Mr. Pravir K. Jain with Mr. M.A. Khan, Advocate v. UNION OF INDIA & ORS .....

1. The Petitioner IS a proprietary concern engaged in the business and manufacture of various medicines and pharmaceutical products. It was registered with the Directorate General of Health Services ('DGHS') Medical Stores Organization ('MSO'), Respondent No.2 herein and the Chief Medical Officer ('CMO'), Respondent No.3 herein for supply of its various products since 1995.

2. It is stated that the Respondent Nos. 2 and 3 have not been purchasing the products of the Petitioner company for the last about 2-3 years. On enquiries, it transpired that Respondent Nos. 2 and 3 claimed to have deregistered the Petitioner company. It also transpired that the said information had been circulated by Respondent Nos. 2 and 3 to Government Medical Store Depot at Mumbai and other departments by a letter dated 21st 2010:DHC:11548 n!

3. The main ground on which the Petitioner challenges the order dated 21st April 2006 was that no prior show cause notice had been issued to the t<-.Petitioner before the said order was passed.

4. On 14th January 2010 this Court passed the following order: ''1. Among the grounds on which the Petitioner has challenged the impugned order dated 21st April 2006 deregistering the Petitioner "permanently for supply of all products" to the Medical Stores Organisation (MSO) of the Directorate General of Health Services (DGHS) is that the said order was passed without issuing any prior show cause notice and further that the said order was never communicated to the Petitioner. The further grievance made is that for three years thereafter no action was taken on the said order but a communication was sent on 1st March 2009 by the CMO (MSO) to the Ministry of Health and Family Welfare, requesting it to display ?blacklisted companies/organizations on its website. This letter enclosed a list in which WP(C) No.9436/2009 the Petitioner was included.

2. Counsel for the Petitioner points out that in the list as appearing on the website, the heading is "list of companies/organizations blacklisted/debarred" and in the remarks column as against the Petitioner's name it is stated permanently deregistered?. The grievance is that the use of words "blacklisted/debarred" cause severe prejudice to the Petitioner as it is prevented from submitting bids invited by other bodies. It is, therefore, without prejudice to the rights and contentions of the parties, maintain the words in the remarks column as against the Petitioner's name.

3. Mr. Jatan Singh, the learned counsel appearing for the respondents contests the position that no show cause notice was issued and states that he will produce the records to substantiate that a show cause notice was issued and further that the impugned order was communicated to the Petitioner.

4. It is directed that in the meanwhile, till the next date, the Respondents are restrained from displaying on their website the name of the Petitioner under the title "blacklisted/debarred". It is made clear that it will be open to the Respondents to continue indicating on the website that the Petitioner is permanently deregistered from supply of all products to the MSO as indicated in the impugned order dated 21st April 2006. This change on the website be effected by the Respondents within a period of one week from today. It is made clear that this is subject to the final orders that will be passed by the court.. 5. The case be listed for final hearing on 14th April2010. The records of the case will be kept ready for perusal of the court on the next date ofhearing.

6. Order dasti to the counsel for the parties."

5. In response to the petition, the Respondents have adverted to a letter dated 2nd August 2001 written by the MSO of the DGHS to all other departments regarding the action to be taken against firms generally in the event of their I] ~; I ~ I Category A defects, it was advised that supplier should be debarred from supplying that product for three years and for repeated failure of a similar;y-nature, the supplier shall be debarred from supply of all products permanently. Mr. Jatan Singh, learned counsel for the Respondents refers to the show cause notices dated 2nd September 2004, 31st March 2005 and 30th August 2005 and submitted that since some of the samples were found defective, the Respondents were justified in debarring the Petitioner.

6. On the perusal of the above letters, it is seen that in each of them the Petitioner has been asked to show cause why the item in question which was defective should not be debarred or removed from the list of drugs to be supplied. This obviously cannot be treated as show cause notice issued to the Petitioner preceding the debarring of the Petitioner. Till date and definitely not before the impugned order, no show cause notice has been admittedly issued to the Petitioner for seeking an explanation prior to the debarring.

7. Consequently, the impugned order dated 21st April 2006 cannot be sustained in law and it is hereby set aside. It will be open to the Respondents to issue to the Petitioner within a period of two weeks a show cause notice detailing the instances and the specific materials on the basis of which the Respondents propose to blacklist/debar the Petitioner permanently or for a specific period. A reply to the show cause notice will be taken within a period of two weeks from the date of its receipt by the Petitioner. A decision r. Petitioner within ten days thereafter. If the Petitioner is still aggrieved, he can seek further remedies as may be available to the Petitioner in law.

8. With the above directions, the petition and the pending application are disposed of. Order be given dasti to learned counsel for the parties.

S. MURALIDHAR, J..(2