1. Sale of Nitrous Oxide I.P. by a licensed manufacturer to another firm holding a manufacturing license — Alleged violation of Section 18(a)(vi), Drugs and Cosmetics Act, 1940. (Para 2 , 3 )
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2025 Supreme(SC) 250
SUPREME COURT OF INDIA
B.R. GAVAI, AUGUSTINE GEORGE MASIH, JJ.
INOX Air Products Limited Now Known as INOX Air Products Private Limited and Another – Appellants
Versus
The State of Andhra Pradesh – Respondent
Criminal Appeal No. 486 of 2025 [Arising Out of SLP (Crl.) No. 2345 of 2024]
Decided On : 30-01-2025
Important Points
IMPORTANT POINT
Summoning of accused in a criminal case is a serious matter – Order of Magistrate summoning accused must reflect that he has applied his mind to facts of the case and law applicable thereto – Magistrate is not a silent spectator at the time of recording of preliminary evidence before summoning accused.
Summoning of accused in a criminal case is a serious matter – Order of Magistrate summoning accused must reflect that he has applied his mind to facts of the case and law applicable thereto – Magistrate is not a silent spectator at the time of recording of preliminary evidence before summoning accused.
Subject
Criminal Law - Drugs and Cosmetics Act
Act Referred
Headnote
Drugs and Cosmetics Act, 1940 – Sections 18(a)(vi) and 27 – Drugs and Cosmetics Rules, 1945 – Rule 65 – Criminal Procedure Code, 1973 – Section 482 [Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 528] – Unauthorised sale of drugs – Summoning order – For constituting an offence, what is necessary to establish is that accused manufactures for sale or for distribution, or sells, or stocks or exhibits or offers for sale or distributes any drug without a valid license – Licence under Form 25 would be liable, subordinate, subservient, inferior, obedient to; governed or affected by licence under Form 20B – However, for that, prosecution will have to show that appellant No. 1 who possesses licence under Form 25 has violated any of provisions under licence in Form 20B – Counsel for State has not been in a position to point out violation of any of conditions as stipulated in Form 20B – Even if allegations made in complaint are taken at its face value, no case is made out for offence punishable under Section 18(a)(vi) read with Section 27 (d) of Act – Except recording submissions of complainant, no reasons are recorded for issuing process against accused persons – Summoning of accused in a criminal case is a serious matter – Order of Magistrate summoning accused must reflect that he has applied his mind to facts of the case and law applicable thereto – Magistrate is not a silent spectator at the time of recording of preliminary evidence before summoning accused – In present case, there is no application of mind by Magistrate while issuing process – On this ground also, impugned judgment and order is liable to be quashed and set aside – Summoning order passed by Trial Court and proceedings arising therefrom quashed and set aside. (Paras 18, 30, 31, 33, 35, 38 and 41)
Facts of the case:
Present appeal challenges judgment and order dated 12th January 2024 passed by High Court of Judicature of Andhra Pradesh at Amravati, whereby High Court dismissed Criminal Petition No. 4148 of 2018 filed by appellants herein under Section 482 of Code of Criminal Procedure, 1973.
Findings of Court:
Impugned judgment and order 12th January 2024 passed by High Court of Judicature of Andhra Pradesh at Amravati in Criminal Petition No. 4148 of 2018 is quashed and set aside.
Result : Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Whether sale to a manufacturer without a wholesale license is illegal — Validity of non-speaking summoning order — Liability of Managing Director for company offences. (Para 5 , 6 , 7 , 8 , 9 , 10 )
3. Manufacturing license under Form 25 permits repacking and wholesale sale — Summoning order lacking reasons indicates failure to apply judicial mind to prima facie evidence. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 )
4. Manufacturing license under Form 25 encompasses wholesale dealing of manufactured drugs — Summoning orders must be speaking orders reflecting judicial application of mind. (Para 26 , 38 )
5. Appeal allowed — High Court judgment and Trial Court summoning order quashed. (Para 41 )
6. What constitutes manufacture under the Drugs and Cosmetics Act, 1940?
Manufacture is an inclusive and wide term encompassing any process or part of a process for making, altering, ornamenting, finishing, packing, labelling, breaking up, or otherwise treating a drug with a view to its sale or distribution. (Para 14 , 15 , 23 , 24 , 25 )
7. Does a holder of a manufacturing license under Form 25 require a separate wholesale license under Form 20B to sell manufactured drugs?
No, a license under Form 25 authorizes the sale by way of wholesale dealing and storage for sale of the drugs manufactured under that license, subject to conditions applicable to sale licenses. (Para 20 , 21 , 26 )
8. What are the legal requirements for a Magistrate's order issuing process or summons against an accused?
A summoning order must not be a mere formality; it must reflect that the Magistrate applied their mind to the facts and law, scrutinizing evidence to determine if a prima facie case exists. (Para 34 , 35 , 37 , 38 )
JUDGMENT :
B.R. GAVAI, J.
1. Leave granted.
2. The present appeal challenges the judgment and order dated 12th January 2024 passed by the High Court of Judicature of Andhra Pradesh at Amravati, whereby the High Court dismissed the Criminal Petition No. 4148 of 2018 filed by the appellants herein under Section 482 of the Code of Criminal Procedure, 19731 [“Cr.P.C.” hereinafter] thereby praying for calling of the records pertaining to C.C. No. 71 of 2018 on the file of First Additional Judicial Magistrate of First Class, Kadapa2 [“Trial Court” hereinafter] and to quash the same against the appellants herein, who are arraigned as Accused Nos. 5 and 6.
3. Shorn of details, the facts leading up to the present appeal are:
3.1. The first appellant herein - INOX Air Products Limited (Now known as M/s. INOX Air Products Private Limited) is a company incorporated in India having its registered office in Navi Mumbai, Maharashtra and is engaged in the manufacture and sale of industrial and medical gases in India. The second appellant-Pavan Kumar Jain, is the Managing Director of the first appellant company.
3.2. A complaint came to filed on 22nd December 2017 by the Drugs Inspector, Kadapa before the Trial Court wherein the appellants were made Accused Nos. 5 and 6. It was alleged in the complaint that based on information received by the complainant, on 3rd May 2016, the complainant along with 2 panch witnesses went to the RIMS General Hospital, Kadapa at around 02:00 P.M. and met the Superintendent of the Hospital. He was asked for the purchase bills and the person from whom they had procured Oxygen I.P. and Nitrous Oxide I.P. The Superintendent informed that they had purchased drugs from M/s. Varasi Oxygen firm (Accused No. 1). On verification of the purchase bills, it was discovered that the Accused No. 1 firm had the licenses for Oxygen I.P. only and not for Nitrous Oxide I.P. The complainant asked for the purchase agreement between the Hospital and the Accused No. 1 firm, and it was revealed that the agreement had existed since 2009. The complainant then seized the 72 purchase bills of the Nitrous Oxide I.P. from the Superintendent and on verification it was found that there was no physical stock of Nitrous Oxide I.P. gas cylinders in the RIMS General Hospital.
3.3. The complainant addressed a letter to the Superintendent on 5th January for the name and address of the Accused No. 1 firm and to produce the agreement between them. This was duly submitted. Another letter was issued thereafter to Accused No. 1 firm on 6th January 2017 to produce the drug licenses for the purchase and sale of the Nitrous Oxide I.P. and to produce the purchase bills, sale bills, sale drugs and constitution particulars. Accused No. 1 replied through its representative G. Raghunadha Reddy (Accused No. 2) that the Nitrous Oxide I.P. was purchased from another firm - M/s. R.S. Gas Products (Accused No. 3) and the purchase bills for the same were submitted.
3.4. The complainant issued a letter seeking similar submission of licenses and purchase bills relating to Nitrous Oxide I.P. to Accused No. 3 firm. Accused No. 3 firm submitted in its reply that they had purchased the Nitrous Oxide I.P. from M/s INOX Air Products (Accused No. 5), i.e. Appellant No. 1 herein. However, no license for the purchase of Nitrous Oxide I.P. was submitted by Accused No. 3 firm.
3.5. A similar letter was issued by the complainant to Appellant No. 1 firm on 19th May 2017 to produce and submit the drug license to manufacture the drug Nitrous Oxide I.P. and to produce the sale bills. A reply was received on 7th June 2017 from Appellant No. 2 herein representing Appellant No. 1. The drug licenses for manufacturing and selling the drug Nitrous Oxide I.P were submitted.
3.6. It was thus concluded by the Drug Inspector while submitting the complaint that Appellant No. 1 firm (Accused No. 5) represented by Appellant No. 2 (Accused No. 6) sold the drug Nitrous Oxide I.P. to the unlicensed Accused No.
