Natural justice in licence cancellation: adverse material must be disclosed and the affected party given a fair opportunity to respond.

Cancellation of drug licences was found unsustainable where the adverse laboratory report and other material relied on were not disclosed to the appellants before being used against them. The appellants' explanation regarding the alleged non-production of the godown licence was not shown to be false, yet it was ignored. The lack of prior disclosure and failure to consider the explanation amounted to denial of a fair opportunity and non-compliance with natural justice. The cancellation orders were set aside and the matter was remitted for fresh consideration after giving the appellants a proper opportunity.

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Issues: Whether the cancellation of the appellants' drug licences could be sustained when they were not given a proper opportunity to meet the adverse material relied upon by the appellate authority.

Analysis: The adverse laboratory report and other material used to support cancellation were not furnished to the appellants before reliance was placed on them. The explanation offered by the appellants regarding the alleged non-production of the godown licence was not shown to be false, yet it was ignored. The absence of prior disclosure of the material and the failure to consider the appellants' explanation amounted to denial of a fair opportunity and non-compliance with natural justice.

Conclusion: The cancellation orders could not be sustained and were set aside. The matter was sent back for fresh consideration after giving the appellants a proper opportunity and following the principles of natural justice.

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