The D.C. Court of Appeals reversed yesterday a ruling by a Superior Court judge and held that the City Council regulation that prohibits possession of five commonly abused drugs is valid.

The appeals court decision averts what could have been large scale administrative and legal consequences of the ruling by Judge Tim Murphy, which if upheld might have invalidated more than 500 prior convictions under the drug regulation and affected 300 or more pending cases.

On Monday, Murphy held that the regulation was unenforceable because the City Council had failed to make a specific finding as to why the substances named in the regulation were dangerous.

The dispute involved a regulation passed by the Council in late 1974 that incorporated the five drugs - LSD, PCP, Preludin, Quaalude and Ritalin - into the Dangerous Drug Act, a part of the D.C. Code.

According to the code, after public notice and hearings, the Council may classify a substance as a dangerous drug if it "shall find and declare" that the substance is "habit-forming, excessively stimulating, or (has) a dangerously toxic hypnotic" effect on humans or animals.

Murphy held that the Council regulation did not contain a specific finding as to the dangerous characteristics of the five drugs and thus failed to meet the requirements of the code.

The Council regulation said, instead, that the five drugs were dangerous "within the meaning" of the code.

The government had argued that the Council was not required to be so specific in including the drugs in the act, and the appeals court apparently agreed.

In an unsigned opinion, the appellate courte said that when the Council found that the drugs were "dangerous" within the meaning of the act, its decision necessarily incorporated "the specific attributes of dangerousness enumerated in that act."

The appellate court noted that the Council, through a committee, held public hearings in 1974 to determine if the drugs should be classified as dangerous and that the findings of that committee were that each of the five drugs had at least one of the code characteristics that would "qualify it as dangerous . . ."

The regulation subsequently passed by the Council was intended to incorporate those committee findings, the appeals court said.

"The declaration and findings in the regulation itself and those in the committee report were adequate to meet the requirement of the statute," the appeals court said, in reversing Judge Murphy's decision.

The issue was raised last Thursday at the trial of Bernard S. Yancey, 21, Evelyn Lowery, 23, and her estranged husband, Lamana L. Lowery, 23, all of whom were charged with one count of possession of phencyclidine (PCP).

Murphy ruled on the question at the outset of the defendant's trial Monday, whereupon the government immediately petitioned the appeals court to rule on the issue under a rarely used procedural rule that requires a decision from the appellate court within 96 hours.

A three-judge appellate panel heard oral arguments at a special session Tuesday on the validity of the regulation.

In the meantime, judges at Superior Court postponed cases that were to come to trial for violations of the regulation until the question was resolved, the U.S. Attorney's Office said.

Even if the appeals court had upheld Murphy, possession of the five drugs would have remained illegal in the District of Columbia under the federal Controlled Substances Act.

Yesterday, after the appeals opinion was released, Judge Murphy resumed the trial of the three defendants.