The Court of Appeal in Sri Lanka has issued notices to two Chennai-based pharmaceutical manufacturers and their local agent in Sri Lanka on a writ petition seeking suspension of their registration to supply drugs to the Sri Lankan Health Department.

According to reports, the petitioner Arushan Raninkumar, a businessman, complained that the Director General of Health Services and the State Pharmaceutical Corporation, the drug distribution agency under the state government, had failed to take action to claim reimbursement for the supply of inferior quality drugs worth Rs 3,500 million from the Chennai-based Madras Pharmaceuticals, Bafna Pharmaceuticals and their local agent, Pharma Associations, Colombo.

The petitioner also informed the court that as per a report submitted by the auditor general to the Sri Lankan Parliament, medicines worth Rs 3,500 million supplied by the companies through the local agent were destroyed due to its lack of quality standards.

The petitioner also sought a writ of mandamus to suspend the registration of all drugs and current tenders given to the companies and the local agent till the reimbursement of Rs 3,500 million to the concerned department.

Meanwhile, the Chennai-based company informed that the case was filed due to a business issue between the petitioner and the first respondent, Pharma Associates, Colombo and the company has nothing to do with the issue.

"The petitioner was earlier a partner of our local agent and the case is part of vendetta between these persons. We have nothing to do with this issue and cannot say anything about the petition unless we get any intimation from the court," said A M Sulaiman, managing partner, Madras Pharmaceuticals Ltd and the second respondent in the petition. He also informed that the company has a miniscule supply to Sri Lanka through the State Pharmaceutical Corporation.

Bafna Pharmaceuticals Ltd, which has its major share of exports to Sri Lanka has crossed Rs 20 crore sales in this market in the financial year 2007-08. The company earlier declared that it is expecting a 25 per cent growth in the next financial year with the launch of its branded generics products in the country. In 2005, the company has received the 'Best Supplier Award' from the State Pharmaceutical Corporation of Sri Lanka in 2005. Sri Lanka is largely relying on imported drugs for its healthcare management and India is a major supplier of medicines to that country.