Chimanlal Jagjivandas Sheth vs State of Maharashtra

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 107 of 1961

Decision Date: 26 September 1962

Coram: Subba Rao, J., Syed Jaffer Imam, N. Rajagopala Ayyangar, J.R. Mudholkar

In the matter titled Chimanlal Jagjivandas Sheth versus State of Maharashtra, the Supreme Court delivered its judgment on the twenty‑sixth day of September, 1962. The bench that heard the appeal comprised Justice Subbarao, Justice Syed Jaffer Imam, Justice N. Rajagopala Ayyangar and Justice J. R. Mudholkar. The case is reported in the 1963 volume of the All India Reporter at page 665 and also in the 1963 Supplement to the Supreme Court Reports (Series 1) at page 344; it is cited in the reference finder as RF 1968 SC1450 (10). The citation notes that the dispute involved the interpretation of the Drugs Act, 1940 (as amended by the Drugs (Amendment) Act, 1955), specifically sections 3(b) and 18, in relation to absorbent cotton wool, roller bandages and gauze. The appellant, Chimanlal Jagjivandas Sheth, was found in possession of large quantities of these articles, which he had manufactured. Laboratory analysis established that the cotton wool, bandages and gauze were sub‑standard. Accordingly, the appellant was prosecuted under section 18 of the Act for manufacturing sub‑standard drugs, convicted and sentenced to three months’ rigorous imprisonment and a fine of five hundred rupees. The appellant argued that the articles did not fall within the definition of “drugs” under section 3(b) and that the sentence was excessive. The Court held that “drugs” under the statute includes substances intended for use in the treatment of disease, and that “substances” encompasses items other than medicines, such as the sterilised cotton and gauze used for surgical dressings. The Court reasoned that allowing sub‑standard surgical dressings would defeat the Act’s purpose of maintaining high medical standards. The Court further concluded that the sentence was not overly severe; rather, the appellant’s conduct—manufacturing large quantities of spurious, sub‑standard materials—was a serious antisocial act deserving of the imposed punishment.

The appeal, numbered Criminal Appeal No. 107 of 1961, was filed by special leave against the judgment and order dated the sixteenth of June, 1961, of the Bombay High Court in Criminal Appeal No. 21 of 1961. Counsel for the appellant were briefed as the petitioner’s representatives, while counsel for the respondents were identified as the State’s representatives. The matter was argued on the factual findings recorded by the High Court. The appellant operated a business under the name Deepak Trading Corporation, situated in the Bulakhidas Building on Vithaldas Road, Bombay. The Court’s judgment was delivered by Justice Subbarao, who examined the construction of section 3(b) of the Drugs Act, 1940, as amended, and adjudicated the appeal on the basis of the evidence and legal principles previously established.

In Bombay, on December 27, 1958, the Sub‑Inspector of Police together with the Drug Inspector entered the premises known as the Bulakhidas Building and discovered large quantities of absorbent cotton wool, roller bandages, gauze and other similar articles. The investigation revealed that the appellant was not merely storing these items in bulk but was actually manufacturing them in Bombay and was representing them as if they had been produced by a reputable firm located in Secunderabad. Samples of the seized articles along with some lint were forwarded to the Government Analyst. The analyst reported that, of all the samples examined, only the lint met the required standard of quality, whereas the remaining articles failed to satisfy the standard quality criteria. Consequently, the appellant was prosecuted before the Presidency Magistrate, 16th Court, Bombay, for offences under section 18 of the Drugs Act, including the manufacturing of drugs that were not of standard quality. The learned Presidency Magistrate acquitted the appellant on the ground that the prosecution had not established that the articles were in the appellant’s possession. Upon re‑examination of the evidence, the High Court reached a contrary conclusion, finding that the articles were indeed in the appellant’s possession, that they had been manufactured by him, and that they fell below the prescribed standard. Based on these findings, the High Court convicted the appellant, sentencing him to three months of rigorous imprisonment and imposing a fine of Rs 500 for each count. The present appeal therefore arises from that conviction. An initial argument that the articles had not been proved to be below the prescribed standard was eventually abandoned. The sole remaining issue before the Court was whether the articles in question fall within the meaning of “drug” as defined in section 3(b) of the Act. That provision states that “drug” includes (i) all medicines for internal or external use of humans or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in humans or animals, other than medicines, and substances exclusively used or prepared for use in accordance with the Ayurvedic or Unani systems of medicine; and (ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in humans or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette. The Court observed that this definition of “drug” is sufficiently comprehensive to encompass not only medicines but also substances intended for use in the treatment of diseases of humans or animals. The definition creates a distinction between medicines and other substances that are not strictly medicines. Accordingly, the term “substances” must refer to items other than medicines that are employed for treatment. The portion of the definition that is relevant to the present case is the reference to “substances intended to be used for or in the treatment.”

The Court explained that the word “substances” in the statutory provision should be understood in its ordinary sense as “things”. It was not contested that items such as absorbent cotton wool, roller‑bandages and gauze qualified as “substances” within that meaning. Having settled that issue, the Court turned to the next question of whether these items were employed “for or in treatment”. The Court observed that such articles were routinely sterilised or otherwise processed so as to become disinfectant, and that they were then used as surgical dressings. In that capacity they formed essential material for the treatment of patients undergoing surgery. Moreover, the Court noted that for the dressings to fulfill their therapeutic role they had to possess specific qualities; for example, gauze had to meet a prescribed standard of absorbency so that it could draw away wound exudate rather than allowing fluid to collect at the wound site.

The Court further observed that the legislature had deliberately broadened the definition of “drug” in order to bring within its ambit substances that serve as necessary aids for medical or surgical treatment. The principal aim of the Act, the Court said, was to prevent the circulation of sub‑standard drugs and thereby to safeguard high standards of medical care. Allowing the ancillary items used in treatment to be diluted or left unregulated would defeat that purpose, because the very problem the Act sought to eliminate would persist. Counsel for the appellant had argued that surgical instruments were not covered by the definition and that gauze and lint belonged to the same class. The Court held that it was unnecessary to exhaustively list every “substance” that might fall within the definition; irrespective of whether surgical instruments were regarded as drugs, the specific articles in question were unquestionably covered.

In support of his position, counsel for the appellant referred to a report prepared by a high‑level committee of medical experts, which expressed the view that surgical dressings were not subject to the Drugs Act and therefore escaped quality control. The Court rejected the relevance of that expert opinion, stating that the interpretation of a statutory provision could not be guided by such external views. Consequently, agreeing with the decision of the High Court, the Court affirmed that the items were “substances used for or in treatment” as contemplated by section 3(b) of the Act.

The appellant had made a passionate request for a reduction of the sentence imposed. The High Court, when faced with a similar submission, had characterised the matter as a grave case involving the manufacture of large quantities of adulterated drugs that were passed off as products of a reputable firm. The Court noted that the appellant’s conduct amounted to a serious anti‑social offence. In the Court’s view, the punishment of three months’ rigorous imprisonment was relatively lenient rather than excessive. Accordingly, there was no basis to interfere with the lower court’s sentencing. The appeal was consequently dismissed.