The Punjab and Haryana High Court has restrained the Directorate General of Foreign Trade (DGFT) from placing Cosmas Research Lab Limited on the Denied Entities List (DEL) without following the principles of natural justice. However, the Court has directed that the company will not be able to avail duty drawback until an appropriate order is passed after granting it an opportunity of hearing.
A Division Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor passed the order while hearing a writ petition filed by Cosmas Research Lab Limited against the DGFT and other respondents.
The Court noted that, despite its earlier directions, the Union Government had not passed any specific order placing the petitioner on the Denied Entities List after affording it an opportunity of hearing. The respondents informed the Court that a notice had now been issued to the company to appear before the concerned authority.
Relying on its earlier decision in Pace International v. Union of India, MANU/PH/3600/2012, the Court reiterated that inclusion in the Denied Entities List has civil consequences and that the authority must adhere to the principles of natural justice by providing an opportunity of hearing before passing such an order.
In Pace International, the Court had held that although the authorities may have the power to place an entity on the list, they must exercise that power in accordance with the applicable parameters and after following due process.
Finding that no order placing the petitioner on the list had been passed after a hearing and that compliance with the principles of natural justice had not been demonstrated, the Court issued notice to the respondents and granted them time to file a reply.
As an interim measure, the Court directed that Cosmas Research Lab Limited shall not be placed on the Denied Entities List. However, it clarified that the company would remain unable to avail duty drawback until the authorities pass an appropriate order after giving it an opportunity of hearing.
The matter has been listed for further hearing on December 1, 2026.
