Research › Browse › Judgment

Rajasthan High Court · body

1996 DIGILAW 1043 (RAJ)

Gupta Medical Store, Kota v. Union of India

1996-09-12

V.K.SINGHAL

body1996
Honble SINGHAL, J.–All these three writ petitions are disposed of by this common Judgement, since the controversy involved is common to all of them. The provisions of Rule 64(2) of the Drugs and Cosmetics Act, 1945, have been challenged. (2). The petitioners are aggrieved by the action of respondent in fixing the mi- nimum requirement of 10 Mtr. of space for storage of the drugs for which the licence was granted and renewal is sought. The Drugs & Cosmetics Act, 1940 was inacted to regulate the import, manufacturer, distribution and sale of drugs and cosmetics. The drugs and cosmetic Rules, 1945, have been framed under the said Act. Rule 64 is in respect of the conditions to be specified before a licence in Form No. 20, 20-B, 20-F, 20-G, 21 or 21-B, is granted or renewed. It is provided that a licence to sell, stock, exhibit, or offer for sale or distribute, drugs shall not be be granted or renewed to any person unless the authority empowered to grant the licence is satisfied that the premises in respect of which the licence is to granted or renewed are adequate, equipped with the proper storage accomoda- tion for preserving the properties of the drugs to which the licence applies and are in charge of a person competent in the opinion of the licensing authority to supervise and control, the sale, distribution and preservation of drugs. Sub-rule 2 of Rule 64 and second proviso has required an area of not less than 10 Sq.mtr. for grant or renewal of the licence in form No.20-B or Form 21-B. Earlier the restriction was only for grant of licence but by amendment dated 6th June 1988, even the renewal cannot be made if the Whole-saler is not having an area of not less than 10 sq. meter. for grant or renewal of the licence in form No.20-B or Form 21-B. Earlier the restriction was only for grant of licence but by amendment dated 6th June 1988, even the renewal cannot be made if the Whole-saler is not having an area of not less than 10 sq. meter. The form No. 20-B is applicable in respect of licence to sell, stock or exhibit or offer for sale or distribute by wholesale, drugs other than those specified in Schedule C,C(1) & X. While Form No.21-B is applicable to the licence to sell store or exhibit or offer for sale or distribute by whole sale drugs drugs specified in Schedule-C and C-1 excluding those specified in Schedule X. Thus, in respect of the specified in Schedule X, there is no restriction with regard to the area of 10 Sq.meter, while in respect of the drugs specified in Schedule C & C1 and other than schedule X, the requirement of 10 Sq.mtr. is there. (3). The submission of the learned counsel for the petitioners is that the restriction is unreasonable arbitrary and violative to Articles 14 and 19(1)(g) of the Constitution of India. Reliance has been placed on the decision of Apex Court in the case of Chintaman Rao vs. State of Madya Pradesh (1), wherein it was observed that the phrase `reasonable restriction in Article 19(6) connotes that the land taken imposed on a person in enjoyment of a right should not be arbitrary or of excessive nature beyond what is required in the interests of the public. The word ``reasonable implies intelligent care and deliberation i.e. the choice of a course which reason dictates legislation which arbitrarily or excessively invades the right, cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1)(g) and social control permitted by clause (6)of Article 19, it must be held to be wanted in that quality. (4). Reliance has been placed in the case of Pathumma and others vs. State of Kerala & Ors. (4). Reliance has been placed in the case of Pathumma and others vs. State of Kerala & Ors. (2) In this case the Apex Court has laid- down various tests of reasonableness and it was observed : ``(1) that in judging the reasonableness of the restrictions imposed by clause (5) of Article 19, the Court has to bear in mind the Directive Principle of State Policy, AIR 1973 SC 1461 : AIR 1976 SC 490 , AIR 1957 SC 699 , AIR 1977 SC 1825 and AIR 1951 SC 318 , Foll. (Para 8) (2) that restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. AIR 1951 SC 118 and AIR 1954 SCC 244 Foll. (Para 14) (3) that in order to judge the quality of the reasonableness no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will very from case to case. AIR 1952 SC 196 , AIR 1958 SC 731 ; AIR 1959 SC 1124 ; AIR 1960 SC 1980 and AIR 1961 SC 1602 . Foll. (Para 15) (4) that a just balance has to be struck between the restriction imposed and the social control envisaged by clause (6) of Article 19. AIR 1960 SC 430 and AIR 1971 SC 2164 . Foll. (Para 18) (5) that there must be a direct and proximate nexus or a reasonable connection between the restriction imposed and the object which is sought to be achieved in other words, the Court has to see whether by virtue of the restriction imposed on the right of the citizen at the object of the statute is really fulfilled or frustrated. AIR 1960 SC 1080 and AIR 1963 SC 812 Foll. (6) that court must see the prevailing social values whose needs are satisfied by restrictions meant to protect social welfare. AIR 1964 SC 416 and AIR 1952 SC 196 , Followed (Para 22) (7) that so far as the nature of reasonableness is concerned it has to be viewed not only from the point of view of the citizen but the problem before legislature and the object which is sought to be achieved by the statute. AIR 1964 SC 416 and AIR 1952 SC 196 , Followed (Para 22) (7) that so far as the nature of reasonableness is concerned it has to be viewed not only from the point of view of the citizen but the problem before legislature and the object which is sought to be achieved by the statute. In other words the, Courts must see whether the social control envisaged in clause (6) of Article 19 is being effectuated by the restrictions imposed on the fundamental right. AIR 1958 SC 731 Followed (Para 24) It was also observed that : ``64. What Article 14 guarantees is the right to equality in directing that the State shall not deny to any person equality before the law or the equal protection of the laws within the country. The prohibition is however not absolute inasmuch as this court has taken the view that it incorporates the doctrine of `classification (see Makhan Lal vs. Union of India (1961) 2 SCR 120 ; ( AIR 1961 SC 392 )). It is therefore, equally well settled that Art. 14 will not prevent the making of a law which gives rise to a classification based on any intelligible differential having a rational relation with the object to be achieved thereby. (5). The decision in the case of M/s. Laxmi Khandsari vs. State of U.P. (2), is also relied to show that :– ``it is abundantly clear that fundamental rights enshrined in part-III of the Constitution are neither absolute nor unlimited but are subject to reasonable restrictions which may be imposed by the State in public interest under Clause 2 to 6 of Article 19. As to what are reasonable restrictions would naturally depend on the nature and circumstances of the case, the character of the statute, the object which it seeks to serve, the existing circumstances, the extent of the evil sought to be remedied as also the nature of restraint or restriction placed on the rights of the citizen. It is difficult to law down any hard or fast rule of universal application but this court has consistently held that in imposing such restrictions the State must adopt an objective standard amounting to a social control by restricting the rights of the citizens where the necessities of the situation demand. It is difficult to law down any hard or fast rule of universal application but this court has consistently held that in imposing such restrictions the State must adopt an objective standard amounting to a social control by restricting the rights of the citizens where the necessities of the situation demand. It is manifest that in adopting the social control one of the primary considerations which should weigh with the Court is that as the directive principles contained in the Constitution aim at the establi- shment of an egalitarian society so as to bring about a welfare State within the framework of the Constitution, these principles also should be kept in mind in judging the question as to whether or not the restrictions are reasonable. If the restrictions imposed appear to be consistent with the directive principles of State policy they would have to be upheld as the same would be in public interest and manifestly reasonable. Further restrictions may be partial, complete permanent, or temporary but they must bear a close nexus with the object in the interest which they are imposed. Sometimes even a complete prohibition of the fundamental right to trade may be upheld if the commodity in which the trade is carried on is essential to the life of the community and the said restriction has been imposed for a limited period in order to achieve the desired goal. Another important consideration is that the restrictions must be in public interest and are imposed by striking a just balance between the deprivation of right and danger or evil sought to be provided.Thus freezing of stocks of food-grains in order to secure equitable distribution and availability on fair prices have been held to be a reasonable restriction in the cases of Narendra Kumar vs. The Union of India 1960 (2) SCR 375 ( AIR 1960 SC 430 ); Diwan Sugar & General Mills (P) Ltd. vs. The Union of India 1959 (2) Suppl. SCR 123 (AIR 1959 SC 629) and the State of Rajasthan vs. Nath Mal 1954 SCR 982 ( AIR 1954 SC 307 ). (6). SCR 123 (AIR 1959 SC 629) and the State of Rajasthan vs. Nath Mal 1954 SCR 982 ( AIR 1954 SC 307 ). (6). On the basis of the above decision, it is contended that the restriction of 10 sq.meter cannot be said to be reasonable as it has no nexus to the object sought to be achieved and the exclusion of the goods of category specified in Schedule-X creates discrimination and the rule making authority has no power for prescribing this restriction. (7). On behalf of the respondents,it is stated that in the case of Anil Medicos, the petitioner has requested three months time before the Appellate Authority which was allowed by order dated 31.12.1991. It is further submitted that the licence itself was granted in violation of the rules. Now the petitioner is not justified to challenge the renewal of licence. It is stated that in the Drug Consultative Commi- ttee Meeting, complaints were received that the licensees are indulging in malpractices by storage of goods at places other than licenced premises and manipulating their record of purchase and sell with sole intention to over come the shortage of licenced premises. These drugs for which restrictions have been imposed require the specific storage condition of temperature, humidity and proper storage of these drugs which may lead to deterioration of quality of drugs which reaches the consumer/patient and it was only for the purpose of accommodating the necessary equipment in the maintenance of storage conditions, temperature and humidity and also that the record/purchase, sales and stock is also maintained at the licence premises. This minimum requirement of the space was contemplated as one of the condition for grant of licence/renewal. The draft of the amendment was notified on 21.3.80 and after considering the objections raised rule was amended. Consent of Drugs Technical Advisory Board which is the Apex rule making body under the Drugs and Cosmetics Act, was also obtained and the suggestions from the public and persons who are effected by the amendment were invited. But no such objection or suggestion was received. (8). On behalf of the Controller and Director of Drugs, it is stated that the licencing authority has to satisfy himself that the premises in repsect of which the whole-sale licence is to be granted or renewed is having an area of not less than 10 sq. meter. But no such objection or suggestion was received. (8). On behalf of the Controller and Director of Drugs, it is stated that the licencing authority has to satisfy himself that the premises in repsect of which the whole-sale licence is to be granted or renewed is having an area of not less than 10 sq. meter. The rationale for this condition is stated to be that at-least the space must be such which is sufficient for the storage of medicines in the proper manner and as per specifications as they are to be kept at a particular temperature. The provision is said to be in the interest of the society. (9). I have considered over the matter. Article 14 of the Constitution forbids an arbitrary discrimination or classification. Here the wholesale licences have been categorised in respect of two types of drugs which is specified in Schedule C and C-1 the other which are specified in schedule other than Schedule-X. This classification is said to be on account of the particular temperature/humidity etc. which is required for these medicines and a separate list has been provided thereof. The requirement under Rule 64(2) of minimum of 10 Sq.meter, therefore, cannot be challenged on the ground of arbitrary discrimination. So far as the persons who are having wholesale licence of categories other than schedule-X and the similarly situated wholesale dealers dealing in the drugs of schedule-X it has differently been considered. This is not prohibited under Article 14 of the Constitution. (10). In the case of Viklad Coal Merchand, Patiala and others, vs. Union of India and others (3), it was observed by the Apex Court that the guarantee under Article 19(1)(g) to the Constitution is fundamental freedom of the petitioners to carry on their occupation, trade or business and this fundamental freedom is subject to reasonable restriction, that can be imposed by law relating to the carrying on by the State or by a Corporation owned or controlled by the State of any trade business, industry of service whether to the exclusion complete or partial of citizens or otherwise. (11). (11). The word `reasonable has been considered to be an adjective and it is inevitable that the social philosopy and the scle of values of the Judges partici- pating in the decision should play an important part and the limit to their interference with legislative judgment in such cases shall only be dictated by their sense of responsibility to see that the soverieng restriction that the Constitution has contemplated is not only for public of their way of thinking through the elected representative of the people in authorising the imposition of the restrictions considered to be reasonable. What is contemplated by the word reasonable is that the restriction should be reasonable in relation to the subject and even in certain circumstances it may extent to complete prohibition. The judicial review is permissible. To see that in the facts of particular case the restriction is reasonable and has not become unreasonable is permissible. (12). The rules which are framed are placed in the Parliament. It has to be seen as to whether there is a proper balance between he freedom guaranteed under Article 19(1)(g) and Social Control permitted by Clause 6 of Article 19. The rules which have been framed are of the Central Government and are applicable throughout the country. Considerable time has already passed and it has not been brought to the notice of this court that any decision has been given by any other court where this matter is agitated with regard to the validity of rule in dispute. For the practical difficulty of few of the traders, the rule cannot be declared invalid if the society as a whole is benefited or if no problem arises to the trade in general in respect of wholesale drugs. The test which has been laid down by the Apex Court that it should be necessary and should not be excessive or should not be arbitrary. While taking into consideration, the reply of the respondents that the restriction of 10 sq.meter was for the benefit of the soceity as a whole and there may be circumstances that space and huge quantity of drugs are required. In order to keep the drugs at different places or out of control drug authorities it was in the interest of public and for implementation of the Act. In order to keep the drugs at different places or out of control drug authorities it was in the interest of public and for implementation of the Act. All such activities should be at one place for which the minimum requirement of 10 sq.meter cannot be considered to be arbitrary or violative of provisions of Article 14 or 19(1)(g) of the Constitution. The writ petitions are having no force and dismissed.