Santokba - The Pharmacy - OPD (M/s. ), A Unit of Tara Medicose Pvt. Ltd. v. License Authority & Asst. Drug Controller, Jaipur
2018-11-27
ASHOK KUMAR GAUR
body2018
DigiLaw.ai
JUDGMENT : Ashok Kumar Gaur, J. The petitioner who is a licensee under the Drugs and Cosmetics Act, 1940 is aggrieved by the order dt.07.08.2018 passed by the Licensing Authority wherein the license of the petitioner has been “invalidated” under the provisions of Rule 66 (1) of the Drugs and Cosmetics Rules, 1945 (hereinafter shall be referred to as “the Rules, 1945”). The petitioner is also aggrieved by order dt.29.08.2018 passed by the Appellate Authority dismissing the appeal filed against the order dt.07.08.2018. 2. The petitioner has made following prayers in the present writ petition, which are quoted as under:— “It is, there fore, most respectfully prayed that your Lordships may graciously be pleased to call for and examine the record and thereafter may kindly accept and allow this Writ Petition with cost and by an appropriate writ, order or direction be pleased to: 1. Quash and set aside the impugned order dated 29.08.2018 (Annexure-1) passed by the Ld. Appellate Officer & Secretary, Department of Health And Family Welfare, Government of Rajasthan, in Appeal no. 43/2018; 2. Quash and set aside the Order dated 07.08.2018 passed by Respondent No. 1 (Annexure-5); 3. Direct the Respondent Authority to issue fresh Drug License to the Petition on Form 20, 21, 20B, 21B, 20F & 20G of the said Act of 1940 on the premises in issue i.e., Ground Floor, RDMC Block, OPD Building, Santokba Durlabhji Hospital, Bhawani Singh Road, Jaipur. 4. Quash/Cancel the following Drug Licenses issued to Rajasthan Rajya Sahakari Upbhokta Sangh Ltd. (CONFED), Medical Branch, on Petitioner's business premises located on Ground Floor, RDMC Block, OPD Building, Santokba Durlabhji Hospital, Bhawani Singh Road, Jaipur: (i) Form 20 -DRUG/2018-19/15804 valid from 07.08.2018 to 06.08.2023 (ii) Form 21- DRUG/2018-19/15805 valid from 07.08.2018 to 06.08.2023 5. Any other appropriate order or direction which may be considered just and proper in the facts of the circumstances of the case may also kindly be issued in favour of the Petitioner.” 3. The brief facts, as pleaded in the writ petition, are that the petitioner has been issued licenses under Rule 61 of the Rules, 1945.
Any other appropriate order or direction which may be considered just and proper in the facts of the circumstances of the case may also kindly be issued in favour of the Petitioner.” 3. The brief facts, as pleaded in the writ petition, are that the petitioner has been issued licenses under Rule 61 of the Rules, 1945. The licenses issued to the petitioner are as under:— “a. Wholesale Licenses- (a) Form 20B- JPR/2015/1564 Valid upto 18.02.2020 (b) Form 21B - JPR/2015/1565 Valid upto 18.02.2020 b. Retail Licenses: (a) Form 20 - JPR/2015/1562 Valid upto 18.02.2020 (b) Form 21 - JPR/2015/1563 Valid upto 18.02.2020 c. Form 20F - No. 1566-Retail license for Schedule X Drugs valid upto 18.02.2020. d. Form 20G - No. 1567-Wholesale license for Schedule X Drugs valid upto 18.02.2020.” 4. The petitioner has pleaded in his petition that he was running a drug store at Ground Floor, RDMC Block, OPD Building, Santokba Durlabhji Hospital, Bhawani Singh Road, Jaipur on the basis of duly executed agreement of leave and license dt. 12.02.2015 which later on came to be renewed vide agreement dt.21.03.2017 having its validity upto 31.03.2023. The petitioner has pleaded in his petition that there has been no allegation of any contravention of any of the provisions of the Drugs and Cosmetics Act, 1940 and the Rules, 1945 till filing of the writ petition. 5. The petitioner has pleaded that to the utter shock and dismay, on 07.08.2018 the Licensing Authority issued an order holding therein that the License Nos. JPR/2015/El 562 to E1567 under Form(s)-20, 21, 20B, 21B, 20F & 20G stood automatically invalidated from the date when the Jaipur Development Authority sealed the business premises of the petitioner located at Ground Floor, RDMC Block, OPD Building, Santokba Durlabhji Hospital, Bhawani Singh Road, Jaipur. 6. The petitioner has pleaded in his petition that the perusal of the order dt.07.08.2018 invalidating the licenses of the petitioner makes it clear that such order had been issued at the behest of letter issued by the Deputy Commissioner, Zone-I, Jaipur Development Authority dt.05.08.2018 requesting the Licensing Authority to cancel the license on account of alleged violation of certain conditions of allotment of land by Santokba Durlabhji Hospital Trust.
It was further mentioned in the impugned order dt.07.08.2018 that by another letter bearing No. D-2445 dt.05.08.2018, the Jaipur Development Authority had sealed the business premises of the petitioner along with other medicines, medical equipments, computers and other belongings of the petitioner and “possession” of the same was transferred to the Rajasthan Rajya Sahakari Upbhokfa Sangh Ltd. (CONFED) for running the petitioner's medical shop. 7. The petitioner has alleged in his petition that the letters referred in the impugned order being Nos. D-2453 and D-2445 dt.05.08.2018 were not provided to the petitioner. 8. The petitioner has pleaded that in the impugned order, a reference has further been made of a letter dt.06.08.2018 issued by the Drug Controller Officer to conduct survey of the business premise of the petitioner and submit a report. The impugned order takes into consideration the report dt.06.08.2018 of Drug Controller Officer and the Licensing Authority concluded that the petitioner does not have “legal possession” of the premises, as mandated under Rule 65-A of the Rules, 1945. 9. The petitioner has pleaded that after issuing order dt.07.08.2018 declaring the petitioner's Drug Licenses as “automatically invalidated” which was otherwise valid till 18.02.2020, the Drug Licensing Authority issued two drug licenses in favour of the Rajasthan Rajya Sahakari Upbhokta Sangh Ltd. (CONFED)-respondent No. 2 on the same premise where the petitioner was running its busines. 10. The petitioner has pleaded that feeling aggrieved against the illegal order dt. 07.08.2018, the statutory Appeal under Rule 66 (2) of the Rules, 1945 was filed before the Appellate Authority and Secretary, Department of Health and Family Welfare, Government of Rajasthan. The Appellate Authority vide order dt.29.08.2018 has upheld the order dt.07.08.2018 and has accordingly dismissed the appeal of the petitioner. 11. The petitioner has pleaded in his petition that the Appellate Authority under a complete misconception of facts as well as law erroneously decided the appeal. The petitioner in the instant petition has raised the following grounds to challenge the impugned orders:— (i) The impugned order dt.07.08.2018, invalidating the licenses, amounts to cancellation of licenses and the order of cancellation of licenses can only be passed as per the statutory requirement provided under Rules 66 of Rules, 1945.
The petitioner in the instant petition has raised the following grounds to challenge the impugned orders:— (i) The impugned order dt.07.08.2018, invalidating the licenses, amounts to cancellation of licenses and the order of cancellation of licenses can only be passed as per the statutory requirement provided under Rules 66 of Rules, 1945. (ii) The cancellation of licenses, without providing opportunity of hearing/opportunity to show cause, is a nullity in the eye of law and in absence of statutory compliance of principles of natural justice, the impugned order is non-est in the eye of law. (iii) The Appellate Authority has misconstrued and decided the appeal on the wrong premise holding that lease-deed of the petitioner of Santokba Durlabhji Hospital Trust was canceled by the Jaipur Development Authority and as such the Authority had no option except to cancel the licenses of the petitioner. 12. Learned counsel for the petitioner has reiterated the above noted submissions while making oral arguments. Counsel has submitted that the impugned order has been passed by the respondents by invoking Rule 65A of the Rules, 1945 by holding that the petitioner did not have legal possession and accordingly, the counsel submitted that even if violation of Rule 65A of the Rules, 1945 was to be considered by the Licensing Authority, the impugned order invalidating the licenses/canceling the licenses could not have been passed without the compliance of requirement of Rule 66 of the Rules, 1945. 13. Counsel further highlighted the fact that Rule 66 of the Rules, 1945 casts a duty on the Licensing Authority of giving the licensee an opportunity to show cause as why such an order should not be passed in writing stating the reasons thereof to cancel the license or to suspend it. 14. Counsel submitted that Rule 65A of the Rules, 1945 casts a duty on the Licensing Authority to seek information from a person who has been granted license and such demand has to be made by the Licensing Authority to submit documentary evidence in respect of ownership/occupation/rental or other basis of the premises. 15.
14. Counsel submitted that Rule 65A of the Rules, 1945 casts a duty on the Licensing Authority to seek information from a person who has been granted license and such demand has to be made by the Licensing Authority to submit documentary evidence in respect of ownership/occupation/rental or other basis of the premises. 15. Counsel submitted that Rule 65A of the Rules, 1945 has been violated by the respondents, as they assumed that the petitioner is not in possession of the premise and without seeking explanation or the requirement of Rule 65A of the Rules, 1945 to ask the information on demand, the entire exercise is vitiated in eye of law. 16. Counsel further argued that the requirement of giving a show cause notice and considering the reply filed by the incumbent/notice is a sine qua non for taking any administrative decision affecting the rights of a person. Counsel submitted that where the statute itself provides of giving a show cause notice, the compliance of the said requirement is mandatory and the respondents by not issuing any show cause notice, have caused prejudice to the rights of the petitioner to run the shop, even after having appropriate licenses. 17. Counsel for the petitioner has placed reliance on the following judgments of the Apex Court as well as High Courts:— (1) M/s. North Bihar Agency v. State of Bihar reported in (1981) 3 SCC 131 . (2) P.C. Guha and Sons v. State of West Bengal (Writ Petition No. 14918(W) of 2002) decided by the High court of Calcutta on 23.08.2004. (3) Nawal Kishore v. State of Rajasthan (S.B. Civil Writ Petition No. 700/1978) decided by this court vide order dt. 12.02.1979. (4) Mackinnon Mackenzie and Company Limited v. Mackinnon Employees Union reported in (2015) 4 SCC 544 . (5) Municipal Committee, Hoshiarpur v. Punjab State Electricity Board reported in (2010) 13 SCC 216 . 18. The respondent No. 1 has filed reply to the writ petition. The respondent No. 1 has pleaded in his reply that the Jaipur Development Authority had allotted land to the Santokba Durlabhji Hospital Trust at concessional rate and as per condition Nos. 8, 9 & 12 of the terms of allotment, any sort of commercial construction and activities were prohibited and further it was to entail cancellation of lease granted to such Trust on violation of such conditions.
8, 9 & 12 of the terms of allotment, any sort of commercial construction and activities were prohibited and further it was to entail cancellation of lease granted to such Trust on violation of such conditions. The respondent alleges that the premise in question was given to the petitioner on a license fee of Rs. 30,00,000/- per month or 22% of the net sales, whichever is higher. The respondent has alleged that the said agreement itself shows that the said premise was used for commercial gains and contrary to the terms of allotment of land to the SDMH Trust by the Jaipur Development Authority. The respondent No. 1 asserted that the Jaipur Development Authority due to the aforesaid contravention of terms and commercial activities carried out by the SDMH Trust against the terms of allotment, allotted the shop premises to CONFED. The respondent has supported the reasons given by the Appellate Authority that legal possession/occupation of the premises was not with the petitioner and the licenses were invalidated. 19. The respondent No. 1 has further pleaded that the petitioner himself had written a letter dated 06.08.2018 (Annexure-7 of the writ petition) informing the Drug Controller of Rajasthan that the Jaipur Development Authority had sealed the premise illegally on 31.07.2018 and on 04.08.2018 the premise which was sealed on 31.07.2018 was opened and in illegal manner some persons were interfering with the stock which was already lying inside the shop. It was further intimated in the said letter that on 05.08.2018 some persons had collected the medicines by putting them in boxes and as such the licensed premise was used by putting medicine of some other person. Counsel submitted that the petitioner informed about the possession being taken from them and as such the authority was without its domain to form an opinion that the petitioner was not in the possession of the premise for which licenses were issued to him. 20. The reply submitted by respondent No. 1 further states that before passing the order of invalidating the licenses, they got the inspection done of the premise and after a report being submitted, the opinion was formed that in absence of occupation of the premise by the petitioner, the licenses could not be continued and had to be invalidated. 21. Counsel for the State-respondent No. 1 Mr.
21. Counsel for the State-respondent No. 1 Mr. S.K. Gupta, learned Additional Advocate General has submitted that the order passed by the Licensing Authority was fully justified. The requirement under Rule 65A of the Rules, 1945 regarding ownership or occupation of the premise is a condition precedent for a valid license. 22. Counsel submitted that even after initial grant of license, the authority can always seek information during the period license is in force about ownership and occupation and if it finds that the licensee is not in the possession/occupation of the premise, the license can accordingly be invalidated or canceled. 23. Mr. S.K. Gupta has further submitted that in view of the report received from the Jaipur Development Authority, the letter from the petitioner and the inspection report, as carried out under Rule 65B of the Rules, 1945, the Licensing Authority had no option rather a compulsion to invalidate the licenses of the petitioner as he was no more in possession or occupation of the premises. 24. Counsel further submitted that “doctrine of compulsion” is attracted in the instant case as the Licensing Authority had no option except to invalidate the licenses as the licensee had no premises to run the shop. 25. Mr. S.K. Gupta further submitted that the Rules, 1945 though provide under Rule 66 to give a show cause notice before cancelling/suspending the license, however, in the wake of report being furnished under Rule 65B of the Rules, 1945, after proper inspection, no purpose would have been served to even serve a show cause notice to the petitioner. Mr. Gupta has submitted that the show cause notice in the present case was an empty formality as the petitioner himself admitted that possession of the premise has already been lost by him due to sealing of the shop by the Jaipur Development Authority and handing over the same to the other licensee-CONFED. 26. Mr. Gupta has further submitted that Licensing Authority has to ensure that medicines are supplied to the needy patients who are undergoing treatment in the hospital in a city like Jaipur and if no arrangement would have been made to provide medicines to such persons, the Licensing Authority would have been failing to ensure that Licensee run a shop properly to distribute the medicines. 27. Mr.
27. Mr. Bhrigu Sharma, counsel for the respondent No. 2 has submitted that the petitioner does not deserve any indulgence from this court as the petitioner has violated the conditions No. 8, 9 & 12 of the allotment of land by Jaipur Development Authority. Counsel submitted that SDMH Trust has entered into an illegal arrangement with the petitioner to run commercial activity and the allotment letter had specifically provided that if any of the conditions would be violated, the same will result in cancellation of allotment in favour of the SDMH Trust. 28. Counsel has submitted that the petitioner has not suffered or no prejudice has been caused to him and it does not lie in the mouth of the petitioner that show cause notice ought to have been given as per the Rule 66 of the Rules, 1945. Counsel has submitted that even notice could have been a “useless formality” as the petitioner admittedly is no more in possession of the premise and as such no right of the petitioner has been infringed. 29. Counsel has further submitted that the word “invalidated” which has been used in the impugned order may not be taken into by usage of the word and the real nature and character of the word is to be seen. Counsel submitted that real nature and character of invalidating a license will be cancellation and if the petitioner would have been afforded an opportunity of show cause, the same would not have any different result as the petitioner admittedly is not in possession of the premises. 30. Counsel further submitted that the respondent No. 2-CONFED is now a license holder and in case the petition of the petitioner is allowed, there will be more complications as the respondent No. 2 is already running a shop by having a proper license. 31. Counsel further submitted that the Appellate Authority has rightly taken a view that the issue is with regard to cancellation of lease of SDMH Trust and once lease has been cancelled, no right flows to a person who by virtue of some arrangement is permitted to run a shop to earn profit on commercial basis. 32. This court before dealing with the rival submissions of the parties would like to quote Rules 65A, 65B and 66 of the Rules, 1945, which are relevant for the present purpose and the same read as follows:— “65A.
32. This court before dealing with the rival submissions of the parties would like to quote Rules 65A, 65B and 66 of the Rules, 1945, which are relevant for the present purpose and the same read as follows:— “65A. Additional information to be furnished by an applicant for licence or a licensee to the Licensing Authority.- The applicant for the grant of a licence or any person granted a licence under this Part shall, on demand, furnish to the licensing authority, before the grant of the licence or during the period the licence is in force, as the case may be, documentary evidence in respect of the ownership of occupation or rental or other basis of the premises, specified in the application for licence or in the licence granted, constitution of the firm, or any other relevant matter which may be required for the purpose of verifying the correctness of the statements made by the applicant or the licensee, while applying for or after obtaining the licence, as the case may be. 65B. Inspection for verification of compliance.- The licensing authority shall cause inspection, by the Inspector appointed under the Act, of each premises licensed under this Part, to verify the compliance with the conditions of licence and the provisions of the Act and these rules, not less than once in three years or as needed as per risk based approach. 66.
65B. Inspection for verification of compliance.- The licensing authority shall cause inspection, by the Inspector appointed under the Act, of each premises licensed under this Part, to verify the compliance with the conditions of licence and the provisions of the Act and these rules, not less than once in three years or as needed as per risk based approach. 66. Cancellation and suspension of licences.- (1) The Licensing Authority may, after giving the licensee an opportunity to show cause why such an order should not be passed by an order in writing stating the reasons there for, cancel a licence issued under this Part or suspend it for such period as he thinks fit, either wholly or in respect of some of the substances to which it relates, if in his opinion, the licensee has failed to comply with any of the conditions of the licence or with any provisions of the Act or Rules there under: Provided that, where such failure or contravention is the consequence of an act or omission on the part of an agent or employee, the licence shall not be cancelled or suspended if the licensee proves to the satisfaction of the licensing authority- (a) that the act or omission was not instigated or connived at by him or, if the licensee is a firm or company, by a partner of the firm or a director of the company, or (b) that he or his agent or employee had not been guilty of any similar act or omission within twelve months before the date on which the act or omission in question took place, or where his agent or employee had been guilty of any such act or omission the licensee had not or could not reasonably have had, knowledge of that previous act or omission, or (c) if the act or omission was a continuing act or omission, he had not or could not reasonably have had knowledge of that previous act or omission, or (d) that he had used due diligence to ensure that the conditions of the licence or the provisions of the Act or the Rules there under were observed. (2) A licensee whose licence has been suspended or cancelled may, within three months of the date of order under sub-rule (1), prefer an appeal against that order to the State Government, which shall decide the same.” 33.
(2) A licensee whose licence has been suspended or cancelled may, within three months of the date of order under sub-rule (1), prefer an appeal against that order to the State Government, which shall decide the same.” 33. This court on conjoint reading of Rules 65A and 66 of the Rules, 1945 finds that a licensee either at the time of granting of license or during the currency period of license, has to show documentary evidence in respect of ownership/occupation of the premises which is specified in the application. Such information is to be given in the application form when any person applies for grant of license and during the currency period of license, the Licensing Authority, on demand, can ask for the documentary evidence in respect of ownership or occupation. This court finds that in the present case at hand, the information of ownership or occupation of the premises has not been sought by the Licensing Authority. 34. This court finds that the respondent No. 1 has taken a plea that the petitioner himself had written a letter on 06.08.2018 wherein he had informed that his premises was illegally put under seal by the Officials of Jaipur Development Authority on 31.07.2018. The letter written by the petitioner is reproduced hereunder:— Hindi 35. A bare reading of the above letter reveals that the petitioner had made a request that proper inspection is to be done in respect of the illegal action taken by the Jaipur Development Authority and there was already a dispute which was pending before the JDA Tribunal in respect of illegal possession being taken or seal being put on the premises in question. This letter further makes it clear that the petitioner has made a specific request before the Licensing Authority that before taking any action in respect of the licenses granted to him, the petitioner should be afforded an opportunity of hearing. The perusal of the said letter makes it very clear that the petitioner had apprehended that the Licensing Authority may take some measure prejudicial to its interest and accordingly a request was made to afford an opportunity of hearing before any action could be taken.
The perusal of the said letter makes it very clear that the petitioner had apprehended that the Licensing Authority may take some measure prejudicial to its interest and accordingly a request was made to afford an opportunity of hearing before any action could be taken. This court finds that if at all the respondent No. 1 had to take action or seek information under Rule 65A of the Rules, 1945, the proper course would have been to at least confront the petitioner with the material which had come in the possession of the Licensing Authority to judge the continuance of ownership or possession. The Licensing Authority could not have proceeded on the basis that some letter was written by the petitioner to the Jaipur Development Authority on 06.08.2018 inasmuch as the said letter did not amount to furnishing information, as was required under Rule 65A of the Rules, 1945. 36. The moot question before this court is with respect to the compliance of Rule 66 of the Rules, 1945. Rule 66 of the Rules, 1945 quoted in above paragraph would clearly show that the Licensing Authority after giving licensee an opportunity to show cause can cancel the license or suspend it for such period as it thinks fit. The Licensing Authority has been fastened with the liability that before it takes extreme step of either suspending or cancelling the license, at least a notice is required to be given or opportunity to show cause is to be afforded. 37. The submission of learned counsel for the petitioner that no notice or opportunity of hearing was afforded to them, this court finds substance in his submission. The Licensing Authority in the instant case has though used the word “invalidated”, however, there is no such term in the Rules, 1945 where license can be “invalidated”. The Drug License can either be cancelled or it can be suspended for a particular period. The invalidation of license amounts to cancellation of license and as such the rigors of Rule 66 of the Rules, 1945 are required to be followed. 38. The submission of learned counsel for the State and private respondent that giving a show cause notice was an empty formality and no purpose would have been served, this court finds no substance in such submission made by learned counsel for the respondents.
38. The submission of learned counsel for the State and private respondent that giving a show cause notice was an empty formality and no purpose would have been served, this court finds no substance in such submission made by learned counsel for the respondents. This court finds that when the petitioner in the instant case was questioning the very action of the Jaipur Development Authority and other authorities in taking illegal and extreme step of sealing his premises and throwing his goods out of the premises and the matter was subjudice before the JDA Tribunal, the petitioner had every right to defend by submitting before the authorities. The theory of useless or empty formality cannot be applied in the facts of the present case. 39. The Apex Court in the case of Dharampal Satyapal Limited (supra) has laid down the principle that it is not permissible for the authority to jump over the compliance of the principles of natural justice on the ground that even if hearing had been provided, it would have served no useful purpose. The opportunity of hearing will service the purpose or not has to be considered at a later stage and such things cannot be presumed by the authorities. The relevant paragraphs 42, 43 & 45 of the judgment are reproduced as under:— “42. So far so good. However, an important question posed by Mr. Sorabjee is as to whether it is open to the authority, which has to take a decision, to dispense with the requirement of the principles of natural justice on the ground that affording such an opportunity will not make any difference? To put it otherwise, can the administrative authority dispense with the requirement of issuing notice by itself deciding that no prejudice will be caused to the person against whom the action is contemplated? Answer has to be in the negative. It is not permissible for the authority to jump over the compliance of the principles of natural justice on the ground that even if hearing had been provided it would have served no useful purpose. The opportunity of hearing will serve the purpose or not has to be considered at a later stage and such things cannot be presumed by the authority. This was so held by the English Court way back in the year 1943 in the case of General Medical Council v. Spackman.
The opportunity of hearing will serve the purpose or not has to be considered at a later stage and such things cannot be presumed by the authority. This was so held by the English Court way back in the year 1943 in the case of General Medical Council v. Spackman. This Court also spoke in the same language in the case of The Board of High School and Intermediate Education, U.P. v. Kunnari Chittra Srivastava, as is apparent from the following words: “7. The learned counsel for the appellant, Mr. C.B. Aggarwal, contends that the facts are not in dispute and it is further clear that no useful purpose would have been served if the Board had served a show cause notice on the petitioner. He says that in view of these circumstances it was not necessary for the Board to have issued a show cause notice. We are unable to accept this contention. Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority's satisfaction that the person to be penalised has no defence but on the nature of the order proposed to be passed.” 43. In view of the aforesaid enunciation of law, Mr. Sorabjee may also be right in his submission that it was not open for the authority to dispense with the requirement of principles of natural justice on the presumption that no prejudice is going to be caused to the appellant since judgment in R.C. Tobacco had closed all the windows for the appellant. 44. xx.xxxxx 45. Keeping in view the aforesaid principles in mind, even when we find that there is an infraction of principles of natural justice, we have to address a further question as to whether any purpose would be served in remitting the case to the authority to make fresh demand of amount recoverable, only after issuing notice to show cause to the appellant. In the facts of the present case, we find that such an exercise would be totally futile having regard to the law laid down by this Court in R.C. Tobacco.” 40. Learned counsel for the respondent-State Mr. S. K. Gupta has submitted that in the same judgment, the Apex Court has also coined and reiterated the theory of “useless formality”.
In the facts of the present case, we find that such an exercise would be totally futile having regard to the law laid down by this Court in R.C. Tobacco.” 40. Learned counsel for the respondent-State Mr. S. K. Gupta has submitted that in the same judgment, the Apex Court has also coined and reiterated the theory of “useless formality”. This court finds that the Apex Court has observed in paras-45 and 46 of the Dharampal Satyapal's case that such an exercise would be totally futile as per the law already laid down by the Apex Court in R.C. Tobacco (P) Ltd. v. Union of India reported in (2005) 7 SCC 725 . 41. This court finds that the principle which has been laid down by the Apex Court requires that the authorities should not conclude without compliance of principles of natural justice that hearing would afford no useful purpose. 42. The Apex Court in Municipal Committee, Hoshiarpur v. PSEB (supra) has dealt with the issue of compliance of rules of natural justice. The Apex Court has laid down the principle that rules of natural justice namely nemo judex in causa sua, and audi alteram partem now have a definite meaning and connotation in law and their contents and implications are well understood and firmly established and they are nonetheless non-statutory. 43. The Apex Court has further held that there may be cases where on admitted and undisputed facts, only one conclusion is possible and in such an eventuality, the application of the principles of natural justice would be a futile exercise and an empty formality. The Apex Court in para-34 of the said judgment has held that there may be cases where non-observance of natural justice is itself prejudice to a person and proof of prejudice is not required at all. 44. The non-compliance with a statutory requirement of law or the principles of natural justice, violated under some circumstances, may itself be prejudicial to a party and in such an eventuality it is not required that a party has to satisfy the court that his cause has been prejudiced for non-compliance of the statutory requirement of principles of natural justice. The paragraphs 32 to 36 of the said judgment, being relevant for the present context, are reproduced as under:— “32.
The paragraphs 32 to 36 of the said judgment, being relevant for the present context, are reproduced as under:— “32. The two rules of natural justice, namely, nemo judex in causa sua, and audi alteram partem now have a definite meaning and connotation in law and their contents and implications are well understood and firmly established; they are nonetheless non-statutory. The court has to determine whether the observance of the principles of natural justice was necessary for a just decision in the facts of the particular case. (Vide: The Chairman, Board of Mining Examination and Chief Inspector of Mines v. Ramjee, Union of India v. Tulsiram Patel and Managing Director, ECIL, Hyderabad v. B. Karunakar.) 33. There may be cases where on admitted and undisputed facts, only one conclusion is possible. In such an eventuality, the application of the principles of natural justice would be a futile exercise and an empty formality. (Vide: State of U.P. v. Om Prakash Gupta, S.L. Kapoor v. Jagmohan and U.P. Junior Doctors' Action Committee v. Dr. B. Sheetal Nandwani) 34. However, there may be cases where the non-observance of natural justice is itself prejudice to a person and proof of prejudice is not required at all. In A.R. Antulay v. R.S. Nayak, this Court held as under: “55. ……No prejudice need be proved for enforcing the fundamental rights. Violation of a fundamental right itself renders the impugned action void. So also the violation of the principles of natural justice renders the act a nullity.” 35. Similarly, in S.L. Kapoor (supra), this Court held: “24. ….The non-observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. It ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced.” 36. In view of the above, in case there is a non-compliance of a statutory requirement of law or the principles of natural justice have been violated under some circumstances, non-compliance of the aforesaid may itself be prejudicial to a party and in such an eventuality, it is not required that a party has to satisfy the court that his cause has been prejudiced for non-compliance of the statutory requirement or principles of natural justice.” 45.
This court finds that once in the Rules, 1945 itself there is a provision of affording an opportunity of hearing or following the principles of natural justice, the respondents cannot be allowed to plead that the same would be an empty formality. 46. This court further finds that in the order passed by the Appellate Authority, the Appellate Authority has recorded a finding erroneously that the dispute relates to the determination of lease and if it has been cancelled, the petitioner cannot be allowed to have a license. This court finds that the petitioner has challenged invalidation/cancellation of his licenses and the Appellate Authority was only concerned with the impugned order passed by the Licensing Authority. The issue of cancellation of lease was not required to be looked into by the Appellate Authority. 47. The submission of learned counsel for the respondents that third party right has been created and now a medical shop is being run by CONFED, this court without commending anything on merits with regard to grant of license in favour of CONFED, deems it proper to observe that the impugned order whereby license of the petitioner has been cancelled, has not been passed in accordance with law and as such the order dt.07.08.2018 deserves to be set aside. 48. Mr. S.K. Gupta, Additional Advocate General in the last submitted that if at all this court deems it proper to set aside the impugned orders, the Licensing Authority may not be prevented from taking appropriate action after following due process of law. This court finds that in case the Licensing Authority finds it proper for taking any action prejudice to the interest of the petitioner, the same can always be done after following due process of law and after giving proper opportunity of hearing and following the principles of natural justice. 49. Consequently, the instant writ petition is allowed and the impugned order dt.07.08.2018 passed by the Licensing Authority and the order dt.29.08.2018 passed by the Appellate Authority are quashed and set aside. No costs.