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SUPREME COURT OF INDIA
R.F. NARIMAN, NAVIN SINHA, KRISHNA MURARI, JJ.
Vetindia Pharmaceuticals Limited – Appellant
Versus
State of Uttar Pradesh And Another – Respondent
Civil Appeal No. 3647 of 2020 (Arising out of S.L.P (C) No. 6319 of 2020)
Decided On : 06-11-2020
(A) Drugs and Cosmetics Act, 1940 – Sections 9, 23, 25 and 26 – Blacklisting – Supply of misbranded drug – Appellant is a licensed drug manufacturer – Drugs in question have been found to be misbranded and not spurious or adulterated – Injection was not supplied to respondents by appellant – Yet show cause notice referred to further action in terms of Tender for supplying misbranded medicine to appellant – Show cause notice did not state that action by blacklisting was to be taken, or was under contemplation – It only mentioned appropriate action in accordance with rules of Tender – Fact that terms of tender may have provided for blacklisting is irrelevant in facts of the case – There could not be arbitrary blacklisting and that too in violation of principles of natural justice – If respondents had expressed their mind in show cause notice to blacklist, appellant could have filed an appropriate response to the same – Possibility always remains that if a proper show cause notice had been given and reply furnished would have been considered in accordance with law, even if respondents decided to blacklist appellant, entirely different considerations may have prevailed in their minds especially with regard to duration – Insistence of respondents to support impugned order by reference to terms of tender cannot cure illegality in absence of appellant being a successful tenderer and supplier – Order of blacklisting dated stands vitiated from very inception on more than one ground and merits interference – High Court erred in dismissing writ petition on grounds of delay – Impugned orders set aside. (Paras 8, 9, 10, 12 and 16)
(B) Constitution of India – Article 226 – Writ Petition – Delay and laches – High Court in its discretionary jurisdiction may decline to exercise discretionary writ jurisdiction on ground of delay in approaching court – But it is only a rule of discretion by exercise of self-restraint evolved by court in exercise of discretionary equitable jurisdiction and not a mandatory requirement that every delayed petition must be dismissed on ground of delay – Limitation Act stricto sensu does not apply to writ jurisdiction – Discretion vested in court under Article 226 of Constitution has to be a judicious exercise of discretion after considering all pros and cons of matter, including nature of dispute, explanation for delay, whether any third-party rights have intervened etc. – Jurisdiction under Article 226 being equitable in nature, questions of proportionality in considering whether impugned order merits interference or not in exercise of discretionary jurisdiction will also arise. (Para 14)
Facts of the case:
Appellant is aggrieved by indefinite order of blacklisting dated 08.09.2009. The High Court dismissed the writ petition in limine, only on the ground of delay, as having been preferred ten years later.
Findings of Court:
The contention of the respondents that they have acted in accordance with the provisions of the Drugs Act pursuant to report of the analyst for misbranded product under Section 9 is devoid of substance and merits no consideration. It is not the case of the respondents that the procedure prescribed under Sections 23, 25 and 26 of the Drug Act has been followed. The feeble attempt to show compliance with provisions of the Drugs Act by alleged purchase of the samples under Form 14A at Annexure R5 to the counter affidavit dated 21.07.2008 from an unknown source and date must be rejected outright as an attempt to create evidence where none exists.
Result : Appeal allowed.
JUDGMENT :
NAVIN SINHA, J.
1. Leave granted.
2. The appellant is aggrieved by indefinite order of blacklisting dated 08.09.2009. The High Court dismissed the writ petition in limine, only on the ground of delay, as having been preferred ten years later.
3. Ms. Shobha Gupta, learned counsel for the appellant, submits that it holds a valid licence under the Drugs and Cosmetics Act, 1940 (hereinafter referred to as 'the Drugs Act') in Form 28 (Rule 76) issued by the Drugs Control Administration, Government of Andhra Pradesh. M/s Palak Pharmaceuticals Private Limited had obtained supplies from the appellant in the year 2007, and in turn had supplied it to the respondent under a tender notice dated 04.10.2006. The label 'XYO701' on the injection was an inadvertent human error. The brand name of the medicine was correctly mentioned as "OXY-125". The composition of the medicine was also correctly mentioned as "Oxytetracycline IP Vet 125 mg". The generic word "Hcl" was only missing on the label, and it was written as "OXYTETRACYCLINE INJ. I.P. VET" in place of "OXYTETRACYCLINE HCL INJ. I.P. VET". It was therefore a case of bonafide inadvertent printing error which resulted in misbranding. The product was not substandard or spurious veterinary medicine.
4. The appellant was served with an order of blacklisting dated 08.09.2009 by the Office of Director, Animal Husbandry Department of the respondent referring to the State Analyst report dated 10.10.2008, declaring the batch supplied by the appellant to be of substandard quality (misbranded/not in accordance with Oxytetracycline injection), thus violating clauses 8.12 and 8.23 of the Tender of 2006-07. The appellant informed the respondents that it had never made any supplies to them under the Tender in question. The misbranding referred to was an inadvertent error. The respondents required certain further clarifications which were furnished on 04.05.2019 but to no outcome. The order of blacklisting is causing great prejudice to the appellant preventing it from participating in similar tenders, the most recent being the rejection by the Government of Rajasthan dated 05.07.2019 for the said reason. No proceedings were taken out by the respondents against the appellant under Sections 23, 25, 26 and 27 of the Drugs Act.
5. The explanation furnished for the delay in the writ petition has not been considered properly. The order of blacklisting being in violation of the principles of natural justice, delay is irrelevant and the cause of action continues because of its indefinite nature and consequences. Learned counsel has relied heavily on Gorkha Security Services vs. Government (NCT of Delhi) & Ors., (2014) 9 SCC 105, to submit that the show cause notice dated 21.10.2008 did not meet the requirement of the law. She has further relied upon M/s Daffodills Pharmaceuticals Ltd. & Anr. vs. State of U.P. & Anr., 2019 (17) SCALE 758, where this Court opined that a debarment of approximately four years was sufficient.
6. Shri Ankit Goel, learned counsel for the respondents, submits that the writ petition was rightly dismissed on grounds of gross and inordinate delay of ten years in challenging the order of blacklisting. It was preceded by a show cause notice dated 21.10.2008, and consideration of the reply submitted. The veterinary medicine was misbranded in terms of Section 9 of the Drugs Act, duly supported by the report of the analyst. Any latent defect in the show cause notice has not caused any prejudice to the appellant. The impugned orders therefore merit no interference.
7. We have considered the submissions on behalf of the parties and are satisfied that the writ petition deserves to be allowed for more than one reason.
8. The appellant is a licensed drug manufacturer. The drugs in question have been found to be misbranded and not spurious or adulterated. The appellant took the plea of a bonafide inadvertent printing error on the label, by stating "OXYTETRACYCLINE INJ. I.P. VET" in place of "OXYTETR
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