IN THE HIGH COURT AT CALCUTTA

(Constitutional Writ Jurisdiction)

APPELLATE SIDE

Present:

The Hon’ble Justice Krishna Rao

W.P.A. No. 3159 of 2026

Kemecos India Private Limited & Ors.

Vs.

Uttar Pradesh Medical Supplies

Corporation Limited & Ors.

Mr. Kamalesh Bhattacharya

Mr. Ashim Ghosh

Mr. Sujit Bhattacharya

Mr. Ushananda Jana

Mr. Ashok Mazumdar

Mr. Swadin Pan

....For the petitioners.

Mr. Avinash Chandra

Mr. Abhijit Prasad

….For the respondents.

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Hearing Concluded On : 06.08.2026

Judgment Delivered On : 27.08.2026

Judgment Uploaded On : 27.08.2026

Krishna Rao, J.:

1. The petitioners have filed the present writ petition for issuance of

mandamus upon the respondent authorities particularly the

respondent no.2 not to take any action on the basis of the show cause

notice dated 31

st

December, 2025, the order being UPMSC/05/2025-

26/1512 dated 29

th

January, 2026, and for release of payment to the

tune of Rs. 1,53,91,742.16/-.

2. The respondent no.1, namely, Uttar Pradesh Medical Supplies

Corporation Limited (hereinafter referred to as “UPMSCL”) decided to

procure Benzyl Benzoate application 25% W/W, 100 ml. bottle and

supply the same to various healthcare establishments across all the

districts of Uttar Pradesh.

3. For procurement of the Benzyl Benzoate Application 25% W/W 100 ml

bottle, the respondent no.2 published an e-tender notice inviting

eligible and qualified bidders. The petitioners have participated in the

bid process and were selected for supply of Benzyl Benzoate

Application 25% W/W, 100 ml bottle in tranches within a period of

one year.

4. The petitioners have supplied the Benzyl Benzoate Application 25%

W/W, 100 ml bottle having quantity of 1401000 bottles for a value of

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Rs. 1,65,38,525/-. As per agreement, the petitioners have also

uploaded test reports certified by National Accreditation Board for

Testing and Calibration Laboratories (NABL) prior to the delivery of

Benzyl Benzoate Application 25% W/W 100 ml bottle since the year

2022 till March, 2025.

5. Mr. Kamalesh Bhattacharya, Learned Advocate, representing the

petitioners submits that the respondents did not raise any objection

regarding the test reports. The test reports did not depict any result of

Biological Tests since 2022 to March, 2025.

6. Mr. Bhattacharya submits that there was no abbreviated term of I.P.

incorporated after the name of drugs i.e. Benzyl Benzoate Application

I.P.25% W/W 100 ml bottle in terms of Rule 104 of the Drugs Rules,

1945. He submits that I.P. stands for Indian Pharmacopoeia. He

submits that Benzyl Benzoate Application 25% W/W 100 ml is a drug

in terms of Section 3(b) of the Drugs and Cosmetics Act, 1940, thus

the question of I.P. standard does not arise.

7. Mr. Bhattacharya submits that after supply of materials in terms of

contract, the petitioners have submitted invoices and made several

requests for disburse of the amount but no amount is paid to the

petitioners instead the respondent no.2 has issued First Show Cause

notice dated 16

th

July, 2025 to the petitioners by informing the

petitioner no.1 that 26 batches of the Benzyl Benzoate Application I.P.

25% W/W 100 ml bottle were found to be not of standard quality. It

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was further alleged that based on the feedback given by purported

technical experts, the biological tests were found to be of allegedly

higher specificity and sensitively and has been giving inconsistent

results. He submits that the purported test reports were not carried

out in presence of the petitioners.

8. Mr. Bhattacharya submits that the petitioner no.2 has submitted

detailed written reply on 21

st

July, 2025 and clarified that the high

standard of the Benzyl Benzoate Application 25% W/W 100 ml bottle

supplied and further informed the respondents that not a single

complaint was received by the petitioner no.1 from July, 2022 till

June, 2025 when the petitioners supplied the said materials to the

respondents.

9. Mr. Bhattacharya submits that on 26

th August, 2025, the respondents

have issued an order upon the petitioner company declaring that (i)

quantity corresponding to twenty six batches are not of standard shall

be deemed as non-supply and flat 20% penalty shall be levied on the

value of the corresponding quantity, (ii) 0.2% demurrage shall be

levied on the value of corresponding quantity and in addition cost for

destruction shall be liable to pay (iii) the petitioners have been

blacklisted for the Drug Benzyl Benzoate Application 25% W/W 100

ml bottle for three years with effect from 26

th

August, 2025.

10. Mr. Bhattacharya submits that the petitioners have obtained an

information under Right to Information Act, 2005, regarding whether

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Microbiological test for Benzyl Benzoate Application 25 % W/W 100 ml

bottle is required before the Director of State Drugs Control and

Research Laboratory, Government of West Bengal and in reply, it is

informed that the test parameters of Benzyl Benzoate 25% W/W as per

Indian Pharmacopoeia- 2022, Monograph and General Chapter of

I.P.2022, namely, “Mircobial Contamination of non-sterile products”

does not include any Microbiological tests.

11. Mr. Bhattacharya submits that the activities of empanelled testing

laboratories and UPMSCL are not in consonance with Drugs and

Cosmetics Rules and official compendiums. He submits that the

respondents have issued 2

nd show cause notice dated 31

st December,

2025, to show cause why the petitioners shall not be debarred from

supplying the subject drug for a period of two years. He submits that

the petitioners have submitted reply to the show causes notices but

without considering the reply submitted by the petitioners, the

respondents no. 2 has issued an order of blacking of the petitioners for

a period of three years for the Drug Benzyl Benzoate application 25%

W/W 100% ml bottle and other punitive steps by allowing only 15

days to recall the drugs of 26 batches declared as not of standard

quality by the empanelled testing approved laboratories of the

respondents.

12. Mr. Bhattacharya submits that again on 2

nd

February, 2026, the

respondent no. 2 has issued a third show cause notice alleging that

the petitioners have not supplied the standard quality of two batches

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being Batch Nos. 819 and 808 of Benzyl Benzoate Application 25%

W/W 100 ml bottle and on receipt of the said show cause notice, the

petitioners have submitted reply to the show cause notice. He submits

that second show cause notice was issued without passing a final

order on the first show cause notice, and as such the second show

cause notice is premature and improper and thus, the order dated 29

th

January, 2026, has become infructuous. He further submits that

issuing the second show cause notice on the same cause of action

without passing any order on the first show cause notice, is irregular

and actionable and issuing a third show cause notice dated 2

nd

February, 2026, is also irregular and actionable.

13. Mr. Bhattacharya submits that the respondents’ empanelled

Laboratories are not accredited for Microbiological testing for the drug

Benzyl Benzoate Application 25% W/W 100 ml bottle in terms of

Form- 36 read with Rule 150-B of the Drugs and Cosmetics Rules,

1945. He submits that the said laborites are only entitled to do

microbiological tests of Schedule C and C(1) Drugs only. He submits

that Benzyl Benzoate Application 25% W/W 100 ml bottle is not

coming under Schedule C and C/1.

14. It is the contention of the petitioners that the Drug Inspectors are the

authority for sampling of drugs in terms of Section 23 of the Drugs

and Cosmetics Act read with Rule 51 of Drugs and Cosmetics Rules,

1945, by sending one part of sample to the Government analyst

appointed under Section 20 of the said Act and the Government

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analyst shall deliver test reports in Form-13 to the Inspector of Drugs

within 60 days as per Rule 45 of Drugs and Cosmetics Rules, 1945

but in the present case, the Inspector of Drugs has not taken any

samples and the Government analysts did not test or done any

analysis.

15. Per contra, Mr. Avinash Chandra, Learned Advocate, appearing for the

respondents submits that Clause 11(ii) of the tender condition which

is an admitted document by the petitioners provides that the samples

of all batches of all drugs shall be subjected to confirmatory quality

testing as per UPMSCL Quality Policy. Clause 4 of the Quality Policy

empowers the UPMSCL to empanel the laboratories for conduct of

confirmatory quality testing and Clause 5 provides that in case, no

empanelled laboratory of testing of drugs or in case of unavailability of

more than two empanelled labs for confirmatory testing or in case of

recommendation by Quality Council, the testing may be done by the

Government labs.

16. Mr. Chandra submits that Clause 6 of the Quality Policy provides for

the method of sample preparation and randomization. For the purpose

of executing the liabilities of the Corporation, EAushidhi (Drugs and

Vaccine Distribution Management System) has been introduced in the

corporation which is centralized automated web-based application

dealing in the management of stocks, of various drugs a surgical item,

the demands made and its satisfaction. He submits that for the said

purpose, the Government of Uttar Pradesh has independently entered

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into a Memorandum of Understanding with Center for Development of

Advanced Computing (C-DAC), a Scientific Society under the

Department of Electronics and Information Technology, Ministry of

Communications and Information Technology, Government of India

and operation of the said application is beyond the control of the

answering respondent.

17. Mr. Chandra submits that in the instant case, the Drug samples were

sent for testing to three Laboratories which are licensed by the

Licensing Authorities under the provisions of the Drugs and Cosmetics

Act, 1945 and Rules and are accredited by National Accreditation

Board of Testing and Calibration Laboratories at relevant point of time.

18. Mr. Chandra submits that the system adopted by UPMSCL for

masking the identity of the manufacturer and batch number before

dispatch of samples to empanelled analytical laboratories is an

established quality assurance mechanism intended to ensure

impartial, objective and unbiased testing. He submits that at the time

of dispatch of samples, the original particulars relating to the

manufacturer, manufacturing license number, logo and batch number

are intentionally concealed and replaced with a unique confidential

identification (Secret Code) through DVDMS portal. The laboratory

receives only the coded samples. He submits that the Secret Code is

not an anonymous or arbitrary. It is a unique traceable code generated

and maintained by DVDMS portal.

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19. Mr. Chandra submits that the Indian Pharmacopoeia monograph for

the subject drug was in force on the date of manufacture, supply and

quality testing. The microbial limit test was not introduced by

UPMSCL as an additional or contractual condition. It is an integral

requirement of the Indian Pharmacopoeia for the concerned drug.

Failure of the supplied batch to comply with the prescribed microbial

limit rendered the batch Not of Standard Quality (NSQ). He submits

that irrespective of whether the suffix “IP” is expressly mentioned in

the tender schedule, every drug having an applicable IP monograph is

required to confirm to the standards prescribed therein.

20. The UPMSCL has issued show cause notice to the petitioners on 16

th

July, 2025, directing the petitioners to explain the followings:

i. why as per condition no. 11(v) of tender the

supplied quantity of drug batches- BB-791, BB-

793, BB-794, BB-795, BB-796, BB-798, BB-799,

BB-802, BB-803, BB-804, BB-810, BB-811, BB-

812, BB-816, BB-817, BB-818, BB-826, BB-833,

BB-837, BB-838, BB-843, BB-845, BB-853, BB-

863, BB-864, BB-865 should not be treated as

non-supply and payment of corresponding value

should not be deducted.

ii. why as per condition no. 11(v) of tender, 20% of

the above value should not be taken from

Company as penalty for supplying "Not of

standard quality drug".

iii. why to take back the said drug batches by

Company's own arrangement within 30 days of

receipt of this notice otherwise after 30 days,

0.2% demurrage shall be levied on the value of

corresponding quantity and the stock of said

drug shall be destroyed by the UPMSCL and the

cost incurred for such destruction would be

charged from Company. Available stock of

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above drug batch as per DVDMS portal is

attached with this notice.

iv. why as per condition no. 13 (1) of tender,

Company Kemecos India Private Limited should

not be blacklisted for drug "Benzyl Benzoate

Application: 25% w/w (-) 100 ml Bottle" due to

supply of 26 drug batches (Batch no. BB-791,

BB-793, BB-794, BB-795, BB-796, BB-798, BB-

799, BB-802, BB-803, BB-804, BB-810, BB-

811, BB-812, BB-816, BB-817, BB-818, BB-

826, BB-833, BB-837, BB-838, BB-843, BB-

845, BB-853, BB-863, BB-864 & BB-865) to

different District warehouses of UPMSCL.”

21. Condition Nos. 11(v), 11(vi), 11(vii) and 13 of the tender conditions,

reads as follows:

“11. QUALITY ASSURANCE

v. Quantity corresponding to NSQ batch

shall be deemed as non-supply and flat

20% penalty shall be levied on the value of

corresponding quantity.

vi. In case a batch is declared NSQ, the

supplier has to take back the

corresponding quantity supplied by its own

arrangement within 30 days of intimation.

Beyond 30 days, 0.2% demurrage charge

per day shall be levied on the value of

corresponding quantity remaining un-lifted.

vii. In case the supplier does not take the

stock of NSQ drugs back within 90 days of

intimation, then UPMSCL shall be at liberty

to destroy the quantity lying at its

warehouses. Supplier shall be liable to pay

the expenses incurred for such destruction

in addition to the demurrage charges

applicable.

vii. The decision of the Tender Inviting

Authority or any officer authorized by him

as to the quality of the supplied items shall

be final and binding.

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13. DEBARRING & BLACKLISTING

i. If two batches of any drug supplied by a

Company/firm is found not of standard

quality, then the Supplier Company/firm

shall be blacklisted for that particular drug

for a period of three years.

ii. If the Supplier fails to execute at least 70%

of the order quantity for any particular

drug for more than two purchase orders,

then the Supplier shall be debarred for

supply of that particular drug for a period

of two years.

iii. lf a Supplier is blacklisted for more than

two drugs for quality issues, then the

Supplier shall be debarred as whole for a

period of three years.

iv. The bidder/Supplier who have submitted

forged documents in tender or in

correspondence to any subsequent

communication from UPMSCL shall be

declared ineligible to participate in the

tenders for a period of 5 years.

v. The Supplier shall be blacklisted for a

period of 3 years if any of the drugs

supplied is declared spurious or

adulterated by the regulatory authority.

vi. The Supplier shall be blacklisted for 3

years if proved to have manipulated expiry

date of the drugs.

vii. Goods against orders placed prior to

blacklisting/debarring any Supplier shall

be received as per normal protocol.”

22. The petitioners have obtained information under Right to Information

Act on the issue whether Microbiological test for Benzyl Benzoate

Application 25% W/W 100 ml bottle is required before the Director of

State Drugs Control and Research Laboratory, Government of West

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Bengal. In reply to the said issue, it was informed to the petitioners

that the test parameters of Benzyl Benzoate Application 25% W/W 100

ml bottle as per Indian Pharmacopeia-2022, Monograph and General

Chapter of I.P. 2022, namely, “Microbial Contamination of non-sterile

products” does not include any Microbiological tests.

The UPMSCL by an email dated 27

th

March, 2026, asked for

Clarification on Microbial Limit Test (MLT) Requirement for Benzyl

Benzoate Application I.P. 25% W/W and in reply to the said

clarification, the Indian Pharmacopoeia Commission clarified that:

“The Indian Pharmacopoeia (IP) serves as the

official book of standards for drugs in accordance

with the Drugs and Cosmetics Act, 1940.

As Benzyl Benzoate is intended for cutaneous

use, you are requested to refer to General Chapter

2.2.9 “Microbial Contamination in Non-sterile

Products” (refer pages 56 of IP 2026). Under Table

6 – Acceptance criteria for microbial quality of non-

sterile dosages forms, the applicable limits for

cutaneous use are as follows:

 Total Aerobic Count (TAC): 10

2

CFU per g or

ml

 Total Fungal Count (TFC): 10

1 CFU per g or

ml

 Specified Microorganisms: Staphylococcus

aureus and Pseudomonas aeruginosa –

Absent in 1 g or 1 ml

Accordingly, the above limits shall be

applicable to Benzyl Benzoate preparations

intended for cutaneous use.”

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Chapter 2.2.9. Microbial Contamination in Non-Sterile Products

reads as follows:

“Acceptance Criteria for Microbiological

Quality of Non-Sterile Pharmaceutical

Substances and Non-Sterile Doses Forms.”

This provides, acceptance criteria for microbiological quality of

non-sterile substances of pharmaceutical use and non-sterile dosage

forms, unless otherwise specified in the monograph.

If microorganisms are present in a pharmaceutical preparation,

they can reduce or in activate the therapeutic activity of the products

or can adversely affect the health of the patients. Hence,

pharmaceutical preparations should have low bio-burden and they

should not have specified microorganisms, which are harmful.

Microbial examination of non-sterile product is performed

according to the methods given above. Acceptance criteria for

microbiological, quality of non-sterile substances for pharmaceutical

use and non-sterile pharmaceutical products based upon the Total

Aerobic Viable Count (TAC) and the Total Fungal Count (TFC) are

given in Tables 5 and 6 respectively. Thus, “Microbial Contamination

of Non-Sterile Products” does not include any Microbiological test, is

contrary to the Indian Pharmacopeia-2022.

23. The petitioners have raised the issue that the activities of the

empanelled testing laboratories and UPMSCL are not in consonance

with the Drugs and Cosmetics Rules and official compendiums. The

14

Drugs and Cosmetics Rules, 1945, was amended and various

provisions were amended/substituted/added by G.S.R. 223 (E) dated

18

th March, 2019. Thereafter, Rules 150B, 150C, 150E of the Drugs

Rules, 1945, were substituted with the new provisions and now, the

laboratories may be approved, licensed and conduct testing for

procurement agencies also. A new Form-39A is inserted. As per Rule

150-E(f) of the Drugs Rules, 1945, the report can be given in Form-

39A and thus, it is not necessary that the samples should be collected

only by the Government Analyst and reports should be signed only by

Government Analyst.

24. The petitioners have raised the issue that the Drug Inspectors play

crucial role in sampling of drugs in terms of Section 23 of the Drugs

and Cosmetics Act, 1940, read with Rule 51 of the Drugs and

Cosmetics Rules, 1945 by sending one part of sample to Government

Analyst appointed under Section 20 of the Act and the Government

Analyst shall deliver test reports in Form-13 to the Inspector of Drugs

within 60 days as per Rule 45 of the Drugs Rules. As per the

contention of the petitioners that the test reports of the approved

laboratories as empanelled by the respondents are not in accordance

with law and have no legal sanctity.

25. The Drugs Rules, 1945, was amended on 15

th

December, 2020 and in

Rule 150 test for procurement agencies were also permitted through

independent laboratories and a new Form-39 was introduced of test

reports on the request of procurement agencies. In the present case,

15

tests were conducted as per the provisions of the Drugs and Cosmetics

Rules therein. As per modified Quality Policy of UPMSCL which was

approved on 13

rd Board held on 3

rd March, 2022, the samples

preparation and randomization was approved. Sub-Clauses (c), (d) and

(e) of Clause 6 of modified Quality Policy of UPMSCL, reads as follows:

“6. Sample Preparation & randomization

(c)(i) Consignee selection of drug batches from

all samples received to Quality Control

Division of UPMSCL Lucknow Drug

warehouse will be done by the headquarter

Pharmacist (Quality Control) through DVDMS

portal. Quality control division shall wait for

7 days of receipt of first sample of any batch

or up to samples of same batch is received

from 3 warehouses (Whichever is earliest) for

consignee selection and sending sample for

testing at empanelled lab.

(ii) If single batch of a drug is supplied to

single district drug warehouse then

consignee selection of that single batch will

be done immediately without waiting for 7

days after "permission of MD, UPMSCL.

(D) All marks of manufacturer's identity

including batch number shall be

erased/masked for the sample to be sent to

empanelled lab & sample shall be sent with

system encrypted code, product name &

strength.

(E) software system/ DVDMS shall

recommend the laboratory to which sample is

to be sent based on a randomized logic in

consideration with various lab empanelled for

respective drug and total sample load

balance (cumulative number of samples sent

to the labs & total samples pending for

testing at the labs at that point of time).”

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26. At the time of dispatch of samples, the original particulars relating to

the manufactures, manufacturing license number, logo and batch

number are intentionally concealed and replaced with a unique

confidential identification within (Secret Code) through DVDMS portal

and the laboratory receives only the coded samples. The respondents

have disclosed the details of the batch number against each secret

code of 26 NSQ declared drugs batches downloaded from DVDMS

portal which shows that the respondent authorities have sent the

drugs by masking the batch number and by giving a secret code.

27. Considering the above, this Court finds that the drugs supplied by the

petitioners to UPMSCL were sent to the laboratories and after receipt

of the report from the concerned laboratories, the respondents find

that the same were not of standard quality and thus the respondents

have issued show cause notice to the petitioners and after considering

the reply of the petitioners, the UPMSCL has passed the order dated

26

th August, 2025. This Court did not find any illegality in the

impugned order.

28. The respondents have raised preliminary objection with regard to

maintainability of the writ petition on the ground that Clause 21 of the

conditions of contract which provides for resolution of disputes and

also raised the point of Territorial Jurisdiction. Clause 21 of the

conditions of contract reads as follows:

“21. RESOLUTION OF DISPUTES

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1. If dispute or difference of any kind shall

arise between the Tender Inviting Authority/

Purchaser and the successful bidder in

connection with or relating to the contract, the

parties shall make every effort to resolve the

same amicably by mutual consultations.)

2. If, after thirty (30) days from the

commencement of such informal negotiations,

the Purchaser and the Supplier have been

unable to resolve amicably a Contract dispute,

either the Tender Inviting Authority/Purchaser

or the successful bidder/Supplier may give

notice to the other party of its intention to

commence arbitration, as provided by the

applicable arbitration procedure and shall be

as per the Arbitration and Conciliation Act,

1996,

3. In the case of a dispute or difference arising

between the Tender Inviting Authority/

Purchaser and a bidder/Supplier relating to

any matter arising out of or connected with the

contract, such dispute or difference shall be

referred to a sole arbitrator as mutually

decided by the parties. The fees, if any, for the

arbitration including arbitrator fees, if required

to be paid before the award is made and

published, shall be borne equally by both

parties. The Arbitrator's award shall be final

and Conclusive.

4. Seat of Arbitration: The seat of

arbitration shall be at Lucknow, Uttar

Pradesh, India. Courts of Lucknow shall have

exclusive jurisdiction.

5. The language of Arbitration shall be English

language and shall be governed, construed in

accordance with applicable Indian laws.”

29. There is no denial that the registered office of the petitioners is

situated at Kolkata. Letter of Intent (LOI) was issued in favour of the

petitioners on 6

th November, 2024, which was received by the

petitioners at the registered office at Kolkata. After issuance of LOI, the

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petitioners have executed an agreement at Kolkata and were also duly

notarized before the Notary Public at Kolkata. The petitioners had

opened Bank Guarantee for Performance Security at Punjab National

Bank at Bosepukur Rajdanga Branch, Kolkata and all

correspondences were made by the respondents with the petitioners at

the registered address at Kolkata.

30. Considering the above, this Court finds that the preliminary objection

and territorial jurisdiction raised by the respondents are not

sustainable.

31. In view of the above, WPA No. 3159 of 2026 is dismissed.

Parties shall be entitled to act on the basis of a server copy of the

Judgment placed on the official website of the Court.

Urgent Xerox certified photocopies of this judgment, if applied for,

be given to the parties upon compliance of the requisite formalities.

(Krishna Rao, J.)