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CASE NO.: Appeal (crl.)  672 of 2006

PETITIONER: State of Uttaranchal

RESPONDENT: Rajesh Kumar Gupta

DATE OF JUDGMENT: 10/11/2006

BENCH: S.B. Sinha & P.P. Naolekar

JUDGMENT: J U D G M E N T

S.B. Sinha, J.

The respondent herein is an Ayurvedacharya.  He operates from two  clinics known as : (1) Neeaj Clinic Pvt. Ltd. (NCPL) and (2) Dr. B.S. Gupta  Medical Charitable Society (BSGMCS).  Advertisements were, allegedly,  being issued by him in various newspapers claiming that medicines used by  him were prepared from herbal plants collected from the Banks of Ganges  and by application thereof patients suffering from epilepsy can be cured.   The State, however, on the allegation that in his medicine, he had been using  unlabelled tablets containing psychotropic substances making the  unsuspecting patients addicted to the drugs, raided the premises of the said  clinics.  70 kgs. pure phenobarbitone were recovered.  It is alleged that  through NCPL 336.88 kgs., 524 kgs., 537.32 kgs. and 117 kgs. of drugs  (phenobarbitone) were sold in the years 2001-2002, 2002-2003, 2003-2004  and 2004-2005 (April to July) respectively and through BSGMCS 398.65  kgs., 406.88 kgs., 519.95 kgs. and 235.12 kgs. of drugs (phenobarbitone)   were sold in the years 2001-2002, 2002-2003, 2003-2004 and 2004-2005  (April to July) respectively.   

The drugs allegedly used to be dispatched by post also.  Appellant  was arrested on 13.8.2004 and since then he is in jail custody.  Charges were  framed against him under Section 8 read with Section 22 of the Narcotic  Drugs & Psychotropic Substances Act, 1985 (’1985 Act’, for short) and  Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954.  An  application for bail was moved by him before the Special Judge.  It was  dismissed.  He filed an application for bail, however, before the High Court  on 30.7.2005, which has been granted.  Special Leave Petition was filed  thereagainst and by an order dated 14.11.2005, the bail application was  revived.  The High Court was requested to dispose of the same  expeditiously.  By reason of the impugned order dated 2.12.2005 the said  bail application has been allowed.  The State is, thus, before us.

In its order the High Court noticed that ordinarily applications for bail  are required to be considered having regard to Section 37 of the 1985 Act.   It, however, opined that the drugs in question not being listed in the 1st  Schedule appended to Narcotic Drugs and Psychotropic Substances Rules,  1985 (’the Rules’, for short), the respondent cannot be said to have  committed any offence under Section 8 read with Section 22 of 1985 Act.

Mr. A. Sharan, learned Additional Solicitor General appearing on  behalf of the State submitted that the High Court committed a serious error  in opining that the offence under Section 22 having not been referred to in  Section 37 of 1985 Act, the rigours thereof have no application.  The learned  Additional Solicitor General urged that although in terms of Section 8 of  1985 Act, an exception has been made as regards use of the psychotropic

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substances for medicinal or scientific use, such use must be bona fide and in  terms of the Rules framed under the 1985 Act.   

Mr. K.T.S. Tulsi, learned Senior Counsel appearing on behalf of the  respondent, on the other hand, contended that the drugs alleged to have been  seized from the Neeraj Clinic being Schedule H drugs as envisaged in Drugs  and Cosmetics Act and the same having been used for medicinal purposes  and being not the drugs provided for in the rules framed under the 1985 Act,  prima facie no offence can be said to have been committed under the 1985  Act.  Our attention in this behalf has been drawn to a decision of a learned  Single Judge of the Delhi High Court in Rajinder Gupta vs.  The State  reported in 123 (2005) DLT 55.

The 1985 Act was enacted with a view to consolidate and amend the  law relating to narcotic drugs, to make stringent provisions for control and  regulation of operations relating to narcotic drugs and psychotropic  substances, to provide for the forfeiture of property derived from, or used in  illicit traffic in narcotic drugs and psychotropic substances, to implement the  provisions of the International Convention on Narcotic Drugs and  Psychotropic Substances and for matters connected therewith.   

Section 2 (viia) defines "commercial quantity" to mean any quantity  greater than the quantity specified by the Central Government by  notification in the Official Gazette.  "Small quantity" has been defined in  Section 2(xxiiia) to mean any quantity lesser than the quantity specified by  the Central Government by notification in the Official Gazette.         Section 8 provides for prohibition in respect of certain operations,  stating :

"8. Prohibition of certain operations.--No person shall\026   (a) cultivate any coca plant or gather any  portion of coca   plant; or (b) cultivate the opium poppy or any cannabis  plant; or (c) produce, manufacture, possess, sell,  purchase, transport, warehouse, use, consume, import  inter-State, export inter-State, import into India,  export from India or tranship any narcotic drug or  psychotropic substance,  

except for medical or scientific purposes and in the  manner and to the extent provided by the provisions of  this Act or the rules or orders made thereunder and in a  case where any such provision, imposes any requirement  by way of licence, permit or authorisation also in  accordance with the terms and conditions of such licence,  permit or authorisation:                                        Provided that, and subject to the other provisions  of this Act and the rules made thereunder, the prohibition  against the cultivation of the cannabis plant for the  production of ganja or the production, possession, use,  consumption, purchase, sale, transport, warehousing,  import inter-State and export inter-State of ganja for any  purpose other than medical and scientific purpose shall  take effect only from the date which the Central  Government may, by notification in the Official Gazette,  specify in this behalf:  Provided further that nothing in this section shall  apply to the export of poppy straw for decorative  purposes."

       Section 37 of the 1985 Act reads as under:

"37. Offences to be cognizable and non-bailable.\027   

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(1) Notwithstanding anything contained in the Code of  Criminal Procedure, 1973 (2 of 1974),\027

(a) every offence punishable under this Act shall be  cognizable;

(b) no person accused of an offence punishable for  offences under section 19 or section 2 or section 27A and  also for offences involving commercial quantity shall be  released on bail or on his own bond unless\027

(i)     the Public Prosecutor has been given an  opportunity to oppose the application for such  release, and (ii)    where the Public Prosecutor opposes the  application, the court is satisfied that there are  reasonable grounds for believing that he is not  guilty of such offence and that he is not likely to  commit any offence while on bail.

       (2) The limitations on granting of bail specified in  clause (b) of sub-section (1) are in addition to the  limitations under the Code of Criminal Procedure, 1973  (2 of 1974), or any other law for the time being in force  on granting of bail."

The Central Government is empowered to permit, control and regulate  cultivation or gathering of any portion of coca plant or the production,  possession, sale, purchase, transport import inter-State, export inter-State,  use or consumption of coca leaves, etc. in terms of Section 9 of the 1985  Act.  Section 10 empowers the State Government to permit, control and  regulate in regard to matters specified therein.  Section 22 provides for a  penal provision for three categories of cases in regard to contravention  involving small quantity, contravention involving quantity lesser than  commercial quantity but greater than small quantity and contravention  involving commercial quantity.   

The Central Government is conferred with the power under Section 9  read with Section 76 to fame rules, pursuant whereto rules have been  framed, known as Narcotic Drugs and Psychotropic Substances Rules, 1985  (hereinafter referred as ’the Rules’). Chapter VI of the Rules deals with  import, export and transshipment of narcotic drugs and psychotropic  substances.   

Rule 53 of the Rules reads thus :

"53. General prohibition.\026 Subject to the other  provisions of this Chapter, the import into and export out  of India of the narcotic drugs and psychotropic  substances specified in Schedule I is prohibited :

       Provided that nothing in this rule shall apply in  case the drug substance is imported into or exported out  of India subject to an import certificate or export  authorisation issued under the provision of this Chapter  and for the purpose mentioned in Chapter VII-A."         

Rule 64 provides for general prohibition, stating : "64. General Prohibition.- No person shall manufacture,  possess, transport, import Inter-State, export inter-State,  sell, purchase, consume or use any of the psychotropic  substances specified in Schedule I."    Rule 65 provides for manufacture of psychotropic substances with  certain restrictions imposed therefor.  Sub-Rule (3) of Rule 65 permits

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manufacture of psychotropic substances by a licensee in regard to the  quantity mentioned therein.  The proviso appended thereto reads as follows :

"Provided that nothing contained in this rule shall  apply in case the psychotropic substances specified in  Schedule I are manufactured, possessed, transported,  imported inter-State, exported inter-State, sold,  purchased, consumed or used subject to other provisions  of this Chapter which applies to psychotropic substances  which are not included in Schedule I and for the purposes  mentioned in Chapter VII-A :

Provided further that the authority in charge of the  drug control in a State referred to in sub-rule (2) of rule  65 shall consult the Narcotics Commissioner before  issuing a licence under rule 65 in respect of psychotropic  substances included in Schedule I and Schedule III."  Rule 66 of the Rules reads thus :         "66. Possession, etc., of psychotropic  substances.\026 (1) No person shall possess any  psychotropic substance for any of the purposes covered  by the 1945 Rules, unless he is lawfully authorised to  possess such substance for any of the said purposes under  these Rules.          (2) Notwithstanding anything contained in sub-rule  (1), any research institution or a hospital or dispensary  maintained or supported by Government or local body or  by charity or voluntary subscription, which is not  authorised to possess any psychotropic substance under  the 1945 Rules, or any person who is not so authorised  under the 1945 Rules, may possess a reasonable quantity  of such substance as may be necessary for their genuine  scientific requirements or genuine medical requirements,  or both for such period as is deemed necessary by the  said research institution or, as the case may be, the said  hospital or dispensary or person:          Provided that where such psychotropic substance  is in possession of an individual for his personal medical  use the quantity thereof shall not exceed one hundred  dosage units at a time.          (3) The research institution, hospital and  dispensary referred to in sub-rule (2) shall maintain  proper accounts and records in relation to the purchase  and consumption of the psychotropic substance in their  possession."  

Rule 67 provides for transport of psychotropic substances.  It reads as  under : "67-A. Special provisions regarding  manufacture, possession, transport, import-export,  purchase and consumption of narcotic drugs and  psychotropic substances for medical and scientific  purposes.\026 Notwithstanding anything contained in the  foregoing provisions of these rules \026

(a) a narcotic drug and psychotropic substance may be    used for \026

(i)     scientific requirement including analytical  requirements of any Government laboratory  or any research institution in India or abroad; (ii)    very limited medical requirements of a  foreigner by a duly authorised person of a  hospital or any other establishment of the  Government especially approved by that

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Government; (iii)   the purpose of de-addiction of drug addicts by  Government or local body or by an approved  charity or voluntary organisation or by such  other institution as may be approved by the  Central Government. (b) persons performing medical or scientific functions  shall keep records concerning the acquisition of the  substance and the details of their use in Form 7 of  these rules and such records are to be preserved for  at least two years after their (sic); (c) a narcotic drug and psychotropic substance may be  supplied or dispensed for use to a foreigner pursuant  to medical prescription only from the authorised  licensed pharmacists or other authorised retail  distributors designated by authorities responsible for  public health."                  

       The High Court as noticed hereinbefore proceeded on the basis that  offences under Section 8 or Section 22 do not come within the purview of  Section 37 of the Act.  Our attention was drawn to Section 22 of the 1985  Act to contend that offences in relation to commercial quantity having  specifically been mentioned in Section 37 of the 1985 Act, the same shall  also be applicable.  We would proceed on the assumption that Section 37  embraces within its fold an offence contemplated under Section 22 of the  1985 Act also so far as it, inter alia, relates to possession of commercial  quantity of contraband.   

       Chapter III of the 1985 Act, however, provides for prohibition, control  and regulation.  Section 8 provides for prohibition of certain operations in  terms whereof no person shall make any cultivation of the plants mentioned  in Clauses (a) and (b) thereof or, inter alia, produce, manufacture, possess,  sell, purchase, transport, warehouse, use, consume, import inter-State, export  inter-State, import into India, export from India or tranship any narcotic drug  or psychotropic substance.  The said provision contains an exception which  takes within its fold all the classes of cases preceding thereto.  Use of the  contraband for medical or scientific purposes is, therefore, excluded from  the purview of the operation thereof.  However, such exception carves out  under the 1985 Act specifically refers to the manner and to the extent  provided by the provisions of the 1985 Act or the rules or orders made  thereunder.

       It has not been brought to our notice that the 1985 Act provides for the  manner and extent of possession of the contraband.  The Rules framed under  Section 8 of the 1985 Act read with Section 76 thereof, however, provides  for both the manner and the extent, inter alia, of production, manufacture,  possession, sale, purchase, transport, etc. of the contraband.  Chapter VI of  the 1985 Rules provides for import, export and transshipment of narcotic  drugs and psychotropic substances.  Rule 53 contains general prohibition in  terms whereof the import and export out of India of the narcotic drugs and  psychotropic substances specified in Schedule-I appended thereto is  prohibited.  Such prohibitions, however, is subject to the other provisions of  the said Chapter.  Rule 63 to which our attention has been drawn specifically  prohibits import and export of consignments through a post office box but  keeping in view the general provisions contained in Rule 53 the same must  be held to apply only to those drugs and psychotropic substances which are  mentioned in Schedule-I of the Rules and not under the 1985 Act.  Similarly,  Chapter VII provides for psychotropic substances.  Rule 64 provides for  general prohibition.  Rules 53 and 64, thus, contain a genus and other  provisions following the same under the said Chapter are species thereof.   This we say in view of the fact that whereas Rule 64 provides for general  prohibition in respect of sale, purchase, consume or use of the psychotropic  substances specified in Schedule-I, Rule 65 prohibits manufacture of  psychotropic substances; whereas Rule 66 prohibits possession, etc. of  psychotropic substances and Rule 67 prohibits transport thereof.  Rule 67-A

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provides for special provisions for medical and scientific purposes.

       The general provisions contained in both Rules 53 and 64, therefore,  refer only to the drugs and psychotropic substances specified in Schedule-I.   It is neither in doubt nor in dispute that whereas the Schedule appended to  the 1985 Act contains the names of a large number of psychotropic  substances, Schedule-I of the Rules prescribes only 35 drugs and  psychotropic substances.

       Respondent admittedly possesses an Ayurveda Shastri degree.  It is  stated that by reason of a notification issued by the State of Uttar Pradesh  dated 24.2.2003, the practitioners of Ayurvedic system of medicines are  authorised to prescribe allopathic medicines also.  Respondent runs a clinic  commonly known as ’Neeraj Clinic’.  He is said to be assisted by eight other  medical practitioners being Allopathic and Ayurvedic doctors.  It is also not  in dispute that only seven medicines were seized and they are mentioned in  Schedules G and H of the Drugs and Cosmetics Act.  In this regard, we may  notice the following chart:

S.No. Medicine seized Schedule H Drugs &  Cosmetics  Act The  Schedule 1985 Act Schedule I 1985  Rules 1. Epilan C.  Phenobarbitone Yes Entry 69 - 2. Phensobar \026 50 Yes - - 3. Chlorodiazepoxide Yes Entry 36 - 4. Carbin Yes - - 5. Wefere  (ayurvedic) - - - 6. Phenso (Schedule  \026 G) - - -

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7. Epibar \026 30 Yes - -      

       It is not in dispute that the medicines seized from the said clinic come  within the purview of Schedules G and H of the Drugs and Cosmetics Act.   It is furthermore not in dispute that the medicines Epilan C. Phenobarbitone  and Chlorodiazepoxide are mentioned in Entries 69 and 36 of the 1985 Act  respectively, whereas none of them finds place in the Schedule I appended to  the 1985 Rules.  If the said drugs do not find place in Schedule I appended to  the Rules, the provisions of Section 8 of the 1985 Act would have no  application whatsoever.  Section 8 of the 1985 Act contains a prohibitory  clause, violation whereof leads to penal offences thereunder.

       In view of the fact that all the drugs being Item Nos. 1,2,3,4,6 & 7  being allopathic drugs mentioned in Schedules G and H of the Drugs and  Cosmetics Act indisputably are used for medicinal purposes.  Once the drugs  are said to be used for medicinal purposes, it cannot be denied that they are  acknowledged to be the drugs which would come within the purview of  description of the expression "medicinal purposes".  

       The exceptions contained in Section 8 of the 1985 Act must be judged  on the touchstone of :

(i)     whether drugs are used for medicinal purposes. (ii)    whether they come within the purview of the regulatory  provisions contained in Chapters VI and VII of the 1985 Rules.  

       Chapter VII-A of the 1985 Rules which was introduced by a  notification dated 25.6.1997 with effect from 27.6.1997 provides for special  provisions regarding manufacture, possession, transport, import-export,  purchase and consumption of narcotic drugs and psychotropic substances for  medical and scientific purposes.  

       It, therefore, permits use of narcotic drugs and psychotropic  substances for the purposes mentioned therein.  Rule 67-A does not abrogate  the provisions of Rule 53 or Rule 64 provided for in Chapters VI and VII of  the 1985 Rules.  They are in addition to the said provisions.  It, however,  contains some more restrictions.  We are only concerned with Clause (b) of  Rule 67-A, in terms whereof the records concerning the acquisition of the  substance and the details of their use in Form 7 of those Rules are to be  mentioned.   

       Violation of Clause (c) of Rule 67-A does not appear to have been  alleged against Respondent.  It was, however, stated at the Bar that  Respondent has complied with the said provisions and, in fact, along with  his bail application requisite documents have been furnished.  Rule 67-A  expressly permits use of certain drugs for limited medical requirements of a  foreigner.  It, however, appears that the sentence contained in Sub-Rule (b)  of Rule 67-A is not complete.   

       Section 37 of the 1985 Act must be construed in a pragmatic manner.   It cannot be construed in such a way so as to negate the right of party to  obtain bail which is otherwise a valuable right for all practical purposes.

       We may notice that in Dadu alias Tulsidas vs. State of Maharashtra  [(2000) 8 SCC 437], this Court struck down Section 37 of the 1985 Act in  terms whereof power to suspend sentence by an appellate court was taken  away.  This Court, however, opined that Section 37 of the 1985 Act would  be applicable.  On the aforementioned backdrop we may analyse the  requirements of the provisions contained in Section 37 of the 1985 Act.   

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       In Ranjitsing Brahmajeetsing Sharma vs. State of Maharashtra &  Anr. [(2005) 5 SCC 294], the law has been stated in the following terms:

"The wording of Section 21(4), in our opinion,  does not lead to the conclusion that the court must arrive  at a positive finding that the applicant for bail has not  committed an offence under the Act. If such a  construction is placed, the court intending to grant bail  must arrive at a finding that the applicant has not  committed such an offence. In such an event, it will be  impossible for the prosecution to obtain a judgment of  conviction of the applicant. Such cannot be the intention  of the legislature. Section 21(4) of MCOCA, therefore,  must be construed reasonably. It must be so construed  that the court is able to maintain a delicate balance  between a judgment of acquittal and conviction and an  order granting bail much before commencement of trial.  Similarly, the court will be required to record a finding as  to the possibility of his committing a crime after grant of  bail. However, such an offence in futuro must be an  offence under the Act and not any other offence. Since it  is difficult to predict the future conduct of an accused, the  court must necessarily consider this aspect of the matter  having regard to the antecedents of the accused, his  propensities and the nature and manner in which he is  alleged to have committed the offence. It is, furthermore, trite that for the purpose of  considering an application for grant of bail, although  detailed reasons are not necessary to be assigned, the  order granting bail must demonstrate application of mind  at least in serious cases as to why the applicant has been  granted or denied the privilege of bail. The duty of the court at this stage is not to weigh  the evidence meticulously but to arrive at a finding on the  basis of broad probabilities. However, while dealing with  a special statute like MCOCA having regard to the  provisions contained in sub-section (4) of Section 21 of  the Act, the court may have to probe into the matter  deeper so as to enable it to arrive at a finding that the  materials collected against the accused during the  investigation may not justify a judgment of conviction.  The findings recorded by the court while granting or  refusing bail undoubtedly would be tentative in nature,  which may not have any bearing on the merit of the case  and the trial court would, thus, be free to decide the case  on the basis of evidence adduced at the trial, without in  any manner being prejudiced thereby."   

       The law to the same effect has been laid down in Babanrao  Tukaram Ranjabe vs. State of Maharashtra [JT 2006 (11) SC 33].   

       Reliance has been placed by the learned Additional Solicitor General  of India on Collector of Customs, New Delhi vs. Ahmadalieva Nodira  [(2004) 3 SCC 549] wherein this Court stated:

       "7. The limitations on granting of bail come in  only when the question of granting bail arises on merits.  Apart from the grant of opportunity to the Public  Prosecutor, the other twin conditions which really have  relevance so far as the present accused-respondent is  concerned, are: the satisfaction of the court that there are  reasonable grounds for believing that the accused is not  guilty of the alleged offence and that he is not likely to  commit any offence while on bail. The conditions are

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cumulative and not alternative. The satisfaction  contemplated regarding the accused being not guilty has  to be based on reasonable grounds. The expression  "reasonable grounds" means something more than prima  facie grounds. It contemplates substantial probable  causes for believing that the accused is not guilty of the  alleged offence. The reasonable belief contemplated in  the provision requires existence of such facts and  circumstances as are sufficient in themselves to justify  satisfaction that the accused is not guilty of the alleged  offence. In the case at hand the High Court seems to have  completely overlooked the underlying object of Section  37."  

       This Court, thus, therein was required to consider the merit of the  prosecution case against the accused therein and on consideration thereof  opined that the rigours of Section 37 of the Act are applicable.

       This Court, however, in the said decision was not concerned with the  construction of Section 8 of the 1985 Act.  It does not and did not lay down  a law that although the provisions of the 1985 Act shall prima facie not  apply, no bail can be granted.

       In Sajan Abraham vs. State of Kerala [(2004) 4 SCC 441], this  court held :

"Learned counsel for the State submitted that  unless the appellant held a permit granted under Rule 66  of the NDPS Rules, he cannot claim benefit under the  provisions of that rule. We find no substance in the  argument because having regard to the provisions of  Section 9 of the NDPS Act under which the Rules have  been framed, the Central Government is empowered by  the Rules to permit and regulate the matters mentioned  therein. Rule 66 itself permits possession of psychotropic  substance below a specified quantity and subject to the  conditions stated therein. Thus if the possession of  psychotropic substance is justified under the said rule, no  separate permit is required to be issued to the person  possessing such psychotropic substance because the rule  itself permits possession of such psychotropic substance  to the extent mentioned in the rule and subject to the  conditions laid down therein."   

       {See also Hussain vs. State of Kerala [(2000) 8 SCC 139].}

       In the instant case, we are of the opinion that Section 37 of the 1985  Act would prima facie has no application in view of the exception contained  in Section 8 thereof read with the Rules.        

       The views which we have taken appear also to have been taken by the  High Court of Delhi in Rajinder Gupta vs. The State [123 (2005) DLT 55]  as also the Bombay High Court in Pradeep Dhond vs. Intelligence Officer,  Narcotic & Control Bureau, Ballard Estate and Anr. [Criminal  Application No. 6787 of 2005] disposed of on 7th February, 2006 by the  Bombay High Court.

       Respondent is charged with a grave offence.  It was, therefore, all the  more necessary to apply the principles of law strictly.  A person cannot be  denied the right of being released on bail unless a clear case of application of  the 1985 Act is made out.  He might have committed an offence which  repulses out morality. He may ultimately be found guilty even for  commission of an offence under the 1985 Act, but in a case of this nature

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when prima facie the provisions of the said Act are not found applicable  particularly in view of the fact that he has been in custody for a period of  more than two years now, in our opinion, it is not a fit case where we should  exercise our discretionary jurisdiction under Article 136 of the Constitution  of India.                     For the reasons aforementioned, there is no merit in this appeal which  is dismissed accordingly.