S. ATHILAKSHMIversusTHE STATE REP. BY THE DRUGS INSPECTOR

914                      [2023]REPORTS
               SUPREME COURT    2 S.C.R. 914               [2023] 2 S.C.R.


A                              S. ATHILAKSHMI
                                        v.
               THE STATE REP. BY THE DRUGS INSPECTOR
                       (Criminal Appeal No. 804 of 2023)
B                              MARCH 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, stocking
C
      or exhibition of medicines for the purposes of sale – In the present
      case, prosecution against the appellant was unwarranted –
      Appellant is a registered medical practitioner along with the fact
      that the quantity of medicines seized was extremely small, a quantity
      which can be easily found in the house or a consultation room of a
D     doctor – Considering the small quantity of medicines, most of which
      are in the category of lotions and ointments, it cannot be said that
      such medicines could be ‘stocked’ for sale and would come in the
      category of stocking of medicines for the purpose of sale – No
      offence is made out – It is not the case of the prosecution that the
      Appellant was selling drugs from an open shop across the counter
E
      – It is possible that she was distributing these drugs to her patients
      for emergency uses and thus she is protected by the Act itself – An
      exception has been created under Schedule ‘K’ r/w r.123 in favour
      of medical practitioner, the appellant ought to have been given the
      benefit of these provisions – Further, the sanction for prosecution
F     given in the instant case, prima facie, suffers from the vice of non-
      application of mind – Order of the High Court set aside – Criminal
      proceedings against appellant quashed – Drugs and Cosmetics
      Rules, 1945 – Schedule K – Drugs and Cosmetics Rules, 1940 –
      r.123 – Code of Criminal Procedure, 1973 – s.482.
G           Allowing the appeal, the Court
            HELD: 1.1 It is not the case of the prosecution that the
      Appellant was selling drugs from an open shop across the counter.
      She is a senior doctor who is engaged as an Associate Professor
      and Head of Department, Dermatology in a Government Medical
H     College, and being a medical practitioner, under certain conditions,
                                       914
    S. ATHILAKSHMI v. THE STATE REP. BY THE DRUGS                      915
                      INSPECTOR

she is also protected under the law which has been referred to         A
above. Considering the small quantity of medicines, most of which
are in the category of lotions and ointments, it cannot be said by
any stretch of imagination that such medicines could be ‘stocked’
for sale and would come in the category of stocking of medicines
for the purpose of sale. When small quantity of medicine has been
                                                                       B
found in the premises of a registered medical practitioner, it would
not amount to selling their medicines across the counter in an
open shop. In fact, this is not even the allegation against the
Appellant. Undoubtedly, the provisions of Section 18 and are
relevant provisions under the law, which have a social purpose,
which is to protect ordinary citizens from being exploited inter       C
alia, by unethical medical practitioners, and for this reason the
punishment under Section 27 can extend up to 5 years under the
law, and has a minimum punishment of 3 years. But given the
facts and circumstances of the case and considering that the
Appellant is a registered medical practitioner, along with the fact
                                                                       D
that the quantity of medicines which have been seized is extremely
small, a quantity which can be easily found in the house or a
consultation room of a doctor, no offence is made out in the
present case. In fact, an exception has been created under
Schedule ‘K’ read with Rule 123 to the rules, the appellant ought
to have been given the benefit of these provisions and such a          E
registered medical practitioner should not have been allowed to
face a trial where in all likelihood the prosecution would have
failed to prove its case beyond reasonable doubt. [Paras 8, 9][922-
A-F]
      1.2 What the High Court failed to consider, however, is the      F
provisions contained in Rule 123 read with Schedule ‘K’ to the
1945 Rules and when admittedly it is not the case of the
prosecution that the drugs which were seized were being sold in
an open shop across the counter. Since this was not being done,
and an exception is created under the law in favour of the medical
practitioner where the drugs given in Schedule ‘K’ would be            G
exempted from the purview of Chapter 4 of the Act, prosecution
against the Appellant is unwarranted. The sanction for
prosecution given in the present case appears, prima facie, to
suffer from the vice of non-application of mind. There is no
reference to any of the documents, evidence or the submissions         H
916            SUPREME COURT REPORTS                          [2023] 2 S.C.R.


A     submitted by either of the parties, no reasons assigned or even
      an explanation pertaining to the delay which indicates it has been
      passed in a mechanical manner. [Paras 10, 14][923-D, 924-F]
            Hasmukhlal D. Vohra and Anr. v. State of Tamil Nadu
            2022 SCC OnLine SC 1732; Mansukhlal Vithaldas
B           Chauhan v. State of Gujarat (1997) 7 SCC 622 : [1997]
            3 Suppl. SCR 705; Mohd. Shabir v. State of
            Maharashtra (1979) 1 SCC 568 : [1979] 2 SCR 997 –
            relied on.
                              Case Law Reference
C     [1997] 3 Suppl. SCR 705          relied on        Para 14
      [1979] 2 SCR 997                 relied on        Para 15
            CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
      804 of 2023.
D           From the Judgment and Order dated 21.06.2022 of the High Court
      of Judicature at Madras in CRLOP No. 5579 of 2020.
           S. Nagamuthu, Sr. Adv., M.P. Parthiban, Ms. Priya Ranjini
      Nagamuthu, A.S. Vairawan, R. Sudhakaran, Vikash Rajkumar,
      Subrahmanya Bhanu, Devendran, Alagendiran, Advs. for the Appellant.
E          V. Krishnamurthy, A.A.G., Dr. Joseph Aristotle S., Shobhit
      Dwivedi, Ms. Richa Vishwakarma, Advs. for the Respondent.
            The Judgment of the Court was delivered by
            SUDHANSHU DHULIA, J.
F           Leave granted.
             2. The Appellant before this Court is a registered medical
      practitioner who is presently working as an Associate Professor and the
      Head of Dermatology Department, in the Government Omandurar
      Medical College, Chennai. In the past, she has held the post of Assistant
G     Professor and Civil Surgeon at Royapettah Medical College. It is
      permissible for her under the law to practice medicine when she is not
      performing her official duties. The Appellant, in her individual and
      independent capacity was carrying on her medical practice at a premises
      which is No. 87, Red Hills Road (North), Villivakkam, at Chennai. It is
H
     S. ATHILAKSHMI v. THE STATE REP. BY THE DRUGS                           917
           INSPECTOR [SUDHANSHU DHULIA, J.]

here that she could be consulted and where she meets and examines her        A
patients.
      3. An inspection was made on the above premises by the Drugs
Inspector, Villivakkam Range on 16.03.2016. As per inspection report,
the Drugs Inspector found the following medicines in the inner room of
her premises.                                                                B




                                                                             C




                                                                             D




                                                                             E




      The Drugs Inspector also referred to certain sale bills of medicines
which are as follows:                                                        F




                                                                             G




                                                                             H
918            SUPREME COURT REPORTS                           [2023] 2 S.C.R.


A           4. The Drugs Inspector thereafter moved an application for
      obtaining sanction from the office of the Director of Drugs Control,
      Tamil Nadu, Chennai-06 on 22.09.2016 which was given to him on
      23.01.2018. Consequently, the Drugs Inspector filed a complaint before
      the Court of X Metropolitan Magistrate, Egmore, for prosecuting the
      Appellant under Section 18(c) of the Drugs and Cosmetics Act, 1940
B
      punishable under Section 27(b)(ii) of the Act.
            5. Aggrieved by these proceedings, the Appellant filed an
      application under Section 482 of the Code of Criminal Procedure, 1973
      before the High Court of Madras for quashing the criminal proceedings.
      Her petition was dismissed by the Ld. Single Judge on 21.06.2022.
C     Aggrieved by this, the Appellant has filed Special Leave Petition before
      this Court against the order of the Single Judge.
            6. Under Section 18 of Drugs and Cosmetics Act 1940, a
      prohibition has been imposed as to the manufacture, sale etc. of certain
      drugs and cosmetics. Section 18 reads as follows:
D
            18. Prohibition of manufacture and sale of certain drugs and
            cosmetics. — From such date as may be fixed by the State
            Government 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 any
               drug [or cosmetic] which has been imported or manufactured
               in contravention of any of the provisions of this Act or any rule
               made thereunder;
F              (c) [manufacture for sale or for distribution, or sell, or stock or
               exhibit or offer for sale,] or distribute any drug [or cosmetic],
               except under, and in accordance with the conditions of, a licence
               issued for such purpose under this Chapter:
               Provided that nothing in this section shall apply to the
G              manufacture, subject to prescribed conditions, of small quantities
               of any drug for the purpose of examination, test or analysis:
               Provided further that the [Central Government] may, after
               consultation with the Board, by notification in the Official
               Gazette, permit, subject to any conditions specified in the
H
    S. ATHILAKSHMI v. THE STATE REP. BY THE DRUGS                              919
          INSPECTOR [SUDHANSHU DHULIA, J.]

         notification, the [manufacture for sale or for distribution, sale,    A
         stocking or exhibiting or offering for sale] or distribution of any
         drug or class of drugs not being of standard quality.
      The punishment for contravention of Section 18(c) is provided
under Section 27(b)(ii) which reads as follows:
      27. Penalty for manufacture, sale, etc., of drugs in                     B
      contravention of this Chapter— Whoever, himself or by any
      other person on his behalf, manufactures for sale or for distribution,
      or sells, or stocks or exhibits or offers for sale or distributes—
         (a) xxxxxxxxxxxxxxxxxx
                                                                               C
         (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 term
         which shall [not be less than three years but which may extend        D
         to five years and with fine which shall not be less than one
         lakh rupees or three times the value of the drugs confiscated,
         whichever is more]:
                Provided that the Court may, for any adequate and special
         reasons to be recorded in the judgment, impose a sentence of          E
         imprisonment for a term of [less than three years and of fine
         of less than one lakh rupees];
       7. As we can see the prohibition under Section 18(c) is on the
manufacturing, distribution, stocking or exhibition of medicines for the
purposes of sale. The charge in the present case is that the Appellant         F
had “stocked” medicines for “sale”. The entire emphasis is on “sale” of
these medicines. This is evident from the sanction being sought by the
Drug Inspector from the office of the Director, Drugs Control, Tamil
Nadu wherein as per the sanction letter dated 23.01.2018, he had said
that the Appellant be prosecuted for the contravention of:
                                                                               G
      “Section 18(c) of Drugs and Cosmetics Act 1940 for having
      ·stocked drugs for sale and sold the drugs without having a valid
      drug license, which is punishable under section 27(b)(ii) of the
      said Act”.

                                                                               H
920             SUPREME COURT REPORTS                            [2023] 2 S.C.R.


A             Thus, as per the prosecution she had stocked the drugs and sold
      them. What the Director of Drugs Control and the High Court lost sight
      of is the fact that the Appellant is a registered medical practitioner, her
      area of specialization being dermatology. She has an M.D. (DVL) degree
      in this specialisation. It is not a case that she had opened a shop in her
      premises from where she was selling drugs and cosmetics across the
B
      counter! It is possible that she was distributing these drugs to her patients
      for 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 an
      exemption which we shall examine hereafter.
             8. Under Section 33 of the Act, the Central Government can make
C     rules which have to be laid before the Parliament for its ratification
      under Section 38 of the Act. These rules have been framed which is
      known as Drugs and Cosmetics Rules, 1940. Rule 123 of the rules exempts
      certain drugs from the provisions of Chapter IV of the Act (which includes
      both Section 18 and Section 27 referred above, which are penal
D     provisions), under certain conditions Rule 123 reads as under:
             “123. The drugs specified in Schedule K shall be exempted from
             the provisions of Chapter IV of the Act and the rules made
             thereunder to the extent and subject to the conditions specified in
             that Schedule.”
E           Entry No. 5 under Schedule (K) are the drugs which are supplied
      by a registered medical practitioner with which we are presently
      concerned. The relevant provision of Schedule (K) reads as under:-
                                      Schedule K

F                                   (See Rule 123)




G




H
S. ATHILAKSHMI v. THE STATE REP. BY THE DRUGS           921
      INSPECTOR [SUDHANSHU DHULIA, J.]

                                                        A




                                                        B




                                                        C




                                                        D




                                                        E




                                                        F




                                                        G




                                  (emphasis supplied)   H
922             SUPREME COURT REPORTS                           [2023] 2 S.C.R.


A            It is not the case of the prosecution that the Appellant was selling
      drugs from an open shop across the counter. She is a senior doctor who
      is engaged as an Associate Professor and Head of Department,
      Dermatology in a Government Medical College, and being a medical
      practitioner, under certain conditions, she is also protected under the law
      which has been referred to above.
B
              9. Considering the small quantity of medicines, most of which are
      in the category of lotions and ointments, it cannot be said by any stretch
      of imagination that such medicines could be ‘stocked’ for sale and would
      come in the category of stocking of medicines for the purpose of sale.
      When small quantity of medicine has been found in the premises of a
C     registered medical practitioner, it would not amount to selling their
      medicines across the counter in an open shop. In fact, this is not even
      the allegation against the Appellant. Undoubtedly, the provisions of Section
      18 and 27 are relevant provisions under the law, which have a social
      purpose, which is to protect ordinary citizens from being exploited inter
D     alia, by unethical medical practitioners, and for this reason the punishment
      under Section 27 can extend up to 5 years under the law, and has a
      minimum punishment of 3 years. But given the facts and circumstances
      of the case and considering that the Appellant is a registered medical
      practitioner, along with the fact that the quantity of medicines which
      have been seized is extremely small, a quantity which can be easily
E     found in the house or a consultation room of a doctor, in our considered
      view no offence is made out in the present case. In fact, an exception
      has been created under Schedule ‘K’ read with Rule 123 to the rules,
      the appellant ought to have been given the benefit of these provisions
      and such a registered medical practitioner should not have been allowed
F     to face a trial where in all likelihood the prosecution would have failed to
      prove its case beyond reasonable doubt. The learned single judge while
      dismissing the application under Section 482 Cr.P.C of the appellant has
      relied upon a decision of this Court:
            “9. It is too late in the day to seek reference to any authority for
G           the proposition that while invoking the power under Section 482
            Cr.P.C. for quashing a complaint or a charge, the Court should
            not embark upon an enquiry into the validity of the evidence
            available. All that the Court should see is as to whether there are
            allegations in the complaint which form the basis for the ingredients
            that constitute certain offences complained of The Court may
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     S. ATHILAKSHMI v. THE STATE REP. BY THE DRUGS                             923
           INSPECTOR [SUDHANSHU DHULIA, J.]

      also be entitled to see {i) whether the preconditions requisite for      A
      taking cognizance have been complied with or not; and {ii) whether
      the allegations contained in the complaint, even if accepted in
      entirety, would not constitute the offence alleged
      …….
      13. A look at the complaint filed by the appellant would show that       B
      the appellant had incorporated the ingredients necessary for
      prosecuting the respondents for the offences alleged. The question
      whether the appellant will be able to prove the allegations in a
      manner known to law would arise only at a later stage ... ... ........
      .....”                                                                   C
      10. But what the High Court failed to consider, however, is the
provisions contained in Rule 123 read with Schedule ‘K’ to the 1945
Rules and when admittedly it is not the case of the prosecution that the
drugs which were seized were being sold in an open shop across the
counter. Since this was not being done as visualized above, and an             D
exception is created under the law in favour of the medical practitioner
where the drugs given in Schedule ‘K’ would be exempted from the
purview of Chapter 4 of the Act, we are of the considered view that
prosecution against the Appellant is unwarranted.
        11. The backbone of the Respondent’s case is the sales bills with      E
the 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 Notice
issued by the Respondent it is seen that the sales bills are not even for
the medicines which have been seized by the Respondent.
       12. On the contrary, upon being served with the Show Cause              F
Notice, the Appellant was directed, under Section 18-A, to reveal the
name and addresses of persons from whom she obtained the drugs which
were seized. In compliance with the same, Appellant has produced
multiple 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 ‘standard            G
quality’ which indicates it is not a case where the Appellant was operating
a shop to sell spurious medicines over the counter.
      13. Another factor which must be considered is that the search
was carried out on 16.03.2016 and sanction for prosecution was sought
                                                                               H
924               SUPREME COURT REPORTS                         [2023] 2 S.C.R.


A     on 22.09.2016 and the sanction ultimately was given on 23.01.2018. There
      is no explanation which has been given for this delay in getting the
      approval. In the recently decided case of Hasmukhlal D. Vohra and
      Anr. v. State of Tamil Nadu1, criminal proceedings were quashed against
      a Petitioner on the grounds that the substance in question was not a drug
      under Indian Pharmacopoeia. One of the considerations was the delay
B
      in the proceedings against which the following observations were made,
               ‘25. In the present case, the Respondent has provided no
               explanation for the extraordinary delay of more than four
               years between the initial site inspection, the show cause notice,
               and the complaint. In fact, the absence of such an explanation
C              only prompts the Court to infer some sinister motive behind
               initiating the criminal proceedings.
               26. While inordinate delay in itself may not be ground for
               quashing of a criminal complaint, in such cases, unexplained
               inordinate delay of such length must be taken into
D              consideration as a very crucial factor as grounds for quashing
               a criminal complaint.
               27. While this court does not expect a full-blown investigation
               at the stage of a criminal complaint, however, in such cases
               where the accused has been subjected to the anxiety of a
E              potential initiation of criminal proceedings for such a length
               of 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 is
F     no reference to any of the documents, evidence or the submissions
      submitted by either of the parties, no reasons assigned or even an
      explanation pertaining to the delay which indicates it has been passed in
      a mechanical manner. This Court in the case of Mansukhlal Vithaldas
      Chauhan v. State of Gujarat2, highlighted the importance of a prior
G     sanction granted under Section 197 of the Code of Criminal Procedure,
      1973 while quashing the criminal proceedings instituted against a Divisional
      Accountant engaged with the Medium Irrigation Project Division, Gujarat.
      It was observed as follows:

      1
          2022 SCC OnLine SC 1732
H     2
          (1997) 7 SCC 622
        S. ATHILAKSHMI v. THE STATE REP. BY THE DRUGS                           925
              INSPECTOR [SUDHANSHU DHULIA, J.]

         ‘19. Since the validity of “sanction” depends on the applicability     A
         of mind by the sanctioning authority to the facts of the case as
         also the material and evidence collected during investigation, it
         necessarily follows that the sanctioning authority has to apply its
         own independent mind for the generation of genuine satisfaction
         whether prosecution has to be sanctioned or not.’
                                                                                B
       15. The possession of the drugs is not disputed in this case by
either side. However, this Court in the case of Mohd. Shabir v. State of
Maharashtra3 while allowing an appeal in part and directing the release
of an Appellant who had been prosecuted under the provision 18(c) of
the 1940 Act, this Court observed that possession simpliciter would not
itself be an offence but the prosecution had to prove the essential             C
ingredient under Section 27 which was that even a ‘stock’ of the medicine
was for sale. It was observed as follows:
         ‘4. …We, therefore, hold that before a person can be liable
         for prosecution or conviction under Section 27(a)(i)(ii) read
         with Section 18(c) of the Act, it must be proved by the                D
         prosecution affirmatively that he was manufacturing the drugs
         for sale or was selling the same or had stocked them 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. If, therefore, the essential ingredients    E
         of Section 27 are not satisfied the plea of guilty cannot lead
         the Court to convict the appellant.’
        16. The sanctioning authority had not examined at all whether a
practising doctor could be prosecuted under the facts of the case,
considering the small quantity of the drugs and the exception created in        F
favour of medical practitioner under Rule 123, read with the Schedule
“K”. All these factors ought to have been considered by the sanctioning
authority. Under these circumstances we allow this appeal and set aside
the order of the learned Single Judge of the Madras High Court and
quash the criminal proceedings in Criminal Case No. 7315 of 2018 on
the file of X Metropolitan Magistrate, Egmore, Chennai.                         G


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

3
    (1979) 1 SCC 568                                                            H