IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 14" DAY OF OCTOBER
BEFORE:
THE HON'BLE MR. JUSTICE fhi§AAbND B*"I'RA}~'_?.EE§D'Y , O' I is
WRIT PETITION No.26: 18
c/w WRIT FETITION NQ._9463'OF.2006(GM?RES')r.4
' L;c§§3,€'\5@»§.{'.\\8&Q§
BETWEEN:
M/s. Astra Zeneca Pharma Indi'a ii,.i1i*I»1i,tedi,' I _
A company incorporated tj1.nde_1*'--the.. C'
Companies Act,..E?956,_ hailing
Registered Office a,t}'Post,B.oX,No.2483,
Office: Bellairy Road,"i%€ebb--al-,,, " _ '
Bang-al.ore»;56G~.O24*reprcsented byiiits
Cornparty Secretary .'i{,Guha.""""' ...PETITIONER
'cg; ,gt;iata,;;s_ _
J ~ , ,[jn,ion,:Ve.fi'fn.dia,
By it3_Secre'tary, Ministry of
V "iChertti5c_al§$ and Fertilizers,
De1§a1T:'ft_ent of Chemicals and
Petrochemicals, 3;" Floor,
" I Wing, Eattpath Bhavan,
4"New Delhi.
The Under Secretary,
(DPEA),
Government of India,
Ministry of Chetnicais and Fertilizers,
Department of Chemicals and
Petrochemicals, 3"" Floor,
8
per pack was fixed. On 5"' November, 1984, the first
respondent revised the maximum sale price of bu1;k._:'d.i*iug at
Rs.828.25 By its price fixation order dated
respondent revised the retail price of *Ibii.profen”it’ab1ets.¥6C_Q, rrzg.
(ten) to Rs.10.()3 per pack. Being
order dated 21.1.1985, the pvetitiioi-ier revievv
application under Para. i?.7._A’of Order)
1979, (hereinafterpreferifed.1979″, for brevity).
The said review: for consideration as on the date of '9 it 9 13; 'order, dated 13.2.1985, the first
respondent”fi};ed_aV1eader in respect of Ibuprofen tab1ets–400
,_ mg,V’~i.at: ‘per___pack of ten and in respect of 200 mg. at
price of Ibuprofen suspension of 100 ml., 50
mi. paiiia per pack was fixed. Aggrieved by this
igorder o*fd1A3.2.1985, the petitioner had also filed a review, which
V”i:aga_i_nri’emained pending. By its notification dated 25.9.1985, the
respondent revised the maximum sale price of Ibuprofen at
9 Rs.845.60 per kg. And by an order dated 29.7.1986, the leader
3
price of tablets of 400 mg. was revised at Rs.8.70 per pack and
that of 20 mg. at Rs.4.49 per pack.
5. Thereafter, by a letter dated
respondent cailed upon the petitioner-ito’ ‘fur,n.is1_h the 1 9
procurement and utilisation of the ilbt_;1i1<_vdrug8ilvbuprofegp"ffheu
petitioner accordingly had fu1*nis1ieti. the period
from 1.11.1981 to 30.6l'19,_86 cover of1'Hits"llette1* dated
20.1.1987. Despite the furnished, the
respondent again furnish fresh details
by its letter time, the Drugs (Price
Control)lOrder,l referred to as the "DPCO 1987"
for brevity) into force and the DPCO 1979 stood
T&hereai'Hte1r,1 by a letter dated 6.11.1992, details for
iproc'urei1:ei'*it,il_of,"the bulk drug was sought from the petitioner for
1 it _ the i1'.d1.19'79 to 25.8.1987. This would encompass the
1 ll"11:<erfttici'e_.period during which the DPCO 1979 was in force. The
pttittditet by its letter dated 16.12.1992, stated that details had
already been submitted and further, that commercial production
of the formulations having commenced only on 1.11.1981, the
petitioner did not have any data for any period prior thereto.
3
Despite this, the respondent continued to issue reminder letters
seeking information in respect of the procurement foréthe-_per_iod
from April l979 to August l979. Tlie petitioner_wasic’o–rtipel’led
to reply and reiterate its stand. ._
6. It is now the petitioner’s conteintionilithat _.forlthe.first
time, after the repeal of the as a_lso.’l98l7, their
respondent by its letter dva-tend 27..3;”l’ll9_l5,illl1EtS raisedilsaltieinand for
Rs. 5,37,5i6/– in respect on the
basis that since§..lhe_.petitionei* ..l’1ad«.failed’_it_offurnish the requisite
informatioinlf ‘they:yfirstffrespioncient had no alternative, but to work
out the liability czfy from whatever data became
available. to the first respo-ndent and the petitioner was called upon
to dep’osit”‘itiieliisaid amount.
71;’:”‘-Tricia’petitioner denied any such liability, but the
_ respo’ri–den_t’by.i«i”its letter dated 5.l.l996, revised the liability of the
39.44″-Vpetitionerfrom Rs.5,37,5l6/~ to Rs.2~§l,52,383 /–. The petitioner,
dated 14.2.1996, requested for a personal hearing. The
i”‘l.rnatter was thereafter referred to the Drugs Prices Liability Review
Committee (hereinafter referred to he ‘DPLRC’ for brevity).
8. The petitioner filed written submissions before the
Committee. The petitioner particularly pleaded that records
being sought to be produced for a period between ‘years
was unreasonable as the petitioner did not retain rer;ordsffor more i
than 8 years for purposes of audit anti; the _sa’1’r;e”«were ide’stroyed_ or
discarded by the petitioner etc.,g DPVLRC
take any decision between May and July }There was
no response from the C’O.fii’iml[i_€€2.l_ __to the petitioner’s
written submissionsp B3/”le»tter datildp the petitioner
was inforrried’– submitted its report to the
Government’ “Old ~i5i:2o04i. y:”riai;ianiiis*ying the liability of the
petition-3.1′ uunder..theipro\iis.ioi1s of DPCO 1979 at Rs. 1,74,86,519/’-
iand the Goyernmeint had accepted the report and the petitioner
deposit the amount. The petitioner replied
V . that its ikiiowledge, similar demands which were the subject
ii”iiin’rr1attier_uofit:hal1enge in writ proceedings before the Bombay High
=iTCourtii and that there were orders therein restraining the
“.Governmei1t from pursuing or implementing similar notices and
since the present demand was squarely covered by the said
3
orders, the petitioner requested the respondents to abide by those
orders.
9. The respondents thereafter. forwarded
Report sixteen months after it was sub,n1itted_–“by’ .C0n’im1ttt:é”.
and thirteen months after its letter of plover
of its letter dated 5.9.2005. Furthe’i;..V_it was stated V-,th’a.t”the interim it
orders passed by the Bonibay Higii loiirt-»would’ not applicable
to the petitioner and called.t.’upe-nil’t’he__peti.ti.on_er to deposit the
amount. it i_s in tiii.s’p1’bacl;ground tha’t’th.eV_fi.rjstiof these petitions is
Insofar.as:_jthe”s_ec»ond writ petition is concerned, the
petitioner had”n1anufact.ured: formulations based on the bulk drug
0 l’d.i.i_ringitheiiperiod the DPCO 1979 was in force.
was procured either indigenously or through
import was used in the production and sale of formulations made
9″4491’s.:frem4_.the”‘bulk drug from 2.11.1981. The petitioner discontinued
— theprodtiction of the formulations, with effect from 24.8.1984. it
is stated that the respondent did not fix or notify any price in
respect of the bulk drug Refampicin prior to 27.10.1986. It is
hence, contended that from 1.11.1979, when DPCO 1979 came
2
10
into effect, till 27.10.1986, there was no notification as regards
the price of the bulk drug Refampicin. It is only on 27..Viii.li.’1.986,
that the first respondent fixed the maxirrauin sale _
at Rs.3,098/– per kg. _
l 1. it is not only the petitioner:*but1’_theiieritire’ ind.us:tr*3r.i’ivVas
unaware whether the price that inxthc “of the V
formulations made from psing,r-the:”p_l;.:;il’k.,.drugiiiRe.fan’ipicin as a
notional price. The petitioner7contends..that assuming such
notional price was*t.al’_<en into: the formulation
prices, of the ft):-n1j.ilatiions"haSled.hulk drug, the petitioner
and the:'i,;1dus*tr_\,iv%;ra:2,"the dark. It is the petitioner's Case
that no sucii.__4pricei"had. been. determined even notionally. The
petitioiner__ii'contends.,b_y__uotification dated 24.8.1981, the first
resp'o–ndentVhadii'fixed the leader prices in respect of certain
foririuliatioinsiimsed on the bulk drug Refampicin. These were in
iii"~~..'_i_Wexercise power under DPCO 1979 . It is pointed out that at the
A pi"time_ price fixation as on 248.198 E. there was no disclosure of
..fi3{ati0n of the bulk drug price, even though the petitioner was
entitled to market its Refampicin formulations at the leader prices
fixed by the respondent. As a matter of fact, the petitioner had
3
sold the formulations at prices much lower than the leader prices.
AnneXure–C to the writ petition is :1 detailed statement showing
the prices at which the forrnulations were sold and rnarléeted by
the petitioner — company.
12. By a notification dated 16.23983, _El’i6’lti§tdi3’1–i.:p1’iQ€Si_:bf.
Refarnpicin formulations were revised.’downwards.’-. 9″A.g’ai’1i..&tl:iere
was no intimation or disclosu1’e’b_f”fixation of the’ibLil»k_”dr11g–‘price’.. . 9′
Once again, the prices charged bpy.—-thev.pe’titioner” –w.ere..rlower than
the reduced prices of the iiforr.ntiiati3o§is by the notification.
There was yet another doiwnwaifd rey~éisi0n’ir;t’ter1ns of notification
dated 13.9. 19839.9 ggagain-__thei’e was no intimation of fixation
of the bulk 9d.r__u”g vpriceisi prices of the formulations charged
‘by the…petitioneri ‘w’ere___lower than the reduced prices. This was
fo1low.edvb’y* ‘another downward revision by notification dated
.l.3i.Z?..l’984_w’ith the same result. In that, there was no fixation of
. “the bulk. drug price and the petitioners prices were lower than the
prices. By a letter dated 6.9.1984, the first respondent
9 called upon the petitioner to furnish details of procurement of the
9 bulk drug Refatnpicin. By reply dated 28.11.3984, the petitioner
furnished the details. The petitioner also furnished details to
3
show that, compared to the prices allowed by the Government,
the petitioner had actually incurred a net loss of Rs.30.43 a.nd
other aspects such as, the hike in cost of
conversion charges, and that the £iC%Ll&lMimC()St o.f”p1*ocureIne’n,t W83″.
far in excess of the prices fixed by iiflzati’
called profits ought not be viewed_in..,isolation. . i V
13. The first respondent, with the
petitioner and sought for” which were duly
furnished by a_ letter claimed that the
petitionei”‘hatt ftirfhished;hatch}w§’se utilisation of Refarnpicin
from 1979 to Vl98(}ff.and_iii”w,as calted upon to do so before
30.9.1986, lama, petitioneriicomplietl. It is on 27.10.1986, that
iithe iespondent first time fixed the bulk drug price of
if per kg. With effect from 26.8.1987, the
, nPC”o 19.137 -tttme into force and DP(‘.’.() 1979 stood repealed.
9 ,__4l4i.””.It was provided undet” the DPCO .1987 that
he-twithstanding the repeal of opco 1979, anything done or any
action taken insofar as it is not consistent with the provisions of
DPCO 1987, be deemed to have been done or taken under the
3
13
corresponding provisions of D?C(} 1987. The petitioner
contends that DPCO 1987, did not contain any’…pci=o_lvi_sion
corresponding to Para 7 or Para 17 of DPCO 1979..
the general saving under Para 32 of I§ie…DPCO_–‘1l987;_’:vth’e’re’_’wasa”»
limited saving contained in Para–14 w”l1ich’_’coki1ferred the
first respondent to recover dues’ accifiied u’nd__er 9
15. The petitioner contendes–thiit_as~..on the da.tee.cif repeal of
the DPCO 1979, name1yl72l5e_.’8.l9é7:_:v had no amount
accrued as enVis.age:d’:~iind§elr DPCO 1987, the
first respoiidentiifyhad”if:-noti’e~\{e’:2 issiiieciiito the petitioner a notice
c1aimingl’any=arnount’:_a1._1eged1y.~due or payable by the petitioner.
There_–was no ._arnount’-determined as due or payabie under
.ll’E’a,ragrapli:’7:(12)_.ofltheiiDPCO 1979. However, the first
1 dated 25.9.1987, raised a demand for
1 ii _ Rs.25<i~,_l.O;j58».96, in respect of the bulk drug Refarnpicin as the
11 luaniount determined as intended _proi'%_t made by the petitioner on
— of the difference between the price of Refampicin allowed
in the formulations and the actuai procurement price during the
period 14.1979 to 31.3.1984 and claimed that the amount was
recoverable under the DPCO 1979 mad with the saving clause of
3
14
DPCO 1987. The petitioner, in response, pointed out that the
petitioner had in fact suffered a loss by selling
formulation at prices lower than the notified pric_es__ __tli-ere
could not be said to have any uniritended ,’o_enefitcoiiferredfon the 1′
petitioner. There was no response to its ahfove letter to
effect on 19.10.1987 for over t.wio..y’e~srs. A
16. The petitioner aga.i1n_-upon byfaletter dated
19.5.1990 to deposit the arnount 1 The petitioner had
replied raising ..1Afte’r—-“further exchange of
correspoiideineeiiiiiya on 15.2.1993 and the
petitioner7had– Sil.’£13tl’VIe1.”1’i’,’.,:€,”(1’iii1r”El.__I:i’iit’i1(43F” details. The first respondent
constituted a D”1′.1_g Price ‘and.’ Liabilities Review Committee. The
fconirriitteeoaliied upon the petitioner to make its representation on
1l§’7._i.l’0_._ 1.1995, the petitioner made its submissions
9 if _ before tl1e..’:c()’rnrr1ittee. The next hearing was fixed on 27.5.i996.
1*ilfifhesopetiriioner had submitted its written submissions raising
–.i.’.-several preliminary issues. On the basis of recommendations said
‘Vito have been made by the committee, the petitioner was issued
with a dernarid I30t1C€ calling upon the petitioner to pay
Rs.l9,50,l()’7.50 together with interesgif Rs.31,57,44_l.56. The
petitioner acknowledged the notice and called upon the respondent
to furnish the copy of the report of the committee, which was
furnished to the petitioner on 4.4.1997.
17. The petitioner thereafter had cha1ienged.–At’fie
writ proceedings before this court in 533/ fFi;eiideirna’n.d
was quashed by order dated
remitted for a fresh considerationofiiiie respondern: Ana} a iapse
of four years and six months, th(5’fpetVét’io_ner’was caliedxupon for a
persona} hearing. The pet_itior1erv”_h2{d submissions and
thereafter, by 2iI1:;1:_~i..’¢;'(1éi”‘ €dated:_4′ i”.’2(}06, the petitioner’s
submiss’ions_ –were,’negate’d_:”and the demand of Rs.51,07,549/–
under Parafgraphv Paragraph l7(l.)(a) (i) of the
p_ read”-wvitiiFaragraph E4 of DPCO 1987 read with
Paragraphé’ii2~o:f’ DPCO 1995. It is this order which is under
challenge in’Vtijfie5second of the writ petitions.
‘jShri Udaya Hoila, Senior Advocate appearing on behaif
“=of.t_h’ef_Counsei for the petitioner contends that in the first of these
_peiiitions the impugned demand is iiiegai inasmuch as with the
repeai of the DPCO 1979 — the respondents Iacked the power and
jurisdiction to raise a demand with n=:fe.rence to the same. With
16
the repeal of DPCO 1979 with etfect from 26.8.1987 -~ the
restricted saving provision contained in the DPCO 1987, namely
paragraph 14 couid not be pressed into service.
The said provision reads as foifowszw
” (1) Power to recover dues act:rued”u~n,de,r the.VI)rugs’*(hPriC’e
Control) Order, 1979, into the Drug Prices Eouahlisation’ )_
Notwithstanding anything contain’ed<–.._in this. O1'der,*the.i 'Groyez3nmentd*
may, by notice require the manufacture1jV,9importer idijstrihiutor, as the
case may be, to deposit the"aniounti"whi9ch accrued' on account of
the actions under the D1ugs99"(Pr;ices' 1979, on or before
the commencement vof this.Gi'dei", i7'rices Equalisation
Account and the ?_trtati}:,1facturer, iziiporter',_or 'Ciistrihutor, as the case may
be, shaiiivdepositihtiieysaid.arnount__it!_to_' the said account within such time
as the Government *may9,_speci.fy"in the said notice."
VWQI9. It is ¢1ear,,__that the respondents couid exercise power
only" -if, had accrued, was determined and had been
detnaitded.9u't'id_er:'the DPCO 1979, on or before the commencement
DPC'Qhi.987. Admittediy, no amount had accrued prior to the
DPCO I979. The demand was actuaiiy raised for the
time in 1995, by which time even the DPCO 1987 stood
99 repealed.
3
i7
20. The DPLRC has completely overlooked this
preliminary jurisdictional issue weil other contentions on
merits and was not justified in imposing interest on the.de..rnand
made for a period of 8 years during which time the 1naVtte’r’tté§ias
pending consideration before the coinnriittee. i–l.£?§0li:a
would submit that the petition be allowed_, it I I V l
21.. Insofar as the second petitions Shri
Holla contends that if a it iniirespect of a
formulation — a rnan.ufactL}rer.:i.s::~enltii%;%91 formulation at
or beiow” d’tliea..Vieade:rfV manufacturer sells the
formL1iationsia.t or–bVelo_w_iiti:e:ii£e.atier price it would be ilfogicai for
the Central Gouyernineht to pass an order under Section 7(2)(a) of
.DPCOli9’79ito deposit any amount into the Drug Price
E€3ua3’isativon–i A.ccto1.1-rat.
“22. ,__t1t is3″contended that when the Central Government has
indicatetd or fixed the price of the bulk drug, the Centrai
.’_1Goviernrnent cannot thereafter pass any order for deposit of
“-4,Via’rn.ount into a drug price equaiisation account when the
manufacturer sells the formulation at c beiow the leader price.
_ pDPcoi_i9s7.
E8
It is further contended that when the Central Government
exercises the power under paragraph 7(2)(b) read with
l3(6)(a) of DPCO 1979 and fixed the price of rornji11a«tj_(;tisf
the manufacturer has sold the formulatiyons at or’be1(;xj;z’vthe’wpI’ciceso ” .
fixed the Central Government ceases to have’: power directlithe
petitioners to deposit into the Price Eq11alivs_ati.on”‘Account’VV
under paragraph 7(2)(a) of the
it is contended thatilvvith :i’ep:e2t:l.i§>.fi r)1>Co 1979 with
effect from m;»,;–¢: in the Central
Government to imitigate’acti4ori.fl’o.r’tl1e determination of any liability
under paragraph’ I979. It is pointed out that the
Drug Price l’Equalisat_iol11.l.Account i.tsc1_f has been abolished under
..Fti’IIll’1C’31l’;«,llli:?1_t it is only dues which have accrued under
DPCOlil979.l–V’ii’;3.t}:’> the DPE Account. on account of action taken
‘lea,.,.,.’49l7itnder 1979 on or before the commencement of DPCO
determined m- that cotzid be recovered by the
Government.
23. it is contended that the Government was required to
take into account the d.iffere.nce bejgeen the leader price of the
19
formulation fixed by the Governmeni and the price at which the
petitioner sold those formulations. especially when theflentral.
Government has never indicated to the petitioner,
the bulk drug taken into account while fixing
the formulation.
It is contended that the price.__fixationunder.’the;
is to ensure the availability of prices to the
consumers. The petitioner. objective into
consideration prices below the
leader price; the benefit to the
consumer. this fact while making the
demand. V i i ii
Seri.ior”__Atlvocate places reliance on the following
au;th’oritie_S;~tolsiupport the contentions; that a tax becomes due not
because of a7c_ha’rging Section but because it is ascertained by the
i’._assessi1ig:a;?ithority — State 0_f’Raja.s*rfzrm vs. Ghasilal, AIR 1965 SC
The word “due” means that which is determined under a
‘V statute and not otherwise.
8
20
Similarly, “accrued” means that there has been an
adjudication and a demand. — CLmr0dz’an General cgbflefifvat-nee
Property, New Delhi and (m”mrs vs.
AIR 1957 Punjab 58 and Mal2.en.dc1r I’_rqs;zd Rqrzzmiii he:E£ec’:ioit”
Officer and others, AIR 1976 Orissa
A tax becomes due when “e.n_iétles”the State ‘recover the ‘
same. There necessarily deterrninatlion or an
assessment before it can due. Harshad
Sharztilal Mehtq. 5 SC C I .
Shri the above petitions be
allo wedlas prayeci i * ll
25. ‘Per contra;Alptii-{Counsel for the respondent contends
insofar as the firs-tiof these petitions are concerned — that the
liability the DPE Accounz under paragraph 7(2) read
wiithlparalgrlaphlE’i7tI)(a)(i) of the DPCO 1979 accruesnas and when
“._lh€ proeurenient price of the bulk drug concerned falls below the
price. The liability is linked with occurrence of the event
and not with the process of determination of the quantum of
ii liability. Therefore, it ought to be kept in View that it is not the
Z
date on which notice is issued to discliaifge the liability — on which
the liability arises.
Further, that even after the repeal of DPCO l_.9_:79p_
14 of opco 1987 read with parag1′:1phM3′() and
DPCO i995 read with paragraph 27 ll’1.¢1’€(_lf the
powers of the Government.
26. Insofar as the s,eeorid of”th.e_”wr’i-I,_petitions. isvveoncerned,
it is contended that during was in force
the petitioner wa’s, i_nani.:ifac§tt:.i:ii1g..inarketing formulations
based on maximum sale price of
.indigenoi,1sly inani:faL§tluiie(iiV_bu’lk’drug Rifampicin was notified for
the first tinie.._tin.delr’ 3(1) of DPCO 1979 as per order
i1u98oi.i “Pri.O.I_to this the bulk drug was being imported
iiitothep —and the price of formulations based on the bulk
drtigwas from time to time based on the import price of the
‘ ‘bulk drugiiifampicin.
V order to determine the liability of the petitioner,
particulars had been called for which, according to the
” respondents, was not furnished properly. However, the
@
petitioner’s iiabiiity has been fastened on the basis of information
furnished.
27. it is contended that the buik drug Rifampicinvi~si_iania.nti–
tubercular drug and the forrnuiations based on_.A”ihe
specified in category In of the third schedule. ct itjpeio ii97i9.
terms of paragraph i3 of DPCO
empowered to fix the retail price of such formtiia.t.iens”taeeordinglyV
the leader price of the oniiitheiibuik. drug
Rifampiein was fixed of DPCO 1979
vide order ii:–other years.
the primary question that
arises for coirtsidevrationi.niit’he’ first of these petitions is whether the
“i”«–.respvo_jn:ients were jiust-i-fied in raising; demands in terms of sub-
t_)artiigt”&o:t1«:_7(:5,i}’ r§:f”t.he opco 1979 etc notices dated 27.3.1995 and
thei’eafter._ . i i at 2
Tihere is no dispute that DPCC) I979 stood repealed with
it 26.8.1987. However in the Eight of paragraph .14 of
i DPCO 1987 Whether it cottid be said that the respondent couid
yet raise the demands and whether the DPLRC was justified in
endorsing the aiieged iiabiiity of thegetitioner.
tn.)
DJ
29. To answer the above question we may usefully refer to the
letter of paragraph 7 of the DPCU E979, which is extracted
hereunder for ready reference.
” 7. ?ower to fix retention price and pooled _p1i’ce.ifor”th:e isalenof it
bulk drugs specified in First Schedule Ol’iSCCO:¥:lti Sci1h_pedul*e__i1’1dVi
manufactured as well as imported ~»~ (1) Whereaibu1l{‘drug.VspeCi:lied’ in
the First Schedule or the Second Schedule ‘-r_nanufactured.i’
indigenously and is also imported, the”(¥_o\*ei’n111en’t having regard
to the sale prices prevai_ling fromdt-imeyntoy time “in respect of
indigenously manufactured bulk idrugvs, _.yl:s’~yv””.t)rcler, fix with such
adjustments as the 4Gox;_ernrr1enitV’1i.1a:y consider V-necessary;
(a) Vflrnanufacturers, importers, or
(b) a pooledltprice fo1=:tl”ie::s’ale or such bulk drugs.
(2) ~W.here V-an Vrrianuifacttirer of l’o1’mulations utilises in his
iriorrntileattions a11yi’lju’i’kv drug, either from his own production or
‘ ujiarocurled from any other source, the price of such bulk drug
2 “t§emg;”l5v.z¢r’~i,th§i11 the price allowed to him in the price of his
t’o.rmL;_lation’si the Government may require such manufacture:
(a) “to__AEleposit into the Drug Prices Equalisation Account referred
A to in paragraph 17 oil’ the 6XC€:.\’s’ amount to be deterrniried by
the Government; or
(b) to sell the formulations at such prices as may be fixed by the
3 ‘m
Governrnent.”
30. From a plain reading ofthc above it is ciear that there is
an obligation on the petitioner to deposit into the
Equalisation Account the excess amount detertriined:”b’y’r :ti’:et’».
Government. There is no dispuEe~”‘t’ha-t«.th’ere_t.waS_ no..i’.VSti’c.h 9
determination before the repealppof ‘In
event it cannot be said that tithe”»respot1d§nt9i.’.=could” invoke’
paragraph 14 of the DPCiQV~._19E§7.”‘toi terms of
paragraph 7 of It is to be also
noted that it is _1’ec’ord, had “aliowed”
various fixing the price of
forrnulations drug Hence there is no merit
in the ciefer1c_e”souightito “bei1;raised by the respondents and hence
V. A_ the petition oughtto. s__L__1_eceed .
as the second of the petitions is concerned the
qaestion t_ha’te~”ari:ses for consideration is W whether, in the absence
“-of the firs_t’i~respondent having fixed or notified at price in respect of
drug Rifampicin tilt 27.10.1986, it was open for the first
reapondent to claim the difference between the price of
Rifampicin allowed in the formulations and the import or
procurement price during the period E/1.1979 to 31.3.1984, under
paragraph 7(2) of the DPCO 1979. It is admitted by the
respondent that the price. of indigenotisly manufactured,bal.l{d_rug
Rifampicin was notified for the first time
However, it is sought to be contended_that__the imflportipricey the’
buik drug fixed from time to time in the
27.10.1986 could be taken into ‘account, fixinpgl t.he’:~–1ea’derl price” 1
of the formulations madevfrom the”s’a–%.d’bltil’I<_.drug 'As wit is an anti-
tubercular drug and falls ulndei.' lc'ategior.y5l-Ilia.of_w__Schedule HI and
therefore the Go~vet:np:r}tent;=__is em~powe'i'eld- ..tVo__fj"ilx the leader price in
terms of paral;r3Frap:li':1::°ih(lti') of 979.
32.lWThe ._resp<)ndex1t that there was no need for
notifying: the pi'ocurei*nen't price of the bulk drug allowed in fixing
1 1 theV1eade§v"priee__of forrhalations plepared out of the bulk drug as it
was¥'_'oeiit';gj"'–i.ntported prior to 1986, is not a contention that is
V _ supported._':by'v"any legal provision. No such presumption arises
readling of the. Scheme of the DPCO 1979. The respondent
setfhiag to read paragraph 13(6) of the DPCO 1979 in isolation to
l"gtrace the power of the Government to fix the leader price of a
formulation falling under Category 111 of Schedule 111 does not
meet the requirement of the price 0 ' he bulk drug being notified —
26
even if imported. No such presumption that the price of the bulk
drug ought to be taken as the price at which it is imp0rtedVhe_”taa_1(en
into account in the petitioner proceeding to find i_t:?__nt%v’1if&–llege_ti
liability. p
33. In the absence of any detei’«min_atit§n bf
the petitioner in terms of the ._E>979f”prior.Vtd.:ité’~-:re’p’eal «~»~ no”
liability can be fastenedzpn the””‘peVtitit5’r;.er 0ni’ti’1e*Strength of
paragraph E4 of the D?CO’–1#9′:.8’7 ii
Accordinglguthe tn he allowed.
Thein/i*iAt:iiipetiltififiis jinjwpiziériitis/2005 and WR9463/2006
are herehy « a’l.i’0y\Vred,_ . i “-~ l
j.Annexnures:v’f’Si’V,.’Az5i; CC and DD in WP.261l8/2005 are
fl’.V.i’VhCf¢\EyV.qfi§§béd1,, lllll
M and HH in WP 9463/2006 are hereby
_ quasil*ied_..,,’:. ‘
” :.__Orld’ered accordingly.
Sd/-
JUDGE
VEV