act or without any regulation under The Epidemic Diseases Act, the act of the State is wholly illegal and hence the articles need be returned.

16. Heard.

17. Before proceeding further, let me examine whether the act of respondent in seizing the articles is legal? In this context the relevant provision of the different Act(s) need to be noted.

18. The drug defined under Section 3 (b) (iv) of the Drugs and Cosmetics Act, is as under:-

19. The State also relies upon order(s)/notification(s) issued by the appropriate government from time to time to fight this pandemic. The following notifications have been issued and are cited below.

20. An office memorandum dated 11.02.2020 issued by the Government of India, is as under:- “MINISTRY OF HEALTH AND FAMILY WELFARE (Department of Health and Family Welfare) NOTIFICATION New Delhi, the 11th February, 2020 S.O. 648(E).— In pursuance of sub-clause (iv) of clause (b) of section 3 of the Drugs and Cosmetics Act, 1940 (23 of 1940), the Central Government, after consultation with the Drugs Technical Advisory Board, hereby specifies the following devices intended for use in human beings or animals as drugs with effect from the 1st day of April, 2020, namely:― All devices including an instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including a software or an accessory, intended by its manufacturer to be used specially for human beings or animals which does not achieve the primary intended action in or on human body or animals by any pharmacological or immunological or metabolic means, but which may assist in its intended function by such means for one or more of the specific purposes of ―

(i) diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder;

(ii) diagnosis, monitoring, treatment, alleviation or assistance for, any injury or disability;

(iii) investigation, replacement or modification or support of the anatomy or of a physiological process;

(iv) supporting or sustaining life;

(v) disinfection of medical devices; and

(vi) control of conception.

MANDEEP K. BHANDARI, Jt. Secy.”

21. An order No.PN/206/74/2020/F/F, No.8(74)/2020DP/NPPA/Div.- II dated 31st March, 2020 is as under:- “S.O. 1232(E) In pursuance of Notification No. S.O. 648(E) dated 11th February 2020 issued by Ministry of Health & Family Welfare, Government of India whereby Medical Devices intended for use in human beings or animals have been notified as Drugs with effect from 1st April 2020; all Medical Devices shall accordingly be governed under provisions of the Drug (Price Control) Order. 2013." Also vide Notification No. 4/2015-2020 New Delhi, Dated 30 April, 2021, it has been notified that effect of the Notification: Para 2.25 of Foreign Trade Policy, 2015-20 is revised to include import of Oxygen Concentrator for personal use through post, courier or e-commerce portals in the list of exempted categories, where Customs clearance is sought as gifts", till 31 July 2021."

22. An office memorandum dated 29.06.2020 issued by the Ministry of Chemicals and Fertilizers, National Pharmaceuticals Pricing Authority, Department of Pharmaceuticals, Government of India is as under:- “File No.20(8)/09/2019/Div.III/NPPA Government of India Ministry of Chemicals and Fertilizers Department of Pharmaceuticals, National Pharmaceutical Pricing Authority 3rd and 5th Floor, YMCA Cultural Centre Building, 1, Jai Singh Road, New Delhi Dated 29th June 2020 O F F I C E M E M O R A N D U M Subj: Monitoring of maximum Retail Prices of (i)Pulse Oximeter and (ii)Oxygen Concentrator under PDCO, 2013-Reg. This is in reference to Notification No. 1232 (E) dated 31st March 2020 issued by this Office for regulation of Medical Devices under Drugs (Prices Control) Order. 2013 read with Essential Commodities Act, 1955 w.e.f. 1st April

2020. Accordingly, Maximum Retail Price of Medical Devices cannot be increased more than ten percent (10%) in a year.

2. In order to monitor the price movements of critical Medical Equipments required in clinical management of COVID-19, It has been decided to call for MRP details for the following Medical Devices viz. (1) Pulse Oximeter and

(i) Oxygen Concentrator in the prescribed format.

3. xxx xxx

4. xxx xxx (Ratan K Khatwani) Joint Director E-mail: rattan.khatwani@gov.in”

23. An Order dated 07.05.2021 issued by the Drug Controller Department, GNCT of Delhi is as under:- “GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI DRUGS CONTROL DEPARTMENT F-I[7], KARKARDOOMA, DELHI-110032 E-mail ID dirdcd@nic.in, Phone No. 011-22393703 No.F.52 /DCI HOO/2020/199 Dated 07.05.2021 ORDER Sub:-Regarding control over the sale of essential Covid 19 management drugs and ancillary equipments under Drugs Price Control Order Sir

1. Whereas, there are several essential drugs used being used in the clinical management of Moderate and Severe cases of COYID-J[9]. Therefore, ensuring adequate and uninterrupted supplies of these drugs is absolute necessity to save human lives in Delhi.

2. Whereas there have been some report regarding black marketing of COVID 19 management drugs by unscrupulous elements in the market and there is a need. for immediate enforcement and to keep strict vigil on the market to prevent black marketing.

3. Accordingly all the Inspectorate staff of this department is hereby instructed for keeping close watch over any such clandestine activity and take strict action, if any such case is detected. The assistance of Delhi Police/DM office may be taken so as to ensure coverage of all applicable legal provisions.

4. Further, all the stakeholders viz. Retailer/ Wholeseller/ Distributors of these items are hereby directed not to sell these items over and above the notified price/MRP and also to refrain from dealing in these items in a manner which is not permitted or unauthorized and should not get indulged in what so ever manner, in their black marketing. Any deviation in this regard will be viewed seriously and stringent action as per law will be initiated against them. (A. K. Nasa) Head of Office/ Controlling & Licensing Authority”

24. The oxygen concentrator, being a device is covered within the definition of Drug per Section 3 (b) (iv) of the Drugs and Cosmetics Act. Even if we ignore the notification dated 07.05.2021 (supra) at the present moment, being subsequent to seizure as alleged, yet there is a notification dated 11.02.2020 which says device includes an instrument, apparatus, used for treatment, sustaining life etc and an Order dated 31.03.2020 (supra) which says medical device, intending for use in human being shall be governed by the provisions of Drug Price Control order -2013. Further, an Order dated 29.06.2020 (supra) which warns of increasing MRP of the concentrators, more than 10% a year.

25. Now, the Hon’ble Division Bench of this Court in Venkateshwar Hospital vs. Govt. (NCT Of Delhi) 2021 SSC OnLine Del 1830, had noted:-

26. Also in Bram Health Care Private Limited vs. Union of India & Anr W.P.(C) No.4984/2021 per order dated 02.05.2021 the Hon’ble Division Bench had inter alia noted:- “During the course of hearing, we have been informed that Oxygen gas cylinders, Oxygen flow meters, and medicines required for treatment of COVID-19 disease are being sold in the black market at a much higher price above the Maximum Retail Price (MRP). We direct the State to ensure that none of the equipments, or medicines used in the treatment of COVID-19 disease are sold at prices above the MRP. Any person found indulging in malpractice of either hoarding the equipments or medicines, or selling the same at prices above the MRP shall be booked, and brought to the notice of this Court for initiating of independent contempt action against all such persons.”

27. Thus, to say that respondent acted arbitrarily, or their action has no legal backing is all wrong. The police official when got information about black marketing and hoarding of medical devices (concentrator) and of violation of the law / orders (supra) had acted and seized the material. Now, restricting the orders of the Hon’ble Division Bench in Venkateshwar Hospital (supra) and Bram Health Care Private Limited (supra) only to cylinders and not concentrators would be giving a too narrow interpretation to such order(s).

28. The facts reveal the seizure has been made under Section 102 Cr P

29. The seized items were found under suspicious circumstances where individuals were in alleged violation of the Covid-19 lockdown measures imposed at that time, and accordingly, police was authorised to seize the oxygen concentrators lying at the spot. The registration of the FIR was not mandatory for search and seizure under Section 102 Cr P C.

30. If one peruse Section 157(1) Cr PC viz the procedure for investigation and Section 2(h) Cr P C which defines investigation, the following inference can be drawn from its conjoint reading viz a police officer is empowered under Cr PC to investigate upon information received or otherwise, if he suspects the commission of a crime that he is empowered to investigate under Section 156 of the Cr PC, and since the investigation includes collection of evidence hence, it authorizes the Investigating Officer to seize any property for the purpose of the collection of evidence. Unlike Section 156 Cr P C, under Section 102 Cr P C the police is empowered to investigate cognizable cases and the police can seize any property without an FIR.

31. Arguments have been raised qua the alleged irregularities in seizure. Even if it is assumed, there were some irregularities in its procedure to seize, it shall not vitiate the seizure. The only requirement is the Court needs to be careful in scrutinizing the seizure memo, as the law is crystalized over the years viz Pooran Mal v. Director of Inspection (Investigation) (1974) 1 SCC 345 and State of Maharashtra v. Natwarlal Damodardas Soni (1980) 4 SCC 669. A bare perusal of above decisions would show even if there was an irregularity at the time of making a seizure, procedural or otherwise, it would not ipso facto vitiate the seizure. The Courts have consistently held the evidence obtained even through an “illegal” search or seizure will not be excluded or discarded only on the ground that it was obtained through illegal or irregular means. It has been consistently held unless prejudice and miscarriage of justice is pleaded and shown, a mere irregularity shall not result in setting aside of proceedings, or in relevant evidence being discarded.

32. In Commandant, 68 Bn. BSF, Gakulnagar v. Arjun Das (2006) 12 SCC 129 it has been held an irregularity of the procedure is a matter of fact to be decided during trial. Hence, it cannot be the subject matter of current writ petition.

33. Prima facie the act of the petitioner is in violation of an Office Memorandum, Ministry of Chemicals and Fertilizers, Government of India, of dated 29.06.2020 (supra) which had directed the petitioners and others like him, selling oxygen concentrators, to not increase prices of oxygen concentrators by more than 10% of the maximum retail price in a year of the Drugs Pricing Control Order, 2013. Now, all manufacturers / importers were directed to ensure compliance of the provisions of Para 20 of the DPCO failing which action may be initiated for violation of provisions of DPCO read with the EC Act. The DPCO being an order passed under Section 3 of the EC Act any violation thereof is punishable under Section 7 of the EC Act. It was only in compliance with Section 6A (2) of the EC Act and the Order dated 29.4.2021 (supra), as also the directions in Venkateshwar Hospital (supra), a report was rather made to concerned District Magistrate who is now in possession of a majority of the seized oxygen concentrators. Admittedly, the District Magistrate has not been made a party in this writ petition.

34. Thus, a conjoint reading of the FIR, invoices and receipts produced by the petitioner along with the fact that the seized oxygen concentrators were allegedly sold at a huge profit margins in contravention of laws, rules and executive orders pointed out above. The facts show the petitioner was engaged in selling untested oxygen concentrators to people desparate for these devices and at an exorbitant prices through false representations, especially, when the State and the whole country saw a unprecedented surge of covid-19 infections and sever lack of oxygen cylinders and/or concentrators.

35. Lastly, the relief sought qua release of seized oxygen concentrators, is in conflict with the orders passed by the Hon’ble Division Bench dated 29.04.2021 in Venkateshwar Hospital (supra) and also Bram Health Care Private Limited (supra) wherein it is directed whenever any drugs etc. used in treatment of Covid-19 are seized by the authorities or Delhi Police, they shall, without any delay inform the District Magistrate, who shall take the necessary steps to ascertain genuineness of the drugs etc. and pass orders for release of the same before the items seized are rendered unusable; the oxygen concentrators being a lifesaving machine, is covered within the definition of Drug per Section 3(b)(iv) of the Drugs and Cosmetics Act and per notification dated 11.02.2021 (supra) all devises meant for diagnosis, prevention, monitoring, treatment or alleviation of any disease are covered under the definition of Drugs; thus there appears to be no illegality in the act of respondent especially when the State was reeling in acute shortage of drugs, cylinders, concentrators and attendants of patients were running pillar to post, ready to part with their life savings for its purchase.

36. Hence, the investigation being at initial stage, the reliefs sought for in this petition cannot be granted by this Court except the concentrators so seized be put an identification mark(s) and its coloured photographs be kept for future reference, by the respondent.

37. In view of above, the petition is dismissed. Pending application, if any, also stands disposed of.

YOGESH KHANNA, J. MAY 27, 2021 M