Inox Air Products (P) Ltd. vs State of A.P.

2025 INSC 128 REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. OF 2025 (Arising out of SLP (Crl.) No. 2345 of 2024)

INOX AIR PRODUCTS LIMITED NOW KNOWN AS INOX AIR PRODUCTS PRIVATE LIMITED AND ANOTHER …APPELLANT(S)

VERSUS

THE STATE OF ANDHRA PRADESH …RESPONDENT(S)

JUDGMENT

B.R. GAVAI, J.

1. Leave granted.

2. The present appeal challenges the judgment and order

dated 12th January 2024 passed by the High Court of

Judicature of Andhra Pradesh at Amravati, whereby the High

Court dismissed the Criminal Petition No. 4148 of 2018 filed

by the appellants herein under Section 482 of the Code of

Criminal Procedure, 19731 thereby praying for calling of the

Signature Not Verified records pertaining to C.C. No. 71 of 2018 on the file of the First Digitally signed by DEEPAK SINGH Date: 2025.01.30 13:38:02 IST Reason:

1 “CrPC.” hereinafter

1 Additional Judicial Magistrate of First Class, Kadapa2 and to

quash the same against the appellants herein, who are

arraigned as Accused Nos. 5 and 6.

3. Shorn of details, the facts leading up to the present

appeal are:

3.1. The first appellant herein - INOX Air Products Limited

(Now known as M/s. INOX Air Products Private Limited) is a

company incorporated in India having its registered office in

Navi Mumbai, Maharashtra and is engaged in the

manufacture and sale of industrial and medical gases in India.

The second appellant - Pavan Kumar Jain, is the Managing

Director of the first appellant company.

3.2. A complaint came to filed on 22nd December 2017 by the

Drugs Inspector, Kadapa before the Trial Court wherein the

appellants were made Accused Nos. 5 and 6. It was alleged in

the complaint that based on information received by the

complainant, on 3rd May 2016, the complainant along with 2

panch witnesses went to the RIMS General Hospital, Kadapa

at around 02:00 P.M. and met the Superintendent of the

2 “Trial Court” hereinafter

2 Hospital. He was asked for the purchase bills and the person

from whom they had procured Oxygen I.P. and Nitrous Oxide

I.P. The Superintendent informed that they had purchased

drugs from M/s. Varasi Oxygen firm (Accused No. 1). On

verification of the purchase bills, it was discovered that the

Accused No. 1 firm had the licenses for Oxygen I.P. only and

not for Nitrous Oxide I.P. The complainant asked for the

purchase agreement between the Hospital and the Accused

No. 1 firm, and it was revealed that the agreement had existed

since 2009. The complainant then seized the 72 purchase bills

of the Nitrous Oxide I.P. from the Superintendent and on

verification it was found that there was no physical stock of

Nitrous Oxide I.P. gas cylinders in the RIMS General Hospital.

3.3. The complainant addressed a letter to the

Superintendent on 5th January for the name and address of

the Accused No. 1 firm and to produce the agreement between

them. This was duly submitted. Another letter was issued

thereafter to Accused No. 1 firm on 6th January 2017 to

produce the drug licenses for the purchase and sale of the

Nitrous Oxide I.P. and to produce the purchase bills, sale bills,

sale drugs and constitution particulars. Accused No. 1 replied

3 through its representative G. Raghunadha Reddy (Accused No.

2) that the Nitrous Oxide I.P. was purchased from another firm

- M/s. R.S. Gas Products (Accused No. 3) and the purchase

bills for the same were submitted.

3.4. The complainant issued a letter seeking similar

submission of licenses and purchase bills relating to Nitrous

Oxide I.P. to Accused No. 3 firm. Accused No. 3 firm submitted

in its reply that they had purchased the Nitrous Oxide I.P. from

M/s INOX Air Products (Accused No. 5), i.e. Appellant No. 1

herein. However, no license for the purchase of Nitrous Oxide

I.P. was submitted by Accused No. 3 firm.

3.5. A similar letter was issued by the complainant to

Appellant No. 1 firm on 19th May 2017 to produce and submit

the drug license to manufacture the drug Nitrous Oxide I.P.

and to produce the sale bills. A reply was received on 7th June

2017 from Appellant No. 2 herein representing Appellant No.1.

The drug licenses for manufacturing and selling the drug

Nitrous Oxide I.P were submitted.

3.6. It was thus concluded by the Drug Inspector while

submitting the complaint that Appellant No. 1 firm (Accused

No. 5) represented by Appellant No. 2 (Accused No. 6) sold the

4 drug Nitrous Oxide I.P. to the unlicensed Accused No. 3 firm

in contravention of Section 18(a)(vi) of the Drugs and

Cosmetics Act, 19403 read with condition of the license in

Form 26, point No. 03 read with Section 65(5)(1)(b) of the

Drugs and Cosmetics Rules, 19454, punishable under Section

27(d) of the said Act.

3.7. Based on the complaint, the Trial Court vide order dated

20th January 2018 took the complaint on its file and issued

summons to all the Accused persons including the appellants

herein.

3.8. The appellants filed the Criminal Petition No. 4148 of

2018 before the High Court of Judicature of Andhra Pradesh

at Amravati under Section 482 of the CrPC praying for calling

of the records pertaining to C.C. No. 71 of 2018 on the file of

the Trial Court and to quash the same against the appellants

herein, who are arraigned as Accused Nos. 5 and 6.

3.9. The High Court, vide the impugned judgment and final

order dated 12th January 2024 dismissed the criminal petition

filed by the appellants under Section 482 of the CrPC.

3 “The said Act” hereinafter 4 “The said Rules” hereinafter

5 3.10. Being aggrieved thereby, the present appeal was

filed.

4. We have heard Dr. A.M. Singhvi and Shri S. Niranjan

Reddy, learned Senior Counsel appearing on behalf of the

Appellants, and Smt. Prerna Singh, learned counsel appearing

on behalf of the Respondent-State.

5. Dr. Singhvi, learned Senior Counsel for the appellants

submitted that the term ‘manufacture’ as defined in Section

3(f) of the said Act is wide enough and includes inter alia

“making, altering, ornamenting, finishing, packing, labelling

etc.” It is submitted that the process of manufacture adopted

by accused No.3 was outlined in the application form filed by

accused No.3 with the Director General, Drugs Control

Administration, Andhra Pradesh for the grant of a

manufacturing license, as follows:

a. A3 would purchase NOIP in big cylinders from a licensed manufacturer, which would be tested as per I.P. standards and thereafter used for filling small cylinders.

b. A small sample of gas in the small cylinder is taken and tested for its purity in the lab by lab methods.

6 6. Dr. Singhvi submitted that as such the procedure

undertaken by accused No.3 would come within the definition

of ‘manufacture’ as defined under Section 3(f) of the said Act.

7. Dr. Singhvi further submitted that Form 20B and Rule

65(5) of the said Rules are applicable to sale by way of

wholesale. Rule 2(g) of the said Rules defines “sale by way of

wholesale dealing” to mean “sale to a person for the purpose

of selling again”. It is submitted that wholesale dealing would

not cover manufacture within its scope and any drugs

purchased in furtherance of a license under Form 20B must

be sold as it is, without any change and on as is basis. It is

submitted that the sale of Nitrous Oxide I.P. from the first

appellant – accused No.5 to accused No.3 is sale from one

manufacturer to another for further manufacturing. It is

further submitted that accused No.3 was granted a license to

manufacture in Form 25 by the Drugs Control Administration

without requiring it to first obtain a license under Form 20B

and/or any other Form under the said Rules. It is therefore

submitted that the prosecution is totally untenable in law.

8. Dr. Singhvi further submitted that the order passed by

the learned Magistrate dated 20th January 2018 taking

7 cognizance of the complaint filed by the respondent and

issuing process against all the accused persons does not

record any reasons and is a non-speaking one. Relying on the

judgment of this Court in the case of Lalankumar Singh and

Others v. State of Maharashtra5, it is submitted that the

order of the Magistrate issuing process/summons is liable to

be set aside on the said short ground.

9. Without prejudice to the aforesaid contention, it is

submitted that appellant No.1 had already nominated Mr.

E.S.K. Sastry, who has filed an affidavit undertaking that he

was in charge of day-to-day affairs and responsible for the

business of appellant No.1 under Section 34 of the said Act. It

is submitted that appellant No.2 is a 73 years old person who

resides in Mumbai and has no concern in day-do-day affairs

of the appellant No.1 Company. It is submitted that there are

no specific averments in the complaint with regard to the role

played by appellant No.2 and as such, in view of the law laid

down by this Court in the case of Pepsi Foods Ltd. and

5 2022 SCC OnLine SC 1383 : 2022 INSC 1059

8 Another v. Special Judicial Magistrate and Others6, the

complaint is liable to be quashed and set aside.

10. Ms. Prerna Singh, on the contrary, submitted that the

license under Form 25 is subject to the conditions as laid

down in Form 20B. She therefore submitted that since neither

accused No.3 nor accused No.5 possess a license under Form

20B, there was a contravention of provisions of Section 18(c)

of the said Act constituting an offence punishable under

Section 27(d) of the said Act.

11. Since in the present complaint, we are only concerned

with the appellants who are accused Nos. 5 and 6, we will refer

to the averments in the complaint insofar as the present

appellants are concerned. The only averment in the complaint

pertaining to the present appellants is as follows:

“A5 represented by A6 sold the drug Nitrous Oxide I.P. to the unlicensed A3 firm there by contravention of the Sec 18(a)(vi) r/w condition of the license in Form 26 point No.:03 r/w 65(5)(1)(b) of the Act, punishable under Section 27(d) of the Drugs & Cosmetics Act, 1940.”

12. It is thus clear that the only allegation against the

present appellants is that the appellants sold Nitrous Oxide

6 (1998) 5 SCC 749 : 1997 INSC 714

9 I.P. to accused No.3 firm which did not have license for sale

and as such, there was a violation of Rule 65(5)(1)(b) of the

said Rules which is punishable under Section 27(d) of the said

Act.

13. For considering the rival submissions, it would be

relevant to refer to certain provisions of the said Act.

14. Section 3 of the said Act is a ‘Definitions’ section.

Clause (f) thereof reads thus:

“(f) “manufacture” in relation to any drug or cosmetic includes any process or part of a process for making, altering, ornamenting, finishing, packing, labelling, breaking up or otherwise treating or adopting any drug or cosmetic with a view to its sale or distribution but does not include the compounding or dispensing of any drug, or the packing of any drug or cosmetic, in the ordinary course of retail business; and “to manufacture” shall be construed accordingly;”

15. It could be seen that the term ‘manufacture’ as defined

in the said Act is firstly inclusive and secondly wide enough to

include any process or part of process from making, altering,

ornamenting, finishing, packing, labelling, breaking up or

otherwise treating or adopting any drug or cosmetic with a

view to its sale or distribution. What is excluded from the

definition is the compounding or dispensing of any drug, or

10 the packing of any drug or cosmetic, in the ordinary course of

retail business.

16. It will also be apposite to refer to the relevant part of

Section 18 of the said Act which reads thus:

“18. Prohibition of manufacture and sale of certain drugs and cosmetics.—From such date as may be fixed by the State Government by notification in the Official Gazette in this behalf, no person shall himself or by any other person on this behalf—

(a) manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale, or distribute—

(i) ………..;

(ii) ………..

(iii) ……….;

(iv) …………;

(v) ………….;

(vi) any drug or cosmetic in contravention of any of the provisions of this Chapter or any rule made thereunder;

…………”

17. It will be relevant to refer to the relevant part of Section

27 of the said Act which reads thus:

“27. Penalty for manufacture, sale, etc., of drugs in contravention of this Chapter.—Whoever, himself or by any other person on his behalf, manufactures for sale or for distribution, or sells, or stocks or exhibits or offers for sale or distributes,—

(a) …………

(b) ………..

(c) ………..

11 (d) any drug, other than a drug referred to in clause

(a) or clause (b) or clause (c), in contravention of any other provision of this Chapter or any rule made thereunder, shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to two years and with fine which shall not be less than twenty thousand rupees:

Provided that the Court may for any adequate and special reasons to be recorded in the judgment impose a sentence of imprisonment for a term of less than one year.”

18. It could be seen that for constituting an offence, what is

necessary to establish is that the accused manufactures for

sale or for distribution, or sells, or stocks or exhibits or offers

for sale or distributes any drug without a valid license required

under clause (a)(vi) of Section 18 of the said Act. As such, what

the prosecution will have to establish is that the appellants

sold the drug to accused No.3 without accused No.3 having

the valid license for the further sale of the same. It will be

relevant to refer to the relevant part of Rule 65 of the said

Rules which reads thus:

“65. Condition of licences.—Licences in Forms 20, 20-A, 20-B, 20-F, 20-G, 21 and 21-B shall be subject to the conditions stated therein and to the following general conditions—

1. ……………….

2. ……………….

3. ……………….

12 4. ……………….

(5)(1) Subject to the other provisions of these rules the supply of a drug by wholesale shall be made against a cash or credit memo bearing the name and address of the licensee and his licence number under the Drugs and Cosmetics Act in which the following particulars shall be entered—

(a) ……….,

(b) the name, address of the licensee to whom sold and his sale licence number. In case of sale to an authority purchasing on behalf of Government, or to a hospital, medical, educational or research institution or to a Registered Medical Practitioner for the purpose of supply to his patients the name and address of the authority, institution or the Registered Medical Practitioner as the case may be, ……..”

19. Rule 65 of the said Rules deals with conditions of licences

and Forms 20, 20A, 20B, 20F, 20G, 21 and 21B whereas Rule

70 thereof deals with “Form of licence to repack or

manufacture drugs other than those specified in Schedules C

and C(1)”.

20. It will be relevant to refer to Forms 20B and 25 of the said

Rules, which read thus:

“Form 20B [See rule 61(1)]

Licence to sell, stock or exhibit or offer for sale, or distribute by wholesale, drugs other than those specified in Schedules C, C(1) and X

13 1,.……………………………………………………………… …………………………….is hereby licensed to sell, stock or exhibit or offer for sale, or distribute by wholesale drugs other than those specified in Schedules C, C(1) and X on the premises situated at……………….. subject to the conditions specified below and to the provisions of the Drugs and Cosmetics Act, 1940, and the rules thereunder.

2. The licence unless sooner suspended or cancelled, shall remain valid perpetually. However, the compliance with the conditions of licence and the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) and the Drugs and Cosmetics Rules, 1945 shall be assessed not less than once in three years or as needed as per risk based approach.

3. The sale shall be made under the personal supervision of a competent person. (Name of the competent person).] ………

4. Categories of drugs………..

Date ……………………………… Licence No. ……………………………… Licensing Authority Conditions of Licence

1. This licence shall be displayed in a prominent place in a part of the premises open to the public.

2. The licensee shall comply with the provisions of the Drugs and Cosmetics Act, 1940 and the Rules thereunder for the time being in force.

3. (i) No drug shall be sold unless such drug is purchased under a cash or credit memo from a duly licensed dealer or a duly licensed manufacturer.

(ii) No sale of any drug shall be made to a person not holding the requisite licence to sell, stock or exhibit for sale or distribute the drug. Provided that the condition shall not apply to the sale of any drug to —

(a) an officer or authority purchasing on behalf of Government, or

14

(b) a hospital, medical, educational or research institution or a registered medical practitioner for the purpose of supply to his patients, or

(c) a manufacturer of beverages, confectionary biscuits and other non-medicinal products, where such drugs are required for processing these products.]

4. * * *

5. The licensee shall inform the Licensing Authority in writing in the event of any change in the constitution of the firm operating under the licence. Where any change in the constitution of the firm takes place, the current licence shall be deemed to be valid for a maximum period of three months from the date on which the change takes place unless, in the meantime, a fresh licence has been taken from the Licensing Authority in the name of the firm with the changed constitution.”

Form 25 [See Rule 70] Licence of manufacture for sale or for distribution of drugs other than those specified in Schedules C, C(1) and X

Number of licence and date of issue ……………………….

1. ………………………… is hereby licensed to manufacture the following categories of drugs being drugs other than those specified in Schedules C, C(1), and X to the Drugs and Cosmetics Rules, 1945, on the premises situated at ………… under the direction and supervision of the following competent technical staff:

(a) Competent technical staff (Names)…………..

(b) Names of Drugs (each item to be separately specified) ………..

2. The licence authorises the sale by way of wholesale dealing and storage for sale by the licensee of the 15 drugs manufactured under the licence, subject to the conditions applicable to licence for sale.

3. The licence unless sooner suspended or cancelled shall remain valid perpetually. However, the compliance with the conditions of licence and the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) and the Drugs and Cosmetics Rules, 1945 shall be assessed not less than once in three years or as needed as per risk based approach.

4. The licence is subject to the conditions stated below and to such other conditions as may be specified in the rules for the time being in force under the Drugs and Cosmetics Act, 1940.

Date…………..

Signature …………… Designation ……………..

*Licensing Authority *Central Licence Approving Authority.

*Delete whichever is not applicable.] Conditions of Licence

1. This licence shall be kept on the approved premises and shall be produced at the request of an Inspector appointed under the Drugs and Cosmetics Act, 1940.

2. Any change in the competent technical staff named in the licence shall be forthwith reported to the Licensing Authority.

3. If the licensee wants to manufacture for sale additional items of drugs not included above he should apply to the Licensing Authority for the necessary endorsement as provided in Rule 69(5). This licence will be deemed to extend to the categories so endorsed.

4. * * *

5. The licensee shall inform the Licensing Authority in writing in the event of any change in the 16 constitution of the firm operating under the licence.

Where any change in the constitution of the firm takes place, the current licence shall be deemed to be valid for a maximum period of three months from the date on which the change takes place unless, in the meantime, a fresh licence has been taken from the Licensing Authority in the name of the firm with the changed constitution.”

21. A perusal of clause 2 of Form 25 which is a licence issued

under Rule 70 of the said Rules would reveal that it authorizes

the sale by way of wholesale dealing and storage for sale by

the licensee of the drugs manufactured under the licence,

subject to the conditions applicable to licence for sale. It is the

contention of the respondent that the licence under Form 25

is subject to Form 20B and since accused No.3 did not have a

licence under Form 20B, the sale to accused No.3 by the

appellants was in contravention of Section 18 (a)(vi) of the said

Act.

22. It is undisputed that both the accused i.e. appellant No.1

and accused No.3 possessed licence under Form 25. The

allegation is that since accused No.3 did not possess a licence

under Form 20B, appellant No.1 could not have sold the drugs

to accused No.3 for further sale thereof.

17

23. We find the said argument to be totally fallacious in

nature. As discussed hereinabove, the term ‘manufacture’ is

an inclusive term and has a wide scope. It includes any

process or part of a process for making, altering, ornamenting,

finishing, packing, labelling, breaking up or otherwise treating

or adopting any drug or cosmetic with a view to its sale or

distribution.

24. For appreciating the rival contention, it will be apposite

to explain the nature of processes that are undertaken by

appellant No.1 and accused No.3. Appellant No.1 purchases

Nitrous Oxide I.P. in bulk and after storing them in bulk

containers sells them for further sale. Accused No.3 purchases

the large containers from appellant No.1, opens the seal and

stores them in smaller containers and reseals them for further

distribution and sale.

25. Since both accused No.3 and appellant No.1 are holding

the licence for manufacture, they will be entitled to carry out

any process or part of process which includes altering or

breaking up with a view to its further sale or distribution.

26. Since accused No.3 also possesses licence under Form

25 for manufacture it is not only entitled to alter, break up,

18 repack and relabel the product received from appellant No.1,

it is also entitled to do it with a view for further sale or

distribution. Since accused No.3 is also holding the licence

under Form 25, it is entitled to sell and distribute the product

received from appellant No.1 after altering, breaking it up and

packing it in smaller containers. On a plain and literal

interpretation of the term ‘manufacture’ as defined in the said

Act, we find that the contention of the State is totally

untenable. It would have been a different matter if accused

No.3 did not have a licence under Form 25 which apart from

permitting accused No.3 from altering, breaking it up and

packing the product received from appellant No.1 in a smaller

container also authorizes it to further sell the same by

wholesale dealings. Only in the absence of any licence with

accused No.3 which permitted it to further sell and distribute

the product received from appellant No.1, sale of the product

by appellant No.1 to it would have contravened the provisions

of Section 18(a)(vi) and constituted an offence punishable

under Section 27(d) of the said Act.

27. Ms. Prerna, learned counsel for the State vehemently

argued that since the licence under Form 25 is ‘subject to’ the

19 licence for sale i.e. Form 20B, there was a violation of Section

18(a)(vi) of the said Act.

28. Even if the contention of the learned counsel for the State

is to be accepted, still an offence would not be made out.

29. The term ‘subject to’ has been defined in the Black Law’s

Dictionary, 5th Edition at Page 1278, which reads thus:

“Liable, subordinate, subservient, inferior, obedient to; governed or affected by; provided that; provided; answerable for.”

30. As such, the licence under Form 25 would be liable,

subordinate, subservient, inferior, obedient to; governed or

affected by the licence under Form 20B. However, for that, the

prosecution will have to show that appellant No.1 who

possesses the licence under Form 25 has violated any of the

provisions under licence in Form 20B. The learned counsel for

the State has not been in a position to point out violation of

any of the conditions as stipulated in Form 20B.

31. In that view of the matter, we find that even if the

allegations made in the complaint are taken at its face value,

no case is made out for an offence punishable under Section

18(a)(vi) read with Section 27 (d) of the said Act.

20

32. There is another ground on which the impugned

judgment and order is liable to be quashed and set aside. It

will be relevant to refer to the order passed by the learned

Magistrate while issuing the process which reads thus:

“The Drugs Inspector Kadapa filed complaint against A1 and A2 U/s 32 of Drugs and Cosmetics Act 1940 and 1945 for the contravention of the sec 18(c) Punishable under section 27(b)(ii) on A1 to A4 and contravention of section 18(a)(vi) r/w condition of the license in form 25 point No. 03 r/w Rule 65(5)(1)(b) of the Act, punishable under section 27(d) on A5 and A6.

It is submitted that all the concerned records i.e., document number 1 to 6, 7 (72 pages of carbon copy bills on which the payment order passed by Superintendent, RIMS General Hospital, Kadapa) Serial No.8 to 19 and Serial No. 20 containing (pages 1 to 15 along with cover) shown and filed along with the complaint and other connected records are verified and found it on correct lines.

It is further submitted in this case No property seized in this case except the above said documents. Hence, if your honour pleases the case may be taken on file against A1 and A6 and may be pass orders for issue of C.C. No. and also summons to A1 to A6. Submitted Taken on file U/Secs.32 of Drugs and Cosmetics Act 1940 and 1945 for the contravention of the sec 13(c) Punishable under section 27(b)(ii) on A1 to A4 and Contravention of section 18(a)(vi) r/w condition of the license in form 25 point No. 03 r/ow Rule 65(5)(1)(b) of the Act, punishable under section 27 (d) on A5 and A6 of the said Act.

Issue summons to A1 to A6.

Call on 5/3/18.”

21

33. It could be seen from the aforesaid order that except

recording the submissions of the complainant, no reasons are

recorded for issuing the process against the accused persons.

34. In this respect, it will be relevant to refer to the following

observations of this Court in the case of Pepsi Foods Ltd.

(supra):

“28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.”

35. This Court has clearly held that summoning of an

accused in a criminal case is a serious matter. It has been held

22 that the order of the Magistrate summoning the accused must

reflect that he has applied his mind to the facts of the case and

the law applicable thereto. This Court held that the Magistrate

is required to examine the nature of allegations made in the

complaint and the evidence, both oral and documentary in

support thereof and as to whether that would be sufficient for

proceeding against the accused. It has been held that the

Magistrate is not a silent spectator at the time of recording of

preliminary evidence before summoning the accused.

36. The said law would be consistently following by this

Court in a catena of judgments including in the cases of Sunil

Bharti Mittal v. Central Bureau of Investigation7,

Mehmood Ul Rehman v. Khazir Mohammad Tunda and

Others8 and Krishna Lal Chawla and Others v. State of

Uttar Pradesh and Another9.

37. Recently, a Bench of this Court to which one of us (Gavai,

J.) was a Member, in the case of Lalankumar Singh (supra),

has observed thus:

7 (2015) 4 SCC 609 : 2015 INSC 18 8 (2015) 12 SCC 420 : 2015 INSC 983 9 (2021) 5 SCC 435 : 2021 INSC 160

23 “38. The order of issuance of process is not an empty formality. The Magistrate is required to apply his mind as to whether sufficient ground for proceeding exists in the case or not. The formation of such an opinion is required to be stated in the order itself. The order is liable to be set aside if no reasons are given therein while coming to the conclusion that there is a prima facie case against the accused. No doubt, that the order need not contain detailed reasons. A reference in this respect could be made to the judgment of this Court in the case of Sunil Bharti Mittal v. Central Bureau of Investigation9, which reads thus:

“51. On the other hand, Section 204 of the Code deals with the issue of process, if in the opinion of the Magistrate taking cognizance of an offence, there is sufficient ground for proceeding. This section relates to commencement of a criminal proceeding. If the Magistrate taking cognizance of a case (it may be the Magistrate receiving the complaint or to whom it has been transferred under Section 192), upon a consideration of the materials before him (i.e. the complaint, examination of the complainant and his witnesses, if present, or report of inquiry, if any), thinks that there is a prima facie case for proceeding in respect of an offence, he shall issue process against the accused.

52. A wide discretion has been given as to grant or refusal of process and it must be judicially exercised. A person ought not to be dragged into court merely because a complaint has been filed. If a prima facie case has been made out, the Magistrate ought to issue process and it cannot be refused merely because he thinks that it is unlikely to result in a conviction.

24 53. However, the words “sufficient ground for proceeding” appearing in Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect.”

39. A similar view has been taken by this Court in the case of Ashoke Mal Bafna (supra).

40. In the present case, leaving aside there being no reasons in support of the order of the issuance of process, as a matter of fact, it is clear from the order of the learned Single Judge of the High Court, that there was no such order passed at all. The learned Single Judge of the High Court, based on the record, has presumed that there was an order of issuance of process. We find that such an approach is unsustainable in law. The appeal therefore deserves to be allowed.”

38. In the present case also, we find that there is no

application of mind even for the namesake by the learned

Magistrate while issuing the process. On this ground also, the

impugned judgment and order is liable to be quashed and set

aside.

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39. We also find that the High Court has totally misdirected

itself in the present matter. It will be relevant to refer to the

following observations of the High Court:

“24. Admittedly, petitioners/accused have sold the nitrous oxide to Accused 3 & 4 without producing the license. Accused No.3 firm was given permission for manufacturing of nitrous oxide.

25. On repetition, as discussed supra, the 3rd accused has given licence to manufacture the Nitrous Oxide and Oxygen and the petitioner/A5 firm is also given licence to manufacture Nitrous Oxide.

26. In the instant case, the petitioners/accused have sold the drug in contravention of the Act and Rules and, therefore, in view of the provisions under Section 18(a)(vi) r/w Section 27 of the Act, 1940 is liable to be prosecuted.”

40. Having observed all this, the learned Single Judge of the

High Court goes on to observe that the definition of

‘manufacture’ as defined under Section 3(f) of the said Act was

not relevant for deciding the present issue. It goes on to say

that since accused No.3 was given licence to manufacture, he

was not authorized to purchase it from accused No.5. We find

that the said interpretation is without considering the plain

nature of Section 3(f) of the said Act and is totally

unsustainable in law.

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41. In view of the detailed elaborations made by us

hereinabove, we pass the following order:

(i) The appeal is allowed;

(ii) The impugned judgment and order 12th January 2024

passed by the High Court of Judicature of Andhra

Pradesh at Amravati in Criminal Petition No. 4148 of

2018 is quashed and set aside; and

(iii) The summoning order dated 20th January 2018

passed by the Trial Court in C.C. No. 71 of 2018 and

the proceedings arising therefrom are also quashed

and set aside.

42. Pending application(s), if any, shall stand disposed of.

..............................J. (B.R. GAVAI)

..............................................J. (AUGUSTINE GEORGE MASIH) NEW DELHI;

JANUARY 30, 2025.

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