SUPREME COURT IMPOSES FINE IN LIEU OF IMPRISONMENT IN DRUGS AND COSMETICS ACT CASE

INTRODUCTION

A two-Judge Bench of the Supreme Court comprising of Justice B.R Gavai and Justice Sanjay Karol passed an Order dated 14.02.2024 in Criminal Appeal No. 887 Of 2024 (@Petition For Special Leave Appeal (Crl.) No.256 OF 2022) in Palani Vs. The Tamil Nadu State and held that imposing a sentence of imprisonment would be unjustified, particularly when the intent to sell/distribute medicines under Section 18(c) of the Act has been held unproven thereby setting aside the Order of the High Court of Madras.

FACTS

i) The Appellant, Palani, ran a clinic which on 13.010.2015, was inspected by the officials of the State of Tamil Nadu, viz, the Pallippattu Range Drug Inspector; Joint Director, Tiruvallur District Health Department; Zone Drug Inspector Poonamallee.

ii) That the said inspection found 29 types of allopathic medicines meant for distribution without proper paperwork (license) for sale. Moreover, upon being questioned as to the source of procurement of these medicines, details remained unfurnished.

iii) The Drug Inspector, Pallippattu filed a Complaint under Section 200 of the Code of Criminal Procedure, 1973 ( P.C) (Examination of complainant).

iv) Further, the Prosecution was initiated on the basis of 6 witnesses; 12 Exhibits and with 29 types of medicines which were recovered from the clinic, being marked as material objects.

v) The Trial Court upon considering the evidence presented before the Court, found that the case of the Prosecution has been proved beyond reasonable doubt, and therefore, the Appellant was sentenced to two years of rigorous imprisonment along with a fine of Rs. 1,00,000/-.

vi) That the Court held that if the Appellant failed to pay the same, he would have to undergo three months simple imprisonment for the offences under Section 18 (c) of the Drugs and Cosmetics Act, 1940 (Act) (Disclosure of the name of the manufacturer, etc) read with Section 27 (b) (ii) of the Act (Penalty for manufacture, sale, etc).

vii) That for the offences under Section 18A read with Section 28 of the Act, the sentence was six months simple imprisonment with a fine of Rs. 20,000/- with one-month simple imprisonment in default.

viii) That the Sentences awarded by the Trial Court were concurrent in nature.

ix) Further, a cost of Rs. 2,500/- was imposed for newspaper publication under Section 35 of the said Act.

x) Aggrieved by the Order dated 23.11.2018 of the Trial Court, the Appellant filed an Appeal before the Ld. Additional District & Sessions Judge (Appellate Court).

xi) That the primary issue before the Appellate Court was that whether it has been proved that the drugs recovered were in the possession of the Appellant for the purpose of sale/distribution.

xii) That the Appellate Court vide Order dated 16.04.2019 observed that there were no patients or any other persons who were examined to establish that the drugs which were confiscated were actually sold. There were no bills/receipts produced thereof. That PW5 and PW3 testified to the fact that the Appellant was running a medical shop, but it was observed that no proof had been offered to show that the drugs in the clinic were for sale.

xiii) It was, therefore, observed by the Appellate Court that no evidence has been put forth by the Complainant about the sale and/or distribution of the allopathic medicines. The offence under Section 18 (c) of the Act was, therefore, not proven.

xiv) Subsequently, the Appellate Court set aside the conviction and sentence under Section 18 (c) of the Act, while the others were confirmed. Accordingly, it was held that the Appellant was entitled to a refund of Rs. 1,00,000/-.

xv) A Criminal Revision Case bearing No. CRLRC No.413 of 2019 was filed before the High Court of Madras against the Judgment and Order of the Appellate Court. It was observed that the scope of a Revisional Court is limited and is not akin to an Appellate Court. That on account of the absence of any perversity or infirmity in the Order of the lower Courts, the Revision was dismissed. A further prayer was made to set aside the conviction and sentence under Section 18(A) of the Act and a fine could be imposed. The same was rejected.

xvi) Aggrieved by the Order of the High Court of Madras dated 06.09.2021, the Appellant filed Criminal Appeal No. 887 Of 2024 (@Petition For Special Leave Appeal (Crl.) No.256 OF 2022) before the Supreme Court.

SUPREME COURT ANALYSIS

The Apex Court vide Order dated 14.02.2024, made the following observations:

1) The Supreme Court observed that the Appellant being a doctor had no ill intentions to contravene the law and undertake any action which may be scuttling the statutory provisions.

2) Further, it was prayed by the Appellant that sentence of imprisonment be modified to that of a fine.

3) The Court relied on Mohammad Giassudin v. State of Andhra Pradesh (1977) 3 SCC 287 wherein the Supreme Court had observed that it is an amalgam of many factors pertaining to the offence itself as also others such as prior record if any, age, record of employment, education, home life, social adjustment and emotional and mental conditions of the offender etc.

4) The Bench observed that according to the Order of the Revisional Court, it convicted the Appellant under Section 18A read with Section 28 of the Act. That both these provisions concern the disclosure or non-disclosure respectively of the name of the manufacturer. The former stipulates a requirement for every person who is not a manufacturer or agent of distribution to disclose the name of the person from whom he has acquired such drug or cosmetic. The latter imposes a punishment for violation of the aforesaid requirement to the tune of imprisonment up to a year or with a fine not less than Rs.20,000/-, or with both. In the present case, the punishment imposed was six months simple imprisonment with the minimum statutory fine.

5) That it was not disputed that the Appellant was a doctor. The Apex Court relied on Athilakshmi v. State Rep. by The Drug Inspector 2022 SCC OnLine SC 269 wherein the Supreme Court had acquitted a doctor of stocking a small amount of drug, as the same was not slated to be equal to selling medicines across the counter in a shop. This offence was found not proved by the lower Appellate Court.

6) The Bench observed that the only aspect which remains is non-disclosure of the name of the manufacturer. The Court further observed that the quantities of 29 kinds of medicines recovered from the clinic run by the Appellant, were of small quantity.

7) Moreover, in such a situation, non-disclosure of the name of the manufacturer/person from whom the said medicines were acquired, cannot be said to be endangering public interest by allowing the circulation of such substances unauthorizedly.

SUPREME COURT ORDER

The Apex Court, after observing all the facts and circumstances of the case, held that imposing a sentence of imprisonment would be unjustified, particularly when the intent to sell/distribute the medicines under Section 18(c) of the Act has been held not proven. The Court, therefore, found it fit to modify the Order 06.09.2021 and set aside the sentence of imprisonment as awarded, and instead thereof, impose a fine of Rs.1,00,000/- on the Appellant and thereby allowed the Appeal.

Kartik Khandekar

Associate

The Indian Lawyer & Allied Services