CWP-20560-2026 -1- 110 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-20560-2026 Date of Decision : 09.07.2026 NAVDEEP SINGH .....Petitioner VERSUS STATE OF PUNJAB AND OTHERS .....Respondents CORAM: HON'BLE MR. JUSTICE KULDEEP TIWARI Present : Mr. Amit Arora, Advocate, for the petitioners. Mr. Sahil R. Bakshi, AAG, Punjab. KULDEEP TIWARI, J.(Oral) 1. The Zonal Licensing Authority under Drug and Cosmetic Act 1940, invoking the provisions of Rule 66(1) of Drugs and Cosmetic Rules 1945 (for the sake of brevity 'Rules of 1945'), cancelled the retail sale drugs license, issued to the petitioner, vide impugned order dated 11.03.2026 (Annexure P-4), with immediate effect, as he was found in violation of Rules 65(2), 65(3)(1), 65(4)(1), 65(4)(4), 65(17) and 65(6) of aforesaid rules. The statutory appeal filed under the provisions of Rule 66(2) of Rules of 1945, was also dismissed vide impugned order dated 17.06.2026 (Annexure P-6) by the Appellate Authority concerned (respondent no.2). The legality of both the orders (supra) has now put to DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document CWP-20560-2026 -2- question through the instant petition, filed under Article 226/227 of the Constitution of India. 2. Learned counsel for the petitioner, at the outset, placing reliance upon the proviso attached to section 66 (1) of the Rules of 1945, put a statutory defence and submits that on account of an act or omission on the part of an employee the licensing authority ought not to have cancelled the drug licence. 3. He further submits that the petitioner had duly established that neither he nor his employee had been guilty of any act or omission within twelve months preceding the date on which the act in question took place and, therefore, the licence ought not to have been cancelled, at the first instance. 4. He further submits that the inspection conducted on 06.02.2026 was neither fair nor independent. According to him, the inspection was conducted simultaneously with the police raid in connection with FIR No.24 dated 06.02.2026, registered under the NDPS Act, 1985. Instead of independently examining whether any violation of the provisions of the Drugs and Cosmetics Act, 1940, and the Rules framed thereunder had actually occurred, the Drug Inspector merely adopted the version of the police authorities. Consequently, the action of the Licensing Authority was not an independent quasi-judicial determination, but merely an endorsement of the allegations levelled by the police. Such abdication of statutory responsibility renders the entire proceedings illegal. DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document CWP-20560-2026 -3- 5. He further submits that there is no evidence on the record to support the allegation that petitioner is indulging in sale and purchase of prohibited drugs; no customer has been examined; no illegal transaction has been proved; no material indicating organized unlawful sale has been produced; and no finding regarding actual distribution of medicine has been recorded. Therefore, the impugned orders, being totally non- speaking orders, do not pass the test of legality. 6. He finally submits that the punishment of cancellation of license entails far-reaching civil consequence, which effectively amounts to civil death of the petitioner. Admittedly, this is the first alleged offence/violation, therefore, the authority ought to have resorted to suspend the license, instead of cancelling it altogether. 7. Before this Court embarks upon the submissions made by the petitioner, it is imperative to refere to the relevant facts which are essential for adjudication of the instant matter. 8. The petitioner is a partner of M/s Guru Nanak Medical Store, which is a licensee under the Drugs and Cosmetic Act, 1940, and Rules framed thereunder. The retail drug licence was granted on 24.07.2021 and was valid up to 23.08.2026. On request of the SI and ASHO, Police Station Ranjit Avenue, Amritsar, the shop (sales premises) was inspected by the DCO, Amritsar-III, on dated 06.02.2026, in the presence of police team. During the inspection, serious contravention of the provisions of the Drug and Cosmetics Act 1940, and Rules framed thereunder, was found. Apart from other violations, the aforesaid firm, was also found in DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document CWP-20560-2026 -4- unauthorised possession of contraband drug namely, tramadol. All the drugs containing tramadol (a psychotropic substance) were seized by police and a separate FIR No.24 dated 06.02.2026, under Sections 22 and 27(a) of the NDPS Act, 1985, was registered. Thereupon, the petitioner was served with a show cause notice on 12.02.2026, to which the petitioner, submitted a reply. Upon finding the reply to be unsatisfactory Zonal Licensing Authority concerned, proceeded to cancel the licence of the petitioner vide impunged order dated 11.03.2026. 9. The statutory appeal preferred by the petitioner, against the aforesaid order, was also dismissed, vide impugned order dated 17.06.2026. Hence the instant writ petition. 10. In the instant case, it is imperative to have a glimpse upon the violations committed by the petitioner's firm, which were found during the raid conducted by the authority concerned. i) On demand by the raiding team, petitioner failed to produce the purchase record/bills and corresponding sale records of three types of drugs containing Pregabalin-300 mg, key ingredient. Therefore, there is a violation of Rule 8 of the Drugs and Cosmetics Rules 1945. ii) Some of the seized drugs were found to have expired, yet these were found stocked for sale and distribution. iii) The sale records were maintained manually, and the last sale was done through Bills No. 3443, dated Nil, and 344 dated Nil. Hence, the record was found to be incomplete and DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document CWP-20560-2026 -5- not maintained upto date. Further, the Schedule HI Register produced during inspector was also found to be incomplete after 28.03.2025. iv. The petitioner was also found stocking for sale and distribution of some oral dosages forms drugs tramadol and also failed to produce any valid license/permission to stock oral dosages of tramadol, and purchase bills/corresponding sales record of these drugs. 11. Though the petitioner was having drug license, neither the petitioner nor his firm, was not permitted or authorized to stock for sale and distribution of oral dosages forms of drug tramadol, in terms of the licence issued. From the above facts, it is clearly transpires that the petitioner was, not only found in possession of prohibited drug tramadol, but was also not authorized to stock for the sale and distribution of oral dosages forms of drug of tramadol. Even the stock Register maintained for the sale and stock of Schedule H1 drug, had not been maintained properly. 12. The material available on record further reveals that the petitioner failed to produce any document i.e. purchase invoice/bills, with regard to purchase of 100 tablets/capsules of restricted oral drug Tramadol, and 108 capsules of high-strength Pregabalin, which strengthens the observation of the authority concerned that said drugs were procured through illegal black-market channel for unauthorized, commercial exploitation. DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document CWP-20560-2026 -6- 13. It is not merely a case of unauthorised possession. A retail medical store engaged in the business of sale of drugs is not expected to keep psychotropic substances in its premises merely for possession. The only reasonable inference, in the absence of any lawful explanation or statutory records, is that such drugs were intended for sale and distribution. Admittedly, the petitioner was not authorised under the licence to stock or sell oral dosage forms of Tramadol. 14. Now, let us examine the statutory defence put by learned counsel for the petitioner, to the effect that, since it is an act or omission on the part of petitioner's agent or employee, therefore license could not have been cancelled straightway, in view of the proviso to Rule 66(1) of the Rules of 1945. For ready reference, Rule 66 (1) of the Rules of 1945 is reproduced hereunder:- “(1)The licensing authority may, after giving the licensee an opportunity to show cause why such an order should not be passed by an order in writing stating the reasons therefor, cancel a license issued under this Part or suspend it for such period as he thinks fit, either wholly or in respect of some of the substances to which it relates, if in his opinion, the licensee has failed to comply with any of the conditions of the license or with any provisions of the Act or rules thereunder: [Provided that, where such failure or contravention is the consequence of an act or omission on the part of an agent or employee, the license shall not be canceled or suspended if the licensee proves to the satisfaction of the licensing authority- (a) that the act or omission was not instigated or connived at by him or, if the licensee is a firm or company, by a partner of the firm or a director of the company, or (b) that he or his agent or employee had not been guilty of any similar act or omission within twelve months before the date on which the act or omission in question took place, or where his agent or employee had been guilty of any such act or omission, the licensee had not or could not reasonably have had knowledge of that previous act or omission, or DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document CWP-20560-2026 -7- (c) if the act or omission was a continuing act or omission, he had not or could not reasonably have had knowledge of that previous act or omission, or (d) that he had used due diligence to ensure that the conditions of the license or the provisions of the Act or the rules thereunder were observed.] ” 15. The proviso attached to sub clause (1) of Rule 16 provides a statutory defence for licensee. Where a violation has been committed by an agent or an employee, the license shall not be cancelled or suspended, merely on that grouned.The proviso embodies the principle that vicarious liability of the licensee is not absolute. However, the burden lies upon the licensee to establish one or more of the conditions prescribed therein. A licensee should not suffer merely because of violation of act or rules committed by his/her employee. 16. In the present case, the aforesaid proviso does not come to the rescue of the petitioner. The above discussed violations leading to cancellation of the licence cannot be attributed solely to any agent or employee. The petitioner and one Navjot Singh were partners of the firm, and the latter was found present at the premises during the inspection; hence merely because the petitioner himself was absent at the time of the inspection would not render his partner, an agent or employee within the meaning of the proviso. Furthermore, the unauthorised stocking of prohibited drugs, failure to maintain statutory records and inability to produce purchase invoices, are the violations, attributable to the licensee itself and cannot be shifted upon another individual. Consequently, the protection sought to be invoked under the proviso to Rule 66(1) is wholly misconceived and therefore is outrightly rejected. DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document CWP-20560-2026 -8- 17. This Court finds no merit in the present petition warranting judicial interference with the well-reasoned orders passed by the Licensing Authority as well as the Appellate Authority. 18. Accordingly, the instant petition, is hereby dismissed. 19. All pending application(s), if any, also stand disposed of accordingly. (KULDEEP TIWARI) July 09, 2026 JUDGE dharamvir Whether speaking/reasoned. : Yes/No Whether Reportable. : Yes/No DHARAM VIR 2026.07.14 17:12 I attest to the accuracy and integrity of this document