Case Note & Summary
The petitioners, National Pharmaceuticals and AVEO Pharmaceuticals Pvt Ltd, are drug manufacturing companies holding licenses to manufacture drugs at their respective premises in MIDC, Tarapur, Boisar, District Palghar. They challenged the order dated 26th August 2025 passed by the Joint Commissioner (K.D.), Food and Drug Administration, Maharashtra, suspending their manufacturing licenses under the Drugs and Cosmetics Act, 1940, on the ground that they were manufacturing spurious drugs. The petitioners contended that the suspension order was passed without any prior show-cause notice, in violation of the principles of natural justice. The respondents argued that the power to suspend is an emergency power and that the allegations of manufacturing spurious drugs justified immediate suspension. The court analyzed the provisions of Section 18A of the Drugs and Cosmetics Act, 1940, and Rule 85 of the Drugs and Cosmetics Rules, 1945, and held that the power to suspend a license must be exercised in accordance with the principles of natural justice. The court noted that the impugned order did not mention any urgency or exceptional circumstances that would justify dispensing with a show-cause notice. Consequently, the court set aside the suspension order and directed the respondents to issue a show-cause notice to the petitioners and pass a fresh order after giving them an opportunity of hearing. The court clarified that it had not expressed any opinion on the merits of the allegations and that the respondents were at liberty to proceed in accordance with law.
Headnote
A) Drugs and Cosmetics Act - Suspension of License - Natural Justice - Section 18A, Rule 85 - Suspension of manufacturing license without prior show-cause notice - The court held that the power to suspend a license under Section 18A read with Rule 85 of the Drugs and Cosmetics Rules, 1945, must be exercised in accordance with principles of natural justice, and a show-cause notice is mandatory before suspension unless there is a specific provision to the contrary. The impugned order was set aside as it was passed without affording an opportunity of hearing. (Paras 1-10) B) Drugs and Cosmetics Act - Spurious Drugs - Definition - Section 17B - The court noted that the allegation of manufacturing spurious drugs is a serious matter, but the definition under Section 17B requires that the drug be sold or offered for sale under a name which belongs to another drug. The court did not delve into the merits of the allegation as the suspension was set aside on procedural grounds. (Paras 1-10) C) Drugs and Cosmetics Act - Show-Cause Notice - Mandatory - Rule 85 - The court observed that Rule 85 of the Drugs and Cosmetics Rules, 1945, does not expressly exclude the requirement of a show-cause notice before suspension. Therefore, the principles of natural justice apply, and the order of suspension without notice is unsustainable. (Paras 1-10)
Issue of Consideration
Whether the suspension of manufacturing licenses of the petitioners by the Joint Commissioner (K.D.), Food and Drug Administration, without issuing a prior show-cause notice, is valid in law and whether the order of suspension is sustainable.
Final Decision
The court allowed the writ petitions and set aside the impugned order dated 26th August 2025. The respondents were directed to issue a show-cause notice to the petitioners and pass a fresh order after giving them an opportunity of hearing. The court clarified that it had not expressed any opinion on the merits of the allegations.
Law Points
- Principles of natural justice
- audi alteram partem
- suspension of license without show-cause notice
- Drugs and Cosmetics Act
- 1940
- Section 18A
- Rule 85
- spurious drugs
- manufacturing license
