Karnataka High Court
Novo Nordisk India Private Ltd. And Ors. vs The State Of Karnataka And Ors. on 23 March, 2006
Equivalent citations: 2006(4)KARLJ363
Author: H.G. Ramesh
Bench: H.G. Ramesh
ORDER, 1995 - PARA 19 OF THE CONTROL ORDER-price of formulations sold to the dealer under-applicability of para 19 of the control order to imported formulations-HELD-As could be seen from the definition of formulation, an imported formulation is not excluded from it if it otherwise falls within the definition of formulation and an importer is also not excluded from the definition of 'Distributor', 'Manufacturer' and 'wholesaler' defined in para 2(e) (m) and (y) of the control order-An "Importer' is specifically included in the definition of 'Distributor' and wholesaler' ON FACTS FURTHER HELD, para 19(1) of the control order Applies to every manufacturer distributor or a wholesaler who falls within the ambit of the respective definations under the control order and who sells any formulation including an imported formulation-Since para 19 of the control order applies to the petitioners there is no infirmity in launching of the prosecution against them. Writ Petition is dismissed. ORDER H.G. Ramesh, J.
1. In this writ petition, the petitioners have challenged the constitutional validity of para 19 of the Drugs (Price Control) Order, 1995 ("the Control Order' for short) and alternatively have sought for a declaration that para 19(1) of the Control Order does not apply to the petitioners. Further, the petitioners have sought for quashing of the prosecution launched by the Drugs Controller in C.C. No. 20163/ 2002 before the Court of the IX Addl. Chief Metropolitan Magistrate and have also sought for quashing of the instructions dated 31.1.2002 (Annexure-D) issued by the Drugs Controller, Bangalore to all the officers re. launching of prosecutions for contravention of paras 14(2) & 19(1) of the Control Order.
2. I have heard Sri. T. Suryanarayana, Learned Counsel appearing for the petitioners, Sri. Aravinda Kumar, Learned Assistant Solicitor General of India for respondent Nos. 4 and 5 and Sri. A.G. Shivanna, Learned Additional Government Advocate for respondent Nos. 1 and 2.
3. learned Counsel for the petitioners submits that para 19 of the Control Order is violative of Articles 14 and 19(1)(g) of the Constitution of India and without prejudice to the said contention, he submits that para 19(1) of the control order does not apply to the petitioners as they deal only in imported formulations and hence the prosecution launched by the Drugs Controller against the petitioners alleging contravention of para 19(1) of the Control Order is liable to be quahed. He referred to State of Rajasthan v. Nath Mal in support of his submission re. validity of para 19 of the control order.
4. Learned Counsel appearing for the respondents brought to my notice the order passed by this Court dated 17.1.2006 dismissing a similar writ petition in W.P. No. 7721/2002 wherein the constitutional validity of para 19 of the Control Order was challenged. Relevant portion of the said order reads as follows:
5. As noticed above, para 19 of the Control Order would only restricts a manufacturer, distributor or a wholesaler to sell a formulation to a retailer for a price so as to allow only 16% profit to the retailer in the case of scheduled drugs. This restriction cannot be said to be arbitrary or unreasonable so as to offend Articles 14 or 19(1)(g) of the Constitution of India. On the contrary, the restriction imposed is in public interest.
In view of the above, the challenge to the validity of para 19 of the Control order as violative of Articles 14 and 19(1)(g) of the Constitution is liable to be rejected and is accordingly rejected.
5. The decision of the Supreme Court relied on by the Learned Counsel for the petitioner is not applicable to the facts of this case. The nature of the provision that fell for consideration and declared as void by the Supreme Court is not comparable to para 19 of the control order. Except that both the Control Orders were issued under an enactment relating to Essential Commodities, the provisions are not comparable in any way including the nature of the restriction imposed is concerned. The provision which was declared as void in the aforesaid decision as violative of Articles 19(1)(g) and 31(2) of the Constitution of India provided for acquisition of food grains by the Government at any rate fixed by it which could be totally arbitrary. That is not the case here.
6. The other aspect to be considered is as to the applicability of para 19 of the control order to imported formulations. To examine this aspect, it is relevant to refer to para 19 of the Control Order and the definition of 'formation' in the Control order;
Para 19 of the Control Order reads as follows:
19. Price of formulations sold to the dealer,- (1) A manufacturer, distributor or wholesaler shall sell a formulation to a retailer, unless otherwise permitted under the provisions of this Order or any order made thereunder, at a price equal to the retail price, as specified by an order or notified by the Government (excluding excise duty, if any), minus sixteen per cent thereof in the case of Scheduled drugs.
(2) Notwithstanding anything contained in sub-paragraph (1), the Government may by a general or special order fix, in public interest, the price of formulation sold to the wholesaler or retailer in respect of any formulation the price of which has been fixed or revised under this Order.
'Formulation' is defined in para 2(h) as under:
Formulation "means a medicine processed out of, or containing one or more bulk drug or drugs with or without the use of any pharmaceutical aids, for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease in human beings or animals, but shall not include-
(i) any medicine included in any bona fide Ayurvedic (including sidha) or Unani (Tibb) systems of medicines;
(ii) any medicine included in the Homeopathic system of medicine; and
(iii) any substance to which the provisions of the Drugs and Cosmetics Act, 1940 C23 of 1940) do not apply;
As could be seen from the definition of 'formation', an 'imported formulation' is not excluded from it if it otherwise falls within the definition of 'formulation' and an 'importer' is also not excluded from the definition of 'distributor', 'manufacturer' and 'wholesaler' defined in para 2(e)(m) and (y) of the Control Order. On the contrary, an 'importer' is specifically included in the definition of 'distributor' and 'wholesaler'. It is also not the case of the petitioner that they do not fall within the ambit of the definition of 'manufacturer' or 'distributor' or 'wholesaler' under the control order. Hence, I am unable to accede to the contention that para 19(1) of the Control Order does not apply to the petitioners.
7. Para 19(1) of the control order applies to every manufacturer, distributor or a wholesaler who falls within the ambit of the respective definitions under the control order and who sells any formulation including an imported formulation falling within the definition of 'formulation' being a 'scheduled formulation' to a retailer unless otherwise permitted under the provisions of the Control Order or any order made thereunder.
8. It is relevant to state that an imported formulation is not excluded from the provisions of the Control Order. A reading of paras 8(7), 10, 11, 13, 14 and proviso to para 7 of the Control Order would show that the government is empowered to fix retail price for an imported formulation.
9. Since para 19 of the Control Order applies to the petitioners, I find no infirmity in launching of the prosecution against them. Whether the petitioners have offended the Control Order or not is a matter to be proved by the prosecution before the jurisdictional criminal Court. I find no ground to warrant interference with the process of the criminal Court in exercise of the extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India. The law on this aspect is well settled by the Supreme Court in several decisions.
As both the contentions fail, the writ petition is liable to be dismissed and is accordingly dismissed. No costs.