Medipol Pharmaceutical India Pvt. Ltd. v. Post Graduate Institute of Medical Education and Research & Anr.
Background
Medipol supplied a batch of Clotrimazole antifungal cream to PGI Chandigarh under a government supply order. A sample drawn by a drug inspector nearly two years after supply, and tested close to the product's expiry date, came back showing only 61.96% of the required active ingredient strength (against a required 95-105%). Based largely on this one report, Medipol was blacklisted for two years, even though an appellate laboratory later retested a sample (received after the product's shelf life had already expired) and found it at 92.01%: much closer to standard. The Punjab & Haryana High Court upheld the blacklisting, reasoning the appellate figure was still about 3% short of standard.
Decision Breakdown
The Supreme Court held that the authorities' own delays, nearly two years between supply and sample collection, and later sending the appellate sample for testing only after the product's shelf life had expired, deprived Medipol of a fair, timely test, a "valuable right" recognised in a long line of precedent under similar drug/food/insecticide laws. The seven-member committee's post-decisional hearing was an "eyewash" because it ignored the far more favourable appellate report and relied solely on the flawed first report. The High Court also erred by independently assessing the lab reports itself instead of simply checking whether the blacklisting decision was legally sound. The blacklisting order and the High Court's judgment were both set aside.
Lesson Learnt
When a product or sample must be tested within a time limit (like a shelf life), unreasonable delay by the authorities in testing, especially delay that itself causes an unfavourable result, can make the test results legally unreliable, and a business cannot be punished (such as by blacklisting) based on a test that was compromised by the government's own foot-dragging.