The court finds the State's debarment action invalid due to lack of proper notice and withholding of essential test reports.
In a significant judgment, the Calcutta High Court has quashed the blacklisting and debarment order issued against Helax Healthcare Private Limited by the State of West Bengal. The court ruled that the State's action violated the principles of natural justice, thereby setting aside the impugned order dated September 26, 2025.
The dispute arose after Helax Healthcare was blacklisted for allegedly supplying non-standard quality medicines, specifically Telmisartan Tablet IP 40 mg. The company had been declared the L1 bidder in a tender for supplying these medicines and had executed a Performance Bank Guarantee of Rs. 30,00,000/- in favor of the State. However, subsequent notices from the State alleged that the medicines supplied did not comply with the Indian Pharmacopoeia standards.
The petitioner, Helax Healthcare, challenged the blacklisting and debarment order on grounds of procedural impropriety. Their senior advocate, Mr. Jishnu Choudhury, argued that the company was not specifically informed in the show-cause notice or personal hearing notices about the proposed penalty of blacklisting and debarment. Furthermore, the test reports relied upon by the State to determine the non-standard quality of the medicines were not provided to Helax Healthcare, despite repeated requests.
The court, presided over by Justice Krishna Rao, concurred with the petitioner’s arguments, emphasizing that the principles of natural justice require specific notice of proposed actions and provision of relied-upon evidence. The court referenced judgments from the Supreme Court, including Gorkha Security Services v. Government (NCT of Delhi) and UMC Technologies Pvt. Ltd. v. Food Corporation of India, to underline that a valid show-cause notice must detail the nature of the proposed action, allowing the noticee to file an appropriate reply.
Moreover, the court dismissed the State's contention that the petition was not maintainable due to the availability of an appeal mechanism under the tender document. Justice Rao clarified that the writ petition was maintainable as it was filed on the ground of violation of natural justice.
The ruling has significant implications for administrative actions and reinforces the necessity of adhering to natural justice principles in governmental procedures. The court's decision not only quashes the blacklisting order but also permits Helax Healthcare to continue participating in tenders issued by the Central Medical Stores.
The judgment underscores the judiciary's role in upholding fairness and transparency in administrative proceedings, emphasizing that governmental entities must provide clear and specific notices when imposing penalties. This ruling serves as a reminder that procedural lapses can lead to the overturning of administrative decisions.
Bottom Line:
Blacklisting and debarment order passed without giving proper notice of the proposed penalty and without providing the relied-upon test reports is in violation of the principles of natural justice.
Statutory provision(s): Principles of Natural Justice, Drugs and Cosmetics Act, 1940
Helax Healthcare Private Limited v. State of West Bengal, (Calcutta) : Law Finder Doc Id # 2823074
