Holding

The High Court was not justified in quashing the proceedings; the issue of whether the drugs are Ayurvedic and the requirement of a licence are matters for trial, and no threshold interference under Section 482 was warranted.

Summary

A complaint under Sections 18(c) and 27(b)(ii) of the Drugs and Cosmetics Act, 1940 alleged that the accused were manufacturing, selling and storing drugs defined under Section 3(b) without a licence. The accused contended that the seized items were Ayurvedic drugs, governed by Section 3(a), and therefore the complaint was improper. The High Court quashed the criminal proceedings, but the Supreme Court held that the classification of the drugs and the requirement of a licence are matters for trial, not for threshold interference under Section 482 of the CrPC. The Court observed that merely filing a licence application does not authorize manufacture or sale, and the case did not fall within any category permitting the High Court to intervene. Consequently, the appeal was allowed and the proceedings were reinstated.

Issues considered

Whether the nature of the seized drugs (Ayurvedic vs. Allopathy) is a question for trial or for pre‑trial judicial interference.
Whether the absence of a licence, despite a pending application, justifies continuation of criminal proceedings.
Whether the High Court was empowered to quash the proceedings under Section 482 of the Code of Criminal Procedure.
Whether the case falls within any of the categories for threshold interference enumerated in State of Haryana v. Bhajan Lal.

Legislation cited

Code of Criminal Procedure, 1973s. 482
Drugs and Cosmetics Act, 1940s. 18(c), s. 27(b)(ii), s. 3(a), s. 3(b)

Subjects

Drugs and Cosmetics Actlicence requirementAyurvedic drugAllopathy drugSection 482 CrPCthreshold interferenceHigh Court jurisdictioncriminal trial

Judgment

[2008] 15 S.C.R. 428

A STATE OF KERALA
v.
ORISON J FRANCIS & ANR.
(Criminal Appeal No. 1723 of 2008)

NOVEMBER 4, 2008
B
[DR. ARIJIT PASA VAT, C.K. THAKKER AND
LOKESHWAR SINGH PANTA, JJ.]

Drugs and Cosmetics Act, 1940 - ss.3(a), 3(b) and 18
C (c) rlw 27(b)(ii) - Complaint that Respondents were
manufacturing, selling and storing drugs within definition of
s.3(b), without requisite licence - Proceedings in Court of
Judicial Magistrate - Respondents filed petition under s.482
CrPC contending that the drugs seized belonged to
o "Ayurvedic" category which are dealt with under s.3(a) and not
under s.3(b) and hence the said complaint could not have
been filed - High Court quashed proceedings instituted v
against the Respondents - On appeal, held: Whether the
goods seized were Ayurvedic Drugs or not could only be
E decided in trial - Additionally Respondents did -not possess
the requisite licence - Mere fact that application for licence
was filed, did not entitle Respondents to manufacture and/or
to sell the concerned drugs - High Court, therefore, was not
justified in quashing the proceedings - Threshold
F interference by High Court in exercise of power under s.482
CrPC was not called for in the facts and circumstances of the
case - Code of Criminal Procedure, 1973 - s.482.

Pursuant to a complaint under s.18(c) rlw s.27(b)(ii)
of the Drugs and Cosmetics Act, 1940, proceedings were
G instituted against the accused- Respondents in the Court
of Judicial Magistrate. It was alleged that the
Respondents were manufacturing, selling and storing i
drugs within definition of s.3(b), without requisite licence.

H 428
.. STATE OF KERALA v. ORISON J FRANCIS & ANR. 429

Respondents filed petition under s.482 of CrPC inter A
alia contending that the drugs seized belonged to
"Ayurvedic" category which are dealt with under s.3(a)
and not under s.3(b) and consequently the said complaint
could not have been lodged.
8
Appellant, on the other hand, contended that th~
dispute as to whether the goods seized were Ayurvedic
Drugs or not could only be decided in trial and threshold
interference by the High Court was not called for,
Additionally it was submitted that since Respondents did
not possess licence, the High Court had no power of c
interference.
The High Court quashed the proceedings instituted,
against the Respondents in the Court of Judicial
Magistrate. Hence the present appeal. D
Allowing the appeal, the Court
L
HELD: Whether the goods in question are Ayurvedic
drugs is essentially a matter for trial. Also, a licence was
required for dealing with the drugs. The mere fact that the E
application for licence was filed, did not entitle the
Respondent to manufacture and/or to sell the concerned
drugs. The High Court, therefore, was not justified in
quashing the proceedings. This is a not a case where
). threshold interference by exercising power under F
! Section 482 of the Code was called for. The present case
does not belong to any of the categories given by this
Court in Bhajan Lal's case by way of illustration wherein
power under Article 226 of the Constitution or inherent
powers under s.482 of CrPC can be exercised either to
G
prevent abuse of the process of any Court or otherwise
~
to secure the ends of justice [Paras 6, 7, 8 and 9] [432-D;
)
433-A, B; 433-D, E]

State of Haryana v. Bhajan Lal (1992) Supp 1SCC 335,
relied on. H
430 SUPREME COURT REPORTS [2008] 15 S.C.R.

A Case Law Reference:
(1992) Supp 1 sec 335 relied on Para 8

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 1723 of 2008.
B
From the final Judgment and Order dated 7.11.2006 of the
High Court of Kerala at Ernakulam in Criminal M.C. No. 1135
of 2006.
:,
R. Sathish for the Appellant.
c
S.K. Agarwal, Arun K. Sinha and Rakesh Singh for the
Respondents.

The Judgment of the Court was delivered by
D DR. ARIJIT PASAYAT, J. 1. Leave granted.

2. Challenge in this appeal is to the judgment of a learned
Single Judge quashing the proceedings in CC No. 917 of 2004 l
in the Court of Chief Judicial Magistrate, Ernakulam.
E
3. Background facts in a nutshell are as follows:

A complaint was filed alleging commission of offences
punishable under Section 18(c) read with Section 27(b)(ii) of
the Drugs and Cosmetics Act, 1940 (in short the 'Act').
F Allegation was that the three accused persons were j
manufacturing and selling and storing DXN Ganocelium (GL)
\
and DXN Rishi and (RG) capsules, which are drugs within the
definition of Section 3(b) of the Act, without a manufacturing
licence. In the complaint M/s. Deshsan Trading (India) Pvt. Ltd.
G represented by Abdul Rahmath Puvarasar Abdulla, Director and
Abdul Rahmath Pavarsan Abdulla and Orison J Francis, Branch
Manager. were arrayed as accused .Persons Nos. 1 to 3. A Jo-
petition under Section 482 of the Code of Criminal Procedure,
J_
. 1973 (in short the 'Code') was filed by the accused No. 1 and
H 3 wh.o are respondents 1 & 2 in the present appeal. Basic
- STATE OF KERALA v. ORISON J FRANCIS & ANR. 431
[DR. ARIJIT PASAYAT, J.]
.A
stand before the High Court was thatthe alleged drugs seized A
belonged to "Ayurvedic" category which is dealt with under
Section 3(a) whereas the "Allopathy drugs" are defined under
Section 3(b). Separate Chapter i.e. Chapter IVA deals with
Ayurvedic drugs etc. while Chapter IV deals with "Allopathy
drugs". The charge is that the appellants violated Section 18(c) B
of Chapter IV, i.e. with respect to Allopathy Drugs. Acco~ding
to the accused the article sold was food supplement and at best
is only an Ayurvedic proprietary drug. The Drug Department of
'" I

State of Tamil Nadu has issued drug licence under Chapter IV-
A as an Ayurvedic drug and thereafter licence was issued by c
the Food and Drug Administration, Pondicherry. Hehce,
sanction under Section 33 M of the Act ought to have been
'
obtained to launch prosecution, which is lacking. It is also not
established that the person who launched the complaint is a
public servant under Section 21 of the Act. According to tl"ilem,
D
gazette notification and the letter of appointment of the
A
complainant/Drug Inspector are insufficient to satisfy Seytion
21 or Section 33G. What has been produced is only a transfer
order. It was further contended that the court has not considered
the pre-summoning evidence in the matter. Nowhere it is
mentioned in the complaint that the same has been filed by the E
complainant in his capacity as public servant and the
examination of the complainant can be dispensed with.

4. Stand of the present appellant before the High Court was
)<
that whether the goods seized were Ayurvedic Drugs can only F
be decided in the trial and the threshold interference by the
High Court is not called for. Additionally it was submitted that
-+
the undisputed position being that the respondents did' not
possess a licence, the High Court could not have interfered.
The mere fact that the licence was granted subsequently is of G
no consequence. It was pointed out that.the inspector who
made the seizure and filed the complaint was authorized tQ do
-J
so. In this connection, reference is made to the order dated
3.5.2000 transferring the concerned Diug Inspector from,the
Drugs Control Society, Trivendrum to be posted as Drug H
432 SUPREME COURT REPORTS - [2008] 15 S.C.R.

A Inspector in the office of the Assistant Drugs Controller.
Reference is also made to the Notification dated 19.11.i001
relating to the power of inspection of inspectors. It is stated that
. the explanatory note has no application because only when the
drug is shown to be Ayurvedic drug, the explanatory note shall
B have relevance.

5. Learned counsel for the responde_nts, on the _other hand,
· submitted that the seized drugs are nothing but Ayurvedic
drugs. The complaint itself was filed after two years on-
2.12.2003, though the seizure was made on much earlier. It is
C also submitted that the licence was subsequently granted after
a long lapse of about two years. Same is a factor which has
weighed with the High Court and for a technical breach the
proceedings should not continue. The drugs were seized on
12.12.2001 and on the next day itself the respondent had
D obtained the licence.

6. Whether the goods in question are Ayurvedic drugs is
essentially a matter for trial. Section 18(c) of the Act reads as
follows:
E
"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 shal! himself or by any other person
on his behalf. ·
F
(a) ....... .

(b) ........ .

(c) manufacture for sa!e (or for distribution), or sell, or stock
G 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."

H
STATE OF KERALA v. ORISON J FRANCIS & ANR. 433
[DR ARIJIT PASAYAT, J.]

·-'
7. Obviously, a licence was required for dealing with the A
drugs. The mere fact that the application for licence was filed,
did not entitle the respondent to manufacture and/or to sell the
concerned drugs. The High Court, therefore, was not justified
in quashing the proceedings. This is a not a case where
threshold interference by exercising power under Section 482 B
of the Code was called for.

8. The scope for interference at the threshold by exercising
"I power under Section 482 of the Code has been succinctly
stated by this Court in State of Haryana v. Bhajan Lal [1992
Supp(1 )SCC 335]. In paragraph 102 it was stated as follows:
c
"In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of
the principles of law enunciated by this Court in a series
of decisions relating to the exercise of the extraordinary D
power under Article 226 or the inherent powers under
Section 482 of the Code which we have extracted and
reproduced above, we give the following categories of
cases by way of illustration wherein such power could be
exercised either to prevent abuse of the process of any E
court or otherwise to secure the ends of justice, though it
may not be possible to lay down any precise, clearly
defined and sufficiently channelised and inflexible
guidelines or rigid formulae and to give an exhaustive list
of myriad kinds of cases wherein such power should be F
>-
exercised.

(1) Where the allegations made in the first
information report or the complaint, even if they are
taken at their face value and accepted in their
entirety do not prima facie constitute any offence or G
make out a case against the accused.
_,
J (2) Where the allegations in the first information
report and other materials, if any, accompanying the
H
... ~ -- '

434 SUPREME COURT REPORTS [2008] 15 S.C.R.
r
A FIR do .not discl9se a cognizable offence.. ju~tifying ;.....
an invest.igation by police office~s under Secti~n
. 156( 1) .of the, Code except under a,n o.rder of a
Magistrate
.
within the. purview
- of Section 155(2) of
'

the Code.
B
(3) Where the uncontroverted allegations ma·de in
the FIR or complaint and the evidence.collected in
support of the same do not dis"close the
commission of any offence and make out a case
against the accused.
c
(4) Where, the allegations in the FIR do not
constitute a cognizable offence but constitute only
a non-cognizable offence, no investigation is r
permitted by a police officer withou·t an order of a t..
D Magistrate as contemplated under Section 155(2)
of the Code.

(5) Where the allegations made in the FIR or
complaint are so absurd and inherently improbable
on the basis of which no prudent person can ever
E
· reach a just conclusion that there is sufficient ground
for proceeding against the accused.

(6) Where there is ~n express legal bar engrafted
in any of the provisions of the Code or the
F ~
concerned Act (under which a criminal proceeding
is instituted) to the institution and continuance of the
proceedings and/or where there is a specific
provision in the Code or the concerned Act,
providing efficacious redress for the grievance of
G the aggrieved party.

(7) Where a criminal proceeding is manifestly ,..
attended with mala fide and/or where the ~
proceeding is maliciously instituted with an ulterior
motive for wreaking vengeance on the accused and
H
STATE OF KERALA v. ORISON J FRANCIS & ANR. 435
[DR. ARIJIT PASAYAT, J.]

with a view to spite him due to private and personal A
grudge.

9. The present case does not belong to any of the
aforesaid categories.

10. The appeal is accordingly allowed. We make it clear B
that we have not expressed any opinion on the merits of the
case.

B.B.B. Appeal allowed.
c

-'
j.

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