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Supreme Court Draws Line: Drug Record Violations Under Chapter IV Belong in , Not
In a significant clarification on jurisdictional boundaries in pharmaceutical prosecutions, the has ruled that offences under Chapter IV of the —including failures in maintaining manufacturing records—cannot be tried by a . A bench comprising Justice Vipul M. Pancholi and Justice Prashant Kumar Mishra dismissed an appeal by M/s SBS Biotech and its partners against the , upholding criminal proceedings initiated over alleged record-keeping lapses with the habit-forming drug Pseudoephedrine. The verdict, delivered on ( ), reinforces that such cases demand the gravitas of a or higher.
From Factory Floor Inspection to Supreme Court Showdown
The saga began on , when a raided the premises of M/s SBS Biotech—a partnership firm manufacturing pharmaceuticals in Kala Amb, Sirmaur district, Himachal Pradesh. Licensed under Forms 25 and 28, the firm was accused of flouting (good manufacturing practices) and (manufacturing records particulars), particularly for Pseudoephedrine Batch No. 503413 sourced from Neha Pharma Pvt. Ltd.
Inspectors noted incomplete entries for receipt, missing consumption records, and later—during a re-inspection on —discrepancies, tampering (including fluid-erased corrections), and manipulations in batch production records (BPRs) for Eudocet tablets. The firm allegedly ignored directives under and 18-B to produce full records. Seizures followed in Form-16: 24.990 kg of the drug and sundry documents.
After delays—including late notification to the and eventual sanction on —a complaint (No. 36/3 of 2017, renumbered No. 9 of 2017) was filed on , alleging contraventions of , 22(1)(cca) , and 18-B , punishable under and 28-A . was taken on , by the , who committed the case to on . The dismissed quashing pleas on , prompting the SLP.
Key questions: Was the complaint barred by the one-year limitation under for offences, or covered by the three-year period for Section 27(d) ? And could a Magistrate try it summarily under , or did mandate Sessions jurisdiction?
Pharma Firm's Defence: 'Minor Lapses, Wrong Court, Too Late'
Appellants, including Production Head Sanjeev Kumar Santoshi and partner Avinash Banga, argued the lapses were mere record-keeping issues under , punishable mildly under (up to one year), triggering a one-year limitation—long expired by the 2.5-year-old complaint. They distinguished Section 18(a)(vi) (prohibiting manufacture/sale in contravention of Chapter IV/Rules) as inapplicable to documentation alone, invoking and for time-barred precedents.
They further claimed 's bar on inferior courts yields to 's summary trial provision for <3-year punishments (not spurious/adulterated cases), urging Magistrate jurisdiction via the " " in 36-A . to Special Judge was "illegal."
State's Counter: Serious Contraventions, Sessions' Turf
The State painted a graver picture: beyond non-maintenance, there was tampering, misleading entries, "heavy misuse" of the habit-forming drug, unaccounted sales, and manufacturing/testing violations. This squarely hit (mandating records for 5 years) and Section 27(d) (1-2 years imprisonment), attracting three-year limitation. Non-response to notices compounded Section 22(1)(cca) breaches.
Jurisdiction? unequivocally bars Magistrates for Chapter IV offences; explicitly excludes Sessions/Special Court cases. The High Court's reliance on stood unchallenged in context.
Parsing Provisions: Why Trumps All
The Court meticulously dissected the Act. Section 18(a)(vi) prohibits manufacturing/selling drugs contravening Chapter IV or Rules—like 's documentation mandates (Clause 12) and 's raw material/batch records. Violations, including those alleged (discrepancies, tampering, misuse), trigger Section 27(d) 's 1-2 year penalty, filing within three years under . The 2 years 6 months timeline cleared it.
Distinguishing precedents: Unlike
Miteshbhai
and
Cheminova
, where complaints lagged beyond three years, here it was timely. On jurisdiction,
(
"no court inferior to... Sessions"
) overrides;
carves out exclusions for Sessions/Special Courts under
36-AB
(adulterated/spurious focus notwithstanding).
/
orders referenced
27(d)
sufficiently, clerical slips aside.
As LiveLaw reported, the bench underscored: Chapter IV's rigour demands Sessions-level scrutiny, aligning with the Act's public health safeguards.
Key Observations
"From the aforesaid provisions... no person can manufacture... any drug or cosmetic in contravention of any provisions of Chapter IV or any Rule made thereunder."(Para 23)
"Thus, when the allegations are levelled for commission of the offence punishable under Section 18(a)(vi) of the Act, the same is punishable under Section 27(d) of the Act."(Para 27)
"specifically excludes the offences triable by the Special Court underorunder this Act from the purview of."(Para 32(ii))
"Hence, learned JMFC has rightly committed the case to theand thereby has not committed illegality."(Para 32(iii))
Appeal Dismissed: Proceedings March On
The Court dismissed the appeal, affirming the High Court's refusal to quash. No interference warranted.
This ruling fortifies prosecutorial timelines and jurisdictional silos in drug law enforcement, ensuring minor-seeming record slips in manufacturing don't evade Sessions oversight. Pharma firms must now brace for escalated scrutiny, with Magistrates sidelined for Chapter IV matters—potentially streamlining serious cases while upholding accountability in a sector prone to misuse.
