- 18 Oct 2020
The dispute arose when the Importer ditched supplier and struck a deal with Tamil Nadu government for 50,000 kits this time using another intermediary supplier. This scam story makes the ICMR looks like a gullible fool who almost got conned by two intermediaries, had it not been there a trade dispute between the two.
Delhi High Court, it its judgement has avoided a possible scam in purchase of rapid antibody test kits, all set to malign a noble cause like fighting the war against COVID-19. In Rare Metabolics v Matrix Labs, High Court held that the profit margin of Rs. 355 by the intermediaries i.e 144 %, on the landed cost price of Rs. 245 is too high and capped the cost of each kit at Rs. 400 inclusive of GST instead of Rs. 600, as fixed by Indian Council of Medical Research (ICMR).
On 25th March 2020, Rare Metabolics Life Sciences Pvt. Ltd., made a bid to import one million tests of WONDFO COVID-19 antibody tests and asked Chennai based firm Matrix Labs for a Proforma Invoice and a delivery time. Within 3 days on 28th of March, the ICMR/National Institute of Cancer Prevention and Research placed an order for 5 lakh kits from Rare Metabolics, who charged ICMR Rs. 600 per kit. However, the respondent in the case, Matrix Labs sold the kits at Rs. 400. The point to note here is Matrix Labs also aren’t the suppliers but just importers. The dispute arose when the Importer ditched supplier and struck a deal with Tamil Nadu government for 50,000 kits this time using another intermediary supplier. ICMR could have directly contacted the Chinese and got a deal within Rs. 200 per kit without involving any profiteering intermediaries.
The ICMR in a statement had said Price range approved by them is Rs 740-1150 for RT-PCR and ₹528-795 for Rapid Test. 2.76 lakh rapid test kits are already delivered to ICMR. The court has directed Rare Metabolics to pay the amount of remaining 2.24 lakh tests i.e. total amount of 21 crores to the respondent and instructed petitioner to not profiteer from the above and sell the remaining kits at not more than Rs. 400 to ICMR. The court noted that when no customs duty whatsoever was applicable on such items exempted due to COVID-19, why was the petitioner charging them?
Rare Metabolics counsel, after the judgement have agreed before the court that the petitioner is ready to give up all claims, in case respondent is ready to supply the kits/tests at not more than Rs.400 each, plus GST i.e. at 40% lesser than the ICMR approved rate, directly to any Government or its agency or private entity duly approved to carry out these tests, as public interest should be paramount. Funny, they did not think of public interest while planning such a shameless profiteering scam.
“The country is going through an unprecedented medical crisis affecting public order. People have been cloistered in their homes or constrained to stay wherever they were on 24th March 2020. The economy is virtually at a standstill for the last one month. There is an element of disquiet apropos one’s safety. For people to be assured that the pandemic is under control and for governments to ensure and for agencies engaged in the frontline battle to safeguard people’s health, more kits/tests should be made available urgently at the lowest cost,” said Justice Waziri in the judgement.
Public interest must outweigh private gain but the events don’t seem to suggest that. This scam story makes the ICMR looks like a gullible fool who almost got conned by two intermediaries, had it not been there a trade dispute between the two. The role of ICMR officials in this whole inhuman scam at the time of pandemic needs to be investigated. It is very difficult to assume that such a scam happened right under very nose of ICMR. ICMR could have easily got pricing of kits from the Indian embassy in China, if they wished so. The question being, why did they not?
What held ICMR from looking into prices before making a deal? Even if the reason is callousness, if such unethical callous officials are part of such serious deals, should they not be penalized? Do the officials involved have any connections with the two intermediaries? A lot of unanswered questions that ICMR needs to answer, to shed the load of shame and mockery they just have gained through this irresponsible act.
The High Court judgement can be read here