Supreme Court Holds Non-Maintenance of Drug Manufacturing Records Attracts Section 27(d) Punishment and Three-Year Limitation Applies

Case Name: M/s SBS Biotech & Others v. State of Himachal Pradesh
Citation: 2026 INSC 171
Date of Judgment/Order: 20 February 2026
Bench: Hon’ble Mr. Justice Prashant Kumar Mishra and Hon’ble Mr. Justice Vipul M. Pancholi

Held: The Supreme Court held that allegations of non-maintenance, manipulation, and non-production of manufacturing records under Schedule M and Schedule U of the Drugs and Cosmetics Rules amount to contravention of Section 18(a)(vi) of the Drugs and Cosmetics Act, 1940, punishable under Section 27(d), and therefore the applicable limitation period under Section 468 Cr.P.C. is three years; consequently, a complaint filed within three years is not time-barred, and such offences under Chapter IV are triable by a Court not inferior to a Court of Session in view of Section 32(2), rendering summary trial under Section 36-A inapplicable.

Summary: The appellants, a pharmaceutical manufacturing firm and its officers, challenged the High Court’s refusal to quash criminal proceedings alleging contravention of Sections 18(a)(vi), 18-B, and 22(1)(cca) of the Drugs and Cosmetics Act, 1940, punishable under Sections 27(d) and 28-A, arising from inspection findings that the firm failed to maintain and produce mandatory manufacturing and raw material records under Schedule M and Schedule U; the appellants contended that the alleged violations related only to record-keeping under Section 18-B punishable under Section 28-A, attracting a one-year limitation and triable summarily by a Magistrate, whereas the State asserted that the allegations disclosed contravention of Section 18(a)(vi) read with Rule 74, attracting Section 27(d); examining the statutory scheme, complaint averments, and relevant provisions including Sections 32(2), 36-A, and 36-AB, the Court held that the nature of allegations, including manipulation and serious discrepancies in manufacturing and testing records, constituted contravention under Section 18(a)(vi), and thus Section 27(d) applied, carrying punishment up to two years and a corresponding three-year limitation; the Court further clarified that offences under Chapter IV are not triable by a court inferior to a Court of Session unless expressly provided, and Section 36-A does not override Section 32(2) in such cases.

Decision: The Supreme Court dismissed the appeal, upheld the High Court’s order declining to quash the complaint, affirmed that the prosecution was within limitation, and held that the committal to the Special Court was legally valid, thereby allowing the criminal proceedings to continue.