Drug Licence Can't Be Suspended Along With Show Cause Notice: Karnataka High Court
The Karnataka High Court has held that a Show Cause Notice-cum-suspension order suspending a pharmaceutical license can be treated strictly as a Show Cause Notice, observing that an order of suspension or cancelling license can be passed only after licensee is given opportunity to explain why such action should not be taken.
For context, Rule 66(1) of the Drugs and Cosmetic Rules, 1945, allows a licensing authority to suspend or cancel a license if the licensee fails to comply with the license conditions or the legislation. To do this, the authority must first give an opportunity to the licensee to show cause why such an order should not be passed.
In doing so the court directed that the petitioner Wellness Forever Chemists shall be permitted to carry on its business, in accordance with law except for dealing with "Zavicefta and Emblaveo Injection" until further action is taken by the concerned licensing authorities.
This after the court was informed that the petitioner had submitted response to the show cause notice; it thus directed that the notice-cum-order suspending license shall only be read as a show cause notice asking the authorities to pass appropriate orders after considering petitioner's reply.
Justice C.M. Poonacha, commenting on the provision, said:
“A plain reading of sub-Rule (1) of Rule 66 of the Rules clearly indicates that the petitioner is entitled to be given a Show Cause Notice before an order of either suspension or cancellation is passed.”
The High Court, however, noted that the petitioner was served with a Show Cause notice and had his license suspended simultaneously.
“In the present case, vide the impugned notice cum order, the Petitioner has not only been notified of the allegation/assertion against it, but the license of the petitioner has also been suspended, which is contrary to sub-Rule (1) of Rule 66,” the Court said.
The case arose from an SCN -cum-Suspension Order dated September 19, 2026, issued by the licensing authority, suspending the license to deal with pharmaceutical products of the retail chain M/s. Wellness Forever Chemists and Lifestyle Store.s
The allegation against the petitioner was that it had procured “Zavicefta Injection” from M/s. Viva Pharma, which was said to be an unauthorized supply channel of M/s. Pfizer Limited, Bengaluru. The authority further contended that the petitioner subsequently sold the said product to various entities. Aggrieved by the suspension order, the firm approached the High Court.
The High Court, considering the facts of the case and Rule 66(1) of the 1945 Rules, modified the nature of the order issued by the licensing authority.
“Having regard to the aforementioned, the impugned notice cum order dated 19.09.2026 shall be read only as a Show Cause Notice and in addition to the reply dated 21.09.2026, the petitioner shall be permitted to file an additional reply, if any, on or before 08.10.2026, consequent to which, the concerned authorities shall pass appropriate orders in accordance with law,” the High Court held.
It additionally held, “Till further action is taken by the concerned respondents, the petitioner shall be permitted to carry on its business, in accordance with law except for dealing with, 'Zavicefta and Emblaveo Injection'.”