Introduction
The Karnataka High Court has held that a show-cause notice and a suspension order cannot be issued simultaneously under Rule 66(1) of the Drugs and Cosmetics Rules, 1945, without first giving the licensee an opportunity to respond. The Court treated the impugned notice-cum-suspension order issued to Wellness Forever Chemists as a show-cause notice and permitted the firm to continue its business, except for dealing with Zavicefta and Emblaveo injections, pending further action by the licensing authorities.
Background
The case arose from a notice-cum-suspension order dated September 19, 2026, issued by the licensing authority against M/s. Wellness Forever Chemists and Lifestyle Store. The order suspended the firm’s licence to deal with pharmaceutical products.
The allegation against the firm was that it had procured Zavicefta Injection from M/s. Viva Pharma, which was allegedly an unauthorised supply channel of M/s. Pfizer Limited, Bengaluru. The authority further alleged that the firm had sold the product to various entities.
Challenging the suspension, the firm approached the Karnataka High Court. The petitioner argued that the licensing authority had suspended its licence without following the procedure prescribed under Rule 66(1) of the Drugs and Cosmetics Rules, 1945.
The Court was informed that the petitioner had already submitted a reply to the show-cause notice on September 21, 2026.
Legal Issue
The principal issue before the High Court was whether a licensing authority could suspend a pharmaceutical licence simultaneously with issuing a show-cause notice, without first considering the licensee’s explanation.
The Court examined Rule 66(1) of the Drugs and Cosmetics Rules, 1945, which permits the licensing authority to suspend or cancel a licence for failure to comply with the conditions of the licence or the applicable legal requirements. The provision requires the licensee to be given an opportunity to show cause before the suspension or cancellation order is passed.
Court Ruling
Justice C.M. Poonacha held that Rule 66(1) requires the licensing authority to give the licensee an opportunity to explain why its licence should not be suspended or cancelled.
The Court observed that the impugned notice-cum-order had both communicated the allegations against the petitioner and suspended its licence at the same time. This procedure was contrary to the requirement under Rule 66(1), which provides for an opportunity to respond before an order of suspension or cancellation is passed.
The High Court noted that the petitioner had already submitted its reply to the notice. Accordingly, it directed that the impugned notice-cum-order dated September 19, 2026, be treated only as a show-cause notice.
The Court further permitted the petitioner to submit an additional reply, if any, on or before October 8, 2026. The concerned licensing authorities were directed to consider the response and pass appropriate orders in accordance with law.
Pending further action by the authorities, the Court permitted Wellness Forever Chemists to continue its business in accordance with law, except for dealing with Zavicefta and Emblaveo injections.
The Court’s order did not finally determine the allegations concerning the procurement or distribution of the medicines. Instead, it required the licensing authorities to follow the prescribed procedure before taking further action against the firm’s licence.
Implications
The judgment highlights the importance of following the procedural safeguards under Rule 66(1) of the Drugs and Cosmetics Rules, 1945, when considering the suspension or cancellation of a pharmaceutical licence.
A licensing authority cannot treat the opportunity to respond as a mere formality by issuing a show-cause notice and imposing suspension simultaneously where the provision requires an opportunity to explain before such action is taken.
The ruling also demonstrates that procedural non-compliance may lead a court to modify the effect of an administrative order and require the authority to reconsider the matter after hearing the affected party.
However, the decision does not prevent licensing authorities from suspending or cancelling licences where legally justified. They remain entitled to take appropriate action after complying with the applicable statutory requirements.
The judgment adds clarity on the importance of procedural fairness and the right to respond before regulatory action is taken against a pharmaceutical licence.
