The Supreme Court held that alleged violations relating to maintenance and production of manufacturing records under the Drugs and Cosmetics law can attract prosecution under Section 27(d) of the Drugs and Cosmetics Act, 1940, and are not barred by limitation.
The bench of Justices Prashant Kumar Mishra and Vipul M. Pancholi upheld the judgment of the High Court of Himachal Pradesh, which had refused to quash criminal proceedings against the pharmaceutical manufacturer.
The case arose from an inspection conducted on July 22, 2014, at the manufacturing premises of SBS Biotech located in Kala Amb, District Sirmaur, Himachal Pradesh. The firm, engaged in manufacturing pharmaceutical preparations, was operating under valid licences issued under the Drugs and Cosmetics Rules, 1945.
During inspection, the Drug Inspector allegedly found serious discrepancies in the maintenance of records relating to manufacture, testing, and distribution of a drug containing Pseudoephedrine.
Authorities claimed that mandatory records under Schedule M (Good Manufacturing Practices) and Schedule U (Manufacturing Records) were not properly maintained. Entries were incomplete or tampered with. Certain batch production records reflected discrepancies in production, consumption, and sale.
Subsequently, drugs and documents were seized, and prosecution sanction was granted in September 2016. A criminal complaint was filed in February 2017 alleging contravention of Sections 18(a)(vi), 18-B, and 22(1)(cca) of the Drugs and Cosmetics Act, punishable under Sections 27(d) and 28-A.
The principal question before the Supreme Court was whether non-maintenance and non-furnishing of records under Schedule M & U constitutes an offence punishable under Section 27(d) (which provides imprisonment up to two years), or only under Section 28-A (punishable up to one year).
The appellants argued that section 18-B specifically deals with maintenance of records. Violation of record-keeping requirements should attract punishment only under Section 28-A. Since Section 28-A prescribes a maximum punishment of one year, the complaint filed after more than two years was barred by limitation under Section 468 CrPC.
The Court rejected the limitation plea and held that the complaint contained specific allegations not merely of non-maintenance of records but of grievous manipulation in manufacturing records; discrepancies in batch production; misuse relating to a habit-forming drug; and tampering of documentation.
The Court held that such violations fall within Section 18(a)(vi), which prohibits manufacture of drugs in contravention of provisions of Chapter IV or Rules made thereunder.
Since Section 18(a)(vi) was invoked, punishment under Section 27(d) — which prescribes imprisonment of not less than one year and up to two years — was attracted. Therefore, under Section 468 CrPC, the limitation period was three years, not one year. As the complaint was filed within approximately two years and six months from inspection, it was held to be within limitation.
The appellants also argued that offences punishable with imprisonment up to three years should be tried summarily by a Magistrate under Section 36-A of the Act.
However, the Supreme Court clarified that Section 32(2) mandates that no court inferior to a Court of Session shall try offences punishable under Chapter IV. Section 36-A excludes offences triable by a Special Court or Court of Session. Therefore, commitment to the Special Judge was legally valid.
The Court held that the Magistrate rightly committed the case to the Special Judge, and no illegality was committed.
Case Details
Case Title: M/s SBS Biotech & Others Versus State Of Himachal Pradesh
Citation: JURISHOUR-70-SC-2026
Case No.: Special Leave Petition (Criminal) No. 9281 Of 2025
Date: 20/02/2026
