[NDPS Rules] Even If Exporter Has License To Sell Drugs For Medical Purpose, Separate Authorisation To Export Is Mandatory: Bombay High Court

The Bombay High Court on Friday denied bail to an exporter and an Iraqi national who were arrested by Mumbai Customs' Central Intelligence Unit for alleged attempt to illegally export 4,224 kg of psychotropic substance in February 2023.

Justice NJ Jamadar held that obtaining authorization under Rule 58 of the NDPS Rules, 1985 for export of psychotropic substances is mandatory even if the exporter has a licence to possess and sell the drugs for medicinal purposes.

“The use of the terms 'licence', 'permit' or 'authorization;, disjunctively, indicates that these terms have not been used interchangeably…If the submissions sought to be canvassed on behalf of accused Nos.1 and 4 that a 'licence' subsumes in its fold the “authorization” envisaged by Rule 58 of the NDPS Rules, 1985, the Parliament would not have used the terms licence and authorization disjunctively. On a plain construction of Section 8(c) of the NDPS Act, 1985 export of a psychotropic substance sans licence, permit or authorization under the governing rules or orders is expressly prohibited”, the court stated.

The court however, granted bail to co-accused freight manager Ravi Kavthankar, noting that it was "debatable" whether he was aware of the alleged offences.

The applicants, arraigned for offences under Sections 22(c), 23(c), 27A, 28, 29, and 30 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), sought bail in connection with a case involving the illegal export of the psychotropic substance Tramadol.

Prosecution Case

The Central Intelligence Unit (CIU) on February 25, 2023 intercepted an export consignment listed as containing 'Tamol-X-225' tablets by M/s First Wealth Solution and destined for South Sudan. This shipment was described in the shipping bill and export invoice as 21 packages containing 10.5 lakh tablets, with a gross weight of 729 kg and net weight of 720 kg.

During the examination on February 27, 2023, CIU officers discovered that the consignment contained 999,500 tablets labelled as calcium carbonate 225 mg, which was misdeclared. As per the prosecution, tests confirmed the tablets were Tramadol, a psychotropic substance, leading to the seizure of the goods and the subsequent arrests of the applicants.

The prosecution alleged that Gudipati Subramaniam, the Chief Operating Officer of M/s First Wealth Solution, ordered Tramadol Hydrochloride tablets from M/s Safe Formulation Pvt. Ltd., mislabelling them as calcium carbonate to evade export authorization requirements under Rule 58 of the NDPS Rules. Gudipati allegedly sent two different invoices to Ravindra Kavthankar, initially describing the tablets correctly and later changing the description to calcium carbonate.

Ahmed Saleh Hasan, an Iraqi national, allegedly ordered Tramadol on behalf of foreign clients and received commissions for these transactions. Ahmed Saleh allegedly had regular communications with Gudipati and suggested disguising Tramadol as other pharmaceutical products.

Ravindra Kavthankar, the Courier Manager of M/s Galaxy Freight Forwarder was involved in forwarding the shipment and allegedly received extra commissions.

Arguments

Advocate Taraq Sayed for Gudipati and Ahmed Saleh argued that First Wealth had a license to trade in drugs, and did not need an additional export authorization for Tramadol. He asserted that the export was for medicinal purposes, and authorization under Rule 58 was not necessary.

Advocate Sujay Kantawala for Ravindra Kavthankar contended that his role was merely to reserve freight space and he was unaware of the actual contents of the shipment.

Special Public Prosecutor Amit Munde for the CIU argued that the huge quantity of 4,224 kg of contraband was recovered, and the evidence of a well-planned conspiracy justified the denial of bail.

Verdict

The court concluded that there was prima facie evidence supporting the prosecution's claim that the applicants attempted to export Tramadol without the necessary authorization. Rule 53 of NDPS Rules, 1985 stipulates that import and export of these substances are prohibited without an import certificate or export authorization. Rule 58 mandates that no export can occur without an export authorization in the prescribed form.

The court stated that the terms "license," "permit," and "authorization" are used distinctly and purposefully in the statute. Therefore, export of psychotropic substances without proper authorization under the Act or its rules is prohibited.

The court found substantial material indicating Gudipati and Saleh's involvement in the conspiracy. The recovery of significant amounts of cash from Saleh and his detailed communications with Gudipati further corroborated their involvement, the court opined.

Thus, the court denied bail to Gudipati and Saleh. The court said that there is lack of independent evidence showing Kavthankar's knowledge of the criminal activities and granted him bail.

Advocates Taraq Sayed, Sana Khan, Ashwini Achari, Alisha Parikh and Bhumika Gada represented Gudipati Subramaniam and Ahmed Saleh Hasan.

Advocates Sujay Kantawala, Karan Jain, Ankit Dhindale, Avinash Limbola represented Ravindra Kavthankar.

SPP Amit Munde and advocate Jai Vohra represented the Custom Department.

Case no. – Bail Application No. 4210 of 2023

Case Title – Gudipati Subramaniam v. Union of India and Anr.

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