The Punjab and Haryana High Court has upheld the cancellation of a chemist's retail drug licences after unaccounted psychotropic tablets and record-keeping lapses were found at his shop, rejecting the argument that mere possession of the drugs, without proof of an actual sale, could not amount to a violation of the Drugs and Cosmetics Rules, 1945.

 Justice Kuldeep Tiwari referring to Drugs ans Cosmetic Act said, “Under the statutory scheme, a retail licensee cannot harbor unaccounted psychotropic prescription stock on commercial premises and escape administrative liability by merely asserting that the stock was not actively dispensed.”

The Court was hearing a plea filed by a proprietor of a medical store challenging two orders, one cancelling his Retail Sale Drugs Licences, and the other dismissing his statutory appeal against that cancellation.

The petitioner had been granted two retail drug licences in October 2024. About eight months later, an inspection of his premises revealed several violations: physician samples marked “not for sale” were being stocked, including tablets containing Chlordiazepoxide, a psychotropic substance under the NDPS Act. 

The inspection also found that retail sale records and bills had not been maintained, no separate register existed for Schedule H1 drugs, and purchase records were not kept in chronological order.

Following a show-cause notice, the licensing authority found the petitioner's explanation unsatisfactory and cancelled both licences, citing his criminal antecedents and the presence of unaccounted psychotropic stock. His statutory appeal was subsequently dismissed as well.

Counsel for the petitioner raised three contentions. First, that the inspection itself was invalid for not following the sampling procedure under Section 23 of the Drugs and Cosmetics Act, 1940. Second, that Rule 65(3)(1) — which requires entries in a prescription register — applies only at the point of an actual sale against a prescription, and mere stocking of medicines without proof of sale could not attract the provision. Third, that since this was a first offence, a lenient course such as temporary suspension should have been adopted instead of outright cancellation.

The Court rejected all three submissions.

On the inspection procedure, it held that Section 23 applies only where a sample is drawn to test whether a drug itself contravenes the Act, not to the present case, where the petitioner never disputed that the recovered tablets contained a psychotropic substance, since the composition was evident from the labelling itself. The Court viewed the belated raising of this plea as an attempt to escape the cancellation penalty.

On Rule 65(3)(1), the Court held that the provision requires systematic recording of retail stock and corresponding purchase records for prescription drugs held on licensed premises. Where physician samples are found without valid invoices or register entries, the licensee fails to account for lawful custody of the stock.

The Court also noted that the cancellation was not based on Rule 65(3) alone, independent violations of Rule 65(18) (stocking of physician samples) and Rules 65(4)/65(6) (failure to maintain Schedule H1 registers and chronological records) each independently justified the cancellation.

On the question of proportionality of punishment, the Court noted that the petitioner had obtained the licences only about eight months before the inspection, and had two prior NDPS Act convictions, both involving recovery of pharmaceutical drugs. 

In the light ot the above, the Court found no infirmity, illegality, or perversity in the impugned orders, the Court dismissed the writ petition.

Case Title: M/s Harman Medical Store through its Proprietor Angrej Singh v. State of Punjab and Others

Counsel for the Petitioner: Mr. Inderjit Sharma, Advocate, with Mr. Prem Nath, Advocate

Counsel for the Respondents: Mr. Karunesh Kaushal, A.A.G., Punjab

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