The cancellation of a drug licence is invalid if the sampling procedure is not followed as mandated by law, and if the show cause notice lacks clarity regarding allegations.

JUDGMENT :

Pankaj Bhatia, J.

1. Heard learned counsel for the petitioner and learned Standing Counsel for the State-respondents.

2. The present petition has been filed challenging an order dated 12.06.2023, whereby the licence granted to the petitioner for retail sale of the drugs under the Drugs and Cosmetics Act, 1940 (hereinafter referred to as 'the Act) was cancelled as well as the appellate order dated 05.06.2024, whereby the appeal was dismissed. The petitioner has also challenged the show cause notice, which is contained in Annexure No.1 to the writ petition.

3. The facts, in brief, are that the petitioner was running a retail shop for sale of drugs and cosmetics after obtaining a licence on 09.11.2004, which permitted the retail sale of the medicines. The said licence was renewed subsequently on 30th October, 2019 and continued to be valid till the year 2024. However, on 22.12.2022, an inspection was carried out on the shop of the petitioner on the basis of some complaint made by one manufacturer of the medicines, namely, Dr. Reddy. The Drug Inspector, carried out an inspection and noted certain irregularities, for which a seizure memo was also prepared on the said date, which is on record at page No.51 of the paper book. In terms of the said seizure memo, the name of the complainant was also referred and the sample of six medicines were recovered. In pursuance of the said search carried out, a show cause notice was issued on 03.01.2023 calling upon the petitioner to explain the irregularities as noticed in the search. It is claimed that on 17.01.2023, the petitioner gave a reply denying the alleged irregularities. The said irregularities did not pertain to the six medicines, which were seized through the seizure memo. Despite the reply being given by the petitioner to the first show cause notice dated 03.01.2023, an order came to be passed on 31.01.2023 suspending the drug licence of the petitioner in terms of the power conferred by virtue of the Rule 66 of the Drugs and Cosmetics Rules, 1945 (hereinafter referred to as "the Rules). It appears from the record that on 06.02.2023, a chemical examination report was issued in respect of one out of six samples seized, wherein it was noticed that the sample does not confirm with a declared formula in respect of contents of Omeprazole and Demperidone. In pursuance of the said report, which can be read at page No.59 of the paper book, a show cause notice was issued on 03.03.2023 to one M/s. Bhagat Distributors, from whom, the petitioner had claimed that the drug was purchased and was kept for sale. The petitioner was served with the second show cause notice on 31.03.2023, calling upon the petitioner to do three things. The first to stop the distribution of the said drug and to produce the licence; second to disclose the name of the manufacturer along with proof and also do recall the drugs already sold in the market; and the third being to disclose the distribution manner of the said drug along with the evidences and also to disclose as to whom the said drug was sold along with the bill vouchers etc. It was indicated in the said notice that in the absence of giving the reply as desired in respect of the three aspects, a suitable action shall be taken under the provisions of the Act. A copy of the report was also furnished to the petitioner. The petitioner once again gave a reply to the said second show cause notice on 11.04.2023 denying the allegations. He also disclosed that he had purchased the said medicines through invoices numbers disclosed in the reply from the whole sale distributor M/s.