A division bench of the Hon’ble Supreme Court heard the case of Medipol Pharmaceuticals India Pvt. Ltd. V Post Graduate Institute of Medical Education & Research and Anr on 5th August, 2020. The bench comprised of Hon’ble Justice R.F. Nariman and Hon’ble Justice Navin Sinha.
Brief facts of the Case
The first respondent invited quotations for Clotrimazole cream and the appellant, Medipol Pharmaceuticals India Pvt. Ltd submitted the same. The appellant also specified that the cream had a shelf life of 2 years. Subsequently the rates were negotiated and the supply was made. However, after the second installment the respondent made various complaints and sent the cream for testing under section 25(1) of the Drugs & Cosmetics Act, 1940.
The report came few days prior to the expiry of the shelf life of the cream. It showed that the sample was 61.96% against the acceptable standard of 95-105%. Consequently, two show cause notices were issues by the State Drugs Controller and Drug Inspector respectively to the appellant. Meanwhile, the appellant also sent the cream for testing in the appellate lab and requested to hold the blacklisting of its cream till the results came. Nevertheless, the appellant was blacklisted for 2 years. The appellate lab report showed the sample to be of 92.01% even after expiry. The appellant then filed a writ petition in the Punjab and Haryana High Court which was dismissed. The reason given for the same was that the appellate lab result was also not up to the prescribed standard. As a result, the appellant filed an appeal in the Supreme Court.
Court’s Observations
The Hon’ble Supreme Court interpreted section 25(1) of the Drugs & Cosmetics Act, 1940 by referring to several precedents and pari materia provisions of other acts. The court opined that no penalty shall be sustained when inflicted upon an article which deteriorates with time if it is tested as not containing requisite standard due to delay predominantly attributable to the state. It further stated that section 25 grants a valuable right which would render any such penalty as void.
Further, the Court considered the High Court order to be perverse as it was based solely upon the first laboratory report. Instead the High Court should have struck down the order of blacklisting as the said order did not take into account the appellate lab report.
Moreover, the court stated that the delay on the part of Drug Authorities was unexplained as the second sample was tested 8 months after the expiry of shelf life. Thus, the order of blacklisting was infirm
Court’s Decision
The Hon’ble Supreme Court set aside the order of blacklisting as well as the High Court Judgment. The court held that if a person is penalized due to the sample tested by the Government Analyst being against him, then the person shall have a right to get the sample tested by a superior or appellate authority.
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