Introduction:
In the case of M/S Bhagwati Medical Hall & Anr. v. Central Drugs Standard Control Organization & Ors. [SLP(C) Nos. 22833-22834/2022], the Supreme Court of India addressed a pivotal issue involving the scope of regulatory powers under the Drugs and Cosmetics Act, 1940. The case arose from restrictions imposed by the District Magistrate of Uttar Pradesh on the trade of aromatic tincture of cardamom—a licensed medical preparation—on the grounds that it contained high alcohol content and was allegedly misused as a substitute for liquor. The Allahabad High Court upheld these restrictions, leading the appellants to approach the Supreme Court. The bench of Justices Vikram Nath and P.B. Varale emphasized the centralization of authority under Section 26A of the Act, declaring that the power to prohibit or restrict a drug lies exclusively with the Central Government. The Court quashed the orders of the Allahabad High Court and the District Magistrate, upholding the appellants’ fundamental right to carry out lawful trade under Article 19(1)(g) of the Constitution.
Arguments of Both Sides:
The appellants, represented by Senior Advocate Nikhil Goel, argued that the aromatic tincture of cardamom is a licensed medical preparation used to treat ailments like indigestion and nausea. They contended that the restrictions imposed by the District Magistrate were arbitrary and violated their fundamental right to trade under Article 19(1)(g). The appellants emphasized that the tincture remains a lawful product under the Drugs and Cosmetics Act, 1940, as no prohibition has been notified by the Central Government under Section 26A of the Act. They further argued that the actions of the District Magistrate and other local authorities undermined the statutory framework of the Act, which deliberately centralizes the power to impose bans or restrictions to ensure uniformity and scientific evaluation.
On the other hand, the respondents, represented by Samar Vijay Singh, argued that the aromatic tincture of cardamom has an extremely high alcohol content and is often misused by vulnerable groups, including daily wage earners and rickshaw pullers, as a cheap substitute for liquor. The respondents justified the actions of the District Magistrate, stating that the prohibition was imposed in the larger public interest to prevent misuse and safeguard societal health. They relied on Section 22 of the Drugs and Cosmetics Act, which grants inspectors regulatory powers, including the authority to seize non-compliant drugs, to validate the restrictions imposed.
Court’s Judgment:
The Supreme Court, after careful examination of the statutory provisions and the facts of the case, held that the District Magistrate and other subordinate authorities lacked the authority to impose a prohibition or declare the aromatic tincture of cardamom as a prohibited article. Referring to Section 26A of the Drugs and Cosmetics Act, the Court clarified that the power to regulate, restrict, or prohibit the manufacture or sale of drugs in public interest is vested exclusively with the Central Government. This centralized mechanism ensures that any decision to restrict a drug is scientifically informed, uniform, and based on expert advice, safety evaluations, and policy considerations.
The Court emphasized that Section 26A is the sole statutory provision that allows a drug, previously permissible, to be removed from the market or subjected to special conditions. It noted that this centralized approach prevents arbitrary or inconsistent local measures that could fragment the national drug regulatory regime. The Court categorically rejected the respondents’ reliance on Section 22 of the Act, stating that while this provision grants inspectors powers to regulate and enforce compliance, it does not authorize them to impose new prohibitions or classify a licensed drug as contraband. The Court stated, “Section 22(1)(d) is not a substitute for Section 26A of the Drugs and Cosmetics Act, 1940.”
In the absence of a notification under Section 26A by the Central Government, the Court held that the aromatic tincture of cardamom remains a lawful product that can be manufactured and sold in accordance with the law. It further observed that any classification of the product as a prohibited article by subordinate authorities would undermine the statutory scheme, which centralizes decision-making power with the Central Government to prevent ad hoc bans and ensure regulatory consistency.
The Court also noted that the actions of the District Magistrate violated the appellants’ fundamental right to carry on lawful trade under Article 19(1)(g) of the Constitution. It held that the restrictions imposed lacked statutory backing and were arbitrary, rendering them unsustainable in law.