S. ATHILAKSHMI versus THE STATE REP. BY THE DRUGS INSPECTOR on 15 March 2023

[2023] 2 S.C.R. 914

SUPREME COURT REPORTS

[2023] 2 S.C.R.

S. ATHILAKSHMI

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v.

THE STATE REP. BY THE DRUGS INSPECTOR

(Criminal Appeal No. 804 of 2023)

BMARCH 15, 2023

[KRISHNA MURARI AND SUDHANSHU DHULIA, JJ.]

Drugs and Cosmetics Act, 1940 – ss.18(c), 27(b)(ii) –Prosecution of appellant u/s.18(c) punishable u/s.27(b)(ii) – Held:Prohibition u/s.18(c) is on the manufacturing, distribution, stockingCor exhibition of medicines for the purposes of sale – In the presentcase, prosecution against the appellant was unwarranted –Appellant is a registered medical practitioner along with the factthat the quantity of medicines seized was extremely small, a quantitywhich can be easily found in the house or a consultation room of aDdoctor – Considering the small quantity of medicines, most of whichare in the category of lotions and ointments, it cannot be said thatsuch medicines could be ‘stocked’ for sale and would come in thecategory of stocking of medicines for the purpose of sale – Nooffence is made out – It is not the case of the prosecution that theAppellant was selling drugs from an open shop across the counterE– It is possible that she was distributing these drugs to her patientsfor emergency uses and thus she is protected by the Act itself – Anexception has been created under Schedule ‘K’ r/w r.123 in favourof medical practitioner, the appellant ought to have been given thebenefit of these provisions – Further, the sanction for prosecutionFgiven in the instant case, prima facie, suffers from the vice of non-application of mind – Order of the High Court set aside – Criminalproceedings against appellant quashed – Drugs and CosmeticsRules, 1945 – Schedule K – Drugs and Cosmetics Rules, 1940 –r.123 – Code of Criminal Procedure, 1973 – s.482.

GAllowing the appeal, the Court

HELD: 1.1 It is not the case of the prosecution that theAppellant was selling drugs from an open shop across the counter.She is a senior doctor who is engaged as an Associate Professorand Head of Department, Dermatology in a Government MedicalHCollege, and being a medical practitioner, under certain conditions, she is also protected under the law which has been referred toabove. Considering the small quantity of medicines, most of whichare in the category of lotions and ointments, it cannot be said byany stretch of imagination that such medicines could be ‘stocked’for sale and would come in the category of stocking of medicinesfor the purpose of sale. When small quantity of medicine has beenfound in the premises of a registered medical practitioner, it wouldnot amount to selling their medicines across the counter in anopen shop. In fact, this is not even the allegation against theAppellant. Undoubtedly, the provisions of Section 18 and arerelevant provisions under the law, which have a social purpose,which is to protect ordinary citizens from being exploited interalia, by unethical medical practitioners, and for this reason thepunishment under Section 27 can extend up to 5 years under thelaw, and has a minimum punishment of 3 years. But given thefacts and circumstances of the case and considering that theAppellant is a registered medical practitioner, along with the factthat the quantity of medicines which have been seized is extremelysmall, a quantity which can be easily found in the house or aconsultation room of a doctor, no offence is made out in thepresent case. In fact, an exception has been created underSchedule ‘K’ read with Rule 123 to the rules, the appellant oughtto have been given the benefit of these provisions and such aregistered medical practitioner should not have been allowed toface a trial where in all likelihood the prosecution would havefailed to prove its case beyond reasonable doubt. [Paras 8, 9][922-A-F]

1.2 What the High Court failed to consider, however, is theprovisions contained in Rule 123 read with Schedule ‘K’ to the1945 Rules and when admittedly it is not the case of theprosecution that the drugs which were seized were being sold inan open shop across the counter. Since this was not being done,and an exception is created under the law in favour of the medicalpractitioner where the drugs given in Schedule ‘K’ would beexempted from the purview of Chapter 4 of the Act, prosecutionagainst the Appellant is unwarranted. The sanction forprosecution given in the present case appears, prima facie, tosuffer from the vice of non-application of mind. There is noreference to any of the documents, evidence or the submissions ABC

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Asubmitted by either of the parties, no reasons assigned or evenan explanation pertaining to the delay which indicates it has beenpassed in a mechanical manner. [Paras 10, 14][923-D, 924-F]

Hasmukhlal D. Vohra and Anr. v. State of Tamil Nadu2022 SCC OnLine SC 1732; Mansukhlal VithaldasBChauhan v. State of Gujarat (1997) 7 SCC 622 : [1997]3 Suppl. SCR 705; Mohd. Shabir v. State ofMaharashtra (1979) 1 SCC 568 : [1979] 2 SCR 997 –relied on.

Case Law Reference

C[1997] 3 Suppl. SCR 705relied onPara 14[1979] 2 SCR 997relied onPara 15

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.804 of 2023.

DFrom the Judgment and Order dated 21.06.2022 of the High Courtof Judicature at Madras in CRLOP No. 5579 of 2020.

S. Nagamuthu, Sr. Adv., M.P. Parthiban, Ms. Priya RanjiniNagamuthu, A.S. Vairawan, R. Sudhakaran, Vikash Rajkumar,Subrahmanya Bhanu, Devendran, Alagendiran, Advs. for the Appellant.

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V. Krishnamurthy, A.A.G., Dr. Joseph Aristotle S., ShobhitDwivedi, Ms. Richa Vishwakarma, Advs. for the Respondent.

The Judgment of the Court was delivered by SUDHANSHU DHULIA, J.

FLeave granted.

2. The Appellant before this Court is a registered medicalpractitioner who is presently working as an Associate Professor and theHead of Dermatology Department, in the Government OmandurarMedical College, Chennai. In the past, she has held the post of AssistantGProfessor and Civil Surgeon at Royapettah Medical College. It ispermissible for her under the law to practice medicine when she is notperforming her official duties. The Appellant, in her individual andindependent capacity was carrying on her medical practice at a premiseswhich is No. 87, Red Hills Road (North), Villivakkam, at Chennai. It is H

here that she could be consulted and where she meets and examines herpatients.

3. An inspection was made on the above premises by the DrugsInspector, Villivakkam Range on 16.03.2016. As per inspection report,the Drugs Inspector found the following medicines in the inner room ofher premises.

The Drugs Inspector also referred to certain sale bills of medicineswhich are as follows:

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A4. The Drugs Inspector thereafter moved an application forobtaining sanction from the office of the Director of Drugs Control,Tamil Nadu, Chennai-06 on 22.09.2016 which was given to him on23.01.2018. Consequently, the Drugs Inspector filed a complaint beforethe Court of X Metropolitan Magistrate, Egmore, for prosecuting theAppellant under Section 18(c) of the Drugs and Cosmetics Act, 1940Bpunishable under Section 27(b)(ii) of the Act.

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5. Aggrieved by these proceedings, the Appellant filed anapplication under Section 482 of the Code of Criminal Procedure, 1973before the High Court of Madras for quashing the criminal proceedings.Her petition was dismissed by the Ld. Single Judge on 21.06.2022.CAggrieved by this, the Appellant has filed Special Leave Petition beforethis Court against the order of the Single Judge.

6. Under Section 18 of Drugs and Cosmetics Act 1940, aprohibition has been imposed as to the manufacture, sale etc. of certaindrugs and cosmetics. Section 18 reads as follows:

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18. Prohibition of manufacture and sale of certain drugs andcosmetics. — From such date as may be fixed by the StateGovernment by notification in the Official Gazette in this behalf,no person shall himself or by any other person on his behalf—

E(a) …………………………………..

(b) [sell or stock or exhibit or offer for sale,] or distribute anydrug [or cosmetic] which has been imported or manufacturedin contravention of any of the provisions of this Act or any rulemade thereunder; F

(c) [manufacture for sale or for distribution, or sell, or stock orexhibit or offer for sale,] or distribute any drug [or cosmetic],except under, and in accordance with the conditions of, a licenceissued for such purpose under this Chapter:

Provided that nothing in this section shall apply to themanufacture, subject to prescribed conditions, of small quantitiesof any drug for the purpose of examination, test or analysis:

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Provided further that the [Central Government] may, afterconsultation with the Board, by notification in the OfficialGazette, permit, subject to any conditions specified in the H

notification, the [manufacture for sale or for distribution, sale,stocking or exhibiting or offering for sale] or distribution of anydrug or class of drugs not being of standard quality.

The punishment for contravention of Section 18(c) is providedunder Section 27(b)(ii) which reads as follows:

27. Penalty for manufacture, sale, etc., of drugs incontravention of this Chapter— Whoever, himself or by anyother person on his behalf, manufactures for sale or for distribution,or sells, or stocks or exhibits or offers for sale or distributes—

(a) xxxxxxxxxxxxxxxxxx

(b) any drug –

(i) xxxxxxxxxxxxxxxxxx

(ii) without a valid licence as required under clause (c)of section 18, shall be punishable with imprisonment for a termwhich shall [not be less than three years but which may extendto five years and with fine which shall not be less than onelakh rupees or three times the value of the drugs confiscated,whichever is more]:

Provided that the Court may, for any adequate and specialreasons to be recorded in the judgment, impose a sentence ofimprisonment for a term of [less than three years and of fineof less than one lakh rupees];

7. As we can see the prohibition under Section 18(c) is on themanufacturing, distribution, stocking or exhibition of medicines for thepurposes of sale. The charge in the present case is that the Appellanthad “stocked” medicines for “sale”. The entire emphasis is on “sale” ofthese medicines. This is evident from the sanction being sought by theDrug Inspector from the office of the Director, Drugs Control, TamilNadu wherein as per the sanction letter dated 23.01.2018, he had saidthat the Appellant be prosecuted for the contravention of:

“Section 18(c) of Drugs and Cosmetics Act 1940 for having·stocked drugs for sale and sold the drugs without having a validdrug license, which is punishable under section 27(b)(ii) of thesaid Act”.

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AThus, as per the prosecution she had stocked the drugs and soldthem. What the Director of Drugs Control and the High Court lost sightof is the fact that the Appellant is a registered medical practitioner, herarea of specialization being dermatology. She has an M.D. (DVL) degreein this specialisation. It is not a case that she had opened a shop in herpremises from where she was selling drugs and cosmetics across theBcounter! It is possible that she was distributing these drugs to her patientsfor emergency uses and thus she is protected by the Act itself. Schedule(K) which is a part of the Drugs and Cosmetics Rules, 1945 provides anexemption which we shall examine hereafter.

8. Under Section 33 of the Act, the Central Government can makeCrules which have to be laid before the Parliament for its ratificationunder Section 38 of the Act. These rules have been framed which isknown as Drugs and Cosmetics Rules, 1940. Rule 123 of the rules exemptscertain drugs from the provisions of Chapter IV of the Act (which includesboth Section 18 and Section 27 referred above, which are penalDprovisions), under certain conditions Rule 123 reads as under:

“123. The drugs specified in Schedule K shall be exempted fromthe provisions of Chapter IV of the Act and the rules madethereunder to the extent and subject to the conditions specified inthat Schedule.”

EEntry No. 5 under Schedule (K) are the drugs which are suppliedby a registered medical practitioner with which we are presentlyconcerned. The relevant provision of Schedule (K) reads as under:- Schedule K

(See Rule 123)

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(emphasis supplied)

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AIt is not the case of the prosecution that the Appellant was sellingdrugs from an open shop across the counter. She is a senior doctor whois engaged as an Associate Professor and Head of Department,Dermatology in a Government Medical College, and being a medicalpractitioner, under certain conditions, she is also protected under the lawwhich has been referred to above.B

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9. Considering the small quantity of medicines, most of which arein the category of lotions and ointments, it cannot be said by any stretchof imagination that such medicines could be ‘stocked’ for sale and wouldcome in the category of stocking of medicines for the purpose of sale.When small quantity of medicine has been found in the premises of aCregistered medical practitioner, it would not amount to selling theirmedicines across the counter in an open shop. In fact, this is not eventhe allegation against the Appellant. Undoubtedly, the provisions of Section18 and 27 are relevant provisions under the law, which have a socialpurpose, which is to protect ordinary citizens from being exploited interDalia, by unethical medical practitioners, and for this reason the punishmentunder Section 27 can extend up to 5 years under the law, and has aminimum punishment of 3 years. But given the facts and circumstancesof the case and considering that the Appellant is a registered medicalpractitioner, along with the fact that the quantity of medicines whichhave been seized is extremely small, a quantity which can be easilyEfound in the house or a consultation room of a doctor, in our consideredview no offence is made out in the present case. In fact, an exceptionhas been created under Schedule ‘K’ read with Rule 123 to the rules,the appellant ought to have been given the benefit of these provisionsand such a registered medical practitioner should not have been allowedFto face a trial where in all likelihood the prosecution would have failed toprove its case beyond reasonable doubt. The learned single judge whiledismissing the application under Section 482 Cr.P.C of the appellant hasrelied upon a decision of this Court:

“9. It is too late in the day to seek reference to any authority forGthe proposition that while invoking the power under Section 482Cr.P.C. for quashing a complaint or a charge, the Court shouldnot embark upon an enquiry into the validity of the evidenceavailable. All that the Court should see is as to whether there areallegations in the complaint which form the basis for the ingredientsthat constitute certain offences complained of The Court may H

also be entitled to see {i) whether the preconditions requisite fortaking cognizance have been complied with or not; and {ii) whetherthe allegations contained in the complaint, even if accepted inentirety, would not constitute the offence alleged

…….

13. A look at the complaint filed by the appellant would show thatthe appellant had incorporated the ingredients necessary forprosecuting the respondents for the offences alleged. The questionwhether the appellant will be able to prove the allegations in amanner known to law would arise only at a later stage ... ... .............”

10. But what the High Court failed to consider, however, is theprovisions contained in Rule 123 read with Schedule ‘K’ to the 1945Rules and when admittedly it is not the case of the prosecution that thedrugs which were seized were being sold in an open shop across thecounter. Since this was not being done as visualized above, and anexception is created under the law in favour of the medical practitionerwhere the drugs given in Schedule ‘K’ would be exempted from thepurview of Chapter 4 of the Act, we are of the considered view thatprosecution against the Appellant is unwarranted.

11. The backbone of the Respondent’s case is the sales bills withthe list of 18 drugs seized from the premises of the Appellant. However,the details of the sales bills and seized drugs in the Show Cause Noticeissued by the Respondent it is seen that the sales bills are not even forthe medicines which have been seized by the Respondent.

12. On the contrary, upon being served with the Show CauseNotice, the Appellant was directed, under Section 18-A, to reveal thename and addresses of persons from whom she obtained the drugs whichwere seized. In compliance with the same, Appellant has producedmultiple invoices from pharmaceutical shops to show her bonafides.Further, upon inspection of the drugs by the Drugs Testing Laboratory,Tamil Nadu they returned a finding that the drugs were of ‘standardquality’ which indicates it is not a case where the Appellant was operatinga shop to sell spurious medicines over the counter.

13. Another factor which must be considered is that the searchwas carried out on 16.03.2016 and sanction for prosecution was sought A

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Aon 22.09.2016 and the sanction ultimately was given on 23.01.2018. Thereis no explanation which has been given for this delay in getting theapproval. In the recently decided case of Hasmukhlal D. Vohra andAnr. v. State of Tamil Nadu[1], criminal proceedings were quashed againsta Petitioner on the grounds that the substance in question was not a drugunder Indian Pharmacopoeia. One of the considerations was the delayBin the proceedings against which the following observations were made, ‘25. In the present case, the Respondent has provided noexplanation for the extraordinary delay of more than fouryears between the initial site inspection, the show cause notice,and the complaint. In fact, the absence of such an explanationConly prompts the Court to infer some sinister motive behindinitiating the criminal proceedings.

26. While inordinate delay in itself may not be ground forquashing of a criminal complaint, in such cases, unexplainedinordinate delay of such length must be taken intoDconsideration as a very crucial factor as grounds for quashinga criminal complaint.

27. While this court does not expect a full-blown investigationat the stage of a criminal complaint, however, in such caseswhere the accused has been subjected to the anxiety of aEpotential initiation of criminal proceedings for such a lengthof time, it is only reasonable for the court to expect bare-minimum evidence from the Investigating Authorities.’

14. The sanction for prosecution given in the present case appears,prima facie, to suffer from the vice of non-application of mind. There isFno reference to any of the documents, evidence or the submissionssubmitted by either of the parties, no reasons assigned or even anexplanation pertaining to the delay which indicates it has been passed ina mechanical manner. This Court in the case of Mansukhlal VithaldasChauhan v. State of Gujarat[2], highlighted the importance of a priorGsanction granted under Section 197 of the Code of Criminal Procedure,1973 while quashing the criminal proceedings instituted against a DivisionalAccountant engaged with the Medium Irrigation Project Division, Gujarat.It was observed as follows:

1 2022 SCC OnLine SC 1732H2 (1997) 7 SCC 622

‘19. Since the validity of “sanction” depends on the applicabilityof mind by the sanctioning authority to the facts of the case asalso the material and evidence collected during investigation, itnecessarily follows that the sanctioning authority has to apply itsown independent mind for the generation of genuine satisfactionwhether prosecution has to be sanctioned or not.’

15. The possession of the drugs is not disputed in this case byeither side. However, this Court in the case of Mohd. Shabir v. State ofMaharashtra[3] while allowing an appeal in part and directing the releaseof an Appellant who had been prosecuted under the provision 18(c) ofthe 1940 Act, this Court observed that possession simpliciter would notitself be an offence but the prosecution had to prove the essentialingredient under Section 27 which was that even a ‘stock’ of the medicinewas for sale. It was observed as follows:

‘4. …We, therefore, hold that before a person can be liablefor prosecution or conviction under Section 27(a)(i)(ii) readwith Section 18(c) of the Act, it must be proved by theprosecution affirmatively that he was manufacturing the drugsfor sale or was selling the same or had stocked them orexhibited the articles for sale. The possession simpliciter ofthe articles does not appear to be punishable under any ofthe provisions of the Act. If, therefore, the essential ingredientsof Section 27 are not satisfied the plea of guilty cannot leadthe Court to convict the appellant.’

16. The sanctioning authority had not examined at all whether apractising doctor could be prosecuted under the facts of the case,considering the small quantity of the drugs and the exception created infavour of medical practitioner under Rule 123, read with the Schedule“K”. All these factors ought to have been considered by the sanctioningauthority. Under these circumstances we allow this appeal and set asidethe order of the learned Single Judge of the Madras High Court andquash the criminal proceedings in Criminal Case No. 7315 of 2018 onthe file of X Metropolitan Magistrate, Egmore, Chennai.

Divya Pandey(Assisted by : Adiraj Bali and Shevali Monga, LCRAs)

Appeal allowed.

3 (1979) 1 SCC 568

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