/2023 INSC 0180/
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.                      OF 2023
(@ SPECIAL LEAVE PETITION (CRL.) No.9978 OF 2022)
S. ATHILAKSHMI      ……Appellant(s)
Versus
       THE STATE REP. BY THE DRUGS          ..…Respondent(s)
       INSPECTOR  
J U D G M E N T
SUDHANSHU DHULIA, J.
Leave granted.
2.  The   Appellant   before   this   Court   is   a   registered   medical
practitioner   who   is   presently   working   as   an   Associate   Professor
and   the   Head   of   Dermatology   Department,   in   the   Government
Omandurar   Medical   College,   Chennai.   In   the   past,   she   has   held
the   post   of   Assistant   Professor   and   Civil   Surgeon   at   Royapettah
Medical   College.       It   is   permissible   for   her   under   the   law   to

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practice medicine when she is not performing  her official duties.
The   Appellant,   in   her   individual   and   independent   capacity   was
carrying   on   her   medical   practice   at   a   premises   which   is   No.   87,
Red   Hills   Road   (North),   Villivakkam,   at   Chennai.     It   is   here   that
she   could   be   consulted   and   where   she   meets   and   examines   her
patients. 
3.  An   inspection   was   made   on   the   above   premises   by   the
Drugs   Inspector,   Villivakkam   Range   on   16.03.2016.   As   per
inspection   report,   the   Drugs   Inspector   found   the   following
medicines in the inner room of her premises. 
S No. Name of Drug Quantity M.R.P (Rs.)
1. Denidol Lotion
50ml 1 No. 198.50
2. Salico Lotion 30ml 4 Nos. 75/30 ml.
3. A­CN Gel 20 gms 1 No. 98/20gms
4. Tebir Gel 10 gms 9 Nos. 47.90/10gms
5. Soltop­S.6% Lotion (30ml) 4 Nos. 125/30ml
6. Mycotin Cream 15 gms 3 Nos. 115/15gms
7. Mopry 2% Ointment 4 Nos. 75.60/5gms
8. Momtop­S Ointment 
(10gms) 1 No. 145/10gms
9. ESM Cream (10gms) 4 Nos. 76/10gms

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10. Nu­Whitified Ointment 
(20gms) 7 Nos. 40/20gms
11. Momesone Cream (15gms) 3 Nos. 82/15gms
12. Sudif Cream (10gms) 4 Nos. 99/10gms
13. CAP Gel (15gms) 1 No. 156/15gms
14. Kenozole Cream (30gms) 2 Nos. 130/30gms
15. Soltop­S 3% Ointment 1 No. 125/30gms
16. Zylo AC gel 2.5% (20gms) 1 No. 99.74/30gms
17. Ketzi cream (30gms) 1 No. 99.47/30gms
18. Ketoff lotion (60ml) 2 Nos. 150/60ml
The   Drugs   Inspector   also   referred   to   certain   sale   bills   of
medicines which are as follows:
Sr.
No. Bill No. & Date Name of the Drug Qty. Sold
1 409 dated 
24/02/2016 Mycotin Cream
Nufoce Power
Certrezol – L tablets 1 No.
1 No. 
10 Tablets
2 423 dated 9/03/2016 Certivera Lotion
ESM Cream
ILor or Tablets
Cetrezol L Tablets 1 No.
1 No.
10 Tablets
10 Tablets
3 426 dated 
11/03/2016 Adixied Tablets
CAP Gel
AFK Lotion
CAN Soap
Zit care Tablets 2 Strips
1 No.
1 No.
1 No.
2 strips
4 424 dated 9/03/2016 P Scab Lotion
1 for Tablets
Loxip Tablets 1 No.
10 Tablets
10 Tablets
5 428 dated 
11/03/2016 Cultivera Location
Momesone Cream
Cetrezol – L tablets 1 No.
1 No.
10 Tablets
4. The   Drugs   Inspector   thereafter   moved   an   application   for
obtaining   sanction   from   the   office   of   the   Director   of   Drugs

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Control, Tamil Nadu, Chennai­06 on 22.09.2016 which was given
to him on 23.01.2018. Consequently, the Drugs Inspector filed a
complaint before the Court of X Metropolitan Magistrate, Egmore,
for   prosecuting   the   Appellant   under   Section   18(c)   of   the   Drugs
and Cosmetics Act, 1940 punishable under Section 27(b)(ii) of the
Act. 
5. Aggrieved   by   these   proceedings,   the   Appellant   filed   an
application under Section 482 of the Code of Criminal Procedure,
1973 before the High Court of Madras for quashing  the criminal
proceedings. Her petition was dismissed by the Ld. Single Judge
on 21.06.2022. Aggrieved by this, the Appellant has filed Special
Leave   Petition   before   this   Court   against   the   order   of   the   Single
Judge. 
6. Under   Section   18   of   Drugs   and   Cosmetics   Act   1940,   a
prohibition has been imposed as to the manufacture, sale etc. of
certain drugs and cosmetics.  Section 18 reads as follows:
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) …………………………………..
(b) [sell or stock or exhibit or offer for sale,] or distribute
any   drug     [or   cosmetic]   which   has   been   imported   or

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manufactured   in  contravention   of   any   of   the  provisions
of this Act or any rule made thereunder;
(c)   [manufacture   for   sale   or   for   distribution,   or   sell,   or
stock or exhibit or offer for sale,] or distribute any drug
[or cosmetic], except under, and in accordance with the
conditions   of,   a   licence   issued   for   such   purpose   under
this Chapter: 
Provided   that   nothing   in   this   section   shall   apply   to   the
manufacture,   subject   to   prescribed   conditions,   of   small
quantities   of   any   drug   for   the   purpose   of   examination,
test or analysis: 
Provided   further   that   the   [Central   Government]   may,
after consultation with the Board, by  notification in the
Official   Gazette,   permit,   subject   to   any   conditions
specified in the notification, the [manufacture for sale or
for   distribution,   sale,   stocking   or   exhibiting   or   offering
for sale] or distribution of any drug or class of drugs not
being of standard quality.
The   punishment   for   contravention   of   Section   18(c)   is   provided
under Section 27(b)(ii) which reads as follows:
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) xxxxxxxxxxxxxxxxxx
(b) any drug –
(i) xxxxxxxxxxxxxxxxxx
(ii) without a valid licence as required under clause (c) of
section 18,  shall  be punishable with  imprisonment  for  a term
which   shall   [not   be   less   than   three   years   but   which   may
extend to five years and with fine which shall not be less than
one   lakh   rupees   or   three   times   the   value   of   the   drugs
confiscated, whichever is more]: 
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  three  years
and of fine of less than one lakh rupees]; 

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7. As we can see the prohibition under Section 18(c) is on the
manufacturing,   distribution,   stocking   or   exhibition   of   medicines
for   the   purposes   of   sale.   The   charge   in   the   present   case   is   that
the   Appellant   had   “stocked”   medicines   for   “sale”.   The   entire
emphasis is on “sale” of these medicines. This is evident from the
sanction being sought by the Drug Inspector from the office of the
Director, Drugs Control, Tamil Nadu wherein as per the sanction
letter   dated   23.01.2018,   he   had   said   that   the   Appellant   be
prosecuted for the contravention of:
“Section 18(c) of Drugs and Cosmetics Act 1940 for having ∙stocked
drugs   for   sale   and   sold   the   drugs   without   having   a   valid   drug
license, which is punishable under section 27(b)(ii) of the said Act”.
Thus, as per the prosecution she had stocked the drugs and sold
them. What the Director of Drugs Control and the High Court lost
sight   of   is   the   fact   that   the   Appellant   is   a   registered   medical
practitioner,   her   area   of   specialization   being   dermatology.   She
has   an   M.D.   (DVL)   degree   in   this   specialisation.   It   is   not   a   case
that she had opened a shop in her premises from where she was
selling drugs and cosmetics across the counter! It is possible that
she   was   distributing   these   drugs   to   her   patients   for   emergency
uses   and   thus   she   is   protected   by   the   Act   itself.   Schedule   (K)

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which is a part of the Drugs and Cosmetics Rules, 1945 provides
an exemption which we shall examine hereafter. 
8. Under   Section   33   of   the   Act,   the   Central   Government   can
make   rules   which   have   to   be   laid   before   the   Parliament   for   its
ratification   under   Section   38   of   the   Act.   These   rules   have   been
framed   which   is   known   as   Drugs   and   Cosmetics   Rules,   1940.
Rule 123 of the rules exempts certain drugs from  the provisions
of   Chapter   IV   of   the   Act   (which   includes   both   Section   18   and
Section   27   referred   above,   which   are   penal   provisions),   under
certain conditions Rule 123 reads as under: 
“ 123.   The   drugs   specified   in   Schedule   K   shall   be   exempted   from
the   provisions   of   Chapter   IV   of   the   Act   and   the   rules   made
thereunder to the extent and subject to the conditions specified in
that Schedule.”
Entry No. 5 under Schedule (K) are the drugs which are supplied
by  a  registered medical  practitioner  with  which  we are presently
concerned.     The   relevant   provision   of   Schedule   (K)   reads   as
under:­ 
Schedule K
(See Rule 123)
Class of Drugs Extent   and   Conditions   of
Exemptions
1.xxxxxxxxxxxx xxxxxxxxxxxxxxxxx

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2. xxxxxxxxxxx xxxxxxxxxxxxxxxxx
3. xxxxxxxxxxx xxxxxxxxxxxxxxxxx
4. xxxxxxxxxxx xxxxxxxxxxxxxxxxx
5.   Drugs   supplied   by   a   registered
medical   practitioner   to   his   own
patient   or   any   drug   specified   in
Schedule   C   supplied   by   a   registered
medical practitioner at the request of
another   such   practitioner   if   it   is
specially   prepared   with   reference   to
the   condition   and   for   the   use   of   an
individual   patient   provided   the
registered medical practitioner  is not
(a)   keeping   an   open   shop   or   (b)
selling   across   the   counter   or   (c)
engaged   in   the   importation,
manufacture,   distribution   or   sale   of
drugs   in   India   to   a   degree   which
render him liable to the provisions of
Chapter   IV   of   the   Act   and   the   rules
thereunder. All   the   provisions   of   Chapter
IV   of   the   Act   and   the   Rules
made   thereunder,   subject   to
the following conditions:
  [1.   The   drugs   shall   be
purchased   only   from   a   dealer
or   a   manufacturer   licensed
under   these   rules,   and
records   of   such   purchases
showing   the   names   and
quantities   of   such   drugs,
together   with   their   batch
numbers   and   names   and
addresses   of   the
manufacturers   shall   be
maintained.   Such   records
shall be open to inspection by
an Inspector  appointed  under
the   Act,   who   may,   if
necessary,   make   enquiries
about   purchases   of   the   drugs
and   may   also   take   samples
for test.] 
2.   In   the   case   of   medicine
containing   a   substance
specified in [Schedule G, H or
X]   of   the   following   additional
conditions   shall   be   complied
with:­ 
a.   the   medicine   shall   be
labelled with the 
name   and   address   of   the
registered   medical
practitioner   by   whom   it   is
supplied; 
b.   if   the   medicine   is   for
external   application,   it   shall
be   labelled   with   the   words
[***]   “For external use only”―
or, if it is for internal use with
the dose; 
c. the name of the medicine or

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ingredients of the preparation
and   the   quantities   thereof,
the dose prescribed, the name
of   the   patient   &   the   date   of
supply   and   the   name   of   the
person   who   gave   the
prescription   shall   be   entered
at   the   time   of   supply   in
register   to   be   maintained   for
the purpose; 
d.   the   entry   in   the   register
shall   be   given   a   number   and
that   number   shall   be   entered
on the label of the container;
  e.   the   register   and   the
prescription,   if   any,   on   which
the medicines are issued shall
be preserved for not less than
two years from the date of the
last   entry   in   the   register   or
the   date   of   the   prescription,
as the case may be.
3.   The   drug   will   be   stored
under   proper   storage
conditions   as   directed   on   the
label.]
4.   No   drug   shall   be   supplied
or   dispensed   after   the   date   of
expiration of potency recorded
on   its   container,   label   or
wrapper  or in violation of any
statement   or   direction
recorded   on   such   container,
label or wrapper.]
(emphasis supplied)
It is not the case of the prosecution that the Appellant was selling
drugs   from   an   open   shop   across   the   counter.   She   is   a   senior

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doctor   who   is   engaged   as   an   Associate   Professor   and   Head   of
Department,  Dermatology  in a Government Medical College, and
being a medical practitioner, under certain conditions, she is also
protected under the law which has been referred to above. 
9. Considering the small quantity of medicines, most of which
are in the category of lotions and ointments, it cannot be said by
any stretch of imagination that such medicines could be ‘stocked’
for sale and would come in the category of stocking of medicines
for   the   purpose   of   sale.     When   small   quantity   of   medicine   has
been found in the premises of a registered medical practitioner, it
would   not   amount   to   selling   their   medicines   across   the   counter
in   an   open   shop.   In   fact,   this   is   not   even   the   allegation   against
the Appellant. Undoubtedly, the provisions of Section 18 and 27
are   relevant   provisions   under   the   law,   which   have   a   social
purpose,   which   is   to   protect   ordinary   citizens   from   being
exploited   inter   alia,   by   unethical   medical   practitioners,   and   for
this reason the punishment under Section 27 can extend up to 5
years under the law, and has a minimum punishment of 3 years.
But   given   the   facts   and   circumstances   of   the   case   and
considering   that   the   Appellant   is   a   registered   medical

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practitioner,   along   with   the   fact   that   the   quantity   of   medicines
which have been seized is extremely small, a quantity which can
be easily  found in the house or a consultation room  of a doctor,
in   our   considered   view   no   offence   is   made   out   in   the   present
case.   In   fact,   an   exception   has   been   created   under   Schedule   ‘K’
read with Rule 123 to the rules, the appellant ought to have been
given   the   benefit   of   these   provisions   and   such   a   registered
medical practitioner should not have been allowed to face a trial
where in all likelihood the prosecution would have failed to prove
its case beyond reasonable doubt.  The learned single judge while
dismissing   the   application   under   Section   482   Cr.P.C   of   the
appellant has relied upon a decision of this Court: 
"9. It is too late in the day to seek reference to any authority for
the   proposition   that   while   invoking   the   power   under   Section
482   Cr.P.C.   for   quashing   a   complaint   or   a   charge,   the   Court
should   not   embark   upon   an   enquiry   into   the   validity   of   the
evidence   available.   All   that   the   Court   should   see   is   as   to
whether  there  are allegations in the complaint  which  form  the
basis   for   the   ingredients   that   constitute   certain   offences
complained of The Court may also be entitled to see {i) whether
the   preconditions   requisite   for   taking   cognizance   have   been
complied with or not; and {ii) whether the allegations contained
in   the   complaint,   even   if   accepted   in   entirety,   would   not
constitute the offence alleged
…….
13.  A   look   at   the   complaint   filed  by   the  appellant   would  show
that   the   appellant   had   incorporated   the   ingredients   necessary
for   prosecuting   the   respondents   for   the   offences   alleged.   The
question   whether   the   appellant   will   be   able   to   prove   the

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allegations   in   a   manner   known   to   law   would   arise   only   at   a
later stage ... ... ........ ..... "
10. But what the High Court failed to consider, however, is the
provisions   contained   in   Rule   123   read   with   Schedule   ‘K’   to   the
1945   Rules   and   when   admittedly   it   is   not   the   case   of   the
prosecution that the drugs which were seized were being sold in
an open shop across the counter. Since this was not being done
as visualized above, and an exception is created under the law in
favour   of   the   medical   practitioner   where   the   drugs   given   in
Schedule ‘K’ would be exempted from the purview of Chapter 4 of
the   Act,   we   are   of   the   considered   view   that   prosecution   against
the Appellant is unwarranted. 
11. The   backbone   of   the   Respondent’s   case   is   the   sales   bills
with   the   list   of   18   drugs   seized   from   the   premises   of   the
Appellant. However, the details of the sales bills and seized drugs
in   the   Show   Cause   Notice   issued   by   the   Respondent   it   is   seen
that   the   sales   bills   are   not   even   for   the   medicines   which   have
been seized by the Respondent. 
12. On   the   contrary,   upon   being   served   with   the   Show   Cause
Notice, the Appellant was directed, under Section 18­A, to reveal

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the name and addresses of persons from whom she obtained the
drugs which were seized. In compliance with the same, Appellant
has   produced   multiple   invoices   from   pharmaceutical   shops   to
show her  bonafides . Further, upon inspection of the drugs by the
Drugs   Testing   Laboratory,   Tamil   Nadu   they   returned   a   finding
that the drugs were of ‘standard quality’ which indicates it is not
a case where the Appellant was operating a shop to sell spurious
medicines over the counter.  
13. Another factor which must be considered is that the search
was carried out on 16.03.2016 and sanction for prosecution was
sought   on  22.09.2016   and   the   sanction   ultimately   was   given   on
23.01.2018.   There   is   no   explanation   which   has   been   given   for
this delay in getting the approval. In the recently decided case of
Hasmukhlal   D.   Vohra   and   Anr.   v.   State   of   Tamil   Nadu 1
,
criminal   proceedings   were   quashed   against   a   Petitioner   on   the
grounds   that   the   substance   in   question   was   not   a   drug   under
Indian   Pharmacopoeia.   One   of   the   considerations   was   the   delay
in the proceedings against which the following observations were
made, 
1   2022 SCC OnLine SC 1732

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‘25.   In   the   present   case,   the   Respondent
has   provided   no   explanation   for   the
extraordinary   delay   of   more   than   four
years   between   the   initial   site   inspection,
the  show cause  notice, and the complaint.
In fact, the absence of such an explanation
only   prompts   the   Court   to   infer   some
sinister   motive   behind   initiating   the
criminal proceedings.
26.   While   inordinate   delay   in   itself   may
not   be   ground   for   quashing   of   a   criminal
complaint,   in   such   cases,   unexplained
inordinate   delay   of   such   length   must   be
taken   into   consideration   as   a   very   crucial
factor   as   grounds   for   quashing   a   criminal
complaint.
27.   While this court does not expect a full­
blown   investigation   at   the   stage   of   a
criminal complaint, however, in such cases
where   the   accused   has   been   subjected   to
the   anxiety   of   a   potential   initiation   of
criminal   proceedings   for   such   a   length   of
time,   it   is   only   reasonable   for   the   court   to
expect   bare­minimum   evidence   from   the
Investigating Authorities.’
14. The   sanction   for   prosecution   given   in   the   present   case
appears,  prima facie , to suffer from the vice of non­application of
mind. There is no reference to any of the documents, evidence or
the   submissions   submitted   by   either   of   the   parties,   no   reasons
assigned   or   even   an   explanation   pertaining   to   the   delay   which
indicates   it   has   been   passed   in   a   mechani   cal   manner.   This

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Court in the case of   Mansukhlal Vithaldas Chauhan v. State
of   Gujarat 2
,   highlighted   the   importance   of   a   prior   sanction
granted   under   Section   197   of   the   Code   of   Criminal   Procedure,
1973 while quashing the criminal proceedings instituted against
a   Divisional   Accountant   engaged   with   the   Medium   Irrigation
Project Division, Gujarat. It was observed as follows:
‘ 19.   Since   the   validity   of   “sanction”
depends   on   the   applicability   of   mind   by
the   sanctioning   authority   to   the   facts   of
the case as also the material and evidence
collected   during   investigation,   it
necessarily   follows   that   the   sanctioning
authority   has   to   apply   its   own
independent   mind   for   the   generation   of
genuine   satisfaction   whether   prosecution
has to be sanctioned or not.’  
15. The possession of the drugs is not disputed in this case by
either side. However, this Court in the case of   Mohd. Shabir v.
State   of   Maharashtra 3
  while   allowing   an   appeal   in   part   and
directing   the   release   of   an   Appellant   who   had   been   prosecuted
under   the   provision   18(c)   of   the   1940   Act,   this   Court   observed
that possession simpliciter would not itself be an offence but the
prosecution had to prove the essential ingredient under Section
2   (1997) 7 SCC 622
3  (1979) 1 SCC 568

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27 which was that even a ‘stock’ of the medicine was for sale. It
was observed as follows:
‘4.   …We,   therefore,   hold   that   before   a
person   can   be   liable   for   prosecution   or
conviction   under   Section   27(a)(i)(ii)   read
with   Section   18(c)   of   the   Act,   it   must   be
proved   by   the   prosecution   affirmatively
that   he   was   manufacturing   the   drugs   for
sale   or   was   selling   the   same   or   had
stocked   them   or   exhibited   the   articles   for
sale.   The   possession   simpliciter   of   the
articles   does   not   appear   to   be   punishable
under   any   of   the   provisions   of   the   Act.   If,
therefore,   the   essential   ingredients   of
Section   27   are   not   satisfied   the   plea   of
guilty   cannot   lead   the   Court   to   convict   the
appellant.’
16.   The sanctioning authority had not examined at all whether
a   practising   doctor   could   be   prosecuted   under   the   facts   of   the
case,   considering   the   small   quantity   of   the   drugs   and   the
exception   created   in   favour   of   medical   practitioner   under   Rule
123, read with the Schedule “K”.  All these factors ought to have
been   considered   by   the   sanctioning   authority.   Under   these
circumstances   we   allow   this   appeal   and   set   aside   the   order   of
the   learned   Single   Judge   of   the   Madras   High   Court   and   quash

17
the  criminal proceedings in Criminal Case No. 7315 of  2018 on
the file of X Metropolitan Magistrate, Egmore, Chennai. 
…....…...………….………………. J.
         (Krishna Murari)
…………….....……………………. J.
                (Sudhanshu Dhulia)
New   Delhi, 
March 15,   2023.