PETITIONER: SWANTRAJ & ORS. Vs. RESPONDENT: STATE OF MAHARASHTRA DATE OF JUDGMENT05/02/1974 BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. SARKARIA, RANJIT SINGH CITATION: 1974 AIR 517 1974 SCR (3) 287 CITATOR INFO : F 1982 SC1397 (2) ACT: Drugs and Cosmetics Act, (23 of 1940), S. 18(1)(c)--`Stocked for sale', if includes temporary storage for sale not at the Place of storage but elsewhere--Whether forms for licences Provided are inflexible or suitable licences with modification can be issued. HEADNOTE: Section 18(c) of the Drugs and Cosmetics Act, 1940, provides that no person shall manufacture for sale, or sell, or stock or exhibit for sale or distribute any drug except under a licence and s. 27(b) provides for punishment for its contravention. The appellant was a wholesale dealer and distributor of drugs and had the necessary licences prescribed under the Act. It had also the necessary licences authorising it to sell, stock or exhibit for sale or distribute by wholesale through its motor van. The appellant booked certain drugs by lorry but as the motor van was delayed, the drugs were released from the lorry and temporarily kept in the godown of a local drugs dealer. On the questions, (1) whether the licence which permitted stocking and selling in a specified vehicle, covered the brief interval of storage in the godown before loading on to the appellant's van, and (2) whether the act of the appellant in temporarily storing drugs, not for immediate sale there, but for ultimate sale in various parts of the State, is contrary to, s. 18(c) and punishable under s. 27(b). HELD :(1)(a) A licence in terms for a vehicle cannot do duty for one to keep drugs in a fixed place. Assuming that none of the prescribed forms provide for anitinerant wholesale distributor and that it would be impossible to furnish the very many possible places where for short intervals drugs may have to be stored awaiting the arrival of the van, an arguments ab inconvenience cannot be a defence. if the law requires a licence for a place and drugs are kept in such a place without the licence, even as a stop-gap arrangement. The paramount purpose of regulation through licensing is, to set in motion vigilant medical watch over the proper protection of drugs and medicines. verification of the expiry of the time of their efficacy, and the rejection of spurious products. If godowns, temporary stores etc., can be unlicensed, they can become foci of dubious, deceptive and harmful drugs. Therefore, every place where storage is made must be licensed. [290 D-F; 292 A-0] (b) The rules made under the Act, while they visualise wholesale distribution licences. the forms have not provided for licences for mobile vans or distribution depots so essential for a wholesale distribution system. The licence given to the appellants' vehicle is an improvised innovation without the law. 'Mere is no express power to thus modify the forms or innovate according to need. But such an authority to grant suitable licenses under rr. 61 and 62 (proviso), including the wayside depots or 'emergency' stores. could be implied. The appellant should therefore have applied for and obtained the necessary licence for the temporary storage. [291 C-H] (Law Lexicon of British India compiled and edited by Ramanatha Aiyar. sale there' or 'stocked for sale elsewhere late. The Central Government should however clarify the rules and provide for appropriate forms. The first interpretation permits abuse through loopholes, while the second tightens up but casts on the dealer the burden of obtaining more licences. Since risk 288 of life and health is avoided by the latter interpretation, it must be held that the storage, even though for short spells and on ad hoc basis and without intent to sell at that place but as part of the sales business, comes within stocking for sale in s. 18(c) and r. 62. [293 C-E] JUDGMENT:
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 177 of
1970.
From the judgment and order dated the 7th August 1969 of the
Bombay High Court in (Nagpur Bench) at Nagpur in Criminal
Appeal No. 25 of 1968.
S. C. Manchanda and O. P. Verma for the appellant.
M. C. Bhandare and M. N. Shroff, for the respondent.
The Judgment of the Court was delivered by
KRISHNA IYER, J.-Every legislation is a social document and
judicial construction seeks to decipher the statutory
mission, language permitting, taking the cue from the rule
in Heydon’s(1) case of suppressing the evil and advancing
the remedy. The Drugs and Cosmetics Act, 1940 (the Act, for
short) is a life-saving statute one of the provisions of
which, together with a bunch of rules and forms, falls for
interpretation and application to the substantially admitted
facts set out concisely in the order granting certificate of
fitness to appeal. The Bench projected the factual-legal
issue in these words :-
“It is not in dispute that the petitioners
have a wholesale dealers’ licence to stock
drugs at Bombay and have a further licence to
distribute the drugs through the motor van
throughout the territory of the state, of
Maharashtra. Accordingly, their motor van
started filled with drugs and reached the
Vidarbha area. The petitioners booked certain
drugs for which they have already a licence to
distribute, by lorry to Yeotmal. The idea was
that the motor van, which was touring the
Vidarbba area, should reach Yeotmal by about
the time when the goods were due to arrive and
the person in charge. of the motor van would
collect the drugs so booked from the lorry and
distribute them as per instructions given by
the firm. But unfortunately the motor van was
delayed by about three days and one of the
partners of the petitioner-firm who was moving
with the van, went ahead of Yeotmal, released
the goods from the transport operator and
temporarily kept them in the godown of a local
drugs dealer. The intention was to load the
van with those drugs and distribute the drugs
as permitted by the licence.
In the appeal in this Court, these facts have
been found as pleaded by the accused persons.
However, it is held that the temporary deposit
of the goods in the godown of a local drugs
dealer amounts to stocking for sale( as
contemplated by clause (c) of section 18 of
the Drugs
(1) 3 CD. Ref. 7 a Maxwell on the
interpretation of Statutes-12 Edition. 40.
289
and Cosmetic Act, 1940. For the purpose of
stocking the drugs, either for sale or for
distribution,, the accused persons had no
licence for the premises at Yeotmal and this
act amounted to a breach of the conditions of
the licence and, as such, breach of rule 62,
amounting to an ,offence under section 27 (b)
of the Drugs and Cosmetics Act, 1940.
The point, whether a temporary deposit of
drugs or temporary retention of drugs in a
place outside Bombay for which place the
petitioners have no licence to stock the
,goods, amounts to stocking for sale or
distribution, is a point ,of law which appears
to us of general importance.”
The appellant has been concurrently convicted
but hopefully challenged. Sec. 18 (e
) of the
Act forbids manufacture for sale or sell or
stock or exhibit for sale, or distribute any
drug without licence under this Chapter (Ch.
IV). Sec. 27 (b) is the penal provision for
,contravention of the provisions of Ch. IV of
the Act or the rules made thereunder. Rule 62
is claimed to have been violated and so may be
read here together with the sister rule, i.e.
R. 61
“61. Forms of licences to sell drugs-
(1 ) A licence to sell, stock or exhibit for
sale, or distribute drugs other than those
specified in Schedules C and C (1) by retail,
on restricted licence or by wholesale shall be
issued in Form 20, 20-A or 20-B as the case
may be.
Provided that a licence in form 20-A shall be
valid for only such drugs as are specified in
the licence :
(2) A licence to sell, stock or exhibit for
sale, or distribute drugs specified in
Schedules C and C(1) by retail, on restricted
licence or by wholesale shall be issued in
Form 21, 21-A or 21-B as the case may be
Provided that, a licence in form 21 A shall be
valid for only such drugs as are specified in
the licence.
62. Sale at more than one place-If drugs are sold or
stocked for sale at more than one place, separate
application shall be made, and a separate licence shall be
issued, in respect of each such place :
Provided that this shall not apply to itinerant vendors who
have no specified place of business and who will be licensed
to conduct business in a particular area within the
jurisdiction of the licensing authority.”
The appellant is a wholesale dealer and distributor-and has
a licence for his Bombay shop in Form 20B and another in
Form 21B, one for drugs specified in C and C (1) Schedules
and the other for other drugs (Ex. 37 and 38). The firm has
one more licence issued under R.61(2) in Form 21B
authorising it to sell, stock or exhibit for
290
Sale or distribute by wholesale on the premises situated at
through Station Vagan No. No. 1279 in the state of
Maharashtra, the following categories of drugs specified in
Schedule C and C(1) to the Drug Rules, 1945 :-
Categories of drugs : for items of Schedule C(1) drugs not
requiring Cold Storage.
2.This licence shall be in force for two years from the
date of issue of this licence.
3.This licence is subject to the conditions stated below
and to, the Provisions of the Drugs Act, 1940 and the rules
thereunder.
The question is whether the, act of the appellant in
temporarily storing drugs, not for immediate sale there but
intended for ultimate sale in various, parts of the State,
is contrary to sec. 18(c) and punishable under Sec. 27 (b)?
Even if it is, can Ex. 39, which permitted stocking and
selling in the specified vehicle of the accused, cover the
brief interval of storage between taking delivery from the
railway or other public transport and loading into the
appellant’s mobile van
Agreeing with the High Court, we may make short shrift of
the second contention first. If a brief storage for sale in
the circumstances of this case necessitates a licence a
legal issue we will examine separately-does Ex. 39 fill the
bill ? A licence in terms for a vehicle cannot do duty for
one to keep drugs in a fixed place. The grievance assuming
it to be real, that none of the prescribed forms provide for
an itinerant wholesale distributor or that it would be a
fantastic impossibility to furnish the possible places-
likely to be numerous-where for short intervals drugs may
have to be stored awaiting the arrival of the van, is no
defence. If the law asks for a licence for a place and you
do not have it and still keep the articles there you are
asking for criminal trouble, whether it is a stopgap
stocking or not. The arguments ab inconvenienti affords no
answer. The. Act mandates the taking of a licence for
every place where you stock drugs for sale, the words of
Sec.18(v) and rule 62 being plain and admitting of no
exceptions. you ask four questions. is it a drug? If it is,
is it stored in a place or, is it in transit ? If it is
stored in a place, is the storage for sale? If it is, a
licence for that place half way house, may be is the, only
answer to a prosecution. There is none here, ex confession
of course, what looms large then is as to whether such a
stop gap storing is one for sale even if, admittedly. no
sale is intended in that drug shelter ?
Counsel for the State Shri Bhandare counters the argument of
absence of prescribed forms and difficulties in mentioning
many places for temporary storage of drugs, in two ways.
Firstly, statutory forms are samples for guidance, not-
exhaustive prescriptions unamenable to addition modification
or improvisation as the circumstances require. The forms in
the appendices to the Civil Procedure Code illustrate this
point of course, it is not as sample as that Sec.18 which
regulates manufacture and sale of drugs prohibits these
activities, “except under and in accordance with the
conditions of a licence issued for such purpose…….. No
inflexible formula nor petrified
291
form is built into the section, suitable forms dictated by
pragmatic considerations and conditions of business being
not ruled out. The rules, however, are a little confusing
Rule 2(b) defines ‘Form’ as a form set forth in Sch. A and
does not profess to be illustrative and that Schedule
applies 6 forms under R. 61 (1) and (2) and none for
peripatetic wholesale distributors who may transport to and
stock in central places and radiate from there to remote
retailers. The licence Ex. 39 for the accused’s vehicle is
an improvised innovation without the law but prompted by
practical sense. The sub-rules of Rs. 61 state that
licences there under shall be issued in forms 20A, B and C,
21A, B and C. Rule 62 leaves no room for variations to suit
exigencies although its proviso envisages licences for
itinerant vendors for an area and R 62A takes cognisance of
travelling agents and itinerant vendors who are required to
take licences in Form 21A. But it is a glaring deficiency
that while the rules visualise wholesale distribution
licences the forms do not spell out licences for mobile vans
or distribution depots so essential for a wholesale
distribution system. There is no doubt that if a scientific
system of over-seeing wholesale distribution and a viable
scheme of protected distribution is to be devised, licences
for large and well equipped conveyances and storage depots
is desirable, nay, necessary. Indeed, storage in transit
must also be licensed so that medicines do not suffer in the
process. At present, no rules take care of transit by road
or rail. Actually, cold storage or air-conditioned
facilities for sensitive medicines are scarce in
nationalised and private transport services and the drugs
legislation winks at it. Likewise, the forms do not provide
for storage depots or medical vans for wholesale supplies.
Social guilt attaches to legal lacunae, the community being
the victim. Arguments in this case have exposed these,
shortfalls in the law and we state them for legislative
attention.
The statutory scheme does provide for retail and wholesale
sales and storages for sale. It does prescribe forms for
itinerant retailers for specified areas, travelling
representatives supplying samples and the like. But storage
for sale in mobile wagons or vans resorted to by wholesalers
is not expressly covered by statutory forms. That is why
Ex. 39 is an adaptation not found in the fasciculus of
prescribed forms. There is no express power to modify the
forms conferred by the rules, or innovate according to need,
desirable though it is. As the law now stands, we are,
disinclined to invalidate Ex. 39. on the other hand, the Act
and the rules must prevail over the forms and, therefore, we
are inclined to overlook the technical deficiencies in the
rules and, bending the law to save life, uphold the implied
authority to grant suitable licences under R. 61 and 62
(proviso) even if liberties have to be taken with those
given in Schedule A. This Will extend to grant of such
licences for way side depots or ’emergency’ stores. But
licences there must be for every storage for sale (S. 18(C).
Sri Manchanda’s plea’ that licences should not be insisted
on for every place of make-shift storage in a far-flung area
served by a wholesaler may look reasonable. The police
power of the State is
292
exercised to ensure safe and potent drugs for a people
peculiarly susceptible to ailments and largely ignorant of
health hazards. The paramount purpose of regulation through
licensing is, inter alia, to set in motion vigilant medical
watch over the proper protection of drugs and medicines and
the verification of the expiry of their life and the
spuriousness of the products. If godowns, temporary stores
and depots can remain unlicensed, they escape official
attention and can deteriorate into foci of dubious or
deceptive drugs harmful to society. Every place where
storage for sale is made must be licensed. That is the
plain meaning of Sec. 18 (c) in fulfillment of the clear
purpose, the sensitive defence of the sick.
The only surviving issue is whether the medicines in this
case were stocked for sale in the house of Jaswani at
Yootmal. Admittedly, they were kept not for sale in those
premises. Admittedly, they were meant for sale eventually
to rural retailers elsewhere. If so, were they stocked for
sale? Either contention has some claims to acceptance but
what must tilt the balance is the purpose of the, statute,
its potential frustration and judicial avoidance of the
mischief by a construction whereby the means of licensing
meet the ends of ensuring pure and potent remedies for the
people. This liberty with language is sanctified by great
judges and textbooks. Maxwell(1) instructs us in these
words :-
“There is no doubt that ‘the office of the
Judge is, to make such construction as will
suppress the mischief, and advance the remedy,
and to suppress all evasions for the
continuance of the mischief.’ To carry out
effectually the object of a statute, it must
be so construed as to defeat all attempts to
do, or avoid doing, in an indirect or circui-
tous manner that which it has prohibited or
enjoined : quando liquid prohibit, prohibetur
et omne per quod devenitur ad illud.
This manner of construction has two aspects.
One is that the courts, mindful of the
mischief rule, will not be astute to narrow
the language of a statute so as to allow per-
sons within its purview to escape its net.
The other is that the statute may be-applied
to the substance rather than the mere form of
transactions, thus defeating any shifts and
contrivances which parties may have devised in
the hope of thereby falling outside the Act.
When the courts find an attempt at
concealment, they will, in the words of Wilson
C.J., ‘brush away the cobweb varnish, and chew
the transactions in their true light.”
This benignant rule originated four hundred
years ago in Heydon’s case which resolved
“that for the sure and true interpretation of
all statutes in general (be they penal or
beneficial, restrictive or enlarging of the
common law) four things are to be discerned
and considered : (1st). What was the common
law before
(1) Marwell on the Interpretation of
Statutes-12th Edition p. 137.
293
the making of the Act. (2nd) What was the
mischief. and defect for which the common law
did not provide. (3rd). What remedy the
Parliament hath resolved and appointed to cure
the disease of the commonwealth. And, (4th).
The true reason of the remedy; and then the
office of all the Judges is always to make
such construction as shall suppress the
mischief, and advance the remedy, and to
suppress subtle inventions and evasions for
continuance of the mischief, and pro private
commode, and to add force and life to the cure
and remedy, according to the true intent of
the makers of the Act, pro bono publico.”
If any godown, depot or premises become the nidus of
spurious. time-expired or unscientifically stored drugs, can
they be allowed to escape the coils of the penal law on the
plea that they are not to be sold there, without great peril
to patients? Then legal shelter for spurious drug rackets
would be judicially ensured. And this colours construction.
Stocked for sale there and then? or to be sold certainly but
elsewhere later ? are the two alternatives flowing from the
language of Sec. 18(1) (c). The former permits abuse
through, loopholes, the latter tightens up but loads the
dealer with expenses and need for more licences. Since risk
to life and health is avoided by the latter interpretation,
we hold that the storage, even though for short spells and
on ad hoc basis and without intent to sell at that place but
as part of the sales business, comes within the scope of
storage for sale’ in Sec. 1.8(c) and R. 62. To loosen the
law in its joints is to play with life and therefore anti-
humanist.
On the admitted facts, the offence is not serious. On
the face of it, the law is a little defective. Our
interpretation makes the accused guilty and clarifies the
legal position although the Central Government will do well
to tidy up and tighten the provisions by a close second look
at the law in the book. We need hardly say that a law is
effective not by making it perfect on paper but by providing
a sufficient and conscientious cadre of officers.
The sentence is light but here it is enough. We dismiss
the appeal for the reasons above set out.
V. P. S.
Appeal dismissed.
294