Drug & Cosmetic Act | Manipulated Manufacturing Records Of A Habit-Forming Drug Are Not A Mere Record-Keeping Lapse – They Attract Section 27(d): Supreme Court

“When Allegations Disclose Contravention Of Section 18(a)(vi), Punishment Must Follow Under Section 27(d)”, In a strong reaffirmation of regulatory discipline under the Drugs and Cosmetics Act, 1940, the Supreme Court dismissed the appeal filed by M/s SBS Biotech & Others, holding that non-maintenance and alleged manipulation of mandatory manufacturing records under Schedule M and Schedule U are not minor procedural breaches but constitute contravention of Section 18(a)(vi), punishable under Section 27(d).

The Division Bench of Justice Prashant Kumar Mishra and Justice Vipul M. Pancholi upheld the Himachal Pradesh High Court’s refusal to quash the criminal complaint. The Court clarified that violations affecting statutory manufacturing records directly impact the legality of manufacture for sale and distribution and therefore fall within the penal fold of Section 27(d).

The appeal arose from proceedings initiated after inspection of the appellant firm’s premises in July 2014 in relation to Pseudoephedrine, a habit-forming drug. The Drug Inspector alleged serious discrepancies in production, testing and distribution records, including tampering and misleading entries.

The complaint recorded that “the firm had not maintained the records as per Schedule M & Schedule U of the Act of 1940 and Rules of 1945,” and further alleged “grievous manipulation and violations at the time of manufacturing and testing of the said drugs.”

Rejecting the argument that the case involved only a record-maintenance lapse under Section 18-B punishable under Section 28-A, the Supreme Court held that the allegations clearly attracted Section 18(a)(vi), which prohibits manufacture for sale or distribution “in contravention of any of the provisions of this Chapter or any rule made thereunder.”

The Bench categorically observed that “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.”

The Court emphasized that Schedule M prescribes Good Manufacturing Practices and Schedule U mandates detailed batch production and raw material records. Failure to maintain these is not an isolated clerical lapse but a breach of statutory conditions governing lawful manufacture.

“Limitation Is Three Years Under Section 27(d); Complaint Filed Within Two Years And Six Months Is Not Time-Barred”

The appellants had strongly relied on Section 468 of the Code of Criminal Procedure, arguing that since Section 28-A prescribes punishment up to one year, the limitation period would be one year, rendering the complaint time-barred.

The Court rejected this contention, holding that once Section 27(d) is attracted, which prescribes imprisonment up to two years, the limitation period would be three years.

The Bench observed that “when Section 27(d) of the Act provides for imprisonment for a term not less than one year but may extend to two years… complaint can be filed within a period of 03 years.”

Since the complaint was filed within two years and six months from the date of inspection, it was held to be well within limitation.

The Court distinguished its earlier decisions in Miteshbhai J. Patel v. Drug Inspector and Cheminova (India) Ltd. v. State of Punjab, noting that in those cases the complaints had been filed beyond three years. In the present matter, the prosecution was instituted within the permissible period.

“Omission To Mention Section 27(d) In Handwritten Cognizance Order Is A Clerical Error, Not A Jurisdictional Defect”

Another argument advanced was that the Magistrate, while taking cognizance, did not expressly mention Section 27(d) in the handwritten order.

Examining the complaint, the title of the proceedings and the committal order, the Supreme Court found that Section 27(d) was clearly referred to in the complaint and the committal order. The omission in the handwritten cognizance order was treated as inadvertent.

The Court noted that “while writing the hand written order, the learned JMFC has missed to mention Section 27(d).” It held that no prejudice had been caused to the accused and the proceedings were not vitiated.

“Offences Under Chapter IV Not Triable By Court Inferior To Court Of Session – Section 36-A Summary Trial Not Applicable”

On the issue of jurisdiction, the appellants contended that offences punishable with imprisonment not exceeding three years should be tried summarily by a Magistrate under Section 36-A.

The Court examined Section 32(2), which provides that “no court inferior to that of a Court of Session shall try an offence punishable under this Chapter,” unless otherwise provided.

The Bench clarified that Section 36-A excludes offences triable by Special Court or Court of Session from its summary procedure. In view of Section 32(2), offences under Chapter IV, including those under Section 27(d), are not to be tried by a court inferior to the Court of Session.

The Court held 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.”

Accordingly, the Judicial Magistrate First Class rightly committed the case to the Special Judge.

The Supreme Court concluded that the High Court had committed no error in refusing to quash the complaint under Section 482 CrPC. Holding that the allegations disclosed a prima facie case involving serious discrepancies and manipulation in relation to a habit-forming drug, the Court dismissed the appeal and directed that the trial proceed before the Special Judge in accordance with law.

The ruling reinforces that statutory manufacturing records under Schedule M and Schedule U are integral to lawful drug manufacture. Their manipulation or non-maintenance is not a trivial compliance lapse but a contravention attracting penal consequences under Section 27(d).

Date of Decision: 20 February 2026