Drugs And Cosmetics Act| S. 36-A Not Applicable Where S. 32(2) Applies: Supreme Court Denies Relief To Pharma Company Accused Of Violations

The Court was hearing an appeal challenging the High Court’s refusal to quash criminal proceedings initiated against a pharmaceutical manufacturing firm and its officials for alleged violations of statutory record-keeping requirements under the Drugs and Cosmetics Act, 1940.

A Bench of Justice Prashant Kumar Mishra and Justice Vipul M. Pancholi, dismissing the appeal, observed that “when Section 32(2) specifically provides for offence to be tried by the Courts not inferior to the Court of Sessions, Section 36-A would not be applicable to the facts of the present case.”

Background

The appellants, a pharmaceutical manufacturing firm and its officials, were prosecuted for alleged contraventions of Sections 18(a)(vi), 18-B and 22(1)(cca) of the Drugs and Cosmetics Act, read with the relevant Rules, punishable under Sections 27(d) and 28-A.

The prosecution case originated from an inspection conducted by a Drug Inspector, during which it was alleged that the firm had not maintained mandatory records as required under Schedule M and Schedule U and had failed to furnish complete documentation despite directions.

Following re-inspection and seizure of records and drug stock, prosecution sanction was granted, and a criminal complaint was filed before the Judicial Magistrate First Class, who took cognisance and later committed the case to the Special Judge on the ground that the offence was triable by a Sessions Court.

The appellants challenged the proceedings before the High Court, contending that the offences were punishable with imprisonment up to one year and therefore triable summarily by a Magistrate under Section 36-A, and that the complaint was barred by limitation. The High Court rejected these contentions, leading to the present appeal.

Court’s Observation

The Supreme Court examined the statutory framework governing offences under the Act, particularly Sections 18, 18-B, 27(d), 28-A, 32(2), 36-A and 36-AB. It noted that Section 18 prohibits the manufacture or sale of drugs in contravention of Chapter IV or rules framed thereunder, while Section 18-B mandates the maintenance of prescribed records.

The Court observed that allegations in the complaint specifically referred to failure to maintain required manufacturing and transaction records and discrepancies in documentation, which attracted liability under Section 18(a)(vi) and consequently punishment under Section 27(d).

It further held that offences punishable under Section 27(d) carry imprisonment of up to two years, thereby attracting a limitation period of three years under Section 468 Cr.P.C. Since the complaint had been filed within this period, the plea of limitation was rejected.

The counsel for the appellants argued that, read together, Sections 32(2), 36-A and 36-AB require offences punishable up to three years and not involving spurious or adulterated drugs to be tried by a Magistrate under Section 36-A, and that the High Court erred in holding such offences triable by a Sessions or Special Court.

Addressing the argument regarding the forum of trial, the Court analysed Section 32(2), which bars courts inferior to a Court of Session from trying offences under Chapter IV, and contrasted it with Section 36-A, which provides for summary trial of certain offences punishable with imprisonment not exceeding three years but expressly excludes offences triable by Sessions Courts or Special Courts.

The Bench held that the statutory scheme makes it clear that offences falling within Chapter IV and triable by a Sessions Court cannot be shifted to summary trial merely because the maximum punishment is less than three years. It concluded that the Magistrate had rightly committed the case to the Sessions Court and that no illegality had been committed.

The Court also rejected reliance placed by the appellants on earlier decisions, holding that those judgments dealt with complaints filed beyond limitation and were therefore distinguishable on the facts.

Conclusion

The Supreme Court held that the High Court had not committed any error in refusing to quash the complaint and that the prosecution was legally maintainable. It found no ground for interference with the impugned judgment.

Accordingly, the appeal was dismissed.

Cause Title: M/s SBS Biotech & Others v. State of Himachal Pradesh (Neutral Citation: 2026 INSC 171)

Appearances

Petitioners: Advocates Sanjay Jain, Akshay Jain, Govind Rishi, Ashwarya Sinha, AOR

Respondent: Kartikeya Rastogi, DAG; Advocates Inderdeep Kaur Raina, Ranjeet S, Rohit Bansal, AOR

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