M/S New Green Medical Hall vs. The State Of Bihar

Facts

The appellant, M/s New Green Medical Hall, represented by its proprietor, filed a writ petition challenging the order of the Assistant Drug Controller, Lakhisarai, who cancelled the appellant's drug license. The learned Single Judge dismissed the writ petition, citing the availability of alternate remedies and rejecting the appellant's contention that a suspension of license for specific commodities would have been more appropriate. The cancellation followed an inspection revealing deficiencies such as the absence of a pharmacist, black marketing of hand sanitizers at prices exceeding government notifications, un-updated sales invoices, sales without invoices, alterations in invoices, and failure to maintain purchase records. The appellant provided explanations, including the pharmacist's absence, submission of purchase documents, and ignorance of the price control notification. However, the licensing authority found the purchase invoices suspicious, as inquiries revealed the purported wholesale dealer did not exist, suggesting forged and fabricated invoices.

Held

The Court held that the learned Single Judge was correct in refusing to exercise discretion under Article 226 and directing the appellant to pursue alternate remedies. The appellate court found no reason to interfere with the learned Single Judge's judgment. Regarding the penalty, the Court distinguished the present case from the precedent cited by the appellant. While acknowledging that the Drugs and Cosmetics Act envisages both partial suspension and complete revocation, the Court emphasized the gravity of the appellant's actions. The finding that the appellant produced fraudulent invoices to support inflated sale prices of hand sanitizers, especially during the pandemic, was considered beyond a technical breach. The Court agreed with the learned Single Judge that the cancellation was not onerous given the evidence of forged and fabricated purchase invoices and the non-existence of the purported supplier. The appeal was dismissed, with the appellant left to pursue their appellate remedy, subject to due deference to the observations made by the learned Single Judge regarding the gravity of the allegations.

Key Issues

1. Whether the learned Single Judge was justified in dismissing the writ petition on the ground of available alternate remedies, thereby refusing to exercise extraordinary jurisdiction under Article 226 of the Constitution of India? 2. Whether the cancellation of the appellant's drug license by the Assistant Drug Controller was an onerous penalty, considering the appellant's contention that a suspension of license, particularly concerning specific commodities like hand sanitizers, would have been a more appropriate lesser penalty, as argued by the appellant relying on the decision in Universal Drug House Private Limited vs. State of Bihar and others (AIR 2004 Patna 86)? Contentions: Petitioner/Appellant: Argued that a suspension of license for specific commodities would have been a lesser and more appropriate penalty than outright cancellation. Relied on the precedent set in Universal Drug House Private Limited vs. State of Bihar and others (AIR 2004 Patna 86) where similar circumstances led to suspension rather than cancellation. Revenue/State: The judgment does not explicitly record arguments made by the respondents regarding the specific legal issues raised by the appellant. However, the reasoning of the learned Single Judge, as affirmed by the appellate court, indicates that the gravity of the allegations, including the use of fraudulent invoices, justified the cancellation.