Malik Medical Hall v. Union Of India

1. Heard learned counsel for the petitioner.

2. The first submission made by learned counsel is that under Rule 59 of the Drugs and Cosmetics Rules, 1945 (hereinafter referred to as 'the Rules') the Director of Medical and Health Services, Rajasthan was appointed by the State Government as the Licensing Authority for the whole of the State of Rajasthan for the purpose of Part VI and Part VII of the Rules and thereafter under Rule 60 of the Rules the Licensing Authority, with the approval of the State Government, by an order dated July 4, 1958 delegated the power to sign licences and all other powers under Part VI of the Rules to the District Medical and Health Officer, Jaipur. By a subsequent notification dated September 11, 1959 the Licensing Authority delegated the very same powers to the Assistant Director of Health Services, Jaipur instead of the District Medical and Health Officer, Jaipur. The contention of the learned counsel for the petitioner is that the Licensing Authority having delegated "all other powers of the Licensing Authority under Part VI of the Rules", it could not thereafter itself exercise the powers under Rule 66, regarding the cancellation of the licence of the petitioner. I am unable to accept this contention of the learned counsel as by delegation of the powers under Part VI of the Rules, the Licensing Authority namely the Director did not completely divest itself of the powers relating to cancellation or suspension of licences or other powers under Part VI of the Rules. It cannot be held that the delegation by the Licensing Authority amounted to a denudation of its authority. S. A. De Smith in Judicial Review of Administrative Action Second Edition at p. 285 observed .

"The general rule is that an authority which delegates its powers does not divest itself of them--indeed, if it purports to abdicate it may be imposing a legally ineffective fetter on its own discretion--and can resume them. But if it has validly delegated an executive power to make decisions, it will normally be bound by a particular decision made in pursuance of the delegated power and will be incapable of rescinding or varying it, nor will it be competent to "ratify" with retroactive effect a decision encroaching on individual rights made by the delegate in excess of the powers so delegated, even though the delegating authority could validly have made the decision itself in the first place."

It has been said by the learned Author that the delegator retains the power to take decisions in relation to matters comprised within the delegation and it can revoke the authority of a delegate. This opinion of the learned Author was cited with approval by a Bench of this Court in Ghasi Ram v. State, AIR 1966 Raj 247, wherein their Lordships further observed:--

"We are of opinion that when an authority delegates its power to another, it does not follow that that authority thereby divests itself of such authority altogether. In other words, when the delegator delegates its authority to the delegate, its authority by itself does not cease, for, it may choose to revoke such authority which it could not do if it did not retain the authority itself. In support of this view, we may refer to Huth v. Clarke, (1890) 25 QBD 39, where it was held that the word "delegate" in its usual sense did not mean a parting with or denudation of power or authority by the person who grants the delegation, but rather the conferring of authority by him upon some one also so that the delegate may also do what otherwise he alone could do."

From the language employed in the notifications issued by the Licensing Authority delegating its power under Part VI of the Rules to the District Medical and Health Officer and the Assistant Director of Health Services, Jaipur it is impossible to conclude that the Director of Medical and Health Services completely divested himself of the powers of the Licensing Authority under Part VI of the Rules or that he completely defaced itself out of existence for that purpose Therefore, in my view, the Director of Medical and Health Services, who was designated as the Licensing Authority under Rule 59 of the Rules by the State Government was duly empowered to take action against the petitioner under Rule 66 of the Rules.

3. The second submission made by the learned counsel is that while the delegate, namely the Chief Medical and Health Officer was seized of the matter, the Director of Medical and Health Services could not have intervened and take the proceedings in his own hands by issuing the notice Annexure 3 dated January 9, 1974. Learned counsel in this respect drew my attention to the endorsement No. 2 of Annexure 2 wherein the Chief Medical and Health Officer, Jaipur had directed the Drugs Inspector, Jaipur to check the records of the Medical Halls, including the petitioner, and submit a detailed report to him. He also relied upon the endorsement No. 3 of Annexure 3 whereby the Director had called upon the Chief Medical Officer, Jaipur to send the file of the petitioner firm. The endorsements referred to by the learned counsel do not at all go to show that the Chief Medical and Health Officer, Jaipur had taken any proceedings against the petitioner under Rule 66 for cancellation or suspension of the licence, after passing the order Annexure 2. The quasi-judicial proceedings started with the giving of a show cause notice under Rule 66 and they have been taken in the present case, by one authority only namely, the Director of Medical and Health Services vide notice Annexure 3 and any earlier inquiry or investigation by the delegate could not debar the Licensing Authority from taking proceedings against the petitioner under Rule 66. Moreover, the action of the delegate must be considered to be an action taken by the Director himself. In this connection the following observation of their Lordships of the Supreme Court in Roop Chand v. State of Punjab, AIR 1963 SC 1503 may be usefully quoted:--

"When the delegate exercises the power, he does so for the Government." In this view of the matter there was no illegality in the action taken by the Director under R. 66 so far as the petitioner is concerned.

4. The next submission made by the learned counsel is that the Director had already made up his mind and the action taken against the petitioner was biased. In this connection learned counsel relied upon the fact that the order Annexure 1 suspending the licence of the petitioner was issued by the Chief Medical and Health Officer, Jaipur under instructions from the Director of Medical and Health Services and submitted that the Director intended to suspend the licence of the petitioner without any material. However, it may be noticed in this connection that although the order Annexure 1 appears to have been issued under the instructions of the Director, yet it was the Director of Medical and Health Services himself who directed the Chief Medical and Health Officer to withdraw the suspension order as appears from Annexure 2. As the Director realised that a proper show cause notice should be given to the petitioner, he directed the withdrawal of the suspension order, which was done vide Annexure 2. Thereafter a proper show cause notice was given to the petitioner by the Director, in accordance with the report made by the Drugs Inspector and the discrepancies and illegality found by the Inspector were duly notified to the petitioner. In this view of the matter it cannot be held that the Director was in any manner biased against the petitioner.

5. Another argument advanced by the learned counsel is that the Director was acting under the instructions of the Minister and he did not exercise his own independent discretion in the matter. In fact this argument is contradictory to the earlier argument made by the learned counsel that the Director was biased against the petitioner. For the last mentioned submission learned counsel relies upon the endorsements made on the orders Annexures 3 and 4, whereby copies thereof were sent to the Private Secretary to the Health Minister for the information of the Minister. I am unable to conclude from these endorsements that the action was being taken against the petitioner by the Director under the instructions of the Health Minister, merely because copies of the action taken by the Director were sent by him for the information of the Minister. This ground, therefore, also fails.

6. The next submission of the learned counsel is that the Health Minister could not hear the appeal on account of his involvement in the inquiry made against the petitioner. As I have already observed above that the mere endorsements made on the orders Annexures 3 and 4 do not go to show that the Director was acting under the instructions of the Minister, it cannot be said that the Minister was involved or was instrumental in the action taken by the Director against the petitioner. An appeal lies under Rule 66 (2) from the order of the Licensing Authority suspending or cancelling the licence to the State Government and the Health Minister was fully competent to hear the appeal on behalf of the State Government.

7. The next submission made by learned counsel was that Rule 66 pro-

vides for two alternative penalties namely, cancellation or suspension of licence and his grievance is that in some other cases the Health Minister in appeal merely passed an order of suspension of licence till the decision of the appeal, but in the case of the petitioner he upheld the order of the Director cancelling the licence. As learned counsel himself submitted that the proceedings before the Director under Rule 66 as well as before the Health Minister in appeal were quasi-judicial in nature, it is not for this Court to interfere in the quantum of punishment awarded to the different licensees, As a matter of fact, the grounds on which action was taken against the various licensees were not exactly the same in each case. It has to be noticed that in case of all the licensees, whose orders have been filed by the petitioner, it appears that the Minister found that there was a breach of the conditions of the licence as also the breach of the Rules. However, in some of the eases he thought that the extreme penalty of cancellation was not called for and, therefore, the order of the Drugs Controller and Licensing Authority was modified by the Minister and the licence was merely suspended for some period. In the case of the petitioner, the Minister did not find any mitigating circumstance for taking a lenient view and, therefore, the order of the Licensing Authority cancelling the licence of the petitioner was held to be just and proper. In these proceedings under Article 226 of the Constitution it is not possible for me to interfere with the quantum of the punishment awarded to the other licensees who also committed breach of the Rules and the conditions of their licences.

8. The last argument advanced by the learned counsel was that the Drugs and Cosmetics Act did not provide for any power of cancellation of licence. Clause (e) of Sub-section (2) of Section 33 gives the power to the Central Government to make rules prescribing the forms of licences for the manufacture for sale, for the sale and for the distribution of any drugs or any specified drug or class of drugs or of cosmetics or any specified cosmetic or class of cosmetics, the form of application for such licences, the condition subject to which such licences may be issued, the authority empowered to issue the same and the fees payable therefor. In my opinion the power to issue licences includes the power to revoke the licences and as the rules were to be framed for giving the power to issue licences, such Rules could also provide for the conditions in which the licences could be suspended or cancelled. Therefore, Rule 66 cannot be held to be outside the rule-making power of the Central Government under Section 33 of the Act.

9. No other point was argued before me.

10. There is no substance in the writ petition and the same is summarily dismissed.