Drugs & Cosmetics Act | Power To Prohibit Drug Only With Central Govt; Trade Can't Be Restricted Without Notification U/S 26A : Supreme Court

The Supreme Court recently set aside the orders of the Allahabad High Court which upheld the decision of a District Magistrate in restricting the trade of 'aromatic tincture of cardamom' on grounds that it has a high level of alcohol content and therefore is a prohibited article under the Drugs & Cosmetics Act, 1940.A bench of Justices Vikram Nath and PB Varale held that the power to impose a prohibition or declare a drug as banned or restricted for reasons of public interest lies exclusively with the Central Government as provided in Section 26A (Powers of Central Government to regulate, restrict or prohibit manufacture, etc., of drug and cosmetic in public interest) of the D&C Act, 1940.Referring to Section 26A of the Act, the Court observed: "This is the sole statutory mechanism through which a drug, previously permissible, can be effectively taken off the market or subjected to special conditions. The provision ensures that any decision to restrict a drug stem from a central, uniform, and scientifically informed process, guided by expert advice, safety evaluations, and considered policy determinations. This centralized approach is deliberate, aimed at preventing arbitrary or inconsistent local measures that would fragment the national drug regulatory regime."It held that in the absence of a notification issued under Section 26A by the Central Government, the tincture remains a licensed medical preparation that can be manufactured and sold in accordance with law. "The Respondent authorities cannot, on their own accord, treat this lawful product as a “prohibited article.” Any such classification by subordinate authorities would undermine the statutory scheme, which deliberately centralizes the ultimate decision-making power over prohibition with the Central Government. To hold otherwise would effectively allow local officials to unilaterally bypass the checks and balances embedded in the Act, and to create, in practice, an ad hoc ban outside the statutory process," the Court averred.The Court rejected the reliance on Section 22 (Powers of Inspectors) of the 1940 Act which allows inspection, sampling, and seizure of non-compliant drugs. It said this is a general regulatory authority provided under the Act but it cannot surpass the special centralised power of the Central Government to prohibit drugs.It held: "It does not, however, confer authority to impose new prohibitions or to classify a duly licensed drug as contraband. Section 22(1)(d) is not a substitute for Section 26A of the D&C Act, 1940."Brief factsAs per the brief facts, the Appellant carries out business in aromatic tincture of cardamom, used for treating mild ailments such as indigestion, flatulence, stomach pain, nausea, and vomiting. It is alleged that the Respondent officers from the Drug Control Exercise Departments carried out repeated inspections of their shops in Uttar Pradesh, leading to an abrupt closure.Eventually, through an order of the District Magistrate, the Appellants were restricted from carrying out the business on the grounds that the tincture was alcohol mixed. The Appellants preferred a writ petition and thereafter, a review petition before the Allahabad High Court. Both were dismissed. Against these orders, the Appellant preferred an SLP before the Supreme Court arguing that restricting their fundamental right to carry on a lawful trade and business violates Article 19(1)(g) when there is no restriction provided under the 1940 Act to sell aromatic tincture of cardamom.Against this, the Respondent contended that the aromatic tincture of cardamom has extremely high alcohol content and is misused as a cheap substitute for country liquor by vulnerable sections of society, including daily wage earners and rickshaw pullers. Case Details: M/S BHAGWATI MEDICAL HALL & ANR. v. CENTRAL DRUGS STANDARD CONTROL ORGANIZATION & ORS., SLP(C) Nos.22833-22834/2022]Appearances: Senior Advocate Nikhil Goel (Appellants) and Samar Vijay Singh (AOR and Standing Counsel for State of Uttar Pradesh)Citation : 2024 LiveLaw (SC) 1055Click Here To Read Order

Drugs & Cosmetics Act | Power To Prohibit Drug Only With Central Govt; Trade Can't Be Restricted Without Notification U/S 26A : Supreme Court

Gursimran Kaur Bakshi

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Gursimran Kaur Bakshi

Drugs & Cosmetics Act | Power To Prohibit Drug Only With Central Govt; Trade Can't Be Restricted Without Notification U/S 26A : Supreme Court

Gursimran Kaur Bakshi

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