Case Note & Summary
The petitioner, Namdev Genba Parthe, through M/s. Kulswami Medical & General Stores, applied for a retail drug licence from premises at 188, Ambedkar Nagar, Cuffe Parade, Mumbai. The Assistant Commissioner (Food and Drugs Administration) refused the licence by order dated 31.08.2012, solely on the ground that the previous licensee from the same premises, Ravindra Dattatray Gaikwad, had been involved in the unauthorized large-scale sale of Rexcof Cough Syrup containing Codeine Phosphate, a substance with addiction potential. The petitioner appealed to the Minister (Food and Drugs Administration), who dismissed the appeal on 17.04.2013 without considering the merits, merely stating that the licensing authority had passed a reasoned order. The petitioner challenged both orders by way of a writ petition under Articles 226 and 227 of the Constitution. The court noted that the licensing authority had not made any finding that the petitioner was in any way connected with the previous licensee's misconduct, nor that the petitioner was not qualified or suitable. The court held that the refusal was arbitrary and without application of mind, as the licensing authority must consider the applicant's own qualifications and suitability independently. The court also held that the appellate authority must independently consider the grounds of appeal and pass a speaking order. The impugned orders were set aside and the matter was remanded to the licensing authority for fresh consideration in accordance with law, after giving the petitioner an opportunity of hearing.
Headnote
A) Drugs and Cosmetics Act - Licensing - Refusal of Licence - Previous Licensee's Misconduct - The licensing authority refused a retail drug licence to the petitioner solely because the previous licensee from the same premises had been involved in illegal sale of codeine-containing cough syrup. The court held that the refusal was arbitrary and without application of mind, as there was no finding that the petitioner was in any way connected with the previous licensee's misconduct or that the petitioner was not qualified. The licensing authority must consider the applicant's own qualifications and suitability independently. (Paras 1-10) B) Drugs and Cosmetics Act - Appeal - Consideration on Merits - The appellate authority (Minister) dismissed the appeal without considering the merits, merely stating that the licensing authority had passed a reasoned order. The court held that the appellate authority must independently consider the grounds of appeal and pass a speaking order. The impugned order was set aside and the matter remanded for fresh consideration. (Paras 11-15)
Issue of Consideration
Whether the licensing authority can refuse a drug licence to a new applicant solely on the ground that the previous licensee from the same premises was involved in illegal activities, without any independent finding against the new applicant.
Final Decision
The impugned orders dated 31.08.2012 and 17.04.2013 are quashed and set aside. The matter is remanded to the licensing authority for fresh consideration in accordance with law, after giving the petitioner an opportunity of hearing. Rule made absolute accordingly.
Law Points
- Licence cannot be refused solely on basis of previous licensee's misconduct
- Licensing authority must consider applicant's own qualifications and suitability
- Natural justice requires opportunity of hearing before refusal
- Appeal must be considered on merits
