Legal Roadblock? Why Himachal High Court Judgment May Complicate Centre's Crackdown On Bad Drugs

Last Updated:May 25, 2026, 09:02 IST

At the centre of the row are Central Drugs Standard Control Organisation’s “risk-based inspections” launched aggressively after contaminated cough syrups brought disrepute to India

The Himachal Pradesh High Court judgment on drug inspections has raised serious legal questions over the very inspection system India has relied upon to clean up its pharmaceutical industry after global scandals linked to Indian-made medicines.

At the centre of the controversy are the apex drug regulator, Central Drugs Standard Control Organisation (CDSCO)’s “risk-based inspections"—surprise factory inspections launched aggressively after contaminated cough syrups made in India were linked to deaths of children in Gambia and Uzbekistan, triggering worldwide scrutiny of India’s drug regulatory system.

For the last two years, these inspections have become CDSCO’s strongest enforcement tool. Teams from the CDSCO have conducted nationwide inspections of manufacturing plants, flagged poor manufacturing practices, suspended licences and ordered recalls.

Now, the Himachal Pradesh High Court has questioned whether centrally appointed CDSCO inspectors have the legal authority to carry out such enforcement actions under the Drugs and Cosmetics Act.

The ruling came in Salus Pharmaceuticals and Others vs Union of India, where the court quashed criminal proceedings initiated after a CDSCO drugs inspector collected samples of a drug from a military hospital and later prosecuted the company after the medicine failed quality testing.

What Was The Case About & Why Judgement Matters

The case involved Salus Pharmaceuticals, based in Himachal Pradesh. According to the judgment, the drug inspector collected samples of oral corticosteroid Medrofex-180 tablets from a military hospital in Jalandhar in August 2019. The drug sample was later declared “not of standard quality" by a government laboratory. Based on that report, prosecution proceedings were launched against the company and its partners.

The company then approached the Himachal Pradesh High Court seeking cancellation of the case. The judgment is significant because it questions whether CDSCO inspectors appointed by the central government have the legal authority to carry out such inspections and prosecutions under Chapter IV of the Drugs and Cosmetics Act—the part of the law dealing with the manufacture and sale of medicines.

This matters because CDSCO’s nationwide inspection drives are built around this very power.

Over the last few years, especially after contaminated cough syrup cases linked to the deaths of children abroad, CDSCO has intensified inspections across factories. Officials described these as “risk-based inspections," where plants are selected based on risk factors like past violations, product category or complaints.

Court Says Powers Mainly Lie With States

The high court said powers related to the manufacture and sale of drugs mainly lie with state governments and state-appointed drug inspectors.

In one of the key observations, the court said: “Neither the constitution nor any act made by the Parliament, including the Drugs Act and the Drugs Rules, provide for the exercise of the executive functions in relation to Chapter IV by any authority of the central government, including the drugs inspector appointed by it…"

The court further said: “…drugs inspector appointed by the central government shall, to the exclusion of the state government, exercise executive functions in relation to Chapter III relating to import of drugs and cosmetics, but constitutionally not in relation to Chapter IV by any authority of the central government, including the drugs inspector…"

In simple terms, the court said CDSCO inspectors may have powers over imported drugs, but not necessarily over manufacturing-related enforcement inside states.

Court Also Found Problems In Testing Process

The court also pointed to delays in testing the drug sample. Under Rule 45 of the Drugs and Cosmetics Rules, samples are supposed to be tested within 60 days. In this case, the sample reached the laboratory on September 2, 2019, but the adverse report came only on December 5, 2019, showing the gap of three months.

The judgment recorded the company’s argument that: “The insertion of the period, within which the test is to be carried out by the government analyst by virtue of afore amendment, is mandatory, and not directory." The court agreed that this delay weakened the prosecution’s case. “However, in the instant case, afore mandate of provision of Rule 45 has been violated with impunity…"

Partners Cannot Be Prosecuted Automatically: Court

The high court also said company partners cannot automatically be prosecuted unless there are clear allegations showing they were directly responsible for day-to-day operations.

The court noted that the complaint did not clearly explain the role of the partners in running the company. Referring to earlier Supreme Court rulings, the judgment said: “Simply because a person is a director of the company, it does not necessarily mean that he fulfils the twin requirements … to make him liable."

Why The Ruling Could Matter Nationally

The judgment may now become important for pharmaceutical companies facing action after CDSCO inspections. If other courts follow similar reasoning, companies could start challenging not just the findings of inspections, but also the legal authority behind such inspections. That could create complications for the Centre’s ongoing effort to build a stronger nationwide drug-quality monitoring system through centrally coordinated inspections.

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