JUDGMENT V.K. Mehrotra, J. - At Hathras, in District Aligarh, there is a laboratory called "Shri Karan Prakash Laboratories" of which Laxmi Chandra Agrawala is the proprietor. It holds licence for the manufacture, amongst others, of Morphine Sulphate injections from Morphine Sulphate. In the year 1951 it was granted a licence under the Drugs Act for manufacture of medicines. Under the Dangerous Drugs Act, 1930, and the Rules framed thereunder, it had to and obtained a licence in the prescribed form No. DD-6 in the year 1968 for manufacturing Morphine Sulphate injections. In 1972, a licence was granted to it for manufacturing medicinal preparations in Form L-2, prescribed under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Under it, medicines could be manufactured by it outside Bond on payment of necessary duty. Later, in the year 1979, a licence in Form L-I enabling it to manufacture medicines under Bond was granted to it under the provisions of the aforesaid Act and the Rules framed thereunder. These licences were renewed year by year until, in the year 1981 some investigation said to have been made by the Central Bureau for Investigation (C. B. I., for brief) allegedly revealed some irregularities on the part of the laboratories so that the District Excise Officer suggested to the Collector, Aligarh, who is the licensing authority, to obtain a report from the C. B. I. before ordering renewal of the DD-6 licence for the year 1982-83. On May 18, the Collector passed an order refusing renewal of the licence in Form DD-6 after considering the recommendations made by the Additional District Magistrate, Aligarh, in the matter. The order was communicated to the Laboratory on June 1, 1982 whereafter an application for reviewing the order was made by it to the Collector. The matter was considered by the Collector who directed that the licence be renewed till July 31, 1982. It appears that in the meanwhile, the Collector had asked the District Excise Officer to obtain a report from the C. B. I. On July 3, 1982 a confidential report dated June 25. 1982 was received from the C. B. I. and on considering it the Collector suspended the licence in form DD-6 on July 4, 1982 and a show cause notice was issued to the Laboratories as to why the licence may not be cancelled. 1982 was received from the C. B. I. and on considering it the Collector suspended the licence in form DD-6 on July 4, 1982 and a show cause notice was issued to the Laboratories as to why the licence may not be cancelled. A reply was given and after considering it the Collector passed an order on December 2. 1982 cancelling the licence. 2. On October 5, 1982, the present petition under Article 226 of the Constitution was filed by the Laboratories through its proprietor Laxmi Chand assailing the order of July 4. The petition was admitted to fuller hearing by a Bench of this Court on October 15. 1982. Prior to it, the petitioner unsuccessfully approached the Collector, Aligarh, for renewing the licence for the entire year 1982-83 and made written applications to the Excise Commissioner, U. P. as well with that request. This was in the months of July, August and September, 1982. The petitioner had also made a request for an interim order. No ex parte order was granted by this Court but on November 23, an order was passed by one of us (V. K. Mehrotra, J.) directing the respondents to consider the petitioner's representation dated August 5, 1982. It was then that the Collector passed the order cancelling the licence of the petitioner in form DD-6 on December, 2, 1982. The .petitioner then made an application to bring the subsequent facts on the record of the writ petition and permit incorporation of the prayer challenging the order. This was allowed. 3. Lala Ram Sharma filed the affidavit in support of the petition as well as the supplementary affidavit filed in the case after the order of December 2, 1982. He has sworn a rejoinder affidavit in reply to the counter affidavit sworn by Sri K. K. Chaturvedi, the District Excise Officer, in the main writ petition as well as one in reply to the supplementary counter affidavit sworn by Sri R. R. Patel the successor of Sri Chaturvedi. One supplementary counter affidavit was sworn by Sri Laxmi Chand Agrawal on October 5, 1982. With this supplementary affidavit copies of the communications addressed by him to the Excise Commissioner on August 5 and September 22, 1982 were appended. One supplementary counter affidavit was sworn by Sri Laxmi Chand Agrawal on October 5, 1982. With this supplementary affidavit copies of the communications addressed by him to the Excise Commissioner on August 5 and September 22, 1982 were appended. At the time of the hearing of the writ petition, the challenge mainly was to the orders by which the licence of the petitioner in Form DD-6 was suspended and then cancelled. The latter was the one passed on December 2, 1982 and its copy is on the record before us as annexure 'C. A. I' to the supplementary counter affidavit sworn by Sri Patel The notice that was given to the petitioner, calling upon it to show cause why its licence in Form DD-6 should not be cancelled, is of July, 4, 1982 and its copy is annexure 5 to the writ petition. The petitioner's reply to this notice is annexure 6' to the writ petition and is dated July 13, 1982. The Collector, it appears, had written to the Excise Commissioner on August 17, 1982, for, a copy of the reply of the Excise Commissioner dated November 9, 1982 to the Collector, Aligarh has been appended as annexure 'C. A. 2' to the supplementary counter affidavit of Sri R. R. Patel sworn by him in December, 1982 and is in reply to the supplementary affidavit sworn by Sri Laxmi Chandra Agrawal In this letter, the Excise Commissioner expressed an opinion that in view of the facts reported by the C. B. I. in its confidential report of June 25, 1982, the licence of the petitioner in Form DD -6 could be suspended or cancelled and that in view of the decision of the Supreme Court in Narendra v. Union of India reported in (1962) 2 SCR 375: ( AIR 1960 SC 430 ) it was not necessary to give an opportunity of hearing to the licensee before taking such action. 4. Before proceeding to consider the case on its merits, I may observe that in view of the expression of opinion by the Excise Commissioner any appeal by the petitioner to him against the order of Collector would have been futile. 4. Before proceeding to consider the case on its merits, I may observe that in view of the expression of opinion by the Excise Commissioner any appeal by the petitioner to him against the order of Collector would have been futile. The objection of the learned Additional Chief Standing Counsel that under R. 42, U. P. Dangerous Drugs Rules, 1961, the petitioner has an alternative remedy of approaching the Excise Commissioner for relief and that this Court should not go into the correctness or otherwise of the Collector's order cannot, therefore, be sustained. The petitioner could not approach the State Government directly invoking its revisional jurisdiction because under Rule 43, the State Government can only revise an order passed by the Excise Commissioner under Rule 42. 5. The U. P. Dangerous Drugs Act, 1930 (Central Act No. I of 1930), which came into force on February 1, 1931 was enacted with a view, amongst others, to control certain operations relating to dangerous drugs and to increase and render uniform penalties for offences relating to such operations. Section 2 (f) defines "opium derivative", amongst others, as Morphine and all preparations containing more than 0.2% of Morphine while "manufactured drug" in S. 2 (g) includes opium derivative. In clause (h), "dangerous drug" has been defined to include all manufactured drugs. Section 8 of the Act provides for control of the State Government over internal traffic in manufactured drugs and coca leaf and reads thus; "Section 8. Control of State Government over internal traffic in manufactured drugs and coca leaf - (1) No one shall (a) import or export inter provincially, transport, possess or sell any manufactured drug, other than prepared opium, or coca leaf, or (b) manufacture, medicinal opium or any preparation containing morphine, diacetylmorphine or cocaine, save in accordance with rules made under sub-s. (2) and with the conditions of any licence for that purpose which he may be required to obtain under those rules. (2) That State Government may (* * *) make rules permitting and regulating - (a) the inter (State) import and export into and from the territories under its administration, the transport, possession and sale of manufactured drugs, other than prepared opiun, and of coca leaf; and (b) the manufacture of medicinal opium or of any preparation containing morphine, diacetylmorphine or cocaine from materials which the maker is lawfully entitled to possess. Such rules may prescribe the form and conditions of licences for such import, export, transport, possession, sale and' manufacture, the authorities by which such licences may be granted and the fees that may be charged therefor, and any other matters requisite to render effective the control of the State Government over such import, export, transport, possession, sale and manufacture. (3) Save in so far as may be expressly provided in rules made under sub-sec. (2), nothing in this section shall apply to manufactured drugs which are the property and in the possession of Government: Provided that such drugs shall not be sold or otherwise delivered to any person who, under the rules made by the (State Government) under this section, is not entitled to their possession." 6. Section 14 provides for punishment for contravention of S. 8 or any rule made under that section or of any condition of a licence issued thereunder. It can be imprisonment which may extend to three years with or without fine. 7. The U. P. Dangerous Drugs Rules, 1961, were framed in exercise of powers under S. 8 (2) of the Act. Part III of these rules deals with transport of manufactured drugs while Part V deals with their vend. In Part VI are miscellaneous rules of which R. 36, dealing with the cancellation and suspension of licence, is in these terms: "Cancellation, suspension, of licences - subject to any directions that the Excise Commissioner may give in this behalf, the Collector may cancel or suspend a licence granted by him under these rules - (i) if the licensee has - (a) failed to pay any fee payable by him; or (b) by himself or by any servant or person acting on his behalf, committed any breach of the conditions of such licence or order under these rules; or (c) been convicted of any offence under the Act or under any law for the time being in force relating to Excise Revenue or Opium or the Drugs Act, 1940 or rules made thereunder or of any criminal offence which in the Collector's opinion renders him unfit to hold the licence; (ii) if for reasons to be recorded he considers it desirable that the licence should be cancelled in which case he should give to the licensee fifteen days' notice." 8. Rule 39 provides that composition money, not exceeding two hundred rupees, may be accepted by the Collector from a licenced dealer or a chemist whose licence is liable to be cancelled under sub-cl. (a) or (b) of R. 36 (1) in lieu of such cancellation. When such payment has been duly made no further proceedings are to be taken against the licenced dealer or chemist in respect of the act or omission compounded. 9. A dealer's licence in form DD-6 for the manufacture and possession of opium derivatives other than prepared opium and for sale thereof otherwise than on prescriptions, and in accordance with the terms of licence, can be granted by the Collector under R. 31. Form DD-6, in which a licence is so granted, is printed at page 222 of the U. P. Excise Manual Volume III (1970 Edition). The petitioner has appended a copy of this form as Annexure 1' to the writ petition. The conditions of the licence, which are relevant for our purpose are these: "No. 7 That he/they shall not export Lac drugs to a district in India unless an import permit has been granted by the prescribed authority in such importing district and has been countersigned by the Collector. No. 8 That he/they shall sell the drugs otherwise than on prescription and only - (a) to a dealer or chemist licensed under the U. P. Dangerous Drugs Rules, 1961, or under the rules for the time being in force in any part of India outside Uttar Pradesh, or, (b) to an approved practitioner, or (c) to an approved practitioner in managing or supervising charge of a hospital or dispensary, authorised to possess the drugs under U. P. Dangerous Drugs Rules, 1961 or any corresponding Rules for the time being in force in India outside Uttar Pradesh, in such quantity and in such manner as may be specified in such authorisation. No. 9 ....................................................... No. 10. That he/they shall maintain an account in the following form in respect of each drug and entries should be made on the day on which transactions take place : Date Balance in hand yesterday Quantity Manufactured or received this day and when received Total quantity to be accounted for Quantity sold this day Name of purchaser Address Remarks 1 2 3 4 5 6 7 8 9 11. .................................................. 12. .................................................. 13. ................................................... 14. .................................................... 10. .................................................. 12. .................................................. 13. ................................................... 14. .................................................... 10. This licence may be cancelled by the Collector, if any breach of the provision of the United Provinces Excise Act, 1910, the Opium Act, 1878, or the Dangerous Drugs Act, 1983, or any of the Rules made thereunder or of the above mentioned conditions, is committed by the licence holder or any of the licensee by himself or his partner or agent or any other person employed or working in the premises for which this licence is granted." 11. In the notice dated July 4, 1982 (annexure 5' to the writ petition), the petitioner was required to explain the allegations, in substance, that on enquiry, the C. B. I. found that during the period between March 11, 1981 and May 9, 1981, the petitioner had shown sale of injections prepared out of morphine sulphate supplied to it to different doctors, vaidyas and medical practitioners in Aligarh and Agra of whom 16 persons had died prior to the purported date of sale and 23 persons had denied that they had made the purchase of injections attributed to them by the petitioner in its record. The petitioner laboratories had shown sale of morphine injections to Aardee Medicals Agra. Ram Das Gupta, the proprietor of Aardee Medicals had intimated the C. B. 1. that he had not purchased the injections. In addition, it was found that Ram Das Gupta did not have any permit from the District Excise Officer, Agra for purchase of morphine injections in such huge quantities of which the sale had been shown by the petitioner in its books. Thus, the petitioner had shown false sales in its records of morphine injections which was a breach by it of the-U. P. Dangerous Drugs Rules and the conditions of the licence in Form DD-6. Further, that against Laxmi Chandra Agrawal, proprietor of the firm and his other associates, complaint had been instituted in the Court of Special Magistrate, Dehradun for having committed offence under S. 120-B/477A. Penal Code, read with S. 14, Dangerous Drugs Act. 12. The notice gave 15 days time for showing cause by the licensee why the licence in Form DD-6 should not be cancelled. Annexure ' f to the supplementary counter affidavit of R. R. Patel is the reply sent by the petitioner to this notice. This is dated July 13, 1982. Penal Code, read with S. 14, Dangerous Drugs Act. 12. The notice gave 15 days time for showing cause by the licensee why the licence in Form DD-6 should not be cancelled. Annexure ' f to the supplementary counter affidavit of R. R. Patel is the reply sent by the petitioner to this notice. This is dated July 13, 1982. In para 3, it has been mentioned that the petitioner Laboratories had no knowledge about any case having been filed by the C. B. 1. in the Court of Special Magistrate, Dehradun. Further that mere filing of complaint did not give any cause either to suspend the licence or to cancel it. In para 4, it was said that the entries of sale in the records for the period between March 11, 1981 and May 9, 1981 were correct. Sale was made only to a dealer or chemist licensed under the rules and mere denial of a named purchaser would not be a ground for taking action against the seller like the petitioner. If any medical agency had purchased more than permissible quantity then it could alone be responsible. Then in para 6, it has been said that it is incorrect that sale to 16 persons who had died much before they had been made and no particulars of any such person has been given in the order. It was prayed that the order of July 4, be recalled and the licence be restored at the earliest. 13. As noticed earlier, in his letter of 9-11-1982, the Excise Commissioner had intimated the District Magistrate, Aligarh, that the petitioner had recorded imaginary sale to 16 persons who had already died to 23 persons who had disowned any sale to them and the sale of a huge quantity of injection to Aardee Medicals Agra which had been disowned by them; further that the Collector, Agra, had not issued any permit to Medical Agencies for purchasing the huge quantity of Morphine Sulphate injections which had been allegedly sold to it by the petitioner. The petitioner did not sell injections to Aardee Medical Agency nor had the Medical Agency purchased any medicines. There was a breach of condition No. 7 of the licence by the petitioner in this respect. The petitioner did not sell injections to Aardee Medical Agency nor had the Medical Agency purchased any medicines. There was a breach of condition No. 7 of the licence by the petitioner in this respect. The order of 2nd December, 1982 (Annexure C. B. I. to the supplementary counter-affidavit of R. R. Patel sworn in December, 1982) records the fact that the petitioner was heard through its counsel It notices the submission made on behalf of the petitioner that the sale to 16 persons, who, it is said, had died before the date of sale, was made by the petitioner when the licence enabling purchase was produced on their behalf and there is nothing to indicate that the licence had ceased to be effective on the date of sale by the petitioner. Further, that in case Aardee Medical Agencies, Agra, purchased more quantity than was permissible under the licence held by them it was the Medical Agencies which was responsible. The mere fact that some complaint had been made by the C. B. L was not enough to cancel the licence until such time that the petitioner was found guilty by a competent court. 14. The Collector has taken the view that the petitioner had claimed to have made sales to the persons who had been found to be dead prior to the date of alleged We as well as to these who disowned any purchase from the petitioner. The petitioner also committed breach of conditions of its licence by sale of injections to a purchaser of Agra who did not have the requisite permit to transport the injections from Hathras. The quantity allegedly sold to it was sizeable and its sale, even if made, should not have been affected by the petitioner without looking at the licence of Aardee Medical Agencies which would have contained a mentioned of the maximum quanity which it could purchase as well as the permit for transport from one District 'to another. Since morphine medicines had considerable effect on the health of the people generally, even ordinary negligence in connection with their distribution could have serious repercussion. As such, irresponsible firm like the petitioner did not deserve to continue to have the licence which was cancelled with immediate effect under R. 36 (1), Dangerous Drugs Rules, 1961. 15. Since morphine medicines had considerable effect on the health of the people generally, even ordinary negligence in connection with their distribution could have serious repercussion. As such, irresponsible firm like the petitioner did not deserve to continue to have the licence which was cancelled with immediate effect under R. 36 (1), Dangerous Drugs Rules, 1961. 15. During the course of hearing of the petition, it was brought to our notice that charge-sheet had been submitted against the petitioner by the C. B. I. in Court. A copy of this charge-sheet was also made available for our perusal by the learned Additional Chief Standing Counsel It is the common case of the parties that along with the charge-sheet were appended four lists, annexures A, B, C and D, the first being a copy of the register containing entries of sale made by the petitioner between March 10, 1981 and May 9, 1981 on different dates and the second and third being lists containing the names of eighteen persons who had died prior to the date of sale and 23 persons who had disowned any sale to them by the petitioner. The list of 23 persons contains the name of Aardee Medical Agencies Agra at Serial No. 20. We have placed the copy of the charge-sheet given to us by the Additional Chief Standing Counsel on the record of the writ petition. 16. The first submission of Sri S. N. Misra, who appeared on behalf of the petitioner before us, was that R. 36, under which the order of cancellation was passed, could not be invoked on the basis of mere allegations made by the C. B. I. until the petitioner was actually convicted by a competent Court in respect of the accusation contained in the charge-sheet because the petitioner had admittedly not failed to pay any fee payable by it nor had it committed any breach of the conditions of the licence or order made under the Rules. 17. It is undisputed that the requisite fee for renewal of the licence had been deposited by the petitioner in time. That he has not been convicted of any offence in pursuance of the charge-sheet submitted by the C. B. I., is also not in dispute. The Collector has mentioned in his order that it was being passed in exercise of powers under R. 36 (b). That he has not been convicted of any offence in pursuance of the charge-sheet submitted by the C. B. I., is also not in dispute. The Collector has mentioned in his order that it was being passed in exercise of powers under R. 36 (b). In other words, the basis is that the petitioner had committed breach of the conditions of the licence granted to it. The show cause notice gave 15 days time to the petitioner to show cause against the proposed cancellation of the licence. Obviously, the notice is relatable to R. 36 (ii). This sub-rule, it would appear, permits cancellation of a licence even for reasons which may not be covered by any clause of R. 36 (1) but which may be relevant for ensuring the due observance of the provisions of the Act or the Rules framed thereunder. These reasons, in terms of sub-rule (ii), are to be recorded which would suggest that they are open to judicial scrutiny. 18. The show cause notice referred to the fact that on enquiry by the C. B. I. it was found that sale had allegedly been made to 16 persons who were dead and to 23 who had disowned any such sale to them. Neither the names nor details of these purchasers were disclosed in the show cause notice. It is clear that the petitioner could not reasonably be expected to effectively reply to such a vague assertion in the notice. 19. In this Court too, the names of only 16 persons who were allegedly dead prior to the date of sale have been disclosed in a list appended as annexure `S. C. A. It to the supplementary counter affidavit of R. R. Patel sworn in December, 1982. The names of 23 persons who are supposed to have disowned the sale made to them was not disclosed even in this Court in any of the affidavits filed on behalf of the respondents. The only name disclosed in this connection in the show cause notice, as well as in the counter-affidavit, is that of Ardee Medical Agencies. 20. The names of 23 persons who are supposed to have disowned the sale made to them was not disclosed even in this Court in any of the affidavits filed on behalf of the respondents. The only name disclosed in this connection in the show cause notice, as well as in the counter-affidavit, is that of Ardee Medical Agencies. 20. It has been asserted that each of the sale had been made by the petitioner at its own counter and it was made to persons who presented the requisite copy of the registration certificate in the case of medical practitioners and of the licence in the case of chemists enabling them to make the purchase. They wert duly recorded in the register maintained the petitioner along with the entry relating to the number of injections sold and the bill number. The fact that such entries were made by the petitioner is clearly borne out by the copy of the register maintained by the petitioner which has been filed as annexure `A' to the charge-sheet submitted by the C. B. I. The assertion of the petitioner is that in view of the fact that sales were made at the counter by it, there was no error committed by it in making sales to registered medical practitioners on whose behalf the registration certificate was shown to the petitioner at the time of sale. At that time it was not possible for the petitioner to have comprehended that some of the persons, in whose name purchase had been made, were already dead. It could not proceed on the assumption that some people would make purchase from the petitioner on the basis of registration numbers of persons who had already died. Besides, in the absence of any detail about the persons supposed to have been dead on the date of purchase, it could not have effectively replied to that allegation. Likewise, the details of 23 persons, who were supposed to have disowned the purchase were also not disclosed to the petitioner. The fact that the purchaser subsequently disowned the sale made to him, by itself, could not be taken to be sufficient for the cancellation of the licence of the petitioner unless the petitioner had been afforded effective opportunity of establishing that the stand of the purchaser was factually incorrect. The fact that the purchaser subsequently disowned the sale made to him, by itself, could not be taken to be sufficient for the cancellation of the licence of the petitioner unless the petitioner had been afforded effective opportunity of establishing that the stand of the purchaser was factually incorrect. In regard to the sale to Aardee Medical Agencies too the same is the stand with regard to the disowning of purchase by it and, in addition, it is said that, inasmuch as, sale was made to Aardee Agencies as well at the counter, there is no question of the petitioner insisting upon the possession of a transport permit by the Agencies. The petitioner has appended an affidavit of Ram Das Gupta, proprietor of Aardee Medical Agencies, Agra, sworn by him in January, 1983 as annexure `I to the supplementary rejoinder affidavit of Lala Ram Sharma sworn on 7th January, 1983. In this affidavit Ram Das Gupta has stated that he is the proprietor of Aardee Medical Agencies and that he had purchased 5900 ampules of morphine sulphate injections from the petitioner at Hathras through bills Nos. 560 and 584 dated March 12 and March 13, 1981 in regard to 3600 and 2300 respectively and further that he had nowhere stated contrary to the facts mentioned in it. It has also been stated by R. D. Gupta that he was authorised to deal with these injections and possessed valid authority for the sale at all relevant time. 21. Affidavits of four more persons have been filed as annexures 2, 3, 4 and 5 along with the same supplementary rejoinder affidavit purporting to be by some of the persons, out of 23, who are said to have disowned having made any purchase of the injections from the petitioner. In these affidavits they have acknowledged having purchased the injections on the dates mentioned by the petitioner, in quantities and under the bills mentioned by the petitioner in the sale register. 22. The principal submission of the learned Additional Chief Standing Counsel before us has been that even after disclosure of the relevant details to the petitioner in the counter-affidavits filed in this Court, the petitioner has not been able to explain the alleged sale made by it to dead persons or those who, on enquiry, denied having made those purchases. 22. The principal submission of the learned Additional Chief Standing Counsel before us has been that even after disclosure of the relevant details to the petitioner in the counter-affidavits filed in this Court, the petitioner has not been able to explain the alleged sale made by it to dead persons or those who, on enquiry, denied having made those purchases. It has also been urged that assuming that sale was made by the petitioner to the deponents of the five affidavits filed along with the supplementary rejoinder affidavit, the correctness of which was not accepted, there still remained a large number of persons to whom sales were shown by the petitioner in his sale register but was disowned by them about which no explanation was forthcoming even in this Court. As to Ardee Medical Agencies it was urged that, in any case, they were from Agra and the petitioner was not entitled to make any sale to them except on presentation of a valid transport permit as envisaged by the Rule contained in para 203, U. P. Excise Manual Volume III. That paragraph envisages that the transport of manufactured drug by licenced dealer or chemist shall be covered by a permit in Form DD-2A granted by the Collector of the District to which the manufactured drugs are to be transported. The paragraph, however, contains a proviso to the effect that no permit shall be issued for the transport of the manufactured drugs by a licenced dealer or chemist within the same District. The argument also was that in view of the dangerous nature of the drug which was being manufactured by the petitioner greater care on its part was contemplated while making sales and it was necessary for the petitioner to have ensured, before selling the injections, that it was not being sold to non-existent person or persons who came from outside the District of Aligarh. 23. It is true that Morphine Sulphate injections which the petitioner manufactures are capable of misuse and are comprised within the definition of dangerous drugs so that care is expected from a dealer who manufactures and sells the same while disposing it of. Care, of course, has to be (taken) to an extent to which it is expected of a reasonable person. Care, of course, has to be (taken) to an extent to which it is expected of a reasonable person. Whether, in a given case, such care was taken or not is ordinarily a question to be decided, in the first instance, by the authorities constituted under the Act and the Rules on consideration of the material on the record before them. The right of a person to carry on trade in dangerous drugs can be regulated by law and the Dangerous Drugs Act, 1930 and the Rules of 1961 framed thereunder are instances of such statutory Regulation. The authorities are expected to exercise control, within the amibt of the statutory provision, in a reasonable manner consistent with the right of a person to carry on trade in the dangerous drug which has not been prohibited but has only been regulated. It follows that it is not open to the authorities to act arbitrarily or on the basis of mere suspicion without regard to facts actually found. They cannot proceed to base their conclusion either on irrelevant considerations or on facts of which veracity is yet to be established. 24. R. 36, under which action has been taken against the petitioner, itself contemplates opportunity to be given to a person whose licence is proposed to be cancelled and opportunity given is to be in substance and not only in form. The basis upon which action is proposed against a licensee is to be explicitly disclosed in a manner which may enable the licensee to give his version about it effectively, else the serving of a show cause notice would be a mere compliance with the requirement of giving an opportunity in form, bereft of the essential substance. Where, after a proper disclosure of the basis upon which the licensee is to be proceeded against and after affording an effective opportunity of explanation to the licensee, the authority comes to the conclusion that the licensee is not a fit person to be permitted to continue to carry on the trade, his licence may be cancelled. If the conclusion is based upon relevant material and is reasonable, the courts would be loath to intervene. Where, however, these elements are missing interference by a court of law becomes necessary. 25. If the conclusion is based upon relevant material and is reasonable, the courts would be loath to intervene. Where, however, these elements are missing interference by a court of law becomes necessary. 25. The order of 2-12-1982 proceeds upon the assumption that the petitioner showed fictitious sales in its books for it was found that the alleged sales were to dead persons and to those who stated that they had not purchased it from the petitioner at all. How could the petitioner be expected to give a reply to the allegations in this respect effectively when in the notice given to it to show cause neither the names nor any other details of such persons were disclosed to the petitioner. The effort of the respondents at the discosure about these persons even in this Court has been half hearted. The list (annexure `S.C.A `II' appended to the supplementary counter-affidavit of Patel) contains just the names of the persons supposed to be dead on the date on which sale was shown to have been made to them and the name of the town or township and no more. Even the names of 23 persons who are supposed to have disowned any sale to them by the petitioner have not been disclosed. Could the petitioner be expected to meet the allegations in this respect. After all, in the course of business, the petitioner has been making sales to a large number of medical practitioners and unless the disclosure is such which makes it possible for the petitioner, to locate the persons in respect whereof the charge of fictitious sale is levelled against the petitioner it would not be possible for the petitioner to offer any explanation whatsoever. I am not impressed by the submission that, inasmuch as, the persons to whom the petitioner made his sales were medical practitioners with registration numbers it should have been possible for the petitioner, at least in respect of the so called dead purchasers, to locate them with reference to their names and the place disclosed in the S.C.A. II. Where was the difficulty in disclosing to the petitioner the date of the alleged sale, the registration number, the quantity sold and the bill number when these admittedly were known to the respondents as the relevant sale register of the petitioner was with them. Where was the difficulty in disclosing to the petitioner the date of the alleged sale, the registration number, the quantity sold and the bill number when these admittedly were known to the respondents as the relevant sale register of the petitioner was with them. If such disclosure had been made, it may have been possible for the petitioner to have established that either the persons were alive on the date of sale or that the sale had been made to persons who had provided the requisite registration number of the allegedly dead purchasers, bona fide, in the normal course, without any suspicion that the person in whose name the purchase was being made was not alive. 26. The allegation that Ram Das Gupta of Ardee Medical Agencies had disclaimed having made any purchase from the petitioner to the C. B. I. and that it had been found that he did not have any permit from the District Excise Officer, Agra for purchasing the injections in huge numbers (3600+2300) contained in the show cause notice cannot also be considered to be disclosure in such detail as to enable the petitioner to effectively show cause against it. The petitioner mentioned in the reply to the show cause notice (annexure `6' to the petition) that the mere denial of a named purchaser cannot be a ground for taking drastic action against the seller and in case the purchaser has purchased more quantity than was permitted to him, the seller could not be held responsible for it. A reference was made to condition No. 8 of the petitioners' licence to the effect that the petitioner was bound to sell to drug, otherwise than on prescription, to a dealer or chemist, licenced under the U. P. Dangerous Drugs Rules for which a licence was there with Ardee Agencies. It was not disclosed to the petitioner in the show cause notice as to when had R. D. Gupta intimated the C. B. I. that he had not made purchases from the petitioner nor has it been mentioned in it as to what was the quantity which could be purchased by Ardee Agencies under the permit held by it. It was not disclosed to the petitioner in the show cause notice as to when had R. D. Gupta intimated the C. B. I. that he had not made purchases from the petitioner nor has it been mentioned in it as to what was the quantity which could be purchased by Ardee Agencies under the permit held by it. No condition of the licence in form D. D. 6 was referred to in the show cause notice of which breach was alleged in this respect nor was there any provision of the Act or Rules, allegedly violated by the petitioner, mentioned in it. Even in this Court, all that has been pointed out in this regard is a violation of the proviso to S. 8 (3) of the Act and Paras 202 and 203, U. P. Excise Manual Volume III, to show that the sale made to Ardee Agencies, Agra, was contrary to the Act and the Rules. These provisions, prima facie, do not make the sale to Ardee Agencies contrary to any provision of the Act or the Rules without a further allegation, in the charge-sheet or in this Court, and proof of the fact that Ardee Agencies was not entitled to the possession of the quantity of injections sold to them under any Rule made by the State Government or that requisite documents enabling it to possess that quantity and purchase the same at Hathras was not presented before the petitioner at the time of sale by it. The case of the petitioner has been that all sales were made by it at the counter at Hathras. The proviso to Para 203 itself contemplates that in case a manufactured drug is to be transported by a licenced dealer or a chemist within the same District no permit is to be issued for its transport. Prima facie. The list of sales shows that all the sales were made by the the petitioner at its counter. Even the Collector has not found that sale was not made by the petitioner at its counter at Hathras. Where it is proved that sale was made by the petitioner at its counter at Hathras to a licenced dealer or chemist it would apparently be for the purchaser, who is transporting the injection outside the District of Aligarh, to possess a transport permit. Where it is proved that sale was made by the petitioner at its counter at Hathras to a licenced dealer or chemist it would apparently be for the purchaser, who is transporting the injection outside the District of Aligarh, to possess a transport permit. Any way, the petitioner may have adduced evidence to show that he had made the sale at its counter at Hathras and that it could do so without insisting that the purchaser should produce a permit for transport, if the allegation in that regard was a little more specific in the show cause notice. 27. Condition No. 4 of the licence envisages that the licensee shall store and sell the drugs only at the premises for which the licence is granted and shall not sell or store in any other place without a separate licence. There is no allegation in the show cause notice that there was a breach by the petitioner of this condition. This would lend credence to petitioners claim that it had made the sales at its counter. Could then it be said that the petitioner had committed breach of any condition of its licence or any provision of the Act or the Rules in selling the injections to Aardee Medical Agencies without insisting upon presentation by the purchaser of a transport permit without there being a further allegation that it was within the knowledge of the petitioner that these injections would be taken by the purchaser outside the district of Aligarh. 28. True, there were allegations of serious nature against the petitioner in the charge-sheet prepared by the C. B. I. but, these are only allegations which could raise suspicion against the petitioner. And suspicion cannot take the place of proof. The Act or the Rules do not permit action against a licensee on mere suspicion. 29. Rule 36, under which action has been taken against the petitioner, envisages either cancellation or suspension of the licence by the Collector upon the occurrence of one of the contingencies mentioned in sub-r. (i) or for some other relevant reason under sub-r. (ii). Both suspension or cancellation of the licence are envisaged by way of a final order. Suspension as an interim measure, pending finalisation of proceedings for cancellation of the licence, is not contemplated by the Rule. Both suspension or cancellation of the licence are envisaged by way of a final order. Suspension as an interim measure, pending finalisation of proceedings for cancellation of the licence, is not contemplated by the Rule. It is implicit in the provision that before even an order of suspension is passed, the licensee should be given an opportunity of putting forward his version in regard to the proposed suspension. This is not only on account of the principles of fair play, for, even an order of suspension adversely affects the licensee in carrying on his business, which must be stopped upon passing of the order of suspension but also on account of the fact that show cause notice is envisaged by the Rule itself where cancellation has to be made of the licence for some relevant cause. It is apparent that rules of a natural justice are not excluded by the Statute. Admittedly, before passing the order of suspension of the licence on July 4, 1982, no opportunity of any kind was afforded to the petitioner by the Collector. The order of suspension of the licence was bad both for the reason that it was passed as an interim measure, during the pendency of the proceedings for cancellation of the licence in pursuance of the show cause notice, as well as for the reason that it was passed without affording any opportunity to the petitioner before it was passed. 30. A perusal of the provisions of the Act and the Rules would suggest that the renewal of a licence is a matter of course when the requisite fee is deposited. A licence once granted is normally renewed from year to year except when it is cancelled by the authority or surrendered by the licensee. In this situation, it is all the more necessary that before curtailing the right of a licensee to carry on his business even by suspension of the licence, opportunity must be afforded to present his point of view against the proposed order of suspension. 31. It was strenuously contended by the learned Additional Chief Standing Counsel that in view of the allegations made against the petitioner and in view of the fact that a prosecution had been launched by the C. B. I. we may not interfere with the order of suspension or cancellation of the licence in our equitable jurisdiction under Article 226 of the Constitution. On giving anxious consideration to this aspect of the case, I feel that for so long as the accusation against the petitioner was only in the realm of suspicion it could not be utilised against it for it is axiomatic that suspicion, howsoever strong, cannot take the place of proof. Our refusal to intervene in the matter would, as it were, leave the petitioner condemned unheard, for, it has been found that the petitioner was not given opportunity of showing cause before the order of suspension was passed nor was he given effective opportunity to show cause before the passing of the order of cancellation of the licence. In case, after proper opportunity, the petitioner is found to be unsuitable to continue holding the licence in Form DD-6, proper orders in that regard can always be passed by the appropriate authority but, as far as the impugned orders of July 4, 1982 and December 2, 1982 are concerned they cannot be allowed to stand. 32. On conclusion of the hearing in the case, judgment was reserved on April 20, 1983. With an affidavit sworn on May 16, 1983, a copy of the judgment of the Special Magistrate, who tried Laxmi Chand and another on the charge-sheet submitted by the C. B. I. dated May 11, 1983 was filed on behalf of the petitioner. The Special Magistrate has acquitted the accused persons on the view that they were not guilty of the offences with which they were charged. How slender was the basis upon which the respondents proceeded against the petitioner is exemplified by this Judgment. 33. In conclusion, the petition succeeds and is allowed. The orders dated July 4, 1982 (annexure'5' to the writ petition) suspending the petitioner's licence and December 2, 1982 (annexure 'C. A. I.' to the supplementary counter-affidavit of Sri R. R. Patel sworn on December 19, 1982) are quashed and the respondents are restrained from interfering with the petitioner's right to carry on business except in accordance with law. 34. The petitioner will be entitled to its costs. R.M. Sahai, J.:- 35. I agree with brother Mehrotra J. that this petition should be allowed and orders dated 4th July and 2nd December, 1982 suspending and cancelling petitioner's licence, respectively in Form No. DD6 issued under Dangerous Drugs Rules, 1961 be quashed, because show cause notice issued on 4th July 1982 was vague. R.M. Sahai, J.:- 35. I agree with brother Mehrotra J. that this petition should be allowed and orders dated 4th July and 2nd December, 1982 suspending and cancelling petitioner's licence, respectively in Form No. DD6 issued under Dangerous Drugs Rules, 1961 be quashed, because show cause notice issued on 4th July 1982 was vague. It did not disclose names or details of those persons who were found to have been dead and to whom sale of Morphine Sulphate Injection in contravention of condition 8 of Licence was made. Nor did it disclose names of even those persons who according to report of Central Bureau of Investigations had denied to make any purchases for petitioner. From the order it does not appear if petitioner was even confronted with material, namely report of C. B. I., who had seized all documents and registers of petitioner also, which formed foundation for action against petitioner. 36. Further after judgment was reserved petitioner filed an application along with certified copy of order dated 11-5-1983 passed by Special Magistrate in case No. 11 of 1982 discharging proprietor of petitioner firm of criminal prosecution u/s 14 of Dangerous Drugs and Intoxicants Act, 1930 read with Sections 120B and 477 I.P.C. started on C. B. I. report as no prima facie case against petitioner was made out. It is not disputed that petitioner's licence was suspended due to investigation and report of C. B. L The order of suspension, therefore, also cannot stand. 37. In view of these it is not necessary to express any opinion if the order was under R. 36(1)(i) or 36(ii) or suspension under this rule is contemplated as final order. Nor it is necessary to examine submission of petitioner that even if sale was made to dead persons it would not amount to violation of condition of licence as petitioner had made sale to registered practitioners whose registration number etc. was mentioned in its register. For the same reason the argument of learned additional Chief Standing Counsel that once petitioner was found to have committed breach by selling to dead person it could not take cover under pretext of innocent mistake need not be examined.