IND SWIFT LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Petitioner, being a pharmaceutical limited company, having its registered office in Chandigarh seeks the quashing of an order dated 26th August 2008 passed by the Deputy Director General (MS), in compliance with a letter dated 7th August 2008 of the Directorate General of Health Services ('DGHS'), Government of India permanently deregistering the Petitioner from participation in the business and supply of drugs to the DGHS. THE Petitioner also challenges the show-cause notices dated 30th April 2007 and 18th December 2007 issued to it by the DGHS preceding the order of deregistration.

(2.) ACCORDING to the Petitioner, the DGHS (Medical Store Organization) ['MSO'], New Delhi adopted the tender document of the GNCTD for supply of drugs to its Directorate of Health Services. In terms of Clause 9 of the General Conditions for the purchase of drugs and pharmaceuticals on Running Rate Contract, the supplies were to be accompanied by an in-house test report. On receipt of the consignment, the demanding officer was to draw a sample out of each consignment and send it for testing at one of the Government approved testing laboratories located in the National Capital Region of Delhi. If the sample was found not of standard quality, the consignment was to be rejected. Clauses 9 (iv) to (vii) which are relevant for the purpose of the present case read as under:

(3.) ON 18th December 2007 the Petitioner was issued a show-cause notice with regard to rejection of another drug Atenolol 100 mg tablet which was declared as sub-standard by the DGHS, Jaipur as the sample did not conform to the test for disintegration as per the IP. A copy of the said test report was enclosed with the show-cause notice. The Petitioner is stated to have replied to the show-cause notice on 24th December 2007 which fact is however denied by the Respondents. The Respondents maintain that since no reply was sent, the Deputy Assistant Director General (Stores), Government Medical Store Depot, New Delhi recommended to the DGHS, MSO that the product i.e. Atenolol 100 mg should be deregistered under category 'A' defect as per the letter dated 2nd August 2001 of the DGHS.