# SWANTRAJ & ORS. \ v. STATE OF MAHARASHTRA

- **Citation:** [1974] 3 S.C.R. 287
- **Court:** Supreme Court of India
- **Decided:** 1974-02-05
- **Bench:** V. R. Krishna Iyer, R. S. Sarkaria
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/swantraj-ors-v-state-of-maharashtra-6043
- **Pages:** 7

## Headnote

.
Drugs a11d Cosmetics Act, (23 of !940), S. IS(IJ(c)-'Stocked for sale', if
uicludes. te1nporary storage for sale not at the place of storage but elsewhereWhe!her fonns for lic~nces provided are intlexible or suitable licences with
nrodificat101is can be. issuel/.
Section 18(c) of the Drugs and Cosmetics Act, 1940, provides that no
p~rs~n -shall manufacture for sale, or sell, or stQck or exhibit. for sale .or
distribute any drug except under a Jicence ·and s. 27(b) provides for punish-
. ment for its contravention.
The appeJJant was a wholesale dealer and distributor of drugs and bad
_t~e _necessary licences prescribed under· the ·Act. It- bad also the necessary
licences autbo!ising i~ ·to sell, stock oi exhibit for sale or distribute by wholesale through its motor van. The appellant booked certain drugs by tony but
as the motor van was delayed, the drugs were reteasCd from the Jorry and
temporarily kept in the godown of a local drugs dealer.
On the questiOns, ( 1) whether the licence which permitted stocking· and
selling in a specified vehicle, ·covered the brief interval of storage in the
god own before loadirig on to the appeilanfs van, and ( 2) whether the· act
of the appellant in temporarily storing drugs, not for immediate sale there,
but for ultimate sale in various parts of the State,· is contrary to s. 18(c)
and punish~ble under s. 27(b),
HEID:
( l) (a) A licence in_ terms for a vehicle cannot do duty for one
to keep druJS in a fixed place·.
Assuming that none of the· prescribed forms
provide for an itinerant wholesale distributor and that it would ·be impossible
to furnish the very ma.ny possible places where for short intervals drugs may
have to be stored awaiting the arrival of the· van, an argumentunJ ab. incon-
"Veniend cannot be a defence; if the law requires a 'licence for a- place and
drup are lept ·in such a place without the licence, even as a stop-gap arrangement. The paramount purpose of regulation through licensing is, to set in
motion vigilant medical watch over the proper protection of drugs and medi ..
cines. verification of the expiry of the time of their efficacy, and t~.e ~jection
of spuriou.11· products. If god.owns, temporary stores etc .• can be unhcensed,
1heY can become foci of -dubious, deceptive and harmful drugs. Therefore,
levery place Wh~re stornge is made must be licensed.
[290 D-F; 292 A-OJ -
(b) The rules made under the Act, while they visualise wholesale distrl-
"bution licences, the. forms h~ve ·not provided fOr licences for . mobile vans or
distn"bution depots so essential for a wholesale <futribution system. The
. licence aivcn to the appellants' vehicle is an improvised innovation without
the. law. There is no express power to thus modify· the forms or innovate
·according to need. But such an authority to grant su~table Hcen11es under
rr. 61 and '62· (proviso), including the wayside depots or 'emergency' stores,
coUld be implied. The appellant should therefore have applied fOr and
obtain~ the n'ecessary Jiccnc~ for the temporary stor~ge. (291 C-HJ
(LIJw Lexicon of British- India ·com~iltd· and edited by Ramanati1a1 Ai}'ar,
sale there' or. ~stocked for sale elsewhere later'. TDe Central Governmen.t
should'.howevtr clarify the rules and nrovide for al'?nropriate· forms .. The first
interpretation permits abuse through loophole~,. while the .seCQDd llJ<!llens ~P
'but" caSts ·on the dealer the burden. of. obta1n1ng more licences. Since nsk
288
SUPREME COURT REPORTS
( ft974 l 3 S.C.It.
of life and health is avoided by the latter interpretation, it must be held that
th~ storage, even though for short spelJs "and on ad hoc basis
1 and without
intent to sell at that place but as part of the sales business, comes within stocking
for sale in s. IS(c) dOd r. 62.
[293 C-EJ
CRIMINAL APPELLATE JuR1smcTioN : Criminal Appeal No. 177
of 1970.
From the judgment and order dated the 7th August 1969 of the
Bombay High Court in
(Nagpur Bench) at Nagpur in Criminal
Appeal No. 25 of 1968.
S. C. Manchand

## Text

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287
SWANTRAJ & ORS.
\
v.
STATE OF MAHARASHTRA
February 5, 1974
(V. R. KRISHNA IYER AND R. S. SARKARIA, JJ.)
.
Drugs a11d Cosmetics Act, (23 of !940), S. IS(IJ(c)-'Stocked for sale', if
uicludes. te1nporary storage for sale not at the place of storage but elsewhereWhe!her fonns for lic~nces provided are intlexible or suitable licences with
nrodificat101is can be. issuel/.
Section 18(c) of the Drugs and Cosmetics Act, 1940, provides that no
p~rs~n -shall manufacture for sale, or sell, or stQck or exhibit. for sale .or
distribute any drug except under a Jicence ·and s. 27(b) provides for punish-
. ment for its contravention.
The appeJJant was a wholesale dealer and distributor of drugs and bad
_t~e _necessary licences prescribed under· the ·Act. It- bad also the necessary
licences autbo!ising i~ ·to sell, stock oi exhibit for sale or distribute by wholesale through its motor van. The appellant booked certain drugs by tony but
as the motor van was delayed, the drugs were reteasCd from the Jorry and
temporarily kept in the godown of a local drugs dealer.
On the questiOns, ( 1) whether the licence which permitted stocking· and
selling in a specified vehicle, ·covered the brief interval of storage in the
god own before loadirig on to the appeilanfs van, and ( 2) whether the· act
of the appellant in temporarily storing drugs, not for immediate sale there,
but for ultimate sale in various parts of the State,· is contrary to s. 18(c)
and punish~ble under s. 27(b),
HEID:
( l) (a) A licence in_ terms for a vehicle cannot do duty for one
to keep druJS in a fixed place·.
Assuming that none of the· prescribed forms
provide for an itinerant wholesale distributor and that it would ·be impossible
to furnish the very ma.ny possible places where for short intervals drugs may
have to be stored awaiting the arrival of the· van, an argumentunJ ab. incon-
"Veniend cannot be a defence; if the law requires a 'licence for a- place and
drup are lept ·in such a place without the licence, even as a stop-gap arrangement. The paramount purpose of regulation through licensing is, to set in
motion vigilant medical watch over the proper protection of drugs and medi ..
cines. verification of the expiry of the time of their efficacy, and t~.e ~jection
of spuriou.11· products. If god.owns, temporary stores etc .• can be unhcensed,
1heY can become foci of -dubious, deceptive and harmful drugs. Therefore,
levery place Wh~re stornge is made must be licensed.
[290 D-F; 292 A-OJ -
(b) The rules made under the Act, while they visualise wholesale distrl-
"bution licences, the. forms h~ve ·not provided fOr licences for . mobile vans or
distn"bution depots so essential for a wholesale <futribution system. The
. licence aivcn to the appellants' vehicle is an improvised innovation without
the. law. There is no express power to thus modify· the forms or innovate
·according to need. But such an authority to grant su~table Hcen11es under
rr. 61 and '62· (proviso), including the wayside depots or 'emergency' stores,
coUld be implied. The appellant should therefore have applied fOr and
obtain~ the n'ecessary Jiccnc~ for the temporary stor~ge. (291 C-HJ
(LIJw Lexicon of British- India ·com~iltd· and edited by Ramanati1a1 Ai}'ar,
sale there' or. ~stocked for sale elsewhere later'. TDe Central Governmen.t
should'.howevtr clarify the rules and nrovide for al'?nropriate· forms .. The first
interpretation permits abuse through loophole~,. while the .seCQDd llJ<!llens ~P
'but" caSts ·on the dealer the burden. of. obta1n1ng more licences. Since nsk
288
SUPREME COURT REPORTS
( ft974 l 3 S.C.It.
of life and health is avoided by the latter interpretation, it must be held that
th~ storage, even though for short spelJs "and on ad hoc basis
1 and without
intent to sell at that place but as part of the sales business, comes within stocking
for sale in s. IS(c) dOd r. 62.
[293 C-EJ
CRIMINAL APPELLATE JuR1smcTioN : Criminal Appeal No. 177
of 1970.
From the judgment and order dated the 7th August 1969 of the
Bombay High Court in
(Nagpur Bench) at Nagpur in Criminal
Appeal No. 25 of 1968.
S. C. Manchanda and 0. P. Verma for the appellant.
M. C. Bharldare and M. N. Shroff, for the respondent.
The Judgment of .the Court was delivered by
KRISHNA IYER, J .-Every legislation is a social document and judi<
cial construction seeks to decipher the statutory mission, language
permitting, taking the cue from the rule in Heydon's( 1) case of suppressing the evil and advanciRg the remedy. The .Drugs and Cosmetics
Act, 1940 (the Act, for short) is a life-saving statute one of the provisions of which, together with a bunch of rules and fotms, falls for
interpretation and application to the substantially admitted facts set
out concisely in the order granting
certificate of fitness to appeal.
The Bench projected the factual-legal issue in these words :-
"It is not in dispute that the petitioners have a wholesale dealers' licence to stock .durgs at Bombay and h~ve
a further licence to distribute the drugs through the motor
van throughout the territory of the state of Maharashtra.
Accordingly, their motor van started filled with drugs and
reached the Vidarbha area.
The petitioners booked certain drugs for which they have already a licence to distribute, by lorry to Y eotmal.
The idea was that the moto~
van, which was touring the Vidarbha area, should reach
Yeotmal by about the time when the goods were due to
arrive and the person in charge of the motor van would
collect the drugs so hooked from the lorry and distribute
them as per instructions given by the firm.
But Ul)fortunately the motor van was delayed by about three days ~nd
one of the partners of the petitioner-firm who was movmg
, with the van, went ahead of Yeotmal,
r~leased the goods
'from the transport operator and temporanly kept them m
the godown of a local drugs dealer.
.Th~ intention was to
load the van with those drugs and distnbute the drugs as
permitted by the licence.
In,the appeal in this
Court, these facts
have .bec_n
found as pleaded by the accused persons. However,
1t
1s
held that the temporary deposit of the goods _in the godown of a local drugs dealer amounts to stocking for sala
as ccntcmplated. by clause (c) of section 18 of the Drugs
.(1) 3 co:R~-;a-Maxwcll ~n the interPretation ofStatutes-12 Edition-p .. 40:
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SWANTRAJ v. MAHARASHTRA (Krishna Iyer, J.)
289.
and Cosmetion Act, 1940.
For the purpose of stocking
the drugs, either for sale or for distribution, the accused
persons had no licence for the premises at Y eotmal and
this act
amounted to a breach
of the
conditions of the
licence and, as such, breach of rule 62, amounting to an
offence under section 27 (bl of. the Drugs and Cosmetics
Act, 1940.
The point,
whether
a temporary deposit of drugs or
temporary retention of drugs in a place outside Bombay for
which place the petitioners have no licence to stock the
goods, amounts to stocking for sale or distribution, is a point
of law which appears to us of general importance."
C
The appellant :has been concurrently convicted but
hopefully
challenged. Sec. 18 (e) of the Act forbi0s manufacture for sale or sell
or stock. or exhibit for sale, or distribute any drug without licence
under this Chapter (Ch. IV). Sec. 27 (b) is the penal provision for
contravention of the provisions of Ch. IV of the Act or the rules
made thereunder.
Rule 62 is claimed to have been violated and so
may be read here together with the sister rule, i.e. R. 6 ! :
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"61. Forms of licences to sell drugs-·
(I) A licence to sell, stock or exhibit for sale, or distribute
drugs other than those specified in Sc.hedules C and C
(I) by retail, on restricted licence or by
wholesale
shall be issued in Form 20, 20-A or 20-li as the case
may be.
Provided that a licence in form 20-A shall be valid for only
such drugs as are specified in the licence :
(2) A licence to sell, stock or exhibit for sale, or distribute
drugs specified in Schedules C and C(') by retail, on
restricted licence or by wholesale shall be issued in Form
21, 21-A or 21-B as the case may be:
Provided that .a licence in form 21-A shall be valid for only
such drugs as are specified in the licence.
62. Sale at more than one place-If drugs are sold or stocked ..
for sale at more than one place, separate application shall be made,
and a separate licence shall be issued, in respect of each such place :
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Provided that this shall not apply to itinerant vendors who have
no specified place of business and who will be licensed to conduct
business in a particular area within the jurisdiction, of the licensing
authority.''
The appellant is a wholesale dealer and distributor-and has a
licence for his Bombay shop in Form 20B and another in Form 21B,
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one for drugs specified in C and C (1) Schedules and the other for
other drugs (Ex. 37 and 38). · The firm has one more licence issued
under R.61(2) in Form 218 authorising it to sell, stock or exhibit for
290
SUPREME COURT REPORTS
[ 1974] 3 S.C,R.
~tlet' or tstribute by wholesale on the premises situated at through .
. a 10~
agan ~o. MHR 1279 in the state of Maharashtra . the
fohllo0wmg categories of drugs specified in Schedule c and C(l)' to
t e
rug Rules, 1945 :-
-
Categories of drugs: for items of Schedule C(l) drugs not requiring Cold Storage.
_ 2. Thi~ li~ence shall be in force for two years from the date 0£
issue of this licence:
3. T~i~ licence is subject to the conditions stated below and to
11\e Prov1s1ons of the Drugs Act, 1940 and the
rules
thereunder.
The question is w~ether !he act of the appellant in temporarily stor1_ng df?gs, not for mimediate sale there but mtended for ultimate sale
m various parts of the Sta~e,_is. contrary to sec. l~(c) and punishable
under Sec. ~7 \b)? Even ~f 1t 1s, ~an Ex. 39, which permitted stockmg and selltng m the specified vehicle of the accused, cover the brief
mterval of storage between taking delivery from the railway or other
public transport and loading into the appellant's mobile van ?
Agreeing with the High Court, we may make short shrift of the
second contention first. If a brief storage for sale in the circumstances of this case necessitates a licence a legal issue we will examine
separately-does Ex. 3 9 fill the bill ? A licence in terms for a vehicle
cannot do duty for one to keep drugs in a fixed place. The grievance
as~uming it to be real, that none of the prescrib.ed forms provide for
an itinerant wholesale distributor or that it would be a fantastic ~
possibility to furnish the possible places-likely to be numerous-where
for short intervals drugs may have to be stored awaiting the arrival of
the van, is no defence. If the law asks for a licence for a place and
you do not have it and still keep the articles there you are asking
for criminal trouble, whether it is a stopgap stocking or not.
The
argumentum ab inconvenienti affords no answer. The Act mandates
the taking of a licence for every place where you stock drugs for sale,
the words of Sec.18(v) and rule 62 being plain and admitting of no
exceptions.
You ask four questions.
Is it a drug? If it is, is
it stored in a place or is it in transit ? If it is stored
in a place is the storag~ for sale? If it is, a licence for that place--
half way house, may be-is the only answer to a prosecution. 1:herc
is none here ex confessio.
Of course, what looms large then ts as
to whether s~ch a stop gap storing is one for sale.even if, admittedly.
no sale is intended in that drug shelter?
Counsel for the State Shri Bhandare counters the argument of
absence of prescribed forms and
difficulties in mentioning
many
places for temporary storage of drugs, in two ways. Firstly, statutory
forms are samples for guidance, not exhaustive prescriptions unamcnable to addition modification or improvisation as the
circumstances
require. The forms in the appendices· to the Civil Procedure Code
illustrate this point. Of course, it is not as sample as that. Sec. 18
which regulates manufacture and sale of drugs prohibits these activities "except under and in accordance· with the conditions of a licence
iss~cd for such purpose ...... " No inflexible fonnula nor petrified
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SWANTllAJ v. MAHAllASHTRA (Krish11a Iyer, I.)
29 [
form is built into the section, suitable forms dictated by pragmatic
considerations and conditions of business being not ruled out. The
rules, however, are a little confusing .
Rule 2(b) defines 'Form' as a form set forth in Sch. A and does
not profess to be illustrative and that Schedule applies 6 forms under
R. 61 (1) and (2) and none for peripatetic wholesale distributors who
may. transport to and stock in central places and radiate from there to
remote retailers.
The licence Ex. 39 for the accused's vehiele is an
improvised innovation without the law but prompted by practical
sense. The sub-rules of Rs. 61 state that licences there under shall be
issued in forms 20A, B and C, 21A, B and C. Rule 62 leaves no
roc·m for variations to suit exigenciCll' although its proviso envisages
licences for itinerant vendors for an area and R 62A takes cognisance
Of. travelling agents and itinerent Venaors who are required to take
licences in Form 21A. But it is a glaring deficiency that while the
rules visualise wholesale distribution licences the forms do not spell
out licences for mobile vans or distribution depots so essential for a
wholesale distribution system. There is no doubt that if a scientific
system of over-seeing wholesale . distribution and a viable scheme of
protected distribution is to be devised, licences for large and wellequipped conveyances ancl storage depots is desirable, nay, necessary.
Indeed, storage in transit must also be licensed so that medicines du
not suffer in the process.
At present, no rules take care of transit
by road or rail. .Actually, cold storage or air-conditioned facilities for
sensitive medicines are scarce in nationalised and private transpor11
;e)'Vices and the drugs legislation winks at. it. Likewise, the fo;ms
do not provide for storage depots or medical vans for
wholes~e
supplies. Social guilt attaches to legal lacunae, the' community be~g
the victim.
Arguments in this case have exposed these shortfalls m
the Jaw and we state them for legislative attention.
The statUtory scheme does provide for retail and wholesale saks
and storages for sale. It does prescribe forms for itinerant retailers
for specified areas, travelling representatives supplying samples and
the like. But storage for sale in mobile wagons or vans resorted to
by wholesalers is not expressly covered by statutory forms .. That is
why Ex, 39 is an adaptation not found in the fasciculus of prescribed
forms. There is no express power to modify the forms conferred by
the rules, or innovate according to need, desirable though it is.
As
the Jaw· now stands, we are disinclined to invalidate Bx. 39. qn the
other hand the Act and the rules must prevail over the forms and,
therefore ;_,. are inclined to overlook the technical deficiencies in
the rules' and, ~nf.ling _the law to save life, uphold the implied a~thc:··
rity to grant swtllble licences under R. 61 and 62 (prov1So) e~en .1f
liberties have to be taken with those given !n Schedule A., Thi> wll!
extend to grant of such licences for way side depots or emergency
stores. But li.cences there must be for every storage for sale (S. 18(C) •
Sri .Manchanda's plea that licences should not be insisted on for
every place of make-shift storage in a far-tlung area served bv · .~
wholesaler may look wasonabte.
The police power of the State J,
292
SUPREME COURT REPORTS
[ 1974 J 3 S.C.ll.
exercised to ensure safe and potent drugs for a people
peculiar[y
susceptibl~ to ailments and largely ignorant of health hazards. The
paramount purpose of regulation through licensing is, inter alia, to set
in motion vigilant medical watch over the proper protection of drugs
and medicines and the verification of the expiry of their life and the
spuriousness of the products. If godowns, temporary stores anJ depots can remain unlicensed, they escape official attention and can
deteriorate into foci of dubioμs or .deceptive drugs harmful to society.
Every place where storage for sale is made must be licensed.
That
is the plain meaning of Sec. 18 ( c) in fulfilment of the clear puQOS<',
the sensitive defence of the sick.
The only surviving issue is whether the medicines in this case
were stocked for sale in the house of Jaswani at Y ootmal. Admittedly, they were kept not for sale in those premises. Admittedly, they
were meant for sale c>entually to rural retailers elsewhere. lf so,
were they stocked for sale? Either contention has some claims to
acceptance but what must tilt the balance is the purpose of the statute,
its potential frustration and judicial avoidance of the mischief by a
construction whereby the means of licensing meet the ends of ensuring pure and potent remedies for the people. This liberty with language is sanctified by great judges and textbooks. Maxwell (') instructs
us in these words :-
"Th•re is no doubt that 'the office of the Judge is, to
make such construction as will suppress the mischief, and
advance the remedy, and to suppress all evasions for the
continuance of the mischief.' To carry out effectually the
object of a statute, it must be so construed as to defeat
all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or
enjoined :
quando aliquid prohibetur, prohibetur et omne per. quod
devenitur ad il/ud.
This manneP of construction has two aspects.
One is
that the courts, mindful of the mischief rule, will not. be astute to narrow the language of a statute so as to allow persons within its purview to ascape its net. The other is that
the statute may be applied to the substance rather than the
mere form of transactions, thus defeating any shifts and
contrivances which parties may have devised in the hope of
thereby falling outside the Act. When
the. courts find
an attempt at concCalment, they will, in the words of Wilmot
C.J., 'brush away the cobweb varnish, and shew -the transactions in their true light."
This benignant 1ule originated four hundred years ago in Heydcm's
case which resolved -
"that for the sure and true interpretation of all statutes
in general (be they penal or beneficial,
restrictive or enlarging of the common law) four things are to be discerned
and considered: (!st). What was the comon law before
(1) Manwcll on the lnterprctati1:>n of Statutes·12th Edition p. 137.
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·sWANTRAJ v. MAHARASHTRA (Krishna Iyer,!.)
293
the making of the Act.
(2nd) .
What was the misch1d
and defect for w;1ich the common Jaw. did· not provide.
(3rd).
What remedy the
Parliament hath resolved and
appointed to cure the disease of the commonwealth.
Ancl,
(4th). The true reason of the remedy; and then the office
of all the Judges is always to make such ccmstruction as
shall suppress the mischief,
and
advance
the
remedy,
and to suppress subtle inventions and evasions for continuance of the mischief, and pro privata commodo, and. to
add force. and life to the cure and remedy, according to the
true mtent of·lhc makers of the Act, pro bono publico."
if.any godown, depot or premises become the nidus of spurious,
time-expired or unscientifically stored drugs, can they be allowed to
escape the coils of the penal Jaw on the plea that they are not to be
sold there, without great peril to patients? . Then legal shelter for
spurious drug rackets would be judicially ensured. And this colours
construction.
Stocke<l for sale there and then? or io be sold certainly but elsewhere later? are the two alternatives flowing from the
language of Sec.
18 (1) ( c) .
The former permits abuse througti
loopholes, ·the latter ugh tens up but loads the dealer\ with expenses
and need for more hC-'nces.
Since risk to life and health is avoided
by the latter interpretation, we hold 'that the storage, even though for
short spells and on d:i\ /we basis and without intent to sell at that
place but as part of !he sales business,
comes within the scupe of
"storage for sale' in Sec. 18(c) artd R. 62. To loosen the Jaw m its
joints is to play wilh life and therefore anti-humanist.
On the admitteu facts, the offence is not serious . On the face
of it, the law is a little defective. Our interpretation makes the accused
guilty and clarifies the legal position although the Central Government
wi)I do well to tidy •lp and tighten the provisions by a close. second
took at the Jaw in tho book. We need ha•aly say that a law 1s e~ec
tive not b,Y making it perfect on paper but by providing a sufficient
and conscientious cadre of officers.
The sentence is light but here it is enough. We dismiss the appeal
for the reasons . above set out.
V .. P. S.
Appeal dismissed.