Bombay HC Grants Relief to Cadila, Pulls Up FDA Over Drastic Drug Sales Action
According to the news reported by TOI, the court questioned the manner in which the regulator had exercised its powers and stressed that coercive action against a licensed pharmaceutical manufacturer must follow due process.
The matter came before a bench comprising Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad. Cadila challenged the FDA’s action, which had halted the sale of some of its medicines despite the company holding a valid manufacturing licence. The dispute also raised a broader pharmaceutical industry issue concerning the use of brand extensions by drug manufacturers.
Cadila’s senior advocate Birendra Saraf argued that brand extension is a widespread practice across the pharmaceutical industry and that the matter therefore had implications beyond the company itself. He pointed out that the Central Government had initiated a public consultation on the issue on July 6, 2026, but the state FDA had proceeded with coercive measures while the consultation process was still underway.
Saraf argued that the regulator could not prohibit the sale of medicines manufactured under a valid licence without first following the prescribed legal procedure. According to him, the FDA was required to issue a show-cause notice and provide the licence holder an opportunity to present its case before taking such a serious step.
He submitted that “Once there is a valid licence, the prohibition of sale can be only by following the prescribed procedure of issuing show-cause and hearing the licence holder,’’ and sought a stay on what he described as an arbitrary prohibition order.
Saraf further contended that stopping the sale without giving Cadila an opportunity to be heard effectively amounted to an unlawful suspension or revocation of its manufacturing licence. The company also told the court that it had suffered substantial financial losses after the sales prohibition remained in force for around 20 days before the petition was filed. It claimed that medicines worth approximately Rs 2.4 crore had also been seized across the state over the alleged branding-related violations.
The FDA, however, defended its action as a preventive measure rather than an excessive exercise of regulatory authority. Government pleader Neha Bhide, appearing for the regulator, told the court that the action had arisen from confusion concerning the medicines and submitted that it was not intended to be high-handed.
During the hearing, the FDA offered to withdraw the orders issued against Cadila, issue fresh show-cause notices and provide the company with an opportunity of being heard before passing fresh, reasoned orders. The offer came after the High Court indicated that the company should be given a proper hearing before any drastic regulatory action was taken.
The High Court accepted the FDA’s statement and disposed of Cadila’s petition. The court’s intervention effectively required the regulator to follow due process before taking further action against the company’s products.
The bench, however, made it clear that its concern extended beyond Cadila’s financial losses. Acting Chief Justice Ghuge observed that the more significant issue was the impact of the sales prohibition on patients who depended on the medicines. The affected products are used for gastrointestinal conditions, including acid reflux, heartburn and stomach or intestinal ulcers.
The court also expressed concern over what it perceived as a pattern of aggressive enforcement by the FDA under its latest commissioner, Tukaram Mundhe. The bench urged the regulator to exercise its statutory powers carefully and proportionately rather than immediately resorting to the most severe measures.
The Acting Chief Justice reportedly reiterated the analogy of “using a sword to swat a mosquito”, suggesting that the FDA had adopted an unnecessarily severe approach before adequately investigating the alleged violations. The court also indicated that it had come across several instances involving what it considered drastic action by the department and warned that costs could be imposed in appropriate cases.
TOI reports that the bench made its concern particularly clear by stating: “You (FDA) have the power to use a sword, but the problem is you are using it to kill a mosquito. The power has to be judiciously exercised. It has to be used properly. Even in the cases of hotels and restaurants, you shoot first and then ask questions,” the bench said.
