Bombay High Court raps Maharashtra FDA for procedural violations in Cadila drug seizure case

In a stinging rebuke, the High Court of Bombay on Tuesday pulled up the Maharashtra Food and Drug Administration (FDA) for what it termed "arbitrary" actions against pharmaceutical giant Cadila Pharmaceuticals Ltd, observing that the regulator was "only displaying its powers" rather than exercising them judiciously. A division bench comprising Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad granted relief to the company and directed the FDA to follow due procedure, including issuing show-cause notices and allowing written responses before passing any adverse orders.

The court's remarks came while hearing a plea filed by Cadila challenging the FDA 's decision to stop the sale and distribution of several of its medicines, a move the company claimed caused heavy financial losses and deprived patients of critical drugs for over a month. The bench, led by Acting Chief Justice Ghuge, expressed grave concern over the regulatory body's haste, noting that "shooting first and asking questions later is a rule of the Wild West which does not apply in the arena of law."

The FDA's Action and the Company's Response

The Maharashtra FDA, under the leadership of Commissioner Tukaram Mundhe, had earlier issued orders suspending the sale and distribution of certain Cadila products, alleging that the medicines carried similar branding despite having different active pharmaceutical ingredients (APIs), which could lead to medication errors. The FDA subsequently seized stock from the company's facilities. In response, Cadila approached the High Court through senior advocate Birendra Saraf, seeking quashing of the "arbitrary" impugned orders.

During the hearing, Acting Chief Justice Ghuge highlighted the practical consequences of the FDA 's decision: "The drug was not sold for 20 days. We are not concerned with the loss of senior advocate Saraf's client. We are concerned that the drug was not available to the patients for 20 days, effectively 32 days till today." This observation underscored the court's emphasis on patient welfare over mere procedural formalities.

The Court's Critical Observations

The bench did not mince words in censuring the FDA . "You have the power to use the sword, but you use it to kill a mosquito. That is the problem. Power has to be judiciously exercised… How to use the powers with adequate propriety is the question," remarked Acting Chief Justice Ghuge, drawing a vivid analogy that resonated across the courtroom. The court also noted that the FDA 's actions appeared to be a display of authority rather than a measured regulatory response.

Referring to a previous ruling of the High Court, the bench reiterated that "shooting first and asking questions later is a rule of the Wild West which does not apply in the arena of law. Even when it comes to hotels, you shoot first, then ask questions. At least undertake the task of shooting all the insects. The same is happening in this case (Cadila)." This colourful language highlighted the court's frustration with the regulator's disregard for basic principles of natural justice .

Procedural Direction and FDA's Concession

After the court's strong rebuke, the FDA assured the bench that it would revoke the earlier stop-sale orders against Cadila and proceed with a proper course of action. The regulator agreed to issue show-cause notices and allow written responses from the company before passing any final order. This concession effectively ended the immediate deadlock and provided interim relief to Cadila, allowing the drugs to return to the market while the dispute was resolved through an orderly process.

The High Court, while acknowledging the FDA's regulatory vigilance in several other instances, made it clear that such powers must be exercised with "judiciousness" and in accordance with law. The bench emphasised that merely because an authority has the jurisdiction to act, it does not have a licence to act arbitrarily or in a disproportionate manner.

Legal Analysis: The Doctrine of Proportionality and Natural Justice

The case raises significant questions about the balance between regulatory autonomy and fundamental rights. The FDA's action, taken without prior notice or an opportunity to be heard, ran afoul of the principles of natural justice—specifically, the audi alteram partem rule, which mandates that no person shall be condemned unheard. The court's insistence on procedural compliance reflects a well-established legal tenet: even when a statute empowers a body to act, that power must be exercised fairly, reasonably, and in accordance with the procedure established by law.

The "sword to kill a mosquito" analogy is particularly apt in the context of proportionality . Administrative actions must be proportionate to the gravity of the alleged violation. Here, the FDA 's decision to stop the sale of multiple drugs and seize stock, without first initiating a show-cause process, appears to have been a disproportionate response to the alleged labeling issue. The court's observations suggest that such heavy-handed tactics undermine public trust in both the regulator and the regulated industry.

Furthermore, the court's reference to patient welfare highlights the broader public interest at stake. Regulatory decisions must consider not only the potential risks but also the consequences of their actions on the availability of essential medicines. By pointing out that the drug was unavailable for 32 days, the bench underscored that regulatory overreach can inadvertently harm the very public it seeks to protect.

Impact on Regulatory Practice

This judgment serves as a cautionary tale for all administrative bodies, not just the FDA. It reinforces the principle that statutory powers, no matter how broad, are always subject to judicial review for arbitrariness and procedural impropriety. The requirement to issue show-cause notices and afford a hearing is not a mere formality but a fundamental safeguard against abuse of power.

For pharmaceutical companies, the ruling reaffirms their right to challenge regulatory actions that lack procedural fairness. It also signals that courts will not hesitate to intervene when regulators act in a manner that is disproportionate or ignores due process. This could lead to more cautious and well-documented enforcement actions by the FDA and similar bodies in the future.

The case also underscores the importance of regulatory bodies acting in a manner that is both efficient and fair. While the FDA may have had legitimate concerns about patient safety, its approach was flawed. The court's directive to follow a structured process—issuing notices, considering responses, and then deciding—provides a template for balanced regulation that respects both public health and the rights of businesses.

Looking Ahead

The matter is likely to continue as the FDA reinitiates its inquiry against Cadila in accordance with the court's directives. The High Court's strong words will likely prompt a review of the FDA's internal procedures, ensuring that similar instances of "shooting first" do not recur. For the legal community, this judgment is a cogent reminder that the rule of law applies equally to regulators, and that constitutional courts will always guard against overreach.

In the meantime, Cadila's medicines are back on the shelves, and patients can once again access the drugs they need. But the broader message—that power must be exercised with judiciousness and propriety—resonates far beyond this single case. As Acting Chief Justice Ghuge aptly put it, "Power has to be judiciously exercised." The Bombay High Court has made it clear that it will not tolerate anything less.