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10. On the above pleadings, my attention has been invited by both the learned Counsel to the scheme of the provisions of the Drugs & Cosmetics Act, 1940. Chapter IV deals with the manufacture, sale and distribution of the drugs and cosmetics. Under section 18 there is a prohibition for the manufacture and sale of certain drugs and cosmetics, except under and in accordance with the conditions of a licence issued for such purpose under the said Chapter. Section 33-A. which is the last section appearing in Chapter IV, says that nothing contained in the said Chapter shall apply to Ayurvedic, Siddha or Unani drugs. The Chapter which follows thereafter viz. Chapter IV-A deals with the provisions relating to Ayurvedic, Siddha and Unani drugs. Section 33-EX. C deals with the prohibition of manufacture and sale of Ayurvedic, Siddha and Unani drugs. Under clause (c) of section 33-EX. C, no person either by himself or by any other person can manufacture for sale or for distribution any Ayurvedic, Siddha or Unani Drug, except under and in accordance with the conditions of a licence issued for the said drug by the prescribed authority. Section 33-I prescribes the penalty for manufacture, sale etc. of Ayurvedic, Siddha or Unani drug in contravention of the provisions of Chapter IV-A. The First Schedule to the Act gives a list of the standard books on Ayurvedic and Siddha system. Those mentioned by the petitioners in support of their formula find a specific mention in the said Schedule.

11. My attention has then been invited to the Drugs and Cosmetics Rules, 1945. Part XVI deals with the manufacture for sale of Ayurvedic (including Siddha) or Unani drugs. Rule 154 deals with the form of licence to manufacture Ayurvedic (including Siddha) or Unani drugs. Sub-rule (2) of Rule 154 says that a licence under this rule shall be granted by the licensing authority after consulting such expert in Ayurvedic (including Siddha) or Unani systems of medicine as the case may be, which the State Government may approve in this behalf. Rule 156 deals with the duration of the licence. Rule 157 deals with the conditions of the grant or renewal of licence and Rule 159 empowers the licensing authority to suspend or cancel the licence if there is a breach to comply with the conditions of licence or the provisions of the Act or the rules. There is, thus, an elaborate machinery provided under the Drugs & Cosmetics Act, 1940 read with the Drugs & Cosmetics Rules, 1945 to investigate into the claim for issuance of a licence for the manufacture of an ayurvedic medicine. The formula of the medicine has to confirm to the standard drugs of the particular system of medicine. The experts in the field can be consulted before granting a licence. There is thus a strict control on the manufacture and sale of the drug or medicine. It is in the above background that the matter has been argued at length.

Thereafter in Para 15 of the Judgment at Page 376 and Page 377 of the Report, it has been observed as under:-

"In other words, the Drugs and Cosmetics Act makes it abundantly clear that only those drugs which are manufactured under a valid licence issued under the said Act and in compliance with its provisions can be lawfully sold, exhibited for sale or distributed. This also indicates that trade in respect of drugs is lawfully possible only when there is a compliance with the provisions of the said Act, but by the manufacturers and dealers. In Ashok Leyland's case (above), the Division Bench of this Court held that the relationship between the manufacturer and the dealer is not that of a principal and agent but that of a seller and a buyer. Applying the ratio of this decision to the case at hand, it seems to us obvious that the relationship that is established between the manufacturer and the dealer as regards the sale of the products manufactured by the petitioners is of a seller and a buyer and thus, the observation of the Supreme Court in Hindustan Sugar Mills' case (above) became most relevant. Their Lordships of the Supreme Court, dealing with the provisions of the Central Act regulating the sale and the price of cement vis-a-vis the clauses of the agreement entered into by the parties, indeed observed that the provisions of the Central Act regulating the sale and the price of cement and had an overriding effect and thus, if the said Control Order was stipulating that the freight was to be paid by the purchaser, such stiupulation had to prevail notwithstanding clauses to the contrary in the agreement. In the case at hand, considering the provisions of the Drugs and Cosmetics Act which minutely regulate the manufacture, sale and distribution of drugs and cosmetics, it appears to us that such provisions necessarily have an overriding effect and therefore, prevail and thus, the definition of `drug' given in the said Act is most relevant for determining its meaning in the trade. We are thus of the view that Mr. Hidayatullah is entirely right when he contends that the true and real meaning which a drug has in the trade or in commerce is the meaning given to it in the Drugs and Cosmetics Act. The provisions of section 18 are unquestionably motivated by public interest to protect and defend the health and lives of people. We are, therefore, of the view that the popular or the commercial meaning of a drug is synoymous to the one given in the Drugs and Cosmetics Act".

41. As against the above, I must deal with the contention of Shri Walawalkar on merits. His contention is that the licence under the Drugs & Cosmetics Act is not conclusive of the nature of the article as having been "drug". I have already referred to the Scheme of the provisions of the Drugs & Cosmetics Act, 1940. The definition of `Ayurvedic Drug' under clause (a) of section 3 read with the definition of patent or proprietary medicine in relation to an Ayurvedic system of medicine as per section 3(h)(i) pre-supposes a product which has to conform to the standard prescribed in the said definitions. The First Schedule to the Act mentions the names of the Standard Books and, as stated earlier, the petitioners' product does conform to the Standard Books mentioned in the Schedule. For instance, there is a reference to Bhava Prakasha and Rasaratna Samuchaya in the manufacturing licence produced by the first petitioner. Ayurved Text Bhava Prakasha is mentioned at Sr. No. 11 in the First Schedule, whereas Rasaratna Samuchaya is mentioned at Sr. No. 20 in the First Schedule to the Drugs and Cosmetics Act, 1940. Section 18 prohibits manufacture and sale of certain drugs and cosmetics with which we are not concerned. But when we come to Chapter IV-A dealing with the provisions relating to Ayurvedic, Siddha and Unani Drugs, Section 33-C deals with Ayurvedic and Unani Technical Advisory Board which consist of experts in the field to advise the government. Section 33-EEC prohibits the manufacture for sale of certain Ayurvedic, Siddha and Unani Drugs except in accordance with the conditions of licence issued under the said Chapter. Section 33-I prescribes penalty for manufacture for sale or for distribution of an Ayurved Medicine in contravention of the provisins of the said Chapter.