Manjit Kumar vs The Director of Revenue Intelligence

Paramjeet Singh, J.—Present petition has been filed u/s 439 Cr.P.C. for grant of regular bail to the petitioner in Criminal Case No. 855 (06) LDH/2011, under Sections 2, 9, 22, 25, 27A and 29 of the Narcotic Drugs and Psychotropic Substances Act, filed by respondent from the area of Police Station Sector 17, Chandigarh. Brief facts of the case are that on a specific intelligence, a case was registered against M/s Ten Star Industries, Village Nalka, Near Baghbaniya, Tehsil Nalagarh, District Solan (H.P.) that it was indulged in unlawful delivery/removal/dealing with Controlled Substances in violations of provisions of the Narcotic Drugs and Psychotropic Substances (Controlled Substance Regulation) Order, 1993 (hereinafter referred to as "1993 Order") and the Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter referred to as the "NDPS Act"). During the search of M/s Ten Star Industries on 23.10.2011, 5.350 kgs. powder and 115.045 kgs generic tablets were recovered. During the search of another premises of M/s Torranto Pharmaceutical (P) Limited, Khalsa School Chowk, Bathinda Road, Muktsar, having Jasvir Singh Sodhi as one of the Director, various medicines were recovered. During the preliminary investigation and recording of voluntary statement u/s 67 of the NDPS Act on 25.10.2011, Sh. Jasvir Singh Sodhi in his voluntary statement had named M/s Allwell Pharmaceuticals, Chandigarh as supplier of Pseudoephedrine and Alprazolam. Thereafter, a raid was conducted at the premises of M/s Allwell Pharmaceuticals, SCO No.2419-20, Sector 22-C, Chandigarh. Sh. Manjit Kumar, during panchnama proceedings dated 19.11.2011, as well as, during recording of his statement dated 20.11.2011 was confronted with bill dated 26.09.2011 issued by M/s Allwell Pharmaceuticals, Chandigarh for supply of psychotropic substance to M/s Ten Star Industries. In the voluntary statement of the above referred date, Manjit Kumar admitted that bill dated 26.09.2011 for Rs.23,680/-was issued by him after Diwali. i.e. after the arrest of Jasvir Singh Sodhi without maintaining statutory records and even failed to produce the records. During the search from M/s Allwell Pharmaceuticals, 460 grams Ketamine, a psychotropic substance was also recovered and he could not produce any record regarding procurement of the said psychotropic substance.

Learned counsel for the petitioner vehemently argued that the petitioner is a partner of M/s Allwell Pharmaceuticals and is a license holder from Licensing Authority-cum-Drug Controller, Chandgiarh and referred to Annexure P/1 wherein license has been issued and the petitioner is shown as Incharge and Proprietor of the firm. Learned counsel for the petitioner has further made reference to a bill dated 12.05.2001 (Annexure P/2) regarding purchase of Ketamine from Turakhia Bros, Mumbai and contended that when the Ketamine was purchased, it was not in the list of psychotropic substance. It has come on the list for the first time on 10.02.2011. It is the case of the petitioner that the said medicine had a shelf-life of 3 years and has expired in the year 2004. As such, the ketamine was not a contraband and Ketamine has been added for the first time vide notification dated 10.02.2011 in the schedule at Sr. No. 10A and has been notified in the notification at Serial No. 238E in pursuance of notification dated 21.06.2011, so the possession of the petitioner was legal in pursuance of the purchase order.

The said contention of the learned counsel for the petitioner has been opposed by learned counsel for the respondent - Director of Revenue Intelligence and it is stated that the petitioner has not complied with the provisions of 1993 Order, as well as, the provisions of NDPS Act.

This Court in the matter of Vinod Kumar versus State of Punjab, CRM M-9327of 2012, decided on 01.06.2012, has held as under:

I have considered the rival contentions of the learned counsel for the parties. I have no doubt that in terms of Section 80 of the NDPS Act, a person can very well be prosecuted both under the N.D.P.S. Act as well as under the Drugs and Cosmetics Act, 1940 simultaneously for violation of the provisions of those Acts. Merely because a person is prosecuted for violation of Drugs and Cosmetics Act, 1940 that will not operate as a bar to prosecute him under the provisions of the N.D.P.S. Act rather if the offences made out under the Drugs and Cosmetics Act also come within the scope of the provisions of NDPS Act such person shall also be prosecuted for possession of the contrabands violating the provisions of the NDPS Act. Both the Acts are independent. Violation of one Act does not mean no violation of the other Act.

The contention of the learned Counsel for the petitioners is that there is no provision for license and compliance of any statutory requirements under the NDPS Act, Rules and Order 1993. When a person deals in the aforesaid manufactured drugs/medicines under a proper and valid license issued under the Drug and Cosmetics Act, he is not required to comply with the provisions of N.D.P.S. Act, Rules and Order 1993.

I have considered the contention of the learned counsel for the petitioners. The same cannot be sustained for the reason that Section 8(c) of NDPS Act specifically CRM M-1866 of 2012 states "the possession in the manner and to the extent provided by this Act or the Rules or Order made thereunder." Similar is the position with respect to Section 9 which refers to the power of the Central Government to permit control and regulation. The said Section is subject to Section 8. Section 9(1)(a)(v & vi) also refers to the provisions of this Act. Section 9A of the Act provides that if Central Government is of the opinion that having regard to the use of any controlled substance production or manufacture of any Narcotic Drug and Psychotropic Substance, it is necessary or expedient so to do in the public interest it may, by order, provide for regulating or prohibiting the production, manufacture, supply and distribution thereof and trade and commerce therein. Furthermore, Section 10 of the NDPS Act specifically provides that the State Government can frame rules to permit, control and regulation. Such rules will be subject to Section 8 of the NDPS Act. The cumulative effect of all these provisions and the rules made thereunder is that a person can possess the Narcotic Drugs and Psychotropic Substances only if the same are permitted under the NDPS Act. The words "the possession in the manner and to the extent provided by this Act or the Rules or Orders made thereunder" mentioned in Section 8 of the NDPS Act are significant and it certainly means any possession of the Narcotic Drug and Psychotropic Substance is only subject to the provisions of NDPS Act, Rules and Order 1993. Furthermore, the reading of Rules 64, 65 and 66 of the Rules makes the position very clear. The Rules 64 to 67-C of the Narcotic Drugs and Psychotropic Substances Rules, 1985 are reproduced below:

CHAPTER VII PSYCHOTROPIC SUBSTANCES

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.

Manufacture of psychotropic substances.-(1) Subject to the provisions of sub-rule (2), the manufacture of any of the psychotropic substances other than those specified in Schedule I shall be in accordance with the conditions of a licence granted under the Drugs and Cosmetics Rules, 1945 (hereinafter referred to as the 1945 Rules) framed under the Drugs and Cosmetics Act, 1940 (23 of 1940), by an authority in charge of drugs control in a State appointed by the State Government in this behalf: Provided that the authority in charge of drug control in a State referred to above may issue a licence to manufacture a psychotropic substance specified in Schedule III for the purpose of export only.

(2) The authority in charge of Drugs Control in a State (hereinafter referred to as the Licensing Authority) shall consult the Drugs Controller (India) in regard to the assessed annual requirements of each of the psychotropic substances in bulk form referred to in sub-rule (1) in the country and taking into account the requirement of such psychotropic substances in the State, the quantity of such substance required for supply to other manufacturers outside the State and the quantity of such substance required for reasonable inventory to be held by a manufacturer, shall specify, by order, the limit of the quantity of such substance which may be manufactured by the manufacturer in the State.

(3) The quantity of the said psychotropic substance which may be manufactured by a licensee in a year shall be intimated by the Licencing Authority to the licensee at the time of issuing the licence: 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.

65A. Sale, purchase, consumption or use of psychotropic substances - No person shall possess any psychotropic substance for any of the purposes covered by the 1945 Rules, unless he is lawfully authorized to possess such substance for any of the said purposes under these rules.

Possession, etc., of psychotropic substances.-

(1) No person shall possess any psychotropic substance for any of the purpose 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:

Provided further that an individual may possess the quantity of exceeding one hundred dosage units at a time but not exceeding three hundred dosage units at a time for his personal long term medical use if specifically prescribed by a Registered Medical Practitioner.

(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.

Transport of psychotropic substances.-(1) Subject to the provisions of rule 64, no consignment of psychotropic substance shall be transported, imported inter-State or exported inter-State unless such consignment is accompanied by a consignment note in [Form 6] appended to these rules and in the manner as provided hereinafter.

(2) The consignment note referred in sub-rule (1) shall be prepared in triplicate, and the original and duplicate copies of the said note shall be sent alongwith the consignment of psychotropic substances to the consignee who shall return the duplicate copy of the note to the consignor for his use after endorsing on the original and duplicate copies the particulars of the receipt of the quantity consigned.

(3) The consignor shall make necessary entries on the triplicate copy of the said note with reference to the receipt of quantity of the psychotropic substances indicated on that duplicate copy of that note.

(4) The consignor and consignee shall keep such consignment note for a period of two years and the said note may be inspected at any time by an officer authorised in this behalf by the Central Government:

Provided that consignment note in Form 6 shall not apply in cases where the sale of the psychotropic Substance is accompanied by a sale bill or invoice or cash memo or any other document duly signed by the consignor or his authorised signatory, which shall include the following information about the consignment:

(a) name, address and licence number of the consignor and the consignee;

(b) description, batch number and quantity;

(c) mode and particulars of transport:

Provided further that such document shall be preserved by consignor and consignee for a period of two years for inspection by the officers referred to in sub-rule

(4) above.

Explanation -Where the consignee is a research institution, registered medical practitioner, hospital or dispensary, the requirement of incorporating licence number of consignee shall not be applicable.

CHAPTER VII-A SPECIAL PROVISIONS REGARDING MANUFACTURE, POSSESSION, TRANSPORT, IMPORT-EXPORT, PURCHASE AND CONSUMPTION OF NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES FOR MEDICAL, SCIENTIFIC AND TRAINING PURPOSES. 67-A. Special provisions for medical and scientific purposes.- Notwithstanding anything contained in the foregoing provisions of these rules-

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

(i) scientific requirements 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 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. 67-B (1) Notwithstanding anything contained in these rules, the Government Opium and Alkaloid Works may procure, manufacture or import and supply narcotic drugs and psychotropic substances as may be required as samples by various drug law enforcement agencies, testing laboratories and training institutions of the Central and State Governments.

(2) The Government Opium and Alkaloid Works may also supply samples to organisations other than those covered by sub-rule (1) with the prior approval of the Central Government.

(3) Any enforcement agency, laboratory, training institution or organisation requiring the samples shall apply to the Chief Controller of Factories in Form No. 8.

(4) The quantities of various narcotic drugs and psychotropic substances to be supplied as samples shall be determined by the Central Government from time to time. The organisation obtaining the samples shall designate an officer, at the time of sending the request for samples, in whose custody the samples shall be kept.

(5) The organisation requisitioning the samples shall maintain records and submit an annual report to the Chief Controller of Factories in Form No. 9.

(6) When a sample is used for training, the organisation shall maintain a record of the quantity of drug taken out for training and the quantities actually used. 67-C. Notwithstanding anything contained in these rules, the Narcotics Commissioner may permit import or export of narcotic drugs and psychotropic substances for the purpose of controlled deliveries, investigations, intelligence collection scientific analysis.

The reading of the above said rules makes it clear that there is a general prohibition to sell, purchase, consume or use any psychotropic substances specified in Schedule-I. In view of Rule 66 no person shall possess any psychotropic substance for any of the purposes covered by the 1945 Rules unless he is lawfully authorized to possess such substance for any of the said purposes. The said purposes are only medical and scientific purposes. Furthermore, provisos to Rule 66(2) specifically state that how much quantity can be retained if prescribed by a registered medical practitioner. In the present cases, the petitioners have failed to show any such prescription and the wholesaler and retailer and their employees failed to show to this Court that they are authorized under the Act and the Rules framed under the NDPS Act to possess the contrabands in question. The quantity in possession of all the petitioners is more than the prescribed limit in Rule 66 of NDPS Rules. The Clauses 3 to 7 of the Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 1993, are as under:

Manufacture, distribution, sale, imports, exports and consumption of controlled substance.-(1) Every person who manufactures or distributes or sells or imports or exports or consumes any controlled substance shall maintain daily accounts of his activities in Form 1 and Form 2, as the case may be. The records of his activity shall be preserved for a period of two years from the date of last entry in the register.

(2) He shall report to the Director General, Narcotics Control Bureau, Wing No. 5, West Block-I, R.K. Puram, New Delhi-110066 immediately regarding any loss or disappearance of the controlled substances under his control. A copy of the report shall also be endorsed to the Zonal Director of the Narcotics Central Bureau within whose area of jurisdiction such loss or disappearance occurred.

Transport of controlled substance.-(1) A consignment of controlled substance shall be moved from one place to another place only when it is accompanied by a Consignment Note in Form 3.

(2) The Consignment Note shall be prepared in triplicate. The original and duplicate copies of the Consignment Note shall be sent alongwith the consignment to the consignee, who shall return the duplicate copy to the consignor for retention after endorsing on the original and duplicate copies the particulars of quantity received by him.

(3) The consignor shall make necessary entries on the triplicate copy of the Consignment Note with reference to the receipt of the controlled substance indicated on the duplicate copy of the Consignment Note.

(4) In the case of any consignment of the controlled substance which is imported into India, such consignment from the port of entry to any warehouse or factory or business establishment or premise of the importer or consumer, as the case may be, shall be accompanied by a Bill of Entry.

(5) The Consignment Note or the Bill of Entry, as the case may be, shall be, preserved for a period of two years by the consignor and the consignee or importer, as the case may be.

(6) No transporter shall carry a consignment of controlled substance without a Consignment Note or Bill of Entry.

(7) The transporter shall produce the Consignment Note or Bill of Entry, as the case may be, when required by an officer (being an officer superior in rank to a peon, sepoy or constable) of the department of central excise, narcotics, customs, revenue, intelligence or any other department of the Central Government or of the Border Security Force as is empowered in this behalf by general or special order by the Central Government, or any officer (being an officer superior in rank to a peon, sepoy or constable) of the revenue, drug control, excise, police or any other department of a State Government including Union Territory Administration as is empowered in this behalf by general or special order of the State Government including Union Territory Administration authorised under this clause.

(8) Whenever controlled substances are transported by motorised tankers, all the inlets and outlets of the tankers shall be sealed with tamper-proof seals each of which shall have identifiable description. Such seal shall be affixed at the premises of the consignor and removed at the premises of the consignee. The description of tamper-proof seal affixed on the tanker shall be entered on the Consignment Note/Bill of entry with each consignment. No person shall use or possess any tamper-proof seal which has identifiable description on it identical to another tamper-proof seal.

(9) Whenever a consignment of controlled substance is transported from the area which comes within the jurisdiction of a Zonal Director of the Narcotics Control Bureau to an area which comes within the jurisdiction of another Zonal Director of the Narcotics Control Bureau, the consignor shall send a quarterly report to the latter Zonal Director in Form 6. Explanation.-For the purposes of quarterly report under this clause, the area of jurisdiction of the Zonal Directors are the areas as specified in Form 4 of this order.

Selling of controlled substance.-Every person who sells a controlled substance to a buyer in a transaction shall sell so only after the buyer establishes his identity by production of a document like industrial licence or any registration certificate under any law or any other similar documents which establishes his identity and upon a declaration being made of the purpose for which the controlled substance is being purchased.

Labelling of consignments for export or import. -Every container or vessel containing a controlled substance in a consignment for export or in a consignment which is imported shall be labelled prominently giving details of the name and quantity of the controlled substance, name and address of the exporter and importer and the consignee if any. The documents relating to the import or export of the controlled substance such as invoice, cargo manifests, customs, transport and shipping documents shall contain the details such as name of the controlled substance, quantity and the name and address of the consignee, exporter and the importer and the documents shall be preserved for a period of two years.

Filing of returns.-(1) Every person mentioned in clause 3 of this Order shall send a quarterly return by registered post in Form 4 or Form 5, as the case may be, to the concerned Deputy Director, Narcotics Control Bureau, whose address is given in the Form. The quarters for this purpose shall be January to March, April to June, July to September, and October to December. The retun shall be despatched before the last day of the month following the quarter.

(2) Schools, Colleges, Universities, Government or autonomous institutions, registered scientific societies and hospitals using the controlled substance for educational scientific and analytical purposes are only exempted from maintaining records as prescribed under clause 3 and sending returns as prescribed under this clause. But they shall comply with other provisions of this order.

(3) The persons who are to send quarterly returns under this clause shall intimate in Form 4 or Form 5, as the case may be, to the concerned Zonal Director, Narcotics Control Bureau, whose address is given in the Form upto the 15th day of May, 1993 regarding the opening balance of stock of the controlled substance possessed by him as on the 15th day of April, 1993. The first regular returns shall be sent for the period from 15th April, 1993 to 30th June, 1993.

The reading of Clause 3 of the Order 1993 makes it clear that distributor or seller of any controlled substance shall maintain a daily account of his activities in form prescribed under the Act and that record is to be preserved for two years from the date of last entry in the register and also required to report to Director General Narcotic Control Bureau as per clause 3 (2) of the Order 1993. Clause 4 of the Order 1993 refers to the transport of the controlled substances. Some of the petitioners who are claiming to be relations and employees / agents of the license holders under the Drugs and Cosmetics Act have failed to show that they had been maintaining the statutory records as per Order, 1993 and had complied with the requirement of sending report to the Director General Narcotic Bureau. They also failed to show the consignment note with regard to the transport / movement of controlled substances as is required under Clause 4 of the Order 1993. Clause 5 of the Order, 1993 refer to the Selling of Controlled substance after showing the industrial license or any registration certificate under any law.

For the reasons recorded above, question No.2 is answered in the affirmative and it is held that the manufacturers of manufactured drugs or prescription drugs, chemists, wholesale license holders under the Drugs and Cosmetics Act are required to comply with the provisions of NDPS Act, Rules and Order, 1993 for the possession of narcotic drugs, psychotropic and controlled substances.

Court has specifically held in Vinod Kumar''s case (supra) that even the retailer selling drugs and holding license under the Drugs and Cosmetics Act is required to comply with the provisions CRM M-1866 of 2012 of 1993 Order and statutory record is required to be maintained and information is required to be sent to Narcotic Control Bureau of the concerned area. In the present case, these terms and conditions have not been complied with. The recovery from the petitioner is of 460 grams Ketamine which is not a small quantity. It is slightly less than a commercial quantity. As per the notification, 500 grams of Ketamine is shown to be commercial quantity.

Learned counsel for the petitioner has relied upon judgments of this Court in Brij Lal vs. State of Haryana, 2002(2) R.C.R. ( Crl.) 109, Harbansh vs. State of Haryana, 2005(2) R.C.R. (Crl.) 663, Joga Singh vs. State of Punjab, 2002(1) AICLR 592, Sudhir vs. State of Haryana, 2008(4) R.C.R. (Criminal) 385, judgment of Hon''ble Apex Court in Sami Ullaha versus Superintendent, Narcotic Central Bureau, 2009(1) R.C.R.(Crl.)40 and judgment of Calcutta High Court in Re: Subhas Roy, 2002(3) AICLR 651 (Annexure P/7 to P/12) and judgments of Himachal Pradesh High Court in the matter of Anil Kumar Sethi vs. State of Himachal Pradesh and another, CR.M.P.(M) No. 1072 of 2011, and Jasveer Singh Sodhi vs. Union of India and another, CR.M.P.(M) No.1104 of 2011, decided on 05.04.2012.

In the said judgments, the provision of law i.e. specifically 1993 Order has not been considered and discussed which clearly castes a duty upon the person to inform the Narcotic Control Bureau and also to maintain statutory records. In view of this, these authorities are not applicable. It is the own case of the petitioner, Ketamine had already lost shelf-life means it is an expired drug/salt.

Keeping in view the gravity of offence and prevailing situation within the State of Punjab and in the surrounding area i.e. U.T., Chandigarh, the Court cannot turn blind eyes to the misuse of controlled substance. In view of the fact that since the quantity at the most, can fall in the category of "Non-commercial quantity" but is not "small quantity" to retain the drugs like Ketamine in violation of the provisions of 1993 Order even for medicinal and scientific purposes, that too an expired medicine as per the own case of the petitioner, I do not find any ground to grant bail to the petitioner. Hence, the instant petition is dismissed.