Section 18(a)(vi) Drugs & Cosmetics Act| Altering Or Breaking Up Drugs For Further Sale Or Distribution Allowed If Parties Hold A Licence For Manufacture: SC
The Supreme Court set aside the High Court’s Order which set aside the Appellant’s petition to quash the criminal case.
The Supreme Court has held that Section 18(a)(vi) of the Drugs and Cosmetics Act does not prohibit the process of altering or breaking up a drug/medicine for further sale or distribution if parties hold a ‘licence for manufacture’.
The Court set aside the decision of the Andhra Pradesh High Court, which had dismissed the Petition filed by M/s. INOX Air Products Private Limited (Appellant) under Section 482 of the CrPC to quash the case.
A Bench of Justice BR Gavai and Justice Augustine George Masih held “It could be seen that the term ‘manufacture’ as defined in the said Act is firstly inclusive and secondly wide enough to include any process or part of process from making, altering, ornamenting, finishing, packing, labelling, breaking up or otherwise treating or adopting any drug or cosmetic with a view to its sale or distribution. What is excluded from the definition is the compounding or dispensing of any drug, or the packing of any drug or cosmetic, in the ordinary course of retail business.”
Senior Advocates Abhishek Manu Singhvi and S. Niranjan Reddy represented the Appellants, while Advocate Prerna Singh appeared for the Respondent.
Brief Facts
The Trial Court issued summons against the Appellant based on the complaint by the Drug Inspector who alleged that the Appellant was selling drugs to an unlicensed firm in violation of: Section 18(a)(vi) of the Drugs and Cosmetics Act, 1940 (the Act), Rule 65(5)(1)(b) of the Drugs and Cosmetics Rules, 1945 (Rules) punishable under Section 27(d) of the Act.
Court’s Reasoning
The Supreme Court explained that a “plain and literal” interpretation of the term ‘manufacture’ under the Act permits parties to alter, break up and pack a product in a smaller container and even authorised them to further sell the same by wholesale dealings.
“Only in the absence of any licence with accused No.3 which permitted it to further sell and distribute the product received from appellant No.1, sale of the product by appellant No.1 to it would have contravened the provisions of Section 18(a)(vi) and constituted an offence punishable under Section 27(d) of the said Act,” it explained.
The Court held that “the term manufacture is an inclusive term and has a wide scope. It includes any process or part of a process for making, altering, ornamenting, finishing, packing, labelling, breaking up or otherwise treating or adopting any drug or cosmetic with a view to its sale or distribution.”
Therefore, the Bench clarified that “Since both accused No.3 and appellant No.1 are holding the licence for manufacture, they will be entitled to carry out any process or part of process which includes altering or breaking up with a view to its further sale or distribution.”
Consequently, the Court held, “The impugned judgment and order passed by the High Court of Judicature of Andhra Pradesh…is quashed and set aside; and...The summoning order passed by the Trial Court…and the proceedings arising therefrom are also quashed and set aside.”
Accordingly, the Supreme Court allowed the Appeal.
Cause Title: INOX Air Products Limited Now Known As INOX Air Products Private Limited & Anr. v. State Of Andhra Pradesh (Neutral Citation: 2025 INSC 128)
Appearance:
Appellants: Senior Advocates Abhishek Manu Singhvi and S. Niranjan Reddy; Advocates R. Bhatnagar, Ishan Khanna, Agni Sen, Priyanka Sharma, Akhila and Tejas Anand
Respondent: Advocates Prerna Singh and Dhruv Yadav; AOR Guntur Pramod Kumar
