An order cancelling a license that results in civil consequences is null and void if passed in violation of the principles of natural justice (audi alteram partem) and mandatory statutory procedures requiring the issuance and service of a show cause notice.

JUDGEMENT

(Oral)

1. By way of the present petition, the petitioner has challenged Order No. ADC/DFCO/PUL-SPN/863-867 dated 10.12.2020, issued by respondent No. 4, whereby the Retail Drug Sale Licenses of the petitioner, granted in Form 20 and 21 vide Nos. AR/2480 and AR/2481, in favour of the firm “M/S John Medical Hall, Kadalbal, Pampore”, have been cancelled.

2. The grievance of the petitioner is that the impugned order has been passed in violation of the principles of natural justice, inasmuch as no show cause notice was served upon him prior to the cancellation of his licenses. It is stated that the cancellation of the license has been effected on the ground of non- payment of renewal/retention fee under the Drugs and Cosmetics Act, 1940 and the Rules framed thereunder. However, the petitioner has duly paid the requisite fee from time to time and that the license remains valid up to the year 2024.

3. It is stated that, as per the applicable rules, a license to sell drugs remains valid for a period of five years from the date of renewal. In support of this contention, the petitioner has placed on record renewal receipts, the latest being dated 10.07.2019, valid for a period of five years. Therefore, the ground taken in the impugned order is stated to be factually incorrect and unsustainable in law.

4. It is also stated that although the impugned order refers to a show cause notice dated 07.12.2020, the same was never served upon the petitioner. It is urged that the respondents proceeded to pass the impugned order without affording any opportunity of being heard, thereby rendering the order liable to be set aside.

5. Per contra, the respondents have filed the reply, contending that the impugned order has been passed by the competent authority strictly in accordance with the provisions of the Drugs and Cosmetics Act, 1940 and the Rules framed thereunder, after following due procedure.

6. It is further submitted that the petitioner was operating the drug sale business illegally and without valid authorization. It is also stated that a criminal complaint has been lodged by the concerned Drug Inspector, which is pending adjudication before a competent court.

7. Additionally, it is alleged that the petitioner was running the drug sale shop within the Sub-District Hospital Pampore on a proxy license issued in favour of another entity, which has already been cancelled. It is further contended that the license had been shifted without obtaining requisite permission from the competent authority, in violation of the applicable rules.

8. Heard learned counsel for the parties and perused the material available on record.

9. The record reveals that this Court, vide order dated 25.02.2025, granted interim relief in favour of the petitioner and directed that the impugned order shall remain in abeyance, considering that the petitioner is running the business of sale of retail drugs for several decades and that abrupt stoppage thereof would cause undue hardship.

10. Subsequently, the respondents were directed to produce the relevant record. Upon perusal of the record so produced, this Court, vide order dated 23.02.2026, observed that there was no material on record to demonstrate that the show cause notice had been served upon the petitioner.

11. Learned counsel for the respondents fairly conceded that although a show cause notice forms part of the record, there is no proof of its service upon the petitioner, as no acknowledgment is available on the record.

12. In view of the aforesaid admission, it stands established that the petitioner was not served with the show cause notice prior to the passing of the impugned order, thereby violating rule 159 of The Drugs and Cosmetics Rules, 1945, which provides that before cancellation or suspension of licences the person aggrieved should be given an opportunity to show cause. For the facility of reference rule 159 of The Drugs and Cosmetics Rules, 1940 is