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Judgment
This petition has been filed by the petitioner/M/s Ciron Drugs and Pharmaceuticals Pvt. Ltd. Mumbai under Article 226 of the Constitution of India against the order dated 01.03.2019 (Annexure P/10), whereby the respondent No.1-Madhya Pradesh Health Services Corporation Limited has blacklisted two products viz. Atenolol 50mg and Amlodipine 5mg tablets of the petitioner/company. This petition is also filed against the issuance of the show cause notice dated 18.01.2019 (Annexure P/12) passed by the respondent whereby the petitioner has been asked to show cause as to why their company be not blacklisted under Clause 7 of the tender document which provides black listing of the firm for a period of three years.
Learned counsel for the petitioner has fairly admitted that so far as the alternative remedy is concerned, an appeal is provided against the impugned order of blacklisting under Clause 25 of the tender document before the Commissioner Health, Government of M.P., but it is submitted that it is not an efficacious alternative remedy available to the petitioner as the order of black listing has been passed in violation of the principles of natural justice and is liable to be struck down by this Court under Article 226 of the Constitution of India.
The case of the petitioner is that it is the manufacturer of medicines and is one of the major suppliers of medicines to various Governments and Government agencies throughout India including the respondent No.1/Madhya Pradesh Public Health Services Corporation Limited which is owned by the State Government of Madhya Pradesh. According to the petitioner, on 25.07.2017 the respondent No.1 issued a show cause notice to the petitioner as to why Chlopheniramine Maleate Tablets of the petitioner/company should not be blacklisted as the same were found to be not of standard quality as per the report of the CDTL, Mumbai.
A reply to the said show cause notice was also submitted by the petitioner but on 23.09.2017 the aforesaid products of Chlopheniramine Maleate Tablets were black listed by the respondent No.1 for a period of two years. Against the aforesaid order an appeal was also preferred by the petitioner before the Commissioner Health, Government of M.P. on 03.10.2017 but the appeal was not decided expeditiously and the final order was passed only on 19.04.2018, although it was signed on 03.05.2018 confirming the order of black listing. According to the petitioner the aforesaid order passed in appeal was not further challenged by the petitioner before this Court as the period of blacklisting was due to expire as the order in an appeal in itself was passed belatedly.
Further, the case of the petitioner is that on 04.12.2018 again a show cause notice was issued to the petitioner in respect of its products Atenolol 50mg and Amlodipine 5mg tablets as to why these tablets should not be black listed for quality failure.
A reply to the aforesaid notice was also submitted by the petitioner on 10.12.2018. In the said reply it was submitted by the petitioner that they are in the process of challenging the report of the Drugs Inspector within 28 days from the date of receipt of the counterpart sample which was received by them on 05.12.2018 and thus it was submitted that no action regarding black listing be taken against the petitioner as the report from the laboratory is still awaited. According to the petitioner a sample of drug has also been sent to the Central Drug Laboratory, Kolkata but the respondents, without waiting for the report which is to be submitted by the Central Drug Laboratory, Kolkata has passed the impugned order of blacklisting the product Atenolol 50mg and Amlodipine 5 mg tablets for a period of two years.
Learned counsel for the petitioner has vehemently argued before this Court that the aforesaid order has been passed by the respondents without giving any opportunity of hearing to the petitioner and apart from that the procedure adopted for blacklisting is in clear violation of the tender condition as the procedure which is to be followed for blacklisting is provided in the tender document (Annexure-XI) dated 18.07.2016 and, without following the said procedure, the order of black listing could not have been passed. Thus, it is submitted that the quality test of one laboratory in respect of any product is not conclusive unless it has the stamp of approval by a second laboratory as provided under Clause 6 of the procedure for blacklisting.
Learned counsel for the petitioner has further submitted that because of blacklisting of the aforesaid product, the petitioner is likely to suffer huge losses and its very existence has come under clout. Similarly, it is also submitted that the show cause notice issued to the petitioner for blacklisting of its firm is also without jurisdiction as the preconditions for issuing such show cause notice are not yet satisfied because as per Clause 7 of Annexure-XI, upon blacklisting/debarrement of such 3 products or found such 3 NSQ batches (of one or more products) under a tender then firm will be blacklisted not less than 3 years. It is contended that till date even the third sample of the product has not been taken by the respondent so there is no question of blacklisting the firm and the aforesaid notice has been issued with malafide intention to blacklist the firm. In support of his contention, learned counsel for the petitioner has relied upon the orders of this Court in the case of M/s Trishul Construction Vs. State of MP & others, WP No.12641/2016 decided on 16.2.2017, NMDC Ltd. Vs. State of MP, WP No.4143/1999 decided on 31.1.2017, GLR Real Estate Private Limited Vs. State of MP & others, WP No.5503/2015 decided on 17.1.2019 and in the case of Institute of Chartered Accountants of India Vs. L.K.Ratna & others, reported in 1986 KHC 706.
Shri Praveen Dubey learned counsel appearing for respondents No.1 and 2 on the other hand has submitted that the petitioner was given a prior show cause notice regarding the blacklisting and its reply was also filed by them which was found to be unsatisfactory hence it cannot be said that there is any violation of principles of natural justice. It is further submitted that the petition is premature and is liable to be dismissed on the ground of availability of alternative remedy only as according to the tender document Clauses 24 and 25 the remedy of arbitration as well as of appeal is also available to the petitioner. Counsel has also drawn the attention of this Court to Clause 24 which relates to resolution of disputes and provides that the dispute shall be settled in accordance with the Arbitration and Conciliation Act, 1996. It is further submitted that as per Clause 25 an appeal is also provided to the petitioner which has also been admitted by the petitioner in Clause 3 of the petition that the remedy of appeal is available.
Counsel has further submitted that at this stage it cannot be said that the remedy is not efficacious as all the grounds raised by the petitioner can certainly be raised in the appeal as provided under Clause 25 of the tender document. Thus, it is submitted that petition being premature is liable to be dismissed.
Learned counsel has further submitted that if the petitioner/company is allowed to continue to supply the drugs which are not of standard quality as per the test carried out by the respondents, it would be at the cost of compromising the health of the people of the State. Thus, it is submitted that no interim relief can be granted to the petitioner.
Heard learned counsel for the parties and perused the record.
From the record this Court finds that prior to the issuance of the impugned order of blacklisting on 01.03.2019, a show cause notice was also issued to the petitioner on 04.12.2018, thus it cannot be said the the principle of audi alteram partem which is one of the facets of the principles of natural justice has been violated. In the considered opinion of this Court it is one thing to say that the petitioner has not been heard before passing the impugned order and quite another thing to say that the order is passed in violation of the prescribed procedure in the tender document.
This Court is conscious of the petitioner's apprehension that the remedy of appeal is not efficacious as the same bears out of their earlier experience with the respondents whereby their appeal preferred against the order of blacklisting another product viz. Chlopheniramine Maleate Tablets was not decide expeditiously as provided by Clause 25 of the tender document and learning from their earlier unsavory experience with the respondents, they have thought it better to file the writ petition instead of appeal and to an extent, this Court also agrees that in that case the remedy of appeal was rendered inefficacious by the respondents by their delaying tactics. However, since the petitioner has filed this petition at the initial stage itself, this Court can certainly take care of the apprehension of the petitioner by directing the respondents to decide the appeal expeditiously.
Clause 25 of the tender document which refers to appeal provides that an appeal has to be preferred within 15 days from the date of receipt of the order and the Commissioner Health shall dispose of the appeal expeditiously. In view of the same, it is directed that if the petitioner submits its appeal within a period of 7 days from the date of receipt of certified copy of this order, the same shall be decided by the Commissioner Health without raising any objection as to delay, on merits and in accordance with law within a further period of 15 days there from after giving due opportunity of hearing to the petitioner.
So far as the notice to show cause Annexure P/12 is concerned, this Court sees no point in interfering with the aforesaid show cause notice as the petitioner shall have ample opportunity to contest the aforesaid case and if any adverse order is passed against the petitioner it has further remedies in the form of resorting to the Arbitration clause as per Clause 24 and also to file an appeal under Clause 25 of the tender document. This Court is of the considered opinion that when an alternative, in house remedy for settlement of the dispute is already made available to the parties under the contract, in such circumstances the invocation of writ petition under Art.226 is not called for. So far as the judgments cited by the learned counsel for the petitioner are concerned, the same are distinguishable and have no application in the facts and circumstances of the case.
In view of the aforesaid discussion, this Court does not find it to be a fit case for admission. Accordingly, the admission is hereby declined, however, with the aforesaid observations.
It is made clear that this court has not reflected upon the merits of the case.
Petition stands disposed of. No cost.