Leading Drug Cases

Rajasthan Sales Tax Act, 1994 -Section-A-Sale of Goods Act, 1930 (Central Act 3 of 1930)-Section 4-Constitution of India, 1950-Article 366 (29-A)-Seventh Schedule List II Entry 54-

Constitutional Validity of Section  4-A of the Rajasthan Sales Tax Act, 1994, as inserted by Finance Act, 2004, and notification thereunder—Provision seeking to levy single point sales tax on maximum retail price published on packaged goods (Pharmaceutical products) at the point of transaction between wholesaler and retailer—Is violative of Entry 54 of List II of  the Seventh Schedule of the Constitution—Sale within the ambit of above entry means completed sale of goods as per Sale of Goods Act, 1930—Further, in contradistinction to excise duty, levy under the Sales Tax Act is not on the ‘goods’ but on ‘sale’—Maximum retail price is relevant to the transaction between retailer and end consumer—Levying sales tax on the maximum retail price at the point of transaction between wholesaler and retailer would be on the price qua which the transaction has yet to take place or may not even take place and thus falls foul with the legislative competent under Entry 54 of List II of Schedule VII to the Constitution—Section-A and the notification thereunder are, therefore, invalid to that extent. [ Rajasthan Chemists Association v. State of Rajasthan & Ors., Rajasthan High Court, D/d 29.3.2005, 2005(4) RDD 571 (Raj) (DB) D/d 29.3.2005 ]

Drugs and Cosmetics Act, 1940

Section  3- Human Blood-

whether falls within definition of ‘ drug’? -human blood is a substance intended to be used in the treatment of diseases in human beings and hence is a drug. [ Adharsha Hospital vs. The Union of India and others, Karnataka High Court , 2006 Drugs Cases (DC) 9]

Sections 3(b)(i)(iii) and 18 - definition of 'drug' - 

Whether EC 350 (Vitamin E and Vitamin C Capsules) and Cecure (Multi - Vitamin Capsules) manufactured by the petitioner and sold in the market through medical shops as "Dietary Supplements" falls within the definition of "drug" requiring licence under the Drugs and Cosmetics Act, 1940? - held the definition of 'drug' in the Act the clearly specifies that all substances intended to be used for mitigation of prevention of any disease or disorder in human beings is a drug and further all substances intended for use as components of a drug including empty gelatin capsules is a drug - the two items of Vitamins are filled in empty gelatin capsules. So a combined reading of clauses (i) and (iii) of Section 3(b) would show that the two items, EC 350 and CECURE which are Vitamin E and Vitamin C and/or multi-vitamin tablets would fall within the definition of 'drugs' - as per Rule 43 of the Drugs and Cosmetics Rules drugs specified in Schedule D shall be exempted from the provisions of chapter III of the Act and of the Rules made thereunder to the extent and subject to the conditions specified therein. The items which are exempted under schedule D, item 5 reads "the following substances' which are used both as articles of food as well as drugs : (1) all and minerals - by virtue of the definition of 'drug' in the Act a substance which is swallowed for mitigation or prevention of disease in human beings or in animals is a medicine and a drug. The two products in question is not used by any person as a general dietary supplement. Vitamin deficiencies in human being may result in certain diseases in human beings. In such cases doctors prescribe these vitamin capsules of a particular dozage which is for mitigation or for prevention of such diseases. These vitamin capsules will squarely fall within the definition of 'drug' under the Act - two items 'EC-350' and 'CECURE' which are styled as 'dietary supplements' are 'drugs' within the definition of the said word in Section 3(b) of the Drugs and Cosmetics Act, 1940. (Cadila Pharmaceuticals Ltd. vs. State of Kerala and Others, KERALA HIGH COURTS, 2003 Drugs Cases 21)

Section 5(2)--- Drugs & Cosmetics Rules, 1945---Rule 106-B-

Prohibition imposed on quantity and percentage of alcohol in homeopathic medicines---contention that mandatory procedural requirements of the Act not followed as the Drugs Technical Advisory Board did not have any representative with an expert knowledge in the field of Homoeopathy untenable---Court cannot mandate any change in statury provisions relating to Constitution of the Board---sub-committee for homoeopathic science constituted by Board—writ petiotion dismissed. [ Shrikrishna Homoeo Pharmacy vs. Union of India and others, Bombay High Court, 2006 Drugs Cases (DC)  96]

 Section 16 - Standards of quality 

Section 16, 17A, 17B, 27 and 32—18(a) (1), 25 and Drugs & Cosmetics Rules, 1945—Rules 4 and 8—expired drug—Standard drug does not include expired drug—as a Doctor he had the duty and responsibility to check the manufacturing date and expiry date of the Vaccine before pushing it into the body of one innocent and infant baby of only two months old. The Doctor was the last person who could have saved pushing of an expired drug into the body of a minor baby. Vicarious liability of the Doctor is manifestly transparent and clear in this case and he cannot be absolved of the criminal responsibility in this matter—the definition of Standard drug as defined in section  16 of the Act does not include expired drug. In the instant case from the seizure list, from the statement of witnesses and from the invoice-cum-challan it has been prima facie established that the expired drug was used and expired drug cannot be included within definition of standard drug.[Bimal Kumar Kundu vs. State of West Bengal, Calcutta High Court, 2005 Drugs Cases (DC) 240]

Taking of licence has nothing to do with fixation of standards of quality - Taking of licence has nothing to do with fixation of standards of quality. [Gopilal Agarwal, Petitioner V State of  Orissa and another O.J.C. No 1005 of 1971, decided on 2nd February 1972, Orissa High Court, G. K. Misra, CJ. And R.K. Ray J., 1975 Drug Cases 13:AIR1973Ori 15

Section 17- Misbranded drug 

The word ‘place’ is not a synonym for country and definitely connotes different meaning from the word country. The word ‘place’ is not a synonym for country. The word definitely connotes different meaning from the word country. Where the product of one town is being described as the product of another town it amounts to misbranding within the meaning of Section 17(b). [Dharam Deo Gupta,  Applicant V. State, Respondent, Cri. Rev. No. 14 of 1956 decided on 27th March 1958, All.  High Court ( Lucknow Bench), A.N.Mulla., J.,1979 FAC-6-183:AIR1958All1863]  

Where the product of one town is being described as the product of another town, it amounts to misbranding. -  Where the product of one town is being described as the product of  another town, it amounts to misbranding within the meaning of Section 17(b).[Angoori Devi,Applicant V. State, Respondent,Criminal revision application No.382 of 1972 ,decided on 10/3/1977, Allahabad High Court,K.C.Agrawal,J, 1977 Drug Cases 9 ]  

Drugs not labelled in prescribed manner are deemed to be misbranded within the meaning of Section 17(e)  - Not a single bottle bore any label. The name of the manufacturer, licence number, the batch number and other mandatory particulars required by Rule 96 were conspicuous by their absence. Thus, it is abundantly clear that the respondents cannot escape the consequences of his act in stocking a misbranded drug in violation of Section 18(a ) ( ii) of the Act..[State of Maharashtra, Appellant V. J.S. Ujawane, Respondent, Criminal Appeal No.13 of 1975, decided on 15/6/1978, Bombay  High Court, (Nagpur bench), Lentin and Joshi JJ., 1979 CRI.L.J. 530 : 1979 Mh.L.J.50]  

Section 17B, 18 and 19 -

No prohibition in any of the provisions of the Act that a dealer cannot be prosecuted for sale of spurious drug or drug of below standard quality without manufacturer being made a co-accused. Such a conclusion by the High Court is not borne out from the provisions of the Act - the High Court of Andhra Pradesh in its order totally overlooked the provisions contained in sub-section (1) of section 19 of the Act which denies defence plea to the accused that 'he was ignorant of the nature, substance and quality of the drug or the circumstances of its manufacture'. The only defence available to him as set out in clause (b) of sub-section (3)is that ' he did not know and could not, with reasonable diligence have ascertained, that the drug or cosmetic in any way contravened the provisions of the Act'. This defence plea, if at all available to the accused would be considered in accordance with sub-section (1) read with sub-section (3) of section 19 of the Act only after the prosecution has led its evidence to prove its case. (The State of Andhra Pradesh vs. M/s. Venu Veterniary Division, SUPREME COURT OF INDIA , 2003 Drugs Cases 32)

 

Section 18- Prohibition of manufacture and sale of certain drugs and cosmetics. 

In view of the principles enunciated in Section 24 of the General Clause Act, notification issued under Section 18 of the principal Act will be deemed to have been issued under Section 18 as amended and fresh notification is not necessary  Contentions on behalf of the respondent - The Notification issued under Section 18 of the principal Act will continue to be in force even after amending Act 21 of 1962 and will be deemed to have been issued under Section 18 as amended. Therefore it was not necessary for the State Government to have issued a fresh notification fixing a date for the purposes of Section 18 as amended by amending Act 21 of 1962. [State of  Maharashtra, Appellant V. Zahid Hussein, Respondent, Criminal Revision No.124/1973, decided on 12-8-1974, 1975 Drug Cases 165:1975 FAC 118: 1975 MAH L.J.455.] 

S.18(c) r/w Rule 62 - Requirment of separate licence for separate premises.

Licence under Section 18(c) read with Rule 62 required for storage for short spells and on ad-hoc basis - The storage’ even though for short spells and on ad-hoc basis and without intent to sell at that place but as a part of sale business, comes within the scope of ‘storage for sale’ in Section 18(c) and Rule 62. [Swantraj and others, Appellants V. State of  Maharashtra, Respondent, Criminal Appeal No.177 of 1970, decided on 5/2/1974, Supreme Court, V.R. Krishan Iyar and R.S. Sarkaria JJ, 1974 CRI. L.J.472 (V.80 c 72 ):AIR 1974 SC 517] 

A separate  licence for separate place is  required under Section 18( c)read with Rule 62- The respondent was required  to obtain separate licence for separate place under Rule 62. [State of Maharashtra, Appellant V. Sevantilal Jasanglal, Shah, Respondent, Cri. A.No. 997/1975, decided on 6/10/1977, Bombay High Court,  Apte, J. (1978) FAC 39:1978 CRI.L.J.1013] 

Requirement of licence under Section 18(c) 

Where a particular medicine is kept in the shop there would be a presumption that it is for the purpose of sale unless that presumption is rebutted by the accused. - Held. -  Where a particular medicine is kept in the shop there would be a presumption that it is for the purpose of sale unless that presumption is rebutted by the accused.  There is nothing in the statement of the accused or in the evidence produced by him that these tubes of Penicillin Ointment were kept in the shop not for the purpose of sale but for any other purpose [Kasim Bhai, Applicant v.. State , Respondent, Cri. R. No. 1229 of 1954, decided on 13th Jan 1956, Allahabad High Court, Asthana, J., AIR 1956 All. 703, 1979 Drug Cases.9:1956CRI.L.J.380:] 

The intention of legislature was to penalise the stocking or exhibiting of goods of sub standard quality only if they were meant for sale - From the words in sub-clause(a) of Section 18 it is seen  that a person can be convicted under the provisions of this section only if the stocking or exhibiting is  for the purpose of sale. The intention of legislature was to penalise the stocking or exhibiting of goods of sub standard quality only if they were meant for sale. Mere stocking unless it  is for the purpose of sale does not amount to an offence within the meaning of Section 18 of the Drugs and Cosmetics Act, 1940.  [Dharam Deo Gupta,  Applicant V. State, Respondent, Cri. Rev. No. 14 of 1956 decided on 27th March 1958, All. High Court ( Lucknow Bench), A.N.Mulla., J.,1979 FAC-6-183:AIR1958All1865 : 1958 CRI. L.J. 1453]  

The term ‘stock’ means  ‘ to keep’ and includes keeping or carrying on one’s person. Storing in a place not necessary to prove that drugs are  ‘stocked’ for sale. Held - The plain meaning of ‘stock’ is ‘ to keep’ and it is not necessary that the drug should be  ‘stored’ in a place in order  that it can be said to have been ‘stocked’ for sale. The large quantity of 95,000 capsules found in possession of the appellant  leaves no doubt that he had stocked or kept the drugs  for sale. It could not have been meant for his personal use.  [ Sk. Amir, Appellant V. The State of Maharashtra, Respondent, Criminal Appeal No. 149 of 1970, decided on 9/1/1974, Supreme Court M.H. Beg and  Y.V.. Chandrachud., JJ.,  1974 CRI. L.J. 459 (V-80, C166) : AIR 1974 SC 469 : 1975 Drug  Cases 25] 

The possession simpliciter not punishable under Section 18 read with Section 27of the Act. - Before a person is liable for prosecution or conviction under Section 27(a)(i) and (ii) read with Section 18(c) of the Act, it must be proved by prosecution affirmatively that he was manufacturing the drugs for sale or was selling the same or had stocked or exhibited the articles for sale.  The possession simpliciter of the articles does not appear to be punishable under any of the provisions  of the Act. [ Moh. Shabbir, Appellant V. State of Maharashtra, Respondent, Cri. Appeal No.103 of 1973, decided on17/1/1979, Supreme Court, S. Murtaza Fazal Ali and A.D. Koshal, JJ., 1979 CRI. L.J. 466: AIR 1979 SC 564] 

The penal provisions of the Act do not contemplate keeping of drugs for personal use.  - The penal provisions of the Act do not contemplate keeping of drugs  for personal use.  In order to sustain a conviction under the Act, it must not only be proved that the accused has kept the medicines without licence, but it must also be proved that they have been kept for selling the same. [ Mohan Nair, Petitioner V. State, Respondent, Cri. Rev.C.No.810 of 1983, and C.R.P.No.793 of 1983, decided on 25/4/86, Madras High Court, Swamikkannu, J., 1987 (I) FAC 23

Bills and Registers produced--Sections 18(c), 22(1) and (3)—acquittal-appeal  against- at the time of examination, accused No. 1 produced all the bills and registers, which he was supposed to maintain as per Schedule K of the Act—the mediator’s report did not disclose as to the specific records that are required to be produced by accused No. 1—In view of the infirmities the learned Magistrate rightly rejected the evidence of P. Ws. 1 to 5 and held that the prosecution failed to prove the guilt of the accused beyond all reasonable doubts. [Drugs Inspector, Bhimavaram vs. Dr. I. Ramakrishna Gandhi and another, Andhra Pradesh High Court, 2005 Drugs Cases (DC) 16]

S.18(c) r/w Section 27(a)(ii) of Act.-  

Mere suspicious circumstances not sufficient to establish charge under Section Contentions on behalf of appellant - Though the circumstances are sufficiently suspicious in nature, we are unable to hold that the prosecution has succeeded in establishing the charge under Section 18(c) r/w Section 27(a)(ii) of Act. [ Dr. Sanat kumar Basu, Appellant V. State of West Bengal, Opposite  Party, Cri. A. No. 228 and Cri. Rev. No. 1920 of 1979 decided on 4/10/83, Calcutta High Court, B.C. Chakarabarti and I.N. Chudhari JJ.,  1984 CRI. L.J. 931]. 

Note : Relying on Supreme Court decision in Mohd. Shabir V. State of Maharashtra., various High Courts have taken a similar view in  (1) Badirot Jamal, Petitioner V. State of Assam, Opposite Party, Cri. Rev,. No. 54 of 1977, decided on 10/8/82,Gauhati High Court, S.M. Ali. J, 1983 CRI. L.J. No:22(GAU). (2) Bawa Singh, Petitioner V. State of Punjab, Respondsent, Cri. Rev. No. 1632 of 1979 decided on 6/7/1982, Punjab and Haryana High Court, Rajendra Nath Mittal, J., 1983 CRI. L.J. No. 60 (Punj &Har): (1982) 9 CRI,. L.J. 237.  (3)  State of Karnataka, Petitioner V. Channkeshwara Medicals and others, Cri. A.No. 3988of 1988, decided on 27/1/1992, Karnataka High Court, D.P. Hiremath and C. Shivappa JJ., 1993 Drugs Cases 56].  

  Circumstances make it clear that stock was for sale and not for personal use  -Circumstances    make it clear that stock was for sale and not for personal use. We therefore, uphold the conviction of the accused. [State of Maharashtra,Appellant V. Hasmukhrai Fulchand Shah, Respondent, Cri. Appeal No. 146/1976, decided on 31/8/1977, Bombay High Court,  Deshmukh and Agarwal, JJ, 1988 (1) FAC 98]

  The evidence of large scale possession of drugs was beyond any doubt capable of no other     explanation excepting that the drugs had been stocked for the purpose of sale - The learned Magistrate grievously misconstrued the evidence because the evidence of large scale possession of drugs was beyond any doubt capable of no other explanation excepting that the drugs had been stocked for the purpose of sale. [State, Appellant V. Puran Lal Ahuja, Respondent, Criminal Appeal NO.64 of 1984, decided on 29/8/1985, Delhi High Court, Rajinder Sachar, C.J. and Malik Sharief-Ud-Din, J., 1986 CRI.L.J. 1715] 

When drugs are found in a chemist shop having business of retailing in drugs, only inference is they  were stocked for sale  regardless of whether they are in a cupboard or in kerosene tin.. Sending a bogus customer or to produce counterfoils of bills, etc. not necessary.  It would be carrying the burden of proof too far. - Where the accused is a Chemist and where his business is of retailing in drugs and where substandard drugs are found in shop, regardless of whether they are in a cupboard or in kerosene tin, there can be no other inference except that they were stocked for sale. [State of Maharashtra, Appellant V. Jethmal Himatlal Jain and another, Respondents, Criminal Appeal No.249 of 1985, decided on 25/3/1994, Bombay High Court, M.F. Saldanha J., 1994 CRI. L.J. 2613.] 

After insertion of the words ‘offer for sale’ in Section 18 by amendment in 1982,earlier decision in Mohd. Shabir V.State of Maharashtra, 1979 Drug Cases 1, is distinguished and considered not applicable.- - Ultimately the manner of keeping or exhibiting them in a shop would assume relevance and importance to see if they were really offered for sale. We have considered the facts of the case in the light of meaning that could be attributed to the words ‘offer for sale’, namely that whether such articles are displayed in a shop so as to make a customer know that they were available for purchase. As this element in the facts of the case is not proved, we find no grounds to interfere with the Judgment of the trial Court. [State of Karnataka, Appellant V. M/s. Kannika Stores and others, Respondents, Cri.  A. No. 615 of 1988, decided on 9-12-1992, Karnataka High Court, D. I. Hiremath and L. Sreenivasa Reddy, JJ., 1993 Drug Cases 266.] 

Comment. - The prosecution case was that the drugs were stocked in the racks. The complainant had deposed in the Court and there was no reason to disbelieve him. The panch witness pw2 was already declared hostile. The pw3 had only stated that he has not seen the accused selling any drugs in their shop. Much importance should not have been attached to his  negative statement. The High Court, rightly came to the conclusion that in view of amended Section 18, the decisions relied upon by the trial Court are not applicable to the facts of the case. It is a common knowledge that household drugs like Aspro, Anacin, Vicks etc., are sold by General and Provision Stores. The customer, as a matter of routine approaches a shop for purchase of articles under genuine belief that commodities in the shop are for sale. Such belief does not depend on the manner of storing the commodity. For a customer it is immaterial whether a commodity is stored on the floor or on the table or in the racks. With due respect it is submitted that the fact that drugs were recovered from a shop should have been considered enough to presume that they were offered for sale, especially when the High Court came to the conclusion that  the decision in Mohd. Shabir V. State is not applicable to the facts of the case. The law laid down in Jethmal Jain V. State and  State V. Puran lal appears to be correct appreciation of precedents, facts and law.  

S.18(c) r/w Schedule K. entry 5A - Extent of exemption to the hospitals 

Hospitals not exempted from obtaining licence to manufacture drugs for distribution. -The hospital can claim exemption under Rule 123 from obtaining licence for sale and there is nothing in Sch. ‘K’ to show that hospital is exempted from btaining licence for distribution of drugs, which they manufacture. [Dr. Aletta Grace Bell, Petitioner V. Dr.(Miss) S.Trikay and another, Respondents, Civil W. P. NO. 3326 of 1979, decided on 17/7/80, Patna High Court, K.B.N.Singh, C.J. and P.S. Sahay J., 1982 (II) FAC 389:AIR1981Pat 17]  Overruled by the Supreme Court in Dr. Aletta Grace Bell, V. Dr.(Miss) S.Trikay and another, Supreme Court, AIR 1996 S.C.538. please see serial no - page-. 

The Form of licence to manufacture drugs for distribution was not provided on the date of offence. Hospitals were not required to obtain licence for manufacture and distribution of drugs..  In the absence of the requisites laid down in Section 18(c) and 33 of the Act, the hospital could not be required to obtain licence for manufacture and distribution of drugs on the date when the offence was allegedly committed. [Dr. Aletta Grace Bell, Petitioner V. Dr.(Miss) S.Trikay and another, Respondents, Civil Appeal No.85, decided  on 8/11/1995, Supreme Court, AIR 1996 S.C.538] 

Comment - The Supreme Court judgment has overruled the judgment of the Patna High Court.  Hwever, in the Supreme  urt judgment the words ‘on the date when the offence allegedly committed’ are important and should be noted. By Act 68 of 1982, the words for distribution have been inserted in clause (e) of sub-section (2) of Section 33, Section 18(a) and in form  25, 28.  As a result of this amendment, it is clear that now hospitals are required to obtain licence if they want to manufacture drugs even for distribution to their own patient.

S.18(c) r/w Schedule ‘K’ Entry 5 - Exemption to the Registered Medical Practitioners 

The accused is not absolved of the criminal liability under Section 18( c) of the Act merely because negotiations were going on with the Government. - Where offence has been committed under any provision of law in vogue, the fact that some negotiations are going on which may alter the liability of the accused would not turn back the wheel of the time and obliterate the commission of the act constituting  the  offence.  The liability of the petitioner under Section 18(c) r/w Section 27 is not changed and Court could not be said to have committed any error by not permitting the examination of witnesses from the other States. [P.D. Puri, Petitioner V. State, Respondent, Criminal Revision Application No. 181 of 1974, decided on 21/11/94, Delhi High Court, P.S. Saffeer, J., 1975, CRI. L.J. 1075: 1975 FAC 377] 

The petitioner entitled to practice modern system of medicine only in Punjab  and not in Delhi. The sub-section (3) of Section 17 of Indian Medicines Central Council Act, 1970 cannot be construed as enlarging the scope of existing rights and entitlements. -The petitioner not authorised to stock, exhibit and sell or distribute modern drugs without requisite licence under the Act. [Mohinder Singh, Petitioner V. The State, Respondent, Cri. Revision No.17of 1979 decided on  1/8/79, Delhi High Court, Yogeshwar Dayal, J, 1979 FAC 205:1979 Drug Cases 113]. 

The decision based on overruled authority cannot be sustained. -  The accused cannot legally stock or keep in his possession allopathic medicines at his shop for sale. The observation of the trial Court based on the authority in Phool singh’s case cannot legallly be sustained [The State of Punjab, Appellant V. Lashkar Singh, Respondent, Cri. Appeal No.148 of 1987, decided on 29.11.1991, Punjab and Haryana High Court, S. S. Grewal and A. S. Netra, JJ, 1996 Drugs Cases 402]

The Practitioners of the Indian System of Medicine that is Ayurveda (including Siddha) or Unani are not entitled to keep allopathic drugs for administering to the patients [Swaran Singh vs. State of Punjab, AIR 1987 P & H 81]
 

S.18-A. Disclosure of the name of the manufacturer, etc. –  

For application of Section 18A the person concerned shall not be a manufacturer or his agent. The person concerned to whom Section 18A applies is anyone other than the manufacturer or his agent. - It is obvious that for application of the Section 18 A, the person concerned shall not be a manufacturer of drug or his agent. In other words, the person to whom Section 18A applies is anyone other than a manufacturer or his agent for distribution thereof. The reason d’etre of it is that, if he is the manufacturer or his agent he cannot disclose the name of the person from whom he acquired the drug because he himself is its manufacturer. To expect the other way is to expect the impossible. Hence, there is no question of requiring him to disclose the identity of the person from whom he acquired the drug. Exclusion of manufacturer and his agent from the purview of section 18A is therefore on understandable premise. The Supreme Court set aside the order of the acquittal under Section 28 passed by the High Court and restored the conviction of the accused under Section 18A. [State of Orissa Appellant V. Janmejoy Dinda, Respondent, Criminal Appeal No.219 of 1998, decided on 20-2-1998, Supreme Court, M.K.Mukherjee and K.T.Thomas,JJ., 1998 CRI. L.J. 2046] Decision of Orissa High Court in State of Orissa V. Janmejoy  Dinda, 1996 CRI. L.J. 2250 overruled.  

When the defence version that they fulfilled obligation under Section 18A has not been rebutted, the charge under  Section 18A cannot be proved. - Held. - The Inspector has not been examined, nor his report proved. Obviously, therefore, the defence version remained unrebutted and violation of Section 18A remained unestablished.  [State of Karnataka, Appellant V. Pratap Chand and others, Respondents, Cri. A. No. 91 of 1976, decided on 11-3-1981, Supreme Court, O.Chinnappa Reddy and Baharul  Islam, JJ., 1981 CRI. L.J. 595 :AIR 1981 SC872] 

It is not necessary that all witnesses must sign the seizure list and all witnesses must be examined - It is not requirement of law that all the seizure list witnesses must be examined. It is not necessary that all witnesses must sign the seizure list or else their presence should be disbelieved. [Dr. Sanat Kumar Basu, Appellant V. State of West Bengal, Opposite party, Cri. A. No. 228, and Cri. R. No. 1920 of 1979, decided on 04.10.83, Calcutta High Court, B. C.     Chakrabarti and J. N. Chaudhary, JJ, 1984, CRI. LJ.931.]    

Police officer’s powers of search and seizure under the Code are not taken away by Section 22 of the Drugs Act. Held  - Search and seizure by Sub-Inspector of Police in presence of Drugs Inspector was not illegal and prosecution not vitiated  [ Bichitrananda Swain, Petitioner, V. State of Orissa, Opposite Party, Cri. Rev. No. 195 of 1982, decided on -22-12-1986,Orissa High Court, K.P. Mohapatra, J. 1988 CRI. L.J. 292].  

Separate punishment cannot be imposed under Section 22(1)(c ). -  The Rule 54A prohibits contravention of a prohibitory order made under Section 22(1)(c) and Section 27(b) itself makes such contravention punishable with imprisonment or with fine or with both.  Section 22(1)(c) does not provide separate punishment. [ Manoj Drugs House and Another, Appellants V. State of Karnataka, Respondents, Cri. A.No. 96 of 1975, Supreme Court, R.S. Sarkaria and A.C. Gupta, J.J., 1981 CRI. L.J. 348] Decided with Rajasthan Pharmaceutical Laboratory V. State of Karnataka.  Judgment of Karnataka High Court in State of Karnataka V. Manoj Drug House and others, 1975 Drug Cases 179 : 1975(2) Kant. L.J. 17 (DB) : 1975 Mad. L.J. 211 overruled.  

Only a person from whom sample is drawn and person whose name is disclosed is entitled to a copy of the report and a counterpart of the sample. - Disclosure of the names and addresses of accused No.4 to 6 by the third accused would not be disclosure under Section 18A and consequently they are not entitled to make use of sub-section (3)and (4) of Section 25. [R.Dayalan and others, Misc. Petition No.3833/1979, decided on 27/7/78, Madras High Court, Paul, J., 1979 FAC(1) 29:1978 CRI.L.J.1852:1978 Mad.L.W. (Cri.)146]   

The manufacturer is not entitled to get the copy of report and portion of sample when his name is not disclosed under Section 18A of the Act.  - The manufacturer is not entitled to get the copy of report and portion of sample when his name is not disclosed under Section 18A of the Act. He cannot claim that he is deprived of his right to have the drug analysed from Central Drug Laboratory. [Manager, Medico Pharmaceutical Processors, Petitioner V. State of H.P. and others, Respondents, Cr. M.P. (M) No.295 of 1981, decided on 7/10/1982, Himachal Pradesh High Court, Vyas Dev Misra, C.J. 1983  CRI.L.J. 67] Overruled by divisional bench of Himachal Pradesh High Court in Kiran Dev Singh V. State of Himachal Pradesh.    

S.22(1)(c) (i) search or seizure by a Drugs Inspector

Since under the Drugs & Cosmetics Act a search or seizure by a Drugs Inspector is equated to a search and seizure under the authority of a warrant, it is not necessary for a Drugs Inspector to record his reasons for making a search; Public [Prosecutor vs. Mahaveer Prasad, 1972 Cri LJ 1546, 1976 Drugs Cases 79]
 

S.22(1)(c) (iii) Order prohibiting disposal of certain drugs

An Order prohibiting disposal of certain drugs is invalid and illegal because it can be issued only for specified period not exceeding 20 days under Section 22(1) (c) [B. K. D. Rajeswari vs. State of Kerala, AIR 1984 Ker 95, 1983 Drugs Cases 58]

S.23(4)(iii). Procedure of Inspector etc. -Sample Portion to Manufacturer

Contention is advanced on a misconception that the mode of challenge against the Report of the Government Analyst is by sending the portion of the sample kept with vendor. In case where the drug or medicine has passed from the manufacturer to a wholesaler (a distributor) and then to a retailer, the obligation of the Inspector as for giving portions of the sample would end up by giving it to the retailer and also to the distributor. The manufacturer, who is not entitled to be supplied with a copy of the report of the Government Analyst, has liberty to Challenge the correctness of the facts stated in the report by resorting to any other modes by which such facts can be disproved. He can avail the remedy indicated in Sub-Section (4) of Section 25 of the Act by requesting the court to send the other portions of the sample remaining in the Court to be tested at the Central Drugs Laboratory. Acquitting offending manufacturers only on the legi slative lacuna would be hazardous to public health and the lives of the patients to whom drugs are prescribed by medical practitioners would be in jeopardy. [Amrey Pharmaceuticals & anr vs. State of Rajasthan, 2001 Drugs Cases 168, Supreme Court Of India, 16.3.2001]

S.25 (4). Reports of Government Analyst etc.

On Account of inaction and lack of diligence on part of the Drugs Inspector, the valuable right, which is vested in the accused   under   Section 25(4), had been lost. Proceedings against petioners were quashed. [Ashok Sureshchand Bal & others vs. State of Maharashtra, 2002 Drugs Cases 114]

Right of the petioners to get the sample retested
The copies of report of Government Analyst were received by the petitioners on 1.6.1995, but in spite of that admittedly the petioners did not notify their intention to adduce their evidence in controversion of the said report within 28 days either to the Inspector or the Court concerned. The right of the petioners to get the sample re tested by Central Drugs Laboratory through the trial Court stood extinguished and the report of the Government Analyst became conclusive evidence under sub-section (3) of Section 25 of the Act. [K. Guruswami and another vs. State of Maharashtra, 2001 Drugs Cases 193, Bombay High Court, 16.9.2000]

Apart from the mode prescribed in S.25(4) the sample can be sent for analysis to the Central Drugs Laboratory - the mode prescribed under S.25(4) is one method of sending it to the Director of the Central Drugs Laboratory. The other method is by the Drugs inspector sending it direct as contemplated under the first part of S.25(1) It is significant the sub-sec. (4) of Section 25 starts with the words "unless the sample has already been tested or analysed in the Central Drugs Laboratory. (Ram Shankar Misra vs. State of U.P., SUPREME COURT OF INDIA, 2003 Drugs Cases 285)

Section 27.

Section 27 (a) and (b) read with section 18 (a)(1)(ii)—spurious drugs seized from retail chemist—supplier or manufacturer not arrayed as party—complaint filed by Drug Inspector himself who is conducting prosecution himself—same practice being followed in numerous cases pending trial—suitable directions needs to be issued—Drug Controller directed to file reply on questions framed.[State through the Drug Inspector, Delhi vs. M/s Deep Medical Stores and another, Delhi High Court, 2005 Drugs Cases (DC) 509]

Section 18, 27 and 28—offence under—the sessions Judge was right in holding that the Chief Judicial Magistrate could try the case as he was empowered to try the case and impose appropriate punishment in view of section 36 of the Act. But the Sessions Judge was not justified in passing the order of discharge of the accused for the offence under section 27 (a) of the Act—the accused were entitled to plead for discharge in case a charge was framed against them. However, the sessions Judge could not have discharged the accused when he himself was holding that the order of transfer/ committal was not justified—the accused shall be at liberty at raise all contentions that are available to them and the accused would also be at liberty to raise the plea that no offence was made out under section 27 (a) of the Act in view of the averments made in the complaint and the evidence adduced by the complainant.[State of Rajasthan vs. M/s Mittal Distributors and another, Supreme Court of India, 2005 Drugs Cases (DC) 363]

Neither the trial Court nor the appellate court have given any reasons for imposing the sentence of one month - as the provisions of law stand term of imprisonment cannot be reduced to fine only. (Ram Shankar Misra vs. State of U.P., SUPREME COURT OF INDIA, 2003 Drugs Cases 285)

Fine in lieu of imprisonment-Two questions for consideration arose in Criminal Appeal before the Apex Court (i) Whether a company can be attributed with mens rea on the basis that those who work or are working for it have committed a crime and can be convicted in a criminal case? (ii) Whether a company is liable for punishment of fine if the provision of law contemplates punishment by way of imprisonment only or a minimum period of punishment by imprisonment plus fine whether fine alone can be imposed? For the first question, three-judge Bench of Apex Court was of the opinion that mens rea involves positive act of commision or omission and since company is a juristic person the proposition of 'punishing a company' cannot be accepted. It could neither be imprisoned, nor be asked to pay a fine. However, the ruling does not apply to a company's directors and employees, who can be punished with imprisonment or imprisonment and fine. Since the punishment prescribed under other economic laws are similar, the ruling can be extended to legislation on wealth Tax Act, Employees Provident Fund and Miscellaneous Provisions Act, Negotiable Instruments Act, Drugs and Cosmetics Act, Essential Commodities Act, Indian Merchandise Act, Narcotic Drugs and Psychotropic Substances Act, Prevention of Food Adulteration Act. As regards the second question, Apex Court held that under the present Indian law it is difficult to impose fine in lieu of imprisonment. Further the Hon'ble Court held that under those sections where imprisonment has been made compulsory for an offence, it is not open to a Court to impose a sentence of fine only and not to award any substantive sentence if the Court finds a company guilty under the Section. If the Court does so, it would be altering the very scheme of the Act and usurping the legislative function. To bring such a fundamental change in criminal jurisprudence is a legislative function. Only Parliament can do it. Corporate criminal liability cannot be imposed without making corresponding legislative changes. [Supreme Court of India, Criminal Appeal No. 142 of 1994,The Assistant Commissioner, Assessment-II, Bangalore and Ors. Vs.M/s Velliappa Textiles Ltd. and Ors., decided on 16.9.2003]

Section 32-

Cognizance of offences---quashing of proceedings---FIR lodged against medicines shops running without licences by Deputy Superintendent of Sub-Divisional Hospital---as per Section 32 prosecution under the Act can be only instituted by an Inspector or other competent persons authorised to do same---lodging of FIR contrary to provisions of the Act is bad in law---proceedings quashed [Basudeo Gupta vs. State of Bihar and others, Patna High Court, 2006 Drugs Cases (DC)  12 ]

Section 33-C

Injectable material being marketed as ayurvedic injection - do not find place in any of the ayurvedic texts and are also not listed in Ayurvedic Pharmacopoeia of India. As regards the data to be furnished by the firm about efficacy, safety and clinical trial of the products, the Committee formed an opinion that sufficient data was not furnished in sprite of adequate opportunity having been allowed. The Committee of Experts concluded that the ayurvedic injections marketed by the petitioner firm required to be prohibited - held whether to permit or not to permit ayurvedic injections is a policy decision requiring thought and consideration to be given to people's health and treatment methods - adjudication on such issues does not fall within the scope of judicial review and the jurisdiction of this Court The petitioner is still at liberty to pursue its case with the Government of India (M/s. Sidi Pharmacy (P) Ltd. and another vs. Union of India and others , SUPREME COURT OF INDIA, 2003 Drugs Cases 292)

S.34.Offence by Companies-

Section  34 (2)—Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954—sections 7 and 9—Code of Criminal Procedure, 1973—sections 482—offences by company—petition for quashing of proceedings filed by directors of company charged with offences under section  3(d) of  Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 stating that they were not responsible for conduct of business of the company—admitted that they as directors frame policy decisions of the company—no other directors in the company—hence petitioners liable to be prosecuted—petition dismissed. [Suresh Kumarji Sharma and another vs. State of A. P., Andhra Pradesh High Court, 2005 Drugs Cases (DC) 348]

Chairmain & two directors were impleaded without evidence. No allegations in Complaint that petitioners were in charge or responsible to the company for the conduct of the business. Complaint in absence of such allegations is not maintainable. [Lal Chand Patni & others vs. State of Haryana, 2002 Drugs Cases 539, Mrs. Kavita Mittal vs. Drugs Inspector, 1994 Drugs Cases19]
Vicarious liability of a person for being prosecuted for an offence arises if at relevant time, he was in charge of and was also responsible to the company for the conduct of its business. The onus of proving that a particular director was in charge of and also responsible to the conduct of the business of the company is on the prosecution. If it is shown that a particular director has overall control over the day to day business of the company then in that event, there will be transformation of onus of proof from prosecution to the accused. [Pannalal Sunderlal Choksi and others vs. State of Maharashtra and another, 2001 Drugs Cases 7, Bombay High Court, 14.9.2000]

Drugs and Cosmetics Rules, 1945

Rule 122F (1), Explanation---Blood bank---a hospital engaged in operations of collection, storage, processing or distribution of human blood comes within definition of blood bank, hence is required to obtain a licence under Rule 122F---writ petition dismissed [ Adharsha Hospital vs. The Union of India and others, Karnataka High Court , 2006 Drugs Cases (DC) 9]

Criminal Procedure Code, 1973—

Section 274, 275 and 465—submission of the charge sheet under section 279. [Bimal Kumar Kundu vs. State of West Bengal, Calcutta High Court, 2005 Drugs Cases (DC) 240]

Section 482—petition under—excise duty—payment evaded by A2 and A3—in manufacture of NIVARAN 90 herbal materials not contained—non-ayurvedic preparation shown as ayurvedic preparation, exclusively for the purposes of evading excise duty—it is for the petitioners to explain as to how and under what circumstances they were necessitated to purchase synthetic materials which could as well be utilized for the preparation of their products. Unless and until satisfactory explanation comes forth from the petitioners, it is possible from the circumstances narrated, that they should have necessarily purchased the synthetic articles only to make it useful in the manufacture and production of the so-called ayurvedic preparation-NIVARAN 90.[M/s Velvette International Pharma and others vs. The Deputy commissioner of Central Excise, Madras High Court, 2005 Drugs Cases (DC) 237] 

Sections 482—offences by company—petition for quashing of proceedings filed by directors of company charged with offences under section 3(d) of Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 stating that they were not responsible for conduct of business of the company—admitted that they as directors frame policy decisions of the company—no other directors in the company—hence petitioners liable to be prosecuted—petition dismissed.[Suresh Kumarji Sharma and another vs. State of A. P., Andhra Pradesh High Court, 2005 Drugs Cases (DC) 348]

Drugs and Cosmetics (6th Amendment) Rules 2001

Enhancement of fee of drugs licence - held the enhancement cannot be said to be so exorbitant as to amount to an unreasonable restriction on the right of the petitioner to do trade and business under Article 19(i)(g) of the Constitution. Primarily it is for the Government to decide at what rate licence fee is to be fixed and not for the Court - no violation of Article 19(i)(g) or Article 14 of the Constitution. (Tribhuwan Mittal vs. Union of India and others, ALLAHABAD HIGH COURT., 2003 Drugs Cases 300)

Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 -

Sections 3, 4 , 5 and 7 - complainants claiming herself to be "Divine Mother" having supernatural powers for curing many diseases and also had in a Television Talk claimed of curing cancer patients - offence if any committed? - Held it is sufficiently clear that in the alleged advertisement in news papers there is no indication of use of any Drug for the purposes as enumerated under Section 3 of the Act. It is simply indicated in the advertisement that the problems enumerated therein can suprisingly be solved. Such advertisement is published under the heading "Jyotish" (means Astrology) indicating that it would be supernatural or spiritual or astrological solution. Spiritual, supernatural or astrological activities are not prohibited in this country, nor taking avocation of Astrologer is an offence and accordingly, publication of advertisement of Astrology or of an Astrologer cannot be construed to be an offence under the Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 or under any of the statute - publication of an advertisement in the manner done in this case cannot be construed to be an offence punishable under Section 7 of the Act - it is a conviction of the complaint that cancer cannot be cured by Stones or Metallic substance as because this is a clinic disease, as has been opined by the Cancer Experts. On the other hand, the appellant opined in the Televisions discussion that cancer patients could be cured by spiritual or supernatural power. but mere opinion on a questionable topic cannot be construed to be an offence punishable under Section 7 of the Act. However, in the alleged advertisement in the Newspapers it was never claimed that cancer can be cured by Magic Remedy. (Prabir Ghosh vs. Smt. Jaya Ganguly and another, CALCUTTA HIGH COURT, 2003 Drugs Cases 125)

Medicinal and Toilet Preparations (Excise Duties) Act, 1955

Section 2(k) -- old spice and blue stratos -- shave lotions manufactured by Colfax Laboratories -- whether toilet preparation or medicinal preparation? -- held ASLs manufactured by Colfax are ‘toilet preparations’ within the meaning of Section 2(k) of the Act. The High Court has also examined the matter threadbare and has arrived at the same finding -- no reason to disagree with the view taken by the Excise Commissioner, who is an expert in the field.[Supreme Court Of India, The State of Goa and another Appellants versus M/s. Colfax Laboratories Ltd. and another Respondents, Civil Appeal No. 414 of 2000 (With C.A. No. 415 of 2000), Date of Decision: 10/29/2003 , 2003 Drugs Cases 316]

Bihar Excise Act, 1915

Section 2(12a) -- 'intoxicant' -- legislative competence of the State Legislature in redefining the word in section 2(12a) -- by including therein [State of Bihar and others v. Shree Baidyanath Ayurved Bhawan (P) Ltd. and others , Supreme Court of India, Civil Appeal Nos. 1543-1547 of 1999, D/d 11.1.2005, 2005 SCCL.COM 33]

Essential Commodities Act, 1955-

Section 11-- Drugs & Cosmetics Act, 1940—section 21—Indian Penal Code, 1860—Section 21—Officer competent to file complaint—public servant—Drug Inspector appointed by Central or State Government deemed to be a Public Servant hence competent to file complaint under section  11 for  contravention of provisions of an order. Section 7—Essential commodities (Special Provisions) Act, 1981—Sections 12A—drug being sold at a higher price—plea that the Sessions Court not being a Special Court cannot take cognizance of offence—vide notification dated 20.3.84 Sessions Court designated as special Court hence empowered to try the offences under the Act. [M/s Laxmi Medical Distributors vs. State of A. P., Andhra Pradesh High Court, 2005 Drugs Cases (DC) 359]

N.D.P.S. Act, 1985 -

Sections 2(xx), (xxiii), 8, 9, 21, 22 and Entry Nos.92 and 110 of the Schedule- Drugs and Cosmetics Rules, 1945-Rule 97-Buprenorphine Hydrochloride a psychotropic substance within meaning of NDPS Act and a Schedule H drug within meaning of  Drugs and Cosmetics Act and Rules---manufacture, sale etc, regulated by Drugs and Cosmetics Act and Rules and not by the NDPS Act---not included in Schedule I of NDPS Rules. [Rajinder Gupta vs. State, Delhi High Court, 2006 Drugs Cases (DC)  52]

Sections 8(c), 2, 22, 29 and 37--- Drugs and Cosmetics Rules, 1945—Rule 61 (1), (2) and 97---Bail---granting of Buprenorphine Hydrochloride ampoules and injections recovered from petitioners---a Psychotropic substance under NDPS Act but not included in Schedule I of the NDPS Rules---a Schedule H drug within the meaning of Drugs and Cosmetics Act and Rules---manufacture, sale and possession not prohibited under provisions of NDPS Act or Rules---bail granted. [Rajinder Gupta vs. State, Delhi High Court, 2006 Drugs Cases (DC)  52]

Section 21 , Rule 66 -- accused charged under and in possession of 25 ampoules of manufactured drug, namely - Buprenorphine Hydrochloride (Tidigesic) alongwith three syringes when he was apprehended on the road was found guilty of the offence punishable under Section 21 of the NDPS Act and was sentenced to undergo rigorous imprisonment for 10 years and to pay a fine of rupees one lakh --appeal filed dismissed -- review petition -- the psychotropic substance namely, -- Buprenorphine Hydrochloride (Tidigesic) found in possession of the appellant was not in breach of Rule 66 of the NDPS Rules and having regard to the fact that the same was for his personal consumption, no offence under Section 21 of the NDPS Act is made out.( Sajan Abraham Appellant versus State of Kerala, Supreme Court of India, 2004 SCCL.COM 228(Case No: Criminal Appeal No.1022 of 1997), D/D 262//2004)

Constitution of India-

Articles 14 and 19(1)(g)--- Drugs & Cosmetics Rules, 1945---Rule 106-B---

Prohibition imposed on quantity and percentage of alcohol in homeopathic medicines—challenged on ground that it makes unreasonable discrimination between Homoeopathic and Ayurvedic manufacturers—not necessary for legislature to regulate every conceivable activity in order to regulate something—it can recognize and distinguish between degrees of evil and regulate those areas where its intervention is most required—classification not arbitrary or unconstitutional—writ petition dismissed. [ Shrikrishna Homoeo Pharmacy vs. Union of India and others, Bombay High Court, 2006 Drugs Cases (DC)  96]

Articles 16, 309 and 311 -- Central Civil Service (Classification, Control and Appeal) Rules -- Rule 2(h) --

Respondent appointed as Drug Inspector on short term contract on fixed salary -- advertisement issued for regular selection -- respondent disqualified on ground of over-age -- respondent not a Government servant as he was working on contract basis, hence not eligible for relaxation of upper age limit -- appeal allowed. [Union Public Service Commission Appellant versus Girish Jayanti Lal Vaghela and others, Civil Appeal No. 933 of 2006, decided on 2/2/2006, Supreme Court of India, 2006 SCCL.COM 62]