SPECIAL CIVIL APPLICATION NO. 5700 OF 1983 Date of Decision: December 26, 1996. For Approval and Signature : The Honourable Mr. Justice S.D. Shah 1. Whether Reporters of Local Papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes Except [ ] portions 3. Whether Their Lordships wish to see the fair copy of judgment? Yes 4. Whether this case involved a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder? No 5. Whether it is to be circulated to the Civil Judge? No Appearance : Mr G.N. Desai & Mr P.G. Desai for petitioners Mr K.C. Shah, learned AGP for respondents. Coram : S.D. SHAH, J. (Date: 26.12.1996) CAV JUDGMENT : 1. Is human blood a "drug"? AND Are Pathologists tapping blood from human beings manufacturing "drug" so as to incur liability to obtain licence U/sec 18(c) of Drugs & Cosmetics Act, 1940? are the questions posed for consideration of this court in this petition under Article 226 of the Constitution of India filed by some of the Pathologists and Association of Pathologists. 2. The respondents, namely, the Director of Food & Drugs has by notices, dated 8th July, 1983 called upon the petitioners individually to show cause as to why action should not be taken against them for breach of Section 18(c) of the said Act inasmuch as they have been carrying on the activities of tapping blood, collecting the blood and of selling the blood for which licence is required under section 18(c) of the said Act and since such activity was being carried on by them without obtaining licence, actions were required to be taken against them. The issuance of such notice to various pathologists has given rise to the present petition whereby the petitioners have challenged the legality and validity of said notices issued under section 18(c) and they have also prayed for issuance of appropriate writ, order or direction declaring that the pathologists are not liable to obtain any licence under the provisions of the said Act. 3. It is the case of the petitioners that the petitioner Nos 1 to 4 are registered medical practitioners possessing necessary medical degrees carrying on the noble profession as Pathologists in the city of Ahmedabad. It is their case that they only tap the blood from donor willing to donate his/her blood for a particular patient who may be in need of his/her (donor's) blood for treatment and who is referred to the pathologist by a medical practitioner. It is their further case that they do not stock the blood. They do not sell the blood nor do they distribute the blood to needy patients. It is their further case that the donor of the blood himself comes to the pathologists for tapping his blood for being given to the patient who is in need of blood and to whom the blood is offered by such donor at the recommendation of or at the instance of medical practitioner. It is their positive case that they do not sell the blood and by tapping the blood and making the same available to the relatives of the patient for being transfused they are simply discharging their professional services. The petitioners further contend that they have been carrying on such activities since long and therefore they were surprised when they received the impugned notice, dated 8.8.83 whereby the Director of Food & Drugs--the respondent No.1 herein has called upon them to obtain licence under section 18(c) of the Drugs & Cosmetics Act, 1940. According to them human blood can not be regarded as "drug" and secondly pathologists can not be treated as "manufacturers of blood" so as to incur obligation to obtain licence under the provisions of the said Act. They have further submitted that all throughout the country nowhere such a demand is made by any authority acting under the provisions of the said Act, and therefore, also the respondents were not justified in calling upon the pathologists to obtain licence under the provisions of the said Act. 4. The Deputy Commissioner, Food & Drugs Control Administration, Gujarat State, has filed detailed affidavit-in-reply and has tried to justify the action of the Director of Food & Drugs Control Administration. It is the case of the respondents as can be gathered from the affifdavit-in-reply that the pathologists are collecting blood by a particular process which process and act of collection of blood would fall within the definition of "manufacturer" as defined by Section 3(f) of the Drugs & Cosmetics Act, 1940, hereinafter referred to as the "said Act". It is denied that the pathologists are collecting blood only from donors willing to donate his/her blood for a particular patient. For collecting blood the pathologists are supposed to carry out certain processes. Without which process the pathologists can not collect blood. It is because of particular process followed by the pathologists for collecting blood that they can be said to be manufacturing blood. According to respondents it is immaterial whether the pathologists charge their professional charges for rendering services of collecting blood. What is material is that while collecting blood they are undertaking certain processes because of which their activity would fall within the definition of "manufacture of drug" and therefore they are required to obtain licence under section 18(c) of the said Act. According to respondents, the pathologists are required to conduct certain tests for detecting V.D, Malaria, Jaundice, AIDS etc. They have further submitted that their aforesaid conclusion is supported by the fact that the Central Govt has inserted Part XII B in Schedule "F" to the Drugs & Cosmetics Rules, 1945. Said Part XII B is introduced in Schedule "F" of the said Rules vide notification, dated 7th July, 1967 and much reliance is placed upon the provisions of said Part XII B to which reference will be made hereafter in the course of this judgment. The respondents have very strongly relied upon this Part XII B introduced in Schedule "F" in the said Rules by pointing out that by said Part necessary conditions have been imposed for the "Blood Bank" which are required to be followed by the blood bank. By necessary analogy they submitted that since the blood banks are required to obtain licence, the pathologists who are, by and large, carrying on similar activities are also required to obtain licence under section 18(c) of the said Act. They have also relied upon one additional fact, i.e. in the Indian Pharmacopoeia the standard of blood is prescribed and the "Whole Human Blood" is included in Indian Pharmacopoeia. As per Section 16(1)(a) of the Act and the Rule 124 of the Rules the standard of drug shall have to be maintained and it shall have to be as set out in Second Schedule of the said Act, and therefore, the blood which is to be collected by the pathologists should also conform to the said standard. Even for this purpose check on their activities is required and that check would only be achieved by subjecting them to the requirement of obtaining licence under the provisions of the said Act. 5. From the aforesaid narration of rival versions of the parties, this court is called upon to decide the first and primary question as to "Whether the human blood" can be said to be "drug"? To the common man the question may appear to be somewhat ludicrous. Very recently, an American Judge of the Supreme Court of America was faced with seemingly ridiculous question as to: Whether a Poney can be said to be a small bird and to the surprise of common man but to no surprise to the lawyers he held that Poney is a small bird. Looking to the need of Human Blood for treatment of variety of patients, by way of Blood Transfusion, legislative intention to include Human Blood in the definition of the term "drug" may not and for the reasons stated hereafter, shall not sound unreasonable or legislative will can not be said to have run riot. RELEVANT STATUTORY PROVISIONS OF THE ACT: 6. Before this court proceeds to deal with the rival submissions made by the parties, it will be necessary to refer to some of the relevant provisions of Drugs & Cosmetics Act, 1940 which was enacted to regulate the import, manufacture, distribution and sale of drugs and cosmetics. Section 3 of the said Act enacts "definition clause" which defines various words and phrases used in the Act. 7. Section 3(b) defines "drug" as under: "b" "drug" includes-- (i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or [in the diagnosis, treatment], mitigation or prevention of disease in human beings or animals; and (ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for destruction of [vermin] or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the official gazette;" 8. Section 3(f) defines "Manufacture" as under: (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 and 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; 9. Section 3(i) provides that the word "prescribed" would mean prescribed by the Rules made under this Act. 10. Chapter IV of the said Act is dealing with manufacture, sale and distribution of drugs. Section 16 deals with "standard quality" in relation to a drug. Section 17 and 17A deal with "misbranded drugs" and "misbranded cosmetics" respectively. Section 17B enacts a deeming provision as to when for the purpose of the said chapter a drug shall be deemed to be "adulterated drug". Section 18 deals with prohibition of manufacture and sale of certain drugs and cosmetics. If the State Government by notification in the Official Gazette imposes prohibition from such date, as may be fixed by it, no person shall himself or by anyother person on his behalf carry on the activities enumerated in the section. Since the Learned Counsel appearing for both the parties have placed much reliance upon the provisions of section 18, it would be just and proper to reproduce section 18 herein in its entirety: "18. 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 anyother person on his behalf:-- (a) manufacture for sale, or sell, or stock or exhibit for sale, or stock or exhibit for sale, or distribute-- (i) any drug [or cosmetic] which is not of standard quality; (ii) any misbranded drug or misbranded cosmetic; (ii) any adulterated drug; (iii) any patent or proprietary medicine, unless there is displayed in the prescribed manner on the label or container thereof the true formula or list of ingredients contained in it in a manner readily intelligible to the members of the medical profession; (iv) any drug which by means of any statement, design or device accompanying it or by anyother means, purports or claims [to prevent, or cure or mitigate] any such disease or ailment, or to have any such other effect as may be prescribed; (v) any cosmetic containing any ingredient which may render it unsafe or harmful for use under the directions indicated or recommended; (vi) any drug or cosmetic in contravention of any of the provisions of this Chapter or any rule made thereunder; (b) sell, or stock or exhibit for sale, or distribute any drug [or cosmetic] which has been imported or manufactured in contravention of any of the provisions of this Act or any rule made thereunder; (c) manufacture for sale, or sell, or stock or exhibit for sale, or distribute any drug [or cosmetic], except under, and in accordance with the conditions of, a licence issued for such purpose under this Chapter: Provided that nothing in this section shall apply to the manufacture, subject to prescribed conditions, of small quantities of any drug for the purpose of examination, test or analysis; Provided further that the [Central Government] may, after consultation with the Board by notification in the Official Gazette, permit subject to any conditions specified in the notification, the [manufacture for sale or for distribution, sale, stocking or offering for sale] or distribution of any drug or class of drugs not being of standard quality" 11. From the aforesaid provision of section 18, and more particularly, clause (c) it becomes clear that the State Government is empowered to provide that no person shall manufacture for sale, or sell, or stock or exhibit for sale or distribute any drug except under, and in accordance with the conditions of, a licence issued for such purpose under this chapter. 12. Section 27 interalia provides that whoever himself or by anyother person on his behalf manufactures for sale, sells, stocks or exhibits for sale, or distributes any drug without a valid licence as required under clause (c) of section 18 shall be punishable with imprisonment for a term which shall not be less than one year, or which may extend to ten years and shall also be liable to fine. 13. It may be stated that under section 8 which finds its place under Chapter III captioned as "Import of Drugs", the expression "Standard quality" is defined to mean in relation to a drug, that the drug complies with the standard set out in the Second Schedule. Subsection (2) of section 8 empowers the Central Government to add to or otherwise amend the Second Schedule. 14. Section 16 which finds its place in Chapter IV captioned as "Manufacture, sale and distribution of drugs" also defines expression "standard quality" for the purpose of said chapter to mean in relation to a drug, that the drug complies with the standard set out in Second Schedule. Second Schedule to the said Act prescribes standards to be complied with by the drugs manufactured for sale, sold, stocked or exhibited for sale, sold, stocked or exhibited for sale or distributed. This court is not concerned with various other classes of drugs dealt with at item Nos 1 to 4A of the Schedule but item No.5 being relevant is reproduced herein: "5. Other drugs: (a) Drugs included in the Standards of identity the Indian Pharmacopoeia. purity and strength spe- cified in the edition of Indian Pharmacopoeia for the time being and such standards as may be pre- scribed. (b) Drugs not included in the Standards of identity Indian Pharmacopoeia, but purity and strength spe- which are included in any cified for the Drugs in Pharmacopoeia of any other the edition of such Phar- country. macopoeia for the time being and such standards as may be prescribed." 15. From the aforesaid standard prescribed by the Second Schedule it becomes clear that all drugs included in the Indian Pharmacopoeia are included in the general category of "other drugs" and similarly all drugs not included in the Indian Pharmacopoeia but which are included in anyother Pharmacopoeia of another country are also included in the general category, namely, "other drugs". 16. Section 33 of the said Act empowers the Central Government to make Rules for the purpose of giving effect to the provisions of Chapter IV after consultation with the Drugs Technical Advisory Board constituted under section 5. RELEVANT PROVISIONS OF THE RULES: 17 Having referred to the relevant provisions of the said Act it would now be necessary for this Court to make reference to the relevant provisions of Drugs and Cosmetic Rules, 1945, (hereinafter referred to as the said Rules). 18 Section 33(2) interalia provides that without prejudice to the generality of foregoing power, such rules may-- (a) provide for the establishment of laboratories for testing and analyzing drugs (or cosmetics) (b) prescribe the qualifications and duties of Government Analysts and the qualifications of Inspectors; (c) prescribe the methods of test or analysis to be employed in determining whether a drug (or cosmetic) is of standard quality; (d) prescribe, in respect of biological and organometallic compounds which a drug may bear or contain for purposes of coloring; (e) prescribe the forms of licences for the manufacture for sale, for the sale and for the distribution of drugs or any specified drug or class of drugs [or of cosmetics or any specified cosmetic or class of cosmetics], the form of application for such licences, the conditions subject to which such licences may be issued, the authority empowered to issue the same and the fees payable therefor; (f) to (q) ... ... ... ..." In exercise of powers conferred by section 6(2), 12 and 33 of the said Act, 1940, the Central Government has framed Rules known as "Drugs & Cosmetics Rules, 1945". 19. The Drugs & Cosmetics Rules, 1945, as amended, from time to time, assume importance in the context of the present controversy to the extent they provide for the licensing procedure. Rule 2 contains definition clause and clause (h) thereof defines "schedule" to mean schedule to the Rules. Part VII of the Rules is captioned as " Manufacture for sale [or for distribution] [of drugs other than Homeopathic Medicines]". Rule 69 provides for application for grant or renewal of licence to manufacture, for sale, or for distribution of drugs other than those specified in Schedule "C" and C(1) Rule 76 deals with forms of licence to manufacture drugs, specified in Schedule C & C(1) excluding those specified in the schedule. Such forms of licence are to be found in Form 28 & 28B. Form 28 is the proforma of licence to manufacture for sale (or for distribution of) drugs specified in schedules C & C(1) and X. Clause 3 of the said form is as under: "3. The licence authorises the sale by way of wholesale dealing and storage or sale by the licensee of the drugs manufactured under the licence subject to the conditions applicable to licences for sale." [Rule 78 provides for conditions of licence in form 28 or 28B. It further provides that such licence shall be subject to special conditions, if any, set out in schedule "F" or "F(1)", as the case may be, which relate to the substances in respect of which the licence is granted. It thereafter prescribes the general condition which the licensee is required to comply with. Reference to various conditions prescribed by Rule 78 is not necessary at this stage, though it can be stated that the licensee is subjected to all reasonable conditions which are necessary to be imposed for the purpose of proper manufacture of drugs, maintenance of standards of drug, preservation, storage and stock of drugs and other precautions to be taken by the licensee so that human health is not put to hazard. Rule 79 provides for inspection by the Licensing authority before grant of licence. Such power includes power to examine plant and appliances, the process of manufacture intended to be employed and the means to be employed for standardising and testing the substances to be manufactured. Rule 81 prescribes the procedure of licensing authority after it has made necessary enquiry and if the authority is satisfied that the requirement of the Rule under the Act have been complied with all the conditions of licence and the Rules under the Act will be observed, he shall issue a licence in form 28 or 28B.] At this stage, it shall have to be stated that initially Chapter IV of the said Act was not brought into force along with the said Act but by subsequent notification issued by the then Government of Bombay, the Local Self-Government in Public Health Department, Sachivalaya bearing No.1056, dated 11th July, 1958. 1st August, 1958 was fixed as the date from which Chapter IV of the said Act came into effect in the whole of the State of Bombay. It is, thus, clear that section 18 of the said Act was brought into force with effect from 1st August, 1958 by the then State Government of Bombay. It is the case of the respondents that in view of the said notification the Pathologists who are collecting the blood are supposed to obtain licence under the said Act. It is also required to be noted that subsequently under the said Act by the Central Government in the Ministry of Health & Family Welfare Department Notification No. SO-2369, dated 7.7.69 Part XII B in Schedule F in the said Rules was inserted. By the said insertion of Part XII B Schedule F necessary conditions have been imposed for the Blood Bank. Since the respondents rely upon this Part XII B Schedule F and since it is the case of the petitioners that said Part XII B Schedule F would not apply to any person other than the Blood Bank it would be necessary at this stage to make reference to said notification of the Central Government dated 7.7.67 whereby Part XII B came to be introduced in Schedule F of the schedule. Schedule F to the said Rules is divided into Part I to Part XIIA and XII B. Part XII B deals with equipment and supplies required for a blood bank. It then proceeds to prescribe the requirement of an ideal Blood Donor Room. Said room shall be an air-conditioned room. It then prescribes blood collection supplies by providing that it shall be done either by the closed method or by the gravity method. It also provides for Haemoglobin determination, temperature and pulse determination, canteen equipment, emergency equipment. It also prescribes the requirements of laboratory, such as equipments, regents, General supplies, Technical Staff, Accommodation for Blood Bank, Label for whole blood, Colour scheme for Labels etc. It then contains precautionary measures to be observed by the Blood Bank which interalia, include: 1. Administer without warming. 2. Shake gently before using. 3. Do not add other medication to the blood. 4. Check blood group on label and recipient's group before administration. 5. Use a fresh, clean, and sterile transfusion set to transfuse the blood. 6. Do not dispense without prescription. Below this prescription of conditions to be observed by " blood bank and laboratory" there is one note prescribed which reads as under: "Note: The above requirements of the blood bank are subject to modifications at the discretion of the Licensing authority if he is of the opinion that having regard to the extent of manufacturing operations it is necessary to relax or alter them in the circumstances of a particular case" 20. Incidentally, it may be stated that the Drugs & Cosmetics (1st Amendment Rules), 1993 are framed by the Central Government after consultation with the Drugs Technical Advisory Board in exercise of powers conferred by Sections 12 and 33 of the Drugs & Cosmetics Act, 1942. It appears that prior thereto after Part X of Schedule X, Part X-A came to be introduced and by the aforesaid Amendment Rules, 1993 published in the Govt.Gazette of India on 22.1.1993 Part XB is inserted. The heading of Part XB is as under: "REQUIREMENT FOR THE COLLECTION, STORAGE, PROCESSING AND DISTRIBUTION OF WHOLE HUMAN BLOOD, HUMAN BLOOD COMPONENTS BY BLOOD BANKS AND MANUFACTURE OF BLOOD PRODUCTS" "122-F: Form of application for licence for operation of Blood Bank/Processing of whole human blood for components/manufacture of Blood Products for sale or distribution--(1) Application for the grant and/or renewal of licence for the operation of a Blood Bank/Processing of Human Blood for components/manufacture of Blood Products shall be made to the licensing authority appointed under Part VII in Form 27-C and shall be accompanied by licence fee of rupees