ENDO LABS LIMITED Vs. MANAGING DIRECTOR TAMIL NADU MEDICAL SERVICES CORPORATION LTD

JUDGEMENT

(1.) The first respondent - Corporation is a Nodal agency for procurement and distribution of Drugs, Surgical and Suture items for about 11,000 Government Medical Institutions all over Tamil Nadu. For the said purpose, the first respondent called for tenders. The petitioner was the successful tenderer for the supply of Povidone Iodine Solution I.P. 5% for the year 2007-2008 and 2008-2009. On being successful tenderer, the first respondent entered into an agreement with the petitioner for the supply of the aforesaid drug. The agreement provides for quality testing of the drug and medicines supplied by the suppliers. Samples of each batch of each product supplied, would be drawn at the point of supplies / distribution / storage and would be sent by the purchaser to the different analytical laboratories selected by them at their discretion for testing. On being successful in the quality test as stated above, the first respondent would instruct its warehouses for the supply of such items of drugs to various hospitals / medical institutions. If the samples fail in the quality test and a report is received from the analyst certifying that the sample is not of standard quality, one more sample would be drawn from the same batch and would be sent to the Government Laboratory for quality testing. If such sample fails the quality test conducted by the Government Analyst, the first respondent would reject the drugs supplied in the batch. If such sample passes the quality test in the Government Laboratory, then the first respondent would instruct for issue of such items of drugs to various hospitals / medical institutions.

(2.) According to the petitioner, they have been supplying the aforesaid drug during 2007-2008 and 2008-2009. Samples from each batch were sent to the Laboratories chosen by the first respondent and the samples also passed the test. Hence, the supply has been made.

(3.) While so, the first respondent issued a show cause notice dated 03.12.2009, stating that samples drawn from the 8 batches of supply of Povidone Iodine Solution I.P. 5% w/v (Drug Code: 342) for the period 2007-2008 and 2008-2009, did not conform to I.P. Specification for Povidone Iodine solution with respect to the content of available Iodine in Povidone Iodine. The aforesaid finding is based on the test reports received from the Government Analyst. It is stated further that though the samples passed the quality test in the empanelled laboratories, the samples were found not of standard quality in the quality test conducted by the Government Laboratory, during the shelf life period. The petitioner was called upon to show cause as to why his product should not be blacklisted for five years. The said notice was sent as per tender condition (2008-2009) Annexure X, Clause 10(b).