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Andhra Pradesh High Court - Amravati

T Siddaiah vs The State Of Andhra Pradesh on 21 September, 2021

Author: R. Raghunandan Rao

Bench: R. Raghunandan Rao

            HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO

                         W.P.No.17015 of 2021

ORDER:

The case of the petitioner is:

The petitioner had valid licences under the Drugs and Cosmetics Act, 1940 (for short 'the Act') for sale of medicines, which were valid till 29.01.2022. On 26.11.2020, the respondent authorities came to the shop of the petitioner and sought illegal gratification, which was refused by the petitioner. On that the authorities initially left the place and after some time came back and took photographs of the medicines available in the shop of the petitioner and obtained his signatures on a white paper before leaving. Thereafter, the respondent authorities cancelled the licences of the petitioner for 10 days.

2. On 18.03.2021, the respondent authorities took the petitioner from his house to his shop and after conducting a search of the place, took photographs in the presence of the third parties, who are said to be the mediators, and again obtained signature of the petitioner on the white paper and left the place. At that point of time, the respondent authorities also served the impugned undated proceedings in file No.AD- TPT-TRDOINS(YIO)/2/2021-D1-TPTI-DCA, after obtaining signatures of the petitioner on the proceedings. These proceedings were issued cancelling the drug licences held by the petitioner.

3. The petitioner assails the impugned proceedings on the ground that the respondent authorities had not followed the procedure set out in Section 23 of the Act and that the impugned proceedings are not 2 RRR,J.

valid on account of the violation of the procedure set out under Section 23 of the Act.

4. The petitioner also challenged the impugned proceedings on the ground that the said proceedings, which are said to have been signed on 12.02.2021, were served on the petitioner only on 18.03.2021 and the delay of more than one month clearly shows that these proceedings are suspect.

5. The petitioner would reiterate the contention that the respondent authorities did not conduct any panchanama nor seized any the drugs available with the petitioner, under the cover of the licences given to him, in accordance with the procedure contemplated under Section 23 of the Act, and consequently the impugned proceedings would have to be set aside.

6. The third respondent had filed a counter affidavit in response to the notice given to the respondents. The 3 rd respondent raised a preliminary objection that the present writ petition is not maintainable as the petitioner has an effective alternative remedy under Rule 66(2) of the Drugs and Cosmetics Rules, 1945 (for short 'the Rules'). The 3rd respondent also relies upon the judgments of this Court in W.P.No.3794 of 2019 and W.P.No.10628 of 2020 wherein this Court had held, in similar circumstances, that the alternative remedy available under Rule 66 (2) of the Rules would preclude the petitioner from approaching this Court.

7. The 3rd respondent, on the merits of the case, states that the shop of the petitioner was inspected by the 2nd and 3rd respondents on 26.11.2020 wherein certain violations were noticed. The 3rd 3 RRR,J.

respondent, after perusing the inspection report of the 2nd respondent, in this regard, had issued a show cause notice dated 27.11.2020 to the petitioner on 28.11.22020. The petitioner replied to the show cause notice on 28.11.2020 itself, admitting that certain Rules have been violated by him, which may be excused, as it is his first offence. The 3rd respondent after taking into account the said reply, had suspended the licences of the petitioner for a period of 10 days and the said order was served on the petitioner on 04.12.2020.

8. The 2nd respondent had again inspected the shop of the petitioner on 21.01.2021, on the basis of credible information, and certain violations were again noticed. The inspection report of the 2nd respondent was forwarded to the 3rd respondent, who again issued show cause notice dated 23.01.2021 to the petitioner and the same had been received by the petitioner on 30.01.2021. The petitioner in his written explanation dated 04.02.2021 admitted that he had violated certain Rules and committed irregularities and requested to be excused. After perusal of the Rules and the explanation given by the petitioner, the 3rd respondent had cancelled the drug licences of the petitioner on 12.02.2021. This order was served on the petitioner on 16.02.2021. the petitioner, after receiving this order had addressed a letter dated 16.02.2021 to the 3 rd respondent seeking a week's time to return the drugs, which were held in the premises of the petitioner and the petitioner had submitted the bills of the returned drugs on 02.03.2021.

9. Thereafter, complaints were again received in the office of the Director General, Drugs Control Administration, Guntur on 15.03.2021 that the petitioner was again operating his shop without any licence. There upon, the 3rd respondent along with the Drug Inspector, 4 RRR,J.

Madanapalle, Drug Inspector (Vigilance) Kurnool and mediators, had inspected the premises of the petitioner on 18.03.2021 and seized the drugs from the petitioner in accordance with the procedure set out under the Act and the Rules made therein. It is the contention of the respondents that the procedure set out under Section 23 of the Act was followed on 18.03.2021.

10. The 3rd respondent, on the basis of the above submissions, submits that the writ petition requires to be dismissed.

11. Sri Jada Shravan Kumar, learned counsel appearing for the petitioner would submit that a perusal of the impugned proceedings would sho that the impugned proceedings said to have been passed on 12.02.2021 were served on the petitioner only on 18.03.2021 and not on 16.02.2021 as claimed by the respondents. He further submits that the respondents had misused the blank signed papers of the petitioner to create admissions of violation of the Rules and no such admissions were made by the petitioner.

12. The learned Government Pleader for Medical and Health would submit that the provisions of Section 23 of the Act are irrelevant to the passing of the impugned order dated 12.02.2021. He submits that the licences of the petitioner were cancelled under Rule 66 of the Rules on three grounds, viz., - (1) the petitioner failed to maintain and produce Schedule-H1 register, which is in violation of Rule 65(3)(1)(h) of the Rules; (2) the petitioner sold Schedule-H drugs without prescriptions of registered medical practitioners in violation of Rule 65(9)(a) of the Rules; and (3) the petitioner failed to produce sale bills for the drugs sold in violation of Rule 65(4)(3) of the Rules.

5 RRR,J.

13. He submits that Section 23, which relates to the procedure for seizure of drugs for the purpose of getting the same tested, is not relevant to Rule 66.

14. The case of the petitioner, essentially, is that the inspection said to have been carried out on 26.11.2020, 21.01.2021 and on 18.03.2021 was conducted in violation of the provision of Section 23 of the Act and the impugned proceedings, which are passed on these inspections would have to fail as the inspection itself was in violation of the provisions of the Act.

15. A perusal of Section 23 of the Act would show that Section 23 relates to the procedure which an inspector has to follow before taking any sample of a drug or cosmetic under the provisions of the Act. A perusal of the impugned proceedings would show that the said proceedings have been initiated under Rule 66 of the Rules.

16. Rule 66 of the Drugs and Cosmetics Rules, 1945 reads as follows:

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 therefore, 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 thereunder:

Provided ............... (2) .....................

17. It is clear that an order of cancellation or suspension of the licences shall be issued under Rule 66 for violation of the conditions of the 6 RRR,J.

licence and the procedure set out under Section 23, which relates to the manner in which samples of the drugs or cosmetics available with the dealer shall be taken would not be relevant for proceedings under Rule 66 of the Rules. In the circumstances, the question whether the procedure set out under Section 23 of the Act have been followed or not in the course of the inspections held on 26.11.2020 and 21.01.2021, which are the basis on which the impugned proceedings have been issued, would not be relevant. As far as the proceedings dated 18.03.2021 are concerned, the said proceedings are said to have been conducted as the petitioner was selling drugs without a proper licence which had already been cancelled on 12.02.2021 and a copy of the said order was served on the petitioner on 16.02.2021. These proceedings are after the cancellation of the licences of the petitioner and have no bearing on the impugned order dated 12.02.2021.

18. The last issue raised by the learned counsel for the petitioner is, the question whether the proceedings dated 12.02.2021 were served on the petitioner on 16.02.2021 or on 18.03.2021. The copy of the proceedings filed by the petitioner does not show any signature of the petitioner on 16.02.2021. However, the copy of the same proceedings filed by the respondents show that the petitioner had acknowledged the receipt of the copy of the order on 16.02.2021.

19. In these circumstances, the case of the petitioner that the impugned proceedings are invalid on account of non-compliance of the procedures set out under Section 23, would have to fail.

7 RRR,J.

20. However, the question, whether the replies of the petitioner to the show cause notices dated 27.11.2020 and 23.01.2021 were obtained on blank signed papers or not, remains.

21. This is a disputed question of fact, which can be more properly decided by the appellate authority under Rule 66(2) of the Rules. Apart from this, the decisions of this Court, cited by the learned Government Pleader, clearly stipulate that it would be appropriate to relegate the petitioner to the remedy of appeal in such situations.

22. Accordingly, this writ petition is disposed of leaving it open to the petitioner 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. There shall be no order as to costs.

As a sequel, pending miscellaneous petitions, if any, shall stand closed.

________________________ R. RAGHUNANDAN RAO, J 21st September, 2021 Js 8 RRR,J.

HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO W.P.No.17015 of 2021 21st September, 2021 Js