Supreme Court Modifies Sentence for Non-Disclosure of Drug Manufacturer: Palani vs. State of Tamil Nadu (2024)

Introduction

Date of the Judgment: 14th February, 2024
Citation: 2024 INSC 110
Judges: B.R. Gavai, J. and Sanjay Karol, J.

Can a doctor be imprisoned for not disclosing the source of medicines found in their clinic, even if there’s no proof they were selling them? The Supreme Court of India recently addressed this question, focusing on the intent behind possessing such medicines. This case revolves around the interpretation of the Drugs and Cosmetics Act, 1940, and its implications for medical practitioners. The Supreme Court modified the sentence of imprisonment to a fine, emphasizing the absence of proven intent to sell or distribute the medicines. The judgment was delivered by a bench comprising Justices B.R. Gavai and Sanjay Karol, with Justice Sanjay Karol authoring the opinion.

Case Background

The case began with an inspection of a clinic run by Palani on 13th October, 2015. During the inspection, officials from the State of Tamil Nadu discovered 29 types of allopathic medicines. These medicines were found without proper documentation or licenses for sale, and the clinic operator, Palani, failed to provide details about where he had obtained them. Subsequently, a complaint was filed by the Drug Inspector, Pallippattu, under Section 200 of the Code of Criminal Procedure, 1973, leading to the initiation of prosecution. The prosecution presented six witnesses, twelve exhibits, and the 29 types of recovered medicines as material objects.

Timeline

Course of Proceedings

The Trial Court, after considering the evidence, convicted Palani under Section 18(c) read with Section 27(b)(ii) of the Drugs and Cosmetics Act, 1940, sentencing him to two years of rigorous imprisonment and a fine of Rs. 1,00,000. Additionally, for the offense under Section 18A read with Section 28 of the Act, Palani received six months of simple imprisonment and a fine of Rs. 20,000. The sentences were concurrent. The lower Appellate Court, upon appeal, modified the Trial Court’s order, setting aside the conviction under Section 18(c) of the Act. The Appellate Court noted that there was no evidence to prove that the drugs were intended for sale or distribution, as no patients or bills were presented. The High Court of Judicature at Madras dismissed the criminal revision case, noting the limited scope of a revisional court and the absence of perversity in the lower courts’ orders. This led to the present appeal before the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and application of the following sections of the Drugs and Cosmetics Act, 1940:

• Section 18(c): This section prohibits the sale or distribution of drugs without a valid license.
• Section 18(A): This section mandates that every person, who is not a manufacturer or agent of distribution, must disclose the name of the person from whom they acquired the drug or cosmetic.
• Section 27(b)(ii): This section provides punishment for contravention of Section 18(c) of the Act.
• Section 28: This section imposes a punishment for violating the requirement of disclosing the name of the manufacturer, with imprisonment up to one year, or a fine not less than Rs. 20,000, or both.

These provisions are designed to regulate the manufacture, sale, and distribution of drugs to ensure public safety and prevent the circulation of unauthorized substances. The Act aims to ensure that all drugs available in the market are of standard quality and are sold through authorized channels.

Arguments

Appellant’s Arguments:

• The appellant, being a doctor, had no ill intention (mens rea) to contravene the law.
• The appellant did not intend to undertake any action to scuttle the statutory provisions of the Drugs and Cosmetics Act, 1940.
• The sentence of imprisonment should be modified to a fine, given the circumstances of the case.

Respondent’s Arguments:

• The respondent argued for the upholding of the conviction under Section 18A read with Section 28 of the Drugs and Cosmetics Act, 1940.
• The respondent emphasized the importance of disclosing the name of the manufacturer to ensure public safety.

Submissions

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in a separate section, however, the main issue that was considered by the Supreme Court was:

• Whether the sentence of imprisonment for non-disclosure of the manufacturer’s name under Section 18A read with Section 28 of the Drugs and Cosmetics Act, 1940, is justified when the intent to sell/distribute under Section 18(c) of the Act has been held unproven.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

• Mohammad Giassudin v. State of Andhra Pradesh [(1977) 3 SCC 287] – This case was cited to emphasize that a proper sentence is an amalgam of many factors, including the nature of the offense, prior record, age, employment, education, social adjustment, and emotional and mental conditions of the offender.
• S. Athilakshmi v. State Rep. by The Drug Inspector [2022 SCC OnLine SC 269] – This case was cited to support the acquittal of a doctor for stocking a small amount of drugs, as it was not considered equal to selling medicines across the counter in a shop.

The Court also considered the following legal provisions:

• Section 18(c) of the Drugs and Cosmetics Act, 1940: Prohibits the sale or distribution of drugs without a valid license.
• Section 18(A) of the Drugs and Cosmetics Act, 1940: Mandates the disclosure of the name of the person from whom a drug or cosmetic was acquired.
• Section 27(b)(ii) of the Drugs and Cosmetics Act, 1940: Provides punishment for contravention of Section 18(c).
• Section 28 of the Drugs and Cosmetics Act, 1940: Imposes punishment for violating the requirement of disclosing the manufacturer’s name.

Authorities Considered by the Court

Judgment

How each authority was viewed by the Court:

• The Supreme Court followed Mohammad Giassudin v. State of Andhra Pradesh [(1977) 3 SCC 287]* to emphasize the factors to be considered while determining a proper sentence, particularly the need to consider the offender’s background and circumstances.
• The Supreme Court followed S. Athilakshmi v. State Rep. by The Drug Inspector [2022 SCC OnLine SC 269]* to support the acquittal of a doctor for stocking a small amount of drugs, as it was not considered equal to selling medicines across the counter in a shop.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The appellant was a doctor, and there was no evidence of intent to sell or distribute the medicines.
• The quantity of medicines recovered was small.
• The non-disclosure of the manufacturer’s name did not endanger public interest in the given circumstances.
• The Court considered the purpose of the law, which is to prevent the circulation of unauthorized substances, and found that the appellant’s actions did not violate this purpose.

Fact:Law Ratio

The Court’s reasoning was influenced more by the factual aspects of the case, such as the appellant’s profession, the quantity of drugs, and the lack of intent to sell, than by strict legal interpretations. The court emphasized that the purpose of the law was to prevent the circulation of unauthorized substances, and the appellant’s actions did not violate this purpose.

Logical Reasoning

Judgment Analysis

The Supreme Court modified the sentence, setting aside the imprisonment and imposing a fine of Rs. 1,00,000. The Court reasoned that the appellant, being a doctor, did not have the intent to sell or distribute the medicines, and the small quantity of drugs recovered did not pose a significant threat to public interest. The Court emphasized that the primary object of the prohibition in law is to prevent the circulation of unauthorized substances, and the appellant’s actions did not violate this objective.

The Court observed:

“…non-disclosure of the name of the manufacturer/person from whom the said medicines were acquired, cannot be said to be endangering public interest (which obviously, is the primary object of the prohibition in law) by allowing the circulation of such substances unauthorizedly.”

The Court also noted:

“In the attending facts and circumstances, considering that the Appellant is a doctor and also keeping in view the observations of this Court in Mohammad Giassudin (supra), we are of the considered view that imposing a sentence of imprisonment would be unjustified, particularly when the intent to sell/distribute under Section 18(c) of the Act has been held unproven.”

Further, the Court stated:

“Therefore, we find it fit to modify the impugned judgment, set aside the sentence of imprisonment as awarded, and instead thereof, impose a fine of Rs. 1,00,000/- on the Appellant.”

The judgment highlights a nuanced approach to the application of the Drugs and Cosmetics Act, 1940, emphasizing the need to consider the intent and circumstances of the offender. It suggests that not every violation of the Act should result in imprisonment, especially when the violation does not significantly endanger public interest. This decision may have implications for future cases involving medical practitioners and minor violations of drug regulations.

Key Takeaways

• Medical practitioners who possess small quantities of medicines without proper documentation may not face imprisonment if there is no evidence of intent to sell or distribute them.
• The focus of the Drugs and Cosmetics Act, 1940, is on preventing the circulation of unauthorized substances that endanger public interest.
• Courts will consider the intent and circumstances of the offender when determining the appropriate sentence for violations of the Act.
• This judgment may lead to a more lenient approach towards medical practitioners who commit minor violations of drug regulations.

Directions

The Supreme Court modified the impugned judgment, set aside the sentence of imprisonment, and instead imposed a fine of Rs. 1,00,000 on the appellant. The exemption from surrendering granted by the Court on 7th January, 2022, was made absolute.

Development of Law

The ratio decidendi of this case is that a sentence of imprisonment for non-disclosure of the manufacturer’s name under Section 18A read with Section 28 of the Drugs and Cosmetics Act, 1940, is not justified when the intent to sell/distribute under Section 18(c) of the Act has been held unproven. This judgment clarifies that the focus of the Act is on preventing the circulation of unauthorized substances that endanger public interest, and not every violation should result in imprisonment. This decision indicates a shift towards a more nuanced approach, taking into account the intent and circumstances of the offender, especially in the case of medical practitioners.

Conclusion

In the case of Palani vs. The Tamil Nadu State, the Supreme Court modified the sentence of a doctor who was convicted for non-disclosure of the manufacturer of recovered drugs. The Court set aside the imprisonment and imposed a fine, emphasizing that the intent to sell or distribute the drugs was not proven. This judgment highlights the importance of considering the intent and circumstances of the offender when applying the provisions of the Drugs and Cosmetics Act, 1940. The decision underscores that the primary objective of the Act is to protect public interest by preventing the circulation of unauthorized substances.