Karnataka HC Quashes Pharma Licence Cancellation Two Days After Show-Cause Notice, Allows Trade For Now But Bars Zavicefta Sales

The petitioner, a pharmaceutical distributor holding three drug licences, was served with a show-cause notice dated 17 September 2026 under Rule 66(1) of the Drugs and Cosmetics Rules, 1945, alleging that it had dealt in allegedly spurious “Zavicefta injection”.

Although the notice allowed seven days to respond, the licensing authority cancelled the licences by order dated 19 September 2026, before that period had expired.

The petitioner challenged the cancellation under Articles 226 and 227 of the Constitution.

Rule 66(1) of the Drugs and Cosmetics Rules, 1945 authorises the licensing authority, by a reasoned written order, to suspend or cancel a licence—wholly or in respect of some of the substances to which it relates—only after giving the licensee an opportunity to show cause.

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

The authority cancelled the licences on 19 September 2026 despite having allowed the petitioner seven days to respond to the notice issued on 17 September; the cancellation therefore preceded the opportunity contemplated by the notice and was, on its face, unsustainable.

The Court also observed that Rule 66(1) permits action in respect of only some substances, and directed that this aspect be considered by the authority.

The Court did not determine the merits of the allegation concerning Zavicefta injection.

It permitted the petitioner 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 decision, the petitioner could continue its licensed business, except that it could not deal in Zavicefta injection; all merits contentions were left open, and the petition was partly allowed.