Case Note & Summary
The petitioner, a pharmaceutical company, filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka seeking certiorari to quash a blacklisting order dated 28 March 2025 issued by the respondent, Karnataka State Medical Supplies Corporation Limited (KSMSCL). The petitioner had successfully bid for a tender floated on 5 May 2023 for supply of iron tablets. After supplying the drugs with test reports from an NABL-accredited laboratory and its own in-house quality control, the respondent had the drugs tested by the Drug Inspectorate, which declared them Not of Standard Quality (NSQ). Replacement notices were issued on 24 January 2025 and 24 February 2025, but the petitioner did not replace the consignment, contending in its reply dated 3 March 2025 that neither the Government Analyst's report nor the statutory sample portions had been furnished to it, thereby violating the mandatory procedure under the Drugs and Cosmetics Act, 1940. The respondent rejected this explanation and issued a show‑cause notice on 6 March 2025 invoking Clause 21.1(g) of the tender document for blacklisting. The petitioner replied on 7 March 2025 reiterating its stand and pointing out the procedural lapses, but the respondent passed the blacklisting order on 28 March 2025 debarring the petitioner for three years. Before the High Court, the petitioner primarily contended that the blacklisting order was ultra vires Rule 26A of the Karnataka Transparency in Public Procurements Rules, 2000, as there was no finding of corrupt or fraudulent practice; a mere allegation of NSQ drugs did not constitute fraud or corruption. It further argued that the mandatory procedural requirements of Rule 26A(2) and (3) — constitution of a Debarment Committee and grant of an oral hearing — were not complied with. The petitioner also highlighted the violation of the Drugs and Cosmetics Act procedure, which deprived it of the right to challenge the Government Analyst's report. The matter was reserved for orders on 1 June 2026 and pronounced on 9 June 2026. The judgment text is incomplete; the final decision and reasoning of the court are not available.
Issue of Consideration
Whether the blacklisting order violates Rule 26A of Karnataka Transparency in Public Procurements Rules, 2000, and whether the procedural safeguards of constitution of a Debarment Committee and oral hearing were followed
Law Points
- Power to blacklist under Rule 26A requires corrupt or fraudulent practice
- mere supply of NSQ drugs does not constitute corrupt practice
- Debarment Committee and oral hearing mandatory before blacklisting
- procedural safeguards under Karnataka Transparency in Public Procurements Rules must be complied with
Case Details
2026 LawText (KAR) (06) 57
WP No. 25026 of 2025 (GM-TEN)
Sri Piyush Kumar Jain.D. (for petitioner), Smt. Sumana Baliga M. (for respondent)
Biogenetic Drugs Private Limited
Karnataka State Medical Supplies Corporation Limited
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging a blacklisting order
Remedy Sought
Petitioner sought a writ of certiorari to quash the blacklisting order dated 28 March 2025
Filing Reason
Petitioner was blacklisted for three years for supplying drugs found Not of Standard Quality and failing to replace them despite notices
Issues
Whether the blacklisting order satisfied the conditions of Rule 26A of the Karnataka Transparency in Public Procurements Rules, 2000, requiring corrupt or fraudulent practice
Whether the mandatory procedural safeguards under Rule 26A(2) and (3) — constitution of a Debarment Committee and grant of an oral hearing — were complied with
Whether the non‑compliance with the procedure under the Drugs and Cosmetics Act, 1940, for furnishing the Government Analyst’s report and sample portions vitiated the blacklisting order
Whether a finding of Not of Standard Quality drugs, without more, could constitute corrupt or fraudulent practice under Rule 26A
Submissions/Arguments
The petitioner argued that it had complied with all tender conditions and contractual obligations
Reliance was placed on Rule 26A of the Karnataka Transparency in Public Procurements Rules, 2000, which permits debarment only upon a finding of corrupt or fraudulent practice
The allegation of NSQ drugs did not amount to corrupt practice, fraud, suppression of material facts, or an attempt to mislead the procurement entity
The respondent could at most resort to contractual remedies (replacement or recovery of losses) but could not impose the drastic penalty of blacklisting without satisfying Rule 26A
Sub‑rule (2) of Rule 26A requires constitution of a Debarment Committee, and sub‑rule (3) mandates a reasonable opportunity including an oral hearing before debarment — these mandatory procedural safeguards were not followed
The Drug Inspectorate failed to furnish the Government Analyst’s report and statutory sample portions as required under the Drugs and Cosmetics Act, 1940, thereby depriving the petitioner of its statutory right to challenge the report and seek re‑analysis
The respondent acted on an assumption that the Government Analyst’s report was conclusive, without complying with the statutory procedure, and therefore the blacklisting order was illegal
Judgment Excerpts
the petitioner contended that neither a copy of the Government Analyst's report nor the statutory sample portions had been furnished to it by the Drug Inspectorate. It was further contended that the procedure prescribed under the Drugs and Cosmetics Act, 1940 and the Rules framed thereunder had not been complied with by the concerned authorities.
sub-rule (2) of Rule 26A requires the Procurement Entity to constitute a Debarment Committee consisting of officers not below the rank of the Tender Inviting Authority for the purpose of considering any proposal for debarment and taking a decision thereon.
A distinction is required to be drawn between a contractual dispute relating to quality of goods supplied and conduct amounting to fraud or corruption warranting debarment from future participation in public procurement processes.
Procedural History
The writ petition was filed challenging the blacklisting order dated 28.03.2025. The matter was reserved for orders on 01.06.2026 and the order was pronounced on 09.06.2026.
Acts & Sections
- Drugs and Cosmetics Act, 1940:
- Karnataka Transparency in Public Procurements Rules, 2000: Rule 26A
- Constitution of India: Articles 226, 227
