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In one such policy of 1994, the NPPA is established as an independent body of experts to undertake the task of price fixation of scheduled formulations of bulk drugs and it is entrusted with the task of overseeing the enforcement of the provisions of the DPCOs issued by the Central Government. Under the DPCO of 1995 introduced by the Central Government, the power was conferred to fix the ceiling price of scheduled formulations, containing at least one scheduled bulk drug and from time to time, the NPPA would issue standing orders fixing the ceiling prices, with a clear understanding that the Central Government/NPPA is authorised to fix the prices only for scheduled formulations i.e. formulations 4/34 903 WP-2069-22.odt containing at least one bulk drug specified in the First Schedule of the DPCO. The power to fix the prices was directed to follow the procedure prescribed in Para 10 of the DPCO.

11. The learned senior counsel Mr.Seervai, would vehemently submit that the impugned Standing Order issued by NPPA is covered under para 9 of the DPCO, which empowers the Government to fix ceiling price of scheduled formulations, which are the formulations containing atleast one scheduled bulk drug, and which are specified in the First Schedule of DPCO. According to him, one important thing, which is required to be ascertained for the purpose of determining, whether a formulation is liable for price control, is to verify whether it contains any of the bulk drugs listed in the First Schedule to the said DPCO, but neither Silver Sulphadiazine nor Chlorhexidine Gluconate is listed in the First Schedule and, 10/34 903 WP-2069-22.odt therefore, there is no justification in fixation of its price by the Central Government.
Urging that Silver Sulfadiazine is not a scheduled bulk drug, and hence, not amenable to price control under the DPCO, Mr.Seervai would urge that NPPA has erred in considering it to be a derivative, but has not offered any reasons for doing so. According to him, the scheduled bulk drug under DPCO has a specific meaning and it is restricted to bulk drugs specified in First Schedule of the DPCO and does not include a derivative of scheduled bulk drug and adding words to an otherwise explicit and unambiguous provision, is 11/34 903 WP-2069-22.odt completely impermissible, according to Mr.Seervai. Thus according to him, the impugned order is passed with non application of mind, without citing proper reasons.
12. One more point, which is pressed into service by Mr.Seervai is, DPCO has prescribed specific procedure for inclusion of particular bulk drug as scheduled bulk drug in para 10(c) and the inclusion thus can happen only after following the procedure. He would submit that if it was the intention of NPPA to include Silver Sulfadiazine which has different chemical properties, different indications of use, it could have included the said bulk drug as a scheduled bulk drug by following the procedure prescribed under para 10. According to Mr.Seervai, NPPA is seeking to subvert the procedure laid down in the DPCO by seeking to impose a ceiling price on the non-scheduled formulation, which is completely illegal and, therefore the impugned Standing Order followed by the demand, is liable to be quashed and set aside.