Karnataka HC Lets Drug Distributor Resume Business For Now, Except Allegedly Spurious Zavicefta Injection, After Quashing Licence Suspension Before Reply

The petitioners, an authorized pharmaceutical distributor, held wholesale and retail drug licences.

After a show-cause notice dated 17 September 2026 alleged that they had dealt in “Zavicefta injection,” alleged to be spurious, Respondent No. 1 suspended their licences by order dated 19 September 2026 under Rule 66 of the Drugs and Cosmetics Rules, 1945.

The petitioners challenged the suspension, contending that the notice allowed seven days to respond but the licences were suspended before that period expired.

Rule 66(1) of the Drugs and Cosmetics Rules, 1945 authorizes the licensing authority to cancel or suspend a licence, wholly or in respect of some substances, where the licensee has failed to comply with licence conditions or the Act or Rules; before doing so, the authority must give the licensee an opportunity to show cause and issue a written order stating reasons.

Rule 66(2) provides for an appeal to the State Government within three months against an order of suspension or cancellation.

The Court held that Rule 66(1) required the petitioners to have an opportunity to respond before suspension.

The authority suspended the licences on 19 September 2026, although the show-cause notice dated 17 September 2026 allowed seven days for a response. The Court therefore found the suspension ex facie unsustainable.

It also noted that Rule 66(1) permits suspension wholly or only as to particular substances, an aspect the authority was required to consider.

It permitted the petitioners to reply to the show-cause notice by 29 October 2026 and directed the authority to provide a hearing and proceed in accordance with law.

Pending the authority’s consideration, the petitioners could continue their licensed business, except for dealing in “Zavicefta injection.”

The merits were left open, and the writ petition was partly allowed.