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4. We have heard the learned Advocates appearing for the parties and perused the writ papers together with statement of objections.

5. The contention of learned counsel appearing for petitioners is that in terms of DPCO - 1995 the Central Government can fix ceiling price in respect of a scheduled Formulation only in accordance with formula laid down in Paragraph 7 of DPCO - 1995 and the ceiling price fixed in respect of Glipizide Formulation is contrary to the formula laid down in Paragraph 7 and therefore illegal and arbitrary. He would elaborate his submissions by contending under Paragraph 7 of DPCO - 1995, the Government is required to fix norms for calculating the process loss, conversion costs, packing material costs and for packing charges on year to year basis by notifying the same in Official Gazette and contends that before fixing a ceiling price, such norms are required to be notified and then only these charges are to be calculated before fixing ceiling price and if ceiling price is fixed without these norms, it would be contrary to DPCO - 1995. It is further contended that retail price has been fixed without taking into account the cost factor pertaining to packing materials which was required to be computed after duly notifying and challenge to the impugned notification is laid on the ground that year after year retail price is fixed without any change right from the year 1999 and without independently collecting various data under the different heads and then arriving at the retail price in parity with contemporary pricing norms is erroneous; that first respondent has failed to notify the norms under various heads as contemplated under Paragraph 7 of DPCO-1995 as such, the formula deviced by the respondent is wrongly applied year after year and fixation of price made in 1999 has not been revised despite wide range increase in the Indices; the packing material cost which had to be taken into account has been totally excluded while notifying 'Glipizide' Formulation under impugned notification; respondents have failed to take into consideration the disparities pointed out by Organisations of pharmaceutical producers of India and Indian Drug Manufacturers' Association and sale of said product as per ceiling price would affect industrialists like petitioners. On these grounds petitioners seek for allowing the writ petition.

(3) What order?

BRIEF HISTORY

9. DPCO - 1995 came to be promulgated by Central Government in exercise of power conferred under Section 3 of the Essential Commodities Act with the primary object of ensuring essential commodities are available to the consumers at a reasonable and fair price. Under DPCO - 1995, respondents are empowered to fix and notify the maximum sale price of the scheduled bulk drugs and retail price of the related Formulations under Paragraphs 3, 8 & 9 respectively. Sale of such essential commodities above the notified price attracts penalty under DPCO-1995. Every manufacturer or importer of the scheduled bulk drugs/Formulations has to adopt the price fixed/notified by the Government of India from time to time within 15 days from the date of notification in the Official Gazette as prescribed under Paragraph 14(1) of DPCO-1995. In addition to the same, they are required to issue price list, supplementary list to the dealers, State Drug Controller and the Government by indicating reference to such price fixation or revision.

Where any manufacturer, importer of bulk drug of Formulation fails to submit the application for price fixation or revision, as the case maybe, to furnish information as required under this Order, within the time specified therein, the Government may, on the basis of such information as may be available with it, by order fix the price in respect of such bulk drug or Formulation as the case may be.

RE: POINT NO.(1):

14. The object of the promulgation of DPCO - 1995 by the Central Government is to ensure that essential commodities namely, drugs that may be specified under the schedule thereunder are made available to the consumers at a reasonable price. The fixation of price of a commodity is an administrative action to be exercised within the framework of the law promulgated thereunder. In the instant case, the DPCO - 1995 is brought into force with effect from 06-01-1995 to ensure that certain drugs as specified in the schedule thereunder would be available to the common man at an affordable price and in this direction, the expert body namely, NPPA undertakes to fix the price of a scheduled drug by restricting the profit margin by maintaining the quality of the product. Said exercise undertaken by the expert body cannot be construed as being outside its domain. Leaving the price fixation such as drugs in the instant case to the manufacturers themselves would have to be regarded as encouraging private enterprises which may cause the said products beyond the reach of a common man. Thus, in the interest of the public at large, if the State intervenes and controls the price structure of such essential commodities like the drugs specified in the schedule to DPCO - 1995 , it would ensure that larger public interest would be protected by the State.

RE: POINT NO(2):

18. We would now proceed to consider as to whether the price fixation undertaken by the respondents under the impugned notification is just and proper and whether there is rational nexus to the ceiling price fixed vis-à-vis norms enumerated in the DPCO - 1995 and in this limited sphere this point is examined by us.

19. Paragraph 3 of the DPCO-1995 empowers the Government to fix the maximum sale price of the bulk drugs as specified in the First Schedule. Clause (a) of Paragraph 4 of the DPCO-1995 mandates that every manufacturer is required to furnish the information in relation to the Scheduled bulk drugs manufactured by them and to furnish information of all such drugs within 30 days of DPCO - 1995. Under clause (b) of para 4 of the DPCO - 1995, the manufacturer of a scheduled bulk drug should furnish after commencement of DPCO-1995 the details of the cost of each scheduled bulk drug in Form No.1 by 30th September of every year. Likewise, the manufacturer of non scheduled bulk drug should furnish the information regarding details of cost in Form No.2. However, no time limit is fixed insofar as the non scheduled drug is concerned. Paragraph 6 empowers the Government to issue directions to manufacturers of bulk drugs to sell bulk drugs to such other manufacturers of Formulations which may be specified in such order to achieve adequate production and equitable distribution. Paragraph 7 provides for calculation of retail price of Formulation which would be in accordance with the formula prescribed thereunder. Further, Paragraph 8 provides for fixation of retail price of Scheduled Formulation from time to time in accordance with the formula laid down under Paragraph 7. Paragraph 9 provides for fixing ceiling price of Scheduled Formulations by the Government from time to time in accordance with the formula laid down in Paragraph 7 by keeping in view the cost or efficiency, or both, of major manufacturers of such Formulations, notwithstanding anything contained in the said order.