Over Rs 90 cr due from state govt: KMSCL to Kerala HC

Kochi: The KMSCL has told the Kerala High Court that an amount of Rs 90.88 crore was due to it from the state government.

The Kerala Medical Services Corporation Ltd (KMSCL) made this assertion before the court in response to a pharma company's plea alleging several months delay in payments by the state-run entity for medicines supplied under the Karunya Community Pharmacy project.

Justice Devan Ramachandran said that if the assertion of the KMSCL was true, then "it is a very sorry state of affairs".

The court directed the state government's lawyer to obtain specific instructions with regard to KMSCL's assertion and inform it by the next date of hearing on March 19.

The court also directed the KMSCL to hold discussions with the petitioner pharma companies to "explore ways and means of settling their claim as far as is practically possible".

"A report in this regard shall be made available by the next posting date," it said.

The court was hearing a plea by Sun Pharma, represented by senior advocate Jaju Babu, seeking directions to KMSCL to clear its pending bills of around Rs 9.5 crore for medicines supplied till December 31, 2023.

Babu said that during pendency of the petition, Rs 4.27 crore was paid by KMSCL towards the pending bills and around Rs 5 crore dues remained.

During the hearing of the matter, the KMSCL told the court that Rs 90.88 crore were due to it from the state government.

Sun Pharma, in its petition, has said that the Karunya Community Pharmacy is the largest pharmacy retail chain in the state with 52 outlets in different districts.

"The pharmacy is known to make a profit margin of 7 per cent and above for most of the drugs," it has said.

The pharma company has further claimed that while KMSCL assured to make payments within 45 days of supply of medicines, the same was delayed by five to six months many times.

However, as the drugs supplied by the company were required by patients continuously it did not stop the same as it had a moral responsibility to continue uninterrupted supply.

But the delay in payments were causing financial loss to it, the petitioner company has claimed.

The company has contended that the Karunya stores sell medicines on cash and carry basis and not on credit and if the revenue generated is not diverted, "there is no occasion for such huge arrears and pending dues".