ORDER

1. Leave to appeal is granted.

2. The learned counsel appearing for the parties are heard finally on merits.

3. The respondents herein were prosecuted in Criminal Case No. 345 of 1999 in the Court of the Judicial Magistrate, First Class, Armoor (Andhra Pradesh) for alleged offences under Section 18(a)(vi), read with Sections 17-B(a), 18(b) and (c) punishable under Section 27(c) of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as "the Act").

4. In exercise of the powers under Section 482 of the Code of Criminal Procedure by the impugned order dated 5-9-2001 the learned Single Judge of the High Court of Andhra Pradesh has quashed the criminal proceedings instituted against the respondents. Aggrieved by the impugned order of quashing of the criminal proceedings the State of Andhra Pradesh has preferred this appeal.

5. The learned counsel appearing for the State of Andhra Pradesh submits that the learned Single Judge of the High Court has misunderstood the provisions of the Act under which the prosecution was initiated by the State and erroneously relied on a Division Bench decision of the same High Court delivered on 9-11-1996 in Sri Venkata Raman (Medical Agencies) v. Drugs Inspector and State of A.P. The copy of the judgment of the Division Bench is placed for perusal on record as Annexure P-5 to the special leave petition.

6. We have also heard learned counsel appearing for the respondents who supports the impugned order.

7. By the impugned order the learned Single Judge has held that the respondents who are merely dealers cannot be proceeded against and prosecuted under the provisions of the Act without the manufacturer of the drug being made an accused.

8. We have gone through the judgment of the Division Bench on which the learned Single Judge has placed reliance in quashing the criminal proceedings.

9. It is necessary to examine the relevant provisions of the Act on which the case of the prosecution is based. Section 8 defines the expression "standard of quality" of drug to mean that it must comply with the standards set out in the Second Schedule of the Act. Section 17-B in its relevant part reads:

"17-B. Spurious drugs.- For the purposes of this Chapter, a drug shall be deemed to be spurious,-

(a) * * *

(b) if it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive or bears upon it or upon its label or container the name of another drug unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug;"

10. Relevant part of Section 18 with sub-clause (vi) of clause (a), clauses (b) and (c) reads as under:

"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(a) manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale, or distribute-

(i)-(v) * *

(vi) any drug or cosmetic in contravention of any of the provisions of this Chapter or any rule made thereunder;

(b) sell or stock or exhibit or offer for sale, or distribute any drug or a cosmetic which has been imported or manufactured in contravention of any of the provisions of this Act or any rule made thereunder;

(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:"

11. The learned Single Judge while placing reliance on the judgment of the Division Bench of the High Court of Andhra Pradesh (supra) held that the respondents being merely "dealers" in drugs and not "manufacturers" cannot be prosecuted. The Division Bench of the Andhra Pradesh High Court in the case before it had quashed the criminal proceedings on a finding that the accused therein were