Authorities Cannot Treat A Licensed Medicinal Preparation As A Prohibited Article Without A Notification U/S. 26A Drugs & Cosmetics Act: SC
The Supreme Court has held that authorities cannot treat a licensed medicinal preparation as a ‘prohibited article’ without a notification notification under Section 26A of the Drugs & Cosmetics Act.
The Court quashed Orders passed by the Allahabad High Court and the Respondent authorities restricting the sale of aromatic tincture of cardamom. The Bench upheld the Appellants’ right to carry on their business under valid licenses issued under the Drugs and Cosmetics Act, 1940 (the Act).
The Bench of Justice Vikram Nath and Justice Prasanna B. Varale observed, “In the present case, there is no notification issued under Section 26A of the D&C Act, 1940 prohibiting or restricting the aromatic tincture of cardamom. The absence of such a notification is decisive. Without it, the tincture remains a licensed medicinal preparation that can be manufactured and sold in accordance with the general rules and the conditions of the license held by the Appellants. The Respondent authorities cannot, on their own accord, treat this lawful product as a prohibited article.”
Senior Advocate Nikhil Goel represented the Appellants, while ASG KM Nataraj appeared for the Respondents.
The Appellants, proprietors of Bhagwati Medical Hall, have been engaged in the wholesale and retail sale of medicines, including the aromatic tincture of cardamom, for decades in Agra, Uttar Pradesh. The tincture, a licensed herbal medicinal preparation, is used for treating minor ailments like indigestion and nausea.
A joint team to curb the sale of "alcohol mixed tinctures," was formed leading to inspections and directives to restrict the sale of aromatic tincture of cardamom. Despite having valid licenses, the Appellants were subjected to alleged harassment and arbitrary interference.
The Appellants’ Writ Petition challenging these actions was dismissed by the High Court which upheld the authorities’ characterisation of the tincture as a prohibited article. A subsequent review application was also dismissed.
The Supreme Court held that the action taken by the Respondent lacked any “sustainable reasoning.” The Bench stated that Section 26A of the Act is the sole statutory mechanism through which a drug, previously permissible, can be effectively taken off the market or subjected to special conditions.
“The provision ensures that any decision to restrict a drug stem from a central, uniform, and scientifically informed process, guided by expert advice, safety evaluations, and considered policy determinations. This centralized approach is deliberate, aimed at preventing arbitrary or inconsistent local measures that would fragment the national drug regulatory regime,” it remarked.
Consequently, the Court held, “The Respondent authorities, if genuinely concerned about misuse, may intensify lawful regulatory oversight, ensuring strict compliance with licensing conditions and quality standards. However, they cannot assume the power to declare the product banned or treat it as such in the absence of a notification under Section 26A of the D&C Act, 1940. The statutory scheme envisions uniformity, predictability, and legal certainty— values that would be undermined if local authorities could unilaterally impose prohibitions contrary to the nationally determined regime.”
Accordingly, the Supreme Court allowed the Appeal.
Cause Title: M/S Bhagwati Medical Hall & Anr. v. Central Drugs Standard Control Organization & Ors. (Neutral Citation: 2024 INSC 1048)
Appearance:
Appellants: Senior Advocate Nikhil Goel; Advocates Shubhangi Pandey and Saday Mondol; AOR Parul Shukla
Respondents: ASG KM Nataraj; Advocates Sabarni Som, Fateh Singh, Keshav Mittal, Sukhdev Sharma, Venkatesh Rajput, Santosh Kumar, Sharath Nambiar, Vinayak Sharma, B K Satija, Annirudha Sharma- II and Amrish Kumar Sharma; AOR Samar Vijay Singh and Gurmeet Singh Makker
