Court affirms cancellation of M/s Harman Medical Store's licences due to possession of psychotropic physician samples and multiple breaches of Drugs and Cosmetics Rules, emphasizing strict compliance and accountability.
In a significant ruling dated August 18, 2026, the Punjab and Haryana High Court upheld the cancellation of two Retail Sale Drugs Licences issued to M/s Harman Medical Store, operated by proprietor Angrej Singh, following multiple violations of the Drugs and Cosmetics Rules, 1945, and the possession of psychotropic substances marked as "physician samples, not for sale." The Court also took into account the petitioner's prior convictions under the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985, underscoring the seriousness of the offences.
The petitioner was granted the licences on October 1, 2024. However, within eight months, an inspection conducted on June 5, 2025, by the competent authority revealed numerous contraventions. These included failure to maintain retail sale records and purchase bills, absence of separate registers for Schedule H1 drugs, and, notably, stocking drugs marked as "physician samples, not for sale," which contained Chlordiazepoxide, a psychotropic substance regulated under the NDPS Act.
Following the inspection, the petitioner was issued a show-cause notice on July 17, 2025, but his explanations were deemed unsatisfactory. Consequently, the licences were cancelled with immediate effect on July 30, 2025. The petitioner's statutory appeal against this cancellation was dismissed on July 3, 2026.
The petitioner contested the cancellation on three grounds: procedural irregularities during inspection under Section 23 of the Drugs and Cosmetics Act, 1940; misapplication of Rule 65(3)(1) concerning prescription registers; and the severity of penalty given it was a first offence. The Court rejected all these arguments.
Regarding procedural compliance, the Court clarified that Section 23 procedures apply mainly to drug sampling for quality testing, which was not the issue in this case. The petitioner did not dispute the composition of the seized drugs, rendering the objection a belated attempt to avoid penalty.
The Court also emphasized that Rule 65(3)(1) requires systematic maintenance of prescription and sale records for all prescription drugs, including physician samples. The petitioner's possession of unaccounted samples without lawful invoices or proper registers constituted a clear violation. Furthermore, multiple other breaches of the Rules independently justified the cancellation.
Addressing the plea for leniency, the Court highlighted the petitioner's prior criminal history involving two NDPS Act convictions related to pharmaceutical drugs, with cases decided in 2019 and 2024. Given the petitioner's conduct shortly after obtaining licences and the gravity of violations, the Court upheld the penalty as proportionate and justified.
The judgment reinforces the stringent regulatory framework governing retail sale of drugs, particularly psychotropic substances, and signals zero tolerance for violations involving unaccounted drugs and inadequate record-keeping. It also demonstrates that past criminal antecedents under the NDPS Act are material considerations in regulatory penalties.
Bottom Line:
Cancellation of retail sale drugs licences due to contraventions of the Drugs and Cosmetics Rules, 1945, and possession of psychotropic substances marked as "physician samples, not for sale," upheld. Past convictions of the licensee under the NDPS Act, 1985, considered relevant in determining the penalty.
Statutory provision(s):
Drugs and Cosmetics Act, 1940 Section 23, Drugs and Cosmetics Rules, 1945 Rules 65(3)(1), 65(4)(1), 65(4)(4), 65(6), 65(18), NDPS Act, 1985 Sections 21, 22
M/s Harman Medical Store v. State of Punjab, (Punjab And Haryana) : Law Finder Doc Id # 2971965
