Analysis of Sections 27(b) and 27(d) of the Drugs and Cosmetics Act, 1940

An Analysis of Penal Provisions under Sections 27(b) and 27(d) of the Drugs and Cosmetics Act, 1940

1. Introduction

The Drugs and Cosmetics Act, 1940 (hereinafter "the Act") is the principal legislation regulating the import, manufacture, distribution, and sale of drugs and cosmetics in India. Its primary objective is to ensure that drugs and cosmetics marketed in India are safe, effective, and conform to prescribed quality standards. Chapter IV of the Act contains provisions relating to the manufacture, sale, and distribution of drugs and cosmetics. Section 27, falling within this chapter, outlines the penalties for contraventions of these provisions. This article provides a comprehensive analysis of two specific penal clauses, Section 27(b) and Section 27(d), examining their statutory content, judicial interpretation, and application, drawing significantly from the provided reference materials and relevant Indian jurisprudence.

2. Statutory Framework: Sections 27(b) and 27(d) of the Drugs and Cosmetics Act, 1940

Section 27 of the Act prescribes penalties for various offenses. For the purpose of this article, we focus on clauses (b) and (d).

2.1. Section 27(b)

Section 27(b) of the Drugs and Cosmetics Act, 1940, as amended, stipulates:

"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,—
...
(b) any drug—
(i) deemed to be adulterated under section 17A or spurious under section 17B or which when used by any person for or in the diagnosis, treatment, mitigation, or prevention of any disease or disorder is likely to cause his death or is likely to cause such harm on his body as would amount to grievous hurt within the meaning of section 320 of the Indian Penal Code (45 of 1860), solely on account of such drug being adulterated or spurious or not of standard quality, as the case may be, shall be punishable with imprisonment for a term which shall not be less than ten years but which may extend to imprisonment for life and shall also be liable to fine which shall not be less than ten lakh rupees or three times value of the drugs confiscated, whichever is more;
(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:"

This clause addresses severe violations: sub-clause (i) deals with adulterated or spurious drugs causing or likely to cause death or grievous hurt, and sub-clause (ii) pertains to the manufacture, sale, etc., of drugs without a valid license as mandated by Section 18(c) of the Act.

2.2. Section 27(d)

Section 27(d) of the Drugs and Cosmetics Act, 1940, as amended, provides:

"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,—
...
(d) any drug, other than a drug referred to in clause (a) or clause (b) or clause (c), in contravention of any other provision of this Chapter or any rule made thereunder shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to two years and with fine which shall not be less than twenty thousand rupees: 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 one year."

Section 27(d) serves as a residual penal provision, covering contraventions of Chapter IV or its associated rules that are not specifically penalized under clauses (a), (b), or (c) of Section 27.

3. Analysis of Key Legal Principles and Judicial Interpretation

3.1. Scope and Ingredients of Section 27(b)

Section 27(b) imposes stringent penalties reflecting the gravity of the offenses it covers. Section 27(b)(i) targets drugs that are adulterated (Section 17A) or spurious (Section 17B) to an extent that they are likely to cause death or grievous hurt. The high minimum punishment underscores the legislative intent to severely penalize acts that gravely endanger public health. Cases involving spurious drugs, as seen in Niraj Chaubey v. State of U.P. and Another (Allahabad High Court, 2025) (Ref 22), where allegations of spurious drugs were made, could potentially attract this provision if the conditions regarding harm are met. The case of Islam Khan v. State of U.P. and Another (2020 AHC 11777, Allahabad High Court, 2020) (Ref 18) also involved allegations of adulterated drugs and unlicensed sale, potentially implicating Section 27(b)(i) or (ii) depending on the specifics.

Section 27(b)(ii) specifically penalizes the manufacture for sale, sale, stocking, etc., of drugs without a valid license as required by Section 18(c) of the Act. The case of M/S. Ra Chem Pharma Limited v. ... (Andhra Pradesh High Court, 2018) (Ref 24) involved a complaint for contravention of Section 18(c), punishable under Section 27(b)(ii). Similarly, in STATE OF GUJARAT v. M/S.KALPESH CORPORATION BRAHMANVADA, STATE HIGHWAY (Gujarat High Court, 2019) (Ref 17), the respondents were accused of manufacturing without a license, an offense linked to Section 27(b). The Patna High Court in Rakesh Kumar v. State Of Bihar (Patna High Court, 2018) (Ref 15, 16) took cognizance, inter alia, under Section 27(b) where expired medicines were allegedly sold after tampering with expiry dates, which could also relate to contraventions of licensing conditions or manufacturing standards. The Himachal Pradesh High Court in Maman Chand Jain v. State Of Himachal Pradesh (Himachal Pradesh High Court, 2018) (Ref 20, 21) dealt with an FIR involving Section 27(b)(ii).

The Supreme Court in Rajasthan Pharmaceutical Laboratory, Bangalore And Two Others v. State Of Karnataka (1981 SCC CRI 244, Supreme Court Of India, 1981) (Ref 2, 6), while dealing with an older version of the Act, noted that Section 27(b) (as it then stood, referring to contraventions of Chapter IV or rules for drugs other than those in clause (a)) prescribed mandatory imprisonment. This underscores the consistent legislative approach of treating such violations seriously.

3.2. Scope and Ingredients of Section 27(d)

Section 27(d) acts as a catch-all penal provision for contraventions of Chapter IV or rules made thereunder that are not covered by the more specific and often more severe penalties in clauses (a), (b), or (c).

A crucial aspect in proving an offense under Section 27 (and by extension, 27(d)) is establishing the element of "manufacture for sale," "sells," "stocks or exhibits for sale," or "distributes." The Supreme Court in Mohd. Shabir v. State Of Maharashtra (Supreme Court Of India, 1979) (Ref 9), while dealing with Section 27(a)(i) and (ii), emphasized that the ingredients required by Section 27 must be proved and that mere possession of a drug might not be sufficient. This principle was reiterated by the Orissa High Court in Samar Kumar Swain v. Subodha Kumar Nayak (Orissa High Court, 2009) (Ref 23) specifically concerning Section 27(d). The court held: "In order to make a person liable for conviction under Section 27(d) of the Drugs and Cosmetics Act, the prosecution has to affirmatively prove that he manufactured the drugs for sale, or was selling the same or had stocked or exhibited them for sale. ... possession simpliciter of the drugs of any quantity whatsoever would not fall within the mischief of Section 27 of the Act."

Several provided references illustrate the invocation of Section 27(d):

  • In Rakesh Kumar v. State Of Bihar (Ref 15, 16), cognizance was taken under Section 27(d) alongside other sections.
  • STATE OF GUJARAT v. M/S.KALPESH CORPORATION (Ref 17) involved charges under Section 27(d) for manufacturing without a license (though Section 27(b)(ii) seems more directly applicable for unlicensed manufacture, 27(d) might have been invoked for other related contraventions).
  • Islam Khan v. State of U.P. and Another (Ref 18) also included Section 27(d) in the complaint.
  • Suraj Kumar Petitioner/S v. State Of Bihar And Another Opposite Party/S. (2018 SCC ONLINE PAT 5130, Patna High Court, 2018) (Ref 19) dealt with an FIR including Section 27(d).
  • Maman Chand Jain v. State Of Himachal Pradesh (Ref 20, 21) involved an FIR with Section 27(d).
  • Niraj Chaubey v. State of U.P. and Another (Ref 22) listed Section 27(d) among the offences in the complaint.
  • M/S. Ra Chem Pharma Limited (Ref 24) mentioned a complaint for contravention of Section 18(b) (related to standards of quality) punishable under Section 27(d), and Section 18(a)(vi) (contravention of rules regarding sale, conditions of license) also potentially falling under 27(d).

3.3. Interplay with Other Provisions of the D&C Act

The penalties under Sections 27(b) and 27(d) are triggered by contraventions of various provisions within Chapter IV of the Act, most notably Section 18, which prohibits the manufacture and sale of certain drugs and cosmetics.

For instance:

  • Section 18(c) prohibits manufacture/sale/distribution of drugs without a license. Contravention is punishable under Section 27(b)(ii), as seen in M/S. Ra Chem Pharma Limited (Ref 24) and Islam Khan (Ref 18).
  • Section 18(a)(i) prohibits manufacture/sale of any drug not of standard quality or misbranded, adulterated, or spurious. Depending on the nature (e.g., adulterated/spurious causing harm), this could lead to penalties under Section 27(b)(i) or other clauses of Section 27. Islam Khan (Ref 18) involved Section 18(a)(i).
  • Section 18(a)(vi) prohibits manufacture/sale in contravention of any rules made under Chapter IV. This could fall under Section 27(d) if not covered elsewhere, as indicated in M/S. Ra Chem Pharma Limited (Ref 24) and Drugs Inspector, Palace Road, Bangalore v. Dr B.K Krishnaiah And Another (1981 SCC 2 454, Supreme Court Of India, 1981) (Ref 4).
  • Section 18(b) prohibits sale/stock/exhibit for sale/distribute any drug not manufactured by a licensed manufacturer or not complying with standards. This could be punishable under Section 27(d), as suggested by M/S. Ra Chem Pharma Limited (Ref 24).

Furthermore, Section 34 of the Act deals with offences by companies, establishing vicarious liability for individuals in charge of and responsible for the company's business. The principles laid down in State Of Haryana v. Brij Lal Mittal And Others (1998 SCC 5 343, Supreme Court Of India, 1998) (Ref 1) and Rajasthan Pharmaceutical Laboratory (Ref 2) regarding the need for specific averments and proof of the directors' involvement are pertinent when companies are prosecuted for offences punishable under Sections 27(b) or 27(d).

3.4. Procedural Aspects and Cognizance

The initiation of prosecution under Chapter IV of the Act is governed by Section 32. As established in Union Of India (S) v. Ashok Kumar Sharma And Others (S). (2020 SCC ONLINE SC 683, Supreme Court Of India, 2020) (Ref 3), prosecution for offences under this chapter must be instituted by an Inspector, a Gazetted Officer authorized by the government, the aggrieved person, or a recognized consumer association. An FIR under Section 154 CrPC by the police is generally not the prescribed mode for initiating prosecution for offences solely under the D&C Act. This was also a point of contention in cases like Suraj Kumar Petitioner/S v. State Of Bihar (Ref 19) and Maman Chand Jain v. State Of Himachal Pradesh (Ref 20, 21), where the courts examined the validity of FIRs for D&C Act offences.

Regarding the trial of offences, Section 32(2) of the Act, as amended, mandates that no court inferior to that of a Court of Session shall try an offence punishable under Chapter IV. This was a key consideration in M/S. Ra Chem Pharma Limited (Ref 24), which discussed the jurisdiction of the Sessions Court for offences including those under Sections 27(b)(ii) and 27(d). Additionally, Section 36AB provides for the designation of Special Courts (Courts of Session) by the Central or State Government for trying offences relating to adulterated or spurious drugs, and other specified offences. This further underscores the seriousness with which such violations are treated.

4. Discussion of Reference Materials in the Context of Sections 27(b) and 27(d)

The provided reference materials offer significant insights into the practical application and judicial treatment of Sections 27(b) and 27(d).

The Rajasthan Pharmaceutical Laboratory case (Ref 2, 6) is notable for its discussion on vicarious liability and sentencing, and its reference to an older version of Section 27(b) which still emphasized mandatory imprisonment. The text of Section 27 provided in Ref 6, "any drug other than a drug referred to in clause (a) in contravention of any of the provisions of this Chapter or any rule made thereunder shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with both," while different in penalty structure from current Section 27(d), reflects the long-standing legislative intent to penalize general contraventions of Chapter IV.

The principle from Mohd. Shabir v. State Of Maharashtra (Ref 9), affirmed in Samar Kumar Swain v. Subodha Kumar Nayak (Ref 23) concerning Section 27(d), is fundamental: the prosecution must prove that the drug was manufactured, stocked, or exhibited *for sale* or distribution, and mere possession is insufficient. This highlights the importance of establishing the commercial intent or activity linked to the contravention.

Cases like Rakesh Kumar v. State Of Bihar (Ref 15, 16), STATE OF GUJARAT v. M/S.KALPESH CORPORATION (Ref 17), Islam Khan v. State of U.P. and Another (Ref 18), Maman Chand Jain v. State Of Himachal Pradesh (Ref 20, 21), and Niraj Chaubey v. State of U.P. and Another (Ref 22) serve as practical examples where individuals or entities faced prosecution involving Sections 27(b) and/or 27(d) for various alleged contraventions, ranging from selling expired or adulterated drugs to unlicensed manufacturing. These cases often also involve procedural challenges related to the initiation of prosecution (Section 32) and the quashing of proceedings.

M/S. Ra Chem Pharma Limited (Ref 24) is particularly instructive as it clearly links specific contraventions of Section 18 (e.g., 18(c), 18(b), 18(a)(vi)) to their respective penal provisions under Section 27(b)(ii) and 27(d), and also clarifies the jurisdictional aspect, emphasizing trial by the Court of Session as per Section 32(2) and the role of Special Courts under Section 36AB.

The judgment in Union Of India (S) v. Ashok Kumar Sharma And Others (S) (Ref 3), while not directly interpreting Sections 27(b) or 27(d), is crucial for understanding the procedural exclusivity of the D&C Act under Section 32 for initiating prosecutions, which is a foundational aspect for any case brought under these penal sections.

5. Conclusion

Sections 27(b) and 27(d) of the Drugs and Cosmetics Act, 1940, are critical penal provisions designed to enforce compliance with the standards and regulations governing the manufacture, sale, and distribution of drugs in India. Section 27(b) imposes severe penalties for grave offences such as dealing in adulterated or spurious drugs likely to cause death or grievous hurt, or manufacturing/selling drugs without a license. Section 27(d) serves as a residual provision ensuring that other contraventions of Chapter IV or its rules do not go unpunished.

Judicial interpretation, as evidenced by the referenced case law, emphasizes the need for the prosecution to strictly prove the ingredients of these offenses, including the element of "for sale" or "for distribution." Furthermore, adherence to the procedural requirements laid down in the Act, particularly regarding the initiation of prosecution by authorized persons (Section 32) and trial by competent courts (Section 32(2) and Section 36AB), is paramount. The stringent nature of these provisions reflects the legislative commitment to safeguarding public health by ensuring the quality, safety, and efficacy of drugs available in the Indian market. A thorough understanding of these sections and their application by the courts is essential for all stakeholders in the pharmaceutical sector and the legal professionals engaged therein.