|
The Bombay High Court has delivered a significant judgment, quashing orders that had forced two pharmaceutical manufacturers, National Pharmaceuticals and AVEO Pharmaceuticals Pvt Ltd, to completely halt production.
Justice N J Jamadar ruled that the initial stop-production directives issued by the Joint Commissioner of the Food and Drug Administration (FDA) were a flagrant violation of the principles of natural justice and clear breach of Rule 85(2) of the Drugs and Cosmetics Rules, 1945. The judgment also set aside the subsequent appellate orders passed by the minister, department of food and drugs (FDA), which had upheld the ban.
The legal challenge cantered on the timing and scope of the punitive action. The FDA's action against the two firms, filed as Writ Petition No. 10602 of 2025 and Writ Petition No. 10603 of 2025, originated from a circular issued by the Central Drugs Standard Control Organization (CDSCO) concerning the potential for drug abuse involving the combinations of tapentadol and carisoprodol. Following this advisory, both companies voluntarily surrendered their licenses for the production of these specific drugs.
However, instead of restricting the action to the problematic combinations, the Joint Commissioner (FDA) issued a blanket order directing the companies to stop the manufacture, sale, and distribution of all their medicinal products under their approved licenses. Critically, these sweeping stop-production orders were passed either before or simultaneously with the issuance of a formal show cause notice under Rule 85(2) of the Rules, 1945. For example, in the case of AVEO Pharmaceuticals, the ban was imposed on February 22, 2025, two days before the show cause notice was even issued.
Senior Counsel Amir Arsiwala, appearing for the petitioners, argued that this sequence violated the mandatory requirement of the Rule. The Court concurred, holding that Rule 85(2) explicitly mandates that the licensing authority must first afford the licensee an opportunity to show cause why such an order should not be passed. The regulatory authority acted unlawfully and made its decision invalid from the moment it was issued, given that the right to a hearing is a fundamental constitutional requirement before restricting rights.
The bench was unpersuaded by the respondents’ attempt to justify the immediate ban by citing the exigency of the situation and the gravity of potential drug abuse. Justice Jamadar noted that since both companies had already surrendered the licenses for the specific drugs identified as a risk, the action prohibiting the manufacture of all other products was unduly onerous and impinged upon the petitioners’ rights without the necessary legal foundation.
The ruling mandates that the two pharmaceutical units, which collectively employ over 170 workers, are now free to resume production of all their other licensed products. Both companies, one of which claims to export over 400 products globally, had been completely shut down following the February 2025 orders, significantly impacting their operations and workforce.
While allowing the writ petitions and setting aside the stop-production orders, the High Court clarified that its judgment is not an expression of opinion on the merits of the allegations contained in the subsequent show cause notices. The Competent Authority remains free to continue with the process initiated by the show cause notices and pass appropriate orders regarding the potential cancellation or suspension of the manufacturing licenses, provided they do so strictly in accordance with the due process of law.
|