Eastern Medikit Ltd. v. Kerala Medical Services Corporation Ltd. and The State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE ANTONY DOMINIC** **FRIDAY, THE 12TH AUGUST 2011 / 21ST SRAVANA 1933** **WP(C).No. 19038 of 2011(D)** **--------------------------** **PETITIONER(S):** - **---------------------** **EASTERN MEDIKIT LTD. A PUBLIC LIMITED COMPANY 3, DR.G.C.NARANG MARG DELHI 110 007, REPRESENTED BY ITS DEPUTY MANAGER (SALES) PRASHANT GOSWAMI.** **BY ADVS. SRI.R.T.PRADEEP SRI.SREEKANTH S.NAIR** **RESPONDENT(S):** - **------------------------** **1. KERALA MEDICAL SERVICES CORPORATION LTD. REPRESENTED BY ITS MANAGING DIRECTOR THYCAUD PO, THIRUVANANTHAPURAM. 695 003.** **2. THE STATE OF KERALA REPRESENTED BY ITS SECRETARY TO GOVERNMENT, HEALTH & FAMILY WELFARE DEPARTMENT, SECRETARIAT,THIRUVANANTHAPURAM. 695 001** **R1 BY ADV. SRI.M.AJAY,SC,KERALA MEDICAL SERVICES CORPORATION. R2 BY GOVERNMENT PLEADER SMT.RAJASHREE** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSIN ON 12/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 19038 of 2011(D)** **--------------------------------------** **APPENDIX ---------------** ## **PETITIONER'S EXHIBITS** ## **-----------------------------------** **EXT.P1. COPY OF THE RESOLUTION DATED 9.6.2010 PASSED BY THE BOARD OF DIRECTORS of the PETITIONER FIRM.** **EXT.P2. COPY OF THE TENDER DOCUMENT FOR THE SUPPLY OF MEDICAL DEVICES (CATEGORY-III) FOR THE PERIOD FROM 1.4.2011 TO 31.3.2012.** **EXT.P3. COPY OF THE INSPECTION REPORT DATED 13.6.2011.** **EXT.P4. COPY OF THE REPRESENTATION DATED 8.7.2011 SUBMITTED BY THE PETITOINER.** **EXT.P5. COPY of the NOTICES DATED 06.7.2011 REJECTING THE TENDER OF PETITIONER.** **EXT.P6. COPY of the NOTICE DATED 672011, WHICH ENUMERATES THE SUCCESSFUL BIDDER.** **EXT.P7. CPY OF THE VALIDITY CERTIFICATE DATED 1.7.2011.** **EXT.P8. COPY OF THE COMMUNICATION DATED 30.5.2011 IN THIS REGARD FROM PETITIONER TO STATE DRUGS CONTROLLER REGARDING THE APPOINTMENT OF DEEPAK NANDA.** **EXT.P9. COPY OF THE ISO ACCREDITATION OF THE COMPANY OF PETITIONER, WHICH IS VALID FROM 19.9.2009 TO 19.92012.** **EXT.P10. COPY OF THE GMP CERTIFICATE WHICH IS VALID UPTO 11.5.2011** **EXT.P11. COPY OF THE GMP UNDER CONSIDERTION CERTIFICATE DATED 30.6.2011.** **EXT.P12. COPY of the PRICE LIST OF M/S.B.BRAUN PUBLISHED IN THE WEBSITE.** **EXT.P13. COPY OF THE CE CERTIFICATE 0120 ENABLING THE PETITIONER TO EXPORT PRODUCTS TO EUROPEAN COUNTRIES.** **EXT.P14. COPY OF THE CERTIFICATE FOR THE YEAR 2008-2009 FOR THE TOP EXPORTER OF MEDICAL DEVICES.** **EXT.P15. COPY OF THE LIST OF COUNTRIES TO WHICH THE PETITIONER COMPANY EXPORTS THE MEDICAL DEVICES.** ## **WP(C).No. 19038 of 2011(D)** ## **-------------------------------------** ## **RESPONDENT'S EXHIBITS** **-------------------------------------** **EXT.R1 (A). COPY OF THE PROCEEDINGS .5482/PUR/KMSCL/2010 DATED 8.6.2011.** **EXT.R1 (B). COPY OF THE G.O. (RT) NO.2196/2011/H & FWD DATED 08.06.2011.** **EXT.R1 (C). COPY OF THE INSPECTION REPORT WITH THE NAME DESIGNATION AND SIGNATURES OF THE INSPECTING OFFICERS.** **EXT.R1 (D). COPY OF THE NOTIFICATION N.GSR 365(E) DATED 17.3.1989 ISSUED BY GOVERNMENT OF INDIA.** **EXT.R1(E). COPY OF THE NOTIFICATION NO. S.O 1468(E) DATED 6.10.2005.** **EXT.R1(F). COPY OF THE CLARIFICATION ORDER DT. 20.3.09.** **EXT.R1(G). COPY OF THE LICENCE NO.634-B (H) DATED 4.8.2006 VALID UPTO 7.5.2011.** **EXT.R1 (H). COPY OF THE APPLICATION FOR RENEWAL OF LICENCE DATED 28.4.2011.** **EXT.R1.(I). COPY OF THE PHOTOGRAPHS OF THE RAW-MATERIAL STORAGE AREA SUBMITTED BY THE INSPECTION TEAM.** **EXT.R1 (J). COPY OF THE PHOTOGRAPHS SUBMITTED BY INSPECTION TEAM, THAT DUE TO INADEQUACY OF STORGE SPACE, FINISHED GOODS WERE STORED IN THE DISPATCH BAY.** **EXT.R1(K) COPY OF THE 'TEST FOR STERILITY' EXTRACTED FROM THE INDIAN PHARMACOEPIA, 2007.** **/ TRUE COPY /** **P.A. TO JUDGE** **VK** ## **ANTONY DOMINIC, J. ---------------------------------------------------W.P.(C) No. 19038 OF 2011 -----------------------------------------------------** ## **Dated this the 12[th] day of August , 2011** ## **J U D G M E N T** The petitioner Company has filed this writ petition praying to quash Exts.P3, P5 and P6 and to direct the 1[st] respondent to open its price bid and to award the contract to them. 2. The first respondent is a Government Company incorporated by the Government of Kerala to function as the Central Procurement Agency of all essential drugs and equipments for public health care institutions under the Government of Kerala. The first respondent published Ext.P2 tender notice, inviting tenders for supply of Medical Devices(Category III) for the period from 1.4.2011 to 31.3.2012. In response to Ext.P2, petitioner submitted its tender offering to supply 29 items of Medical Devices. The technical bids were opened on 1.2.2011 and offer of the ## **W.P.(C) No. 19038 OF 2011** **:2 :** petitioner for 21 products was accepted subject to satisfactory report of inspection of the manufacturing facilities, in terms of the provisions of the tender notice. Accordingly, the factory was inspected and the inspection team submitted Ext.P3 report. In its report, the inspection team recommended as follows. “In the opinion of the inspecting team, the Company is not capable of supplying drugs as per GMP specifications, on the following reasons. (1) Manufacturing operations are not made under supervision of an expert staff in production. (2) A separate raw material store is provided but without separators as per GMP. (3) The store provided is not adequate for finished goods. Finished products are stored even at the despatch bays. ## **W.P.(C) No. 19038 OF 2011** **:3 :** (4) Finished products are released for sale, without approval from the Quality Control Authorities. Hence the tender may be rejected.” 3. The inspection report was published in the website of the first respondent and Ext.P4 objection was filed by the petitioner. By Ext.P5 notice, the petitioner's tender was rejected and the reasons stated are that; “Manufacturing operations are not made under supervision of an expert staff in production. Raw material store is not in specification as per GMP. Finished product store is not adequate and the finished products are stored even at the despatch bays. Finished products are released for sale without approval from the quality control section. Hence the offer of the firm is rejected.” ## **W.P.(C) No. 19038 OF 2011** **:4 :** 4. Ext.P6 contains the list of suppliers, whose tender for supply of Medical Devices(Category III) has been accepted. It is in these circumstances the writ petition has been filed challenging Exts.P3, P5 and P6 and for consequential reliefs. 5. The first respondent has filed a counter affidavit. According to the first respondent in terms of the tender conditions, the factory was to be inspected by an inspection team of external experts, constituted as provided in the tender notice. It is stated that accordingly a team consisting of a Medical Doctor from the State Health Services Department(User Institution), one Regional Drugs Inspector from the State Drugs Control Department and one Asst. Professor from Government College of Pharmaceutical Sciences, Thiruvananthapuram conducted inspection of the petitioner's manufacturing facilities on 13.6.2011 and submitted Ext.R1(c) report with ## **W.P.(C) No. 19038 OF 2011** **:5 :** the recommendation to reject the tender. It is stated that the first respondent accepted the recommendation of the inspection team and accordingly the petitioner's tender was rejected. According to the first respondent rejection of the petitioner's tender is therefore fully in compliance with the tender conditions and hence does not call for interference by this court. 6. It was contended by the counsel for the petitioner that the inspection team was constituted violating the tender conditions and therefore the report submitted by such an illegally constituted inspection team, could not have been acted upon. It was also contended by him that the reasons for rejection of the petitioner's tender, on the basis of the recommendations of the inspection team, are factually erroneous. On this basis also, counsel contended that the rejection of the petitioner's tender was illegal and therefore calls for interference. ## **W.P.(C) No. 19038 OF 2011** **:6 :** 7. On the other hand, Standing Counsel for the first respondent contended that the report has been submitted by an expert inspection team, consisting of officers from different Government Departments. It was contended that the inspection team has submitted a factual report and that the report disclosed that the petitioner did not qualify for price bid opening. It is therefore argued that the order of the first respondent rejecting the offer made by the petitioner did not warrant interference. 8. I have considered the submissions made. 9. Ext.P2 is the tender notice. Among the various provisions of this document, clauses 6.16.4, 6.18.1 to 6.18.11 are relevant and therefore are extracted below for reference. “6.16.4. The inspection of the production facilities of those firms which has not been inspected during ## **W.P.(C) No. 19038 OF 2011** **:7 :** the past years and that of the new participants shall be conducted as detailed in clause 6.18 by a team of experts. The check list for inspection is published in the website of the Corporation. 6.18.1. Inspection of Production Facilities. In pursuance of clause 6.16.4 inspection of the production facilities will be, by different teams consisting of experts from the User Institutions/funding agencies/Drugs Control Department/College of Pharmaceutical Sciences. Specialists may also be co-opted into the team as deemed fit by the Tender Inviting Authority. 6.18.2. All the expenses incurred for the inspection will be borne by the Tender Inviting Authority. For those manufacturing facilities of tenderers, who have failed to qualify in the ## **W.P.(C) No. 19038 OF 2011** **:8 :** inspections conducted by the Corporation during 2008-09, 2009-10 and 2010-11, fresh inspections will be conducted only upon remittance of Rs.1 lakh as part of the Technical Bid as Inspection Fee. 6.18.3 All the manufacturing sections (tablets, capsules, injectables, liquids etc. in the unit including the quality control section will be subjected to rigorous inspection/auditing, irrespective of the items quoted. i.e.if the manufacturer has quoted only for certain items of tablets in the tender but is having the production of injectables/liquids/capsules etc. all the sections will be subjected to inspection. The tenderer will have to provide necessary arrangements for the conduct of inspection of all the sections and failure to co-operate with the inspection of the different facilities or ## **W.P.(C) No. 19038 OF 2011** **:9 :** in providing information as per the details in the standard inspection report format, published in the website, will lead to disqualification. As part of transparency policy no official of the Corporation will be accompanying the Inspection team. However, undue demands, beyond the scope of the standard inspection report format etc. made by the members of the Inspection team shall be immediately notified to the Tender Inviting Authority by the manufacturer by fax, so that the disputes could be resolved before the Inspection Team leaves the manufacturing facilities. The decisions of the Inspection team will not be communicated to the tenderer at their site and shall only be published on the website later. 6.18.4. Entry to all the areas of production including sterile products ## **W.P.(C) No. 19038 OF 2011** **:10 :** manufacturing/filling areas shall be facilitated. 6.18.5 The availability of plant & machinery, technical experts, analytical facilities of quality control lab etc as claimed in the technical bids along with the compliance of standard operating procedures adapted for the production of quality assured products, and in case of drugs, all other parameters mentioned in the schedule M of the Drugs and Cosmetics Act shall be evaluated by the team for considering the eligibility of the firm. Claim of holding the valid GMP certification/valid license will not be accepted for eligibility, if the procedures are not followed as stipulated in the schedule M of the Drugs and Cosmetics Rules, or if the available plant/machinery are not in working condition at the time of ## **W.P.(C) No. 19038 OF 2011** **:11 :** inspection. Tender offer will be rejected in such cases. 6.18.6 Minimum Production capacity to meet the demand of the tendered quantity with respect to available production facilities will be criteria for determining the acceptance/rejection of the firm. The Inspection team shall also verity the ability to the tenderer in fulfilling the supply schedule and manufacturing capacity as submitted in Annexure IV as part of the technical bid. 6.18.7 Control samples maintained for the batches for which the batch manufacturing records has been submitted will be cross checked during inspection. Failure to produce any one batch of the control samples will result in the rejection of that product from the tender offer. 6.18.8 Copy of one full set of ## **W.P.(C) No. 19038 OF 2011** **:12 :** the technical bid should be made available at the time of inspection. 6.18.9 Originals of all the documents submitted in the technical bids, should be produced for verification by the inspection team. Failure to produce any of the original documents will result in the rejection of the tender offer. 6.18.10 Key manufacturing areas will be photographed by the inspection team, which will be published along with the inspection report in the official website of the Corporation as part of transparency and cross verification. Denial of permission for photographing will result in the rejection of tender offer. 6.18.11 Failure to observe any of the conditions of the licenses issued under the Drugs and Cosmetics Act, by the manufacturer, if reported by the ## **W.P.(C) No. 19038 OF 2011** **:13 :** inspection team will result in the rejection of the tender offer.” 10. A reading of these provisions of the tender notice show that the inspection was to be conducted by a team of experts, drawn from the agencies which are mentioned in clause 6.18.1. This team was required to conduct inspection in the manner as provided in clauses 6.183, 6.184 and 6.185. 11. In this case the inspection team which submitted Ext.P3 report, consisted of a Medical Doctor from the State Health Department(User Institution), one Regional Drug Inspector from the State Drugs Control Department and one Asst. Prof. from the Government College of Pharmaceutical Sciences, Thiruvananthapuram. 12. The first contention of the petitioner is that clause 6.18.1 prescribed that the inspection team should have at least four officers, i.e, one each from User ## **W.P.(C) No. 19038 OF 2011** **:14 :** Institutions/funding agencies/Drugs Control Department and College of Pharmaceutical Sciences. According to the petitioner, in addition to these four, the first respondent could also co-opt a specialist into the team as they may deem fit. On this basis, it was argued that since the inspection team had only three members, the constitution of the inspection team itself was illegal and therefore their report could not have been the basis for rejecting the tender. 13. This contention of the petitioner has been answered in the counter affidavit of the first respondent, the relevant portion of which, reads as follows. “As per the tender conditions, the inspection of the production facilities will be by a team consisting of experts from the User Institutions/Funding Agencies/Drugs Control Department/College of **:15 :** ## **W.P.(C) No. 19038 OF 2011** Pharmaceutical Sciences. Specialists may be Co-opted into the team as deemed fit by the tender inviting authority. In the instant case, the funding agency is the second respondent. All the members in the inspecting team constituted vide Ext.R1(a) are the employees of the second respondent and hence an additional member representing the funding agency were not included in the team. Moreover the tender conditions never stipulate that the team should compulsorily contain 4 members. The team can be constituted by any of the members as noted in clause 6.18.1. It may also be noted that the team members have been approved by the funding agency, the second respondent, by the order vide Ext.R1(b) in response to the request by the first respondent.” ## **W.P.(C) No. 19038 OF 2011** **:16 :** 14. The correctness of the petitioner's contention that absence of four members, will vitiate the constitution of the inspection team itself will have to be tested in the light of clause 16.181 and the contentions in the counter affidavit. 15. Clause 6.18.1 of the tender notice shows that the inspection team should consist of experts from User Institutions/funding agencies/Drugs Control Department and College of Pharmaceutical Sciences. Clause 6.18.1 nowhere says that the team should consist of representatives from all the aforesaid four Institutions or Departments. On the other hand the Tender Inviting Authority is given the freedom to constitute the team with officers from all the above departments or from some of them. Therefore, the freedom to choose members of the inspection team was that of the first respondent and the first respondent was under no obligation to constitute the ## **W.P.(C) No. 19038 OF 2011** **:17 :** inspection team with members from all the aforesaid four organizations/departments. Having so understood clause 6.18.1 of the tender notice, I should accept the case of the respondent and reject the contention of the petitioner. 16. Yet another aspect of the matter is that the funding agency is the Government of Kerala. “User Institution” is also Department of the 2[nd] respondent. Since both these come under the Government, if the first respondent has decided to constitute a committee with one member representing these two categories, that decision of the first respondent is also not vitiated for any illegality. Further, the constitution of the inspection team itself was approved by the Government of Kerala as per Ext.R1(b) order. In such circumstances there is absolutely no substance in the contention raised by the petitioner regarding the alleged irregularity in the constitution of the inspection team. ## **W.P.(C) No. 19038 OF 2011** **:18 :** 17. As far as the 2[nd] contention is concerned, rejection of the petitioner's bid was based on the recommendation of the inspection team. Ext.P3 report contains four reasons for recommending to reject the tender. The first reason is that the manufacturing operations are not made under the supervision of an expert staff in production. The reasons for making such a recommendation have been explained in the counter affidavit in the following manner. “The inspection was conducted on 13.6.2011 in the manufacturing premises of the petitioner at Plot No.195, 196, Phase -1, Udyog Vihar, Gurgaon, Haryana. As per the licence No.634-B (H) dated 4.8.2006, valid upto to 7.5.2011 the approved technically competent staff for manufacturing were Mr.Ravinder Batra, Mr.V.S.Suresh and ## **W.P.(C) No. 19038 OF 2011** **:19 :** Mr.Chandrashekar. A true copy of the licence is produced herewith and marked Ext.R1(g). They were not present on the day of inspection. On enquiry it was reported that they resigned from the Company. But the date of resignation and alternate arrangements made were not furnished. It was also reported that an application in Form 27 dated 28.4.2011 was forwarded to the Drugs Control Administration for renewal of the licence. A true copy of the renewal application is produced herewith and marked Ext.R1(h). As per the copy of this application produced, the staff responsible for manufacture is Mr.Sutesh Kukreja who was also not present on the date of inspection. The petitioner could not produce any record to prove his approval as manufacturing chemist. In the ## **W.P.(C) No. 19038 OF 2011** **:20 :** document produced along with the technical bid, the bidder has furnished a list of 3 technical staff, Mr.K.P. Singhania, Mr.Deepak Nanda and Mr.Sutesh Kukreja for manufacturing. The petitioner could not produce any documentary evidence to the fact that Mr.K.P.Singhania and Mr.Deepak Nanda have been appointed as manufacturing chemists by the company and approved by the regulatory authority (Drugs control Administration) though their names were included in the list of technical persons furnished along with the technical bid submitted in January, 2011. They could only produce a copy of the application in Form No.27 dated 28.4.2011 submitted before the Drugs Control Administration in which the name of Mr.Sutesh Kukreja was mentioned as manufacturing chemist. ## **W.P.(C) No. 19038 OF 2011** **:21 :** Even Mr. Sutesh Kukreja was not available at the time of inspection though the manufacturing operation was going on in full swing on that day (13.06.2011). The petitioner has not substantiated its claim through any documentary evidence that the production of its medical devices is under the supervision of approved competent technical staff as stipulated in the Drugs and Cosmetics Act. Hence the findings of the inspection team is fully sustainable and not in any manner contradictory to clause 6.18.5 of Ext.P2 as alleged.” 18. In the reply affidavit filed by the petitioner, contention regarding the non availability of the manufacturing chemist noticed by the inspection team, has been answered thus; “Para 12(iii) is denied. The ## **W.P.(C) No. 19038 OF 2011** **:22 :** petitioner has got 5 manufacturing plants of which inspection is confined to plants at Plot Nos.195 & 196. The manufacturing chemist as on the date of inspection was Mr.Deepak Nanda who was very much present in the plant and met the inspection team. The appointment of Deepak Nanda in the plant functioning in Plot Nos.195 & 196 was with effect from 31.5.2011 pursuant to the resignation of Mr.Sutesh Kukreja who was the former manufacturing chemist of the plant. The appointment of Mr. Deepak Nanda with effect from 31.5.2011 is under the process of approval of State Drugs Controller, Haryana. When the Drugs Licence is reissued the name of Mr.Deepak Nanda will find a place in the licence. The copy of communication dated 30.5.2011 in this regard from petitioner to State Drugs Controller regarding the ## **W.P.(C) No. 19038 OF 2011** **:23 :** appointment of Deepak Nanda is produced herewith and marked as Ext.P8. As the manufacturing Chemist was supervising the production at the time of inspection, the stipulation of the Drugs & Cosmetics Act has been fulfilled. Mr.K.P. Singhania has been Manufacturing Chemist for the Drugs Manufacturing licence No.461-B(H), for the manufacturing of I.V. Administration Sets and Blood Transfusion Sets since 1997 and his name is there on the licence since grant of licence. The copy of licence was submitted to the inspection team. The inspection team could not meet Mr.Singhania as they did not visit the premises where products are manufactured under Drugs Manufacturing Licence No.461-B(H).” ## **W.P.(C) No. 19038 OF 2011** **:24 :** 19. The second reason given is that separate raw material store is provided but without separation as per GMP. The basis of such a statement has been explained in the counter affidavit in the following manner. “Para 3 of the Schedule M-III for Medical Devices of the Drugs and Cosmetics Rules, 1945 stipulates as follows “the licensee shall keep inventory of all raw-materials to be used at any stage of manufacture of devices and shall maintain records as per Schedule U. All such raw materials shall be identified and assigned control reference number. They shall be conspicuously labeled indicating the name of the material, control reference number, name of the manufacturer and be specially labeled “Under test” or “Approved” or “Rejected”. The under test, approved or rejected materials shall appropriately be segregated. They ## **W.P.(C) No. 19038 OF 2011** **:25 :** shall be tested for compliance with the required standards of quality.” The Inspection team could not observe appropriate segregation as required by the Schedule. Supporting evidence as photographs of the raw-material storage area was also submitted by the inspection team which is produced herewith and marked Ext.R(1)(i). Hence this allegation of the petitioner is not correct and substantiated.” 20. Answering the allegation that the raw materials store is not separated, the petitioner has stated in its reply affidavit thus. “Para 12(iv) is denied. Para 3 of the Schedule M-III is complied with by storing the raw materials under separate labels “Under Test” (in Yellow Colour), “Tested OK” (in Green Colour), and “Rejected” (in Red Colour) for identification of test status in separate ## **W.P.(C) No. 19038 OF 2011** **:26 :** palates and all records are prepared as per Schedule 'U'. The inspection team suggested that we should have separate areas for “Under Test”, “Tested OK” and “Rejected” materials and keep on moving the material as the inspection status changes, which is not practically feasible for bulky raw materials i.e. Plastic granules, in 25 kg. Packing, received by container loads. Hence Ext.R1(i) doesn't give a contradictory inference.” 21. It is further stated that the store provided is not adequate for finished goods and that finished products are stored even at the despatch bays. It is stated in the counter affidavit that the said report was made by the team on the basis of their observations during inspection. In support of this contention, the first respondent has produced photographic evidence as Ext.R1(j) which ## **W.P.(C) No. 19038 OF 2011** **:27 :** substantiates this contention. 22. This contention is refuted in paragraph 17 of the reply affidavit thus: “The explanation to para 12(v) is denied. The raw materials received on that day which was yet to be checked and entered into the stocks had been placed on the receiving bay. The petitioner has a dedicated storage facility for the finished goods measuring 6400 Sq.Ft. and the finished goods waiting to be loaded on to the trucks was lying at the despatch bay. This is the general practice, which doesn't offend the Drugs & Cosmetics Act, 1940.” 23. The fourth reason stated is that the finished products are released for sale without permission from the quality control officers. This conclusion is sought to be justified in the counter affidavit in the following manner, ## **W.P.(C) No. 19038 OF 2011** **:28 :** “All the products manufactured and offered by the petitioner are supposed to be sterile medical devices. The Indian Pharmacopoeia specifies the procedures of sterility test for these products. Clause 14.1(e) under the heading Quality Assurance of schedule M(Part I) of the Drugs and Cosmetics Rule 1945 stipulates that the system of quality assurance appropriate to the manufacture of pharmaceutical products shall ensure that, the pharmaceutical products are not released for sale or supplied before authorized person have certified that each production batch has been produced and controlled in accordance with the requirements of the label claim and any other provisions relevant to production, control and release of pharmaceutical products. Similarly clause 16.6. under the ## **W.P.(C) No. 19038 OF 2011** **:29 :** heading Quality Control System of Schedule M (Part I) of the Drugs and Cosmetics Rules, 1945 stipulates that no batch of the product shall be released for sale or supply until it has been certified by the authorized person(s) that it is in accordance with the requirements of the standards laid down. The claim of the petitioner that the product is released after obtaining the report of 48 hours incubation of the “self contained biological indicators.” and that there is no requirement of any separate quality control authority itself is a deviation from the prescribed norms stated in the Pharmacopoeia and the Drugs and Cosmetics Rules. Self contained biological indicators are used for validating and assessing the routine performance of sterilizers and sterilizing processes as per the Indian ## **W.P.(C) No. 19038 OF 2011** **:30 :** Pharmacopoeia. Hence the petitioner itself admits the fact that products are released without performing all the quality tests mentioned in the Indian Pharmacopoeia for sterile devices. The sterility test requires minimum of 14 days of incubation. A true copy of the 'test for sterility' extracted from the Indian Pharmacopoeia, 2010 is produced herewith and marked Ext.R1 (k). It may be specifically noted that the petitioner's finished goods store is very small and therefore the petitioner is not in a position to stock the entire finished goods until all the tests are being completed. Releasing supposedly sterile products without ensuring their sterility is a very dangerous situation with the potential of leading to the condition of sepsis in the patients as the products are directly inserted into the blood stream ## **W.P.(C) No. 19038 OF 2011** **:31 :** or into the body cavities. Such products in non sterile conditions may cause health hazards including loss of lives.” 24. With respect to the allegation that the finished products are released for sale without approval from quality control authorities, petitioner has stated in the reply affidavit thus; “Para 12(vi) is denied. The Finished Product, manufactured right from the raw material stage to the stage of finished product, undergoes the quality control both by a semiautomatic process and manual inspection at various stages under the supervision of Manufacturing Chemist and thereafter the Finished Product, further undergoes the process of stringent quality control through random sampling from each batch **:32 :** ## **W.P.(C) No. 19038 OF 2011** manufactured, under the supervision of Analytical Chemist. The Analytical Chemist namely, Mr.Deep Singh Rawat also met the inspection team and ensured that finished products are released for sale with approval from Analytical Chemist, the contrary contention are bereft of truth and hereby denied. The products are manufactured in a plant certified against ISO 9001:2008, ISO 13485:2003 European Council's Medical Device Directive 93/42/EEC by M/s SGS United Kingdom. The said Notified Body conducts as surveillance audit of the manufacturing facility every six months and confirms compliance to the requirements of the Quality Management System in accordance with the above said standard/directive. The sterilization cycle is validated **:33 :** ## **W.P.(C) No. 19038 OF 2011** as per the provisions of international standard ISO 11135 and the product release is as defined in the same international standards, which is an acceptable practice for sterile medical devices all over the world. The controls applied for a validated sterilization cycle are adequate and stringent. The finished product is dispatched only after being formally released by the Analytical Chemist; and the release procedure was demonstrated to the inspection team.” 25. As already stated the report made by the inspection team consisting of external experts is a factual report indicating its findings on physical inspection of the petitioner's manufacturing facilities. A report submitted by such an expert team cannot be lightly interfered with by this Court which lacks any expertise in matters of this nature, unless there are strong reasons to conclude that ## **W.P.(C) No. 19038 OF 2011** ## **:34 :** the report is vitiated either by perversity or for malafides. Petitioner has no case that any of the members of the inspection team had any malafide against them and no such argument was raised. On the other hand, the only contention raised by the petitioner is that the findings in the report are factually erroneous. 26. As far as the availability of manufacturing chemist is concerned while the report and the affidavit shows that such a chemist was not available at the time of inspection, petitioner asserts to the contrary. But, apart from the arguments in the reply affidavit, petitioner did not produce any document to prove that Sri.Deepak Nanda was present in the factory or that the team met him. Further even according to the petitioner, his name is still not included in any licence and therefore, as on date, his appointment itself is not substantiated. If that be so, this at least is a disputed factual question and on the materials ## **W.P.(C) No. 19038 OF 2011** **:35 :** available, it is not possible to conclude that the report submitted by the inspection team is vitiated for any reason. In so far as the absence of separation for the storage facility as found by the inspection team is concerned the petitioner's contention is that these materials are stored in separate pallets and therefore the finding is incorrect. In my view, here again the petitioner's answer itself show that the finding of the inspection team that there was no separation for the storage area for raw materials, which is a requirement of Good Manufacturing Practice laid down under the Rules framed under the Drugs and Chemists Act, 1948 is a factual one. 27. Coming to the conclusion of the inspection team that the products were released without the approval of the quality controller, the petitioner is not directly answering that contention. While it is the specific case of the first respondent that such a practice is necessary in ## **W.P.(C) No. 19038 OF 2011** **:36 :** terms of the provisions contained in the Indian Pharmacopoeia, petitioner seeks to explain its own practices. The factual matters reported by the inspection team are supported by photographs. Similarly, storage of raw materials even in the despatch bays is also supported by photographs, the accuracy of which is not questioned. In such a situation, this court cannot be expected to reject the report submitted by the expert and come to a conclusion of its own. 28. While appreciating a case involving a tender of the nature of Ext.P2, this court cannot forget the fact that the tender is for the purpose of procuring Medical Devices for distribution in the health sector of the Government of Kerala. Therefore respondents are required to ensure full compliance of the quality related conditions which are laid down in the tender notice and the relevant statutes. While insisting on adherence to such quality aspects, in the ## **W.P.(C) No. 19038 OF 2011** **:37 :** absence of any proved case of malafides, even if a technical flaw or error is found in the tendering process, I am of the view that unless public interest demands, this court should not interfere with the decisions taken by the authority concerned. It has been so held by the Apex Court in **Air India Ltd. v. Cochin International Airport Ltd. v. AIR 2000 S.C. 801.** 29. For the aforesaid reasons, I am not satisfied that the petitioner has made out a case justifying interference. The writ petition fails and is dismissed. **ANTONY DOMINIC, JUDGE** ul/-