Delhi High Court - Orders
Olympus Medical Systems India Private ... vs Union Of India & Anr on 13 February, 2023
Author: Satish Chandra Sharma
Bench: Chief Justice, Subramonium Prasad
$~40
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 178/2023 & CM APPL. 636/2023
OLYMPUS MEDICAL SYSTEMS INDIA PRIVATE LIMITED
..... Petitioner
Through: Mr. Amit Sibal, Sr. Advocate with
Mr. Samudra Sarangi, Ms. Abilasha
Khanna, Ms. Nitya Jain and Mr.
Rishabh Sharma, Advocates.
versus
UNION OF INDIA & ANR. ..... Respondents
Through: Mr. Kirtiman Singh, CGSC with Ms.
Manmeet Kaur and Ms. Vidhi Jain,
Advocates.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
ORDER
% 13.02.2023
1. The instant writ petition under Article 226 of the Constitution of India has been filed for quashing the impugned demand notice dated 13.12.2022 issued by Respondent No.2 demanding a sum of Rs. 4,29,25,874/- on the ground that the Petitioner herein has violated the provisions of paragraph 20 (1) of the Drug Price (Control) Order, 2013 (hereinafter referred to as „DPCO, 2013‟) which provides that no manufacturer shall increase the MRP of drugs by more than 10% during the preceding 12 months.
2. When the instant petition came up for hearing before the learned Single Judge on 11.01.2023, the learned Single Judge observed that a Signature Not Verified Digitally Signed W.P.(C) 178/2023 Page 1 of 5 By:RAHUL SINGH Signing Date:17.02.2023 15:44:12 Coordinate Bench vide Order dated 25.02.2019 passed in W.P.(C) 1922/2019 had dealt with a similar demand and had interfered with the demand by directing the National Pharmaceutical Pricing Authority (NPPA) to consider the quantum of the amount recoverable as being overcharged by the Petitioner therein. It was also observed by the learned Single Judge that Union of India had challenged the said Order dated 25.02.2019 passed in W.P.(C) 1922/2019 by filing LPA No. 54/2020 which is pending before this Court. The learned Single Judge opined that the instant writ petition should be dealt with the case i.e., LPA No. 54/2020. LPA No. 54/2020 is coming up for hearing before this Court on 04.05.2023.
3. Mr. Amit Sibal, learned Senior Counsel appearing for the Petitioner, has argued before this Court that the Order dated 25.02.2019 passed in W.P.(C) 1922/2019 has only dealt with the provisions of paragraph 20 (2) of the DPCO, 2013, and therefore, the present matter ought to be treated separately.
4. Per contra, Mr. Kirtiman Singh, learned CGSC, draws attention of this Court towards paragraph Nos.12, 15 and 16 of the Order dated 25.02.2019 passed in W.P.(C) 1922/2019 to contend that paragraph 20 (1) of the DPCO, 2013 was also dealt with in the said Order. Paragraph No.12, 15 and 16 of the Order dated 25.02.2019 passed by the learned Single Judge in W.P.(C) 1922/2019 reads as under:
"12. The language of paragraph 20(1) of the DPCO, 2013 is unambiguous. It proscribes the manufacturer from raising a Maximum Retail Price (MRP) beyond 10% of the MRP as existing during the preceding twelve months. There is no scope for the petitioner to make any adjustment on account of the preceding periods for which MRP has not been raised. It is also Signature Not Verified Digitally Signed W.P.(C) 178/2023 Page 2 of 5 By:RAHUL SINGH Signing Date:17.02.2023 15:44:12 relevant to observe that the National Pharmaceutical Pricing Policy, 2012 brought about a paradigm shift in the administration of the ceiling prices from a cost based price regime to a price determined by the market force. Although, in terms of the DPCO, 2013, the ceiling prices are required to be fixed only for scheduled formulations, the prices of other drugs are also required to be monitored. This monitoring of the prices is also based on the market forces, and a manufacturer is free to fix the MRP with the restriction that the same cannot be increased beyond 10%, over and above the MRP fixed in the preceding twelve months. This is to ensure that the there is no runaway increase in the prices of the drugs. Thus, in cases where a manufacturer is compelled to peg up the MRP on market forces, it would militate against the very object of paragraph 20(1) of DPCO, 2013 to permit such a manufacturer to increase a price beyond 10% , taking into account the period for which such manufacturer was constrained to peg the MRP at a price below the permissible increase.
xxx
15. Insofar as the petitioner‟s contention that it had not charged any amount over and above the permissible price is concerned, the same requires consideration. The petitioner has set out a tabular statement in its petition indicating that even though it had increased the MRPs for the drugs in question beyond a threshold of 10% in the year 2016, the price charged were way below the MRP as fixed in the year 2015. The said tabular statement is set out below:-
# Product MRP ASP Revised ASP ASP
(2015 MRP (2016 (2017
-16) 2016 -17) -18)
1 Trima Accel 10300 4956 12700 4829 4952
LRS Plasma
Signature Not Verified
Digitally Signed W.P.(C) 178/2023 Page 3 of 5
By:RAHUL SINGH
Signing Date:17.02.2023
15:44:12
Set (80300)
2 Trima Accel 10300 5088 13500 5375 5192
LRS Plasma
RBC Set
(80400)
3 Blood 130 36 150 35 37
Administratio
n
Set
(TB*Us00B)
4 COBE 10700 5349 12700 5363 5670
Spectra
Dual Needle
Extended
Liffe
Platelet Set
with LRS
Chamber
(70300)
5 COBE 10700 5384 12700 5328 5510
Spectra
Therapeutic
Plasma
Exchange Set
(70500)
16. In this view, even if it is accepted that the petitioner had fallen foul of the provisions of the paragraph 20(1) of the DPCO, 2013 inasmuch as it had increased the MRP beyond the limit of 10%, it is doubtful that any amount can be recovered in terms of paragraph 20(2) of the DPCO, 2013. This is so as, prima facie, the amount recoverable is the amount actually overcharged and not the difference between two of the MRPs. This Court is not inclined to examine this controversy in this petition, as it would be apposite that the same should have been examined by the NPPA in the first instance."
5. A perusal of the abovementioned paragraphs demonstrate that the learned Single Judge in W.P.(C) 1922/2019 has held that even if the Signature Not Verified Digitally Signed W.P.(C) 178/2023 Page 4 of 5 By:RAHUL SINGH Signing Date:17.02.2023 15:44:12 Petitioner therein had fallen foul of the provisions of paragraph 20 (1) of the DPCO, 2013 inasmuch as it had increased the MRP beyond the limit of 10%, the amount could not be recovered in terms of paragraph 20 (2) of the DPCO, 2013. In view of that the learned Single Judge set aside the Order dated 22.01.2019 passed by the National Pharmaceutical Pricing Authority (NPPA) and remanded the matter back to National Pharmaceutical Pricing Authority (NPPA) to consider the quantum of the amount recoverable as being overcharged by the Petitioner therein.
6. The Petitioner in the present case is challenging the demand notice dated 13.12.2022 on the ground of the applicability of the Order dated 25.02.2019 passed in W.P.(C) 1922/2019 as well as on the other grounds.
7. In view of the above, list the present matter before the learned Single Judge on 27.02.2023. The learned Single Judge is requested to adjudicate the matter on its own merits. All the contentions are left open.
SATISH CHANDRA SHARMA, CJ SUBRAMONIUM PRASAD, J FEBRUARY 13, 2023 S. Zakir Signature Not Verified Digitally Signed W.P.(C) 178/2023 Page 5 of 5 By:RAHUL SINGH Signing Date:17.02.2023 15:44:12