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Company") to deposit an amount of `71.21 crores in the Drug Prices Equalization Account (in short, "DPEA").

iii) What is the effect of `supersession' of a notification and when such supersession is made, would it have the prospective or retrospective effect.

Factual Background

2) The Respondent-Company is engaged in manufacture and sale of three bulk drugs, namely, Betamethasone Alcohol (B.A.), Betamethasone 17 valerate (B.V.) and Betamethasone di Sodium Phosphate (B.P.), and various formulations based on these bulk drugs. They were sold at the price that was declared by the Respondent-Company under the Drugs (Price Control) Order, 1970 [in short, "DPCO 1970"]. The Central Government promulgated the Drug (Price Control) Order, 1979, [in short, "DPCO 1979"], replacing DPCO 1970 which included the above mentioned bulk drugs in Schedule II to the order. The Central Government is vested with the power under Para 3(i) of DPCO 1979 to fix the maximum sale price of indigenously manufactured bulk drugs in First or Second Schedule by issuing a notification in the official gazette. Sub-Para 3(2) provides that while fixing the price of a bulk drug, the  Government may take into account the average cost of production of such bulk drug manufactured by an efficient manufacturer and allow a reasonable return on net worth. Sub-Para 3(3) prohibits any person from selling a bulk drug at a price exceeding the price fixed under sub-para(1) and other local taxes, if any, payable.

12) With regard to the finding of the Division Bench in the impugned judgment that the demands raised is in contravention of Para 7(2)(a) of the DPCO 1979, it is submitted that the Respondent-Company has already benefited from the stay order passed by the High Court, and the demand was based on the difference on the price of bulk drug prevalent prior to the stay order and the prices fixed on 2.1.1989. It is further submitted that the stand of the Respondent-Company that since there is no provision in the DPCO 1979 for the deposit of the excess amount in the DPEA, the Respondent-Company should be allowed to retain  the same, is against the basic principles of `unjust enrichment' as held by this Court. In support of this contention, our attention was drawn to observations made by this Court in Mafatlal, (1997) 5 SCC 536; Concap Capacitators (2007) 8 SCC 658, Swanstone Multiplex Cinema, (2009) 10 SCALE 148]. It is argued that the Drugs (Prices Control) Order is a socio-economic measure, and the same has to be interpreted by this Court in the light of the object sought to be achieved, viz. to ensure that there is a proper availability of drugs at reasonable prices, which are fair to the consumer as well as to the industry. It is also contended that the phrase "excess amount to be determined by the Government" in Para 7(2)(a) of the DPCO 1979, gives a wide discretion to the Government to determine any amount to be recovered, and that the demand made as amount due is therefore justified. It is further submitted that it is incorrect to proceed on the basis that the DPCO 1979 permitted such retention of excess money that was in excess over the formulation price fixed under the price fixation order and such an interpretation will be contrary to the object  of the provisions of the Essential Commodities Act and of the DPCO 1979. It is further argued that since Para 7(2)(a) dealt with DPEA only, and it is totally incorrect to interpret the same in a manner that would permit drug companies to violate price fixation order and get away with the same, by stating that the Respondent-Company was liable only to criminal proceedings, if any.

13) In the alternative, it is submitted that Para 14 of the DPCO 1987, provides for recovery of dues accrued under DPCO 1979 and deposit of the same into DPEA. In view of the said provision, the Central Government has the power to direct the drug companies to deposit such amounts in the DPEA. A further reference is also made to Para 15 of the DPCO 1987, which gives the power to the Central Government to recover dues accrued due to charging of prices higher than those fixed or notified by the Government as per the provisions of the DPCO 1987.

18) The learned counsel disputes that there was any unjust enrichment by the Respondent-Company, as contended by the learned counsel for the Revenue and to the contrary, the returns filed by the Respondent-Company would amply demonstrate that there was less margin of profit than what it is entitled to under the Fifth Schedule of the DPCO 1979. It is also stated that the Respondent-Company never charged prices higher than those that were fixed by the Central Government. It is also contended that the impugned demand made by the Central Government is without the authority of law and in total disregard to the directions contained in the first judgment. It is submitted that Para 7 of the DPCO 1987 did not give any authority to recover the difference in `notional' prices of formulation as the Central Government sought to do vide letter dated 16.11.1990. It is further argued that the only liability that the Respondent-Company had, was the liability that accrued in respect of actions taken prior to 25.08.1987, which was nothing but the difference in bulk  drug prices. It is stated that only this amount could be recovered by virtue of Para 14 of the DPCO 1987, unlike what was claimed by the Central Government. It is also argued that the High Court, in the impugned judgment, had correctly decided the issue by quashing the demand for payment of `71.21 crores made by the Central Government. It is submitted that the demands made vide letter dated 16.11.1990 is liable to be set aside as the demand was made on the prices based on notional formulation prices worked out by the Bureau of Indian Standards, which were not revealed to the Respondent-Company, and that these notional formulation prices were in total disregard of the review of the bulk drug prices notified on 02.01.1989, which were in pursuance of the directions of the first judgment, but on the basis of the previously fixed bulk drug prices of 20.11.1986. In conclusion, it is argued that the Central Government should recalculate the amount based on the difference in bulk drug prices as reviewed and notified on 02.01.1989, in compliance of the directions of the High Court.  The First Judgment of the Delhi High Court