No Substantive Grounds For Audit Objections: Andhra Pradesh HC Directs DoIMS To Release Pending Payments To Pharmaceutical Distributor
Live LawThe Andhra Pradesh High Court recently directed the Director of Insurance Medical Services to release payments withheld under invoices issued between 2017-2019 to Medihauxce Pharma Private Lmt. “Audit Inspection Report is only a intermittent document of the purpose of including findings in the audit report, which can only be considered as a final document of the department and the said audit report will then be laid before the Legislature of the State in terms of the procedure laid down under Article 151 of the Constitution of India is the final document.Thus, issuing the impugned memo based on such an intermittent document is per se illegal and the respondent No.2 cannot deny payment to the petitioner under the garb of the impugned memo, so far as they relate to Rate Contract purchase orders” The petitioner, an authorised distributor of pharmaceutical firms, had moved the High Court contesting the legality of a memorandum issued in 2021 by the DoIMS. The impugned memo directed that payments should solely be made to firms mentioned in the purchase orders and not to distributors, as per the Employees' State Insurance Corporation Rate Contract. Justice Cheemalapati first confirmed the maintainability of the writ petition, recognising that it not only seeks to compel the 2nd respondent to clear the outstanding amount specified in the withheld invoices but also questions the legality of the impugned memo issued in response to the audit objections, as it seems to run counter to established rules and procedures. Accordingly, the 2nd respondent was directed to release pending payment in respect of the Rate Contract Purchase orders within a period of three weeks and the impugned memo was set aside.
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