S.L. Bansal vs State of Rajasthan and Another

Surender Nath Bhargava, J.—This is an appeal against the order dated 22-1-1986 passed by learned Single Judge, dismissing the writ petition filed by the petitioner-appellant, in limine.

The petitioner-appellant is a manufacturer of Ayurvedic Drugs and is carrying on business in the name and style of M/s Indian Products, Madhopuria Street, Beawar. District Ajmer. The Drug Controller-cum-Director Medical and Health Services, Rajasthan, Jaipur (herein after referred to as the ''the Drug Controller'') granted the petitioner a licence on 2-4-1980 for manufacturing certain Ayurvedic Drugs, including Madhu Munnaka Vati and the said licence was renewed, from time to time, and had been renewed till 31-12-1985 The Central Government Ministry of Health & Family Welfare, New Delhi issued permission for use of Indian Hemp (BHANG) in the manufactcre of Munnaka Vati by order dated 23rd April, 1980 (Annexure-4). The above noted drugs have their patents verified by the Drug Controller (vide Annexure 5A and 5B) which shows that Munnaka contains ''VIJAYA'' 15% of the total weight. The appellant has also been issued licence for allotment of Indian Hemp (BHANG) for the manufacture of drugs under Rule 83(2) of the the Medical and Toilet Preparations Rules. 1956 and the same is being renewed from year to year. The Drug Centroller issued an order dated 12-10-1984 (Annexure 10) cancelling the permission for manufacture of Ayurvedic Drug Munnaka Vati and prohibited its manufacture. The appellant preferred an appeal Under Rule 159(2) of the Drugs and Cosmetics Rules, 1945 (here in after refered to as the ''Rules of 1945''), before the Secretary, Medical and Health Rajasthan, Jaipur but the same was dismissed by an order dated 17-12-1985(Annexure-14). During the pendency of the appeal, the Drug Controller issued another order dated 31 5-1985 (Annexure-12) intimating the Excise Commissioner not to deliver Indian Hemp to the appellant for manufacture of Munnaka Vati. The appellant also tiled an appeal a against the said order (Annexure-12) which was also disposed of by an order dated 17-12-1985 (Annexure 14). Hence, the appellant filed the writ petition before the learned Single Judge. Notice to show cause was issued to the respondent but no reply was filed and the writ petition was dismissed in limine vide order dated 22-1-1986. It is against this order that the present appeal has been filed. Notice to show cause was issued and reply to the show cause notice was submitted on 17-9-19-56 and the appeal was admitted after hearing the parties on 16 10-1986.

At the time of hearing on stay application, it was submitted by learned Counsel for the parties that the appeal itself may be disposed of at the time of hearing of the stay application.

We have heard arguments on the appeal as a whole and the same is being disposed of by this judgment.

Learned Counsel for the appellant has very vehemently argued that the principles of natural justice were violated in as much as no hearing was afforded to the petitioner-appellant by the Drug Controller before passing the impugned order (Annexure-10) dated 12-10-1984 specially in view of the fact that Rule 159 of the Rules of 1945 authorises the Drug Controller to cancel or suspend licence only after giving an opportunity to show cause as to why the licence should not be cancelled or suspended and that order has to be in writing stating reasons therefor. In this connection, he has placed reliance on North Bihar Agency and Others Vs. State of Bihar and Others, whereby the order passed by the State Drug Controller and also the aspellate order were set aside and quashed as proper opportunity of hearing was not afforded to the appellant before cancelling their licences.

He has further submitted that the impugned order is arbitrary, without any material or any chemical or analysis report and without any evidence that the said drug was harmful. Thus, the order is based on irrelevant and extraneous considerations and in this connection, has placed reliance on State of U.P. and Another Vs. Raja Ram Jaiswal and Another, He has further submitted that the impugned order violates Article 14 of the Constitution as other persons who are manufacturing similar drug have not been prohibited from selling or manufacturing such drugs. He has further submitted that the Drug Controller had no authority and it was only the Central Government which could pass the impugned order. In this connection he has drawn our attention to Section 33-Article of the Drugs and Cosmetics Act, 1940 (here in after referred to as the ''''Act of 1940") which provides that Chapter IV will not be applicable to the Ayurvedic Drugs and also to Chapter IV-Article provisions added by Amending Act No. 68 of 1982, relating to the Ayurvedic drugs. He has further submitted that Section 33, EEC of the Act of 1940 provides for the prohibition on manufacture and sale of certain Ayurvedic drugs with the permission of the State Government, where as Section 33-EED empowers the Central Government to prohibit manufacture etc. of the Ayurvedic drugs in public interest if it is satisfied that its use is likely to involve any risk of human beings or animals or that any such drug does not have the thereapeutic value claimed or purported to be claimed for it, and has further submitted that the powers of the State Government and the Central Government under the Act are provided by these two Sections. As such, the State Government has no authority or power to stop manufacturing or prohibiting manufacture of any Ayurvedic Drug which may involve risk of human beings or which does, not have any thereaupeutic value.

On the other hand, learned Counsel for the respondents has supported the order of the learned Single Judge and has submitted that the Ayurvedic drug Madhu Munnaka Vati is injurious to health as in Jodhpur on Holi, some children had taken Manoranjan Munnaka Vati manufactured in Buland-shahar and 41 children had become unconscious which news was published in the newspaper and a case is also pending in Jodhpur. This Munnaka Vati containing Bhang is available at the betel shop and the Governor of Rajasthan has expressed its concern in this connection. Therefore, the licence of the petitioner was cancelled. He has further submitted that Annexure-10 is in the form of a show cause notice as required by Rule 159. He has further submitted that there is violation of Rule 161 which provides manner of labelling, giving warning, and since that was not being done, the order cancelling the licence was wholly justified. He has further submitted that the licence given to the appellant-petitioner was of Munnaka Vati for which formula is given in Annexure-5B, whereas the petitioner is manufacturing Madhu Munnaka Vati and therefore also, the order of the Drug Controller was justified.

We have given our thoughtful consideration to the whole matter and in our opinion, the order of the Drug Controller, dated 12-10-1984 (Annexure-10) cancelling the licence of the petitioner-appellant for Munnaka Vati has to be quashed for the simple reason that principles of natural justice were not followed, nor Rule 159 was complied with Annexure-10, on the one hand, has cancelled the licence and has prohibited manufacture on the other hand, it reads as under:

vr% bl i= }kjk vkidks dkj.k crkvks uksfVl tkjh fd;k tkrk gS fd bl i= ds tkjh gksus dh frfFk ls 15 fnol es bl laxBu dks vki }kjk fufeZr fot;k ;qDr equDdk vxj dksbZ fuekZ.k dh tk jgh gSS] ds iw.kZ fooj.k lfgr bl laxBu dks blds vk;qosZfnd vkS"kf/k gksus dk izek.k jksxkf/kdkj lfgr jftLVMZ Mkd }kjk Hksts rFkk fot;k �Hkkax� ;qDr dh equDdk dk fuekZ.k vk;qosZfnd vkS"kf/k ds :i es cUn dj nsos A

The case of M/s North Bihar Agency (supra) is applicable on all fours as that was also a case where in the Drug Controller had cancelled the licence without giving proper opportunity and in that case, not only the initial order of the Drug Controller was set aside but also the order of the appellate authority was set aside. Moreover, the Drug Controller had no material or evidence in the nature of laboratory test report or chemical report or report of some scientific analysis to show that the drug in question was harmful and injurious to human beings. Therefore, the order of the Durg Controller was based on no evidence and without any material, therefore, it was arbitrary and was liable to be quashed. The petitioner had given his formula of manufacturing Munnaka Vati which included the quantity of Vijaya as 15% and for that licence was issued but if the authority thinks or has some reliable evidence that the percentage of Vijaya in this drug is harmful or it should be less than 15%, it is open to the authority to change the formula of the Ayurvedic Drug after giving notice and opportunity to the petitioner-appellant in that connection. Merely because some incident happened at Jodhpur or the Governor showed his concern in this respect, the Drug Controller is not empowered or authorised or gets jurisdiction to pass order (Annx. 10) without any basis or material for coming to the conclusion that it is injurious to human beings. Moreover, if the drug containing Vijaya is found to be harmful then, same treatment should have been accorded to all the manufacturers and sale of all similar drugs should have been prohibited throughout Rajasthan.

In this view of the matter, for the reasons mentioned above, this special appeal is allowed, the judgment of the learned Single Judge is set aside, the writ petition is allowed and the impugned orders (Annexure-10), Annx. 12 and Annx 14) are hereby quashed but looking to the facts and circumstances of the case, the parties are left to bear their own costs.