Case Note & Summary
The appellant, Medipol Pharmaceutical India Pvt. Ltd., supplied Clotrimazole Cream 1% 15 gm tubes to the respondent, Post Graduate Institute of Medical Education & Research, pursuant to a supply order dated 04.11.2015. The first instalment of 1700 tubes was supplied on 18.01.2016 without complaint. The second instalment of 1700 tubes was supplied on 08.04.2016, after which complaints arose. Samples were drawn on 29.11.2017 and sent to the Government Analyst, who reported on 27.03.2018 that the cream contained 61.96% w/w of the active ingredient against the standard of 95-105%. Based on this, show cause notices were issued, and the appellant was blacklisted for two years on 21.01.2019. The appellant had requested that action be deferred pending the appellate lab report from the Central Drugs Laboratory, Kolkata, which was received on 19.08.2019, after the product's expiry in April 2018. The appellate report showed 92.01% content. Despite this, a post-decisional committee on 18.09.2019 upheld the blacklisting based solely on the first report. The Punjab & Haryana High Court dismissed the appellant's writ petition, finding the 3% deficiency sufficient to uphold the blacklisting. The Supreme Court allowed the appeal, holding that the blacklisting decision was perverse as it relied on the first test report and ignored the conclusive appellate report under Section 25(4) of the Drugs and Cosmetics Act, 1940. The Court emphasized that the High Court should have struck down the decision for relying on irrelevant material and not substituted its own view. The blacklisting order was set aside, and the appeal was allowed.
Headnote
A) Administrative Law - Blacklisting - Natural Justice - Blacklisting order must be based on relevant material and cannot ignore conclusive evidence - The respondent blacklisted the appellant for supplying sub-standard cream based on the first test report, ignoring the appellate lab report which is conclusive under Section 25(4) of the Drugs and Cosmetics Act, 1940 - Held that the decision was perverse and liable to be set aside (Paras 4-6). B) Drugs and Cosmetics Act, 1940 - Section 25(4) - Conclusive Evidence - Appellate lab report is conclusive evidence of facts stated therein - The Central Drugs Laboratory report showing 92.01% content was conclusive, yet the respondent relied on the first report showing 61.96% - Held that the High Court erred in not striking down the blacklisting order (Paras 7-9). C) Criminal Procedure - Right of Accused - Reanalysis - Delay in sending sample for reanalysis attributable to prosecution deprives accused of valuable right under Section 25(3) and 25(4) - The sample was sent to appellate lab after expiry of shelf life due to delays by the respondent - Held that such delay cannot work adversely to the appellant (Paras 8-9).
Issue of Consideration
Whether the blacklisting order passed against the appellant was valid when it was based solely on the first laboratory test report, ignoring the appellate laboratory test report which is conclusive evidence under Section 25(4) of the Drugs and Cosmetics Act, 1940.
Final Decision
The Supreme Court allowed the appeal, set aside the blacklisting order dated 21.01.2019 and the impugned High Court order dated 17.09.2019, and directed that the appellant be not blacklisted.
Law Points
- Blacklisting order must be based on relevant material
- Conclusive evidence under Section 25(4) of Drugs and Cosmetics Act
- 1940
- Judicial review limited to decision-making process
- Valuable right of accused for reanalysis under Section 25(3) and 25(4) cannot be denied by prosecution delays
