INOX AIR PRODUCTS LIMITED NOW KNOWN AS INOX AIR PRODUCTS PRIVATE LIMITED AND ANOTHERversusTHE STATE OF ANDHRA PRADESH

                 [2025] 1 S.C.R. 1235 : 2025 INSC 128

           INOX Air Products Limited now known as INOX
              Air Products Private Limited and Another
                                  v.
                    The State of Andhra Pradesh
                     (Criminal Appeal no. 486 of 2025)
                               30 January 2025
           [B.R. Gavai* and Augustine George Masih, JJ.]


                           Issue for Consideration
       Whether selling of Nitrous Oxide I.P. by the appellant no. 1 company
       to the unlicensed accused No.3 firm which does not possess
       license under Form 20B of the Drugs and Cosmetics Act, 1940,
       was in contravention of s.18(a)(vi) read with r.65(5)(1)(b) of the
       Rules, punishable u/s.27(d) of the said Act.

                                  Headnotes†
       Drugs and Cosmetics Act, 1940 – ss.3(f), 18(a)(vi), 27(d) –
       Drugs and Cosmetics Rules, 1945 – rr.65(5)(1)(b), 70, Form
       20B, 25, 26 – Manufacture and sale of drugs – Condition of
       licences – Meaning of term “manufacture” – Appellant no. 1,
       company engaged in the manufacture and sale of industrial
       and medical gases in India – Complaint lodged by Drugs
       Inspector that appellant no. 1 sold Nitrous Oxide I.P. to the
       accused No.3 firm which did not have license for sale and
       was in contravention of s.18(a)(vi) read with r.65(5)(1)(b) of
       the Rules, punishable u/s.27(d) of the said Act – Trial court
       took the complaint on its file and issued summons to accused
       persons including the appellants – Appellants filed petition
       before the High Court praying for calling of the records on
       the file of the trial court and to quash the same against the
       appellants – High Court dismissed the petition – Correctness:
       Held: Both appellant no.1 and accused no.3 possessed licence
       under Form 25 – Submission that the licence under Form 25 is
       subject to Form 20B and since accused no.3 did not have licence
       under Form 20B, sale to accused no.3 was in contravention of
       s.18(a)(vi) is totally fallacious in nature – ‘Manufacture’ includes
       any process or part of a process for making, altering, ornamenting,

* Author
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    finishing, packing, labelling, breaking up or otherwise treating or
    adopting any drug or cosmetic with a view to its sale or distribution –
    Accused no.3, holding licence under Form 25, entitled to sell and
    distribute the product received from appellant no.1 after altering,
    breaking it up and packing it in smaller containers – Even if the
    allegations made in the complaint are taken at its face value, no
    case made out for offence punishable u/s. 18(a)(vi) rw s.27(d) –
    Furthermore, in the order passed by the Magistrate while issuing
    the process, except recording the submissions of the complainant,
    no reasons recorded for issuing the process against accused
    persons – 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 – No application of mind even for the
    namesake by Magistrate while issuing process – Also, the High
    Court totally misdirected itself – Interpretation by High Court
    that since accused no.3 was given licence to manufacture, he
    was not authorized to purchase it from appellant no.1, is without
    considering the plain nature of s.3(f) and is totally unsustainable
    in law – Impugned judgment quashed and set aside – Summoning
    order also quashed and set aside – Code of Criminal Procedure,
    1973 – s.482. [Paras 21-33, 35, 38-41]

                              Case Law Cited
    Lalankumar Singh and Others v. State of Maharashtra, 2022
    INSC 1059 : [2022] 14 SCR 573 : 2022 SCC OnLine SC 1383;
    Pepsi Foods Ltd. and Another v. Special Judicial Magistrate and
    Others, 1997 INSC 714 : [1997] Supp. 5 SCR 12 : (1998) 5
    SCC 749; Sunil Bharti Mittal v. Central Bureau of Investigation,
    2015 INSC 18 : [2015] 1 SCR 377 : (2015) 4 SCC 609; Mehmood Ul
    Rehman v. Khazir Mohammad Tunda and Others, 2015 INSC 983 :
    [2015] 4 SCR 841 : (2015) 12 SCC 420; Krishna Lal Chawla and
    Others v. State of Uttar Pradesh and Another, 2021 INSC 160 :
    [2021] 2 SCR 550 : (2021) 5 SCC 435 – referred to.

                      Books and Periodicals Cited
    Black Law’s Dictionary, 5th Edition – referred to.

                                List of Acts
    Drugs and Cosmetics Act, 1940; Drugs and Cosmetics Rules,
    1945; Code of Criminal Procedure, 1973.
[2025] 1 S.C.R.                                                         1237

    INOX Air Products Limited now known as INOX Air Products Private
           Limited and Another v. The State of Andhra Pradesh

                                     List of Keywords
        Nitrous Oxide I.P.; Industrial and medical gases; License for
        manufacture of Nitrous Oxide I.P.; License for sale of Nitrous
        Oxide I.P.; License under Form 20B of the Drugs and Cosmetics
        Act, 1940; Meaning of term “manufacture”.

                                    Case Arising From
        CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
        486 of 2025
        From the Judgment and Order dated 12.01.2024 of the High Court
        of Andhra Pradesh at Amravati in CRLP No. 4148 of 2018

                                  Appearances for Parties
        Advs. for the Appellants:
        Dr. Abhishek Manu Singhvi, S. Niranjan Reddy, Sr. Advs., R.
        Bhatnagar, Ishan Khanna, Ishan Khanna, Agni Sen, Ms. Priyanka
        Sharma, Ms. Akhila, Tejas Anand, M/s. Khaitan & Co.
        Advs. for the Respondent:
        Ms. Prerna Singh, Guntur Pramod Kumar, Dhruv Yadav.

                        Judgment / Order of the Supreme Court

                                        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 records pertaining to C.C. No. 71 of 2018 on the file of
        the First Additional Judicial Magistrate of First Class, Kadapa2 and



1     “CrPC.” hereinafter
2     “Trial Court” hereinafter
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     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 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 through its representative G. Raghunadha
[2025] 1 S.C.R.                                                         1239

    INOX Air Products Limited now known as INOX Air Products Private
           Limited and Another v. The State of Andhra Pradesh

               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 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
            Rule 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     “The said Act” hereinafter
4     “The said Rules” hereinafter
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     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.
     3.10. 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.   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
[2025] 1 S.C.R.                                                        1241

    INOX Air Products Limited now known as INOX Air Products Private
           Limited and Another v. The State of Andhra Pradesh

       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 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 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:



5     2022 SCC OnLine SC 1383 : 2022 INSC 1059
6     (1998) 5 SCC 749 : 1997 INSC 714
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          “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 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 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
[2025] 1 S.C.R.                                                             1243

 INOX Air Products Limited now known as INOX Air Products Private
        Limited and Another v. The State of Andhra Pradesh

           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) ………..
           (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.”
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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. ……………….
           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,
                ……..”
[2025] 1 S.C.R.                                                            1245

 INOX Air Products Limited now known as INOX Air Products Private
        Limited and Another v. The State of Andhra Pradesh

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
           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.
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        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
        (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
[2025] 1 S.C.R.                                                          1247

 INOX Air Products Limited now known as INOX Air Products Private
        Limited and Another v. The State of Andhra Pradesh

           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 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
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          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 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.
[2025] 1 S.C.R.                                                       1249

 INOX Air Products Limited now known as INOX Air Products Private
        Limited and Another v. The State of Andhra Pradesh

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, 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 licence for sale i.e.
1250                                                       [2025] 1 S.C.R.

                        Supreme Court Reports


     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.
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
[2025] 1 S.C.R.                                                          1251

 INOX Air Products Limited now known as INOX Air Products Private
        Limited and Another v. The State of Andhra Pradesh

           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.”
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
1252                                                         [2025] 1 S.C.R.

                               Supreme Court Reports


            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 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:
            “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



7   (2015) 4 SCC 609 : 2015 INSC 18
8   (2015) 12 SCC 420 : 2015 INSC 983
9   (2021) 5 SCC 435 : 2021 INSC 160
[2025] 1 S.C.R.                                                           1253

 INOX Air Products Limited now known as INOX Air Products Private
        Limited and Another v. The State of Andhra Pradesh

           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.
                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.
1254                                                         [2025] 1 S.C.R.

                          Supreme Court Reports


                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.
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
[2025] 1 S.C.R.                                                        1255

 INOX Air Products Limited now known as INOX Air Products Private
        Limited and Another v. The State of Andhra Pradesh

     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.
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.

     Result of the case: Appeal allowed.



     †
         Headnotes prepared by: Nidhi Jain