Research › Search › Judgment

Patna High Court · body

2003 DIGILAW 833 (PAT)

Raptakos Brett & Co. Limited v. State Of Bihar

2003-08-12

AFTAB ALAM

body2003
Judgment 1. This writ petition is filed challenging the order dated 10.6.2003 (Annexure-17) passed by the Minister, Health (the appellate authority) in Appeal No. 14/2003 filed by the petitioner. By the impugned order he rejected the petitioners appeal and affirmed the order passed by the Licensing authority under his memo No. 695 dated 26.5.2003 (Annexure-14) by which the petitioners whole-sale and retail drug licenses in forms 20B and 21B respectively were put under suspension for three months. 2. The petitioners establishment was inspected by the Drug Inspector-cum-Chief Hospital Pharmacist, P.M.C.H. on 29.4.2003. He made an inspection report on the same date, indicating the irregularities found in course of inspection. The petitioner was given a show cause notice dated 5.5.2003 (Annexure-11) by the Regional Licensing Authority. In the notice the petitioner was asked to show cause why the Drugs licenses issued in its favour be not suspended and cancelled for violation of (i) the different provisions of the Drugs (Prices Control) Order, 1995 and (ii) the provisions of Rule 96 of the Drugs & Cosmetics Rules, regarding the manner of labelling. The show cause notice also enclosed a copy of the inspection report. From the inspection report two chargers are discernible, one relating to the over-pricing of Hovite Drops 15rnl and the other relating to incomplete labelling of Neopeptine Drops and Neopeptine liquid. In regard to Hovite Drops 15ml the National Pharmaceuticals Pricing Authority had fixed its ceiling price at Rs. 10.36 paise but the price of this formulation, manufactured by Svaidyam Pharmaceuticals and Chemicals Pvt. Limited, 11-A Arcot Road, Porur, Chennai, found in the petitioners establishment was shown as Rs. 27/-. This was far in excess of the ceiling price fixed by the N.P.P.A. for the formulation and hence, in clear violation of the provisions of Drugs (Prices Control) Order, 1995. 3. As regards the labelling of Neopeptine Drops and Neopeptine Liquid it was stated in the inspection report that these formulations contained Papain IP which fell under the category of Enzyme and the label of the formulation was, therefore, required to state the enzyme activity which was wanting on the formulation lable. 3. As regards the labelling of Neopeptine Drops and Neopeptine Liquid it was stated in the inspection report that these formulations contained Papain IP which fell under the category of Enzyme and the label of the formulation was, therefore, required to state the enzyme activity which was wanting on the formulation lable. Apart from this, the inspection report indicated that at the time of inspection Shri T.P. Nath (whose name was shown against the column of licence holder in the report) was absent; in the column of competent person; the name of Amit Kumar was shown who was reported to be present at the time of inspection. The report further indicated that one Rajesh Kumar Sinha was also present at the time of inspection. 4. It is, however, significant to note that in the show cause notice there was no charge that the licensee had made any change in the constitution of the firm without any intimation to the Licensing authority nor this charge is discernible from a perusal of the inspection report, a copy of which was enclosed with the show cause notice. 5. The petitioner gave his reply to the show cause notice in which it was. stated that the price of Hovite Drops was fixed by its manufacturer Svaidyam Pharmaceuticals and Chemicals Pvt. Limited and there was no violation of any statutory provisions on the part of the petitioners. The charge with reference to the improper labelling of Neopeptine Drops and Neopeptine Liquid was also explained. 6. The Licensing authority accepted the petitioners show cause in respect of the second charge relating to the labelling of Neopeptine Drops and Neopeptine Liquid and dropped that charge but in regard to the over-pricing of Hovite Drops the petitioners explanation was not accepted. The Licensing authority held that the petitioner was charging from the buyers price of the formulation far in excess of the ceiling price fixed by the N.P.P.A. in violation of the provisions of Drugs (Prices Control) Order, 1995. The Licensing authority further held that in the licenses issued to the petitioner one Shri T.P.Nath was shown as the Power of Attorney Holder. In the inspection report he was found absent and in his place there was one Rajesh Kumar Sinha. The Licensing authority further held that in the licenses issued to the petitioner one Shri T.P.Nath was shown as the Power of Attorney Holder. In the inspection report he was found absent and in his place there was one Rajesh Kumar Sinha. It was further stated that the name of the latter (Rajesh Kumar Sinha) first came to the notice of the Licensing authority at the time of the renewal of the licences in March, 2003 and then on an enquiry made from the office of the Licensing authority it was disclosed by the petitioner that Shri T.P.Nath was removed earlier on 21.8.2001 and in his place Shri Rajesh Kumar Sinha was brought in as the Power of Attorney Holder. It was further stated that this change was effected without any intimation or notice to the Licensing authority which was in violation of the term of the licenses as contained in paragraph 5 of the licence in form 20B and paragraph 6 of the licence in form 21B. For violation of the provisions of the Drugs (Prices Control) Order, 1995 and for contravention of the term of the licenses as contained in paragraphs 5 and 6 respectively, the Licensing authority put the petitioners licenses under suspension for three months and directed it to keep the establishment closed for the period of suspension. 7. The petitioners appeal was rejected by the Appellate Authority on the same two charges. 8. Mr. Abhay Kumar Singh, Sr. Advocate appearing for the petitioners submitted that the orders of suspension of the licences were misconceived, invalid and untenable. Mr. Singh submitted that the Drug Licence could be suspended and/or cancelled for any breach of the conditions specified in the licence or for violation of any provisions of the Drugs and Cosmetics Act, 1940 and the rules thereunder. He further submitted that any alleged violation of the provisions of the Drugs (Prices Control) Order, 1995 could not form the basis of suspension of the license issued under the Drugs and Cosmetics Rules. In this regard Mr. Singh submitted that the Drugs (Prices Control) Order, 1995 was a part of an altogether different statutory scheme. He pointed out that the Drugs (Prices Control) Order, 1995 was made under section 3 of the Essential Commodities Act, 1995 (and not under the Drugs and Cosmetics Act or the Rules). In this regard Mr. Singh submitted that the Drugs (Prices Control) Order, 1995 was a part of an altogether different statutory scheme. He pointed out that the Drugs (Prices Control) Order, 1995 was made under section 3 of the Essential Commodities Act, 1995 (and not under the Drugs and Cosmetics Act or the Rules). The provisions of the Essential Commodities Act and the Drugs (Prices Control) Order, 1995 provided a complete machinery for the enforcement of the provisions contained therein and also provided a complete scheme for dealing with cases of violation of those provisions. Rule 24 of the Drugs (Prices Control) Order, 1995 provided that any contravention of any of the provisions of the Order would be punished in accordance with the provisions of the Essential Commodities Act. The Essential Commodities Act in section 7 provided the penalty for contravention of any order made under section 3 of the Act. Mr. Singh submitted that there was no provision under the Drugs and Cosmetics Act and the rules framed thereunder or in the Essential Commodities Act or the Drugs (Prices Control) Order providing for suspension and/or cancellation of the Drugs Licenses for any violation of the provisions of the Drugs (Prices Control) Order; neither there was any such condition in the licence. 9. The submission of Mr. Singh appears to be well founded and I am inclined to hold that the violation of the provisions of Drugs (Prices Control) Order cannot validly form the basis of cancellation of the drugs licences, though the person committing violation may be liable to penalty under section 7 of the Essential Commodities Act. 10. 9. The submission of Mr. Singh appears to be well founded and I am inclined to hold that the violation of the provisions of Drugs (Prices Control) Order cannot validly form the basis of cancellation of the drugs licences, though the person committing violation may be liable to penalty under section 7 of the Essential Commodities Act. 10. Coming next to the second charge regarding violation of the term of the licence as contained in paragraph 5 of the licence in form 20B and paragraph 6 of the licence in form 21B, it may be noted that the relevant condition reads as follows : "The licensee shall inform the Licensing authority in writing in the event of any change in the constitution of the firm operating under the licence, where any change in the constitution of the firm takes place, the current licence shall be deemed to be valid for a maximum period of three months from the date on which the change takes places unless in the meantime, a fresh licence has been taken from the Licensing Authority in the name of the firm with the changed Constitution." 11. Mr. Singh submitted that as a matter of fact due intimation in regard to the change was given to the Licensing authority in time. He invited my attention to the postal certificate under which the communication was sent to the Licensing authority. He further submitted that Shri T.R Nath and after him Shri Rajesh Kumar Sinha were the local Manager of the licensee company and any change of the local Manager did not amount to any change in the constitution of the firm operating under the licence and therefore there was no question of any breach of this condition. 12. It is not necessary to go into these questions because the petitioners case in regard to the alleged contravention of the condition of licence is to succeed on the simple ground that this charge was not mentioned in the show cause notice or the inspection report enclosed with the notice. Rule 66 provides that an order of suspension or cancellation of the licence can be passed only after giving the licensee an opportunity to show cause why such an order should not be passed. Rule 66 provides that an order of suspension or cancellation of the licence can be passed only after giving the licensee an opportunity to show cause why such an order should not be passed. The charge forming the basis of the order or suspension/cancellation of the licence must, therefore, form part of the show cause notice so that the licensee may get an opportunity to give his explanation in regard to that charge, A charge that is not stated in the show cause notice cannot be later used as a ground for suspension/cancellation of the licenses. 13. On hearing counsel for the parties and on going through the writ petition and the counter affidavit filed on behalf of the State I find and hold that the first charge regarding over pricing of the formulation Hovite Drops had no bearing on the question of suspension/cancellation of the Drugs Licences and the second groung regarding breach of the condition of the licenses, also could not form the basis of the order of suspension because it was not stated in the show cause notice. The impugned orders are, therefore, held to be invalid and unsustainable in law and are set aside. However, for the alleged over-pricing of the formulation Hovite Drops 15ml, the authorities will be free to take such action against the petitioners as may be permissible in law. 14. In the result, this writ petition is allowed but with no order as to costs. q