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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
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.
Court's Key Observations:
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. (!) (!)
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. (!) (!) (!)
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). (!) (!)
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. (!) (!) (!)
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. (!) (!) (!) (!)
High Court committed no error in dismissing Section 482 Cr.P.C. quashing petition; proceedings disclose triable offences requiring trial, not quashing at threshold. (!)
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:
(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
Seizure of drugs for violation of legal provisions – A genuine complaint cannot be quashed without trial.
Directors are liable under the Drugs and Cosmetics Act for the conduct of the company's business, and summoning orders require only a prima facie case without extensive procedural scrutiny.
Non-compliance with statutory provisions and resignation of the accused from the company absolved him of liability, leading to the quashing of the proceedings.
Conviction under drug regulation provisions requires proving non-compliance, highlighting the importance of disclosing the manufacturer's details for legal protection.
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