Karnataka High Court
Union Of India vs M/S Johnson & Smith Co., on 30 October, 2012
Bench: Chief Justice, B.V.Nagarathna
-: 1 :-
IN THE HIGH COURT OF KARNATAKA, BANGALORE
DATED THIS THE 30TH DAY OF OCTOBER, 2012
PRESENT
THE HON'BLE MR. VIKRAMAJIT SEN, CHIEF JUSTICE
AND
THE HON'BLE MRS. JUSTICE B.V.NAGARATHNA
W.A.No.7333/2000, C/w W.A.No.7337/2000,
W.P.Nos.38214-15/2000, W.P.Nos.33985-87/2000,
W.P.Nos.33978-83/2000, W.A.No.7341/2000,
W.A.No.7334/2000, W.A.No.7335/2000, W.P.No.626/2001,
W.A.No.7338/2000, W.A.7339/2000, W.P.No.37657/1998,
W.P.No.53191/2003, W.P.No.26703/2004, W.P.No.42788/2004,
W.P.No.4322/2005 (GM-RES)
IN W.A.No.7333/2000
BETWEEN:
1. UNION OF INDIA,
MINISTRY OF CHEMICALS & FERTILIZERS,
DEPT. OF CHEMICALS & PETROCHEMICALS,
NORTH BLOCK, NEW DELHI,
REP. BY ITS SECRETARY.
2. NATIONAL PHARMACEUTICAL PRICING
AUTHORITY,
DEPT. OF CHEMICALS & FERTILIZERS,
MINISTRY OF CHEMICALS & PETROCHEMICALS,
19TH FLOOR, JAWAHAR VYAPAR BHAWAN,
TOLSTOY MARG, NEW DELHI-110 001,
REP. BY ITS DIRECTOR. ... APPELLANTS
(BY SRI: N.DEVHADAS, Sr. ADV., FOR SRI.C.SHASHIKANTHA,
CGC)
AND:
1. M/S JOHNSON & SMITH CO.,
A REGD. PARTNERSHIP FIRM,
-: 2 :-
HAVING ITS OFFICE AT
NO.B 48, 3RD STAGE,
PEENYA INDUSTRIAL ESTATE,
BANGALORE-560 058 AND
REP. BY ITS MANAGING PARTNER
SHRI RAMESH KUMAR.
2. BIO PHARM DRUGS & PHARMACEUTICALS
A PROPRIETARY CONCERN,
HAVING ITS OFFICE AT NO.14/2,
NS IYENGAR STREET, SESHADRIPURAM,
BANGALORE-20, AND REP. BY ITS PROPRIETOR
SHRI RAMESH KUMAR. ... RESPONDENTS
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH FOR
M/S CHANDER KUMAR & ASSTS.)
*****
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO ALLOW THIS WRIT APPEAL AND
BY SETTING ASIDE THE ORDER DATED 28/7/2000 IN
W.P.NO.26927/99 IN THE INTEREST OF JUSTICE AND EQUITY.
IN W.A.No.7337/2000
BETWEEN:
1. UNION OF INDIA,
MINISTRY OF CHEMICALS & FERTILIZERS,
DEPT. OF CHEMICALS & PETROCHEMICALS,
NORTH BLOCK, NEW DELHI,
REP. BY ITS SECRETARY.
2. NATIONAL PHARMACEUTICAL PRICING
AUTHORITY,
DEPT. OF CHEMICALS & FERTILIZERS,
MINISTRY OF CHEMICALS & PETROCHEMICALS,
19TH FLOOR, JAWAHAR VYAPAR BHAWAN,
TOLSTOY MARG, NEW DELHI-110 001,
REP. BY ITS DIRECTOR. ... APPELLANTS
-: 3 :-
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI C.SHASHIKANTHA,
CGC)
AND:
1. M/S. REMIDEX PHARMACEUTICALS PVT LTD.,
A COMPANY REGD. UNDER THE COMPANIES
ACT, 1956, HAVING ITS REGD. OFFICE AT
B-249 & 250, PEENYA II STAGE,
BANGALORE-560 058, REP. HEREIN BY
ITS MANAGING DIRECTOR MR.MOHINI.D.RAO.
2. S.SATYANARAYANA SETTY,
S/O LATE S.CHENNAPPA SETTY,
AGED ABOUT 45 YEARS,
RESIDING AT NO.44, 7TH CROSS,
PRASHANTHANAGAR,
BANGALORE-560 079. ... RESPONDENTS
(BY SRI: K.P.KUMAR, ADV. FOR M/S KING & PARTRIDGE FOR
R1 & R2)
*****
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO ALLOW THIS WRIT APPEAL AND
BY SETTING ASIDE THE ORDER DATED 29/3/2000 IN
W.P.NO.16409/99 CONSEQUENTLY DISMISS THE WRIT
PETITION NO.16409/99, IN THE INTEREST OF JUSTICE AND
EQUITY.
IN W.P.Nos.38214-15/2000
BETWEEN:
1.HICURE PHARMACEUTICALS PVT LTD.,
MANUFACTURING UNIT AT KADANAKOPPA
VILLAGE OF KALGHATGI TQ:
IN DHARWAD DISTRICT-581 204,
REP. BY DOCTOR P.S.HUILGOL
MANAGING DIRECTOR.
2.BIO-ETHICALS PHARMA LTD.,
MANUFACTURING UNIT AT KADANAKOPPA
VILLAGE OF KALGHATGI TQ:
-: 4 :-
IN DHARWAD DISTRICT-581 204,
REP. BY G.D.DIWAN,
GENERAL MANAGER ... PETITIONERS
(BY SRI: K.B.ADHYAPAK, ADV.)
AND:
1.UNION OF INDIA,
MINISTRY OF CHEMICALS & FERTILIZERS
DEPARTMENT OF CHEMICALS &
PETROCHEMICALS, NORTH BLOCK,
NORTH DELHI, REP. BY ITS SECRETARY.
2.NATIONAL PHARMACEUTICAL-PRICING AUTHORITY,
DEPARTMENT OF CHEMICALS & FERTILIZERS
MINISTRY OF CHEMICALS & PETROCHEMICALS
19TH FLOOR, JAWAHAR VYAPAR BHAVAN,
TOLSTOY MARG, NEW DELHI-110 001
REP. BY ITS DIRECTOR.
3.THE STATE OF KARNATAKA,
REP. BY ITS HEALTH-SECRETARY,
DEPARTMENT OF HEALTH & FAMILY
WELFARE, VIDHANA SOUDHA,
BANGALORE
4.THE DRUGS CONTROLLER FOR THE
STATE OF KARNATAKA,
PALACE ROAD,
BANGALORE-1.
5.THE DEPUTY DRUGS CONTROLLER,
GOVERNMENT OF KARNATAKA,
DRUGS PRICE CONTROL CELL,
DRUGS CONTROL DEPARTMENT,
PALACE ROAD,
BANGALORE-1. ... RESPONDENTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI. Y.HARIPRASAD, CGC
FOR R.1 & 2 AND SRI B.VEERAPPA, AGA FOR R.3 TO 5)
*****
-: 5 :-
THESE W.Ps ARE FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
ORDER VIDE ANN-E DT. 20.7.2000 AND VIDE ANN-F DT.
29.3.2000.
IN W.P.Nos.33985-87/2000
BETWEEN:
1.M/S OKASA LIMITED,
A PUBLIC LIMITED COMPANY
INCORPORATED UNDER THE PROVISIONS
OF THE INDIAN COMPANIES ACT, 1956
AND HAVING ITS OFFICE AT NO.12
GUNBOW STREET, FORT
MUMBAI-400 001 AND REP. BY ITS
COMPANY SECRETARY
SHRI A.P.RAMAN.
2.MR.A.P.RAMAN,
COMPANY SECRETARY
M/S OKASA LTD
NO.12, GUNBOW STREET, FORT
MUMBAI-400 001.
3.M/S. SRI PARSHVA DRUG HOUSE,
A PARTNERSHIP FIRM, CARRYING ON BUSINESS
AT NO.21, LALBAGH FOURTH ROAD,
(NEAR MINERVA CIRCLE), BANGALORE-560 004,
REP. BY ITS PARTNER
SHRI. DHANRAJ BHANDARI.
... PETITIONERS
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH,
ADVS. FOR M/S CHANDER KUMAR & ASSTS.)
AND:
1.UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CHEMICALS & FERTILIZERS,
DEPARTMENT OF CHEMICALS & PETROCHEMICALS
SHASTRI BHAVAN,
-: 6 :-
NEW DELHI-110 001.
2.THE NATIONAL PHARMACEUTICAL
PRICING AUTHORITY,
DEPARTMENT OF CHEMICALS & FERTILIZERS,
NO.2E/21, JHANDEWALAN EXTENSION,
LINK ROAD, NEW DELHI-55 ... RESPONDENTS
(BY SRI: N.DEVHADAS, SR. ADV. FOR SRI.C.SHASHIKANTHA,
CGC)
*****
THESE W.Ps ARE FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
NOTIFICATIONS BEARING NOS.211E DT. 19.3.96 AND 677E DT.
20.7.00 VIDE ANN-F AND G RESPECTIVELY ISSUED UNDER
PARA 9 OF THE DRUG (PRICES CONTROL) ORDER 1995, BY
DECLARING THE SAID NOTIFICATIONS AS BEING ULTRA VIRES
THE PROVISIONS OF PARA 7 AND 9 OF THE ORDER AS WELL
AS BEING ARBITRARY AND VIOLATIVE OF ARTICLES 14 AND
19(1)(g) OF THE CONSTITUTION.
IN W.P.Nos.33978-83/2000
BETWEEN:
1.M/S OKASA PHARMA LIMITED,
A PUBLIC LIMITED COMPANY
INCORPORATED UNDER THE PROVISIONS
OF THE INDIAN COMPANIES ACT, 1956
AND HAVING ITS OFFICE AT
J.M.C. ICE & COLD STORAGE
107, ANANDI ESTATE,
SANE GURUJI MARG, MUMBAI-11,
AND REP. BY ITS MANAGING DIRECTOR
SHRI.V.G.KHIRE.
2.MR.V.G.KHIRE,
MANAGING DIRECTOR
M/S OKASA PHARMA LTD
JMC. ICE & COLD STORAGE
107, ANANDI ESTATE,
-: 7 :-
SANE GURUJI MARG,
MUMBAI-400 011.
3.M/S. SRI PARSHVA DRUG HOUSE,
A PARTNERSHIP FIRM, CARRYING ON
BUSINESS AT NO.21, LALBAGH FOURTH ROAD,
(NEAR MINERVA CIRCLE)
BANGALORE-560 004, REP. BY ITS PARTNER
SHRI. DHANRAJ BHANDARI. ... PETITIONERS
(BY SRI: RAJESH CHANDER KUMAR & SMT. YOVINI RAJESH
FOR M/S CHANDER KUMAR & ASSTS.)
AND:
1.UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CHEMICALS & FERTILIZERS
DEPT. OF CHEMICALS & PETROCHEMICALS
SHASTRI BHAVAN,
NEW DELHI-110 001.
2.THE NATIONAL PHARMACEUTICAL
PRICING AUTHORITY,
DEPARTMENT OF CHEMICALS & FERTILIZERS
NO.2E/21, JHANDEWALAN EXTENSION,
LINK ROAD, NEW DELHI-55. ... RESPONDENTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.C.SHASHIKANTH,
CGC)
*****
THESE W.Ps ARE FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
NOTIFICATIONS BEARING NOS.596E DT. 30.8.96, 885E DT.
6.11.95, 561E DT. 9.8.96 AND 423E DT. 3.6.97 VIDE ANN-F, G, H
AND J RESPECTIVELY ISSUED UNDER PARA 9 OF THE DRUG
(PRICES CONTROL) ORDER 1995 BY DECLARING THE SAID
NOTIFICATIONS AS BEING ULTRA VIRES THE PROVISIONS OF
-: 8 :-
PARA 7 AND 9 OF THE ORDER DAS WELL AS BEING ARBITRARY
AND VIOLATIVE OF ARTICLES 14 AND 19(1)(g) OF THE
CONSTITUTION.
IN W.A.No.7341/2000
BETWEEN:
1.UNION OF INDIA,
MINISTRY OF CHEMICALS AND FERTILIZERS,
DEPT. OF CHEMICALS & PETROCHEMICALS,
NORTH BLOCK, NEW DELHI,
REP. BY ITS SECRETARY.
2.NATIONAL PHARMACEUTICAL PRICING AUTHORITY,
DEPT. OF CHEMICALS AND FERTILIZERS,
MINISTRY OF CHEMICALS AND PETROCHEMICALS,
19TH FLOOR, JAWAHAR VYAPAR BHAWAN,
TOLSTOY MARG, NEW DELHI-110 001,
REP. BY ITS DIRECTOR. ... APPELLANTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.C.SHASHIKANTH,
CGC)
AND:
1.M/S PHARMED LTD.,
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
AND HAVING ITS REGD. OFFICE AT
'PHARMED HOUSE', 141, WALCHAND HIRACHAND
MARG, BOMBAY-400 001.
AND ITS LOCAL OFFICE AT 'PHARMED GARDENS'
WHITEFIELD ROAD, BANGALORE-48
AND REP. BY ITS MANAGING DIRECTOR
SHRI. K.K.AURORA.
2.K.K.AURORA,
MAJOR, SHAREHOLDER,
ADARSH, 411, 17TH MAIN,
4TH BLOCK, KORAMANGALA,
BANGALORE-34 ... RESPONDENTS
-: 9 :-
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH FOR
M/S CHANDER KUMAR AND ASSTS.)
*****
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO ALLOW THIS WRIT APPEAL AND
SETASIDE THE ORDER DATED 28-7-2000 IN W.P.NO.31433/99,
IN THE INTEREST OF JUSTICE AND EQUITY.
IN W.A.No.7334/2000
BETWEEN:
1.UNION OF INDIA,
MINISTRY OF CHEMICALS AND FERTILIZERS,
DEPT. OF CHEMICALS AND PETROCHEMICALS,
NORTH BLOCK, NEW DELHI,
REP. BY ITS SECRETARY.
2.NATIONAL PHARMACEUTICAL
PRICING AUTHORITY, DEPT. OF
CHEMICALS AND FERTILIZERS,
MINISTRY OF CHEMICALS AND PETROCHEMICALS,
19TH FLOOR, JAWAHAR VYAPAR BHAWAN,
TOLSTOY MARG, NEW DELHI-110 001,
REP. BY ITS DIRECTOR. ... APPELLANTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.C.SHASHIKANTH,
CGC)
AND:
1.M/S MEDOPHARM REMEDIES &
PHARMACEUTICALS, A PARTNERSHIP
FIRM HAVING ITS OFFICE AT BANGALORE,
NO.105, KASTURBA ROAD,
BANGALORE-560 001 AND
REP. BY ITS PARTNER
SHRI.R.GOVINDER CHORTIA.
2.SHRI.R.GOVINDER CHORTIA,
MAJOR, PARTNER IN THE RESPONDENT NO.1,
C/O NO.2, LAKSHMI ROAD,
SHANTINAGAR, BANGALORE-97. ... RESPONDENTS
-: 10 :-
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH FOR
M/S CHANDER KUMAR & ASSTS.)
*****
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING THE ADVOCATE ASHOK
HARANAHALLI AGAINST THE ORDER OF THE SINGLE JUDGE
PASSED IN W.P.NO.32768/99 DATED 28-7-2000.
IN W.A.No.7335/2000
BETWEEN:
1.UNION OF INDIA,
MINISTRY OF CHEMICALS AND FERTILIZERS,
DEPT. OF CHEMICALS AND PETROCHEMICALS,
NORTH BLOCK, NEW DELHI,
REP. BY ITS SECRETARY.
2.NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPT. OF CHEMICALS AND
FERTILIZERS, MINISTRY OF CHEMICALS
AND PETROCHEMICALS, 19TH FLOOR,
JAWAHAR VYAPAR BHAWAN, TOLSTOY MARG,
NEW DELHI-110 001
REP. BY ITS DIRECTOR. ... APPELLANTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.C.SHASHIKANTH,
CGC)
AND:
1.M/S BENTLEY & REMINGTON PVT LTD.,
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956,
AND HAVING ITS REGISTERED OFFICE AT
'BENTLEY HOUSE', 515E, 1ST MAIN, VIJAYANAGAR,
2ND STAGE, BANGALORE-40, REP. BY ITS MD
SHRI.B.V.RANKA.
2.B.V.RANKA,
MAJOR, SHAREHOLDER IN PETITIONER NO.1,
-: 11 :-
BENTLEY HOUSE, 515E, 1ST MAIN,
VIJAYANAGAR, 2ND STAGE,
BANGALORE-40. ... RESPONDENTS
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH,
M/S CHANDER KUMAR & ASSTS.)
*****
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING THE ADVOCATE ASHOK
HARANAHALLI AGAINST THE ORDER OF THE SINGLE JUDGE
PASSED IN W.P.NO.26926/99 DATED 28-7-2000.
IN W.P.No.626/2001
BETWEEN:
1.M/S. NATCO PHARMA LIMITED,
A PUBLIC LIMITED COMPANY INCORPORATED
UNDER THE PROVISIONS OF THE INDIAN
COMPANIES ACT, 1956 AND HAVING ITS
REGISTERED OFFICE AT 'NATCO HOUSE',
ROAD NO.2, BANJARA HILLS, HYDERABAD-33.
AND ITS LOCAL OFFICE AT NO.268/7 'B' 9TH 'A' MAIN,
III BLOCK, JAYANAGAR, BANGALORE-560 011,
AND REP. BY ITS COMPANY SECRETARY & GM
(CORPORATE AFFAIRS) SHRI.M.ADINARAYANA.
2.SRI.V.C.NANNAPANENI,
CHAIRMAN AND MANAGING DIRECTOR,
M/S. NATCO PHARMA LTD.,
PLOT NO.530, ROAD NO.26, JUBILEE HILLS,
HYDERABAD-500 033.
3.SRI.K.V.RANGARAO,
EXECUTIVE DIRECTOR,
M/S. NATCO PHARMA LTD.,
PLOT NO.601, SNEHA ENCLAVE,
SRINAGAR, HYDERABAD-500 873. ... PETITIONERS
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH FOR
M/S CHANDER KUMAR & ASSTS.)
-: 12 :-
AND:
1.UNION OF INDIA,
REP BY ITS SECRETARY,
MINISTRY OF CHEMICALS AND FERTILIZERS,
DEPT. OF CHEMICALS AND PETROCHEMICALS,
SHASTRI BHAVAN,
NEW DELHI-110 001.
2.THE NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPT. OF CHEMICALS AND FERTILIZERS,
NO.2F/21, JHANDEWALAN EXTENSION,
LINK ROAD, NEW DELHI-55.
3.DRUGS INSPECTOR,
DRUGS PRICE CONTROL CELL,
DRUGS CONTROL DEPARTMENT,
PALACE ROAD, BANGALORE-1.
4.DEPUTY DRUGS CONTROLLER,
DRUGS PRICE CONTROL CELL,
DRUGS CONTROL DEPARTMENT,
PALACE ROAD, BANGALORE-1. ... RESPONDENTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.Y.HARIPRASAD, CGC
FOR R.1 AND 2 AND SRI B.VEERAPPA, AGA FOR R.3 & 4)
*****
THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
NOTIFICATIONS DATED 19.3.96, 30.8.96, 14.9.92, 20.3.96,
23.2.96, 9.1.97, 2.9.97, 29.12.95, 9.1.97, 17.2.97 AND 9.1.97
VIDE ANN.F, G, H, J, K, L, M, N, O, P, Q AND R RESPECTIVELY,
ISSUED BY RESPONDENTS UNDER PARA 7 AND 9 OF THE
ORDER AS WELL AS BEING ARBITRARY AND VIOLATIVE OF
ARTICLES 14 AND 19(1)(g) OF THE CONSTITUTION.
IN W.A.No.7338/2000
BETWEEN:
1.UNION OF INDIA,
MINISTRY OF CHEMICALS AND FERTILIZERS,
-: 13 :-
DEPT. OF CHEMICALS AND PETROCHEMICALS,
NORTH BLOCK, NEW DELHI,
REP. BY ITS SECRETARY.
2.NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPT. OF CHEMICALS AND
FERTILIZERS, MINISTRY OF CHEMICALS
AND PETROCHEMICALS, 19TH FLOOR,
JAWAHAR VYAPAR BHAWAN,
TOLSTOY MARG, NEW DELHI-110 001,
REP. BY ITS DIRECTOR. ... APPELLANTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI C.SHASHIKANTHA,
CGC)
AND:
1.M/S PHARMED MEDICARE PVT LTD.,
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
AND HAVING ITS REGD. OFFICE AT
PHARMED GARDENS, WHITEFIELD ROAD,
BANGALORE-48, AND REP. BY ITS
MANAGING DIRECTOR,
SHRI.SUNDEEP AURORA.
2.SUNDEEP AURORA,
MAJOR, SHAREHOLDER,
ADARSH, 411, 17TH MAIN,
4TH BLOCK, KORAMANGALA,
BANGALORE-34. ... RESPONDENTS
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH FOR
M/S CHANDER KUMAR AND ASSTS.)
*****
THIS WRIT APPEAL IS FILED BY SRI ASHOK
HARANAHALLI, ADVOCATE, AGAINST THE ORDER OF THE
SINGLE JUDGE, PASSED IN THE W.P.NO.31434/1999 DATED
28-7-2000.
-: 14 :-
IN W.A.No.7339/2000
BETWEEN:
1.UNION OF INDIA,
MINISTRY OF CHEMICALS &
FERTILIZERS, DEPT. OF CHEMICALS
AND PETROCHEMICALS, NORTH BLOCK,
NEW DELHI, REP. BY ITS SECRETARY.
2.NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPT. OF CHEMICALS
AND FERTILIZERS, MINISTRY OF CHEMICALS &
PETROCHEMICALS, 19TH FLOOR,
JAWAHAR VYAPAR BHAWAN,
TOLSTOY MARG, NEW DELHI-110 001,
REP. BY ITS DIRECTOR. ... APPELLANTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.C.SHASHIKANTHA,
CGC)
AND:
1.M/S OVERSEAS PHARMA PVT LTD.,
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
AND HAVING ITS REGISTERED OFFICE AT
POST BOX NO. 9910,
NO. 13, 1ST CROSS, GANDHINAGAR
BANGALORE-560 009.
AND REP. BY ITS MANAGER
AND AUTHORISED SIGNATORY
SHRI.B.V.KINI.
2.N.JAYAWANTHY NAYAK,
MAJOR, SHARE HOLDER, NO.1,
NO.13, 1ST CROSS, GANDHINAGAR,
BANGALORE-560 009. ... RESPONDENTS
(BY SRI: RAJESH CHANDER KUMAR & SMT.YOVINI RAJESH FOR
M/S CHANDER KUMAR AND ASSTS.)
*****
-: 15 :-
THIS WRIT APPEAL IS FILED BY SRI ASHOK
HARANAHALLI, ADVOCATE, AGAINST THE ORDER OF THE
SINGLE JUDGE, PASSED IN THE W.P.NO.26925/1999 DATED
28-7-2000.
IN W.P.No.37657/1998
BETWEEN:
1. M/S EROS PHARMA LTD.,
(A PUBLIC LIMITED COMPANY HAVING
ITS OFFICE AT NO.104/105, MIDFORD HOUSE,
MIDFORD GARDENS, OFF.MAHATMA GANDHI
ROAD, BANGALORE-560 001, AND REP. BY ITS
EXECUTIVE DIRECTOR SHRI.V.V.RAGHAVAN.
2. SHRI.DR.P.RANGANATH NAYAK,
SHAREHOLDER IN PETITIONER NO.1,
R/AT 'SWATI', NO.256, HIG COLONY,
R.M.V.EXTENTION, II STAGE,
BANGALORE-560 095. ... PETITIONERS
(BY SRI: RAJESH CHANDER KUMAR, ADV.)
AND:
1. UNION OF INDIA,
MINISTRY OF CHEMICALS & FERTILIZERS,
DEPT. OF CHEMICALS & PETROCHEMICALS,
NORTH BLOCK, NEW DELHI,
REP. BY ITS SECRETARY.
2. NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPT. OF CHEMICALS &
PETROCHEMICALS, MINISTRY OF CHEMICALS
AND FERTILIZERS, 19TH FLOOR, JAWAHAR
VYAPAR BHAWAN, TOLSTOY MARG,
NEW DELHI-110 001, REP. BY ITS DIRECTOR.
3. THE DRUGS CONTROLLER FOR THE
STATE OF KARNATAKA, PALACE ROAD,
BANGALORE-560 001.
-: 16 :-
4. DEPUTY COMMISSIONER AND
DISTRICT MAGISTRATE, BANGALORE URBAN,
TALUK OFFICE COMPUND, KEMPEGOWDA
ROAD, BANGALORE-560 001. ... RESPONDENTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.C.SHASHIKANTHA,
CGC FOR R1 & R2 AND SRI B.VEERAPPA, AGA FOR R3 & R4)
*******
THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
NOTIFICATION BY R2 DT.25.8.99 VIDE ANN-E AND THE
CORRIGENDUM ORDER DT.10.9.99 VIDE ANN-H AND THE
CONSEQUENTIAL LETTER/ENDORSEMENT DT.28.12.99 VIDE
ANN-K ISSUED BY R2 AS BEING ULTRA VIRES THE PROVISIONS
OF PARA 9 READ WITH PARA 7 AND PARA 2(v) OF THE DRUGS
(PRICES CONTROL) ORDER, 1995, AS ALSO BEING ULTRA
VIRES, ARBITRARY AND DISCRIMINATORY UNDER ARTICLE 14
AND 19(1)(g) OF THE CONSTITUTION.
IN W.P.No.53191/2003
BETWEEN:
1.MEDIBEST PHARMA (P) LTD.,
NO.31, SIDCO INDUSTRIAL ESTATE,
HOSUR - 635 126.
REP. BY ITS MANAGING DIRECTOR,
MR.K.V.KRISHNAN.
2.MR.K.V.KRISHNAN,
MANAGING DIRECTOR & SHAREHOLDER,
M/S. MEDIBEST PHARMA (P) LTD..,
S/O K.V. VISAWANATHAN,
R/AT KRISHNA, NO.7,
MUNISWAMAPPA LAYOUT,
OLD MADRAS ROAD, ULSOOR,
BANGALORE - 8. ... PETITIONERS
(BY SRI: SRI.RAJESH CHANDERKUMAR, ADV. FOR M/S.
CHANDERKUMAR & ASSOCIATES & SMT.YOVINI RAJESH, ADV.)
-: 17 :-
AND:
1.UNION OF INDIA,
REP.BY ITS SECRETARY,
MINISTRY OF CHEMICALS & FERTILISERS,
DEPT. OF CHEMICALS & PETROCHEMICALS,
SHASTRI BHAVAN,
NEW DELHI - 110 001.
2.THE NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPT. OF CHEMICALS & FERTILISERS,
NO.2E/21, JHANDEWALAN EXTENSION,
LINK ROAD, NEW DELHI - 55.
5/3RD FLOOR, NPPA YMCA CULTURAL
CENTRE BUILDINGS, NO.1, JAISINGH ROAD,
NEW DELHI-110 001.
ANNAJI DIRECTOR.
3.KARNATAKA STATE AT THE INSTANCE OF THE
DRUGS INSPECTOR, DRUGS PRICE CONTROL
CELL, DRUGS CONTROL DEPARTMENT,
PALACE ROAD,
BANGALORE - 1. ... RESPONDENTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.H.C.SUNDARESH, CGC
FOR R.1 & 2 AND SRI B.VEERAPPA, AGA FOR R.3)
******
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
NOTIFICATIONS DT. 20.11.2001 AND 10.5.2001 VIDE ANNEX.H.
AND J. RESPECTIVELY ISSUED UNDER PARA 9 OF THE DRUG
(PRICES CONTROL) ORDER, 1995 DECLARING THE SAID
NOTIFICATIONS AS BEING ULTRA VIRES THE PROVISIONS OF
PARA 7,8 AND 9 OF THE ORDER AS WELL AS BEING ARBITRARY
AND VIOLATIVE OF ARTICLES 14 AND 19(1)(g) OF THE
CONSTITUTION.
IN W.P.No.26703/2004
BETWEEN:
1.M/S. POLARIS HEALTHCARE (P) LTD.,
A PRIVATE LIMITED COMPANY INCORPORATED
-: 18 :-
UNDER THE PROVISIONS OF THE COMPANIES
ACT, 1956, AND HAVING ITS
REG.OFF: AT NO.605, ADITYA TRADE
CENTRE, OPP.MAITRIVIHAR,
AMEERPET, HYDERABAD 500 038
AND REP. BY ITS DIRECTOR
MR.JAVED AHMED.
2.MR.JAVEED AHMED,
AGED 53 YEARS,
DIRECTOR-M/S. POLARIS
HEALTHCARE (P) LTD.,
R/AT PLOT NO.106, NRI RESIDENCY,
BHAGYANAGAR COLONY,
OPP.K.P.H.B.COLONY,
HYDERABAD-500 038. ... PETITIONERS
(BY SRI: RAJESH CHANDERKUMAR FOR M/S CHANDER KUMAR
AND ASSTS.)
AND:
1.UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CHEMICALS & FERTILISERS,
DEPARTMENT OF CHEMICALS & PETROCHEMICALS,
SHASTRI BHAVAN,
NEW DELHI-110 001.
2.THE NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPARTMENT OF CHEMICALS
& FERTILISERS, NO.2E/21,
JHANDEWALAN EXTENSION,
LINK ROAD, NEW DELHI-55.
3.THE DRUGS INSPECTOR,
STATE OF KARNATAKA,
DRUGS PRICE CONTROL CELL,
DRUGS CONTROL DEPARTMENT,
PALACE ROAD,
BANGALORE-1 ... RESPONDENTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.V.K.NARAYANA
SWAMY, CGC FOR R.1 & 2 AND SRI B.VEERAPPA, AGA FOR R.3)
-: 19 :-
*****
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
NOTIFICATION DT. 16.8.2001 VIDE ANNEX.H. ISSUED UNDER
PARA 9 OF THE DRUG (PRICES CONTROL) ORDER, 1995
DECLARING THE SAID NOTIFICATION AS BEING ULTRA VIRES
THE PROVISIONS OF PARA 7,8 AND 9 OF THE ORDER AS WELL
AS BEING ARBITRARY AND VIOLATIVE OF ARTICLES 14 AND
19(1)(g) OF THE CONSTITUTION.
IN W.P.No.42788/2004
BETWEEN:
1.M/S. ANCHOR PHARMA PVT LTD.,
A PRIVATE LIMITED COMPANY INCORPORATED
UNDER THE PROVISIONS OF THE COMPANIES
ACT, 1956, AND HAVING ITS REGISTERED
OFFICE AT (UNIT No.2) B-6, OIDC, RIGANWADA,
DAMAN-396210 AND REP. BY ITS DIRECTOR,
MR.MUKESH.J.MEHTA.
2.MR.MUKESH.J.MEHTA,
AGED 52 YEARS, MAJOR,
DIRECTOR M/S.ANCHOR PHARMA
PVT.LTD., R/AT.NO.557,
JAGANNATH SHANKARSHET ROAD,
(CHIRA BAZAAR), MUMBAI-400 002.
3.MR.JAYANTHILAL.R.MEHTA,
MAJOR, AGED 78 YEARS,
DIRECTOR OF M/S. ANCHOR
PHARMA (P) LTD., R/AT.NO.557,
JAGANNATH SHANKARSHET ROAD,
(CHIRA BAZAAR), MUMBAI-400 002. ... PETITIONERS
(BY SRI: RAJESH CHANDER KUMAR FOR CHANDER KUMAR &
ASSTS.)
-: 20 :-
AND:
1.UNION OF INDIA,
REPRESENTED BY ITS SECRETARY,
MINISTRY OF CHEMICALS AND
FERTILISERS, DEPARTMENT OF
CHEMICALS AND PETROCHEMICALS,
SHASTRI BHAVAN, NEW DELHI-110 001.
2.THE NATIONAL PHARMACEUTICAL PRICING
AUTHORITY, DEPARTMENT OF CHEMICALS
AND FERTILISERS, NO.2E/21,
JHANDEWALAN EXTENSION,
LINK ROAD, NEW DELHI-55.
3.THE DRUGS INSPECTOR,
STATE OF KARNATAKA,
DRUGS PRICE CONTROL CELL,
DRUGS CONTROL DEPARTMENT,
PALACE ROAD, BANGALORE-1.
4.THE DRUGS CONTROLLER,
STATE OF KARNATAKA,
DRUGS PRICE CONTROL CELL,
DRUGS CONTROL DEPARTMENT,
PALACE ROAD, BANGALORE-1 ... RESPONDENTS
(BY SRI: N.DEVHADAS, Sr. ADV. FOR SRI.B.PAPE GOWDA, CGC
FOR R.1 & 2 AND SRI B.VEERAPPA, AGA FOR R.3 & 4)
*****
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE
NOTIFICATION DT. 29.6.2001 (ANX.H) ISSUED UNDER PARA 9
OF THE DRUG (PRICES CONTROL) ORDER, 1995 DECLARING
THE SAID NOTIFICATION AS BEING ULTRA VIRES THE
PROVISIONS OF PARA 7, 8 AND 9 OF THE ORDER AS WELL AS
BEING ARBITRARY AND VIOLATIVE OF ARTICLES 14 AND
19(1)(g) OF THE CONSTITUTION, OR ALTERNATIVELY,
DECLARING THE SAID NOTIFICATION TO BE NULL AND VOID
AND UNENFORCEABLE AS IT THEN WAS IN AS MUCH AS THE
SAME BEING ULTRA VIRES THE PROVISIONS OF PARA 7, 8 AND
9 OF THE ORDER AS WELL AS BEING ARBITRARY AND
-: 21 :-
VIOLATIVE OF ARTICLES 14 AND 19(1)(g) OF THE
CONSTITUTION.
IN W.P.No.4322/2005
BETWEEN:
1.M/S. PHARM INDIA,
A PROPRIETORSHIP CONCERN,
AT NO.70, T.H.ROAD, CHENNAI-600 019,
REP. BY ITS PROPRIETOR:
SHRI.THIRU.K.KANTHILAL.
2.SHRI.THIRU.K.KANTHILAL,
PROPRIETOR: M/S. PHARM INDIA,
AT NO.70, T.H.ROAD,
CHENNAI-600 019. .. PETITIONERS
(BY SRI: RAJESH CHANDER KUMAR, ADV. FOR M/S CHANDER
KUMAR & ASSTS.)
AND:
1.UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CHEMICALS AND FERTILISERS,
DEPARTMENT OF CHEMICALS & PETROCHEMICALS,
SHASTRI BHAVAN, NEW DELHI-110 001.
2.THE NATIONAL PHARMACEUTICAL
PRICING AUTHORITY,
DEPARTMENT OF CHEMICALS & FERTILISERS,
NO. 2E/21, JHANDEWALAN EXTENSION,
LINK ROAD, NEW DELHI-55.
3.THE DRUGS INSPECTOR,
STATE OF KARNATAKA,
DRUGS PRICE CONTROL CELL,
DRUGS CONTROL DEPARTMENT,
PALACE ROAD, BANGALORE-1.
4.THE DRUGS CONTROLLER,
STATE OF KARNATAKA,
DRUGS PRICE CONTROL CELL,
-: 22 :-
DRUGS CONTROL DEPARTMENT,
PALACE ROAD, BANGALORE-1 ... RESPONDENTS
(BY SRI: N.DEVHADAS, SR.COUNSEL FOR SRI.Y.HARIPRASAD,
CGC FOR R1 & R2 AND SRI B.VEERAPPA, AGA FOR R.3 & 4)
*****
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE
NOTIFICATION DATED 10.5.2001, VIDE ANNEXURE-'J' ISSUED
UNDER PARA 9 OF THE DRUG (PRICES CONTROL) ORDER, 1995
DECLARING THE SAID NOTIFICATIOIN AS BEING ULTRA VIRES
THE PROVISIONS OF PARA 7, 8 AND 9 OF THE ORDER AS WELL
AS BEING ARBITRARY AND VIOLATIVE OF ARTICLES 14 AND
19(1)(g) OF THE CONSTITUTION; OR IN THE ALTERNATIVE,
HOLD AND DECLARE THE NOTIFICATION DATED 10.5.2001
VIDE ANNEXURE-'J' AS BEING ARINITIO NULL AND VOID AND
UNENFORCEABLE IN LAW.
THESE WRIT APPEALS AND WRIT PETITIONS BEING
RESERVED AND COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, NAGARATHNA J., DELIVERED THE
FOLLOWING:
JUDGMENT
NAGARATHNA, J:
The writ appeals assail the order of the learned Single Judge passed in various writ petitions filed by several pharmaceutical companies assailing the price fixation made by the appellant-Union of India in exercise of its power conferred under Clause 9 r/w Clause 7 of the Drugs (Prices Control) Order, 1995 (hereinafter referred to as "DPCO - 1995") fixing the price ceiling of certain -: 23 :- pharmaceutical products and medicinal preparations manufactured by the Respondents herein, by following the order dated 29.03.2000 passed in W.P.No.16409/1999. The order passed in the aforesaid Writ Petition is also assailed.
The learned Single Judge by his order passed in each of the writ petitions held that the price fixation was not sustainable and accordingly, quashed the same. Being aggrieved by the said orders, the Union of India has preferred these appeals.
2. The writ petitions which assail the notifications and orders passed by the Central Government based on DPCO-1995 on various dates have been connected to the writ appeals by a Special Order of the Hon'ble Chief Justice as the said orders are also made under DPCO-1995.
3. We have heard the learned Senior Counsel along with counsel for the appellant and learned counsel for the respondents and perused the material on record.
4. Initially we were under the impression that these writ appeals could be disposed of in limine by following the decision of another Division Bench of this Court in -: 24 :- W.P.No.6585/2004 dated 06.08.2012, in which one of us (Hon'ble Chief Justice) was a member. However, having regard to the submissions made by the learned Senior Counsel for the appellant, we dispose of these appeals on considering the said submissions.
5. Learned Senior Counsel appearing for Union of India at the outset contended that these matters would have to await the decision of the Hon'ble Supreme Court in similar matters pending consideration therein in C.A.No.329/2005 and therefore, the hearing of these matters would have to be postponed. Reliance was placed on D.K.Trivedi & Sons and others vs. State of Gujarat and Others [1986 (sup) SCC 20] to contend that when the Hon'ble Supreme Court is seized of certain issues, the very same issues cannot be considered by the High Court and that it would be prudent to await the decision of the Hon'ble Supreme Court.
6. It was next contended that the order passed in W.P.No.6585/2004 dated 06.08.2012 by the Division Bench of this Court does not take into consideration the decision -: 25 :- reported in Union of India & another V/s. Cynamide India Ltd. & another (1987(2) SCC 720) and therefore, the said order cannot be treated as a precedent for considering these appeals on merits. It was also contended that the Delhi High Court has dismissed the writ petitions assailing the very same notification and the Special Leave Petition filed against the order of the Delhi Court has also been dismissed.
7. It was further contended that Clause 22 of the DPCO - 1995 contemplates review of the price fixation of the drugs and instead of availing the said remedy, petitioners have straight away approached this court. While drawing out attention to the order of the learned Single Judge, it was pointed out that the learned Single Judge has glossed over the statement of objections filed by the Union of India and therefore, the impugned order requires to be set aside and the Writ Petitions be dismissed. Reliance was also placed on certain other decisions.
8. Per contra, learned counsel for the respondents while supporting the order of the learned Single Judge -: 26 :- contended that the concerned authority had eschewed relevant material and had taken into consideration irrelevant material in the fixation of the prices of various drugs. Therefore, the same is arbitrary. Further Clause 7 of the Drug Control Order which prescribes the statutory methodology in the fixation of prices for drugs has not followed in these cases. Drawing our attention to the various norms that have to be determined from time to time as well as from year to year on the basis of which the price fixation has to be made, it was contended that in the absence of there being any determination of norms, the fixation of prices was not in accordance with the DPCO-1995. It was stated that the order of the Division Bench of this Court dated 06.08.2012 was not per incuriam even though no reference has been made to Cynamide India Limited, since the Division Bench does not say anything contrary to what has been opined by the Supreme Court therein. It was also contended that the order of the Delhi High Court pertains to an interpretation of the notification only and there was no challenge made to its vires. Therefore, the said decision -: 27 :- cannot be a precedent for these cases. Reference made to another decision of the Apex Court in the case of Glaxo Smithkline Pharmaceuticals V/s. Union of India and others by the appellant was distinguished by stating that the issues raised in the said decision were quite different from the issues raised in the present case. Therefore, learned counsel sought for dismissal of the appeals and that the Writ Petitions be allowed in terms of the order of the Division Bench dated 06.08.2012.
9. Learned Senior Counsel for the appellant in reply reiterated that the respondents ought to have sought revision of the price fixation which is a statutory remedy rather than filing writ petitions.
10. Having heard the counsel on both sides, the following points would arise for out consideration:
i) Whether in view of similar matters pending before the Hon'ble Supreme Court, the consideration of these cases would have to be postponed?
-: 28 :-
ii) If the answer to point No.1 is in the negative, whether the writ appeals and writ petitions could be disposed of in terms of the decision of the Division Bench in W.P.No.6585/2004 dated 06.08.2012?
Learned Senior Counsel for the appellant contended that since the issue of validity of the impugned notifications is under consideration before the Hon'ble Supreme Court, these matters would have to await its decision. In support of this contention, reliance has been placed on D.K.Trivedi & Sons and others v. State of Gujarat and Others [1986 (sup) SCC 20]. In the said decision, it has been stated that the High Court was not right in directing the parties to approach the Supreme Court as similar matters were pending by dismissing the Writ Petitions. However, insofar as these matters are concerned, since the Division Bench has already decided the issue raised in these cases by its order dated 06.08.2012, it would be inappropriate to adjourn the hearing of these matters merely because similar matters are pending adjudication before the Hon'ble' Supreme Court. -: 29 :- When the Division Bench of this Court has already expressed its view in the matter, it would be in accordance with judicial discipline to follow the said decision in these cases also since the very same orders/notifications have been impugned in writ petitions, out of which these appeals arise and the Writ Petitions also pertain to the very same issue. At the same time, we also observe that the practice of awaiting the decision of the Hon'ble Supreme Court by the High Courts when identical matters are pending consideration therein cannot be applied in all cases and in all circumstances. Therefore, we negative the contention raised by the learned Senior Counsel for the appellant and accordingly, answer Point No.1.
11. As far as Point No.2 is concerned, it was contended that the order of the Division Bench dated 06.08.2012 does not take into consideration a decision of the Hon'ble Supreme Court in the case of Cynamide India Ltd. and therefore, it is per incurium. In the said decision, the following paragraphs were relied upon:
-: 30 :-
"3. Before we turn to the terms of the Drugs (Prices Control) Order, 1979, we would like to make certain general observations and explain the legal position in regard to them.
4. We start with the observation, 'Price fixation is neither the function nor the forte of the court'. We concern ourselves neither with the policy nor with the rates. But we do not totally deny ourselves the jurisdiction to enquire into the question, in appropriate proceedings, whether relevant considerations have gone in and irrelevant considerations kept out of the determination of the price. For example, if the legislature has decreed the pricing policy and prescribed the factors which should guide the determination of the price, we will, if necessary, enquire into the question whether the policy and the factors are present to the mind of the authorities specifying the price. But our examination will stop there. We will go no further. We will not deluge ourselves with more facts and figures. The assembling of the raw materials and the mechanics of price fixation are the concern of the executive and we leave it to them. And, we will not re-evaluate the considerations even if the prices are demonstrably injurious to some manufacturers or -: 31 :- producers. The court will, of course, examine if there is any hostile discrimination. That is a different 'cup of tea' altogether.
5. The second observation we wish to make is, legislative action, plenary or subordinate, is not subject to rules of natural justice. In the case of Parliamentary legislation, the proposition is self- evident. In the case of subordinate legislation, it may happen that Parliament may itself provide for a notice and for a hearing-there are several instances of the legislature requiring the sub- ordinate legislating authority to give public notice and a public hearing before say, for example, levying a municipal rate-in which case the substantial non-observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. The right here given to rate payers or others is in the nature of a concession which is not to detract from the character of the activity as legislative and not quasi-judicial. But, where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity.
6. Occasionally, the legislature directs the subordinate legislating body to make 'such -: 32 :- enquiry as it thinks fit' before making the subordinate legislation. In such a situation, while such enquiry by the subordinate legislating body as it deems fit is a condition precedent to the subordinate legislation, the nature and the extent of the enquiry is in the discretion of the subordinate legislating body and the subordinate legislation is not open to question on the ground that the enquiry was not as full as it might have been. The provision for 'such enquiry as it thinks fit' is generally an enabling provision, intended to facilitate the subordinate legislating body to obtain relevant information from all and whatever source and not intended to vest any right in anyone other than the subordinate legislating body. It is the sort of enquiry, which the legislature itself may cause to be made before legislating, an enquiry which will not confer any right on anyone.
7. The third observation we wish to make is, price fixation is more in the nature of a legislative activity than any other. It is true that, with the proliferation of delegated legislation, there is a tendency for the line between legislation and administration to vanish into an illusion. Administrative, quasi-judicial decisions tend to merge in legislative activity and, -: 33 :- conversely, legislative activity tends to fade into and present an appearance of an administrative or quasi-judicial activity. Any attempt to draw a distinct line between legislative and administrative functions, it has been said, is 'difficult in theory and impossible in practice'. Though difficult, it is necessary that the line must sometimes be drawn as different legal rights and consequences may ensue. The distinction between the two has usually been expressed as 'one between the general and the particular'. 'A legislative act is the creation and promulgation of the general rule of conduct without reference to particular cases; an administrative act is the making and issue of a specific direction or the application of a general rule to a particular case in accordance with the requirements of policy'. 'Legislation is the process of formulating a general rule of conduct without reference to particular cases and usually operating in future; administration is the process of performing particular acts, of issuing particular orders or of making decisions which apply general rules to particular cases'. It has also been said: "Rule- making is normally directed toward the formulation of requirements having a general application to all members of a broadly -: 34 :- identifiable class" while, "an adjudication, on the other hand, applies to specific individuals or situations". But, this is only a broad distinction, not necessarily always true. Administration and administrative adjudication may also be of general application and there may be legislation of particular application only. That is not ruled out. Again, adjudication determines past and present facts and declares rights and liabilities while legislation indicates the future course of action. Adjudication is determinative of the past and the present while legislation is indicative of the future. The object of the rule, the reach of its application, the rights and obligations arising out of it, its intended effect on past, present and future events, its form, the manner of its promulgation are some factors which may help in drawing the line between legislative and non- legislative acts. A price fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transactions. It is a direction of a general character, not directed against a particular situation. It is intended to operate in the future. It is conceived in the interests of the general consumer public. The right of the citizen -: 35 :- to obtain essential articles at fair prices and the duty of the State to so provide them are transformed into the power of the State to fix prices and the obligation of the producer to charge no more than the price fixed. Viewed from whatever angle, the angle of general application, the prospectiveness of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question that price fixation is ordinarily a legislative activity. Price fixation may occasionally assume an administrative or quasi-judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals. Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the government or its nominee and the price to be paid is directed by the legislature to be determined according to the statutory guidelines laid down by it. In such situations the determination of price may acquire a quasi-judicial character. Otherwise, price fixation is generally a legislative activity. We also wish to clear a misapprehension which appears to prevail in certain circles that price fixation affects the manufacturer or producer primarily -: 36 :- and therefore, fairness requires that he be given an opportunity and that fair opportunity to the manufacturer or producer must be read into the procedure for price fixation. We do not agree with the basic premise that price fixation primarily affects manufacturers and producers. Those who are most vitally affected are the consumer public. It is for their protection that price fixation is resorted to and any increase in price affects them as seriously as any decrease does a manufacturer, if not more.
8. The three observations made by us are well settled and well founded on authority. The cases to which we shall now refer, will perhaps elucidate what we have tried, unfelicitously, to express.
9. In Shree Meenakshi Mills Ltd. v. Union of India, a notification fixing the ex-factory price of certain counts of cotton yarn was questioned on the ground that the price had been arbitrarily fixed. After referring to Harishankar Bagla v. State of M.P., Union of India v. Bhana Mal Gulzari Mal, Sri Krishna Rice Mills v. Joint Director (Food), State of Rajasthan v. Nath Mal and Mitha Mal, Narendra Kumar v. Union of India, Panipat Co- operative Sugar Mills v. Union of India, Anakapalle Co-operative Agricultural & Industrial -: 37 :- Society Ltd. v. Union of India and Premier Automobiles Ltd. v. Union of India, a Constitution Bench of the court observed that the dominant object and the purpose of the legislation was the equitable distribution and availability of commodities at fair price and if profit and the producer's return were to be kept in the forefront, it would result in losing sight of the object and the purpose of the legislation."
12. From the above, it becomes clear that the Hon'ble Supreme Court did not deny to the High Courts the jurisdiction to enquire into the question, in appropriate proceedings, whether relevant considerations had gone in and irrelevant considerations were kept out in the matter of determination of price of drugs and pharmaceuticals in exercise of its powers under Article 226 of the Constitution of India. The Court also held that if there is hostile discrimination, then it had the jurisdiction to enquire into that question also. Therefore, no restriction on the power of judicial review was made by the Hon'ble Supreme Court. While holding that price fixation is more in the nature of legislative activity, the Hon'ble Supreme Court also observes -: 38 :- that it may occasionally assume an administrative or quasi- judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals. The Supreme Court placed reliance on Shree Meenakshi Mills Ltd. V/s. Union of India and several other decisions which in fact have been considered and applied in Union of India V/s. Hindustan Development Corporation & others (AIR 1994 SC 988) and M/s. Shri Sitaram Sugar Co.Ltd. & another V/s. Union of India & others (AIR 1990 SC 1277). In fact, in M/s. Shri Sitaram Sugar Co. Ltd. at para 38, reference has been made to Cynamide India Ltd. and M/s. Shri Sitaram Sugar Co. Ltd. has been referred to in Hindustan Development Corporation at para 9 on page 1002 of the Report. Hence, it cannot be contended that the Division Bench by its order dated 06.08.2012 has totally ignored the dictum of the Hon'ble Supreme Court in Cynamide India Ltd, as the latter two cases have been relied upon by the Division Bench in its order dated 06.08.2012. In fact, in the order dated 06.08.2012, the points for -: 39 :- consideration and the answer to the question of judicial review of price fixation of medical products read thus:
"(1) Whether this Court in exercise of extraordinary jurisdiction of judicial review can interfere with the price fixation of medical products by the respondent-authorities? (2)If the answer to this question is held in the affirmative; whether the impugned notifications are to be sustained or set aside?
(3)What order?"
The Division Bench has answered aforesaid Point No.1 thus:
"17. It is no doubt true that fixation of price for medicine/drugs involves the need of expertise. The scope of judicial review with respect to price fixation by the Government is delineated by plethora of judgments of the Hon'ble Supreme Court and a few of which are already noticed by us hereinabove whereunder their Lordships have lucidly laid down the parameters or contours under which judicial scrutiny is permissible. In the instant case, the hue and cry raised by the petitioners is with regard to fixation of ceiling price of the drug 'Glipizide' on the ground that -: 40 :- norms laid down under DPCO-1995 has not been followed and thereby it has resulted in fixation of ceiling price irrationally and contrary to norms. Hence, it cannot be gainsaid by the respondents that judicial review of such executive action is impermissible in the light of such a plea raised by petitioners and as such we are of the considered view that it is in the domain of the Courts to have a judicial review of an administrative action undertaken for fixation of price and particularly with reference to the DPCO
- 1995 and guidelines issued thereunder and as such, point No.(1) is answered in the affirmative."
13. Therefore, even if Cynamide India Ltd., has not been directly referred to by the Division Bench in its order dated 06.08.2012, that would not take away its precedential value. Therefore, this Bench would place reliance on the order of the Division Bench dated 06.08.2012, the relevant portion of which reads thus:
"21. There cannot be any doubt with regard to the mode and manner under which ceiling price of a Formulation has to be calculated by the Government. The calculation of retail price of Formulation would necessarily have to be under -: 41 :- the formula prescribed in Paragraph 7 of DPCO- 1995 and formula thereunder is required to be followed to arrive at the retail price of a Formulation. Said formula as found in Paragraph 7 of DPCO-1995 reads as under:
"R.P.=(M.C+C.C+P.M.+P.C.)x1+MAPE/100)+ED Where ----
"R.P" - means retail price.
"M.C" - means material cost and includes the cost of drugs and other pharmaceutical aids used including overages, if any, plus process loss thereon specified as a norm from time to time by notification in the Official Gazette in this behalf;
"C.C" means conversion cost worked out in accordance with established procedures of costing and shall be fixed as a norm every year by notification in the Official Gazette in this behalf;
"P.M." means cost of the packing material used in the packing of concerned Formulation, including process loss and shall be fixed as a norm every year by notification in the Official Gazette in this behalf;
"P.C"- means packing charges worked out in accordance with established procedures of costing and shall be fixed as a norm every year by notification in the Official Gazette in this behalf;
"MAPE" (Maximum Allowable Post-
manufacturing Expenses) means all costs incurred by a manufacturer from the stage of ex-factory cost to retailing and includes trade margin and margin for the manufacturer and it shall not -: 42 :- exceed one hundred per cent for indigenously manufactured Scheduled Formulations:
"E.D" means excise duty:
Provided that in the case of an imported Formulation, the landed cost shall form the basis for fixing its price along with such margin to cover selling and distribution expenses including interest and importer's profit which shall not exceed fifty percent of the landed cost.
Explanation--For the purpose of this proviso, "landed cost" means the cost of import of Formulation inclusive of customs duty and clearing charges.
22. A reading of the above clause in conjunction with Paragraph 9, would clearly go to show that Government from "time to time" is required to fix ceiling price of a scheduled Formulation in accordance with the above formula. To arrive at such retail price various factors are required to be considered like material cost, conversion cost, cost of packing material and packing charges. The Government is required to fix as a norm every year by issuance of a notification in the official gazette by specifying the norms. In the instant case it is noticed that initially these norms came to be fixed in the year 1999 i.e., 13.07.99 vide Annexure-D except norms for calculating packing material which is also -: 43 :- mandatory. The Government instead of fixing the said norms by inviting outputs being furnished by the interested parties or obtaining such inputs through its own resources has proceeded to mechanically issue notifications year after year by extending the norms fixed under Notification dated 13.07.99 to hold good for the coming years i.e., 2000-2003. One another fact which is conspicuously found is that norms for calculating material cost admittedly has not been notified. Further the norms for calculating conversion cost, packing charges and process loss that were fixed in the year 1999 have been continued till 2003. The fixation of ceiling price can be done on the basis of the information furnished by the manufacturer or by calling for such information from the manufacturers. In other words, it would mean that the Government should acquire information in this behalf and then fix the ceiling price. It is no doubt true under sub Paragraph (3) of Paragraph 9, such revisions can be effected by the Government on its own motion or on an application made to it by the manufacturer. However, non-furnishing of such information by the manufacturers does not absolve the Government of its onerous responsibility in arriving at these costs by fixing the norms on year -: 44 :- to year basis by taking a holistic view. The proforma in which the information is to be furnished by the manufacturer is prescribed under Paragraphs 4 and 5 of the DPCO-1995 as already stated hereinabove. Form No.1 which is appended to the DPCO - 1995 would clearly go to show that under item No.18 the manufacturer is required to furnish the cost of production of the bulk drug as per Annexure to the Form and said Annexure would clearly depict that various details/inputs are required to be furnished by the manufacturer along with details thereunder as specified under sub-headings notified which comprises item Nos.1 to 17. Under item No.8, it has been specified as under:
8.- Packing:-
a) materials b) other expenses Total packing cost
Likewise, in Form No.2 under Sl.No.13, the manufacturer is required to furnish the details of cost of production of the bulk drug like major raw materials, total raw material cost, cost of production, cost of sales etc., utilised for -: 45 :- manufacturing a Scheduled or Non-Scheduled drug to enable the Government to undertake price fixation by taking these factors.
x x x
25. The material on record do not disclose that in the instant case, Government has undertaken such an exercise to fix the ceiling price for scheduled drug Formulations. In this factual matrix, if we peruse the notifications issued by the respondents in the instant case, which are at Annexures-C, D, E, F, G & H it would clearly go to show that such an exercise has not been undertaken. This we say so, because the revision has been made mechanically and no material is forthcoming either from the statement of objections or from any other material available on record that such inputs envisaged under Paragraph 9 has gone into price fixation to arrive at the ceiling price and thereby decision making process has been given a complete go-by. It is no doubt true that Government has called upon the manufacturers to furnish the details so as to enable it to undertake the exercise of revising the price of Scheduled Drug Formulations. It is also on record by way of statement of objections filed by the respondents that in spite of such information being called for, -: 46 :- same has not been furnished by the manufacturers. The question would be whether mere calling for such information would absolve the Government of its statutory duty or obligation cast under the DPCO-1995. Even in the absence of the information furnished, it would be necessary and incumbent upon the Government to apply the formula as prescribed under Paragraph 7 to fix the ceiling price by taking into consideration all such relevant factors/norms prescribed therein. In the absence of such an exercise being undertaken, issuance of notifications mechanically would result in price fixation in mechanical and haste manner as has been found by us in the instant case.
26. The intent of the legislature for using the word "time to time" under Paragraph No.9 of DPCO-1995 is for the purposes of taking into consideration various factors prescribed under Paragraph 7 since these factors have the tendency of fluctuating. In other words, factors like cost of the packing material, labour, cost of the power used in the said industry, cost of raw materials, salaries and wages would always tend to ascend rather than descend and as such, in the absence of any input in this regard having gone into whilst fixing the ceiling price of the Formulation, the -: 47 :- action of State smacks of it being arbitrary and without due application of mind.
27. Yet another factor which requires to be considered or examined by us is the issue regarding non fixation of the norms for calculating the packing material cost by the Government. Admittedly no such norms have been fixed in regard to packing material cost. Even assuming in a given situation that manufacturers tend to ignore to furnish the information sought for by the Government, the course left open to the Government is to adopt such norms to the factors prescribed under Paragraph 7 and apply the formula to arrive at the ceiling price. In the absence of any norms having been fixed, it gives way for the arbitrariness to step in resulting in improper or irrational fixation of ceiling price. It is always open to the Government to secure the relevant information or material from its own sources and agencies in the event of non co- operation exhibited by the manufacturers and by using its agencies under its command. We notice in the instant case that packing materials norms have not been notified by the Government. However, in spite of notifying norms in relation to other factors the manufacturers have not furnished -: 48 :- the same. In the event norms are fixed from time to time by publishing the same and after giving wide publicity, if the manufacturers do not come forward to place any contra material then, Government would definitely be within its domain to proceed to fix the ceiling price based on such norms by applying the formula prescribed under Paragraph 7. However, we find no such exercise has been undertaken by the Government in respect of impugned notifications. It would be needless to state that such norms if any is also required to be reviewed/modified/varied from time to time as the exigencies may demand. Thus, a notification issued in a particular year cannot hold good for eternity nor revision of such price made under a notification cannot be revised unilaterally or without obtaining information/inputs necessary for fixation of such price."
14. That apart, the calculation of the retail price as per para 7 of the DPCO-1995 requires that material cost would have to be specified as a norm 'from time to time' by notification in the official gazette; conversion cost has to be fixed as a norm 'every year' and gazetted; cost of packing material has to be fixed as a norm annually by notification in -: 49 :- the official gazette as also packing charges would have to be worked out in accordance with the established procedures of costing and fixing as a norm every year by notification in the official gazette. It is noted that for the first time the norms were fixed in the year 1999 i.e., on 13.07.1999 with regard to a few of the factors. Till then there had been no fixation of prices on annual basis or from time to time, though the DPCO is of the year 1995. There is no material forthcoming as to whether subsequently there has been fixation of norms on an annual basis or from time to time as the case may be, on the basis of which, the impugned notifications were issued. Therefore, the order of the Division Bench dated 06.08.2012 applies on all fours to these cases also.
15. The learned Single Judge has considered the statement of objections as well as the rejoinder filed by the writ petitioners and also the statement of objections filed to the rejoinder at length while holding that the notification dated 13.04.1999 is not sustainable. Therefore, there is no merit in the contention that the learned Single Judge has not considered the case of the appellant herein. -: 50 :-
Further, the Apex Court in Glaxo India Ltd., was concerned with the following issues:
" i) Whether the Central Govt. was justified in issuing a demand based on Drug Prices fixed on 02.01.1989, instead of drug prices fixed on 20.11.1986?
ii) Whether the Central Government was justified in directing Glaxo India Ltd. (hereinafter referred to as, "Respondent-Company"- to deposit an amount of 71.21 crores in the Drug Prices Equalization Account (in short, "DPEA")?
iii) What is the effect of 'suppression' of a notification and when such suppression is made, would it have the prospective or retrospective effect?"
The issues raised in the said decision are quite distinct from the issues raised in these cases and therefore, no reliance can be placed on the said decision.
16. In Glaxo Smithkline Pharmaceuticals V/s. Union of India and others the Delhi High Court concerned itself with the interpretation of the notification dated -: 51 :- 24.12.2002 based on note III of notification dated 24.12.2002 issued by the Central Government. There was no challenge to the said notification. Therefore, the said decision dated 14.12.2008 is also of no relevance to the present case.
17. The other contention raised by the learned Senior Counsel for the appellant was that in view of Clause 22 of DPCO - 1995, the respondent-manufacturers could have approached the authorities concerned for review of the price fixation instead of filing the writ petitions. What is pertinent in these cases is the challenge made to the manner in which the price fixation has been made with regard to the medicinal/pharmaceutical products in question. The manufacturers have assailed the fact that the price fixation has not been in accordance with the formula provided in the DPCO-1995. It is not the case of the respondents that the price fixation could have been on the lower side. Therefore, the challenge is not to the quantum of price fixation, but to the methodology applied in doing so. In such circumstances, we think that review is not the appropriate -: 52 :- remedy. Had the authorities strictly followed, the formula given in para 7 of the DPCO - 1995 and fixed the prices, there could possibly have been no interference by the Courts in these matters. The manufacturers then could have sought review of price fixation. That is not the position in these cases. Therefore, the exercise of jurisdiction under Article 226 of the Constitution of India by the learned Single Judge is just and proper. Therefore, the appeals do not call for any interference. They are accordingly dismissed.
18. The writ petitions are allowed. The notifications and orders impugned are quashed.
Parties to bear their own costs.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE S* Index: Y/N