The Supreme Court has asserted that no person can manufacture for sale or for distribution, or sell or stock or exhibit or offer for sale or distribute any drug or cosmetic in contravention of any provisions of Chapter IV of the Drugs and Cosmetics Act, 1940 or the Drugs and Cosmetics Rules, 1945, made thereunder. The Court also pointed out Section 27(d) of the 1940 Act to caution that contravention of such provisions shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to two years.
The Court ruled that the allegations of non-maintenance, manipulation, and tampering of records required under Schedules M and U are not merely procedural lapses punishable under Section 28-A. When these failures are linked to the manufacturing process and suggest misuse of drugs, they constitute a substantive offence under Section 18(a)(vi) of the Act, which is punishable under Section 27(d) of the 1940 Act.
Additionally, the Court clarified that in accordance with Section 32(2) of the Drugs and Cosmetics Act, 1940, any offence punishable under Chapter IV of the Act must be tried by a court not inferior to a Court of Session. The provision for summary trial by a Magistrate under Section 36-A does not apply to such offences, as it expressly excludes matters triable by a Court of Session. Therefore, a Magistrate is required to commit such cases to the Court of Session.
A Two-Judge Bench comprising Justice Prashant Kumar Mishra and Justice Vipul M. Pancholi observed that the complaint contained specific and serious allegations beyond mere non-maintenance of records. It highlighted allegations of grievous manipulation and violations during manufacturing and testing, tampering of records, misleading entries, and heavy misuse of a habit-forming drug, which could not be accounted for by the firm. These allegations pointed towards a contravention related to the manufacturing process itself.
The Bench noted that the failure to maintain records as per Schedule M (Good Manufacturing Practices) and Schedule U (Manufacturing Records) constitutes a contravention of rules made under Chapter IV of the Act, and such a contravention falls under Section 18(a)(vi) and is punishable under Section 27(d) of the Act.
As far as clerical error in Cognizance Order is concerned, the Bench examined the complaint, the typed cognizance order, and the committal order, all of which specifically mentioned Section 27(d). It concluded that the omission of Section 27(d) in the handwritten portion of the JMFC’s order was likely a clerical error and did not reflect a deliberate exclusion of this charge.
Lastly, the Bench analysed the interplay between Sections 32(2), 36-A, and 36-AB, and observed that Section 32(2) establishes a general rule that no court inferior to a Court of Session can try offences under Chapter IV. It further noted that Section 36-A, which permits summary trials by a Magistrate for lesser offences, explicitly carves out an exception for “offences triable by the Special Court under section 36AB or Court of Session under this Act”. Therefore, Section 36-A does not override the mandate of Section 32(2) for offences falling under Chapter IV.
Briefly, in 2014, a Drug Inspector inspected the firm’s premises and alleged that the firm failed to maintain requisite records for the drug Pseudoephedrine B. No. 503413, as required by Schedule-M and Schedule-U of the Drugs and Cosmetics Rules, 1945. A Spot Inspection Report was prepared, directing the firm not to dispose of the drug stock and to produce complete records within seven days.
Later, a re-inspection revealed that the firm had not complied with the earlier directions. The authorities alleged finding significant discrepancies and tampering in the records. Consequently, the Drug Inspector seized 24.990 Kg of Pseudoephedrine Hydrochloride I.P. and related documents under Form-16. A separate letter was also issued on the same day, giving the firm 15 days to submit the required information.
The Appellants, a pharmaceutical manufacturing firm, contended that the seized records were never produced before the Magistrate, violating Section 23(6) of the Act. They also alleged an 11-month delay in informing the State Drug Controller and a failure to return the seized records within the 20-day period mandated by Section 22(2-A). Later, a Show Cause Notice was issued, which was responded by the firm, stating it could not provide a complete response without the seized original documents.
Thereafter, prosecution sanction was granted, and a criminal complaint was filed alleging contraventions punishable under Sections 27(d) and 28-A of the Act. The Judicial Magistrate First Class (JMFC), Nahan, took cognizance and committed the case to the Special Judge, reasoning that the offence under Section 27(d) was exclusively triable by a Special Judge. The Appellants challenged the cognizance and committal orders before the High Court of Himachal Pradesh, which dismissed their petition.
Appearances:
AOR Ashwarya Sinha, along with Advocates Sanjay Jain, Akshay Jain, and Govind Rishi, for the Appellants
DAG Kartikeya Rastogi, Senior Advocate Ranjeet S., AOR Rohit Bansal, and Advocate Inderdeep Kaur Raina, for the Respondent
