1 CGHC010206582026 2026:CGHC:27671-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 2637 of 2026 M/s Mancare Laborateries Pvt. Ltd. Through G.S. Tiwari S/o Shri G.N. Tiwari Aged About 50 Years General Manager And Authorized Signatory Of M/s Mancare Laborateries Pvt.Ltd. R/o Plot No.11 Pharmacity, Selaqui, Dehradun, Uttarakhand Pin -248011 ... Petitioner(s) versus 1 - State Of C.G. Through Principal Secretary (Drugs And Cosmetics Department ), Mahanadi Bhawan, Atal Nagar ,nava Raipur Dist. Raipur (C.G.) 2 - Managing Director, C.G. Medical Services Corporation Ltd., North West Commercial Complex, Sector - 27, Atal Nager, Dist. Raipur C.G. ... Respondent(s) (cause title taken from CIS) For Petitioner(s) : Mr. T. K. Jha, Sr. Advocate along with Mr. Parth Kumar Jha, Advocate For State For Respondent No. 2 : : Mr. Shashank Thakur, Addl. Advocate General Mr. Trivikram Nayak, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon’ble Ravindra Kumar Agrawal, Judge Order on Board Per Ramesh Sinha, Chief Justice 06 .07.2026 1. Heard T. K. Jha, Sr. Advocate, learned counsel for the petitioner as well as Ms. Shashank Thakur, Addl. Advocate General for the Respondent/ State and Mr. Trivikram Nayak, learned counsel for Respondent No. 2. SAGRIKA AGRAWAL Digitally signed by SAGRIKA AGRAWAL Date: 2026.07.08 10:50:45 +0530 2 2. The present writ petition under Article 226 of Constitution of India filed by the petitioner with the following relief:- “10.1 The Hon'ble Court may kindly be pleased to call for the entire records, in the interest of justice. 10.2 The Hon'ble Court may kindly be pleased to allow this petition and set-aside the impugned order (ANNEXURE P/12 Colly) dated 08.05.26 in the interest of justice. 10.3 Any other relief which the Hon'ble Court deems fit and proper in the facts and circumstances of the case. 10.4 That, the Hon'ble Court may kindly be pleased to allow this petition & set-aside the Laboratory Report (Annexure P/8, P/9) & Central Laboratory Report (Part of P/12 Colly), in the interest of justice. 10.5 That, this Hon'ble Court may kindly be pleased to allow this petition & direct the respondent no. 2 to re-test the drugs by central laboratory supplied by the petitioner & if report is received, conforming the standard, then payment may kindly be paid to the petitioner, in the interest of justice.” 3. The brief facts as mentioned in the present petition are that the petitioner, through its authorized signatory, participated in the tender process initiated by the respondent pursuant to NIT dated 08.09.2023 for the supply of medicines and was awarded the contract for supply of Albendazole Tablets IP 400 MG (Drug Code D-12). In pursuance thereof, the petitioner supplied 56 batches of the drug along with Certificates of Analysis issued by a Government-approved NABL accredited laboratory. Subsequently, the respondent informed the petitioner that the supplied drug had failed the quality test. The petitioner immediately requested that the samples be re-tested by the Central Drug Laboratory, Kolkata, and also objected to the testing reports furnished by the respondent, pointing out discrepancies therein, including that only seven batches had been tested while the remaining 3 batches were shown as "unknown", and sought re-analysis in accordance with the prescribed Indian Pharmacopoeia standards. 4. Despite the petitioner's repeated objections and requests for re- analysis, the respondent neither considered nor decided the same and proceeded to pass the impugned order dated 08.05.2026 blacklisting the petitioner-company while enclosing the report of the Central Drug Laboratory, Kolkata. After receipt of the impugned order, the petitioner again raised objections, contending that the samples had not been forwarded to the Central Drug Laboratory in the presence of its representative and that the mandatory procedure and protocol had not been followed. Aggrieved by the arbitrary, illegal and procedurally unfair action of the respondents in blacklisting the petitioner without due compliance with law, the present writ petition has been preferred. 5. Learned counsel for the Petitioner would submit that the impugned order of blacklisting dated 08.05.2026 is ex facie illegal, arbitrary and liable to be set aside. It is contended that the said order has been passed in gross violation of the principles of natural justice, as neither any show cause notice was issued nor any opportunity of hearing was afforded to the Petitioner before imposing the extreme penalty of blacklisting. Learned counsel would further submit that even as per the report of the Central Drugs Laboratory, Kolkata, the assay (potency) of the drug was within the permissible limits and only the dissolution test was reported to be non-compliant. It is argued that the prescribed protocol under the Indian Pharmacopoeia, including the mandatory S2 and S3 stages of dissolution testing, was not followed, thereby rendering the laboratory report unreliable. It is further submitted that the impugned order is contrary to the tender conditions, as blacklisting 4 could be resorted to only where five batches of a particular product are found to be NSQ, whereas only four batches of Albendazole 400 were sent for testing in the present case. Learned counsel would also contend that the Petitioner's manufacturing licence had already been suspended for three months by the competent authority in the State of Uttarakhand on the basis of the very same allegations and, therefore, the subsequent order of blacklisting amounts to imposing a second penalty for the same cause, which is impermissible. It is lastly submitted that the impugned action is also contrary to the guidelines issued by the Drug Controller General of India, which envisage appropriate action only after considering the explanation and investigation report, and therefore the order of blacklisting deserves to be quashed. 6. Learned counsel for Respondent No. 2 would submit that the the petition suffers from misjoinder as well as non-joinder of necessary parties, inasmuch as the competent authorities of the Food and Drugs Administration Department and the Government Analysts, whose laboratory reports are sought to be challenged by way of the amended reliefs, have not been impleaded. It is further submitted that the amended prayers, introduced without any corresponding amendment in the pleadings or grounds, cannot be entertained. Learned counsel would further contend that the Petitioner has an efficacious alternative statutory remedy under Section 25 of the Drugs and Cosmetics Act, 1940 read with the Drugs and Cosmetics Rules, 1945 to assail the reports of the State Drug Laboratory (SDL) and the Central Drugs Laboratory (CDL), and that the present writ petition, involving disputed questions of fact and technical issues relating to laboratory analysis, is 5 therefore not maintainable under Article 226 of the Constitution of India. Reliance is placed upon the decisions in Assistant Commissioner of State Tax v. Commercial Steel Ltd. (2021 SCC OnLine SC 884), PHR Invent Educational Society v. UCO Bank [(2024) 6 SCC 579], Jay Maa Construction v. State of Chhattisgarh (2025 SCC OnLine Chh 6319), Abhishek Gupta v. Dinesh Kumar (2025 SCC OnLine SC 2739). 7. Learned counsel would further submit that the action of the Respondent No. 2 in blacklisting the Petitioner is fully justified and strictly in accordance with the terms and conditions of the tender as well as the principles of natural justice. It is submitted that pursuant to the rate contract, the Petitioner supplied 56 batches of Albendazole 400 mg, out of which 55 batches were reported to be Not of Standard Quality (NSQ) by the empanelled laboratories. Thereafter, eight batches tested by the State Drug Laboratory and four batches tested by the Central Drugs Laboratory were also found to be NSQ. It is argued that the reports of the Government Analysts carry statutory sanctity under Section 25 of the Drugs and Cosmetics Act, 1940 and conclusively establish that the drug supplied by the Petitioner was NSQ. Learned counsel submits that before passing the impugned order dated 08.05.2026, a detailed show cause notice dated 16.01.2026 was issued, the Petitioner submitted its reply, and only thereafter, upon due consideration of the material on record, the competent authority exercised its powers under Clauses 10(C)(v) and 10(E)(i) of the tender conditions to blacklist the Petitioner and its product for a period of three years. Reliance is placed upon the decision of the Hon'ble Supreme Court in State of Odisha v. Panda 6 Infraproject Ltd. (2022) 4 SCC 393, wherein it has been held that issuance of a show cause notice and consideration of the reply constitute sufficient compliance with the principles of natural justice in matters of blacklisting. 8. He lastly submits that the supply of NSQ Albendazole by the Petitioner seriously affected the implementation of the National Deworming Programme undertaken by the State under the National Health Mission, thereby involving significant public interest. It is contended that no compromise can be made in matters concerning the quality of medicines supplied for public healthcare, particularly those intended for children and adolescents. It is further submitted that under the tender conditions, no payment is admissible for NSQ products and the Petitioner cannot seek release of payment or a direction for retesting in the teeth of the consistent findings recorded by the empanelled laboratories, the State Drug Laboratory and the Central Drugs Laboratory. Accordingly, it is prayed that the writ petition, being devoid of merit, deserves to be dismissed. 9. We have heard learned counsel for the parties and perused the material annexed with the petition. 10. The issue revolved around the fact of not of standard quality of Albendazole Tablets supplied by the petitioner and in the tender condition, he blacklisting for quality failure has been provided in Clause 10 (C) to 10 (E), which are reproduced hereinbelow:- C. BLACKLISTING FOR QUALITY FAILURES/ISSUES (i). If any sample fails quality test and report is received certifying that sample is "NOT OF STANDARD QUALITY" then supply batch in declared NOT OF STANDARD QUALITY" and the concerned 7 supplier has to resupply the drug of standard quality. And declared NSQ batch will be disposed off by corporation and supplier bear the burden of cost incurred on disposal of that drug/product (ii). The resupplied batch is again subjected to quality testing and if found "NOT OF STANDARD QUALITY" then the particular drug of the firm shall be blacklisted for a period of 3 years beside forfeiture of security deposit of the particular products. (iii). In case of any complaints/ quality issues found for such quality passed batches of the earlier supply, the same will be again subjected to testing and the latest report of that particular batch will prevails upon the earlier results and binding on the entire quantity of the batch supplied and recovery will be made for the entire quantity of that batch irrespective of purchase order date or date of supply etc. (iv). If such Sample fails in quality test for ASSAY content of less than 50% as per the analysis report, such product of the BIDDER will be blacklisted for 3 years beside forfeiture of security deposit of the particular products. (v). If 3 batches of a particular drug supplied by the supplier is reported to be failing in ASSAY content (above 50% but below prescribed limit) and/or other parameters, then the particular drug of the firm shall be blacklisted for period of 3 years besides forfeiture of security deposit of that particular product(s). (vi). If on organoleptic evaluation drugs fail in descriptions such as change of color, chipping, breaking, being/becoming fragile or soft, appearance of spots, being/becoming sticky. presence/appearance of particulate matters /flakes/ misbranding 8 including label tampering etc. make the drug unfit for use and hence will be deemed as not of standard quality summarily for the purposes of the tender and all clauses applicable to not of standard quality drugs shall apply to such drugs even if the drug has not been tested in the laboratory. D. BLACKLISTING FOR Quality Testing By Statutory Authorities. (i). On complaint from Drug Inspector(s) during their Test of statutory sample, that the particular drug has been reported to be of "NOT OF STANDARD QUALITY", the issue of available stock of the particular drug will be stopped. Further, the available stock of the product in hospitals will be retrieved. If the sample is reported to have less than 50% of content, the particular product will be blacklisted for a period of 3 years from the date of intimation of blacklisting. (ii). If 3 batches of a particular drug supplied by the supplier is reported to be failing in ASSAY content (above 50% but below prescribed limit) and/or other parameters, then the particular drug of the firm shall be blacklisted for a period of 3 years from the date of intimation. (iii). If a single batch of any product(s) supplied by the company/firm declared as adulterated/spurious/ misbranded by the government authorities during the shelf life of the product supplied irrespective of tender period, the company/firm shall be blacklisted for a period of 3 years from the date of intimation besides forfeiture of security deposit in full. 9 (iv). If the supplier supplied more than one drug and if 2 or more drugs are blacklisted for quality failure in 3 financial year the firm will be blacklisted for a period of 3 years from the date of intimation. (v). The purchaser has a separate agreement with the empanelled labs. The bidder shall not be penalized for non supplied or delayed supplies if the there is a delay on the part of empanelled labs for providing reports and time and time shall be extended suitably by the purchaser which shall be communicated to the supplier. E OTHER CONDITIONS FOR BLACKLISTING (i). If total 5 batches of particular tender for any product/ combination of products of firm are found NSQ (for any reason) then firm may be blacklisted for 3 years. (ii). If any articles or things supplied by the bidder have been partially or wholly used after supply and are subsequently found to be inferior in quality or NSQ, then the contract price or prices of such articles will be recovered from the bidder, if payment had already been made to him. (iii). CGMSC Ltd., or its authorized representative(s) has the right to inspect the factories of BIDDER, before, accepting the rate quoted by them or before releasing any purchase order(s) or at any point of time during the continuance of tender and also has the right to reject the tender or terminate/cancel the purchase orders issued and/or not to place further order, based on adverse reports brought out during such inspections by any statutory authorities besides blacklisting for a period of 3 years. 10 11. The material placed before this Court demonstrates that the contractual relationship between the parties is governed not only by the Agreement dated 03.09.2025 but also by the terms and conditions of the Tender/NIT, which, by virtue of Clause 2(e) of the Agreement, stand incorporated into and form an integral part of the contract. Clause 9.1 of Section VII of the Tender specifically mandates quality testing of samples from each batch at empanelled laboratories, including Government Drug Testing Laboratories, before further distribution, while Clause 9.2 contemplates periodic testing during the shelf life of the product and expressly provides that where a drug is found to be "Not of Standard Quality" (NSQ), the procuring agency shall be entitled to recover the cost of the entire batch and initiate proceedings for blacklisting in accordance with the Tender conditions. The contractual framework, therefore, not only authorises but obligates the respondent to undertake quality verification of the medicines supplied, particularly having regard to the fact that the procurement pertains to essential drugs intended for implementation of a public health programme involving children and adolescents. Consequently, the decision of the respondent to subject the supplied batches to laboratory testing cannot be said to be arbitrary or dehors the contractual stipulations. 12. The record further reveals that out of the 56 batches of Albendazole 400 mg supplied by the petitioner, as many as 55 batches were initially declared NSQ by the respondent's empanelled laboratories. Considering the gravity of the issue, representative samples were thereafter subjected to analysis by the Government Analyst at the State Drugs Testing Laboratory, who, by reports dated 22.12.2025, found all eight batches tested to be NSQ. Thereafter, even the Central Drugs 11 Laboratory, Kolkata, upon testing four batches in accordance with the statutory procedure under the Drugs and Cosmetics Act, 1940, also reported all four batches to be NSQ. The statutory reports of the Government Analysts have not been shown to have been set aside or invalidated before any competent forum in exercise of the remedy available under the Drugs and Cosmetics Act. In such circumstances, this Court finds no reason to disregard the consistent findings recorded by the empanelled laboratories, the State Drugs Testing Laboratory and the Central Drugs Laboratory, all of which uniformly establish that the drug supplied by the petitioner was not of standard quality. 13. The blacklisting of the petitioner has been taken under Clauses 10(C) (v), 10(E)(i) and 10(F)(i) of Section VII of the Tender. The petitioner was issued a detailed show-cause notice dated 16.01.2026 specifying the proposed action and the contractual provisions invoked, was afforded adequate opportunity to submit its reply, and its explanation was duly considered before the competent authority passed the reasoned order dated 08.05.2026. The contention that the respondent was obliged to await testing by the Central Drugs Laboratory before initiating contractual action is misconceived, as no such requirement is prescribed either under the Tender conditions or the Agreement. In any event, the subsequent reports of the Central Drugs Laboratory have only reinforced the earlier findings of NSQ. Equally untenable is the plea of double jeopardy, as suspension of the petitioner's manufacturing licence under the Drugs and Cosmetics Act, 1940 constitutes an independent statutory regulatory measure, whereas blacklisting is a contractual consequence flowing from breach of the Tender conditions. 12 14. Section 25 of Drugs and Cosmetics Act, 1940 is also to be taken note here which is reproduced hereinbelow:- 25. Reports of Government Analysts. — (1)The Government Analyst to whom a sample of any drug or cosmetic has been submitted for test or analysis under sub- section (4) of section 23, shall deliver to the Inspector submitting it a signed report in triplicate in the prescribed form. (2)The Inspector on receipt thereof shall deliver one copy of the report to the person from whom the sample was taken and another copy to the person, if any, whose name, address and other particulars have been disclosed under section 18A, and shall retain the third copy for use in any prosecution in respect of the sample. (3)Any document purporting to be a report signed by a Government Analyst under this Chapter shall be evidence of the facts stated therein, and such evidence shall be conclusive unless the person from whom the sample was taken or the person whose name, address and other particulars have been disclosed under section 18A has, within twenty-eight days of the receipt of a copy of the report, notified in writing the Inspector or the Court before which any proceedings in respect of the sample are pending that he intends to adduce evidence in controversion of the report. (4)Unless the sample has already been tested or analysed in the Central Drugs Laboratory, where a person has under sub-section (3) notified his intention of adducing evidence in controversion of a Government Analyst's report, the Court may, of its own motion or in its discretion at the request either of the complainant or the 13 accused: cause the sample of the drug or cosmetic produced before the Magistrate under sub-section (4) of section 23 to be sent for test or analysis to the said Laboratory, which shall make the test or analysis and report in writing signed by or under the authority of, the Director of the Central Drugs Laboratory the result thereof, and such report shall be conclusive evidence of the facts stated therein. (5)The cost of a test or analysis made by the Central Drugs Laboratory under sub-section (4) shall be paid by the complainant or accused as the Court shall direct. 15. Having considered the rival submissions advanced by the learned counsel for the parties and upon perusal of the material available on record, this Court is of the considered opinion that the principal challenge in the present writ petition is directed against the laboratory reports of the empanelled laboratories, the State Drug Laboratory and the Central Drugs Laboratory, on the basis of which consequential action, including blacklisting of the Petitioner, has been taken. The controversy sought to be raised involves disputed questions of fact relating to the correctness and validity of the laboratory reports, which cannot be adjudicated in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India. 16. Section 25(3) of the Drugs and Cosmetics Act, 1940 specifically provides that the report of the Government Analyst shall constitute evidence of the facts stated therein and shall be conclusive unless the person concerned, within the prescribed period, notifies the Inspector or the Court of his intention to adduce evidence in controversion of the report. Furthermore, Section 25(4) of the Drugs and Cosmetics Act, 14 1940 provides the statutory mechanism whereby the competent Court may, upon such objection, direct the sample to be sent to the Central Drugs Laboratory for test or analysis, whose report shall thereafter be conclusive evidence of the facts stated therein. Thus, the Drugs and Cosmetics Act, 1940 itself provides a complete and efficacious statutory mechanism to assail and controvert the findings recorded in the laboratory reports. 17. In view of the aforesaid statutory remedy and the settled principle that the writ jurisdiction under Article 226 of the Constitution of India is ordinarily not to be exercised where an efficacious alternative remedy is available, particularly in matters involving disputed questions of fact, this Court is not inclined to entertain the present writ petition. 18. Accordingly, the writ petition is dismissed. However, it is observed that dismissal of the present petition shall not preclude the Petitioner from availing such statutory remedy as may be available under Section 25 of the Drugs and Cosmetics Act, 1940 or any other remedy available in law. If such remedy is availed, the competent forum shall consider and decide the same independently and in accordance with law, without being influenced by any observations made in this order. 19. No order as to costs. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice sagrika