Can a drug licence be suspended before a hearing? Karnataka HC explains rule

NEW DELHI: Can a drug licensing authority suspend a pharmaceutical distributor’s licence while issuing a show-cause notice, before considering its response? The Karnataka high court has said the procedure under the Drugs and Cosmetics Rules requires an opportunity to respond before a suspension or cancellation order is passed. It allowed a pharmaceutical distributor to continue its business while the authorities reconsidered the matter, except for dealing with two specified injections. In an October 1, 2026, order, the court directed the authorities to treat the notice issued to Wellness Forever Chemists and Lifestyle Store as a show-cause notice, allow it to submit an additional reply and then pass appropriate orders in accordance with law. Why was the pharmaceutical distributor’s licence suspended?According to the judgment, Wellness Forever, an authorised distributor of pharmaceutical products, approached the high court after the licensing authority issued a show-cause notice-cum-suspension order on September 19, 2026. The allegation against the company was that it had procured Zavicefta Injection from Viva Pharma, which was not an authorised supply channel of Pfizer Ltd, Bengaluru, and had sold the product to various entities. The company challenged the action, arguing that the order suspending its drug licences was unlawful. It also told the court that it had filed a reply to the notice on September 21, 2026, and had appealed against the action. The licensing authority’s action was taken under Rule 66 of the Drugs and Cosmetics Rules, 1945, which deals with suspension and cancellation of drug licences. Can a drug licence be suspended when a show-cause notice is issued?Justice C.M. Poonacha examined Rule 66 of The Drugs and Cosmetics Rules, 1945, which allows the licensing authority to suspend or cancel a licence if the licensee has failed to comply with licence conditions or provisions of the law. However, the rule requires the licensee to be given an opportunity to explain why such action should not be taken. The high court noted that the notice issued to the distributor did not merely communicate the allegations but also suspended its licence. It held that this was contrary to Rule 66(1), which provides for an opportunity to respond before an order of suspension or cancellation is passed. “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 court observed. The court therefore directed that the September 19 notice-cum-order be treated only as a show-cause notice. It allowed the distributor to submit an additional response, over and above the reply it had already filed, by October 8, 2026. “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 said. The high court also noted that Rule 66 allows the licensing authority to suspend or cancel a licence either wholly or partly. It said the authorities must consider this aspect while deciding what further action to take. The court ordered that, until further action by the authorities, the distributor could continue its business in accordance with law, except for dealing with Zavicefta and Emblaveo injections. The high court disposed of the petition without preventing the authorities from taking further action in accordance with law. Its order does not amount to a final ruling on the allegation that the distributor procured the products through an unauthorised supply channel. The ruling means the company can continue its other pharmaceutical business for now, subject to the stated restrictions, while the licensing authorities consider its response and decide the next steps.