Court rules against sudden blacklisting, cites lack of due process

Bengaluru: No order of blacklisting can be passed without first complying with the principles of natural justice, the Karnataka High Court has stated in a recent judgment. Justice M. Nagaprasanna made this observation while allowing the petition filed by Sujal Pharma, a Bengaluru-based company that was blacklisted for allegedly supplying poor-quality hand sanitizers during the Covid pandemic.

In April 2020, Karnataka State Medical Supplies Corporation Limited invited the company to supply hand sanitizer. The petitioner submitted a quotation for the available quantity, and subsequently, a purchase order for 10,000 units valued at Rs 2.5 crore was issued.

In April 2021, the petitioner received a notice to replace certain quantities of sanitizers, claiming they were sub-standard. A second replacement notice followed in July 2021. While the petitioner sought test reports to contest the claim of poor quality, on October 20, 2021, a general order was issued that blacklisted several firms, including the petitioner.

The government defended its action by stating that the petitioner was blacklisted for supplying poor-quality hand sanitizers based on a report from the Drugs Control department.

Justice Nagaprasanna noted that no show-cause notice was served on the petitioner. Moreover, the two replacement notices did not indicate that the petitioner’s company would be blacklisted. The court also observed that although the supplies were made in April 2020, the replacement notices were issued only about a year later, on April 16, 2021.