Case Note & Summary
The petitioner, M/s. Raj Pharma, a partnership firm holding a valid drug license under the Drugs and Cosmetics Act, 1940 and Rules, 1945, challenged the suspension of its license. On 11.07.2014, Respondent No.2, the Licensing Authority, inspected the petitioner's premises and found violations: selling drugs over the counter and not selling to authorized persons. Based on this inspection, the Licensing Authority issued a show cause notice on 18.07.2014, to which the petitioner replied on 28.07.2014. However, without providing a copy of the inspection report or granting a personal hearing, the Licensing Authority passed an order on 28.11.2014 suspending the license for 60 days. The petitioner appealed to the Minister of State for Drugs and Cosmetics Department (Respondent No.1), who, by order dated 12.06.2015, reduced the suspension to 10 days but directed enforcement from 25.06.2015 to 04.07.2015. Aggrieved, the petitioner filed the present writ petition. The High Court examined the procedural compliance under Rule 66(2) read with Rule 67-H(2) of the Drugs and Cosmetics Rules, 1945. The court noted that the Licensing Authority failed to provide a copy of the inspection report to the petitioner and did not afford an opportunity of hearing before imposing the suspension. The appellate authority also did not cure this defect. The court held that the principles of natural justice were violated, and the suspension orders were unsustainable. Consequently, the court quashed both the original suspension order dated 28.11.2014 and the appellate order dated 12.06.2015. The writ petition was allowed, and the rule was made absolute.
Headnote
A) Drugs and Cosmetics Law - Suspension of License - Natural Justice - Rule 66(2) read with Rule 67-H(2) of the Drugs and Cosmetics Rules, 1945 - The Licensing Authority suspended the petitioner's license for 60 days without providing a copy of the inspection report and without affording an opportunity of hearing. The Appellate Authority reduced the suspension to 10 days but did not cure the procedural defect. Held that the failure to provide the inspection report and the lack of hearing vitiated the suspension order. (Paras 5-7) B) Drugs and Cosmetics Law - Appellate Authority's Duty - Rule 66(2) read with Rule 67-H(2) of the Drugs and Cosmetics Rules, 1945 - The Appellate Authority, while reducing the suspension period, did not consider the procedural irregularities at the initial stage. The appellate order also suffered from non-application of mind and did not rectify the violation of natural justice. Held that the appellate order cannot sustain when the original order is procedurally flawed. (Paras 8-9) C) Drugs and Cosmetics Law - Inspection Report - Right to Copy - Rule 66(2) of the Drugs and Cosmetics Rules, 1945 - The inspection report is a crucial document that must be furnished to the licensee before any adverse action. Non-supply of the report deprives the licensee of the opportunity to effectively defend. Held that the suspension order based on such report without providing a copy is unsustainable. (Para 6)
Issue of Consideration
Whether the suspension of license under the Drugs and Cosmetics Act, 1940 and Rules, 1945 was valid when the inspection report was not provided to the petitioner and no opportunity of hearing was given before suspension.
Final Decision
The High Court allowed the writ petition, quashing the order dated 28.11.2014 passed by Respondent No.2 and the order dated 12.06.2015 passed by Respondent No.1. The rule was made absolute.
Law Points
- Natural justice
- Right to hearing
- Inspection report
- Suspension of license
- Appellate authority's duty
- Rule 66(2) Drugs and Cosmetics Rules
- 1945
- Rule 67-H(2) Drugs and Cosmetics Rules
