[Pharmacy Act] State Has No Power To Cancel NOC: Allahabad High Court Sets Aside Cancellation Of 301 NOCs Granted To Pharmacy Colleges

The Allahabad High Court has held that neither the State Government nor any Board constituted by it has the power to revoke/cancel No Objection Certificates issued to Pharmacy Colleges as the power specifically vests with the Pharmacy Council of India.

The Pharmacy Act is a special enactment operating in the field of pharmacy. State cannot exercise power in that field based on any general state legislation, it is held.

“The State Government or the Board, at the most, can make views/opinion/report to the PCI and in such a situation, the PCI is only the statutory authority, which can take decision on the report of the State Government or the Board. Thus, the question no.(a), referred to hereinabove, is answered in favour of the petitioners/institutions that the State Government or the Board has no power to cancel the NOC granted earlier as the power to cancel the NOC is vested with PCI,” held Justice Om Prakash Shukla.

The Court further observed that had show cause notice been issued to the petitioner-institutions, they would have been able to explain the deficiencies pointed out by the State/Board. Holding that there was violation of principles of natural justice, the Court observed

“In any case, law stands settled that a party to whose prejudice an order is intended to be passed is entitled to a hearing applies even to authorities, who adjudicate upon matters involving civil consequences.”

Factual Background

Pharmacy Council of India (PCI) issued a letter whereby portal was opened for inviting applications for setting up of new institutions for courses of Bachelor of Pharmacy (‘B. Pharma’) and D. Pharma. Thereafter, Secretary, Board of Technical Education, Uttar Pradesh, Lucknow issued a letter inviting applications for the same. Subsequently a letter was issued by the Board stating that “due to paucity of time, the “No objection certificate” (NOC) as contemplated by PCI for starting a new institution, shall be issued on the basis of self-declaratory affidavits.”

Petitioner-Institutions and other Institutions applied for grant of NOC to open D.Pharma Course by filing relevant documents and self-declaratory proforma affidavit. Subsequently, they were granted NOC for setting up D. Pharma Course for academic year 2022-23. Thereafter, based on a committee which was formed to re-verify the NOCs, directions were issued by the Board cancelling the NOCs granted earlier to petitioner-institutions with immediate effect.

Counsel for petitioner contended that D.Pharma Course is a professional, vocational and technical training Course covered by Entry No.66 of List-1 of Schedule-VII of the Constitution of India. State Government or State Board had no jurisdiction to make inspection and cancel the NOCs.

Further, it was argued that Pharmacy Act, 1948 being a special Act enacted to cover a particular field of study would have precedence in that field. Under the Act, only PCI can approve grant of affiliation to an institution. Under Section 16 (1) (c) of the Pharmacy Act, 1948 only PCI can grant power of inspection to any authority, in absence of delegation by PCI, State Board cannot conduct inspections. Lastly, it was argued that the cancellation of NOC was done in violation of principles of natural justice.

Per Contra, Counsel for State argued that the NOC issued stipulated a specific condition that incase discrepancies are found, they will be revoked with immediate effect. Cancellation of NOC was justified as “fraud vitiates every solemn right and evidently the petitioners/institutions have submitted false affidavits.” Further, reliance was placed on Section 14 of the U.P. Pravidhik Shiksha Adhiniyam, 1962 to contend that a perusal of Section 14 of the U.P. Pravidhik Shiksha Adhiniyam, 1962 to justify the jurisdiction of the State in carrying out inspections.

High Court Verdict

The two main issues framed by the Court were whether the State or Board has the power to cancel the NOCs and whether the cancellation is violative of principles of natural justice.

The Allahabad High Court observed that the Pharmacy Act is a complete Code in the field of pharmacy which is a specific subject. The Court observed that including penal provisions in the Act, clarifies the legislative intent to ensure “seamless regulation of the profession.”

The Court held that Pharmacy Council of India established under the Pharmacy Act includes of experts in the field of pharmacy as opposed to the State Government and State Board exercising their powers under U.P. Pravidhik Shiksha Adhiniyam, 1962. Thus, PCI shall prevail over the State Board and norms and regulations set by PCI and other authorities under the Pharmacy Act must be followed by any institution imparting education for D. Pharma.

“On the other hand, so far as U.P. Pravidhik Shiksha Adhiniyam, 1962 is concerned, it reveals that the State Government has power to communicate its views to the Board on any work done or conducted by the Board or in respect of any matter with which the Board is concerned and the Board shall thereupon report to the State Government the action taken or proposed to be taken by it in regard thereto. This does not appear to mean that the Board, on the views/opinion of the State Government, can exercise the power as envisaged under Pharmacy Act, 1948 as the PCI is the body of experts connected with the subject of pharmacy and related subjects and therefore it will be in the larger interest and more particularly in the interest of education of pharmacy that PCI shall alone have the jurisdiction in the field of pharmacy, rather than State Government or the Board.”

The Court relied on State of Tamil Nadu v. Adhiyaman Educational and Research Institute and others wherein the Supreme Court had held that High Powered Committee constituted by the State Government to inspect the Engineering College was void as a central enactment (All India Council for Technical Education Act, 1987) had already come into force.

Drawing analogies from judgments of the Supreme Court operating in different special fields, the Court held that neither the State Government nor the State Board has any power to cancel the NOCs granted for D. Pharma Courses.

On the second issue of violation of principles of natural justice, the Court observed,

“It is trite law that the underlying principle of natural justice, evolved under the common law, is to check arbitrary exercise of power by the State or its functionaries. Therefore, the principle implies a duty to act fairly i.e. fair play in action. Furthermore, before affecting civil rights of a person adversely, the State is required to adhere to the principles of natural justice.”

The Court held that the order of cancellation gave rise to civil consequences and could not have been passed in violation of principles of natural justice. The Court held that no show cause notice or opportunity of explanation was provided to the institutions by the State/Board. The cancellation order was passed mechanically without assigning any reasoning. Thus, it cannot be sustained in the eyes of law.

The Court also noted that restriction can be imposed but only in accordance with law for restricting the “mushroom growth” of pharmacy colleges.

Accordingly, the Court set aside the cancellation of NOC. However, liberty was granted to the State to act in accordance with law. Further, the Court recorded its faith in PCI in carrying out the proceedings, if any, in accordance with law and providing opportunity of hearing to the parties.

Citaiton: 2023 LiveLaw (AB) 351

Case Title: Committee Of Management Jai Prakash Charitable Trust Thru. Admin Shri Rakesh Bahadur Singh v. State Of U.P. Thru. Addl. Chief Secy. Deptt. Of Technical Edu. Lko. And 2 Others

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