Recently, the Supreme Court has set aside an order issued in 2009 wherein a company called VETINDIA Pharmaceuticals Ltd was indefinitely blacklisted.
A three-judge Bench comprising Hon’ble Justice RF Nariman, Hon’ble Justice Navin Sinha and Hon’ble Justice Krishna Murari observed that an order for indefinite blacklisting of a company impacts not only the present of the company but also the future of the company and its reputation as well.
Such an order might be described as a ‘civil death’ for the company as well, the Bench noted.
History of the Case:-
The appellant-company was served with an order of blacklisting by Office of Director, Animal Husbandry Department, UP based on a State Analysis report wherein a batch supplied by the company was declared substandard. As per the report, the company had violated the tender stipulations.
This order was challenged before the Bombay HC where the petition was dismissed on the ground of delay.
Infirmities noticed by the SC:-
After the perusal of records, the Court noticed that in the show-cause notice that was issued to the appellant-company, there was no mention of the Animal Husbandry Department contemplating blacklisting the appellant-company.
The Bench observed that if the notice had mentioned that the company might be blacklisted, the appellant could have filed a suitable response. It was further observed that blacklisting the company just by referring to the terms of the tender was uncalled for.
A reference was also made to M/s Daffodills Pharmaceuticals vs State of UP, where it was held that blacklisting a company for more than three years or a maximum of five years was disproportionate.
On the issue that there was a delay in approaching the Court, the Bench held that the petition was not barred due to unexplained delay.
Supreme Court held that Indefinitely Blacklisting of a company may spell doom for its future.
The order blacklisting the company has been aside by the Hon’ble Supreme Court.
Title: VETINDIA Pharmaceuticals Ltd. vs State of UP & Another
Case No.: CIVIL APPEAL NO.3647 OF 2020
Date of Order:06.11.2020
Coram: Hon’ble Justice RF Nariman, Hon’ble Justice Navin Sinha and Hon’ble Justice Krishna Murari