Peekay Mediequip Limited v. Kerala Medical Services Corporation Limited and The Chief Government Analyst, Drug Testing Laboratory

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE ACTING CHIEF JUSTICE MRS.MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE MONDAY, THE 24TH DAY OF SEPTEMBER 2012/2ND ASWINA 1934 WA.No. 650 of 2012 () IN WPC/20814/2011 ---------------------------------------AGAINST THE JUDGMENT IN WPC.20814/2011 DATED 05-08-2011 APPELLANT/PETITIONER: ----------------------- M/S. PEEKAY MEDIEQUIP LIMITED REPRESENTED BY ITS MANAGING DIRECTOR,G.SANKER, NO.16 VNS GARDEN,RAMAKRISHNAPURAM,THANJAVUR TAMIL NADU. BY ADVS.SRI.K.RAMAKUMAR (SR.) SRI.S.M.PRASANTH SMT.SMITHA GEORGE RESPONDENTS/RESPONDENTS: -------------------------- 1. THE KERALA MEDICAL SERVICES CORPORATION LIMITED REPRESENTED BY ITS MANAGING DIRECTOR KERALA STATEINSTITUTION FOR HEALTH AND FAMILY WELFARE CAMPUS, THYCAUD,THIRUVANANTHAPURAM-695014. 2. THE CHIEF GOVERNMENT ANALYST, DRUG TESTING LABORATORY,THIRUVANANTHAPURAM-695011. R1 BY ADV. SRI.M.AJAY,SC,KERALA MEDICAL SERV.CORPN R2 BY ADV. GOVERNMENT PLEADER SMT.GIRIJA GOPAL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 24-09-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **MANJULA CHELLUR, Ag.C.J. & A.M.SHAFFIQUE, J. ---------------------------------------------------W.A.No.650 of 2012 ---------------------------------------------------Dated this the 24[th] day of September, 2012** ## **Judgment** ## **Shaffique, J.** The appellant filed the writ petition challenging Ext.P5 order passed by the first respondent. By virtue of Ext.P5 order, the appellant was blacklisted for a period of five years from 2010 to 2015 thereby declaring that the appellant-firm is ineligible to participate in any of the tenders floated by the Kerala Medical Services Corporation for the particular item of disposable syringe without needle 2cc during the said period. Learned Single Judge dismissed the writ petition finding that Ext.P5 order was passed after issuing notice to the petitioner and relying on the test reports as stated in Ext.P5. 2. It is the contention of the appellant that before passing Ext.P5 order, proper notice was not given and that no steps were taken for complying with the statutory provisions under Sections 23(3) and 25(4) of the Drugs and Cosmetics Act, 1940 in relation to taking sample as well as testing. Mr.K.Ramakumar, learned W.A.No.650/2012 2 Senior Counsel appearing for the appellant also relied upon the decision of the Supreme Court in **Amery Pharmaceuticals v. State of Rajasthan** [ (2001) 4 S.C.C. 382]. It is also argued that blacklisting the firm amounts to infringement of Article 21 of the Constitution of India. 3. We have gone through Ext.P5 order as well as terms of Ext.P1 agreement. Clause 7(d)(i) of the agreement clearly indicates that during the contract period if two batches of a particular item supplied by the firm fails in ASSAY content, then that product of that particular firm will be blacklisted. Clause 7(d) (ii) of the agreement also indicates that during the contract period if three batches of the particular item supplied by the firm fails in quality test in any parameters other than ASSAY content mentioned in pharmacopoeia, then that product of that particular firm will be blacklisted. It is the argument of the learned counsel for the appellant that Ext.P4 Certificate of Analysis issued by the lab indicates that the items supplied by the appellant was of very good quality and the same was not taken into consideration while passing Ext.P5 order. A reading of Ext.P5 indicates that the products were sent for lab analysis to the Government laboratory W.A.No.650/2012 3 on receipt of certain complaints and it was found that four batches were declared as not of standard quality. Ext.P4 is a report obtained by the appellant themselves which cannot be relied upon to negative the lab report from Government agencies. 4. It is also relevant to note that when a letter dated 13.5.2009 was sent to the appellant as a show cause for not blacklisting the product as per the agreement conditions, the appellant did not respond. Hence, it cannot be contended that prior notice was not issued to the appellant before issuing Ext.P5. 5. On a reading of Sections 23(3) and 25(4) of the Drugs and Cosmetics Act, 1940, it can be seen that the said provisions have no application to the facts of the present case. The sample and testing procedure contained in the above provisions will not apply in a case where there is violation of agreement conditions. Those provisions apply only when sampling and testing is done to find out any misbranding, adulteration etc. In this case, admittedly, the reports issued by the Government Laboratory clearly indicates that the sample of the syringes was not of standard quality. In that view of the matter, the respondentCorporation was justified in blacklisting the firm in respect of that W.A.No.650/2012 4 particular item alone. The argument that the firm itself has been blacklisted and therefore they are unable to supply other products does not seem to be correct. A reading of Ext.P5 shows that the appellant-firm is ineligible to participate in any of the tenders floated by the Kerala Medical Services Corporation for the particular item of disposable syringe without needle 2cc for a period of five years which apparently does not apply to other items manufactured by them. ## 6. In respect of the decision in **Amery Pharmaceuticals's** case (supra) the Supreme Court was considering a case where the Drug Inspector purchased a drug formulation from a retail medical shop for the purpose of sampling it under the provisions of the Drugs and Cosmetics Act and prosecution was initiated finding that the sample is misbranded, adulterated and spurious. The said decision has no application to the case on hand. The facts of this case is entirely different. Here the subject matter is blacklisting of the supplier in terms of a contract between by the respondent-Corporation and the appellant. The respondentCorporation has blacklisted the appellant-firm as per the agreement conditions. Such findings of fact in Ext.P5 cannot be W.A.No.650/2012 5 examined by this court while exercising powers under Article 226 of the Constitution of India. No materials are produced to substantiate that such a decision is perverse or illegal. 7. The argument that Ext.P5 amounts to deprivation of the right to live under Article 21 of the Constitution of India is also baseless as the blacklisting is only for five years and in respect of a particular item, and that too for violating the contract conditions. 8. In view of what is stated above, we find no reason to interfere with the judgment of the learned Single Judge. The Writ Appeal is dismissed. **MANJULA CHELLUR Ag. Chief Justice** **A.M.SHAFFIQUE Judge** srd W.A.No.650/2012 6 W.A.No.650/2012 7