Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

    CRIMINAL APPEAL NO.             OF 2023
S. ATHILAKSHMI      ……Appellant(s)
       THE STATE REP. BY THE DRUGS          ..…Respondent(s)
Leave granted.
2.  The   Appellant   before   this   Court   is   a   registered   medical
practitioner who is presently working as an Associate Professor
and the Head of Dermatology Department, in the Government
Omandurar Medical College, Chennai. In the past, she has held
the post of Assistant Professor and Civil Surgeon at Royapettah
Medical College.     It is permissible for her under the law to
practice medicine when she is not performing her official duties.
The Appellant, in her individual and independent capacity was
carrying on her medical practice at a premises which is No. 87,
Red Hills Road (North), Villivakkam, at Chennai.  It is here that
she could be consulted and where she meets and examines her
3.  An   inspection   was   made   on   the   above   premises   by   the
Drugs   Inspector,   Villivakkam   Range   on   16.03.2016.   As   per
inspection   report,   the   Drugs   Inspector   found   the   following
medicines in the inner room of her premises. 
S No. Name of Drug Quantity M.R.P (Rs.)
1. Denidol Lotion
1 No. 198.50
2. Salico Lotion 30ml 4 Nos. 75/30 ml.
3. A­CN Gel 20 gms 1 No. 98/20gms
4. Tebir Gel 10 gms 9 Nos. 47.90/10gms
5. Soltop­S.6% Lotion (30ml) 4 Nos. 125/30ml
6. Mycotin Cream 15 gms 3 Nos. 115/15gms
7. Mopry 2% Ointment 4 Nos. 75.60/5gms
8. Momtop­S Ointment 
1 No. 145/10gms
9. ESM Cream (10gms) 4 Nos. 76/10gms
10. Nu­Whitified Ointment 
7 Nos. 40/20gms
11. Momesone Cream (15gms) 3 Nos. 82/15gms
12. Sudif Cream (10gms) 4 Nos. 99/10gms
13. CAP Gel (15gms) 1 No. 156/15gms
14. Kenozole Cream (30gms) 2 Nos. 130/30gms
15. Soltop­S 3% Ointment 1 No. 125/30gms
16. Zylo AC gel 2.5% (20gms) 1 No. 99.74/30gms
17. Ketzi cream (30gms) 1 No. 99.47/30gms
18. Ketoff lotion (60ml) 2 Nos. 150/60ml
The   Drugs   Inspector   also   referred   to   certain   sale   bills   of
medicines which are as follows:
Bill No. & Date Name of the Drug Qty. Sold
1 409 dated 
Mycotin Cream
Nufoce Power
Certrezol – L tablets
1 No.
1 No. 
10 Tablets
2 423 dated 9/03/2016 Certivera Lotion
ESM Cream
ILor or Tablets
Cetrezol L Tablets
1 No.
1 No.
10 Tablets
10 Tablets
3 426 dated 
Adixied Tablets
AFK Lotion
CAN Soap
Zit care Tablets
2 Strips
1 No.
1 No.
1 No.
2 strips
4 424 dated 9/03/2016 P Scab Lotion
1 for Tablets
Loxip Tablets
1 No.
10 Tablets
10 Tablets
5 428 dated 
Cultivera Location
Momesone Cream
Cetrezol – L tablets
1 No.
1 No.
10 Tablets
4. The Drugs Inspector thereafter moved an application for
obtaining   sanction   from   the   office   of   the   Director   of   Drugs
Control, Tamil Nadu, Chennai­06 on 22.09.2016 which was given
to him on 23.01.2018. Consequently, the Drugs Inspector filed a
complaint before the Court of X Metropolitan Magistrate, Egmore,
for prosecuting the Appellant under Section 18(c) of the Drugs
and Cosmetics Act, 1940 punishable under Section 27(b)(ii) of the
5. Aggrieved   by   these   proceedings,   the   Appellant   filed   an
application under Section 482 of the Code of Criminal Procedure,
1973 before the High Court of Madras for quashing the criminal
proceedings. Her petition was dismissed by the Ld. Single Judge
on 21.06.2022. Aggrieved by this, the Appellant has filed Special
Leave Petition before this Court against the order of the Single
6. Under   Section   18   of   Drugs   and   Cosmetics   Act   1940,   a
prohibition has been imposed as to the manufacture, sale etc. of
certain drugs and cosmetics.  Section 18 reads as follows:
18.   Prohibition   of  manufacture   and   sale   of   certain   drugs
and cosmetics. —    From such date as may be fixed by the
State Government by notification in the Official Gazette in this
behalf, no person shall himself or by any other person on his
(a) …………………………………..
(b) [sell or stock or exhibit or offer for sale,] or distribute
any drug   [or cosmetic] which has been imported or
manufactured in contravention of any of the provisions
of this Act or any rule made thereunder;
(c) [manufacture for sale or for distribution, or sell, or
stock or exhibit or offer for sale,] or distribute any drug
[or cosmetic], except under, and in accordance with the
conditions of, a licence issued for such purpose under
this Chapter: 
Provided that nothing in this section shall apply to the
manufacture, subject to prescribed conditions, of small
quantities of any drug for the purpose of examination,
test or analysis: 
Provided   further   that   the   [Central   Government]   may,
after consultation with the Board, by notification in the
Official   Gazette,   permit,   subject   to   any   conditions
specified in the notification, the [manufacture for sale or
for distribution, sale, stocking or exhibiting or offering
for sale] or distribution of any drug or class of drugs not
being of standard quality.
The punishment for contravention of Section 18(c) is provided
under Section 27(b)(ii) which reads as follows:
27.   Penalty   for   manufacture,   sale,   etc.,   of   drugs   in
contravention of this Chapter—  Whoever, himself or by any
other   person   on   his   behalf,   manufactures   for   sale   or   for
distribution, or sells, or stocks or exhibits or offers for sale or
(a) xxxxxxxxxxxxxxxxxx
(b) any drug –
(i) xxxxxxxxxxxxxxxxxx
(ii) without a valid licence as required under clause (c) of
section 18, shall be punishable with imprisonment for a term
which   shall   [not   be   less   than   three   years   but   which   may
extend to five years and with fine which shall not be less than
one   lakh   rupees   or   three   times   the   value   of   the   drugs
confiscated, whichever is more]: 
Provided   that   the   Court   may,   for   any   adequate   and
special   reasons   to   be   recorded   in   the   judgment,   impose   a
sentence of imprisonment for a term of [less than three years
and of fine of less than one lakh rupees]; 
7. As we can see the prohibition under Section 18(c) is on the
manufacturing, distribution, stocking or exhibition of medicines
for the purposes of sale. The charge in the present case is that
the   Appellant   had   “stocked”   medicines   for   “sale”.   The   entire
emphasis is on “sale” of these medicines. This is evident from the
sanction being sought by the Drug Inspector from the office of the
Director, Drugs Control, Tamil Nadu wherein as per the sanction
letter   dated   23.01.2018,   he   had   said   that   the   Appellant   be
prosecuted for the contravention of:
“Section 18(c) of Drugs and Cosmetics Act 1940 for having ∙stocked
drugs for sale and sold the drugs without having a valid drug
license, which is punishable under section 27(b)(ii) of the said Act”.
Thus, as per the prosecution she had stocked the drugs and sold
them. What the Director of Drugs Control and the High Court lost
sight of is the fact that the Appellant is a registered medical
practitioner, her area of specialization being dermatology. She
has an M.D. (DVL) degree in this specialisation. It is not a case
that she had opened a shop in her premises from where she was
selling drugs and cosmetics across the counter! It is possible that
she was distributing these drugs to her patients for emergency
uses and thus she is protected by the Act itself. Schedule (K)
which is a part of the Drugs and Cosmetics Rules, 1945 provides
an exemption which we shall examine hereafter. 
8. Under Section 33 of the Act, the Central Government can
make rules which have to be laid before the Parliament for its
ratification under Section 38 of the Act. These rules have been
framed which is known as Drugs and Cosmetics Rules, 1940.
Rule 123 of the rules exempts certain drugs from the provisions
of Chapter IV of the Act (which includes both Section 18 and
Section 27 referred above, which are penal provisions), under
certain conditions Rule 123 reads as under: 
“123. The drugs specified in Schedule K shall be exempted from
the   provisions   of   Chapter   IV   of   the   Act   and   the   rules   made
thereunder to the extent and subject to the conditions specified in
that Schedule.”
Entry No. 5 under Schedule (K) are the drugs which are supplied
by a registered medical practitioner with which we are presently
concerned.     The   relevant   provision   of   Schedule   (K)   reads   as
Schedule K
(See Rule 123)
Class of Drugs Extent   and   Conditions   of
1.xxxxxxxxxxxx xxxxxxxxxxxxxxxxx
2. xxxxxxxxxxx xxxxxxxxxxxxxxxxx
3. xxxxxxxxxxx xxxxxxxxxxxxxxxxx
4. xxxxxxxxxxx xxxxxxxxxxxxxxxxx
5.   Drugs   supplied   by   a   registered
medical   practitioner   to   his   own
patient   or   any   drug   specified   in
Schedule C supplied by a registered
medical practitioner at the request of
another   such   practitioner   if   it   is
specially prepared with reference to
the condition and for the use of an
individual   patient  provided   the
registered medical practitioner is not
(a)   keeping   an   open   shop   or   (b)
selling   across   the   counter   or  (c)
engaged   in   the   importation,
manufacture, distribution or sale of
drugs   in   India   to   a   degree   which
render him liable to the provisions of
Chapter IV of the Act and the rules
All the provisions of Chapter
IV of the Act and the Rules
made   thereunder,   subject   to
the following conditions:
  [1.   The   drugs   shall   be
purchased only from a dealer
or   a   manufacturer   licensed
under   these   rules,   and
records   of   such   purchases
showing   the   names   and
quantities   of   such   drugs,
together   with   their   batch
numbers   and   names   and
addresses   of   the
manufacturers   shall   be
maintained.   Such   records
shall be open to inspection by
an Inspector appointed under
the   Act,   who   may,   if
necessary,   make   enquiries
about purchases of the drugs
and   may   also   take   samples
for test.] 
2.   In   the   case   of   medicine
containing   a   substance
specified in [Schedule G, H or
X] of the following additional
conditions shall be complied
a.   the   medicine   shall   be
labelled with the 
name   and   address   of   the
registered   medical
practitioner   by   whom   it   is
b.   if   the   medicine   is   for
external   application,   it   shall
be   labelled   with   the   words
[***]   “For external use only” ―
or, if it is for internal use with
the dose; 
c. the name of the medicine or
ingredients of the preparation
and   the   quantities   thereof,
the dose prescribed, the name
of the patient & the date of
supply and the name of the
person   who   gave   the
prescription shall be entered
at   the   time   of   supply   in
register to be maintained for
the purpose; 
d.   the   entry   in   the   register
shall be given a number and
that number shall be entered
on the label of the container;
  e.   the   register   and   the
prescription, if any, on which
the medicines are issued shall
be preserved for not less than
two years from the date of the
last   entry   in   the   register   or
the  date  of  the  prescription,
as the case may be.
3.   The   drug   will   be   stored
under   proper   storage
conditions as directed on the
4. No drug shall be supplied
or dispensed after the date of
expiration of potency recorded
on   its   container,   label   or
wrapper or in violation of any
statement   or   direction
recorded   on   such   container,
label or wrapper.]
(emphasis supplied)
It is not the case of the prosecution that the Appellant was selling
drugs from an open shop across the counter. She is a senior
doctor who is engaged as an Associate Professor and Head of
Department, Dermatology in a Government Medical College, and
being a medical practitioner, under certain conditions, she is also
protected under the law which has been referred to above. 
9. Considering the small quantity of medicines, most of which
are in the category of lotions and ointments, it cannot be said by
any stretch of imagination that such medicines could be ‘stocked’
for sale and would come in the category of stocking of medicines
for the purpose of sale.   When small quantity of medicine has
been found in the premises of a registered medical practitioner, it
would not amount to selling their medicines across the counter
in an open shop. In fact, this is not even the allegation against
the Appellant. Undoubtedly, the provisions of Section 18 and 27
are   relevant   provisions   under   the   law,   which   have   a   social
purpose,   which   is   to   protect   ordinary   citizens   from   being
exploited  inter alia,  by unethical medical practitioners, and for
this reason the punishment under Section 27 can extend up to 5
years under the law, and has a minimum punishment of 3 years.
But   given   the   facts   and   circumstances   of   the   case   and
considering   that   the   Appellant   is   a   registered   medical
practitioner, along with the fact that the quantity of medicines
which have been seized is extremely small, a quantity which can
be easily found in the house or a consultation room of a doctor,
in our considered view no offence is made out in the present
case. In fact, an exception has been created under Schedule ‘K’
read with Rule 123 to the rules, the appellant ought to have been
given   the   benefit   of   these   provisions   and   such   a   registered
medical practitioner should not have been allowed to face a trial
where in all likelihood the prosecution would have failed to prove
its case beyond reasonable doubt.  The learned single judge while
dismissing   the   application   under   Section   482   Cr.P.C   of   the
appellant has relied upon a decision of this Court: 
"9. It is too late in the day to seek reference to any authority for
the proposition that while invoking the power under Section
482 Cr.P.C. for quashing a complaint or a charge, the Court
should not embark upon an enquiry into the validity of the
evidence   available.   All   that   the   Court   should   see   is   as   to
whether there are allegations in the complaint which form the
basis   for   the   ingredients   that   constitute   certain   offences
complained of The Court may also be entitled to see {i) whether
the preconditions requisite for taking cognizance have been
complied with or not; and {ii) whether the allegations contained
in   the   complaint,   even   if   accepted   in   entirety,   would   not
constitute the offence alleged
13. A look at the complaint filed by the appellant would show
that the appellant had incorporated the ingredients necessary
for prosecuting the respondents for the offences alleged. The
question   whether   the   appellant   will   be   able   to   prove   the
allegations in a manner known to law would arise only at a
later stage ... ... ........ ..... "
10. But what the High Court failed to consider, however, is the
provisions contained in Rule 123 read with Schedule ‘K’ to the
1945   Rules   and   when   admittedly   it   is   not   the   case   of   the
prosecution that the drugs which were seized were being sold in
an open shop across the counter. Since this was not being done
as visualized above, and an exception is created under the law in
favour   of   the   medical   practitioner   where   the   drugs   given   in
Schedule ‘K’ would be exempted from the purview of Chapter 4 of
the Act, we are of the considered view that prosecution against
the Appellant is unwarranted. 
11. The backbone of the Respondent’s case is the sales bills
with   the   list   of   18   drugs   seized   from   the   premises   of   the
Appellant. However, the details of the sales bills and seized drugs
in the Show Cause Notice issued by the Respondent it is seen
that the sales bills are not even for the medicines which have
been seized by the Respondent. 
12. On the contrary, upon being served with the Show Cause
Notice, the Appellant was directed, under Section 18­A, to reveal
the name and addresses of persons from whom she obtained the
drugs which were seized. In compliance with the same, Appellant
has produced multiple invoices from pharmaceutical shops to
show her bonafides. Further, upon inspection of the drugs by the
Drugs Testing Laboratory, Tamil Nadu they returned a finding
that the drugs were of ‘standard quality’ which indicates it is not
a case where the Appellant was operating a shop to sell spurious
medicines over the counter.  
13. Another factor which must be considered is that the search
was carried out on 16.03.2016 and sanction for prosecution was
sought on 22.09.2016 and the sanction ultimately was given on
23.01.2018. There is no explanation which has been given for
this delay in getting the approval. In the recently decided case of
Hasmukhlal   D.   Vohra   and   Anr.   v.   State   of   Tamil   Nadu1
criminal proceedings were quashed against a Petitioner on the
grounds that the substance in question was not a drug under
Indian Pharmacopoeia. One of the considerations was the delay
in the proceedings against which the following observations were
1 2022 SCC OnLine SC 1732
‘25. In the present case, the Respondent
has   provided   no   explanation   for   the
extraordinary   delay   of   more   than   four
years between the initial site inspection,
the show cause notice, and the complaint.
In fact, the absence of such an explanation
only   prompts   the   Court   to   infer   some
sinister   motive   behind   initiating   the
criminal proceedings.
26. While   inordinate   delay   in   itself   may
not be ground for quashing of a criminal
complaint,   in   such   cases,   unexplained
inordinate delay of such length must be
taken into consideration as a very crucial
factor as grounds for quashing a criminal
27. While this court does not expect a fullblown   investigation   at   the   stage   of   a
criminal complaint, however, in such cases
where the accused has been subjected to
the   anxiety   of   a   potential   initiation   of
criminal proceedings for such a length of
time, it is only reasonable for the court to
expect   bare­minimum   evidence   from   the
Investigating Authorities.’
14. The   sanction   for   prosecution   given   in   the   present   case
appears, prima facie, to suffer from the vice of non­application of
mind. There is no reference to any of the documents, evidence or
the submissions submitted by either of the parties, no reasons
assigned or even an explanation pertaining to the delay which
indicates it has been passed in a mechani cal manner. This
Court in the case of Mansukhlal Vithaldas Chauhan v. State
of   Gujarat2
,   highlighted   the   importance   of   a   prior   sanction
granted under Section 197 of the Code of Criminal Procedure,
1973 while quashing the criminal proceedings instituted against
a   Divisional   Accountant   engaged   with   the   Medium   Irrigation
Project Division, Gujarat. It was observed as follows:
‘19. Since   the   validity   of   “sanction”
depends on the applicability of mind by
the sanctioning authority to the facts of
the case as also the material and evidence
collected   during   investigation,   it
necessarily   follows   that   the   sanctioning
authority   has   to   apply   its   own
independent   mind  for  the   generation   of
genuine satisfaction whether prosecution
has to be sanctioned or not.’
15. The possession of the drugs is not disputed in this case by
either side. However, this Court in the case of Mohd. Shabir v.
State  of  Maharashtra3
  while allowing an appeal in part and
directing the release of an Appellant who had been prosecuted
under the provision 18(c) of the 1940 Act, this Court observed
that possession simpliciter would not itself be an offence but the
prosecution had to prove the essential ingredient under Section
2 (1997) 7 SCC 622
3 (1979) 1 SCC 568
27 which was that even a ‘stock’ of the medicine was for sale. It
was observed as follows:
‘4.   …We,   therefore,   hold   that   before   a
person   can   be   liable   for   prosecution   or
conviction   under   Section   27(a)(i)(ii)   read
with Section 18(c) of the Act, it must be
proved   by   the   prosecution   affirmatively
that he was manufacturing the drugs for
sale   or   was   selling   the   same   or   had
stocked them or exhibited the articles for
sale.   The   possession   simpliciter   of   the
articles does not appear to be punishable
under any of the provisions of the Act. If,
therefore,   the   essential   ingredients   of
Section   27   are   not   satisfied   the   plea   of
guilty cannot lead the Court to convict the
16.   The sanctioning authority had not examined at all whether
a practising doctor could be prosecuted under the facts of the
case,   considering   the   small   quantity   of   the   drugs   and   the
exception created in favour of medical practitioner under Rule
123, read with the Schedule “K”.  All these factors ought to have
been   considered   by   the   sanctioning   authority.   Under   these
circumstances we allow this appeal and set aside the order of
the learned Single Judge of the Madras High Court and quash
the criminal proceedings in Criminal Case No. 7315 of 2018 on
the file of X Metropolitan Magistrate, Egmore, Chennai. 
…....…...………….………………. J.
         (Krishna Murari)
…………….....……………………. J.
                (Sudhanshu Dhulia)
New Delhi, 
March 15, 2023.


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