Acquittal Upheld Where Prosecution Fails to Prove Actual Sale or Responsibility of Directors for Excess Pricing

The Appellant (State) challenged the acquittal of Theodor Laboratories Pvt. Ltd. and its Directors for alleged violations of Rules 9(1) and 14(2) of the Drugs Price Control Order, 1995 (DPCO).

The prosecution alleged that during an inspection on January 10, 2001, the Drug Inspector found the company had printed a Maximum Retail Price (MRP) of Rs. 9.40 on strips of "Ulcidor Tablets," whereas a Government notification dated December 18, 1997, had fixed the MRP at Rs. 6.42.

The Trial Court acquitted the respondents on July 27, 2012, prompting this appeal.

During the pendency of the appeal, Respondent No. 2 (Director) expired, leading to the abatement of the case against him.

1. Whether the Trial Court was justified in passing the judgment and order of acquittal based on the appreciation of evidence?

2. Whether there was any manifest illegality, irregularity, or perversity in the Trial Court’s findings?

3. Whether the prosecution established that the accused actually sold the drugs at the printed price or that the specific Directors were responsible for the day-to-day affairs of the company?

Sections 3 and 7 of the Essential Commodities Act, 1955, which penalize the contravention of orders regulating the production and pricing of essential commodities.

Rules 9 and 14 of the Drugs Price Control Order, 1995, regarding the notification and printing of retail prices.

The principles of appellate review of acquittals as laid down in Chandrappa v. State of Karnataka (2007) and Rajesh Prasad v. State of Bihar (2022), which emphasize the "double presumption of innocence" in favor of the accused and restrict interference unless the Trial Court's view is perverse or legally unsustainable.

The Court observed that while the prosecution proved the MRP printed on the strips exceeded the notified price, it failed to produce any evidence—such as sales receipts or witness testimony from consumers—to prove that the drug was actually sold or charged at the higher price.

Furthermore, the prosecution failed to establish the specific roles of the Directors (Respondents 3-6) in the day-to-day management of the company to fix liability.

The Court noted that the Drug Inspector relied solely on the statement of a deceased co-accused (Ambalal), which is not substantive evidence against the remaining respondents.

Following the Chandrappa doctrine, the Court found that since the Trial Court's view was a reasonable and possible one based on the lack of credible evidence, the Appellate Court is prohibited from substituting its own view merely because a different conclusion might be possible.

The High Court dismissed the appeal, confirmed the Trial Court’s acquittal, cancelled the bail bonds, and ordered the record returned to the Trial Court.