COMMON JUDGMENT
B. RAJENDRAN, J
1. In view of the issues involved in these appeals are one and the same, both the appeals are taken up together and a common judgment is delivered by consent of both parties.
2. The case of the appellant is that he had obtained valid licence in Form 25-D issued under the Drugs and Cosmetics Act, 1940, to manufacture and sell the ayurvedic medicines viz., Kanakasavam, Jeeraka Aristam and Ashoka Aristam. Originally the licence was issued for the period commencing from 31.10.2000 to 31.12.2001 which is subject to periodical renewal. The licence was renewed upto 31.12.2005. He has also made an application for renewal for a further period beyond 31.12.2005 at that time the same was pending. The renewal application was filed on 15.12.2005 i.e. before the date of expiry. Though the application was pending, no final order was passed. According to the appellant, if no order is passed, he is deemed to have the licence and continued to have the licence as per Rule 157 of Drugs and Cosmetics Rules.
3. As the police officers in that jurisdiction interfered with the manufacture of the medicines on the ground that the appellant did not have L2 licence for manufacturing ayurvedic medicines, he then applied to the authorities concerned on 10.07.2002 for issue of L2 licence which was ultimately rejected by an order dated 13.02.2003. Challenging the rejection order, the appellant preferred an appeal on 09.04.2003 before the first respondent. It is also admitted that pending the application for L2 licence, the appellant was manufacturing the above said ayurvedic preparations as he had drug licence in Form 25-D of the Act.
4. In spite of his application seeking for L2 licence, as the police was still harassing him, he filed another writ petition in W.P.No.44586 of 2002 for a mandamus to forbear the respondents from interfering in manufacturing and selling of Kanakasavam, Jeeraka Aristam and Ashoka Aristam. He had also filed W.P.No.21936 of 2003 to dispose of the appeal of the petitioner dated 09.04.2003 for grant of L2 licence. In the meanwhile, a batch of writ petitions have been disposed of by this Court holding that L2 licence is necessary for manufacturing ayurvedic medicines even though the manufactures have already secured licence under the Drugs and Cosmetics Act, 1940.
5. On 17.06.2004, the Assistant Commissioner (Excise) had sealed the manufacturing unit on the instruction of the second respondent. In the meanwhile, the appeal was also rejected by the first respondent on 30.03.2004 and that order was challenged in W.P.No.22421 of 2004. In that writ petition, this Court passed orders directing the respondents to pass fresh order after giving sufficient opportunity to the appellant. Pursuant to the same, the final order was passed on 20.01.2005 which was challenged in W.P.No.11529 of 2005. Subsequently, he has filed another writ petition in W.P.(MD) No.24879 of 2007 for a mandamus directing the second respondent to remove the seal and permit him to manufacture and sell the ayurvedic medicines. All these writ petitions have been jointly taken up and orders have been passed. Aggrieved against the order, the present two writ appeals have been filed viz., against W.P.No.11529 of 2005 and 24879 of 2007. It is also admitted that after the rejection of the appeal by order dated 30.03.2004, on 17.06.2004 the pharmacy was sealed by the Assistant Commissioner (Excise), Nagercoil. This was challenged by W.P.No.22471 of 2004 and the same was allowed. The appellate authority's order dated 30.03.2004 was quashed and further direction was issued to consider the request for grant of L2 licence. The second respondent once again rejected the application for L2 licence by order dated 12.10.2004 against which an appeal was preferred on 27.10.2004 and that appeal was also rejected on 20.01.2005. Against which W.P.No.11529 of 2005 was filed in which a miscellaneous petition was filed for an interim direction to remove the seal. Interim direction was issued on 22.06.2005 and the seal was removed on 02.08.2005. Once again the police came to the spot and verified the samples and issued a show-cause notice by the second respondent dated 19.04.2007 for which the appellant has sent a reply and the company was sealed once again on 08.06.2007 and it continued to be sealed from then onwards during the pendency of the appeal and the writ petitions. Therefore, the writ petition in W.P.24879 of 2007 filed for a direction to the second respondent to remove the seal and permit the appellant to manufacture and sell the medicines viz., Kanakasavam, Jeeraka Aristam and Ashoka Aristam. As the said writ petition was dismissed the present appeals have been filed.
6. Heard all the parties concerned.
7. Admittedly, the appellant has got one licence viz., the licence issued under Drugs and Cosmetics Act and the same was in force upto 31.12.2005. The appellant has sent an application for renewal before the period of expiry i.e. on 15.12.2005, as per the Rule 157 of the Drugs and Cosmetics Rules, 1945, when the application is made and so long as the application for renewal is pending for consideration before the authorities, then the licence is deemed to be in force till it is rejected or approved. At the same time, whether the rejection of L2 licence sought for by the petitioner under Medicinal and Toilet preparations (Excise Duties) Rules, 1955, as confirmed by the first respondent is valid in law was the main question.
8. The licence issued under Form 25-D by the Drugs Controller is eligible for the appellant to have the sale and transport of ayurvedic preparation. But, at the same time, the licence under L2 under the Medicinal and Toilet preparations (Excise Duties) Rules, 1955, is only empowering him to manufacture the ayurvedic products. But the complaint of the Government is that the appellant is preparing only a particular ayurvedic preparation viz., Kanakasavam with high alcoholic percentage and selling it to the public as a substitute to liquor. In fact, originally his request for grant of L2 licence was rejected by proceedings dated 13.02.2003. Challenging the same, he preferred an appeal before the Commissioner of Prohibition and Excise and that was also rejected on 30.03.2004 against which, he preferred a writ petition in W.P.No.22471 of 2004 and this Court set aside the rejection and directed the Collector to consider afresh and pass appropriate orders. Then after enquiry once again the application for grant of L2 licence was rejected on 12.10.2004 against which, he has preferred another writ petition in W.P.No.11529 of 2005. Though initially interim order was obtained which was ultimately dismissed as the original writ appeals in W.A.Nos.795 to 797 of 2005 were dismissed. Consequently, the said W.P.No.11529 of 2005 was also dismissed. Pursuant to the dismissal of the interim petition and as there were complaints regarding the appellant's sale of such ayurvedic products, once again the pharmacy was sealed on 08.06.2007. As against that sealing, the writ petition in W.P.No.24879 of 2007 has been filed.
9. In this connection, it is pertinent to point out that when the batch of writ petitions including the writ petition filed by the petitioner in W.P.No.44586 of 2002 was disposed of by this Court and in which it is clearly held by order dated 31.10.2003, that L2 licence is absolutely necessary for the manufacture of ayurvedic medicinal preparations.
10. According to the appellant, the confiscated items were sent for chemical analysis and the report would only contemplate that there was less than 10% of alcohol contained in the material which was sent for investigation. Further, in the same report, it was also held that it did not contain any poisonous substance and in the earlier writ appeal this was noted. Therefore, the sealing of the premises merely on the allegation of the third parties or on surmises cannot be correct.
11. Per contra, the learned Government Pleader would mainly contend that at the time of inspection what they found was only one particular variety of medicine which was not in tune with the ayurvedic preparations and they have also not mentioned anything in the bottle what kind of medicine it is. In fact, there was a complaint in this regard. The inspection itself was made only because five persons died due to consuming of the illicit liquor. Therefore, rightly the licence was denied to the appellant.
12. As rightly pointed out by the learned Single Judge, when we analyse even the original order passed by the second and third respondents rejecting the request of the appellant for L2 licence, it is very clear that the appellant himself has admitted that he has prepared those materials without even L2 licence. He has manufactured only with the interim orders. In this connection, Rule 87 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1955, can be usefully referred to which reads as under: 87. Revocation and suspension of license-(1) Any license granted under these rules may be revoked or suspended by the licensing authority if the holder, or any person in his employ, is found to have committed a breach of the conditions thereof or of any of the provisions of the Act or these rules or has been convicted of an offence under Section 161, read with Section 139 or with Section 116 of the Indian Penal Code (45 of 1860).
13. Wherein it is very clearly stated that even in a case where licence has been granted, if the licensee violates any of the provisions of the Act or the Rules, then, the licence is liable to be revoked. Therefore, as rightly held by the learned Single Judge, the appellant has violated the provisions of the Act and disqualified himself from getting L2 licence. According to the respondents, on the inspection on 17.06.2004, about 12,480 litres of black liquor was recovered. Further, it was stated that what was recovered is not a medicinal preparation and it is only a black liquor. In fact, in Crime No.66 of 2006 a case has also been registered for possession of illicit liquor. As rightly pointed out by the learned Single Judge whether it is illicit liquor and it contains only 10% of alcohol have to be gone into only by the competent court. Therefore when the manufacture itself is made without licence, there is nothing wrong for the authority to seal the premises and especially, in this case when there were five deaths reported. Similarly, the learned Single Judge has also held that we cannot re-appreciate the evidence for rejecting L2 licence. In fact, in the order of the appellate authority also it is very clear that it has come to the conclusion that the main lapse was without getting L2 licence he had manufactured the ayurvedic preparations viz., Kanakasavam, Jeeraka Aristam and Ashoka Aristam illicitly and sold to the public in the form of intoxicating material resulting in law and order problem. Therefore, we do not find any reason to interfere with the reasoned order. At the same time, we would only say that the premises has been sealed though by an interim order of this Court the seal has been removed and subsequently again the seal has been made on 08.06.2007. Admittedly, he had the licence for selling the goods under Drugs and Cosmetics Act. He has also filed necessary renewal application in time. But the renewal application was not considered and no order was passed. As per section 157, if no order is passed, it deemed to have continued the licence. Therefore, sealing of the premises at this point of time is not necessary.
14. Since his application for L2 licence has been rightly rejected, he cannot manufacture ayurvedic medicines. He can at least use the licence issued under Drugs and Cosmetics Act. At this point of time, we would state insofar as the sealing of premises on 08.06.2007 alone has to be set aside and the appellant will be permitted to open the shop only to sell any goods under the licence issued in Form 25-D under the Drugs and Cosmetics Act and it is also further directed that his application for renewal of licence under Form 25-D which is pending is to be disposed of by the authorities concerned within a period of three months from the date of receipt of copy of this judgment. It is further made very clear that the appellant will not manufacture any ayurvedic products without L2 licence. In other respects, the writ appeals are dismissed. Consequently, connected miscellaneous petition is closed. No costs.