The Supreme Court of India has unequivocally ruled that the authority to ban or restrict drugs rests solely with the Central Government under the Drugs and Cosmetics Act, 1940 (D&C Act). In a significant decision, the Court set aside actions by local authorities attempting to prohibit the sale of aromatic tincture of cardamom without requisite central notification.
The judgment was delivered by a bench comprising Justice Vikram Nath and JusticePrasanna B. Varale in the case of M/S Bhagwati Medical Hall & Anr. vs. Central Drugs Standard Control Organization & Ors. (Civil Appeal Nos. 14735-14736 of 2024). The ruling clarified critical legal principles concerning the scope of authority under the D&C Act.
Background of the Case
The appellants, M/S Bhagwati Medical Hall and another, proprietors of medical shops in Agra, Uttar Pradesh, challenged restrictions imposed by state authorities, including the District Magistrate and Drug Inspector, on the sale of aromatic tincture of cardamom. Despite holding valid licenses under the D&C Act, they faced allegations that the tincture—due to its high alcohol content—was being misused as an intoxicant by vulnerable populations.
The appellants, represented by advocate Shri Nikhil Goel, contended that their lawful trade was arbitrarily disrupted, violating their fundamental right to carry on business under Article 19(1)(g) of the Constitution. They emphasized that no notification under Section 26A of the D&C Act had been issued to restrict or ban the tincture, making the actions of the state authorities legally unsustainable.
Legal Issues
1. Scope of Local Authorities’ Powers Under the D&C Act
The primary legal question revolved around whether local authorities, such as the District Magistrate and Drug Inspectors, could prohibit the sale of a licensed medicinal preparation without central authorization.
2. Applicability of Section 26A of the D&C Act
The Court examined whether the absence of a central notification under Section 26A of the D&C Act rendered the actions of local authorities ultra vires.
3. Violation of Fundamental Rights
The appellants argued that the restrictions infringed upon their constitutional right to conduct lawful business under Article 19(1)(g).
Supreme Court’s Observations
The Supreme Court made several key observations:
1. Centralization of Prohibitory Powers
The Court held that under Section 26A of the D&C Act, only the Central Government is empowered to impose prohibitions on drugs, ensuring uniformity and preventing arbitrary local actions. The judgment noted:
“Without a central notification, any attempt by local officials to treat a lawful drug as a prohibited article undermines the legislative intent and statutory scheme of the D&C Act.”
2. Limits of Local Authority Jurisdiction
The Court clarified that the powers of local Drug Inspectors under Section 22(1)(d) of the D&C Act are procedural, allowing inspections and enforcement of existing regulations. These powers do not extend to unilaterally declaring a licensed drug as prohibited.
3. Safeguards Against Arbitrary Actions
The bench underscored that any restriction on a drug must follow a centralized, scientifically informed process involving expert advice and notifications under Section 26A, which serves as a statutory safeguard against arbitrary measures.
4. Protection of Lawful Trade
Emphasizing the appellants’ right to carry on business in a lawful manner, the Court observed:
“Fundamental principles of administrative law, as well as the very structure of the D&C Act, demand that any restriction on a licensed medicinal preparation must rest on a firm statutory footing.”
Decision
Allowing the appeals, the Supreme Court quashed the impugned orders of the High Court and state authorities, directing them to cease any interference with the appellants’ business. It further ruled that the appellants, holding valid licenses, were entitled to resume their trade without hindrance.
In its concluding remarks, the Court emphasized the need for a uniform regulatory regime:
“The statutory scheme envisions uniformity, predictability, and legal certainty—values that would be undermined if local authorities could unilaterally impose prohibitions contrary to the nationally determined regime.”
