Gaurav Chawla vs. State Of U.T. Chandigarh

Facts

The petitioner, Gaurav Chawla, Director of Health Biotech Limited, sought regular bail in FIR No. 56 dated 18.04.2021, registered under Sections 420 and 120-B IPC, Section 7 of the Essential Commodities Act, 1955, and Section 27 of the Drugs and Cosmetics Act, 1940. The petitioner's company manufactured Remdesivir injections. The petitioner argued he was not named in the FIR, had no connivance, and the recovery of a request letter for domestic sale did not constitute cheating. He stated the company stopped exports as per government directions and sought permission for domestic sale of existing stock. Purchase orders, a GST invoice dated 16.04.2021, and a return bill indicated a consignment was sent to a merchant exporter but could not be dispatched due to an export ban. The petitioner asserted the 3000 vials recovered were legally manufactured and held due to the ban. He also contended no offence under the Essential Commodities Act was made out and the police were not authorized to prosecute under the Drugs and Cosmetics Act. The petitioner had been in custody since 22.04.2021, and the investigation was complete.

Held

The Court granted regular bail to the petitioner. The Court noted that the challan (charge sheet) had been presented against the petitioner and that nothing further was to be recovered from him. The petitioner had been in custody since 22.04.2021, and the trial of the case was expected to take time to conclude. Therefore, the Court concluded that no useful purpose would be served by keeping the petitioner behind bars. The decision was made without commenting on the merits of the case to avoid prejudicing either side. The operative direction was to release the petitioner on bail upon furnishing bail and surety bonds to the satisfaction of the learned trial Court/Duty Magistrate. The Court explicitly stated that nothing expressed in the order should be construed as an expression of opinion on the merits of the case. No specific issue was expressly left undecided, as the bail was granted based on the procedural stage and length of custody.

Key Issues

1. Whether the petitioner's actions, including the recovery of a request letter for domestic sale of Remdesivir injections and the circumstances surrounding the consignment to a merchant exporter, constitute an offence of cheating under Section 420 IPC and criminal conspiracy under Section 120-B IPC? 2. Whether the petitioner's company's stocking and intended sale of Remdesivir injections in the domestic market, without prior sanction, amounts to an offence under Section 7 of the Essential Commodities Act, 1955? 3. Whether the police were authorized to launch prosecution under Section 27 of the Drugs and Cosmetics Act, 1940? Petitioner's Arguments: The petitioner contended that he was not named in the FIR, nor was there any allegation of his connivance. He argued that a request letter for domestic sale did not amount to cheating, and no inducement was attributed to him. He highlighted that the company had stopped exports as directed and sought permission for domestic sale of existing stock. He presented purchase orders, a GST invoice dated 16.04.2021, and a return bill to show a consignment was sent to a merchant exporter but could not be shipped due to an export ban. He also stated that the recovered vials were legally manufactured and held due to the ban. He further argued that no offence under Section 7 of the Essential Commodities Act was made out and the police lacked authorization for prosecution under Section 27 of the Drugs and Cosmetics Act. Finally, he submitted that investigation was complete, nothing was to be recovered, and his continued custody served no purpose. Respondent's Arguments: The respondent argued that the petitioner, along with co-accused, held a meeting for the sale of Remdesivir injections without a license. The recovery of a request letter dated 13.04.2021 was presented as evidence of connivance. The respondent contended that the company was not authorized to sell injections domestically and that its manufacturing, stocking, and intended sale pointed to criminal conspiracy. They argued that companies cannot prepare stocks for domestic sale without government sanction, and the petitioner's conduct indicated pre-meditation and ulterior motives. The challan was presented on 15.06.2021.