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 20 Feb, 2026
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M/S Sbs Biotech & Others Vs. State Of Himachal Pradesh

  Supreme Court Of India CRIMINAL APPEAL NO. OF 2026 (@ SPECIAL LEAVE
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Case Background

As per case facts, Appellants, M/s SBS Biotech & Others, were prosecuted under the Drugs and Cosmetics Act for non-maintenance and non-furnishing of records concerning a specific drug, with allegations ...

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Document Text Version

2026 INSC 171 _________________________________________________________________________________________

SLP (Crl.) No. 9281 of 2025 Page 1 of 25

REPORTABLE

IN THE SUPREME COURT OF INDIA

(CRIMINAL APPELLATE JURISDICTION)

CRIMINAL APPEAL NO. _____ OF 2026

(@ SPECIAL LEAVE PETITION (CRIMINAL) NO. 9281 OF 2025)

M/s SBS BIOTECH & OTHERS … APPELLANTS

versus

STATE OF HIMACHAL PRADESH … RESPONDENT

J U D G M E N T

VIPUL M. PANCHOLI, J.

1. Leave granted.

2. This Appeal challenges the judgment and order dated

29.07.2024 in Cr. MMO No. 167 of 2018 passed by the High

Court of Himachal Pradesh at Shimla. The Appellants sought

the quashing of Complaint No. 36/3 of 2017 (subsequently

renumbered as Complaint No. 9 of 19.12.2017). The

Appellants are being prosecuted for contravening Section

18(a)(vi) read with Rule 74 and 22(l)(cca) and 18-B, punishable

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SLP (Crl.) No. 9281 of 2025 Page 2 of 25

under Section 27(d) and 28-A of the Drugs and Cosmetics Act,

1940 (hereinafter referred to as 'the Act') and the Rules framed

thereunder.

3. Factual Matrix:

(i) The Appellant No. 1, M/s SBS Biotech, is a partnership

firm engaged in the manufacturing of pharmaceutical

preparations at Mauza Rampur Jattan, Nahan Road, Kala

Amb, District Sirmaur, H.P.. The firm operates under valid

drug licenses issued in Form-25 and Form-28 of the Drugs

and Cosmetics Rules, 1945 ('the Rules'), and is mandated

to adhere to Schedule-M of the Rules. Appellant No. 2,

Shri Sanjeev Kumar Santoshi, is the Production Head, and

Appellant No. 3, Mr. Avinash Banga, was arrayed as the

alleged managing partner at the relevant time.

(ii) The chronology of events commenced with an inspection

of the firm's premises conducted by the Drug Inspector on

22.07.2014. During this inspection, carried out in the

presence of officials of the firm, including the Production

Head, it was alleged by the Respondent that the firm had

not maintained the requisite records as stipulated by

Schedule-M and Schedule-U of the Rules. Specifically

concerning the drug Pseudoephedrine B. No. 503413,

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SLP (Crl.) No. 9281 of 2025 Page 3 of 25

inadequate details regarding the entry of the drug received

from Neha Pharma Pvt. Ltd. were noted, and the firm failed

to produce consumption records.

(iii) A Spot Inspection Report was prepared on 22.07.2014.

Through this report, the firm was directed under Section

22(d) of the Act not to dispose of the stock of the said drug

until the investigation was completed. Further, directions

were issued, commanding the firm, pursuant to Section

22(1)(cca) and 18-B of the Act, to produce the complete

record of purchase, sale/distribution, and consumption of

the said drug within a period of seven days. The Appellants

subsequently contended that serving directions via the

spot inspection report, rather than a separate notice, was

irregular.

(iv) A re-inspection of the manufacturing premises was

conducted on 05.08.2014. It was observed that the firm

had neither submitted a reply nor produced the complete

record as directed. During this re-inspection, it was

alleged that huge discrepancies were found in the record

of manufacturing, testing, and distribution. Allegations

were made that the record was tampered with at certain

places, including misleading entries and corrections made

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SLP (Crl.) No. 9281 of 2025 Page 4 of 25

with fluid. The firm allegedly failed to explain these

discrepancies satisfactorily.

(v) Consequent to these findings, the Drug Inspector seized

the drug and corresponding documents in Form-16 on

05.08.2014 for alleged contravention of Sections 18(a)(vi)

and 18-B of the Act. The seized items included 24.990 Kg

of Pseudoephedrine Hydrochloride I.P. in a blue coloured

PVC drum, along with numerous documents, including

invoices, a register (pages 1 to 29 of the Pseudoephedrine

register), and Batch Production Records (BPRs) for various

batches of Eudocet tablets. On the same day (05.08.2014),

a separate letter (Annexure R-1/PE) was issued to the

firm, requiring them again to submit information, records,

and documents under various Sections, including

22(l)(cca), 18-B, and 22(3), within 15 days. The

Respondent asserted that the Appellants never responded

to this notice.

(vi) On 06.08.2014, the Respondent moved an application

before the learned Chief Judicial Magistrate, Nahan, for

custody orders in terms of Section 23(5)(b) and (6) of the

Act. The learned Judicial Magistrate, Nahan, granted the

custody orders. The Appellants, however, consistently

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SLP (Crl.) No. 9281 of 2025 Page 5 of 25

asserted that while the seized drug (the PVC drum) was

produced before the Court, the records seized in Form-16

were never produced, constituting a blatant violation of

Section 23(6) of the Act.

(vii) The Appellants further averred that the Respondent

informed the State Drug Controller about the inspection

and seizure only after a period of 11 months (via letter

dated 02.07.2015). It was contended that this delay,

combined with the non-return of the seized original

records, constituted a violation of Section 22(2-A) of the

Act, which mandates the return of seized records within

20 days (after certified copies are taken).

(viii) A Show Cause Notice dated 29.07.2015 was received by

the firm from the Assistant State Drug Controller-cum-

Licensing Authority, seeking an explanation regarding the

discrepancies observed. The firm responded via letter

dated 13.08.2015, specifically requesting the return of the

original documents and records seized in Form-16, or

certified copies thereof, noting that their absence

prevented the firm from formulating a complete reply.

Certified copies of the seized documents were eventually

received by the firm's representative on 14.09.2015.

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SLP (Crl.) No. 9281 of 2025 Page 6 of 25

(ix) The firm submitted a comprehensive and detailed reply

dated 03.10.2015. In this reply, the firm contended that

there was no violation of Schedule-M or Schedule-U and,

therefore, no irregularity in maintaining the records. The

firm asserted that the deficiencies pointed out were minor,

routine, and generalized. The firm simultaneously

requested the release of the seized drug and original

records. The Respondent, in their counter-affidavit,

asserted that this reply was found to be totally incomplete

and unsatisfactory.

(x) The Prosecution Sanction was granted by the State Drug

Controller dated 15.09.2016. The sanction noted the

finding of the Screening Committee regarding

"irregularities with respect to maintenance of records as

required under Schedule M and Schedule U. The sanction

was accorded for prosecution under Section 18(a)(vi) read

with Rule 74, 18-B, and 22(l)(cca) of the Act and Rules.

The Appellants asserted that the prosecution sanction

nowhere averred that the manufactured drugs were

substandard, misbranded, adulterated, or spurious,

arguing that the maximum alleged offence related only to

record keeping punishable under Section 18-B/28-A.

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SLP (Crl.) No. 9281 of 2025 Page 7 of 25

(xi) Pursuant to the sanction, the criminal Complaint No.

36/3 of 2017 was filed on 27.02.2017. The complaint

alleged contravention of Sections 18(a)(vi) read with Rule

74 and 22(l)(cca) and 18-B, punishable under Section

27(d) and 28-A of the Act.

(xii) The learned Judicial Magistrate First Class, Nahan, vide

Order dated 06.04.2017, took cognizance of the Complaint

and summoned the Appellants for offences punishable

under Section 18(a)(vi), 18-B, and 28A of the Act. The

Appellants contended that this order of cognizance was

non-reasoned and failed to apply judicial mind.

Furthermore, the Appellants contended that the

proceedings were barred by limitation under Section 468

of Code of Criminal Procedure, 1973 (hereinafter referred

to as ‘Cr.P.C’), arguing that the offence under Section 18-

B/28-A carries a punishment extending up to one year,

meaning the one-year limitation applied, whereas

cognizance was taken more than two and a half years after

the inspection (22.07.2014 to 06.04.2017).

(xiii) Thereafter, the learned Judicial Magistrate First Class,

vide Order dated 05.10.2017, committed the case to the

learned Special Judge-I, Sirmaur. This committal was

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SLP (Crl.) No. 9281 of 2025 Page 8 of 25

made on the finding that the offence punishable under

Section 27(d) read with Section 28-A is exclusively triable

by the Court of Special Judge. The case was renumbered

as Complaint No. 9 of 19.12.2017.

(xiv) The Appellants, being aggrieved by the Cognizance Order

dated 06.04.2017 and the Committal Order dated

05.10.2017, filed a Petition under Section 482 Cr.P.C (Cr.

MMO No. 167 of 2018) before the High Court of Himachal

Pradesh. They argued that the committal was illegal in

view of the saving clause under Section 32(2) read with

Section 36-A of the Act, which provides for summary trial

by a Judicial Magistrate First Class for offences

punishable with imprisonment for a term not exceeding

three years.

(xv) The High Court of Himachal Pradesh, vide the final

impugned Judgment dated 29.07.2024, dismissed the

Petition. The High Court held that the learned Special

Judge-I, Sirmaur, has jurisdiction to try the offences

under Chapter IV of the Act. The High Court determined

that the limitation period was three years under Section

468 Cr.P.C because the offence punishable under Section

27(d) carries imprisonment up to two years, thereby

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SLP (Crl.) No. 9281 of 2025 Page 9 of 25

rejecting the limitation plea. The High Court also

concluded that the omission of Section 27(d) in the

cognizance order was a clerical error.

4. Being aggrieved and dissatisfied with the dismissal of

quashing petition, the appellants have preferred the present

appeal.

5. Heard learned counsel for the appellants and learned counsel

for the Respondent-State.

6. Learned counsel for the appellants would mainly contend that

the impugned complaint has been filed alleging contravention

of the provisions of Section 18 (a) (vi) read with Rule 74 and 22

(1)(cca) and 18-B punishable under Section 27 (d) and 28-A of

the Act of 1940. However, the cognizance has been taken for

contravening Section 18 (a) (vi) and 18-B punishable under

Section 28-A of the Act of 1940. Learned counsel urged that

the High Court has committed an error by observing that the

omission on the part of the Magistrate referred under Section

27 (d) of the act is a typographical error. At this stage, it is also

submitted that in the present case, the question arises as to

whether non-maintenance and non-furnishing of the records

as prescribed under Schedule M & U of Rules of 1945 would

constitute an offence under Section 18 (a) (vi) read with Rule

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SLP (Crl.) No. 9281 of 2025 Page 10 of 25

74 punishable under Section 27 (d) or would fall under Section

18-B punishable under Section 28-A of the Act of 1940.

7. Learned Counsel referred provisions contained in Section 18,

27 (d), 18-B as well as Section 28-A of the Act. Learned counsel

also referred the relevant rules as well as Schedule M & U of

the Rules. After referring to the same, learned counsel would

contend that Section 18 provides for Prohibition of

manufacture and sale of certain drugs and cosmetics and not

for maintenance of record or non-furnishing of information.

Further, the contravention shall have to be in relation to

manufacture, sale, or stock or exhibit or offer for sale of drugs

& cosmetics in contravention of any provisions of the said

Chapter (Chapter IV) or any Rule made thereunder. Learned

counsel, therefore, urged that primarily Section 27 (d) could

be invoked where the contravention is regarding any drug or

cosmetic but not in relation to maintenance of record and non-

furnishing of information.

8. At this stage, it is also contended that Section 18-B specifically

provides for non-maintenance of record and non-furnishing of

information and the same is made punishable under Section

28-A of the Act, for which the Trial Court has rightly taken

cognizance. At this stage, it is pointed out that Section 28-A is

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SLP (Crl.) No. 9281 of 2025 Page 11 of 25

punishable for a maximum period of one year and, therefore,

limitation under Section 468 of Cr.P.C would be one year.

Thus, in the present case, the complaint which has been filed

after a period of two and a half years would be barred by

limitation.

9. Learned counsel has placed reliance upon the decision

rendered by this Court in the case of Miteshbhai J. Patel Vs.

Drug Inspector, 2025 SCC online SC 2203 . Learned counsel

has also relied upon decision in the case of Cheminova (India)

Ltd. Vs. State of Punjab reported in 2021 (8) SCC 818.

10. Learned counsel for the appellant further submits that

another question arises for consideration is whether the

offence punishable with imprisonment for less than 03 years

and not to be tried by the Special Court under Section 36-AB,

or by the Court of Sessions, shall have to be tried by the

Magistrate Court in view of saving clause under Section 32(2)

read with Section 36-A of the Act of 1940.

11. Learned counsel referred the provisions contained in Section

32(2), 36-A and Section 36AB of the Act and, thereafter,

submitted that Section 32(2) starting with the saving clause

would give way to the applicability of Section 36-A of the Act

and, therefore, the offences punishable with imprisonment not

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SLP (Crl.) No. 9281 of 2025 Page 12 of 25

exceeding 03 years but not related to spurious or adulterated

drugs to be tried by Special Court under Section 36-AB or by

the Court of Sessions, shall essentially to be tried by the

Magistrate under Section 36A of the Act. Learned counsel,

therefore, contended that finding recorded by the High Court

regarding the offences falling under Chapter IV to be tried by

the Court of Sessions or by the Special Court, as the case may

be, is fallacious and deserves to be set aside.

12. Learned counsel for the appellants further submits that the

High Court has committed an error while placing reliance

upon decision rendered by this Court in the case of Union of

India Vs. Ashok Kumar Sharma reported in 2021 (12) SCC

674. It is submitted that the said judgment was rendered by

this Court in different context and has no bearing on the facts

or law in the present case.

13. Learned counsel for the appellants, therefore, urged that the

impugned order passed by the High Court be set aside and

thereby the proceedings filed by the respondent against the

appellants as well as the order of taking cognizance be

quashed and thereby the present appeal be allowed.

14. Per contra, learned DAG for the respondent-State has

vehemently opposed the present appeal. He would contend

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SLP (Crl.) No. 9281 of 2025 Page 13 of 25

that the concerned Inspector in the Spot Inspection Report

dated 22.07.2014 had recorded that the petitioners were

instructed not to dispose of the stock of the relevant drug

batch until the completion of the investigation. The petitioners

were also directed to furnish the remaining records, as the

documents produced at the time of inspection were found to

be incomplete. Further, during the seizure of the records

certain serious irregularities including total non-maintenance

of raw material, registers required under Schedules M & U of

the Act and the Rules were found. Most of the batches had no

entries or stock release records showing clear misuse and lack

of accountability thereby rendering the petitioners liable to be

punished under Section 27 (d) for violation of Section 18 (a)

(vi) of the Act read with Rule 74 of the Rules,1945.

15. Learned DAG further submits that the petitioners failed to

respond to the notice issued to them along with the Spot

Inspection Report. Despite repeated notices, the petitioners

failed to produce the requisite documents and, therefore, on

15.09.2016, the respondents applied for grant of sanction to

prosecute the petitioners under Section 18 (a) (vi) read with

Rule 74, 18-B and 22(1)(cca). After getting the sanction from

the Competent Authority, the impugned complaint came to be

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SLP (Crl.) No. 9281 of 2025 Page 14 of 25

filed upon which the cognizance was taken by the learned

Judicial Magistrate First Class on 06.04.2017.

16. At this stage, learned DAG has also referred relevant

provisions of the Act as well as the Rules and, thereafter,

contended that by not providing the complete records, the

petitioners have violated Section 27 (d) of the Act as well as the

Rules.

17. Learned counsel for the respondent further submits that the

plea of limitation raised by the petitioners is misconceived.

Learned DAG submits that violation of Section 18 (a) (vi) is

punishable under Section 27 (d) of the Act which provides

punishment for a period of not less than one year which may

extend up to two years. Thus, the complaint is not barred by

limitation under Section 468 of Cr.P.C as contended by

learned counsel for the appellants.

18. Learned DAG lastly contended that the learned JMFC has

rightly committed the case of the learned Special Judge (I) as

the offence punishable under Section 27 (d) read with Section

28-A is exclusively triable by the Court of Special Judge.

19. Learned DAG, therefore, urged that the High Court has not

committed any error while rejecting the quashing petition filed

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SLP (Crl.) No. 9281 of 2025 Page 15 of 25

by the present appellants and, therefore, this Court may not

interfere with the impugned order.

20. Having heard learned counsel appearing for the appellants

and having gone through the material placed on record as well

as the provisions of law and the decisions relied upon by the

learned Advocates, it transpires that the complaint has been

filed against the appellants on 22.02.2017 wherein specific

allegations are levelled with regard to the contravention of

Section 18 (a) (vi) read with Rule 74 and Section 22 (1)(cca)

and Section 18-B punishable under Section 27 (d) as well as

under Section 28-A of the Act. From the record it further

transpires that the appellant had not maintained the requisite

records as stipulated under Schedule M & U of the Rules.

21. At this stage, we would like to refer the relevant provisions of

the Act as well as the Rules.

Section 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 behalf—

(a) [manufacture for sale or for distribution, or sell, or stock

or exhibit or offer for sale,] or

distribute………………………………………………………………

……………

……………………………..

(vi) any drug or cosmetic in contravention of any of the

provisions of this Chapter or any rule made thereunder.

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SLP (Crl.) No. 9281 of 2025 Page 16 of 25

Section 18B-Maintenance of records and furnishing of

information.—Every person holding a licence under clause

(c) of section 18 shall keep and maintain such records,

registers and other documents as may be prescribed and shall

furnish to any officer or authority exercising any power or

discharging any function under this Act such information as is

required by such officer or authority for carrying out the

purposes of this Act.]

Section 22- Powers of Inspectors.—(1) Subject to the

provisions of section 23 and of any rules made by the Central

Government in this behalf, an Inspector may, within the local

limits of the area for which he is appointed

(a) inspect,— (i) any premises wherein any drug or

cosmetic is being manufactured and the means employed for

standardising and testing the drug or cosmetic; (ii) any

premises wherein any drug or cosmetic is being sold, or

stocked or exhibited or offered for sale, or

distributed;…………………………………………………………

(cca) require any person to produce any record, register, or

other document relating to the manufacture for sale or for

distribution, stocking, exhibition for sale, offer for sale or

distribution of any drug or cosmetic in respect of which he has

reason to believe that an offence under this Chapter has been,

or is being, committed.

Section 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

distributes.

(a)…………………………………………………………………………

….

(d) any drug, other than a drug referred to in clause (a) or

clause (b) or clause (c), in contravention of any other provision

of this Chapter or any rule made thereunder, shall be

punishable with imprisonment for a term which shall not be

less than one year but which may extend to two years [and

with fine which shall not be less than twenty thousand

rupees]:

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 one year.

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SLP (Crl.) No. 9281 of 2025 Page 17 of 25

22. Schedule M provides for good manufacturing practices for

premises and materials whereas Schedule U provides for

particulars to be shown in manufacturing records.

23. From the aforesaid provisions contained in the Act of 1940 and

the Rules framed thereunder it transpires that no person can

manufacture for sale or for distribution, or sell or stock or

exhibit or offer for sale or distribute any drug or cosmetic in

contravention of any provisions of Chapter IV or any Rule

made thereunder. Further, every person holding a license is

required to keep and maintain such records register and other

documents as may be prescribed and shall furnish to the

officer or authority exercising power under the Act. It further

transpires that Section 27 (d) specifically provides that if a

person manufactures for sale or for distribution or sells or

stocks or exhibits etc. any drug or other than drug in

contravention of any provisions of Chapter IV or any Rule

made thereunder shall be punishable with imprisonment for a

term which shall not be less than one year but which may

extended to two years.

24. Now, keeping in view the aforesaid provisions, if the complaint

filed by the respondent against the appellants before the

learned JMFC is examined, it is revealed that in the title of the

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SLP (Crl.) No. 9281 of 2025 Page 18 of 25

complaint it has been specifically referred relevant provision of

the Act as well as the Rule including Section 18-B punishable

under Section 27 (d) and 28-A of the Act. Further, if the order

of cognizance is carefully examined, copy of which is placed on

Page 99 of the compilation, it is revealed that in the said order

also in the title Section 27 (d) of the Act is specifically referred.

25. At this stage, if the order of committal passed by the learned

JMFC, copy of which is produced at Page 103 of the

compilation, is once again carefully examined, it has been

specifically stated in Para 1 itself that the accused have been

sent up to stand their trial for the offence punishable under

Section 27 (d) read with Section 28-A of the Act. Further, in

last paragraph of the order once again the learned Magistrate

has observed that the offence punishable under Section 27 (d)

read with Section 28-A of the Act is exclusively triable by the

learned Court of Sessions Judge, therefore, the case of the

accused is committed to the Court of learned Special Judge (I),

Sirmaur District at Nahan. Thus, looking to the aforesaid

aspects it can be said that while writing the hand written

order, the learned JMFC has missed to mention Section 27 (d).

26. At this stage, it is pertinent to observe that the complainant

has specifically alleged in the complaint filed before the

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SLP (Crl.) No. 9281 of 2025 Page 19 of 25

learned JMFC, against the present appellants, in Para 2 of the

complaint that, after disclosing identity and purpose the

record of the drug in question i.e. pseudoephedrine was

checked and inspected thoroughly in view of the provisions of

the Act and it was observed that the firm had not maintained

the records as per Schedule M & Schedule U of the Act of 1940

and Rules of 1945. Further, in paragraph 3 of the complaint it

has been further alleged that the firm was given opportunity

and time to disclose information, record/documents but firm

failed to disclose the complete record as asked and lot of

discrepancies in the purchase and sale record of the sold drug

in question were found. In paragraph 5 of the complaint it has

been further alleged that record was tempered at certain

places, some misleading entries were also observed. In

paragraph 7 of the complaint, the complainant has alleged

that after careful examination of the batch production record

as seized from the premises of the firm, it was also observed

that the firm has done the grievous manipulation and

violations at the time of manufacturing and testing of the said

drugs and committed blunder in manufacturing the drugs as

per the record as seized by the firm. It is also alleged that the

comparative study of the production, consumption and sale

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SLP (Crl.) No. 9281 of 2025 Page 20 of 25

has been done in this regard and it was observed that the

heavy misuse has been done by the firm for the said habit

forming drug and the firm could not produce the record for the

illegal sale done by the said firm. At this stage, we would like

to refer the provisions contained in Rule 74 of the Rules more

particularly its Clause (d). It provides that the licensee shall

keep records of the details of manufacture as per particulars

given in Schedule U of each batch of the drugs manufactured

by him and such record shall be retained for a period of 05

years.

(i) Now, if we refer Schedule M, it transpires that it provides

for good manufacturing practices and requirements of

premises, plant and equipment for pharmaceutical

products. Further, Clause 12 of Schedule M provides for

documentation and records.

(ii) Similarly, Schedule U states about particulars to be

shown in manufacturing records. Para (ii) of the said

Schedule states about records of raw materials.

27. From the aforesaid allegations levelled by the complainant in

the complaint as well as relevant provisions of the Rules and

Schedule M and U, it is revealed that allegations are with

regard to commission of an offence under Section 18(a)(vi) of

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SLP (Crl.) No. 9281 of 2025 Page 21 of 25

the Act of 1940. 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.

28. In view of the aforesaid, when Section 27 (d) of the Act provides

for imprisonment for a term not less than one year but may

extend to two years, as per Section 468 of Cr.P.C. complaint

can be filed within a period of 03 years. In the present case,

the complaint has been filed within a period of 03 years (two

years and six months). We are, therefore, of the view that the

complaint is not time barred as contended by learned counsel

for the appellants.

29. Learned counsel for the appellants has placed reliance upon

the decision rendered by this Court in the case of Miteshbhai

J. Patel (Supra). Learned counsel has more particularly

referred Para 7 to 9 of the said decision. It is required to be

observed that in paragraph 7 of the said decision this Court

has specifically held that any complaint disclosing offence

punishable under Section 27 of the Act ought to have been

made within a period of 03 years. In the said case, as observed

in Para 8, the complaint were filed much later than 03 years.

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SLP (Crl.) No. 9281 of 2025 Page 22 of 25

In the present case, as discussed hereinabove, the

complaint has been filed within a period of 03 years

and, therefore, the aforesaid decision would not render

any assistance to learned counsel for the appellants.

30. Learned counsel for the appellants also placed reliance upon

the decision rendered by this Court in the case of Cheminova

(India) Ltd. (Supra). In the said case also, as observed in Para

12, the complaint was filed beyond a period of 03 years and,

therefore, this Court quashed the complaint which was filed

after a period of 03 years on the ground that the said complaint

is barred by limitation under Section 469 of Cr.P.C.

We are, therefore, of the view that this decision would

not be applicable to the facts of the present case.

31. Now, at this stage, we would like to refer provisions contained

in Section 32 (2), 36-A & 36-AB of the Act which provides as

under:

Section 32: Cognizance of offences - (1) No prosecution

under this Chapter shall be instituted except by—

……………………………………………….

(2) Save as otherwise provided in this Act, no court inferior to

that of a Court of Session shall try an offence punishable

under this Chapter

Section 36A- Certain offences to be tried summarily.—

Notwithstanding anything contained in the Code of Criminal

Procedure, 1973 (2 of 1974), 5 [all offences (except the offences

triable by the Special Court under section 36AB or Court of

Session under this Act] punishable with imprisonment for a

term not exceeding three years, other than an offence under

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SLP (Crl.) No. 9281 of 2025 Page 23 of 25

clause (b) of sub-section (1) of section 33-I, shall be tried in a

summary way by a Judicial Magistrate of the first class

specially empowered in this behalf by the State Government

or by a Metropolitan Magistrate and the provisions of sections

262 to 265 (both inclusive) of the said Code shall, as far as

may be, apply to such trial : Provided that, in the case of any

conviction in a summary trial under this section, it shall be

lawful for the Magistrate to pass a sentence of imprisonment

for a term not exceeding one year: Provided further that when

at the commencement of, or in the course of, a summary trial

under this section it appears to the Magistrate that the nature

of the case is such that a sentence of imprisonment for a term

exceeding one year may have to be passed or that it is, for any

other reason, undesirable to try the case summarily, the

Magistrate shall, after hearing the parties, record an order to

that effect and thereafter recall any witness who has been

examined and proceed to hear or rehear the case in the

manner provided by the said Code.

Section 36AB- Special Courts. — (1) The Central

Government, or the State Government, in consultation with the

Chief Justice of the High Court, shall, for trial of offences

relating to adulterated drugs or spurious drugs and

punishable under clauses (a) and (b) of section 13, sub-section

(3) of section 22, clauses (a) and (c) of section 27, section 28,

section 28A, section 28B and clause (b) of sub-section (1) of

section 30 and other offences relating to adulterated drugs or

spurious drugs, by notification, designate one or more Courts

of Session as a Special Court or Special Courts for such area

or areas or for such case or class or group of cases as may be

specified in the notification. Explanation. —In this sub-section,

“High Court” means the High Court of the State in which a

Court of Session designated as Special Court was functioning

immediately before such designation. (2) While trying an

offence under this Act, a Special Court shall also try an

offence, other than an offence referred to in sub-section (1),

with which the accused may, under the Code of Criminal

Procedure, 1973 (2 of 1974), be charged at the same trial.

32. From the provisions contained in Section 32(2) of the Act, it is

revealed that save as otherwise provided in the Act of 1940, no

Court inferior to that Court of Sessions shall try an offence

punishable under this Chapter (Chapter IV).

_________________________________________________________________________________________

SLP (Crl.) No. 9281 of 2025 Page 24 of 25

(i) Now, if we carefully examine Section 36-A of the Act, it

transpires that the said Section provides that certain

offences are to be tried summarily. It has been

specifically provided that notwithstanding anything

contained in Cr.P.C., all offences punishable with

imprisonment for a term not exceeding 03 years other

than offence under Section 33(I)(1)(b) shall be tried in a

summary way by Judicial Magistrate First Class except

the offences triable by the Special Court under Section

36-AB or Court of Sessions.

(ii) Thus, Section 36-A specifically excludes the offences

triable by the Special Court under Section 36-AB or

Court of Sessions under this Act from the purview of

Section 36-A of the Act. Now, Section 32(2) specifically

provides that no Court inferior to that of a Court of

Session shall try an offence punishable under this

Chapter (Chapter IV). Thus, it can be said that for the

offences punishable under Chapter IV, the Court inferior

to the Court of Session shall not try such offences.

(iii) We are, therefore, of the view 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

_________________________________________________________________________________________

SLP (Crl.) No. 9281 of 2025 Page 25 of 25

not be applicable to the facts of the present case. Hence,

learned JMFC has rightly committed the case to the

Court of Sessions and thereby has not committed

illegality as alleged by learned counsel for the appellants.

33. In view of the aforesaid discussion, we are of the view that the

High Court has not committed any error while dismissing the

petition filed by the present appellants under Section 482 of

the Cr.P.C. for quashing of the complaint. Hence, no

interference is required.

34. Accordingly, the present appeal stands dismissed.

.......……….…………………….J.

[PRASHANT KUMAR MISHRA]

..….....………………………….J.

[VIPUL M. PANCHOLI]

NEW DELHI,

20

th

February, 2026

Description

Supreme Court Clarifies Jurisdiction and Limitation for Drugs and Cosmetics Act Offences

The recent Supreme Court ruling in M/s SBS Biotech & Others v. State of Himachal Pradesh, now available on CaseOn, provides critical insights into the interpretation of the Drugs and Cosmetics Act Offences and the procedural nuances concerning Criminal Procedure Code Limitation in such prosecutions. This authoritative judgment clarifies the appropriate forum for trial and the applicable periods of limitation, offering essential guidance for legal professionals navigating these complex areas.

Factual Matrix: Unpacking the Allegations Against SBS Biotech

The genesis of this appeal lies in an inspection conducted by the Drug Inspector on July 22, 2014, at the premises of M/s SBS Biotech, a partnership firm engaged in pharmaceutical manufacturing. The firm, operating under valid drug licenses, was mandated to adhere to Schedule-M of the Drugs and Cosmetics Rules, 1945. The inspection revealed alleged deficiencies in record maintenance, particularly concerning the drug Pseudoephedrine B. No. 503413, including inadequate entry details and a failure to produce consumption records.

  • A Spot Inspection Report on July 22, 2014, directed the firm not to dispose of stock and to produce complete purchase, sale/distribution, and consumption records within seven days, citing Sections 22(d), 22(1)(cca), and 18-B of the Act.
  • A re-inspection on August 5, 2014, allegedly found significant discrepancies and tampering in manufacturing, testing, and distribution records, particularly regarding the Pseudoephedrine register and Batch Production Records (BPRs).
  • The Drug Inspector seized 24.990 Kg of Pseudoephedrine Hydrochloride I.P. and related documents under Form-16 for alleged contravention of Sections 18(a)(vi) and 18-B of the Act. A separate letter was issued requiring information and documents within 15 days.
  • Custody orders were granted by the Chief Judicial Magistrate, Nahan, on August 6, 2014. The Appellants, however, contended that seized records were not produced before the Court, violating Section 23(6) of the Act.
  • A Show Cause Notice was issued on July 29, 2015, to which the firm responded on August 13, 2015, requesting the return of original documents. Certified copies were eventually provided on September 14, 2015.
  • The firm submitted a detailed reply on October 3, 2015, asserting no violation of Schedule-M or U and terming the deficiencies as minor. The Respondent deemed this reply unsatisfactory.
  • Prosecution sanction was granted by the State Drug Controller on September 15, 2016, for contravention of Section 18(a)(vi) read with Rule 74, 18-B, and 22(1)(cca), punishable under Section 27(d) and 28-A of the Act.
  • The criminal complaint was filed on February 27, 2017. The Judicial Magistrate First Class (JMFC), Nahan, took cognizance on April 6, 2017, and summoned the Appellants.
  • The JMFC later committed the case to the Special Judge-I, Sirmaur, on October 5, 2017, finding the offence under Section 27(d) read with Section 28-A exclusively triable by a Special Judge.
  • Aggrieved, the Appellants filed a petition under Section 482 Cr.P.C. before the High Court of Himachal Pradesh, challenging the cognizance and committal orders, arguing that the offence was triable by a Judicial Magistrate in a summary way and that the complaint was time-barred.
  • The High Court dismissed the petition on July 29, 2024, holding that the Special Judge had jurisdiction and that the limitation period was three years under Section 468 Cr.P.C., considering the punishment under Section 27(d) extends up to two years. The omission of Section 27(d) in the cognizance order was deemed a clerical error.

Issue: The Core Legal Questions Before the Supreme Court

The Supreme Court was tasked with resolving two primary legal questions:

  1. **Limitation:** Whether the criminal complaint filed against the appellants for alleged contraventions under the Drugs and Cosmetics Act was barred by the limitation period prescribed under Section 468 of the Code of Criminal Procedure, 1973.
  2. **Jurisdiction:** Whether the offences alleged under the Drugs and Cosmetics Act, particularly those punishable with imprisonment not exceeding three years, should be tried by a Judicial Magistrate First Class or exclusively by a Court of Session or Special Court.

Rule: Legal Provisions and Precedents

The Court considered several key provisions of the Drugs and Cosmetics Act, 1940 (the Act), the Drugs and Cosmetics Rules, 1945 (the Rules), and the Code of Criminal Procedure, 1973 (Cr.P.C.), along with relevant judicial precedents.

Relevant Statutory Provisions:

  • **Section 18 (Prohibition of manufacture and sale of certain drugs and cosmetics):** Specifically, Section 18(a)(vi) prohibits the manufacture or sale of any drug or cosmetic in contravention of any provisions of Chapter IV or any rule made thereunder.
  • **Section 18B (Maintenance of records and furnishing of information):** Mandates every licensee to keep and maintain prescribed records and furnish information to authorized officers for the Act's purposes.
  • **Section 22 (Powers of Inspectors):** Section 22(1)(cca) empowers inspectors to require production of records relating to manufacture, sale, or distribution of drugs where an offence is suspected.
  • **Section 27 (Penalty for manufacture, sale, etc., of drugs in contravention of this Chapter):** Section 27(d) prescribes punishment for contravention of any provision of Chapter IV or rules thereunder (other than those specified in clauses (a), (b), or (c)) with imprisonment not less than one year but extending up to two years, along with a fine.
  • **Section 28A (Penalty for non-disclosure of information):** Punishes any person who fails to furnish any information required under the Act or rules with imprisonment up to one year or a fine up to one thousand rupees, or both.
  • **Rule 74 (Conditions for grant or renewal of a licence in Form 25):** Stipulates that a licensee shall maintain records of manufacturing details as per Schedule U, to be retained for five years.
  • **Schedule M & U of the Rules:** Schedule M outlines Good Manufacturing Practices (GMP) and requirements for premises, plant, and equipment, including documentation and records (Clause 12). Schedule U details particulars to be shown in manufacturing records, including raw materials.
  • **Section 32 (Cognizance of offences):** Section 32(2) states that, save as otherwise provided in the Act, no court inferior to that of a Court of Session shall try an offence punishable under Chapter IV.
  • **Section 36A (Certain offences to be tried summarily):** Provides that, notwithstanding anything in the Cr.P.C., all offences (except those triable by Special Courts under Section 36AB or a Court of Session) punishable with imprisonment not exceeding three years shall be tried summarily by a Judicial Magistrate First Class.
  • **Section 36AB (Special Courts):** Mandates the Central or State Government to designate Courts of Session as Special Courts for trials of offences related to adulterated drugs or spurious drugs and certain other specified offences.
  • **Section 468 Cr.P.C.:** Lays down the limitation period for taking cognizance of offences. For offences punishable with imprisonment up to one year, the limitation is one year; for offences punishable with imprisonment exceeding one year but not exceeding three years, the limitation is three years.

Relevant Case Law:

  • Miteshbhai J. Patel Vs. Drug Inspector, 2025 SCC online SC 2203: The Supreme Court in this case had held that complaints disclosing offences punishable under Section 27 of the Act ought to be made within a period of three years.
  • Cheminova (India) Ltd. Vs. State of Punjab, 2021 (8) SCC 818: This Court had quashed a complaint filed beyond a three-year limitation period under Section 469 Cr.P.C.
  • Union of India Vs. Ashok Kumar Sharma, 2021 (12) SCC 674: Relied upon by the High Court, though the appellants argued it was in a different context.

Analysis: Applying the Law to the Facts

Limitation Period

The core contention of the appellants regarding limitation hinged on whether the alleged offence was punishable under Section 28-A (maximum one year imprisonment) or Section 27(d) (one to two years imprisonment). If it were Section 28-A, the one-year limitation under Section 468 Cr.P.C. would apply, making the complaint filed two and a half years after the inspection time-barred.

The Supreme Court meticulously examined the allegations in the complaint. It noted that the complaint specifically alleged contravention of Section 18(a)(vi) read with Rule 74 and 22(1)(cca) and 18-B. The allegations included failure to maintain records as per Schedule M & U, discrepancies in purchase and sale records, tampering, and misleading entries, indicating “heavy misuse” of the habit-forming drug and “illegal sale.”

The Court found that such allegations squarely fall under Section 18(a)(vi), which prohibits manufacture/sale in contravention of Chapter IV or any rule made thereunder. The punishment for contraventions of Chapter IV (other than specified serious offences) is provided under Section 27(d), which mandates imprisonment for a term not less than one year but which may extend to two years. Therefore, the applicable limitation period under Section 468 Cr.P.C. for an offence punishable up to two years is three years.

Since the complaint was filed on February 27, 2017, approximately two years and six months after the initial inspection on July 22, 2014, the Court concluded that it was filed within the three-year limitation period. The reliance on Miteshbhai J. Patel and Cheminova (India) Ltd. by the appellants was deemed inapplicable, as those cases dealt with complaints filed *beyond* the three-year period.

Jurisdiction of Courts

The second major point of contention was the jurisdiction of the trial court. The appellants argued that the offence, being punishable with imprisonment not exceeding three years, should be summarily tried by a Judicial Magistrate First Class under Section 36A, rather than being committed to a Court of Session or Special Court.

The Court analyzed Sections 32(2), 36A, and 36AB of the Act. Section 32(2) is crucial, stating that, *save as otherwise provided in this Act*, no court inferior to that of a Court of Session shall try an offence punishable under Chapter IV. This is a clear jurisdictional bar for lower courts for offences under Chapter IV unless specifically excepted.

Section 36A provides for summary trials by JMFCs for offences punishable with imprisonment not exceeding three years, but *explicitly excludes* offences triable by a Special Court under Section 36AB or a Court of Session under the Act. Since Section 32(2) mandates that offences under Chapter IV (which includes Section 27(d)) are to be tried by a Court not inferior to a Court of Session, the exception in Section 36A comes into play. In simpler terms, Section 36A's summary trial provision does not override Section 32(2)'s requirement for Chapter IV offences to be tried by a higher court.

The Court, therefore, upheld the committal of the case by the JMFC to the Court of Session (or Special Judge, as designated). It noted that the High Court's finding that the omission of Section 27(d) in the initial cognizance order was a clerical error was justified, especially given its explicit mention in the complaint's title and the committal order.

For legal professionals seeking rapid comprehension of such rulings, CaseOn.in's 2-minute audio briefs provide an invaluable resource, distilling complex judgments into easily digestible formats for efficient legal analysis and strategy formulation.

Conclusion: Supreme Court Upholds High Court's Decision

In conclusion, the Supreme Court dismissed the appeal, affirming the High Court's judgment. It was held that the criminal complaint against M/s SBS Biotech & Others for contravention of the Drugs and Cosmetics Act was not barred by limitation, as the applicable period was three years under Section 468 Cr.P.C., given the punishment provisions of Section 27(d) of the Act. Furthermore, the Court clarified that offences punishable under Chapter IV of the Drugs and Cosmetics Act, including the present one, must be tried by a Court not inferior to a Court of Session, and thus, the committal of the case to the Special Judge was legally sound. The High Court's finding of a clerical error in the initial cognizance order was also upheld.

Why This Judgment is an Important Read for Lawyers and Students

This Supreme Court judgment is crucial for several reasons, making it an indispensable read for both legal practitioners and students:

  1. **Clarity on Limitation:** It firmly establishes the three-year limitation period for offences under Section 27(d) of the Drugs and Cosmetics Act, preventing unnecessary quashing of legitimate complaints based on an incorrect interpretation of Section 468 Cr.P.C.
  2. **Jurisdictional Nuances:** The ruling provides definitive guidance on the jurisdiction for trying offences under Chapter IV of the Act, reconciling the seemingly conflicting provisions of Sections 32(2), 36A, and 36AB. It underscores that even if an offence carries a punishment of less than three years, Section 32(2) can mandate trial by a Court of Session or Special Court, overriding general summary trial provisions.
  3. **Interpretation of Record-Keeping Offences:** It highlights the seriousness with which the judiciary views non-maintenance and manipulation of records under Schedule M & U of the Rules, linking them to penal provisions beyond mere administrative lapses.
  4. **Procedural Due Diligence:** The case serves as a reminder for prosecuting agencies to be precise in their complaints regarding the specific penal sections invoked, even though minor clerical errors in cognizance orders might be overlooked if the intent and substance are clear.
  5. **Implications for Pharmaceutical Industry:** For companies operating under the Drugs and Cosmetics Act, this judgment emphasizes the strict adherence required for record-keeping and the severe consequences of non-compliance, which can lead to trials in higher judicial forums.

By dissecting these critical legal aspects, the judgment offers a comprehensive framework for understanding prosecutions under the Drugs and Cosmetics Act, making it a valuable learning resource.

Disclaimer

All information provided in this blog post is for informational purposes only and does not constitute legal advice. Readers are advised to consult with a qualified legal professional for any specific legal concerns.

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