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2026 Supreme(All) 452

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW
RAJEEV BHARTI, J.
Varun Lat (Lath) – Appellant 
Versus
State of U.P. Thru. Prin. Secy. Home Deptt. Lko. – Respondent 
CRIMINAL MISC. BAIL APPLICATION No. - 1908 of 2026
Decided on : 08-06-2026

Advocates Appeared:
For the Appellant : Ayodhya Prasad Mishra A.p. Mishra, Rituraj Mishra, Shesh Ram Verma
For the Respondent: Shri Anoop Trivedi, AAG. Shri Alok Tiwari, A.G.A.

Possession of a valid wholesale drug license does not exempt an accused from prosecution under special narcotics legislation when there is evidence of unauthorized diversion of codeine-based preparations for non-therapeutic, intoxicating purposes, particularly when the volume involved constitutes a commercial quantity subject to strict bail conditions.

Headnote:(A) Narcotic Drugs and Psychotropic Substances Act, 1985 - Sections 8, 9, 21, 37 - Drugs and Cosmetics Act, 1940 - Bail application - Codeine-based cough syrup - Commercial quantity - Possession of a valid wholesale drug license does not provide absolute immunity from prosecution under special narcotic legislation when illicit diversion for non-medicinal purposes is alleged. (Paras 34-36, 44, 48)

(B) Arrest procedure - Communication of grounds of arrest - It is necessary to provide grounds in writing or via oral communication with sufficient time before remand; however, procedural non-compliance acts as a relevant factor for trial but does not automatically mandate bail if substantial grounds for detention exist and no specific prejudice is shown. (Paras 45, 46)

(C) Bail - Commercial quantity - Rigors of Section 37 apply to essential narcotics - The Court must have reasonable grounds to believe the accused is not guilty and is not likely to commit the offense while on bail; a liberal approach is not warranted for commercial quantities. (Paras 47-50)

Facts of the case:
The applicant, a wholesale medicine business owner, was arrested for the alleged illicit procurement and large-scale diversion of codeine-containing cough syrup for non-medicinal, intoxicating use. The prosecution contended that the quantity involved reached a commercial threshold and violated both drug regulations and special narcotic laws. The applicant claimed that holding a valid drug license and the nature of the medicinal preparation precluded the application of the special narcotic statute.

Findings of Court:
The court found that the quantity of diverted material constituted a commercial quantity based on the total weight of the mixture. It held that administrative drug licenses for pharmaceutical commerce do not grant immunity against criminal allegations of drug trafficking or illegal diversion.

Issues: Whether a licensed drug wholesaler is exempt from prosecution under special narcotics legislation for the unauthorized diversion of regulated mixtures, and whether procedural irregularities regarding the communication of arrest grounds warrant immediate bail.

Ratio Decidendi: Possession of a medical business license does not permit the unauthorized diversion of regulated substances for intoxicant use, as regulatory statutes operate in addition to, and not in derogation of, special drug legislation. Furthermore, bail under the strict provisions of the special legislation requires satisfying the twin conditions prescribed, which remain unsatisfied given evidence of systematic diversion involving commercial quantities.

Result: Bail application rejected.

Table of Content
1. overview of the prosecution's case and investigation findings regarding illegal medical store operations. (Para 1 , 2 , 3 , 4 , 5 , 8)
2. arguments concerning valid drug licensing, exemption from ndps act for codeine-based syrup, and procedural irregularities in arrest. (Para 6 , 7 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23)
3. state opposition citing systematic diversion of commercial quantities of drugs and applicability of section 37 ndps act. (Para 24 , 25 , 26 , 27 , 28 , 29)
4. statutory analysis of the ndps act, drug and cosmetics act, and the definition of manufactured drugs. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40)
5. regulation of codeine-based preparations under ndps when diverted for non-medicinal purposes. (Para 41 , 42 , 43 , 47 , 48 , 49)
6. prima facie evaluation of evidence regarding illicit diversion and compliance with communication of arrest grounds. (Para 44 , 45 , 46 , 50)
7. conclusion of bail proceedings and final order of rejection. (Para 51 , 52 , 53)

JUDGMENT :

RAJEEV BHARTI, J.

1. Heard Shri Ayodhya Prasad Mishra, learned counsel for the applicant, Shri Anoop Trivedi, learned Additional Advocate General who has appeared through Video Conferencing, assisted by Shri Alok Tiwari, learned AGA, and perused the record.

2. This is first bail application filed on behalf of the applicant who is involved in Case Crime No. 244 of 2025, under Sections 8/21/29 of the N.D.P.S. Act, Police Station- Tulsipur, District Balrampur.

3. The prosecution case in brief is that the informant Shri Sumit Kumar Verma, Drug Inspector submitted a written report to the SHO, Police Station Tulsipur stating that he is posted as Drug Inspector in District Gonda and is also holding additional charge of District Balrampur. Pursuant to the directions received from the Headquarter of Food Safety and Drug Administration, UP, Lucknow, Shri Shrikant Gupta, Drug Inspector inspected M/s Ashok Medical Store, Tulsipur, Balrampur on 16.10.2025. During the inspection, the proprietor of the firm Shri Ashok Kumar Lath was present and produced drug sale license bearing No. UP 4720800175 and UP 4721800175, which were valid up to 31.12.2026. During the inspection, he was required to produce purchase and sale invoices relating to ‘codeine-based medicine, Codeiva 100 ml and Proxiwim Spas capsules’ for the periods from 01.04.2024 to 31.03.2025 and from 01.04.2025 to 11.10.2025, as per the list supplied by the Headquarters. However, the same were not produced at the spot.

4. Consequently, he was directed to furnish the said invoices, considering the deficiencies found during inspection. The purchase and sale operations of the firm were suspended under Section 21(1)(d) of the Drugs and Cosmetics Act, 1940 until further orders. Thereafter, Shri Ashok Kumar produced certain purchase invoices relating to the aforesaid medicines.

5. Upon scrutiny of the purchase and sale records, it was found that the complete details relating to procurement and disposal of Codeiva cough syrup 100 ml and Proxiwim Spas capsules had not been furnished.

6. It is further submitted that not only above, the prosecution has tried to implicate the applicant in the present case on the basis of some affidavit taken under pressure from the applicant stating therein that he purchased some of cough syrup from M/s. Ashok Medical Store situated in Nai Bazar, Tulsipur, District- Balrampur and without providing any sale bill to the drug inspector. It has been presumed that the cough syrup purchased by applicant firm was diverted for other work than medicinal purposes assuming that he is guilty of the offence as provided under NDPS Act, that's why he has been sent to jail in the present case only with the presumption suspicion and imagination that the same was sold to the person other than medicinal purposes which was absolutely false, incorrect and erroneous presumption of the prosecution of the applicant.

7. It is also significant to mention

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