Once Dealer Establishes Lawful Purchase Chain, He Cannot Be Convicted For Substandard Drugs: Allahabad High Court Acquits Medical Store Owner

“No Adverse Inference Can Be Drawn Without Testing Manufacturer’s Control Sample”, In a landmark decision that brings clarity on the strict liability regime under the Drugs and Cosmetics Act, the Allahabad High Court set aside the 41-year-old conviction of Virendra Kumar Goel, a licensed medical store owner, accused of stocking and selling spurious chloroquine tablets. The Court ruled that once the appellant disclosed a complete and lawful chain of purchase from licensed sources, and in the absence of mens rea or comparative sample testing, he could not be held criminally liable under the Act.

The Court quashed the conviction awarded by the trial court on 9 February 1984 under Sections 27(a)(ii) and 27(b) of the Drugs and Cosmetics Act, and ordered the appellant's acquittal, holding that the prosecution failed to establish guilt beyond reasonable doubt.

The controversy began on 3 January 1976, during the Emergency period, when Drug Inspectors P.K. Rastogi and D.K. Jaju conducted a surprise inspection of the appellant’s medical shop—Arogya Store, located in Meerut. They collected samples of four medicines, including 40 tablets of Chloroquine 250 mg, suspected to be of substandard quality.

The batch bore a hand-written number T500192 and was allegedly manufactured by Nectarine Pharmacy, Faridabad. The Central Drug Laboratory, Calcutta later reported that the sample “did not give a positive test for chloroquine phosphate” and termed the tablets as spurious, misbranded, and adulterated.

While the other three sampled drugs were cleared, the chloroquine tablets led to a complaint being filed before the Chief Judicial Magistrate, Meerut. The appellant was convicted in 1984, sentenced to three years of rigorous imprisonment and a fine of ₹6,000, with an additional three years’ imprisonment in case of default. This conviction stood challenged for over four decades.

The pivotal question before the Court was whether a licensed medical dealer, who lawfully procured drugs from a licensed wholesaler, could be held liable for the sale of spurious drugs, especially in the absence of comparative sample testing and when the manufacturer was not made an accused.

Justice Anish Kumar Gupta answered emphatically in favour of the appellant.

“The appellant has fully discharged the burden as mandated under Section 19(3) and Section 19-A (as amended by the U.P. Act No. 47 of 1975) by disclosing the complete chain of purchase,” held the Court, noting that the dealer had bought the tablets from M/s Bhuvan Pharma, a licensed wholesaler, who in turn had sourced them directly from Nectarine Pharmacy, a licensed manufacturer.

The Court criticized the Drug Inspector’s failure to send 118 control sample tablets (seized from Nectarine Pharmacy) for testing, stating:

“Without examination and analysis of the control sample, any conclusion that the tablets seized from the appellant were not manufactured by Nectarine Pharmacy is without basis.”

The bench added: “Unless both the sample seized from the dealer and the manufacturer are analysed by the same drug analyst, no adverse inference can be drawn against the dealer.”

The trial court had erroneously emphasized the weight discrepancy between the manufacturer’s report (299.16 mg) and the analyst’s finding (379.4 mg), but the High Court accepted the scientific explanation by defence witnesses—professors of chemistry—that moisture absorption could cause such variation in tablets stored in opened or loosely packed bottles.

Justice Gupta went further to remark:

“The source of purchase and complete chain thereof has been brought on record by the appellant, and it has not been disputed either by Nectarine Pharmacy or by Bhuvan Pharma. Therefore, the appellant cannot be held responsible for the defects in the drug.”

The Court noted another grave lapse: while Bhuvan Pharma was discharged during the trial, the manufacturer was never even made an accused.

Mens Rea and Procedural Concerns:

The Court found no evidence of mens rea or criminal intent on the part of the appellant. On the contrary, it was observed that the entire prosecution was marred by procedural irregularities.

“The Drug Inspectors acted in a wholly biased manner,” the Court recorded, accepting the defence plea that the appellant was threatened with arrest under MISA during the Emergency, and denied an opportunity to have his retained sample tested independently.

The absence of independent witnesses during the seizure and the unexplained delay in informing the accused of his right to get the sample tested after release from preventive detention further weakened the prosecution's case.

“Such coercive and opaque conduct undermines the fairness of the process and casts a shadow on the credibility of the entire prosecution,” Justice Gupta observed.

Setting aside the conviction and sentence imposed more than four decades ago, the Allahabad High Court delivered a strong message: compliance with statutory provisions and disclosure of lawful sources under Section 19(3) shields a dealer from criminal liability, and prosecution must not cut corners in procedural fairness.

This ruling not only acquits an innocent medical dealer but also cautions regulators to exercise their powers within the bounds of law and scientific precision.

“If there was any substandard quality of medicine, it was the manufacturer who alone is responsible for the same,” the Court concluded.

Date of Decision: 28.11.2025