1. Prosecution for failing to maintain records and providing incomplete information in violation of statutory drug manufacturing and labeling regulations. (Para 2 , 3 )
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2026 Supreme(SC) 182
SUPREME COURT OF INDIA
PRASHANT KUMAR MISHRA, VIPUL M. PANCHOLI, JJ.
M/s SBS Biotech and Others – Appellants
Versus
State of Himachal Pradesh – Respondent
Criminal Appeal No. 9281 of 2026 [Special Leave Petition (Criminal) No. 9281 of 2025]
Decided On : 20-02-2026
Advocates appeared:
For the Petitioner(s): Mr. Sanjay Jain, Adv. Mr. Akshay Jain, Adv. Mr. Govind Rishi, Adv. Mr. Ashwarya Sinha, AOR
For the Respondent(s): Mr. Kartikeya Rastogi, DAG Mr. Inderdeep Kaur Raina, Adv. Mr. Ranjeet S. Adv. Mr. Rohit Bansal, AOR
For the Petitioner(s): Mr. Sanjay Jain, Adv. Mr. Akshay Jain, Adv. Mr. Govind Rishi, Adv. Mr. Ashwarya Sinha, AOR
For the Respondent(s): Mr. Kartikeya Rastogi, DAG Mr. Inderdeep Kaur Raina, Adv. Mr. Ranjeet S. Adv. Mr. Rohit Bansal, AOR
IMPORTANT POINT
Seizure of drugs for violation of legal provisions – A genuine complaint cannot be quashed without trial.
Headnote:
Drugs and Cosmetics Act, 1940 – Sections 27(d) and 28-A read with Rules 74 and 22(l)(cca) and 18-B – Seizure of drugs – Violation of legal provisions – Cognizance of offence – Every person holding license is required to keep and maintain such records, register and other documents as may be prescribed and shall furnish to officer or authority exercising power under the Act – When allegations are levelled for commission of offence punishable under Section 18(a)(vi) of Act, same is punishable under Section 27(d) of Act – In present case, complaint has been filed within a period of 03 years (two years and six months) – Complaint is not time barred – Quashing petition rightly dismissed by High Court. (Paras 23, 27, 28, 29 and 33)
Facts of the case:
Instant Appeal challenges judgment and order dated 29.07.2024 in Cr. MMO No. 167 of 2018 passed by High Court of Himachal Pradesh at Shimla. Appellants sought quashing of Complaint No. 36/3 of 2017 (subsequently renumbered as Complaint No. 9 of 19.12.2017). Appellants are being prosecuted for contravening Section 18(a)(vi) read with Rules 74 and 22(l)(cca) and 18-B, punishable under Sections 27(d) and 28-A of Drugs and Cosmetics Act, 1940 and Rules framed thereunder.
Findings of Court:
High Court has not committed any error while dismissing petition filed by present appellants under Section 482 of the Cr.P.C. for quashing of complaint. Hence, no interference is required.
Result : Appeal dismissed.
Judgement Key Points
Court's Key Observations:
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The complaint alleges contravention of Section 18(a)(vi) read with Rule 74, Section 22(1)(cca), and Section 18-B of the Drugs and Cosmetics Act, 1940, punishable under Sections 27(d) and 28-A. (!) (!)
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Appellants failed to maintain requisite records as per Schedules M and U of the Drugs and Cosmetics Rules, 1945, including production, consumption, purchase, and sale records for Pseudoephedrine, with discrepancies, tampering, and non-production despite notices. (!) (!) (!)
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Non-maintenance and non-furnishing of records constitutes manufacture, stocking, or distribution of drugs in contravention of Chapter IV provisions and rules, falling under Section 18(a)(vi), punishable under Section 27(d) (imprisonment not less than 1 year, up to 2 years). (!) (!)
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Complaint filed on 27.02.2017 (or 22.02.2017), within 2 years and 6 months from inspection on 22.07.2014, is not barred by 3-year limitation under Section 468 Cr.P.C. for offences punishable up to 2 years. Omission of Section 27(d) in cognizance order was a clerical error, as referenced elsewhere. (!) (!) (!)
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Section 32(2) mandates offences under Chapter IV be tried by no court inferior to Court of Session; Section 36-A's summary trial provision excludes such offences and those triable by Special Court under Section 36-AB. Committal to Special Judge-I was correct. (!) (!) (!) (!)
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High Court committed no error in dismissing Section 482 Cr.P.C. quashing petition; proceedings disclose triable offences requiring trial, not quashing at threshold. (!)
Legal Category Hierarchy
Table of Contents
2. Petitioners contested the limitation period, the maintainability of the complaint, the categorization of the offence, and the jurisdictional authority of the trial court. (Para 6 , 7 , 8 , 10 , 11 )
3. The court found that records non-compliance violated manufacturing standards punishable under Section 27(d), concluding that the complaint was filed within the statutory limitation period and jurisdiction rightfully vested. (Para 20 , 21 , 24 , 25 , 26 , 27 , 28 , 32 )
4. Section 32(2) overrides summary trial provisions for Chapter IV offences, mandating that courts not inferior to the Court of Sessions exercise exclusive trial jurisdiction. (Para 31 , 32 )
5. The appeal is dismissed, affirming the orders of the High Court and the continued prosecution of the accused. (Para 33 , 34 )
6. Can prosecutions for violations under the Drugs and Cosmetics Act be tried by a Judicial Magistrate First Class under summary procedure?
No, because Section 32(2) of the Act mandates that only courts not inferior to a Court of Session may try offences under Chapter IV, thereby excluding the applicability of summary trial for these offences. (Para 31 , 32 )
7. What is the applicable limitation period for a complaint filed under Section 27(d) of the Drugs and Cosmetics Act?
As Section 27(d) prescribes a potential imprisonment of up to two years, the relevant period of limitation for filing a criminal complaint is three years under Section 468 of the Code of Criminal Procedure. (Para 27 , 28 )
8. Does a trial court's inadvertent omission of a specific section in a cognizance order render the entire proceedings irregular?
No, the omission of a statutory provision in a cognizance order is deemed a clerical or typographical error and does not invalidate the proceedings, especially when the complaint clearly specifies the alleged offences. (Para 24 , 25 )
JUDGMENT :
VIPUL M. PANCHOLI, J.
1. Leave granted.
2. This Appeal challenges the judgment and order dated 29.07.2024 in Cr. MMO No. 167 of 2018 passed by the High Court of Himachal Pradesh at Shimla. The Appellants sought the quashing of Complaint No. 36/3 of 2017 (subsequently renumbered as Complaint No. 9 of 19.12.2017). The Appellants are being prosecuted for contravening Section 18(a)(vi) read with Rule 74 and 22(l)(cca) and 18-B, punishable under Section 27(d) and 28-A of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as ‘the Act’) and the Rules framed thereunder.
3. Factual Matrix:
(i) The Appellant No. 1, M/s SBS Biotech, is a partnership firm engaged in the manufacturing of pharmaceutical preparations at Mauza Rampur Jattan, Nahan Road, Kala Amb, District Sirmaur, H.P. The firm operates under valid drug licenses issued in Form-25 and Form-28 of the Drugs and Cosmetics Rules, 1945 (‘the Rules’), and is mandated to adhere to Schedule-M of the Rules. Appellant No. 2, Shri Sanjeev Kumar Santoshi, is the Production Head, and Appellant No. 3, Mr. Avinash Banga, was arrayed as the alleged managing partner at the relevant time.
(ii) The chronology of events commenced with an inspection of the firm’s premises conducted by the Drug Inspector on 22.07.2014. During this inspection, carried out in the presence of officials of the firm, including the Production Head, it was alleged by the Respondent that the firm had not maintained the requisite records as stipulated by Schedule-M and Schedule-U of the Rules. Specifically concerning the drug Pseudoephedrine B. No. 503413, inadequate details regarding the entry of the drug received from Neha Pharma Pvt. Ltd. were noted, and the firm failed to produce consumption records.
(iii) A Spot Inspection Report was prepared on 22.07.2014. Through this report, the firm was directed under Section 22(d) of the Act not to dispose of the stock of the said drug until the investigation was completed. Further, directions were issued, commanding the firm, pursuant to Section 22(1)(cca) and 18-B of the Act, to produce the complete record of purchase, sale/distribution, and consumption of the said drug within a period of seven days. The Appellants subsequently contended that serving directions via the spot inspection report, rather than a separate notice, was irregular.
(iv) A re-inspection of the manufacturing premises was conducted on 05.08.2014. It was observed that the firm had neither submitted a reply nor produced the complete record as directed. During this re-inspection, it was alleged that huge discrepancies were found in the record of manufacturing, testing, and distribution. Allegations were made that the record was tampered with at certain places, including misleading entries and corrections made with fluid. The firm allegedly failed to explain these discrepancies satisfactorily.
(v) Consequent to these findings, the Drug Inspector seized the drug and corresponding documents in Form-16 on 05.08.2014 for alleged contravention of Sections 18(a)(vi) and 18-B of the Act. The seized items included 24.990 Kg of Pseudoephedrine Hydrochloride I.P. in a blue coloured PVC drum, along with numerous documents, including invoices, a register (pages 1 to 29 of the Pseudoephedrine register), and Batch Production Records (BPRs) for various batches of Eudocet tablets. On the same day (05.08.2014), a separate letter (Annexure R-1/PE) was issued to the firm, requiring them again to submit information, records, and documents under various Sections, including 22(l)(cca), 18-B, and 22(3), within 15 days. The Respondent asserted that the Appellants never responded to this notice.
(vi) On 06.08.2014, the Respondent moved an application before the learned Chief Judicial Magistrate, Nahan, for custody orders in terms of Section 23(5)(b) and (6) of the Act. The learned Judicial Magistrate, Nahan, granted the custody orders. The Appellants, however, consistently asserted that while the seized drug (the PVC drum) was
