Chhattisgarh HC: Licensing Authority to Consider License Renewal Applications as No Show-Cause Notices Issued Before Cancellation

Chhattisgarh HC: Licensing Authority to Consider License Renewal Applications as No Show-Cause Notices Issued Before Cancellation

BHERUDAN HIRAWAT v. STATE OF CHHATTISGARH

2025 CGHC 26433

Jun 20th, 2025

In this case the petitioners have challenged the order dated 26.02.2021 of the Licencing Authority that cancelled the licence issued to them under Section-20B and 21B of the Drugs and Cosmetics Act, 1940. The said licence permitted them to sell, stock, or exhibit (or offer) for sale, or distribute drugs.

It was argued by the petitioners that decision taken by the Licensing Authority was contrary to the provisions of Rule 66 of the Drug and Cosmetics Rules, 1945 which provides that without affording the sufficient opportunity of hearing, the license of the like nature cannot be suspended or cancelled. Moreover, no show-cause notice was issued by the Respondent before arriving at such a decision.

Further, it was contended that interim orders were passed in favour of the petitioners and the period of license has already expired but the Petitioner had submitted applications to renew the licences but those applications have not been considered.

On the other hand, the respondent argued that show-cause notices were issued to the petitioners, and thereafter, a decision was taken and the petitioners were not running their medical shops in accordance with the provisions of the Drugs and Cosmetics Act, 1940 and Drug Rules, 1945.

Decision

After hearing both the parties the Chhattisgarh High Court observed that show-cause notices were not issued to the petitioners before the cancellation of their license and it is in violation of Rule 66 of the Rules, 1945, and there was no FIR registered for the alleged offence. The relevant para is quoted as under:

Para 7: “Admittedly, licenses were issued in favour of the petitioners under the provisions of the Act, 1940 and Rules, 1945 to sell or distribute wholesale by drugs/medicines. The documents annexed along with the return would show that show-cause notices were not issued to the petitioners before the cancellation of their license and it is in violation of Rule 66 of the Rules, 1945. It is also not in dispute that the period of license has already expired and the petitioners have moved applications for the renewal of their licenses. The applications moved by the petitioners for the renewal of their license are pending before respondent No. 5 i.e. licensing authority. In the order impugned, respondent No. 5 observed that the conduct of the petitioners was in contravention of the provisions of Sections 420, 466, 467 and 471 of IPC, but no direction was issued to register any complaint or FIR.”

Further, the Court directed the Licensing Authority to decide the pending applications of the petitioners for renewal of their licenses strictly in accordance with the law with 90 days from the date of receipt of a copy of the order. Moreover, the Court opined that the petitioners were at liberty to make representations with regard to the alleged offence under Sections 420, 467, 468 and 471 of IPC.

Click here to access the full Judgment