In a detailed ruling delivered on February 20, 2026, the Supreme Court of India upheld the prosecution of Himachal-based pharmaceutical manufacturer M/s SBS Biotech and its officials under the Drugs and Cosmetics Act, 1940.
The bench, comprising Justices Prashant Kumar Mishra and Vipul M. Pancholi, dismissed the company’s appeal challenging criminal proceedings over alleged record-keeping violations and manufacturing irregularities.
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Background of the Case
The case began with an inspection on July 22, 2014, at the manufacturing unit of M/s SBS Biotech in Kala Amb, Sirmaur district, Himachal Pradesh. Drug inspectors alleged that the firm had failed to maintain proper records related to a batch of Pseudoephedrine, a regulated pharmaceutical substance.
According to the complaint, inspectors found incomplete purchase and consumption records. During a follow-up inspection on August 5, 2014, officials claimed that several entries were missing or altered, and certain registers required under Schedule M and Schedule U of the Drugs and Cosmetics Rules were not properly maintained.
The company’s stock and documents were seized. A prosecution sanction was later granted, and a criminal complaint was filed in February 2017.
However, the firm moved the High Court of Himachal Pradesh seeking quashing of the case. The High Court rejected the plea in July 2024, leading to the present appeal before the Supreme Court.
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The Core Legal Questions
The appeal raised three key issues:
- Whether failure to maintain and furnish records amounts to an offence under Section 18(a)(vi), punishable under Section 27(d), or merely under Section 18-B, punishable under Section 28-A.
- Whether the complaint was barred by limitation.
- Whether the case should be tried by a Magistrate or a Special Court.
The appellants argued that record-keeping lapses fall under Section 18-B, which carries a maximum punishment of one year. If that was so, they contended, the complaint filed more than two years after inspection was time-barred under the Criminal Procedure Code.
They also claimed the Magistrate had committed a clerical mistake by not mentioning Section 27(d) while taking cognizance.
Court’s Observations
Justice Pancholi, writing for the bench, examined the complaint in detail. The Court noted that the allegations were not limited to minor record lapses.
The judgment recorded that the complaint referred to manipulation of batch production records, discrepancies in purchase and sale entries, and alleged misuse of a habit-forming drug.
“The allegations are with regard to commission of an offence under Section 18(a)(vi) of the Act,” the bench observed. It clarified that when drugs are manufactured or handled in violation of statutory rules, the offence attracts Section 27(d), which prescribes imprisonment between one and two years.
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On limitation, the Court stated clearly:
“When Section 27(d) provides imprisonment which may extend to two years, the limitation under Section 468 of Cr.P.C. would be three years.”
Since the complaint was filed within two years and six months of the inspection, it was within time.
On the Cognizance Order
The appellants argued that the Magistrate had not mentioned Section 27(d) while taking cognizance. The Supreme Court examined the complaint title and committal order and found repeated references to Section 27(d).
The omission, the Court held, was a minor drafting lapse.
“While writing the handwritten order, the learned JMFC has missed to mention Section 27(d),” the bench noted, treating it as a clerical oversight rather than a substantive error.
Jurisdiction: Magistrate or Special Court?
Another major issue was whether the case should have been tried summarily by a Magistrate.
The Court examined Sections 32(2), 36-A, and 36-AB of the Drugs and Cosmetics Act. It held that offences under Chapter IV are triable by a Court not inferior to a Court of Session.
Section 36-A allows summary trial only for certain offences, but specifically excludes those triable by Special Courts or Courts of Session.
“We are of the view that when Section 32(2) specifically provides for offences to be tried by courts not inferior to the Court of Sessions, Section 36-A would not apply,” the bench ruled.
The Magistrate was therefore correct in committing the case to the Special Judge.
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Final Decision
Concluding that the High Court had committed no error, the Supreme Court dismissed the appeal.
“In view of the aforesaid discussion… no interference is required,” the Court said, bringing the matter to a close.
The criminal proceedings against M/s SBS Biotech and its officials will now continue before the Special Court.
Case Title: M/s SBS Biotech & Others vs State of Himachal Pradesh
Case No.: Criminal Appeal (arising out of SLP (Crl.) No. 9281 of 2025)
Decision Date: February 20, 2026
