Calcutta High Court Quashes Blacklisting of Helax Healthcare

New Delhi: The Calcutta High Court has set aside the blacklisting and debarment of Helax Healthcare Private Limited by the West Bengal health authorities, holding that the punitive action was taken in violation of the principles of natural justice.

The case arose from a writ petition filed by Helax Healthcare challenging an order dated September 26, 2025, by which the company was blacklisted for three years and debarred from participating in tenders of the Central Medical Stores (CMS), along with forfeiture of a Rs 30 lakh performance bank guarantee. The action was taken in connection with the supply of Telmisartan Tablet IP 40 mg under a state government tender.

The matter was heard and decided by Justice Krishna Rao of the Calcutta High Court, exercising constitutional writ jurisdiction.

Appearing for Helax Healthcare, Senior Advocate Jishnu Choudhury contended that although notices for personal hearing were issued, none of them specifically mentioned that blacklisting or debarment was proposed. He argued that such a drastic penalty could not be imposed without expressly putting the petitioner on notice.

The petitioner also submitted that the authorities relied on laboratory test reports to allege non-standard quality but failed to supply those reports, despite repeated written requests. Helax Healthcare maintained that its own in-house quality control reports and NABL-accredited laboratory reports showed that the drug met IP specifications. The company had also sought joint analysis and details of sample collection and testing methodology, which were never provided.

Relying on Supreme Court judgments, including Gorkha Security Services v. Govt. (NCT of Delhi) and UMC Technologies Pvt. Ltd. v. FCI, the petitioner argued that the absence of a clear mention of proposed blacklisting and denial of relevant documents rendered the action arbitrary and illegal.

Opposing the petition, Junior Standing Counsel Vivekananda Bose argued on behalf of the State that Helax Healthcare had repeatedly been informed about deficiencies in quality and supply. He submitted that despite assurances, the petitioner failed to improve performance and also did not supply medicines in the required quantities.

The State contended that the show cause notice dated July 24, 2025, had warned of “penal action” under the tender terms, which included debarment provisions. It was also argued that the tender conditions provided for an appellate remedy, and therefore the writ petition was not maintainable.

The Court noted that while the authorities had issued several notices warning of penal action, none of the notices specifically stated that blacklisting or debarment was contemplated. Justice Krishna Rao observed that blacklisting is one of the harshest penalties and therefore requires clear and explicit prior notice.

The Court further found merit in the petitioner’s grievance that the authorities relied on laboratory reports without supplying them to the company, thereby denying it a fair opportunity to respond. Such conduct, the Court held, was contrary to settled law and the principles of natural justice.

Relying on Supreme Court precedents, the Court held that merely referring to tender clauses providing for blacklisting is insufficient unless the proposed action is expressly stated in the show cause notice.

Allowing the writ petition, the Court categorically held:

“In such view of the above, the impugned order issued by the respondents dated 26th September, 2025, is in violation of principle of natural justice, accordingly, the same is set side and quashed.”

On the objection regarding maintainability, the Court observed:

“As regard to the filing of the appeal, by the petitioner against the impugned order, this Court finds that the petitioner has filed the present writ application on the ground of violation of principle of natural justice and thus the writ petition is maintainable.”

However, the Court clarified that its decision would not prevent lawful action in the future, stating:

“It is made clear that if the respondents intend to take action against the petitioner, this order will not prevent the respondents for taking appropriate action against the petitioner in accordance with law.”

Accordingly, the Court concluded:

“WPA No. 26915 of 2025 is disposed of.”

To view the order, click the link below: