1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 5794 OF 2003 M/s. Sanket Pharmaceuticals Pvt. Ltd. ..... Petitioner. V/s The State of Maharashtra & Anr. ...... Respondents. ------ Mr. P.D. Sawardekar for the petitioner. Mr. A.I. Patel AGP for Respondent Nos. 1 and 2. Mr. Avinash Chindane for respondent No.3. ------ CORAM : D.K. DESHMUKH & V.M. KANADE, JJ. DATE : 28th February, 2008. P.C.: 1. By this Petition, the Petitioner challenges the order passed by the Joint Commissioner, Konkan Division, Food & Drugs, Maharashtra State, Thane dated 03/12/2002, cancelling two licences Nos. 1097 and 880 granted in favour of the Petitioner for manufacture of drugs. That order was made after issuing show cause notice dated 04/10/2002. 2. A show cause notice was issued to the Petitioner, stating therein that the Petitioner has been permitted to manufacture the drug called "Cyclopar". It has come to the notice of the administration that M/s. Indigo Remedies, 2 Mumbai - Respondent No.3 is manufacturing the drug called "Cyclopam". It was stated that the names of the two drugs "Cyclopar" & "Cyclopam" are similar. In the case of Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Ltd., reported in 2001 PTC 300 (SC), the Supreme Court has held that manufacture of two drugs, with similar names, should not be permitted and, therefore, the Petitioner was asked to show cause why its licenses should not be cancelled. The Petitioner, on receiving the show cause notice, submitted its reply dated 19/10/2002. It was contended that the licence of the Petitioner cannot be cancelled only because of the alleged similarity of two marks. It was also contended that the question whether two marks are similar, is pending before the Chief Metropolitan Magistrate, 10th Court, Andheri. The Joint Commissioner, thereafter, passed an order dated 03/12/2002. Perusal of that order shows that the only reason given in the order for cancelling the licence was that the Petitioner has committed breach of section 17 of the Act. The Petitioner, feeling aggrieved by that order, filed an appeal before the State Government. That appeal has been decided by the State Government by order dated 15/01/2003. The State Government dismissed the appeal by observing that there is a similarity in the two marks and there is likelihood of deception and, therefore, no fault can be found with the cancellation of the licence. 3. The learned Counsel appearing on behalf of the Petitioner submits that the reason given in the order 3 cancelling the licence that the Petitioner has committed breach of section 17 of the Drugs & Cosmetics Act, 1940 is not to be found in the show cause notice. The order also does not deal with the objection raised by the Petitioner that there is no power in the Joint Commissioner to cancel the licence on the ground of alleged similarity in the marks. The order also does not deal with the issue that was raised viz. when the question as to whether the two marks are similar or not is pending before the Chief Metropolitan Magistrate, the Joint Commissioner cannot pronounce on that. The learned Counsel further submits that the order passed by the State Government in appeal is, really, a non-speaking order because no reasons are given in the order. The contention of the Petitioner that there is no power in the Joint Commissioner to cancel the licence because of the alleged similarity in the marks has not been dealt with anywhere by any of the authorities. 4. We have heard the learned Counsel for respondent No. 1 & 2 as also the learned Counsel for respondent No.3. The learned Counsel for respondent No.3 pointed out to us the observation of the Supreme court in its judgment in Cadila's case, where the Supreme Court has stated in para 34 by referring to the provisions of section 17B that the licence to manufacture drugs having similar marks should not be granted. 5. Now, it is clear that the Joint Commissioner made the 4 order cancelling the licence after issuing the show cause notice. Perusal of the show cause notice dated 04/10/2002 shows that the only reason given in the show cause notice for proposal to cancel the licence was the alleged similarity of two marks and the judgment of the Supreme Court. Perusal of the reply given by the Petitioner shows that the Petitioner had categorically raised the contention that the licence cannot be cancelled because of the alleged similarity in the two marks and also because the issue about similarity of the marks was pending before the Chief Metropolitan Magistrate. Perusal of the order cancelling the licence shows that, though the show cause notice is referred to in the order, the reason given in the show cause notice is not the reason given for cancelling the licence. On the contrary, section 17 has been relied on, which does not find place in the show cause notice. Both the objections of the Petitioners viz. (a) that on the basis of the alleged similarity in the marks, licence cannot be cancelled and (b) that the issue of alleged similarity of the marks cannot be considered by the Joint Commissioner because the issue is pending before the Criminal Court, have not at all been considered. Thus, it is clear that the order cancelling the licence suffers from non- application of mind to the explanation given by the Petitioner to the show cause notice. If the explanation given to the show cause notice is not considered while making an order pursuant to the show cause notice, the very purpose of giving show cause notice is defeated. There is a statutory requirement of show cause notice being given before 5 cancellation of the licence. It is a settled law that when the principles of natural justice get incorporated in the statute, compliance with those principles becomes mandatory and, therefore, in our opinion, the Joint Commissioner was under a duty to consider the objections raised by the Petitioner in its reply to the show cause notice and non-consideration of those objections by the Joint Commissioner renders the order of the Joint Commissioner infirm and invalid. Perusal of the order of the appellate authority shows that the appellate authority has not considered any ground raised by the appellant- petitioner. The State Government has merely repeated what is said in the show cause notice. The State Government has not even referred to the provisions of section 17 which is the only reason given in the order of cancellation of the licence. In our opinion, therefore, the order of the State Government is also liable to be set aside. 6. The learned Counsel for the Petitioner has stated before us that even if this Court sets aside the order cancelling the licence, till the Joint Commissioner makes a fresh order pursuant to the show cause notice, the petitioner will not start manufacturing of that drug in relation to which show notice has been issued. The learned Counsel informs us that he has made the above statement after taking instructions from his client. In view of this statement and what we have observed above, in our opinion, the following order would meet the ends of justice. 6 O R D E R (i) The order dated 03/12/2002 passed by the Joint Commissioner and the Order passed by the State Government in appeal dated 15/01/2003 are set aside. (ii) The Joint Commissioner is directed to pass a fresh order pursuant to the show cause notice after considering the objections raised by the Petitioner and the explanation submitted by the Petitioner and after granting an opportunity of being heard to the Petitioner. (iii) The Petitioner shall be free to adopt remedies that may be available to the Petitioner in case the order of the Joint Commissioner goes against the Petitioner. (iv) In view of the statement made on behalf of the Petitioner, the Petitioner is directed not to commence manufacture and sale of the drug in relation to which show cause notice has been issued till the Joint Commissioner passes a fresh 7 order and, thereafter, the manufacture and sale of the drug shall be governed by the order that may be passed by the Joint Commissioner. Rule is made absolute accordingly. No order as to costs. (D.K. DESHMUKH, J.) (V.M. KANADE, J.) 8