Holding

Section 18-A applies to any person other than a manufacturer or his agent, so the conviction under Section 28 is valid, while the High Court’s reduction of the sentence under Section 27(b)(ii) is permissible if adequate reasons are recorded.

Summary

The State of Orissa prosecuted Janmejoy Dinda, who ran a nursing home, for stocking medicinal drugs without a valid licence and for failing to disclose the source of those drugs. The trial court convicted him under Sections 27(b)(ii) and 28 of the Drugs and Cosmetics Act, 1940, imposing imprisonment and fines. The High Court acquitted him of the offence under Section 28, reasoning that Section 18-A applied only to manufacturers or agents, and reduced his sentence for the Section 27 offence. On appeal, the Supreme Court held that Section 18-A applies to any person other than a manufacturer or agent, thus restoring the conviction under Section 28, but affirmed the reduced sentence for the Section 27 offence as the High Court had recorded adequate reasons. The Court imposed a fine of Rs.1,000 for the Section 28 offence, with default imprisonment, and allowed the appeal in part.

Issues considered

The applicability of Section 18-A of the Drugs and Cosmetics Act, 1940 to a person who is neither a manufacturer nor an agent.
Whether the High Court had jurisdiction to reduce the sentence imposed under Section 27(b)(ii) of the Act.
The appropriate sentence for the offence under Section 28 when the failure to disclose the source of the drug may be due to ignorance.

Legislation cited

Drugs and Cosmetics Act, 1940s. 18-A, s. 27(b)(ii), s. 28

Subjects

Drugs and Cosmetics ActSection 18-ASection 27(b)(ii)Section 28licensingnon-disclosuresentence reductionnursing homeconvictionacquittal

Judgment

A STATE OF ORISSA
v.
JANMEJOY DINDA

FEBRUARY 20, 1998

B [M.K. MUKHERJEE AND K.T. THOMAS, JJ.]

Drugs and Cosmetics Act, 1940 :

Sections 18-A, 27(b)(ii) and 28-Search and seizure-Nursing Home-
C Stock of medicinal drugs for sale-No valid licence-Purchase invoice not
produced-Failure to disclose name and address of the person from whom
the drugs were acquired-Conviction and sentence passed by the Trial
Court-Appeal to High Court-Acquittal for offence under section 28 on the
ground that section 18-A not applicable to accused as he was neither a
manufacturer nor an agent-On appeal, Held, section 18-A applies to any
D person other than manufacturer or agent of drug-Acquittal based on faulty
premise-Hence set aside.

Section 27(b)(ii)-Held, High Court has jurisdiction to reduce sentence
of imprisonment, below the period of six months-However adequate and
special reasons to be recorded in the judgment-Even reduced sentence
E should have a term of imprisonment and fine.

The respondent was prosecuted for the offences under sec. 27(h)(ii)
and Section 28 of the Drugs & Cosmetics Act, 1940. The case of the
prosecution was that the Di:ugs Inspector conducted search of the premises
of the nursing home run by the respondent. It was found that the respondent
p had stocked for sale medicinal drugs without any valid licence. Thus the said
drugs were seized by the Drugs Inspector. The respondent was not able to
produce the purchase invoice for the drugs seized and also failed to disclose r
the name and address of the person from whom he acquired the drugs. The
Magistrate after trial, convicted the respondent under sec. 27(b)(ii) and
section 28 of the Act and sentenced him to undergo and year simple
G imprisonment and a fine of Rs. 5,000 and also simple imprisonment for a
period of one month. The appeal filed by the respondent before, the Sessions
Court was dismissed. On revision, the High Court acquitted the respondent
for the offence under sec. 28 of the Act on the ground that sec. 18-A of the (
Act was not applicable as the accused was neither manufacturer nor agent.
The High Court also reduced the sentence and fine imposed for the offence
H under sec. 27(h)(ii). Hence the present appeal by the State.
1034
STA TE OF ORISSA v. JANMEJOY DINDA 1035
The contention of the appellant was that the High Court committed an A
error in holding that the offence under sec. 28 of the Act was not made out.
It was also contended that the judge has acted without jurisdiction in reducing
the sentence for the offence under section 27(h)(ii) of the Act.

Allowing the appeal, this Court
B
HELD : I.I. The acquittal of the respondent for the offence under
section 28 of the Drugs and Cosmetics Act, 1940 is based on a basically
faulty premise. The Section would a11ply to any person other then the
manufacturer of a drug or cosmetic or his agent. Therefore, the acquittal
is set aside and conviction of the respondent under Section 28 of the Act is C
restored. (1038-G-H; 1039-A)

1.2. For application of section 18-A of the Act, the person concerned
shall not be a manufacturer of drug or his agent. In other words, the person
to whom the section applies is anyone other then a manufacturer or his agent
for distribution thereof. The raison D'etre of it is that, if he is the D
manufacturer or his agent he cannot disclose the name of the person from
whom he acquired the drug because he himself is its manufacturer. Hence
there is no question of requiring him to disclose the identify of the person
from whom he acquired the drug. Exclusion of manufacturer and his agent
from the purview of sec. 18-A is, therefore, on unden1andable premise. The
High Court, would have missed the monosyllable 'not' in Section 18A of the E
Act while considering the amplitude of the provision. The position of law
when the word 'not' is remaining in the provision, is just the other way
around. [1038-E-F-G)

2. For failure to disclose the name of the person from whom he had
acquired the drugs, respondent need not be sent to jail as, such a failure F
could ha\'e happened perhaps because he was oblivious of the name and
address of the 11erson from whom he purchased the drug. That apart, there
is no case for the Drugs Inspector or for the prosecution that any drug
seized from the nursing home was either a spurious drug or a misbranded
one or even a tinJe expired medicine. It means that the drug seized would have G
been othenvise genuine medicine. Thus in the circumstances a sentence of
fine of Rs. 1000, would be sufficient to meet the ends of justice as sentence
of imprisonment is not compulsory for an offence under section 28 of the
Act. [1039-B-D)

3. In view of the proviso to sec. 27(b)(ii) the High Court has jurisdiction H
1036 SUPREME COURT REPORTS [1998] l S.C.R.

A to reduce the sentence of imprisonment below the period of six months. H
the conditions specified in the proviso are present. the Court, has the power
.1
to reduce the sentence even fm1her down. For that there must be adequate
and special reasons and such reasons should be recorded in the judgement
and there will be a term of imprisonment and fine in the reduced sentence.
In the instant case the Judge has given some reasons for reducing the
B sentence of im11risonment. Thus this Court is not inclined to enhance the
term of imprisonment or the quantum of fine further upward for the offence
under sec. 27(b)(ii) of the Act. [1040-C-E)

Ram Shankar Mishra v. Stale of UP, AIR (1979) SC 727; and Mis
C Rajasthan Pharmaceutical Laboratory, Bangalore and Ors. v. State of
Karnataka, AIR (1981) SC 809, referred to.

CRIMINAL APPELLATE JUR~SDICTION : Criminal Appeal No.
219 of 1998.

D From the Judgment and Order dated 25.8.95 of the Orissa High Court
in Cr!. R. No. 482of1994.

Janakalyan Das for the Appellant.

B~jan Kumar Ghosh for the Respondent.

E The Judgment of the Court was delivered by

THOMAS, J. A Drugs Inspector conducte~ search of the premises of
a nursing home run by the respondent under the name 'Kalicharan Poly
Clinic' at Naya Bazar in Jaleswar (Orissa) on 7.8.1996. He was accompanied
F by one Deputy Drugs Controller and an Assistant Drugs Controller. In the
search it was detected that medicinal drugs were stocked for sale in two
almirahs kept in the front room of the nursing home. As respondent had no
licence to stock or exhibit for sale such drugs, the Drugs Inspector seized 22
items of drugs. Respondent was not able to produce the purchase invoice
concerning those drugs and he failed to disclose the source from which he
G purchased them.
On the aforesaid facts respondent was prosecuted before a Court of
Judicial Magistrate of First Class for offences under Section 27(b )(ii) and
Section 28 of the Drugs and Cosmetics Act, 1940 (for short the 'Act'). The
magistrate, or conclusion of the trial, convicted respondent under both counts
H and sentenced him to undergo simple imprisonment for one year and a fine
STATE OF ORISSA v. JANMEJOY DINDA [THOMAS, J.] 1037
of Rs. 5,000 on the first count and to simple imprisonment for one month on A
the second count.
"
Appeal filed by the respondent was dismissed by the Sessions Court
which confirmed the conviction and sentence under both charges. But when
he filed a revision before the High Court of Orissa a learned Single Judge
found that conviction under Section 28 of the Act was unsustainable and B
hence respondent was acquitted of that offence. In the matter of sentence for
the offence under Section 27(b )(ii) of the Act learned Single Judge reduced
it to the period of imprisonment which had already been undergone and the
fine was reduce to Rs.3,000.

State of Orissa has filed this special leave petition challenging the
c
aforesaid alteration and modification made by the High Court. Leave is granted.

The concurrent findings of facts arrived at by the trial court and the
appellate court which are not liable to be re-opened are: (1) respondent
stocked for sale the drugs seized from his nursing home on 7.8.1986 without D

- ~ any valid licence as required under clause (c) of Section 18 of the Act, and
(2) respondent did not disclose. to the Drugs Inspector, even after he was
required to do so, the name and address of the persons from whom he
acquired those drugs.

Learned counsel for the appellant contended that the High Court E
committed an error in holding that the offence under Section 28 of the Act
has not been made out. That Section reads thus:-

"Penalty for non-disclosure of the name of the manufacturer, etc. -
whoever contravenes the provisions of Section 18-A or Section 24
shall be punishable with imprisonment for a term which may extend F
to one year, or with fine which may extend to one thousand rupees,
or with both."

Learned Single Judge of the High Court took the view that Section l 8A
of t11e Act would have application "only if t11e person from whom the requisite G
information is sought for, is either the manufacturer or an agent for
distribution" and since the respondent was neither of them he could not have
contravened the Section. The reasoning of the learned Single Judge in reaching
the aforesaid conclusion, in his own words, are the following:-

"Section 18-A deals with disclosure of the name of the manufacturer, H
1038 SUPREME COURT REPORTS [1998] l S.C.R.

A etc. It requires that every person, being the manufacturer of a drug
or cosmetic or his agent for the distribution thereof, shall, if so
required, disclose to the Inspector the name address and other
particulars of the person from whom he acquired the drug or cosmetic.
In order to attract application of Section 18-A, a person, who is either
the manufacturer of the drug or cosmetic or agent for distribution
B thereof is required to disclose to the inspector the name and address
~.

and other particulars of the person from whom he acquired the articles.
If a person does not fall within either of the two categories, Section
18-A will have no application."

C In this context it is necessary, to see how Section l 8A of the Act is
worded which is extracted below:-

18-A Disclosure of the name of the manufacturer, etc. - Every person,
not being the manufacturer of a drug or cosmetic or his agent for lite
distribution thereof, shall, if so required, disclose to the Inspector the name
D address and other particulars of the person from whom lie acquired the drug
or cosmetic."
(emphasis supplied)

It is obvious that for application of the Section, the person concerned
shall not be a manufacturer of drug or his agent. In other words, the person
E to whom Section 18A applies is anyone ot11er than a manufacturer or his
agent for distribution tl1ereof. The raison 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 ell.-pect
the other way is to expect the impossible. Hence there is no question of
F requiring him to disclose the identity of t11e person from whom he acquired
the drug. Exclusion of manufacturer and his agent from the pmview of Section
l 8A is, therefore, on understandable premise.

It seems to us that learned Single Judge of the High Court would have
missed the monosyllable 'not' in Section 18A of the Act when he considered
G the amplitude of the provision. The position of law when tl1e word 'not' is
remaining in tl1e provision, is just the otl1er way aroU11d. The Section, therefore,
would apply to any person other than the manufacturer of a drug or cosmetic
or his agent. Hence, there is much force in the contention of tl1e State that
acquittal of the respondent of the offence under Section 28 of the Act is
based on a basically faulty premise. Such acquittal is, therefore, liable to be
H set aside and the conviction of tl1e respondent under Section 28 has to be
STATE OF ORISSA v.JANMEJOY DINDA [THOMAS, J.] 1039
restored. We do so. A
However, while dealing with the sentence we are of the opinion that for
failure to disclose the name of the person from whom he acquired the drugs,
he need not be sent to jail as we feel that such failure could have happened
perhaps because he was oblivious of the name and address of the person
from whom he purchased the drug. That apart, there is no case for the Drug B
_. Inspector, or for the prosecution itself, that any of the drugs seized from the
nursing home was either a spurious drug or a misbranded one or even a time
expired medicine. It means that the drug seized would have been otherwise
genuine medicine.

We also notice that the offence under Section 28 is punishable with C
either imprisonment or with fine which may extend to Rs.1,000 or with both.
In other words, sentence of imprisonment is not compulsory. In such
circumstances, a sentence offme ofRs.1,000 would be sufficient to meet the
ends or justice for Section 28 of the Act so far as the facts in this case are
concerned. D
The remaining contention is that learned Single Judge has acted without
jurisdiction when he reduced the sentence for the offence under Section
27(b )(ii) of the Act to imprisonment for the period which respondent had
already undergone and to a fme of Rs. 3,000/-. For considering the above
contention it is necessary to extract the material portion of the said sub- E
clause:

"27. Penalty for manufacture, sale, etc., of dings in 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, - F
(a) ............................... .

(b) any drug-

(i) ................................ . G
(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 one year but which may extend to three years and with fine
which shall not be less than five thousand rupees: H
1040 SUPREME COURT REPORTS [1998] l S.C.R.

A Provided that the Court may, for any adequate and special reasons to
be recorded in the judgment, impose a sentence of imprisonment for
a term of less than one year and of fine of less than five thousand
rupees;"

This Court has held in Ram Shankar Misra v. State of UP, AIR (1979)
B SC 727 that the sentence under Section 27 of the Act cannot be reduced to
one of fine only. Again in Mis Rajasthan Pharmaceutical Laboratory
Bangalore and others v. State of Karnataka, AIR (1981) SC 809, this Court
pointed out that a sentence of imprisonment is compulsory under Section 27
(b)(ii) of the Act. But in view of the proviso to the Section (as quoted above)
C it cannot be said that the Court has no jurisdiction to reduce the sentence
of imprisonment below the period of six months. If the conditions specified
in the proviso are present, the Court has the power to reduce the sentence
even further down. For that there must be adequate and special reasons and
such reasons should be recorded in the judgment and there shall still be a
term of imprisonment and fine in the reduced sentence.
D
Learned Single Judge has given some reasons for reducing the sentence
of imprisonment "to the period already undergone" and to a fine of Rs.3,000.
Appellant-State has not even mentioned in the special leave petition that the
reasons shown by the learned Single Judge are neither adequate not special.
We are, therefore, not inclined to enhance the term of imprisonment or the
E quantum of fine further upward for the offence under Section 27(b )(ii) of !be
Act.

In the result, we allow this appeal by setting aside the acquittal under
Section 28 of the Act. We restore the conviction of the respondent of the said
F offence. We impose a fine of Rs. 1,000 on him for the said offence and direct
that in default of payment of such fine within two months respondent shall
undergo simple imprisonment for one month. Appeal is thus, allowed to that
extent.

S.V.K.I. Appeal allowed.