Asok Kumar Ganguly, J.
1. This appeal has been filed by the Directorate of Drugs Control, Government of West Bengal and Dr. Sajal Kr. Roychowdhury challenging the order dated 22nd July, 2005 passed in Writ Petition No. 1510 of 2005 by a learned Judge of the Writ Court. The Court has heard the Counsel for the parties at length and as such with the consent of parties the appeal is treated on the day's list and both the appeal and the stay petition are disposed of by this judgment.
2. By the impugned order the learned Judge of the Writ Court has virtually stayed operation of the order of suspension dated 11th July, 2005 by which the licence, issued in favour of the respondents/writ petitioner, has been suspended. The learned Judge has issued an interim order in terms of prayers 'h' & 'j' of the writ petition. The prayers 'h' & 'j' of the writ petition are as follows:
h) A further interim order of injunction restraining the respondents and each of them either by themselves or through their men, servants, agents, subordinators, from interfering with running of the said Blood Bank, in any manner whatsoever.
j) Stay of operation of the order 11th July, 2005, being Annexure P-11, herein;.
3. The writ petition has been kept pending.
4. The order of suspension has been issued on 11th July, 2005 by Dr. Sajal Kumar Roychowdhury, appellant No. 2 and claiming himself the licensing authority as the Directorate at Drugs Control, West Bengal. A mere perusal of the order of suspension shows that various allegations have been made in the same. The allegations on the basis of which the order of suspension has been issued were made on the basis of an inspection of the Blood Bank which is run by the respondent/writ petitioner. On 23rd June, 2005 various violations of serious nature were detected and those violations were so serious that it can affect the health of general public at large. Some of the violations which have been detected are that the Blood Bank run by the respondent does not perform any of the mandatory tests like HIV-I and HIV-II, HbAsg etc. which are required for prevention of AIDS and Hepatitis. The inspection also revealed that computerised test reports were kept ready with fictitious data and the firm only used to enter the blood bag numbers in handwriting wherever necessary. The inspection also revealed that blood collected on different dates from different donors have shown identical values in test reports and it is alleged that the same is pathologically not possible. On such data the opinion of experts were obtained. Dr. Malay Ghosh, Head of the Department of Haematology, NRS Medical College and Hospital, Kolkata, opined that the same is unrealistic and the opinion of Professor Utpal Chowdhury, Director, Institute of Haematology and Transfusion, Medical College, Kolkata, is that such data are unacceptable.
5. The appellants contend that in view of such allegations, a show-cause notice was served on the respondent and an opportunity of personal hearing was given. As the replies of the respondents were not found satisfactory, the order of suspension was issued with immediate effect for a period of 3 months in accordance with law and considering the public interest involved.
6. In the writ petition the order of suspension was challenged and the learned Judge of the Writ Court passed the interim order on 22nd July mainly on the ground that the appellant had no jurisdiction to issue the suspension order.
7. When the matter was argued before this Court, the argument by both the sides rested solely on the question of jurisdiction of the appellants in view of the provisions of Drug and Cosmetics Act, 1940 (hereinafter called the said Act) and the Drug and Cosmetics Rules, 1945 (hereinafter referred to as the said rules).
8. The learned Counsel for the respondent very strongly contended that the appellant, a State authority, cannot suspend the licence as it is not the licensing authority. According to the learned Counsel, the Central licence approving authority which is an authority of the Central Government is the licensing authority and it alone can suspend the licence. The learned Counsel for the appellant refuted the said contentions by referring to various provisions of the said Act and the rules.
9. Before examining the legal questions, it appears to this Court from the records that previously also the respondents filed another writ petition being Writ Petition No. 1465 of 2003. In that writ petition the same petitioners challenged an order dated 10th July, 2003 issued by the Director of Drugs Control, West Bengal. By the said order the respondents were asked to stop operation of the Blood Bank's activities in view of the reasons stated in the said order. The learned Single Judge, before whom the legality of the said order was challenged, disposed of the writ petition by an order dated 24th July, 2003. In the said order the learned Judge directed the Directorate of Drugs Control, West Bengal, the appellant herein, to give an opportunity of hearing to the writ petitioners and thereafter the Director, the appellant herein, was directed to decide the matter in accordance with the law and by passing a reasoned order. Pursuant to the said order hearing was given and matter was decided. Therefore, the authority of the present appellant in the matter of licence was accepted by the previous proceeding.
10. The question which is to be considered in this present appeal from interim order is, whether the present appellant, who is appointed by the State Government, can function as a licensing authority or whether the Central Licence Approving Authority (CLAA), a Central Government authority, is to function as a licensing authority and whether the Drugs Controller as licensing authority has the power to suspend the licence of the respondent/Bank or whether CLAA, a Central Government authority has the power to suspend the licence.
11. It is not in dispute that the said Act is a pre-constitutional Act. The Preamble to the said Act shows that the legislature of all the provinces passed a resolution in terms of Section 103 of the Government of India Act, 1935 in relation to such matters and ancillary thereto as are enumerated in the List II of the 7th Schedule to the Government of India Act. The said Act is an Act to regulate the import, manufacture and distribution and sale of drugs and cosmetics. It is clear that under Item 14 of the List II of the Government of India Act there was an entry about public health and sanitation, hospitals and dispensaries, registration of births and deaths. Similarly, there is an entry being Entry No. 6 in List II of the 7th Schedule to the Constitution which reads as 'Public Health and Sanitation, Hospitals and Dispensaries'. After the Constitution, the said Act has been continued and from a reference to the legislative history of the above Act it is clear that under the Act both the Central Government and the State Government are exercising their dual authority. Therefore, the licensee has to function under the dual authority of both the Central and the State. And in the administration of law under the said Act, the powers of both the authorities have to be accepted.
12. Now the question is whether the Drugs Controller is the licensing authority in respect of a licence to be given to a Blood Bank. From a reference to Section 3(e) of the Act it appears that both the Central Government and the State Government can appoint Inspectors in relation to Ayurvedic and Unani drug etc. under Section 33G and in respect of any other drugs. Therefore dual authority has been accepted in the structure of the said Act and the same also appears from Section 5 of the said Act, which provides for the constitution of a Technical Advisory Board. The said Board can advise both the Central and the State Governments on technical matters arising out of the administration of the said Act.
13. Similarly, under Section 20 Sub-section (1) of the said Act, a Government Analyst can be appointed by the State Government and under Sub-section (2) Section 20 of the said Act such Analyst can also be appointed by the Central Government.
14. The learned Counsel for the respondent very much relied on the amendment which was made in 1992 to the aforesaid Act and rules. It has been contended that a specific chapter on Blood Bank has been incorporated. Rule 68A was introduced by way of amendment. According to the learned Counsel this amendment empowers CLAA to grant licence for drugs notified by the Central Government and gives power to CLAA in respect of licence, granted by him. It was also argued that by amendment of rules, Part XB was introduced and Part XB expressly excluded from the jurisdiction of the appellant to function as a licensing authority. The learned Counsel very much relied on the provisions of Rule 68A of the said rules. Provisions of Rule 68A is set out below:
68A.Grant or Renewal of Licences by the Central Licence Approving Authority.--(1) Notwithstanding anything contained in this Part, on and from the commencement of the Drug and Cosmetics (Amendment) Rules, 1992, a licence for the manufacture for sale or distribution of drugs as specified from time to time by the Central Government by notification in the Official Gazette, for the purpose of this Rule, shall be granted or renewed, as the case may be, by the Central Licence Approving Authority (appointed by the Central Government):
Provided that the application for the grant or renewal of such licence shall be made to the licensing authority.(2) On receipt of the application for grant or renewal of a licence, the licensing authority shall,--
(i) verify the statement made in the application form;
(ii) cause the manufacturing and testing establishment to be inspected in accordance with the provisions of Rule 79; and
(iii) in case the application is for the renewal of licence, call for the information(s) of the pest performance of the licensee.
(3) If the licensing authority is satisfied that the applicant is in a position to fulfil the requirements laid down in these rules, he shall prepare a report to that effect and forward it alongwith the application [and the licence (in triplicate) to be granted or renewed, duly completed] to the Central Licence Approving Authority:
Provided that if the licensing authority is of the opinion that the applicant is not in a position to fulfil the requirements laid down in these rules, he may, by order, for reasons to be recorded in writing, refuse to grant or renew the licence, as the case may be. (4) If on receipt of the application and the report of the licensing authority referred to in Sub-rule (3) and after taking such measures including inspection of the premises by the Inspector, appointed by the Central Government under Section 21 of the Act, with or without an expert in the concerned field if deemed necessary, the Central Licence Approving Authority, is satisfied that the applicant is in a position to fulfil the requirements laid down in these rules, he may grant or renew the licence, as the case may be:Provided that if the Central Licence Approving Authority is of the opinion that the applicant is not in a position to fulfil the requirements laid down in these rules, he may, notwitstanding the report of the licensing authority, by order, for reasons to be recorded in writing, reject the application for grant or renewal of licence, as the case may be.
15. It has been argued by relying on the said provision that licence for manufacture and sale or distribution of drugs specified by the Central Government in the notification shall be granted or renewed by CLAA.
16. This Court is of the prima facie opinion that such contention is advanced on a rather misconceived interpretation of the said Rule. If properly read it becomes clear that in the said Rule the application for grant or renewal of licence shall be made to the licensing authority. Therefore, even under the said Rule, the role of the licensing authority, which is the Drugs Controller, has not been disputed. Under the said Rule the dual power of the licensing authority and CLAA as separate authorities have been recognised. Sub-rules (2) and (3) of Rule 68A make it clear that when an application is made to the licensing authority namely the appellant, such licensing authority has to verify the processes mentioned in Sub-rule (2). Under Sub-rule (3) the licensing authority is required to be satisfied that the applicant is in a position to fulfil the requirement laid down in the said rules and the licensing authority has to prepare a report to that effect. Then the licensing authority is required to forward the report along with the application to CLAA. It is clear from these provisions that such a licence has to be duly completed and also has to be signed by the licensing authority before it is sent to CLAA. The proviso to Sub-rule (3) makes it clear that licensing authority may for reasons, recorded in writing, refuse to grant or renew the licence, as the case may be. In case of refusal and where such report is sent to CLAA, the CLAA may after inspection of the premises by the Inspector, appointed by the Central Government under Section 21 of the Act and it is if satisfied with such inspection that the applicant is in a position to fulfil the requirement as laid down in the rules, grant or renew the licence as the case may be. On the other hand if CLAA is of the opinion that despite the favourable report by the licensing authority the applicant is not in a position to fulfil the requirement it may for reasons to be recorded in writing, reject the application for grant of licence. Rule 68A(2), Sub-clause (ii) refers to Rule 79 and the said Rule provides for inspection and it is clear from a perusal of the said Rule that under the said Rule both the licensing authority and CLAA have the power of inspection.
17. So on a conjoint reading of Rule 68A and Rule 79 it is clear that ordinarily a licence is to be granted by the licensing authority subject to the approval of CLAA. In fact, in this case, the licence has been granted by the licensing authority, the appellant, herein and the same has been approved by CLAA. The same appears from the original licence, which was shown to this Court. It has been argued in this case, that the exercise of power under Rule 68A of Part III of the said rules read with the Forms in which the licence is granted clearly stipulate that licence can be granted by the State Licensing authority subject to the approval of CLAA. The State Authority has to send the licence duly filled up to CLAA in three parts. The CLAA approves it and retains one part and sends two part to the licensing authority. Then one part of such licence is forwarded to the applicant and the other part is retained by the licensing authority. In the statutory Forms of licence there are four parts and in all the four parts State Licensing Authority signs. Therefore, the licence has been actually issued, in this case, by the licensing authority but it has been approved by the licensing authority. Only in cases of disapproval of the licence by the licensing authority, CLAA can step in and grant a licence that is not the position here.
18. Apart from the Rule 122F(1) of the rules makes it clear that application for licence for the running of a Blood Bank has to be made to the licensing authority appointed under Part III and such application has to be made under Form 27C to the licensing authority. Form 27C is a statutory Form and it has been prepared in view of Rule 122-F and from Note 2 in the said Form it is clear that a copy of the licence along with all the enclosures shall be sent to CLAA.
19. Therefore, on a harmonious construction of different provisions of rules referred to above, it is clear that initial application for licence even in case of a Blood Bank has to be made to the State Licensing Authority. The State authority will thereafter prepare a report after recording its satisfaction and may grant or renew a licence and forward it to the CLAA for approval. It is only on receipt of the entire material including the granted or renewed licence, CLAA can approve it by putting its signature on the body of the licence. Apart from that Rule 122M makes the State Government the appellate authority against an order of licensing authority in a case where licence has not been renewed or granted by Drugs Controller which is a State authority. In the said chapter there is Rule 122O which gives power both to licensing authority and CLAA, to pass an order of suspension.
20. Therefore a conjoint and harmonious reading of the provisions makes it clear that in the instant case the power of suspension has been granted to the licensing authority under Rule 122-O. So it cannot be said, at least prima facie, that the suspension order has been issued without jurisdiction. This is a prima facie view of this Court upon perusal of the various provisions referred to above.
21. This Court is of the opinion that the interim order dated 22nd July, 2005 passed by the learned Judge staying the operation of the suspension order dated 11th July, 2005 was not passed on a proper exercise of discretion or on a proper appraisal of the statutory provisions discussed above. Therefore, this Court cannot sustain the said interim order and the said order dated 22nd July, 2005 is set aside.
22. This Court is of the opinion that since the suspension order has been passed for 3 months this writ petition which has been kept pending should be heard out early by the Writ Court. At the final hearing the Writ Court may apply its mind independently to the relevant statutory provisions and come to a final decision. In doing so, the Writ Court is not inhibited by the observations made in this judgment and order. The observations made herein are made on a prima facie appraisal of the statutory provisions and for the purpose of considering whether interim order as granted can be continued or not.
23. This appeal is thus allowed and the interim order dated 22nd July, 2005 issued by the learned Judge of the Writ Court is set aside.
24. There will be no order as to costs.
25. Urgent xerox certified copy of this judgment, if applied for, be given to the parties expeditiously.
Tapan Kumar Dutt, J.
26. I agree.