In-Principle Approval For Janaushadhi Kendra Confers No Vested Right; Final Allotment To Another Upheld: Karnataka High Court

In-Principle Approval Doesn't Create Vested Right to Challenge Final Allotment: Karnataka HC Upholds PMBI's Decision on Janaushadhi Kendra

Bengaluru: The Karnataka High Court, in a significant ruling, has held that an 'in-principle approval' for establishing a Pradhan Mantri Bhartiya Janaushadhi Kendra (PMBJK) does not create a crystallized or vested right for an applicant. The court dismissed a writ petition challenging the final approval granted to another applicant, emphasizing that public interest in a welfare scheme outweighs a perceived business threat based on an inchoate right.

The judgment was delivered by a single-judge bench of Justice M.Nagaprasanna in a petition filed by Smt. Savinaya against the final approval granted to Mrs. Sheela G. Bhat for a Kendra in Kumbra Village, Dakshina Kannada.

Overview of the Case

The dispute arose after both the petitioner, Smt. Savinaya , and the first respondent, Mrs. Sheela G. Bhat , applied to open a Janaushadhi Kendra under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) scheme. The petitioner received an 'in-principle approval' on December 11, 2023, and was asked to submit further documents.

However, she later discovered that the first respondent, who had also applied, was granted final approval and a store code on December 20, 2023. The petitioner challenged this decision, arguing that her application was first and that the new Kendra violated the scheme's distance policy, as it was located within 600 meters of her proposed site, whereas the policy mandates a distance of 1 km or 1.5 km between two Kendra s.

Arguments from Both Sides

Petitioner's Arguments: The petitioner, represented by Advocate Sri R. Bhadrinath , argued that her application was processed first, leading to an in-principle approval. She contended that granting final approval to the respondent for a location just 600 meters away was a clear violation of the PMBJP distance policy. She sought the cancellation of the respondent's approval and a directive to grant her the final approval and store code.

Respondents' Arguments: The Deputy Solicitor General of India, Sri H. Shanthi Bhushan, representing the Pharmaceuticals and Medical Devices Bureau of India (PMBI), countered that the respondent's application was received first (online on Dec 1, 2023) compared to the petitioner's (offline on Dec 5, 2023). The PMBI processed applications on a 'first come, first served' basis. He clarified that the distance policy applies between two existing or approved Kendra s, and since the petitioner never received final approval, her proposed location did not create a bar for the respondent. The counsel for the respondent, Sri M. Sudhakar Pai, supported this stance.

Court's Analysis and Reasoning

Justice Nagaprasanna meticulously examined the PMBJP scheme, highlighting its noble objective to provide affordable and quality generic medicines to the public. The Court noted that the scheme is a "welfare-oriented scheme designed for the many, not the few."

The Court made a crucial distinction between 'in-principle approval' and 'final approval'. It observed that the communication to the petitioner was explicitly conditional.

"The petitioner who did not get the approval finally, cannot contend her rights were crystalized... It was only an in-principle approval subject to final approval. This would not clothe any right in favour of the petitioner to contend that the Kendra that is now approved in favour of the 1st respondent is at a distance of less than one kilometer."

The Court accepted the PMBI's submission that the respondent's application was considered first. It concluded that since the petitioner was never granted a final approval or a store code, her right remained inchoate. Therefore, she could not invoke the distance policy to challenge the lawful approval granted to the respondent.

The Court concluded that there was no demonstrable arbitrariness or procedural infirmity in the PMBI's decision-making process.

"The petition which is structured on the edifice of an inchoate right is structured on quicksand as it does not bear any legal foundation... Public interest would be ill-served if this Court were to interdict a lawful and beneficial initiative on such slender grounds."

Final Decision

Finding the petition devoid of merit, the Karnataka High Court rejected it, upholding the final approval and store code granted to the first respondent. The court affirmed that administrative bodies can proceed with allotments based on a 'first come, first served' policy and that an in-principle nod does not estop them from granting final approval to a more eligible or prior applicant.