Sri Amrutha Sai Medical & General Stores, Rep. by its Proprietor v. State of Andhra Pradesh
2022-11-23
CHEEKATI MANAVENDRANATH ROY
body2022
DigiLaw.ai
ORDER : This Writ Petition for mandamus is filed to declare the action of respondent No.4 in cancelling the drug licence of the petitioner without giving reasonable opportunity to the petitioner, as illegal and violative of principles of natural justice and consequently, prayed to set aside the impugned order, dated 19.01.2019. 2. The petitioner is M/s.Sri Amrutha Sai Medical and General Stores, represented by its proprietor, doing business in running a medical shop. Licence in Form-20 and 21 bearing No.232, dated 23.01.2013, was granted to the petitioner by the licensing authority to do the said business and the said licence is valid upto 22.01.2023. 3. While the petitioner was doing the said business from the year 2013, as per the aforesaid licence that was granted to the petitioner, earlier on 29.06.2017, the Drug Inspector, Adoni, inspected the business premises of the petitioner and noticed that the petitioner has contravened certain provisions of law mentioned in the inspection report. After following the due process of law, 4th respondent has suspended the drug licence of the petitioner under Rule 66(1) of the Drugs and Cosmetics Rules, 1945 (for short, “the Rules”) for a period of 10 days. Again, on 05.09.2017, the Drug Inspector inspected the business premises of the petitioner and found that the petitioner has contravened certain provisions of law mentioned in his inspection report. After following the due process of law, the drug licence of the petitioner was again suspended for a period of six days. 4. Whileso, again, the Drug Inspector and the Additional Director, Prakasam District, jointly inspected the business premises of the petitioner on 07.01.2019 and during the inspection, they found that the petitioner has violated certain provisions of law. The violations are: (i) the petitioner has failed to submit purchase bills for the drugs shown in Sl.No.9 of the inspection report and thereby violated Rule 65(4)(4) of the Rules; (ii) that the petitioner has failed to submit purchase and sale particulars of the drugs shown at Sl.No.10 of the inspection report and thereby violated Rules 65(4)(4) and 65(4)(3) of the Rules; and (iii) that the petitioner has failed to maintain Schedule “H” Register for verification as stated in Sl.No.12 of the inspection report and thereby violated Rule 65(3)(1) of the Rules. 5.
5. After noticing the above said violations and contraventions of relevant provisions of law, a show-cause notice was issued to the petitioner as required under Rule 66(1) of the Rules to show-cause in writing as to why an order cancelling/suspending the drug licence of the petitioner should not be passed. The petitioner has submitted its explanation on 11.01.2019. 6. After considering the said explanation, being not satisfied with the same, the Assistant Director, Drugs Control Administration, District Sales Licensing Authority, Kurnool, has by the impugned order, dated 19.01.2019, cancelled the drug licence issued to the petitioner, in the interest of public health on the ground that the petitioner has been repeatedly indulging in contravening the Rules set out above and as it is found that the petitioner is habituated in contravening the provisions of the relevant Rules of the Drugs and Cosmetics Act, 1940 (for short, “the Act”). 7. Aggrieved thereby, the instant Writ Petition has been filed assailing the legal validity of the impugned order. 8. Heard Sri K. Srinivas, learned counsel for the petitioner and Sri S. Appadhara Reddy, learned Government Pleader for Medical, Health and Family Welfare, appearing for the respondents. 9. Since the impugned order cancelling the drug licence of the petitioner was passed under Rule 66(1) of the Rules, right of appeal is provided to the petitioner under Rule 66(2) of the Rules, which reads as follows: “66. Cancellation and suspension of licences.— (1) …. (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.” 10. The aforesaid provision makes it abundantly clear that an aggrieved person, whose licence was cancelled under Rule 66(1) of the Rules, got an efficacious remedy of preferring an appeal against the said order to the State Government. The petitioner did not avail the said remedy of right to appeal conferred on it under the Rules and filed this Writ Petition challenging the validity of the impugned order. 11. The petitioner has deliberately suppressed the fact that right of appeal is provided under the Rules in the affidavit filed in support of the Writ Petition and stated that there is no other effective alternate remedy except to approach this Court by invoking its extraordinary jurisdiction under Article 226 of the Constitution of India.
11. The petitioner has deliberately suppressed the fact that right of appeal is provided under the Rules in the affidavit filed in support of the Writ Petition and stated that there is no other effective alternate remedy except to approach this Court by invoking its extraordinary jurisdiction under Article 226 of the Constitution of India. 12. Therefore, when it is questioned as to how the writ is maintainable when right of appeal is provided against the impugned order, learned counsel for the petitioner would submit that no opportunity of personal hearing was given to the petitioner before passing the impugned order and it is violative of principles of natural justice. He would also contend that no reasons are assigned in the impugned order for cancelling the drug licence of the petitioner and in a way it also amounts to violation of principles of natural justice. According to him, an order devoid of reasons is to be construed as an order passed in violation of principles of natural justice. Therefore, on these two grounds, he would submit that when the impugned order is found to be passed in violation of principles of natural justice i.e., (i) without providing an opportunity of personal hearing to the petitioner before passing the impugned order of cancelling the drug licence; and (ii) without assigning reasons for cancelling the drug licence, the party can without availing the right of appeal, even if the said right is conferred under the Rules, invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India to challenge the legal validity of the impugned order. In support of the said contentions, learned counsel for the petitioner relied on the judgments of erstwhile High Court of Andhra Pradesh rendered in the case of M. Sadasiva Sekhar v. District Collector, Kurnool, 2003 (3) ALT 68 ; M. Kalyani v. District Collector, 2006 (5) ALD 796; judgment of the common High Court of Judicature at Hyderabad for the State of Telangana and for the State of Andhra Pradesh rendered in the case of B. Manjula v. District Collector, Civil Supplies, Kurnool, 2015 (4) ALT 572 ; and also the judgment of the Apex Court rendered in the case of Dev Dutt v. Union of India, (2008) 8 SCC 725 . 13.
13. Sri S. Appadhara Reddy, learned Government Pleader for Medical, Health and Family Welfare, appearing for the respondents, would submit that Rule 66 of the Rules, which deals with cancellation and suspension of licence only contemplates giving an opportunity to the licensee to show-cause as to why such an order should not be passed before cancelling the licence and it did not contemplate any enquiry or providing an opportunity of personal hearing. He would submit that in strict compliance with the said Rule 66(1), a show-cause notice was issued to the petitioner calling for its explanation as to why its licence should not be cancelled for contravening and violating certain provisions of law. He would also submit that after considering the explanation submitted by the petitioner, a reasoned order was passed cancelling the licence of the petitioner as the explanation submitted by it is not satisfactory. He would submit that as the petitioner has admitted the violations mentioned in the show-cause notice, there is no necessity of giving any personal hearing also to the petitioner. He then contends that when the petitioner has admitted the violations in its explanation submitted to the aforesaid show-cause notice, it is settled law that when no prejudice is shown to have been caused to the petitioner by not providing personal hearing before passing the impugned order, it would not vitiate the impugned order and the petitioner cannot invoke the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India on the ground of violation of principles of natural justice and he would contend that the petitioner has to avail the remedy of appeal as contemplated under Rule 66(2) of the Rules. Therefore, learned Government Pleader vehemently opposed the Writ Petition and prayed to dismiss the Writ Petition as not maintainable in view of the efficacious remedy of appeal provided to the petitioner. In support of his submissions, he relied on the judgment of the Three-Judge Bench of the Apex Court in the case of State of U.P. v. Sudhir Kumar Singh, 2020 SCC OnLine SC 847 and the judgments of this Court in the case of M.S. Trading v. State of A.P., [Order, dt.06.03.2020, in W.P.No.3794 of 2019 of A.P. High Court.]; T. Siddaiah v. State of A.P., 2021 (2) Drugs Cases (DC) 19; and M/s.Raja Sree Medicals v. State of A.P., 2020 (2) Drugs Cases (DC) 698. 14.
14. The material facts of the lis are not in controversy. Admittedly, the Drug Inspector and the Additional Director of Prakasam District jointly inspected the business premises of the petitioner on 07.01.2019 and they found that the petitioner has contravened certain provisions of law. The said material fact is not controverted by the petitioner and in fact it is categorically admitted that the said inspection took place on 07.01.2019 in the business premises of the petitioner. The following violations are found during the course of said inspection: (i) the petitioner has failed to submit purchase bills for the drugs shown in Sl.No.9 of the inspection report and thereby violated Rule 65(4)(4) of the Rules; (ii) that the petitioner has failed to submit purchase and sale particulars for the drugs shown at Sl.No.10 of the inspection report and thereby violated Rules 65(4)(4) and 65(4)(3) of the Rules; and (iii) that the petitioner has failed to maintain Schedule-“H” Register for verification as stated in Sl.No.12 of the inspection report and thereby violated Rule 65(3)(1) of the Rules. 15. Admittedly, a show-cause notice was issued as contemplated under Rule 66(1) of the Rules to the petitioner calling for its explanation by specifically mentioning the details of the violations with reference to the relevant provision of law. The petitioner has received the said show-cause notice and also has submitted its explanation, dated 11.01.2019. It is significant to note here that the petitioner has categorically and unequivocally admitted that the violations that are mentioned in the show-cause notice are committed in the written explanation. While admitting the said violations, it is stated that the said violations are made due to ignorance and the petitioner prayed to excuse for the mistakes committed by it. 16. Thus, all the violations that are pointed out in the show-cause notice are categorically and unequivocally admitted by the petitioner. 17. So, as the violations are categorically admitted by the petitioner and as proper explanation was not offered, the impugned order cancelling its licence was passed. It is significant to note here that earlier also during two inspections conducted on 29.06.2017 and 05.09.2017, the petitioner was found to have committed certain violations and after following due process of law, its licence was initially suspended for ten days and again for six days for violating certain provisions of the Act. Again, the petitioner has committed the present violations.
Again, the petitioner has committed the present violations. Therefore, as the petitioner is found to be habituated in repeatedly violating the provisions of law in the three inspections that were made by the competent authorities in the business premises of the petitioner, the licence was ultimately cancelled mentioning the said reasons in the interest of public health. Therefore, it cannot be said that the impugned order is devoid of reasons. 18. As the show-cause notice was issued as contemplated under Rule 66(1) of the Rules, there is ample compliance with the requirement of law. The said rule only contemplates issuance of show-cause notice and passing an order stating the reasons. As the said procedure contemplated under Rule 66(1) has been substantially complied with before passing the impugned order of cancelling the licence, it cannot be said that the principles of natural justice are violated. 19. As noticed supra, learned counsel for the petitioner would contend that opportunity of personal hearing is not given to the petitioner before passing the impugned order and as such, it amounts to violation of principles of natural justice. 20. A careful perusal of Rule 66 of the Rules shows that it does not mandate making any enquiry or providing an opportunity of personal hearing before passing the order of cancellation of drug licence. It is well settled law that when the Rule or the Act contemplates causing of any enquiry or giving a right of personal hearing before passing any adverse order, then the authority concerned has to invariably and necessarily adhere to the said procedure and cause an enquiry or provide an opportunity of personal hearing. Even if personal hearing is not contemplated during enquiry, as enquiry pre-supposes personal hearing also, an opportunity for personal hearing is to be given. But, when enquiry or personal hearing is not contemplated and the rule only contemplates issuance of show-cause notice, and when such notice is issued and explanation submitted is considered, and thereafter, an order with some reasons is passed, it would be sufficient compliance with the principles of natural justice and the procedure contemplated under the Rule. It would not vitiate the order on the ground of violation of principles of natural justice.
It would not vitiate the order on the ground of violation of principles of natural justice. Further, when the order impugned is sought to be assailed, on the ground of not providing an opportunity of personal hearing, that fact by itself would not vitiate the order and the petitioner has to further show that prejudice is caused to it in not providing an opportunity of personal hearing. It is not pleaded anywhere in the affidavit filed in support of the Writ Petition that any prejudice was caused to the petitioner in not providing an opportunity of personal hearing. More particularly, when the petitioner has categorically admitted the violations and only pleaded for excuse on humanitarian grounds, the fact that personal hearing was not given to it would not cause any prejudice to the petitioner and it would not vitiate the impugned order. 21. These principles of law are well settled. In the judgment of the Three-Judge Bench of the Apex Court in Sudhir Kumar Singh (Supra), it is clearly held that no prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. At para.28 of the judgment, it is held as follows : “28. In some of the early judgments of this Court, the non-observance of natural justice was said to be prejudice in itself to the person affected, and proof of prejudice, independent of proof of denial of natural justice, was held to be unnecessary. The only exception to this rule is where, on “admitted or indisputable” facts only one conclusion is possible, and under the law only one penalty is permissible. In such cases, a Court may not issue its writ to compel the observance of natural justice, not because it is not necessary to observe natural justice, but because Courts do not issue writs which are “futile”.” 22. In arriving at the said conclusion, the Three-Judge Bench of the Apex Court relied on the earlier judgments of the Apex Court rendered in the case of S.L. Kapoor v. Jagmohan, (1980) 4 SCC 379 and in the case of P.D. Agrawal v. State Bank of India, (2006) 8 SCC 776 and held that this statement of the law has undergone a “sea change”, as follows : “39.
Decision of this Court in S.L. Kapoor v. Jagmohan [ (1980) 4 SCC 379 ] whereupon Mr.Rao placed strong reliance to contend that non-observance of principle of natural justice itself causes prejudice or the same should not be read “as it causes difficulty of prejudice”, cannot be said to be applicable in the instant case. The principles of natural justice, as noticed hereinbefore, have undergone a sea change. In view of the decisions of this Court in State Bank of Patiala v. S.K. Sharma [ (1996) 3 SCC 364 ] and Rajendra Singh v. State of M.P. [ (1996) 5 SCC 460 ] the principle of law is that some real prejudice must have been caused to the complainant. The Court has shifted from its earlier concept that even a small violation shall result in the order being rendered a nullity. To the principle/doctrine of audi alteram partem, a clear distinction has been laid down between the cases where there was no hearing at all and the cases where there was mere technical infringement of the principle. The Court applies the principles of natural justice having regard to the fact situation obtaining in each case. It is not applied in a vacuum without reference to the relevant facts and circumstances of the case. It is no unruly horse. It cannot be put in a straitjacket formula.” 23. The Three-Judge Bench of the Apex Court in Sudhir Kumar Singh (supra) case, at para.38, after considering the earlier judgemtns of the Apex Court rendered on the point that Courts would not pass futile orders in the cases based on admitted facts by reason of estoppel, acquiescence, non-challenge or non-denial, on the ground of breach of principles of natural justice where no prejudice is caused to the person who alleged breach of natural justice, as the case was on admitted facts, summed-up the analysis of law on the said point at para.39 as follows : “39. An analysis of the aforesaid judgments thus reveals: (1) Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.
An analysis of the aforesaid judgments thus reveals: (1) Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused. (2) Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest. (3) No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice. (4) In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person. (5) The “prejudice” exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non-observance of natural justice.” 24. In Aligarh Muslim University v. Mansoor Ali Khan, AIR 2000 SC 2783 , the Supreme Court held that the principle that in addition to breach of natural justice, prejudice must also be proved has been developed in several cases. In K.L. Tripathi v. State Bank of India, (1984) 1 SCC 43 , also it is held that not mere violation of natural justice but de facto prejudice (other than non-issue of notice) had to be proved. 25.
In K.L. Tripathi v. State Bank of India, (1984) 1 SCC 43 , also it is held that not mere violation of natural justice but de facto prejudice (other than non-issue of notice) had to be proved. 25. In the case of M.P. Industries Ltd. v. Union of India, AIR 1966 SC 671 , a question arose before the Apex Court whether personal hearing should be afforded to a person eventhough Rule 55 of the Mineral Concession Rules only enjoins providing an opportunity to a person to make a representation against the comments received from the State Government or other authority, or not. While interpreting Rule 55 of the said Rules, the Apex Court held as follows : “As regards the second contention, I do not think that the appellant is entitled as of right to a personal hearing. It is no doubt a principle of natural justice that a quasi-judicial tribunal cannot make any decision adverse to a party without giving him an effective opportunity of meeting any relevant allegations against him. Indeed, R.55 of the Rules, quoted supra, recognize the said principle and states that no order shall be passed against any applicant unless he has been given an opportunity to make his representations against the comments, if any, received from the State Government or other authority. The said opportunity need not necessarily be by personal hearing. It can be by written representation. Whether the said opportunity should be by written representation or by personal hearing depends upon the facts of each case and ordinarily it is in the discretion of the tribunal. The facts of the present case disclose that a written representation would effectively meet the requirements of the principles of natural justice.” 26. Thus, from the law enunciated in the above judgments, the legal position is clear that when facts are admitted or when the facts are indisputable and when no prejudice is caused to the person complaining violation of the principles of natural justice, the mere fact of not giving a personal hearing would not in any way vitiate the order in question. 27.
27. Even in the judgment of the erstwhile High Court of A.P., relied on by the learned counsel for the petitioner rendered in the case of M. Sadasiva Sekhar (supra), it is clearly held that opportunity of giving oral hearing to a dealer in enquiring into irregularities alleged to have been committed by him and in ordering cancellation, is not necessary in every case and also held that where an opportunity of personal hearing is not given, the burden is on the dealer to plead and prove the prejudice caused to him by not giving a personal hearing. Further clearly held that illegality of the order cannot be readily presumed wherever no personal hearing was given. Further held that the impugned order has to be scrutinized by applying the test of prejudice. 28. Thus, the legal position is clear from the above judgment that giving opportunity of personal hearing is not necessary in every case and a person complaining violation of principles of natural justice on the ground of not providing personal hearing has to show that prejudice is caused to him by not providing any such right of personal hearing. The law is also clear that the order complained has to be scrutinized by applying the test of prejudice and the petitioner has to plead and prove the said prejudice. 29. It is nowhere pleaded in the writ petition nor proved that any prejudice is caused to the petitioner because of not giving an opportunity of personal hearing. Therefore, the petitioner cannot seek to assail the impugned order on the ground of not giving personal hearing to it. 30. As regards passing of order with reasons is concerned, since the petitioner has admitted the violations and only pleaded for excuse on humanitarian grounds and as the explanation was not found to be satisfactory by the concerned authority, who passed the impugned order, it cannot be said that the impugned order is devoid of any reason. If the petitioner denies that any violation is committed, and has submitted explanation to that effect, then the authority concerned is required to assign reasons explaining as to how a violation was committed. When there is no denial of violating the rules and when they are admitted, if any vague explanation is given, then there need not be many reasons to be assigned for passing the order of cancelling the licence.
When there is no denial of violating the rules and when they are admitted, if any vague explanation is given, then there need not be many reasons to be assigned for passing the order of cancelling the licence. More particularly, when the petitioner is habituated in repeating the violations and as its licence was suspended twice earlier for violating the provisions of law and as it is found that the petitioner has again committed the said violations and as no proper explanation is offered and when the licence was cancelled in the interest of public health on the above grounds, it cannot be said that the impugned order is devoid of reasons and thereby the principles of natural justice are violated. So, the judgment relied on by the learned counsel for the petitioner in the case of Dev Dutt (supra), wherein it is stated that requirement of giving reasons is part of natural justice would not advance the case of the petitioner any further. Further, the facts of the said case are also distinguishable on facts. 31. As regards the other two judgments relied on by the petitioner of the erstwhile High Court of Andhra Pradesh in M. Kalyani (supra) and B. Manjula (supra) are concerned, in the case of M. Kalyani (supra), the allegations ascribed are denied and as such, it is held that the failure to assign reasons for holding that the allegations levelled against her are proved, has the effect of vitiating the order of cancellation. Here, as noticed supra, the allegations are admitted. In the case of B. Manjula (supra), as enquiry was contemplated, it is held that enquiry pre-supposes an opportunity of personal hearing. Therefore, these judgments are not of any avail to the case of the petitioner. 32. When the impugned order is found to be passed in accordance with the procedure contemplated under law, and when it is found to be not vitiated for non-compliance with the principles of natural justice, the writ petitioner cannot invoke the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India. The petitioner has to avail its right of appeal provided under Rule 66(2) of the Rules. 33.
The petitioner has to avail its right of appeal provided under Rule 66(2) of the Rules. 33. This Court in the case of M.S. Trading (supra) held at para.6 of the judgment as follows : “Lastly, this Court also holds that the existence of an alternative remedy is a bar to the writ petition being entertained. Normally, this is self-imposed restriction imposed by the Court on itself and in a very limited circumstances, a writ is entertained when there is an alternative remedy. In the case on hand, this Court finds that there is neither breach of Rules of natural justice nor breach of statutory Rules. Therefore, this Court holds that the existence of an alternative remedy clearly precludes this Court from entertaining this Writ Petition.” 34. Following the said judgment, again, this Court in the case of M/s.Raja Sree Medicals (supra), held that when it is not the case of the petitioner that a reasonable opportunity was not afforded to the petitioner, and that the authority who passed the order has no jurisdiction to cancel the drug licence, or the impugned order is passed in violation of any of the statutory provisions, the Writ Petition is not maintainable and the petitioner has to avail the right of appeal. Again, this Court, in T. Siddaiah (supra) case, also held that the petitioner has to avail the alternative remedy of appeal under Rule 66(2) of the Rules on the question whether the petitioner had been given an opportunity to set out his defences in reply to the show-cause notices dated 27.11.2020 and 23.01.2021. In all the above three cases, this Court was not inclined to entertain the Writ Petitions and held that the petitioner has to avail the right of appeal under Rule 66(2) of the Rules. Thus, this Court had taken a consistent view that when right of appeal is provided under Rule 66(2) of the Rules, that the petitioner has to avail the said remedy and cannot invoke the writ jurisdiction of this Court. 35. If the grievance of the petitioner is that inadequate reasons are given for cancelling the drug licence or the reasons given are legally not sustainable, on that ground, the petitioner has to challenge the impugned order by availing the statutory right of appeal as provided under Rule 66(2) of the Rules.
35. If the grievance of the petitioner is that inadequate reasons are given for cancelling the drug licence or the reasons given are legally not sustainable, on that ground, the petitioner has to challenge the impugned order by availing the statutory right of appeal as provided under Rule 66(2) of the Rules. But, the petitioner cannot challenge the said order on those grounds by invoking the writ jurisdiction of this Court. 36. Resultantly, the Writ Petition is dismissed as not maintainable. However, the petitioner is at liberty to prefer an appeal under Rule 66(2) of the Rules to the State Government. In computing the period of limitation of three months as contemplated under Rule 66(2) of the Rules, the time spent during the pendency of the Writ Petition from the date of filing the Writ Petition till its disposal shall be excluded. No costs. As a sequel, miscellaneous applications, pending if any, shall also stand closed.