IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.01.2010 CORAM: THE HON’BLE MR. JUSTICE T.S.SIVAGNANAM W.P.No.10296 of 2009 & M.P.Nos.1,2&3/2009 B.Kantilal ... Petitioner -vs- 1.The Assistant Director of Drug Control, Zone III, Chennai – 600 006. 2.The Principal Secretary to Government, Health and Family Welfare (M.I) Department Fort St. George, Chennai – 600 009. ... Respondents Prayer : The Writ Petition filed under Article 226 of the Constitution of India for issue of Writ of Certiorarified Mandamus to call for the records of the second respondent herein made in G.O.(Rt) No.867 dated 27.05.2009 in confirming the order of the 1st respondent made in R.No.440/A2/Z3/2007 dated 08.05.2007 and quash the same and direct the respondents to effect the change in the constitution of firm and grant the license in favour of the petitioner in accordance with the application of the petitioner dated 25.10.2007 in respect of the medical shop running at Old No.12, New No.25, LB Road, Alias Dr.Muthusamy Salai, Adyar, Chennai – 20. For Petitioner : Mr.M.Palani For Respondents : Mrs.R.Anitha Addl. Govt. Pleader for R2. O R D E R The prayer in the writ petition is for issue of a writ of Certiorarified Mandamus to quash the order passed by the second respond in G.O.(Rt).No.867 dated 27.05.2009, confirming the order of the first respondent dated 08.05.2007 and to direct the respondents to effect the change in the constitution of the firm and grant license in favour of the petitioner to run his medical shop. 2. The facts leading to the filing of the writ petition are as stated hereunder. https://hcservices.ecourts.gov.in/hcservices/ 3. The petitioner's father was granted a license to sell, stock and exhibit for sale and distribute drugs by retail other than those specified in schedule 'C' and C(1) and X of the Drugs and Cosmetics Rules 1945. In terms of the license, the petitioner's father carried on business at Old No.12, New No.25, LB Road, Adayar, Chennai – 20. It is stated that the petitioner herein is a diploma holder in pharmacy, having obtained the qualification in 1990 and was running the business with his father. The license initially granted stood renew from time to time. On 22.07.2006, the petitioner's father died leaving behind the petitioner and other legal heirs. In terms of condition No.6 of the license r/w Rule 61(1) and 61(2) of the Drugs and Cosmetics Rules, if there is any change in the constitution of the firm operating the license, such change in constitution shall be deemed to be valid period of three months from the date on which the change takes place, unless in the meantime a fresh license has been taken from the licensing authority in the name of the firm with the changed constitution. 4. In the instant case, on account of the demise of the licensee, it is deemed to be a change in the constitution and therefore, the licensee is required to apply to the licensing authority for fresh license within a period of three months. The period, therefore in the instant case for applying for such license with the changed constitution ought to have been done on or before 21.10.2006. It is note worthy to mention that the period of license came to an end on 31.12.2006. It is stated that the petitioner had approached the office of the licensing authority on 16.10.2006, with a request to effect the change in constitution, but the same was declined on the ground that unless it is accompanied by a no objection certificate from the landlord, the application cannot be entertained. According to the petitioner the question of obtaining no objection certificate from landlord is next to impossible, since the landlord had filed a petition for evicting the petitioner's father from the premises in RCOP No.1951/04, which came to be dismissed after the contest, by order dated 27.04.2005 and against the said order the landlord has filed an appeal in RCA No.706 of 2006, which is pending. 5. Therefore, the petitioner had explained to the authorities that he would not be able to obtain NOC from landlord and that there is no lease agreement and property tax receipt also cannot be obtained from the landlord on account of the strained relationship. According to the petitioner, only after such explanation a challan for remitting the required fee was issued on 23.01.2007 and after remitting the fee the petitioner filed the application for change of constitution in the proper format on 25.01.2007 enclosing the required details. The said application is stated to have been returned on 05.03.2007, which was received by the petitioner on 12.03.2007, the petitioner represented the application on 13.03.2007, which was again returned on 30.03.2007. Thereafter, the petitioner https://hcservices.ecourts.gov.in/hcservices/ again represented the application on 11.04.2007. The first respondent by order dated 08.05.2007 rejected the petitioner's application on the ground that the petitioner has not applied for the change of constitution within the stipulated period of three months. The petitioner challenged this order dated 08.05.2007 by filing W.P.No.18520/2007. The matter was contested before this Court and the respondents also filed a counter affidavit. This Court by order dated 03.11.2008 disposed the writ petition by holding that under Rule 64 (3) of the Rules, the petitioner has got a right of appeal to the State Government and the State Government may after enquiry into the matter and after giving the petitioner an opportunity for representing his views in the matter could pass orders in relation to such application as it thinks fit. 6. Therefore, this Court granted liberty to the petitioner to file an appeal before the State Government within two weeks from the date of receipt of a copy of the order and status-quo as on that date was ordered to be maintained. In compliance with the direction issue, the petitioner filed an appeal petition before the Government on 07.11.2008. The second respondent by order dated 27.05.2009 rejected the appeal as against, which the petitioner has filed the above writ petition. 7. Mr.M.Palani, learned counsel appearing for the petitioner would contend that the impugned order of rejection of the appeal is perse illegal inasmuch as it is in violation of the principles of natural justice and against the letter and spirit of the direction issued by this Court in the earlier writ petition. That apart the petitioner would submit that the time limit prescribed for intimation the change of constitution has to be held to be directory and not mandatory. Further it is contended that the second respondent erred in holding that the appeal is not filed within the time limit and such finding is untenable, especially when the appeal is filed pursuant to the direction of this Court in the earlier writ petition. The learned counsel placed reliance on the decisions of the Hon'ble Supreme Court in Top Line Shoes Ltd. Vs. Corporation Bank [2002 6 SCC page 33], Shaikh Salim Haji Abdul Khayaumsab Vs. Kumar and others [2006 1 SCC page 46], Kailash Vs. Nanhku and another [2005 4 SCC page 480] to support his contentions that the time limit of for intimation of the reconstitution has to be held as directory and not mandatory. 8. The learned Additional Government Pleader appearing for the respondents by relying upon the counter affidavit would contend that after considering the reply given by the petitioner on 05.03.2007, stating that there is a dispute between the landlord and the petitioner, the Drug Inspector, Adayar Range intimated that the petitioner's application cannot be recommended and this fact was intimated to the petitioner, since the application is not within the prescribed time under condition No.5 & 6 of the license as required https://hcservices.ecourts.gov.in/hcservices/ under Rule 61(1) and 61(2) of the Rules. It is further submitted that in the impugned order passed by the second respondent it is stated that, if the petitioner was aggrieved, he should have filed an appeal within 30 days and the petitioner failed to produce the rental agreement and the property tax records and that the petitioner has stated in his affidavit that after his father death, he had closed the business for five months, which itself proves that he had not applied for grant of license within the time limit. It is further stated that the condition to intimate change of constitution within the period of three months is mandatory, otherwise the license will be deemed to be cancelled. Further, Rule 65(A) of the Rules it is necessary to furnish documents in respect of ownership or occupation of the premises. Therefore, it is submitted that since the petitioner has not complied with the mandatory provisions, the appeal is rejected. 9. I have carefully considered the submissions made on either side and perused the materials on record. 10. The first contention raised by the petitioner is that the impugned order is in violation of the principles of natural justice, failure to comply with the mandatory procedure under the statue and amounts to violation of the earlier order passed by this Court. The reason for rejection of the appeal petition has been stated in paragraph 5 of the impugned order, firstly, the second respondent referred to an investigation report given by the Drugs Inspector, Adayar Range, which was the basis of the rejection. It has been further stated by the second respondent that the petitioner has not filed the appeal within the time prescribed. That apart failure to submit the rental lease agreement as well as the property tax receipts as requested by the Assistant Director of Drugs Control and failure to apply for license within the time limit and the closure of business for five months proves that the petitioner has not applied within the time limit and therefore the petitioner has not putforth any valid point to consider the appeal. It is to be noted that the finding rendered by the second respondent that the appeal has not been preferred within the prescribed time limit cannot be sustained, in view of the direction issued by this Court in the earlier Writ Petition in W.P.No.18520/2007 dated 03.11.2008. While disposing of the earlier Writ Petition this Court took note of the fact that as against order of the Assistant Director of Drug Control dated 08.05.2007, the petitioner had filed Writ Petition on 18.05.2007 well before the expiry of 30 days, therefore, this Court granted liberty to the petitioner to file an appeal before the State Government within two weeks and ordered that status-quo as on that date shall be maintained till orders are passed in the appeal on merits. Therefore, the first respondent cannot state that the appeal is time barred. Hence, such finding is set aside. https://hcservices.ecourts.gov.in/hcservices/ 11. Next, it is to be noted that this Court directed the appeal to be disposed of on merits. The relevant Rule, which deals with the right of statutory appeal is Rule 64(3), reads as follows:- "64(3) Any person who is aggrieved by the order passed by the licensing authority in sub-rule (1) may, within 30 days from the date of the receipt of such order, appeal to the State Government and the State Government may, after such enquiry into the matter as it considers necessary and after giving the appellant an opportunity for representing his views in the matter, make such order in relation thereto as it thinks fit," A perusal of the Rule states that the Government may after such enquiry into the matter as it considers necessary and after giving the appellant an opportunity for representing their view in the matter may make such orders as it thinks fit. 12. Therefore, apart from the direction given by this Court to dispose of the appeals on merits, statue also casts a mandatory duty on the part of the State Government to conduct such enquiry in the matter as it considers necessary and ought to afford an opportunity of representation to the petitioner to putforth his views. Admittedly, this procedure has not been followed while disposing of the appeal petition. Further, it is seen from the impugned order that the first respondent has relied upon a report from the Director of Drugs Control dated 16.02.2009. No doubt the statue empowers the State Government to esquire in to the matter as it considers necessary, but as a result of such enquiry, if there is any material, which would be the basis for the State Government to decide the issue, then such material should be furnished to the petitioner though such information was collected/received without notice to the petitioner. There is no record placed before this Court to show that the report of the Director of Drugs Control dated 16.02.2009 was furnished to the petitioner before final decision was taken on the appeal petition. Further no reasons have been assigned by the first respondent as regards the contention raised by the petitioner regarding his inability produce the rental deed and property tax receipts, in view of the strained relationship between the landlord and the petitioner and the fact that a case is pending in RCA No.706 of 2006, at the instant of the landlord. Further the issue whether the Rule prescribing time limit for submitting the application is mandatory or directory has also not been considered. 13. Therefore, I am convinced that the petitioner has to succeed on the first contention raised by the learned counsel appearing for the petitioner inasmuch as the impugned order has been passed in violation of the statutory procedure prescribed for disposing of an appeal, since no opportunity was given to the petitioner to represent their views and no reasons have been assigned and no finding has been rendered on merits as directed by this Court in the earlier order of this Court, and the copy of the report submitted by the Director of https://hcservices.ecourts.gov.in/hcservices/ Drugs Control dated 16.02.2009 has not been furnished. 14. It is submitted that the time limit prescribed under the statue for submitting such application is in order to ensure that the person so licensed should not be permitted to carry on business without the license, more particularly, since the license granted is for the sale and distribution of drugs. However, the provisions of the Limitation Act has not been excluded under the said provision and therefore in my view no straight jacket formula can be applied for throwing out an application for change of constitution on the ground of limitation. Each application is required to be examined on its own merits and in accordance with law. Admittedly, the petitioner had filed the application on 25.01.2007. According to the petitioner, when he approached the authority earlier on 16.10.2006, requesting for change of constitution to be recorded, the request was not entertained, since he could not produce the NOC from the landlord, since the relationship between the petitioner and the landlord is strained and a rent control appeal in RCA No. 706/06 is pending, at the instance of the landlord. In such circumstances the statutory authority cannot expect the petitioner to produce a No Objection Certificate from such landlord, since the possession of the petitioner is litigious. In fact the petitioner while submitting his application and also by his subsequent representation dated 11.04.2007 has clearly stated about the circumstances, which precludes him from producing the documents relating to his tenancy and has stated that he is in possession of the premises and the landlord is regularly receiving rent and the case filed by the landlords was dismissed on 27.04.2005 and the landlord has filed an appeal in RCA No.706/06 and the same is pending. Therefore the only conclusion that could have been arrived at by the respondents is that the petitioner was continuing as a statutory tenant in the premises and that should have been enough for the purpose of the Rules. 15. Therefore, in my view these factors could very well be taken into consideration to justify the submission of the application beyond time and the authority ought to have examined the matter on merits without rejecting it on technical grounds. Considering the facts and circumstances of the case, I am of the view that this is a fit case, where the discretion ought to be exercised in favour of the petitioner in condoning the delay of filing the application for change of constitution. According to the respondents, the petitioner ought to have filed the application on 21.10.2006, but has filed the same only on 25.01.2007 i.e., after three months. Considering the facts of the case as projected by the respondent in the counter, the petitioner does not appear to be a unscrupulous person adopting dilatory tactics with certain other intentions. 16. Therefore, the procedural law could yield to such https://hcservices.ecourts.gov.in/hcservices/ interpretation bearing in mind the object of the enactment. In fact Hon'ble Supreme Court, while considering the scope of Order 8 Rule 1 CPC. held as follows:- " The object is to expedite the hearing and not to scuttle the same. The process of justice may be speeded up and hurried but the fairness which is a basic element of justice cannot be permitted to be buried. The provision spells out a disability on the defendant: a careful reading of the language in which Order 8 Rule 1 has been drafted, shows that it casts an obligation on the defendant to file the written statement within 30 days from the date of service of summons on him and within the extended time falling within 90 days. The provision does not deal with the power of the court and also does not specifically take away the power of the court to take the written statement on record though filed beyond the time as provided for. Though the language of the proviso to Rule 1 Order 8 CPC is couched in the negative form, it does not specify any penal consequences flowing from the non-compliance; however, the consequences of non-compliance may be read in by necessary implication. The provision being in the domain of the procedural law and considering the object and purpose behind enacting Rule 1 of Order 8 in the present form and the context in which the provision is placed, it has to be held to be directory and not mandatory." The ratio of the above decision rendered by the Hon'ble Supreme Court could very well be applied to the facts of the present case. 17. The Hon'ble Supreme Court while considering the time limit prescribed under section 13(2)(i) of the Consumer Protection Act, 1986 in the case of Top Line Shoes Ltd. Vs. Corporation Bank [2002 6 SCC page 33], held as follows:- 8... The provision is more by way of procedure to achieve the object of speedy disposal of such disputes. It is an expression of "desirability" in strong terms. But it falls short of creating any kind of substantive right in favour of the complainant by reason of which the respondent may be debarred from placing his version in defence in any circumstances whatsoever. It is for the Forum or the Commission to consider all facts and circumstances along with the provisions of the Act providing time-frame to file reply, as a guideline, and then to exercise its discretion as best as it may serve the ends of justice and achieve the object of speedy disposal of such cases keeping in mind the principles of natural justice as well. 18. Hence, I am of the view that the respondents were not justified in rejecting the application filed by the petitioner on ground that it was not submitted within three months from the date of the demise of his father, considering the facts and circumstances of https://hcservices.ecourts.gov.in/hcservices/ this case, and by applying the principles of section 5 of the limitation Act, such time limit could be condoned and it has to be held that the application should be entertained and decided on merits, without insisting upon a NOC from the landlord as the petitioner is continuing as a stautory tenant in the premises. 19. For all the above reasons, the writ petition is allowed, the impugned order is set aside holding that the respondents were not justified in rejecting the application filed by the petitioner for change of constitution for obtaining the license, submitted on 23.01.2007 and the delay in submission on such application is condoned by applying the principles of Section 5 of the Limitation Act and consequently, there will be a direction to the first respondent to reconsider the appeal petition on merits and in accordance with law, after affording an opportunity of personal hearing to the petitioner. It is stated pursuant to the interim orders granted, the petitioner was continuing to carry on business and hence the interim order granted shall continue till the disposal of the appeal petition on merits and in accordance with law by the second respondent as indicated above. Consequently, connected miscellaneous petitions are also disposed off. However, there shall be no order as to costs. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. pbn To 1.The Assistant Director of Drug Control, Zone III, Chennai – 600 006. 2.The Principal Secretary to Government, Health and Family Welfare (M.I) Department Fort St. George, Chennai – 600 009. + 1 CC To Mr.M.Palani, Advocate SR NO.2265 + 1 CC to the Government Pleader SR NO 2326 Order in W.P.No.10296 of 2009 BK (CO) SS (22.01.2010) https://hcservices.ecourts.gov.in/hcservices/