New Delhi: A Supreme Court bench of Justices Vikram Nath, Augustine George Masih and Sandeep Mehta has quashed orders blacklisting pharmaceutical supplier M/s JPEE Drugs for three years and debarring it from supplying a particular drug for two years, after four batches of its medicines were declared Not of Standard Quality (NSQ), LiveLaw reported. The judgment, delivered on October 6, was reported on October 21, and its full text has been published by AdvocateKhoj (2026 LiveLaw (SC) 1074, M/s JPEE Drugs vs State of Madhya Pradesh).

The case arose from the supply of Ascorbic Acid (Vitamin C) tablets and Ethambutol Hydrochloride tablets to government hospitals and health centres in Madhya Pradesh. In September 2024 the firm received a show-cause notice after three batches of Vitamin C tablets and one batch of Ethambutol Hydrochloride tablets were declared NSQ in laboratory reports. On September 30, 2024, the Managing Director of the Madhya Pradesh Public Health Services Corporation Limited (MPPHSCL) ordered recovery of the value of the affected batches, blacklisted the firm for three years for the Vitamin C tablets and debarred it for two years for the Ethambutol tablets; an order on October 1, 2024, rejected its representation and reiterated the decisions. The firm denied supplying substandard medicines and contended — its contention, recorded in the judgment — that any quality failure could have resulted from improper storage and handling after delivery.

The court found that Clause 6 of Annexure IX of the tender required a second sample from the same batch to be sent to another laboratory if the first test declared a drug substandard, and that blacklisting could follow only after the second laboratory confirmed the result. The authorities had not followed that procedure. The Madhya Pradesh High Court had directed fresh samples to be sent to a Central Government laboratory within 15 days, but the Supreme Court noted the retesting remained incomplete even at the High Court's review hearing in February 2026 and when the Supreme Court stayed the blacklisting in May 2026 — the 15-day period had gone uncomplied with for over six months, and by then the shelf life of all four batches had expired, making retesting ineffective.

Referring to its earlier decision in Medipol Pharmaceutical India Pvt. Ltd. v. Post Graduate Institute of Medical Education & Research, the court reiterated the importance of an effective opportunity to challenge an adverse drug-testing report through examination by a superior laboratory, and said the principle behind Sections 25(3) and 25(4) of the Drugs and Cosmetics Act, 1940, applied even though this case concerned administrative and contractual action rather than a criminal prosecution. “The procedural infirmity, coupled with the irretrievable deprivation of the opportunity for re-testing, renders the orders of blacklisting and debarment unsustainable in law,” the court observed. It quashed the competent authority's orders dated September 30 and October 1, 2024, set aside the Madhya Pradesh High Court's judgment dated October 27, 2025, and review order dated February 12, 2026, to the extent they had declined to quash the blacklisting, and allowed the appeals.

Sources: LiveLaw (report and judgment summary, October 21, 2026); AdvocateKhoj (full text of the Supreme Court judgment in M/s JPEE Drugs vs State of Madhya Pradesh, dated October 6, 2026).