1979 Supreme(Raj) 243
RAJASTHAN HIGH COURT
S.C.Agrawal, J.
Nawal Kishore - Appellant
Versus
State of Rajasthan - Respondent
S.B. Civil Writ Petition No. 700 of 1978.
Decided On : 12-02-1979
A licensing authority cannot suspend a license without providing an opportunity to the licensee to show cause, and such suspension cannot be used for an unauthorized purpose.
Headnote:
DRUGS AND COSMETICS ACT - LICENCE SUSPENSION - NATURAL JUSTICE - SHOW CAUSE NOTICE - INTERIM SUSPENSION - MALICE IN LAW - ABUSE OF POWER - WRIT PETITION - MAINTAINABILITY - ALTERNATIVE REMEDY - DELAY AND LATCHES - LOCUS STANDI - RENEWAL OF LICENCE - PROVISO TO RULE 63 OF THE DRUGS AND COSMETICS RULES, 1954.
Fact of the Case:
The petitioner, a proprietor of a medical store, obtained two licenses under the Drugs and Cosmetics Act, 1950, and the Drugs and Cosmetics Rules, 1954, authorizing him to sell and distribute drugs. Before the expiry of the licenses, the Chief Medical and Health Officer (CMHO) passed an order directing the petitioner not to carry on any business in pursuance of the licenses. The petitioner filed a writ petition challenging the order on the grounds of violation of his fundamental right to trade and business, lack of opportunity to show cause, and abuse of power.
Finding of the Court:
The court held that the impugned order was passed in violation of the principles of natural justice and the provisions of Rule 66(1) of the Drugs and Cosmetics Rules, 1954, as no opportunity was given to the petitioner to show cause before the suspension of the licenses. The court also held that the CMHO abused his powers by passing the order for an unauthorized purpose, namely, to enforce a resolution of a trust that prohibited the petitioner from starting a drug shop in certain premises.
Issues: 1. Whether the impugned order was passed in violation of the principles of natural justice and the provisions of Rule 66(1) of the Drugs and Cosmetics Rules, 1954? 2. Whether the CMHO abused his powers by passing the order for an unauthorized purpose? 3. Whether the writ petition was maintainable despite the existence of an alternative remedy and delay in filing?
Ratio Decidendi: 1. The court held that the impugned order was passed in violation of the principles of natural justice and the provisions of Rule 66(1) of the Drugs and Cosmetics Rules, 1954, as no opportunity was given to the petitioner to show cause before the suspension of the licenses. The court relied on the fact that the CMHO admitted in his reply to the writ petition that no opportunity to show cause was afforded to the petitioner. 2. The court held that the CMHO abused his powers by passing the order for an unauthorized purpose, namely, to enforce a resolution of a trust that prohibited the petitioner from starting a drug shop in certain premises. The court noted that the statutory powers conferred by the Act and the Rules on the CMHO cannot be invoked for achieving such an object. 3. The court held that the writ petition was maintainable despite the existence of an alternative remedy and delay in filing. The court relied on the fact that the petitioner was seeking the enforcement of his fundamental right to trade and business, which is protected under Article 19(1)(g) of the Constitution. The court also noted that the proviso to Rule 63 of the Drugs and Cosmetics Rules, 1954, allowed the petitioner's licenses to continue in force as he had applied for renewal before their expiry.
Final Decision: The court allowed the writ petition, quashed the impugned order, and awarded costs of Rs. 250/- to the petitioner.
JUDGMENT
1. - Nawal Kishore jaju, the petitioner in this writ petition, filed under Article 226 of the Constitution, is the proprietor of M/s Jajoo Brothers Medical Stores, and carries on business in purchase and sale of drugs and medicines at Barmer. He obtained two licences (Nos. 102R and 102 R-CC (1) on 5th March, 1976 from the Chief Medical and Health Officer, Barmer, who is the Drug Licensing Authority under the Drug and Cosmetics Acts 1950 (hereinafter referred so as the 'Act) and the Drugs and Come-tics Rules, 1954 (hereinafter referred to as the Rules). Licence No. 102 R. authorises the petitioner to sell, stock or exhibit for sale or distribute by retail, drugs other than those specified in schedules C and C (1) to the Rules. Licence No. 102R-CC (1) authorises the petitioner to sell, stock or exhibit for sale, or distribute by retail, drugs specified in Schedules C & C (1) to the Rules. Both the licences were valid up to 31st December, 1977 but before the expiry of the period of the said licences, the Chief Medical and Health Officer, Barmer, passed an order dated 11th May, 1976 whereby he directed the petitioner not to carry on any business in pursuance of the licences which had been issued in his favour. Being aggrieved by the said order, the petitioner has filed this writ petition for the issue of an appropriate writ or order to quash the said order dated 11th May, 1976 and to direct the respondents not to interfere with the right of the petitioner to conduct his business. It may be mentioned that before the date of the expiry of the aforesaid licences, the petitioner had submitted applications for renewal of the licences in accordance with the Rules and the said applications are still pending for consideration before the Licensing Authority.
2. In the writ petition, the petitioner has submitted that in the town of Barmer, there is a Samiti known as Dongra Vishram Grah Samiti and that the Collector, Barmer, is the Chairman of the said Samiti and the Chief Medical & Health Officer, Barmer, is the Secretary of the said Samiti. The said Samiti has got building constructed near the General Hospital, Barmer, and there are two shops in the said building. The petitioner has taken one of the aforesaid two shops on rent by making a bid in an open auction and a rent note was executed by the petitioner in respect of the said shop in favour of the Samiti on 8th March 1976. The petitioner had obtained the licences referred to above for the purpose of starting a medical store in the shop, that has been taken on lease from the Samiti. The case of the petitioner is that the impugned order had been passed with a view to prevent him from carrying on his business in drugs in the said shop. In the writ petition, the validity of the order dated 11th May, 1976 is challenged on the ground that the said order is violative of the right of the petitioner to carry on trade and business in drugs under the licences, which is guaranteed under Article 19(1)(g) of the Constitution The petitioner has alleged that the impugned order amounts to cancellation of the licences of the petitioner and that it was passed in violation of the principles of natural justice without affording any opportunity to the petitioner to show cause why such an order should not be made.
3. It may observed that after the filing of the writ petition in this Court, a communication dated 24th October, 78 was addressed to the petitioner by the Chief Medical and Health Officer wherein the petitioner had been asked to give his explanation in respect of certain matters, some of which relate to the circumstances in which the shop was taken on rent by the petitioner from the Samiti.
4. In reply to the writ petition, filed on behalf of respondents, certain preliminary objections have been raised with regard to the maintainability of the writ petition on the ground of delay and latches and also on the ground that an alternative remedy by way of appeal, was available to the petitioner. A
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