M/S BHAGWATI MEDICAL HALL & ANR.versusCENTRAL DRUGS STANDARD CONTROL ORGANIZATION & ORS

        [2024] 12 S.C.R. 2102 : 2024 INSC 1048

         M/s Bhagwati Medical Hall & Anr.
                        v.
Central Drugs Standard Control Organization & Ors.
         (Civil Appeal No(s). 14735-14736 of 2024)
                      19 December 2024
      [Vikram Nath and Prasanna B. Varale, JJ.]


                    Issue for Consideration
Whether District Magistrate’s order prohibiting sale of 'aromatic
tincture of cardamom' on the ground of it containing a high level of
alcohol was correct and in accordance with the statutory framework
of Drugs & Cosmetics Act, 1940.

                           Headnotes†
Drugs and Cosmetics Act, 1940 (D&C Act) – District Magistrate
(DM), Agra issued orders prohibiting sale of “alcohol mixed
tinctures” – Drug Inspector acted on said orders and prevented
Appellants from selling “aromatic tincture of cardamom” on
the ground that it was an alcohol mixed tincture – Appellants,
being licensed distributor of “aromatic tincture of cardamom”
under D&C Act objected to such prohibition and challenged
said actions of Respondents before High Court – Dismissed;
review petition also dismissed by High Court – Appellants
approached Supreme Court:
Held: The Court held that under D&C Act, power to ban or
categorize any drug as prohibited article in public interest vests
solely with the Central Government under Section 26A of the D&C
Act – Such legislative scheme of centralised decision-making is
deliberate to prevent fragmentation of drug regulatory regime
in India and to ensure uniformity and avoid inconsistent local
measures. [Paras 7-9]
On facts, the Court found no notification issued by Central
Government prohibiting / restricting trade of “aromatic tincture of
cardamom” – It also referred to the list of prohibited drugs issued
by the Ministry of Health and Family Welfare through their gazette
notifications that was attached as Annexure P17 with the special
leave petition. [Para 10]
[2024] 12 S.C.R.                                                                2103

      M/s Bhagwati Medical Hall & Anr. v. Central Drugs Standard
                    Control Organization & Ors.

     Thus, the directions issued by the DM was held to be against the
     legislative scheme of D&C Act. – Respondents’ reliance on Section
     22(1)(d) of D&C Act to justify their actions was rejected by the Court
     for the reason that the said provision was procedural in nature and
     was limited to inspecting, sampling, seizing non-compliant drugs,
     and in all enforcing the existing statutory framework and could
     not be a substitute for Central Government’s prerogative under
     Section 26A of D&C Act. [Para 11]
     The Court found that High Court failed to appreciate the distinction
     between general regulatory authority and the special, centralized
     power to prohibit drugs under D&C Act; that also adversely impacted
     the rights of the Appellants in this case who were a duly licensed
     trader. [Para 13]

                                  List of Acts
     Drugs & Cosmetics Act, 1940; Constitution of India.

                               List of Keywords
     Prohibited article; Aromatic Tincture of cardamom; Alcohol mixed
     tincture; Restriction; Sale; Ban; prohibition; Public interest; Medicine;
     Section 26A and Section 22 of Drugs & Cosmetics Act; Central
     government; Local authorities.

                              Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 14735-
     14736 of 2024
     From the Judgment and Order dated 12.07.2022 and 22.09.2022
     of the High Court of Judicature at Allahabad in WRITC No. 13134
     of 2022 and CMRA No. 355 of 2022 respectively

                          Appearances for Parties
     Nikhil Goel, Sr. Adv., Ms. Parul Shukla, Ms. Shubhangi Pandey,
     Saday Mondol, Advs. for the Appellants.
     K M Nataraj, A.S.G., Samar Vijay Singh, Ms. Sabarni Som, Fateh
     Singh, Keshav Mittal, Dr. Sukhdev Sharma, Venkatesh Rajput,
     Santosh Kumar, Sharath Nambiar, Vinayak Sharma, B K Satija,
     Annirudha Sharma- II, Amrish Kumar Sharma, Gurmeet Singh
     Makker, Advs. for the Respondents.
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               Judgment / Order of the Supreme Court

                                 Order

1.   Leave granted.
2.   These appeals, by the Appellants, challenge the correctness of the
     orders dated 12.07.2022 and 22.09.2022 passed by the High Court
     of Judicature at Allahabad in Writ C No.13134 of 2022 and Civil Misc.
     Review Application No.355 of 2022, respectively. By the impugned
     orders, the High Court dismissed the writ petition as well as the
     review petition preferred by the Appellants, thereby upholding the
     actions taken by the Respondent authorities restricting the sale of
     a medicinal preparation known as “aromatic tincture of cardamom”
     at the Appellants’ medical shops.
3.   The factual background giving rise to the present appeals are as
     follows:
     3.1. The Appellants are proprietors of medical firms/shops engaged
          for several decades in the wholesale and retail sale of drugs
          and medicines at Agra, Uttar Pradesh. They hold valid and
          subsisting licenses under the Drugs & Cosmetics Act, 1940
          (hereinafter, “D&C Act, 1940”) and the rules framed thereunder,
          permitting them to sell, stock, and distribute various drugs,
          including a herbal medicinal preparation commonly referred to
          as “aromatic tincture of cardamom.”
     3.2. The said tincture, as stated by the Appellants, is a non-
          prescription, licensed medicine recognized under the D&C Act,
          1940. It is used for treating mild ailments such as indigestion,
          flatulence, stomach pain, nausea, and vomiting. The tincture
          is manufactured by licensed manufacturers who are approved
          by the Indian Government, and the Appellants procure their
          supplies from such recognized sources, including the British
          Pharmacopoeia-approved suppliers.
     3.3. The Appellants submit that, despite the lawful nature of their
          business, the Respondent authorities—comprising officers
          from the Drug Control and Excise Departments of the State—
          subjected their shops to repeated inspections, abrupt closures,
          and harassment.
[2024] 12 S.C.R.                                                      2105

      M/s Bhagwati Medical Hall & Anr. v. Central Drugs Standard
                    Control Organization & Ors.

     3.4. On earlier occasions, the Appellants approached the High Court
          of Judicature at Allahabad, which, by an order dated 27.09.2021,
          directed that the State authorities shall not interfere with the
          running of the Appellants’ business except in accordance with
          law.
     3.5. Further grievances arose when the District Magistrate, Agra,
          issued orders on 28.02.2022 constituting a joint team to curb
          the sale of “alcohol mixed tinctures,” and the Drug Inspector
          thereafter, on 11.04.2022, purportedly directed the Appellants
          not to sell aromatic tincture of cardamom.
     3.6. Aggrieved by these actions, the Appellants filed Writ C No.13134
          of 2022 before the High Court, seeking quashing of the impugned
          orders restricting their trade and an interim direction permitting
          them to continue their lawful business. The High Court, however,
          dismissed the writ petition on 12.07.2022, holding inter alia that
          “alcohol mixed tincture is a prohibited article,” thereby upholding
          the actions taken by the Respondent authorities. The Appellants
          filed a Civil Misc. Review Application No.355 of 2022, but the
          review petition was also dismissed on 22.09.2022.
     3.7. The Appellants are before this Court challenging the aforesaid
          orders of the High Court and seek restoration of their right to
          carry on their business in accordance with their valid license
          and the statutory provisions.
4.   The learned counsel for the Appellants, Shri Nikhil Goel, advanced
     the following arguments:
     4.1. The learned counsel for the Appellants contends that the High
          Court erred in categorizing aromatic tincture of cardamom as
          a “prohibited article.” According to the Appellants, no such
          prohibition exists under the D&C Act, 1940, or any notification
          issued thereunder. Section 26A of the D&C Act, 1940 empowers
          only the Central Government to regulate, restrict, or prohibit
          the sale and distribution of any drug in the public interest.
          There being no notification prohibiting this particular tincture,
          the Respondent authorities have no jurisdiction to treat it as a
          banned substance.
     4.2. The Appellants argue that the impugned orders passed by the
          Respondent authorities and the High Court’s endorsement of
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          such actions infringe their fundamental right to carry on a lawful
          trade or business under Article 19(1)(g) of the Constitution of
          India. They stress that they possess a valid license and are in
          compliance with all applicable regulations.
     4.3. The Appellants further submit that repeated inspections, arbitrary
          interference, and harassment by the Respondent authorities
          are motivated by extraneous reasons, including retaliation
          for complaints made against officials demanding bribes. The
          unlawful actions have resulted in closure of their shops, causing
          significant financial loss and damage to their reputation.
     4.4. The Appellants emphasize that the tincture in question is a
          regulated drug, commonly used for minor digestive ailments, and
          does not figure in any list of prohibited or banned medicines.
          Multiple RTI responses from different governmental departments
          have confirmed that aromatic tincture of cardamom is a licensed
          medicine and does not require a doctor’s prescription. In
          these circumstances, the restriction placed by the Respondent
          authorities is wholly unjustified and arbitrary.
5.   In response, the learned counsel for the Respondent Authorities, Mr.
     Samar Vijay Singh, urged the following contentions:
     5.1. The Respondent authorities, while denying any mala fide intent,
          contend that aromatic cardamom tincture has extremely high
          alcohol content (around 84% to 87% v/v). According to them, the
          substance is being misused as a cheap substitute for country
          liquor by vulnerable sections of society, including daily-wage
          earners and rickshaw pullers. They argue that large quantities
          of this tincture are sold by the Appellants’ shop without proper
          records or the presence of a registered pharmacist, and no
          other medicines are reportedly being sold.
     5.2. The Respondent authorities insist that the manner of sale and
          the demographics of the customers indicate that the tincture is
          effectively being used as an intoxicant rather than a medicinal
          preparation. They claim that its indiscriminate consumption
          poses serious health hazards and may lead to untimely deaths.
          They further submit that the misuse is causing substantial
          revenue losses to the State, as the tincture is replacing taxed
          country liquor.
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      M/s Bhagwati Medical Hall & Anr. v. Central Drugs Standard
                    Control Organization & Ors.

     5.3. The Respondent authorities rely on the order of the District
          Magistrate and the joint team’s inspections, which purportedly
          revealed the absence of necessary records and the availability
          of large stocks without any doctor’s prescription. They contend
          that their actions are within the powers conferred under Section
          22 of the D&C Act, 1940, which allows inspection and necessary
          steps to prevent offenses under the Act.
     5.4. It is the Respondents’ stance that, given the abuse and health
          ramifications, the High Court’s observation treating the tincture
          as a prohibited article, at least for practical purposes, does
          not suffer from legal error. They maintain that public interest
          and health considerations justify the restrictions imposed on
          the Appellants’ sale of the tincture, and no interference is
          warranted.
6.   Having carefully considered the arguments advanced by both sides
     and upon a thorough examination of the materials on record, it is
     clear that the action taken by the Respondent authorities lacks a
     sustainable reasoning.
7.   The aromatic tincture of cardamom at issue is governed by the D&C
     Act, 1940 and the rules framed thereunder. Under this statutory
     framework, the manufacture, sale, and distribution of drugs are
     subject to a carefully calibrated regulatory regime. The D&C Act,
     1940 classifies drugs, prescribes licensing requirements, mandates
     compliance with quality standards, and delineates the respective
     powers of Central and State authorities. Crucially, the power to
     impose a prohibition or to declare a drug as banned or restricted for
     reasons of public interest lies exclusively with the Central Government,
     as provided in Section 26A of the D&C Act, 1940, which has been
     reproduced hereunder:
          “Section 26A: Powers of Central Government to
          regulate, restrict or prohibit manufacture, etc., of
          drug and cosmetic in public interest: Without prejudice
          to any other provision contained in this Chapter, if the
          Central Government is satisfied, that the use of any drug
          or cosmetic is likely to involve any risk to human beings
          or animals or that any drug does not have the therapeutic
          value claimed or purported to be claimed for it or contains
          ingredients and in such quantity for which there is no
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          therapeutic justification and that in the public interest it is
          necessary or expedient so to do, then, that Government
          may, by notification in the Official Gazette, [regulate, restrict
          or prohibit] the manufacture, sale or distribution of such
          drug or cosmetic.”
8.   Section 26A of the D&C Act, 1940 empowers the Central Government,
     if satisfied that the use of any drug involves risk to human beings
     or animals, or that it lacks the therapeutic value claimed, or that it
     contains ingredients in a quantity for which there is no therapeutic
     justification, to regulate, restrict, or prohibit its manufacture, sale, or
     distribution by a notification in the Official Gazette. This is the sole
     statutory mechanism through which a drug, previously permissible,
     can be effectively taken off the market or subjected to special
     conditions. The provision ensures that any decision to restrict a drug
     stem from a central, uniform, and scientifically informed process,
     guided by expert advice, safety evaluations, and considered policy
     determinations. This centralized approach is deliberate, aimed
     at preventing arbitrary or inconsistent local measures that would
     fragment the national drug regulatory regime.
9.   In the present case, there is no notification issued under Section 26A
     of the D&C Act, 1940 prohibiting or restricting the aromatic tincture
     of cardamom. The absence of such a notification is decisive. Without
     it, the tincture remains a licensed medicinal preparation that can be
     manufactured and sold in accordance with the general rules and the
     conditions of the license held by the Appellants. The Respondent
     authorities cannot, on their own accord, treat this lawful product as a
     “prohibited article.” Any such classification by subordinate authorities
     would undermine the statutory scheme, which deliberately centralizes
     the ultimate decision-making power over prohibition with the Central
     Government. To hold otherwise would effectively allow local officials
     to unilaterally bypass the checks and balances embedded in the Act,
     and to create, in practice, an ad hoc ban outside the statutory process.
10. It must be noted that the “aromatic tincture of cardamom” is not
    “prohibited” as can be seen from the list of prohibited drugs as issued
    by the Ministry of Health and Family Welfare through their gazette
    notifications which has been attached as Annexure P17 before us.
    The said tincture is prepared by licensed manufactures who are
    duly approved by the Indian Government and the appellant procures
[2024] 12 S.C.R.                                                  2109

      M/s Bhagwati Medical Hall & Anr. v. Central Drugs Standard
                    Control Organization & Ors.

     the same from one such supplied, i.e. British Pharmacopoeia which
     is approved by the Indian Government. The Tincture list in British
     Pharmacopoeia 2022 has the following approved tinctures and serial
     number 11 contains Cardamom Tincture Compound:
     1.   Capsicum Tincture
     2.   Camphorated Opium Tincture
     3.   Concentrated Camphorated Opium Tincture
     4.   Bitter Orange Epicarp and Mesocarp Tincture
     5.   Orange Tincture
     6.   Arnica Tincture
     7.   Aromatic Cardamom Tincture
     8.   Belladonna Tincture
     9.   Belladonna Tincture Compound
     10. Capsicum Tincture Standardized
     11. Cardamom Tincture Compound
     12. Compound Benzoin Tincture
     13. Compound Cardamom Tincture
     14. Compound Rhubarb Tincture
     15. Concentrated Camphorated Opium Tincture
     16. Gentian Tincture
     17. Ginger Tincture
     18. Ipecacuanha Tincture Standardized
     19. Myrrh Tincture
     20. Opium Tincture
     21. Opium Tincture Camphorated
     22. Opium Tincture Concentrated Camphorated
     23. Opium Tincture Standardized
     24. Quillaia Tincture
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     25. Rhatany Tincture
     26. Sage Tincture
     27. Siam Benzoin Tincture
     28. Standardized Belladonna Leaf Tincture
     29. Standardized Ipecacuanha Tincture
     30. Strong Ginger Tincture
     31. Sumatra Benzoin Tincture
     32. Tormentil Tincture
     33. Valerian Tincture
11. The Respondent authorities have attempted to justify their actions
    by relying on Section 22(1)(d) of the D&C Act, 1940. This provision
    empowers Inspectors, within the local limits of their jurisdiction,
    to exercise such powers as may be necessary for carrying out
    the purposes of the Chapter or any rules made thereunder. The
    scope of this provision is essentially procedural, intended to
    facilitate inspection, sampling, seizure of non-compliant drugs, and
    enforcement of existing statutory and regulatory requirements. It
    does not, however, confer authority to impose new prohibitions or
    to classify a duly licensed drug as contraband. Section 22(1)(d) is
    not a substitute for Section 26A of the D&C Act, 1940. While an
    Inspector may inspect premises, verify licenses, ensure proper
    record-keeping, and take action against specific offenses under
    the Act, the Inspector cannot supplant the Central Government’s
    prerogative by effectively banning a drug simply because of alleged
    misuse in certain quarters.
12. Similarly, even if the Respondent authorities are concerned about the
    high alcohol content of the tincture or its potential misuse by certain
    consumers, the D&C Act, 1940 and the rules framed thereunder
    provide mechanisms for addressing such issues without resorting to
    extra-statutory prohibitions. For instance, the authorities may ensure
    that licensees maintain proper records as mandated by the relevant
    rules; they may verify that a qualified pharmacist is present at the
    time of sale; they may inspect the premises regularly and take penal
    action if any license conditions are breached. If, upon gathering
    evidence and seeking expert advice, the authorities believe that the
[2024] 12 S.C.R.                                                     2111

      M/s Bhagwati Medical Hall & Anr. v. Central Drugs Standard
                    Control Organization & Ors.

     drug poses health risks serious enough to warrant prohibition, their
     proper recourse is to move the Central Government to consider
     exercising its powers under Section 26A of the D&C Act, 1940. Until
     such a notification is issued, the drug cannot be unilaterally banned
     at the local level.
13. By endorsing the characterization of the aromatic tincture of
    cardamom as a “prohibited article” without any notification from the
    Central Government, the impugned orders of the High Court have
    effectively circumvented the legislative design. The High Court’s
    reasoning overlooks the clear distinction drawn by the D&C Act, 1940
    between general regulatory authority and the special, centralized
    power to prohibit drugs. This approach also disregards the rights of a
    duly licensed trader who is entitled to carry on business in a product
    that remains lawful unless and until lawfully prohibited. Fundamental
    principles of administrative law, as well as the very structure of the
    D&C Act, 1940, demand that any restriction on a licensed medicinal
    preparation must rest on a firm statutory footing.
14. It follows that the impugned orders dated 12.07.2022 and 22.09.2022
    must be set aside. The Appellants, holding a valid license and acting
    within the boundaries of existing regulations, are entitled to resume
    their business of selling the aromatic tincture of cardamom and
    any other duly permitted medicines. The Respondent authorities, if
    genuinely concerned about misuse, may intensify lawful regulatory
    oversight, ensuring strict compliance with licensing conditions and
    quality standards. However, they cannot assume the power to declare
    the product banned or treat it as such in the absence of a notification
    under Section 26A of the D&C Act, 1940. The statutory scheme
    envisions uniformity, predictability, and legal certainty—values that
    would be undermined if local authorities could unilaterally impose
    prohibitions contrary to the nationally determined regime.
15. The civil appeals are allowed.
16. The impugned orders dated 12.07.2022 and 22.09.2022 passed by
    the High Court of Judicature at Allahabad in Writ C No.13134 of 2022
    and Civil Misc. Review Application No.355 of 2022, respectively, are
    hereby set aside.
17. Consequently, the orders dated 28.02.2022 and 11.04.2022 issued
    by the Respondent No.5 and Respondent No.8 are also quashed.
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     It is further directed that the Respondent authorities shall not, in the
     absence of any valid prohibition or restriction notified by the Central
     Government under the D&C Act, 1940 or the rules made thereunder,
     impose any limitations, conditions, or curbs on the Appellants’ lawful
     business activities relating to the sale, distribution, and wholesaling
     of the aromatic tincture of cardamom or any other duly licensed
     medicine. The Appellants shall be entitled to carry on their trade
     in accordance with their valid license and all applicable statutory
     provisions, free from unwarranted interference.
18. Pending applications, if any, shall stand disposed of.

     Result of the case: Appeals allowed.



     †
         Headnotes prepared by: Niti Richhariya, Hony. Associate Editor
                                 (Verified by: Abhinav Mukerji, Sr. Adv.)