Section 27 of the Drugs and Cosmetics Act 1940 - Penalty for Manufacture, Sale and Distribution of Drugs in Contravention of Chapter IV
Section 27 prescribes criminal penalties for manufacturing for sale or distribution, selling, stocking, exhibiting or offering for sale, or distributing drugs in contravention of Chapter IV of the Drugs and Cosmetics Act, 1940. The punishment depends on whether the drug is adulterated, spurious, manufactured or sold without the required licence, or otherwise contravenes the Act or Rules.
Section 27 at a glance
| Clause | Contravention | Principal punishment |
|---|---|---|
| 27(a) | Adulterated or spurious drug likely to cause death or grievous hurt because it is adulterated, spurious or not of standard quality. | Imprisonment not less than 10 years, extendable to life, and fine not less than Rs. 10 lakh or three times the value of drugs confiscated, whichever is more. |
| 27(b) | Adulterated drug not covered by clause (a), or drug manufactured/sold etc. without a valid licence required by Section 18(c). | Imprisonment not less than 3 years, extendable to 5 years, and fine not less than Rs. 1 lakh or three times the value of drugs confiscated, whichever is more. The court may reduce the minimum for adequate and special reasons recorded in the judgment. |
| 27(c) | Spurious drug not covered by clause (a). | Imprisonment not less than 7 years, extendable to life, and fine not less than Rs. 3 lakh or three times the value of drugs confiscated, whichever is more. A reduced sentence is permitted only for adequate and special reasons recorded by the court, subject to the statutory floor. |
| 27(d) | Other drug contraventions under Chapter IV or rules, excluding clauses (a), (b) and (c). | Imprisonment not less than 1 year, extendable to 2 years, and fine not less than Rs. 20,000. The court may impose imprisonment below one year for adequate and special reasons recorded in the judgment. Eligible offences under Section 27(d) may also fall within the statutory compounding framework under Section 32B and the 2025 Compounding Rules. |
Text and explanation of Section 27
Section 27 applies where a person, either personally or through another person acting on his or her behalf, manufactures a drug for sale or distribution, sells it, stocks it, exhibits or offers it for sale, or distributes it in the circumstances covered by clauses (a) to (d).
Section 27(a): adulterated or spurious drugs causing risk of death or grievous hurt
Clause (a) covers a drug deemed adulterated under Section 17A or spurious under Section 17B where its use for diagnosis, treatment, mitigation or prevention of disease or disorder is likely to cause death or such bodily harm as amounts to grievous hurt, solely because the drug is adulterated, spurious or not of standard quality, as the case may be.
The punishment is imprisonment for not less than ten years, which may extend to imprisonment for life, plus a fine of not less than Rs. 10 lakh or three times the value of the drugs confiscated, whichever is more.
The fine realised from a person convicted under clause (a) is payable as compensation to the person who used the adulterated or spurious drug. If the user died because of such drug, the fine is payable to the relative specified in the Explanation to the clause.
Who is a "relative" for compensation under Section 27(a)?
The Explanation includes the spouse; a minor legitimate son; an unmarried legitimate daughter; a widowed mother; the parent of a minor victim; certain adult sons or daughters wholly dependent on the deceased; and specified other dependants, including a parent, minor brother, unmarried sister, widowed daughter-in-law, widowed sister, certain minor grandchildren and, in the stated circumstances, a paternal grandparent.
Section 27(b): adulterated drugs and drugs without a valid licence
Clause (b) applies to a drug deemed adulterated under Section 17A but not falling within clause (a), and to a drug manufactured, sold, stocked, exhibited, offered for sale or distributed without a valid licence where a licence is required under Section 18(c).
The prescribed punishment is imprisonment for not less than three years and up to five years, together with a fine of not less than Rs. 1 lakh or three times the value of the drugs confiscated, whichever is more. For adequate and special reasons recorded in the judgment, the court may impose imprisonment below three years and a fine below Rs. 1 lakh.
Section 27(c): spurious drugs not covered by clause (a)
Clause (c) applies to a drug deemed spurious under Section 17B that is not within the aggravated category in clause (a). The punishment is imprisonment for not less than seven years, extendable to life, and a fine of not less than Rs. 3 lakh or three times the value of the drugs confiscated, whichever is more.
For adequate and special reasons recorded in the judgment, the court may impose imprisonment below seven years but not below three years and a fine below Rs. 1 lakh, subject to the wording of the statutory proviso.
Section 27(d): other contraventions
Clause (d) is the residual provision. It applies to a drug other than one covered by clauses (a), (b) or (c), where there is a contravention of another provision of Chapter IV or a rule made under it. The punishment is imprisonment for not less than one year and up to two years, together with a fine of not less than Rs. 20,000. The court may, for adequate and special reasons recorded in the judgment, impose imprisonment below one year.
Meaning of important connected provisions
Section 17A - Adulterated drugs
Section 17A specifies when a drug is deemed adulterated. The classification is important because Section 27(a) and Section 27(b)(i) attach substantially different punishments depending on the nature and consequences of the adulteration.
Section 17B - Spurious drugs
Section 17B specifies when a drug is deemed spurious. Section 27(a) applies to the aggravated category involving the statutory risk of death or grievous hurt; Section 27(c) deals with other spurious drugs.
Section 18 - Prohibition of manufacture and sale
Section 18 contains core prohibitions relating to manufacture for sale or distribution, sale, stocking, exhibiting, offering for sale and distribution of specified drugs and cosmetics. Section 18(c) requires manufacture for sale or distribution, sale, stocking or exhibition/offer for sale, or distribution to be under and in accordance with the conditions of the licence issued for that purpose.
Compounding of eligible Section 27(d) offences
Section 32B, as amended by the Jan Vishwas (Amendment of Provisions) Act, 2023, extends the statutory compounding mechanism to specified offences including clause (d) of Section 27, subject to the conditions in Section 32B. The Drugs and Cosmetics (Compounding of Offences) Rules, 2025 provide the procedural framework. This does not make the serious offences under Section 27(a), 27(b) or 27(c) compoundable under that provision.
Legislative history relevant to Section 27
Section 27 was substituted by the Drugs and Cosmetics (Amendment) Act, 1982 with effect from 1 February 1983. The Drugs and Cosmetics (Amendment) Act, 2008 significantly enhanced the punishments and fines, with the relevant amendments taking effect from 10 August 2009.
This page is a general legal-information resource. For a prosecution, licensing dispute or compounding application, the exact provision in force on the date of the alleged conduct and all applicable rules, notifications and saving provisions should be checked.