Calcutta High Court Quashes Tender Blacklisting Of Pharma Firm; Says Show-Cause Notice Must Clearly Propose Debarment Action
“When it comes to blacklisting, the requirement becomes all the more imperative… it is the harshest possible action,” the Calcutta High Court stressed while setting aside a three-year debarment and forfeiture of performance bank guarantee imposed on Helax Healthcare Pvt Ltd for alleged supply of non-standard Telmisartan tablets.
Justice Krishna Rao held that the September 26, 2025 blacklisting order violated principles of natural justice since the Department never disclosed that such a penalty was proposed, nor shared the laboratory report relied upon.
The Court noted that while multiple notices mentioned “penal action”, none expressly warned of blacklisting or debarment — rendering the action unsustainable.
“In none of the notices, the respondents have informed the petitioner that the respondents will take penal action of blacklist and debarment...Respondents have not supplied the report on the basis of which they came to the conclusion that the medicine was of non-standard quality,” it held.
Relying heavily on Supreme Court rulings in Gorkha Security Services (2014) and UMC Technologies (2021), the Court reiterated that blacklisting without specific prior notice and without supplying relied-upon documents offends fair hearing.
Rejecting the State's contention that an alternative appellate remedy was available, the Bench held that violation of natural justice permits exercise of writ jurisdiction.
The Court refused the State's plea for stay.
Background
Helax Healthcare was the L1 bidder in an e-tender for supply of Telmisartan 40 mg tablets to the West Bengal Health Department. After the authorities alleged non-standard drug quality and inadequate supply, they issued show-cause notices and personal hearing notices warning of unspecified “penal action”. On 26 September 2025, the Department passed an order blacklisting the company for three years, debarring it from future tenders and forfeiting its Rs 30 lakh performance bank guarantee. Challenging the action, the petitioner argued that blacklisting was never proposed in any notice, the relied-upon laboratory reports were never furnished, and the action thus violated principles of natural justice.
The State, on the other hand, submitted that there were repeated failures in supply, that the notices were adequate under tender clauses and that the petitioner should have pursued the appellate remedy. Justice Krishna Rao held that the impugned order travelled beyond what was proposed in the notices and, noting the denial of a fair opportunity, quashed the blacklisting order.
Case: Helax Healthcare Private Limited Versus State of West Bengal & Ors.
Case No: WPA No. 26915 of 2025