WP(C) 8123/2008 Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment reserved on: 17.04.2009 Judgment pronounced on: 01.07.2009 + W.P. (C) 8123/2008 SYNGENTA INDIA LTD. ..... PETITIONER Through: Mr. Raju Ramachandran, Sr. Advocate with Ms. Ruchi Agnihotri Mahajan and Ms. Anushree Tripathi, Advocates versus UNION OF INDIA ..... RESPONDENT Through: Mr. K. K. Sharma, Advocate for Resp. Nos.1 & 2. Mr. Laliet Kumar and Mr. Santosh Sharma, Advocates for Resp. No.3. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT 1. Whether the Reporters of local papers Yes may be allowed to see the judgment? 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be Yes reported in the Digest? Hon’ble Mr. Justice S. Ravindra Bhat 1. The petitioner, in these proceedings, under Article 226 of the Constitution of India, impugns the decision of the Union Department of Agriculture, dated 5-11-2008, rejecting its appeal under Section 10 of the Insecticides Act, 1968 (“the Act”) against the decision of the Registration Committee to granting for Emamectin Benzoate 5% SG to the third respondent, (hereafter “Jaishree”) in its 293rd meeting held o 26.09.2008. 2. The facts necessary for deciding the case are that with the Act was brought into force with express the object of regulating the import, manufacture, sale, transport, distribution and use of insecticides with a view to prevent risk to human beings or animals, WP(C) 8123/2008 Page 2 and for matters connected with it. Any prospective manufacturer or importer of any insecticide/pesticide in India is primarily governed by the regime of this Act. One of the areas of focus of the Act, is on import of insecticides and formulations, which it strives to regulate; the concern is enforcement of restrictions on rampant import of chemicals. The Act delegates the function to scrutinize, examine and analyze insecticides to the Registration Committee (“the Committee”, Respondent No.2 in this case). Section 5 enacts for the constitution and functions of the committee, for enabling registration of insecticides on the receipt of applications, after enquiring into the safety and efficacy of the product (Section 5 (1)). Rule 4 of the Insecticide Rules (hereafter “the Rules”) elaborates on the functions of the Committee. Under Section 5 (5), the committee regulates its procedure and conduct of business, including the grant of registrations to parties desirous of importing or manufacturing insecticides, for which purpose it has formulated guidelines. It has apparently issued a check List specifying the various parameters on which data is required to be submitted by an applicant along with its Application for Registration. 3. Part B and C of the Checklist prescribe submission of data in respect of “Bio Efficacy and Residues” and “Toxicity”. Form I of Schedule I under Rule 6 of the Rules provides the necessary contents of an Application seeking Registration of an insecticide. Clause 5 in Form I requires full disclosure of source of supply of the insecticide/chemical and its chemical composition, etc. Clauses 7 & 8 prescribe complete submission of data (as per details specified by RC) on Toxicity (interaction with soil, plant, animals and humans) and bio efficacy. All these, contends the petitioner, reveal that complete disclosure of information about an insecticide’s source as well as the submission of data are essential pre-requisites to be fulfilled by an Applicant before its request for registration. 4. Section 9 of the Act, relevant for the purpose of this case, provides for three kinds of registrations. The first, i.e provisional registration (Section 9 (3-B)) –is granted to an applicant for a period of two years when an insecticide is introduced for the first time in India. It can be granted pending an enquiry. It is contended that this provision pre- supposes insufficiency of examination of the data by the committee; a registration under Section 9 (3B) is also granted in the event of agricultural exigencies, e.g. outbreak of an epidemic, etc. that may require taking emergency measures. The second category is regular registration, under Section 9 (3) – which is – granted only after submission of complete data WP(C) 8123/2008 Page 3 by an applicant. The committee conducts a full and in-depth study of the data and has to ensure itself of the efficacy, toxicity and safety (for humans and other animals) of the insecticide before granting registration. The third category, under Section 9 (4) is popularly known as a “Me Too” registration; it is on same conditions – and is only granted when there already exists a registration under S. 9 (3) for a particular Insecticide. In such circumstances, any second or other person desiring to import or manufacture the insecticide can be granted registration on exactly the same conditions on which the insecticide was originally registered under S. 9 (3). The petitioner contends that these “same” conditions necessarily mean and include the source of import also. It is stated that three kinds of certificates are granted under Section 9 (3-B), i.e. ‘TIT’, ‘TIM’, and ‘FIM’ categories. The “TIT” signifies a New source; this and the FIT category applications can be made only under Section 9 (4) and not under Section 9 (3-B). The registration certificate under ‘TIT (New Source)’ category can only be given where there is a prior registration of the Technical i.e. ‘active ingredient’ in place. It is contended that the registration for the technical (i.e. active ingredient) of a particular Formulation granted under Section 9 (3) of the Act brings the data submitted by the registrant (for the said Insecticide) into the public domain and the Registrant, thereafter, loses its exclusivity in respect of the said data. It is therefore argued that though registration is necessary (as no import or manufacturing licence, excise or customs approval, can be obtained without registration of the insecticide in favour of a party) it also destroys the exclusive rights which the registrant possesses for the data it has generated. 5. The petitioner alludes, in some detail, about vulnerability resulting from data disclosure, in the absence of a protection regime, and its utilization by applicants for the same product, for the purpose of their claim to registration. It is contended that the value in data protection is that it is the basis for the application (for registration) about the source, the raw materials, the nature of production of the insecticide, etc. Unless some measure of protection is afforded, the “data originator” would do all the toil and the “me too” applicant would reap the rewards. It is claimed that Article 39.3 of the TRIPS mandates protection for WP(C) 8123/2008 Page 4 the test data submitted by the pharmaceutical and agro-chemical industries for market approval. It sets the minimum stands in this regard and reads: “Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure except where necessary to protect the public, or unless steps are taken to ensure the data are protected against unfair commercial use.” 6. The petitioner argues that Article 39.3 of TRIPS, clearly recommends that protection be accorded to the data submitted by an Originator, against unfair commercial use and disclosure, meaning thereby that a Statutory Authority (in this case the Committee) cannot rely on the data submitted by the Originator for approving the second and subsequent applications for the same insecticide. This protection and data exclusivity, however, would be for a limited period and not in perpetuity. The petitioner also alludes to a “Reddy Committee” report, dated 31.05.2007 that endorses TRIPS’ recommendations concluding that the Act and the Rules should be amended to ensure that undisclosed test data of the originator is not put to unfair commercial use by others. 7. It is submitted that the Report’s recommendations and due to pressure from the indigenous lobby, the first Respondent issued a Directive dated 30.10.2007 in respect of “FIT” (Import of Formulation) registrations. The Directive introduced the concept of deemed registration of “Technical” i.e. in the category of ‘FIT’ i.e. where formulation of a technical was registered and was being imported, the technical for the said Insecticide would also be deemed to be registered without a separate application for it. It was reiterated that there would be complete submission of data in respect of the “technical” even at the time that a registration was sought for the formulation. To grant some measure of protection to the data originators, the Directive also stated that this registration of “technical” would come into force and would take effect after three years from the date of registration of the formulation without a separate application. It is submitted that this amounted to enforcement of an extremely limited period of data protection as opposed to the previously unlimited data protection being enjoyed by registrants in the category of FIT (import of Formulation). The directive, it is submitted, was effectuated through guidelines WP(C) 8123/2008 Page 5 dated 30.10.2007 framed by the Committee on 13.12.2007. These according to the petitioner, made amply clear that the data on “Technical” must be complete while submitting an Application for registration of formulation. 8. In 2003 the petitioner filed application for registration under Section 9 (3) for import of technical (TIT) sourced from its parent factory in Switzerland, and for indigenous manufacture of formulation (FIM) for the insecticide, Emamectin Benzoate 5 % Soluble Granules (“Emamectin 5% SG”). The committee noted that its (the petitioenrs’) data was incomplete on various parameters like toxicity and bio-efficacy, in its meeting held on 2.7.2004. The petitioner, therefore, could not be granted a registration under Section 9 (3). The petitioner, however, was in the meanwhile, asked by the committee to convert its application to one under Section 9(3-B), on account of an infestation of cotton crop by bollworm at the relevant time, as Emamectin is known to be effective in controlling such infestation Thus, a decision was taken by the Respondent No.2 to grant a provisional registration under Section 9 (3B) of the Act to the petitioner in the same categories of TIT (Import of Technical) and FIM (Indigenous Manufacture of Formulation). Accordingly, on 21.7.2004, certificates for provisional registration valid till 20.7.2006 were granted to the Petitioner in the categories of TIT and FIM under S.9 (3B), for Emamectin 5% SG. This provisional registration permitted commercialization of the insecticide (since the grant of provisional registration was only because of the demand expressed by the State Governments); but was subject to a limit of a total quantity of 5 (five) Metric Tonnes of Technical Emamectin permitted to the Petitioner during the period of 2 years. It is stated that from this 5 MT was indigenously manufactured by the Petitioner about 100 MT of formulation, and used it for commercialization as well as compilation and generation of exhaustive data. 9. The petitioner states that its provisional registrations in the categories of TIT and FIM lapsed on 20.07.2006. By that time it claims to have collated and completed its deficient data. On 11.09.2006, it applied afresh under Section 9 (3) of the Act in the category FIT (Import of Formulation). On 24.7.2007, the petitioner was granted registration under Section 9 (3) of the Act in the category of FIT (Import of Formulation). It is claimed that as on that day, i.e 24.7.2007, there was no registration of the technical Emamectin, since the previous registration for technical (active ingredient) Emamectin granted on 21.07.04 was WP(C) 8123/2008 Page 6 not under Section 9(3) but under Section 9(3B) of the Act, was provisional and based on insufficient data. On 27.07.2007, Jaishree applied for a registration in the categories of “TIT” (Import of Technical) and “FIM” (Indigenous Manufacture of Formulation) for Emamectin 5% SG under Section 9(3-B) of the Act. The petitioner alleges that the said application sought a grant of provisional Registration under Section 9(3B) of the Act since Jaishree’s data was incomplete and insufficient for grant of a Section 9(3) of the Act. Reliance is placed on the minutes of the 278th Meeting of the committee, held on 27.07.2007. 10. It is submitted that the committee directed Jaishree to apply under Section 9(3), instead of under Section 9(3B) of the Act. On 27.07.2007, itself, Jaishree requested the Committee to convert its Section 9(3B) Application to one under Section 9(3) of the Act and grant it registration in the category of “TIT” (New Source) by placing reliance on the data already submitted by the Petitioner. It is argued that Jaishree also requested for framing and issuance of necessary guidelines by the committee, to accord propriety to the grant of such registration in its favour. Jaishree, says the petitioner, intended importation of the insecticide (technical Emamectin) from a completely new and distinct source i.e. China, which was different from the Petitioner’s source i.e. Switzerland. 11. It is submitted that the Directive dated 30.10.2007 and Guidelines dated 13.12.2007, could not aid Jaishree’s application since the Petitioner’s technical Emamectin would only be deemed be registered with effect from 24.07.2010, after lapse of three years of initial registration, i.e 24.07.2007. In this background, on 18.2.2008, a Clarification to the directive dated 30.10.2007, was issued by the first respondent, through an Office Memorandum. This had the effect of deeming that the Petitioner’s registration for technical Emamectin could be said to have come into effect on 21.07.2007 (3 years from the date of grant of provisional registration i.e. 21.07.2004). Thus, the registration fo the “technical” of the Petitioner, in terms of this OM would actually come into effect 3 days prior to the actual grant of registration to the Petitioner’s Formulation (Emamectin Benzoate 5%SG) in the category of “FIT”. It is submitted that this Memorandum, dated 18-2-2008 was considered and acted upon by the committee, in its 293rd Meeting held on 26.09.08 when it granted registration to Jaishree under Section 9(3) of the Act. WP(C) 8123/2008 Page 7 12. The Petitioner opposed the grant of registration to Jaishree, which it (the petitioner) contends relied on its data, through a written representation. It later appealed under Section 10 of the Act to the Central Government, i.e the appellate authority highlighting the irregularity in granting the registration to Jaishree, based on insufficient and truncated data. The impugned Office Memorandum, dated 18.02.08 was also challenged. 13. The Central Government, by its impugned order dated 5-11-2008, rejected the petitioner’s appeal, and observed that: “M/s Syngenta India Limited (M/s Syngenta) have appealed against grant of registration to M/s Jaishree Agro Industries Ltd. (M/s Jaishree). They have mentioned that the Government had agreed to provide three years freeze on data submitted by the applicants for formulation import under Section 9(3) of the Act; that there is no technical Emamectin registered in the country under Section 9(3) as of how; that in terms of the policy enunciated in 284th meeting of the Registration Committee, the technical would be deemed to be registered after three years form the date of formulation import; that as Emamectin Benzoate 5% SG formulation for import was registered in their favour on 26.07.2007, the technical can be deemed tobe registered only after 3 years; that the grant of registration for technical to M/s Jaishree presumes registration of technical prematurely before the expiry of 3 years; that registration for import of technical from alternate source has been granted to M/s Jaishree based on truncated data requirement; that as per guidelines for registration the registrant under section 9(3) is required to submit the complete data on its own which should be applicable for M/s Jaishree also who have relied on data furnished by M/s Syngenta instead as implied in their presentation made in the 278th meeting of the Registration Committee; that policy guidelines should be applicable prospectively and not retrospectively; that the decision of the Registration Committee taken in its 293rd meeting is contrary to the decision taken on 284th meeting; that equating registration under section 9(3) with registration under section 9(3B) for computing the 3 year period for effecting deemed registration of technical in contrary to the earlier decision and is arbitrary and illegal; that their provisional registration for Emamectin Benzoate under section 9(3B) which expired on 20.07.2006 was restricted to import of 5 MT of technical grade material to deal with exigency of bollworm infestation in cotton at the request of State Governments; that the impugned decisions taken on 293rd meeting may be stayed till the matter is decided; that the impugned decision of 293rd meeting (agenda items 6.5 and 3.7) be quashed. In the hearing held on 04.11.2008, the representatives of M/s Syngenta elaborated on these points and also asserted that the letter dated 18.02.2008 of the Government was for formulations for import and not for indigenous manufacture and therefore the registration issued in 2004 for indigenous manufacture of the formulation to them did not come under its purview. The Secretary, CIB&RC, vide letter no.13-29/2008-CIR.I dated 30.10.2008, has questioned the locus standi of M/s Syngenta in the matter of grant of registration to another applicant as the matter is between the Registration Committee and another WP(C) 8123/2008 Page 8 applicant. It has been stated that as per the directive of the Department of Agriculture & Cooperation dated 18.02.2008, the period of deemed registration is to be computed from the date of registration with commercialization under section 9(3B), i.e. from 21.07.2004. The registration to M/s Jai shree, who have submitted requisite data under the relevant guidelines, has been granted as per the policy of the Government and the guidelines of the Registration Committee. The provisional registration was granted to M/s Syngenta in 2004 at their own request. In view of these averments, the appeal is liable to be set aside. These points were further elaborated by Secretary, CIB&RC in the hearing on 04.11.2008. Section 10 of the Act provides that “Any person aggrieved by the decision of the Registration Committee under section 9 may, within a period of 30 days from the date on which the decision is communicated to him, appeal in the prescribed manner…” M/s Syngenta, already holding a registration of the insecticide in question, are an interested party in the matter. It would be too narrow an interpretation if the scope of section 10 is confined to the applicant/registrant alone. The decision of the Registration Committee are in public domain and are displayed on the internet. It would not be fair to deny any person a change to appeal against a decision of the Registration Committee if he is aggrieved by that decision, provided the person has a clear interest in the decision. Coming to the issues raised in the appeal, it is noted that the Government has been issuing directives from time to time for proper enforcement of the Insecticides Act, 1968 and the rules made thereunder, and in doing so it has been taking into account the views of the different sections of the pesticides industry. The letter dated 30.10.2007, issued in view of the instances where formulation had been registered for import without registration of technical under section 9(3) thus blocking registration under section 9(4) and created a monopolistic situation, also took into account the industry’s concern to allow data protection for 3 years till suitable legislative changes are made. The letter dated 18.02.2008 included the category of registration under section 9(3B) with commercialization in this dispensation with a view to remove the perverse tendency to continue with provisional 9(3B) registration with commercialization, thereby creating monopolistic situation. The data protection for 3 years is available to his category also. It would also be disingenuous to make a distinction between registration of formulation for import and registration of formulation for indigenous manufacture for this purpose as indefinite protection in either case would have the same consequence, i.e. existence of a monopolistic situation. Application received for grant of registration for the same product from any other source thereafter is treated under the category of new source and the data requirements for that category apply which have been met by M/s Jaishree. The registration under section 9(3B) with commercialization was granted to M/s Syngenta at their own request in 2004. The Registration Committee has taken the decision in question (agenda items 6.5 and 3.7) in its 293rd meeting in line with the policy laid down by the Government. As such there is no reason to interfere with these decisions. The appeal is, therefore, dismissed. WP(C) 8123/2008 Page 9 14. The petitioner argues that the statutory intention is to ensure that insecticides approved for registration are safe, non-toxic and efficacious. These parameters can be verified only upon disclosure of comprehensive materials and data and its review in accordance with the parameters prescribed by the Committee. Any import or manufacture of insecticides is preceded by mandatory registration under the Act. In this context, it is submitted that the three classes of registration under Section 9 presuppose that the intending manufacturer or importer should disclose most comprehensively the technical specifications under Section 9 (3). However, such disclosure is unnecessary under Section 9(3B) because it is granted for a limited period and subject to restrictions. The last category i.e. Section 9 (4) on the other hand rides “piggyback” upon a registered insecticide. 15. It is submitted that insecticides are comprised of active ingredients which are termed technical that, after additives results in formulations. Whatever be the category in which a registration is sought i.e. TIT (import of technical); FIT (import of formulation); FIM (indigenous manufacture of formulation) and TIM (indigenous manufacture of technical), complete data on the technical or active ingredients of insecticide are submitted. The petitioner argues that the registration of active ingredients i.e. technical of insecticide results in the data disclosure in the public domain. This in turn implies that reliance can be placed upon it by the Committee and other applicants for registration. The registration of the “technical” resulting led to a demand for protection in accordance with Article 39.2 of TRIPS. After detailed consideration, a report was prepared and with the object of balancing the demands of indigenous manufacturers clamoring for registration of technical immediately on the issuance of the certificate itself. A balance struck by the authorities is guidelines contained in the directive dated 30.10.2007. This directive stated that the technical i.e. active ingredients of any insecticide, in the event of registration, would be deemed registered only three years after the registration of the formulation. Effectively three years’ data exclusivity and protection was granted to those who applied with complete specifications of the technical as well as formulation and upon registration of their insecticides under Section 9 (3). 16. It is submitted that the protection afforded by the guidelines dated 30.10.2007 recognized that first application under Section 9 (3) seeking to manufacture insecticide or more particularly import the insecticide not used in India so far are constrained to make full WP(C) 8123/2008 Page 10 disclosure. Such data is compiled after investing and expending substantial amounts of money and resources, as well as time. Unprotected by any regulatory regime, the disclosure of such data can be exploited by a subsequent applicant, which merely would rely upon it. Feeling the need to assure applicants seeking registration of insecticide for the first time and in accordance with the commitment made under Article 39.3 of TRIPS, the directive of 30.10.2007, clarified that once registration is granted, the technical is deemed to be registered only three years after the first date of registration under Section 9 (3). Having applied its mind and granted such protection based on a reasonable assessment of all the circumstances, there was no warrant or necessity to cut down its application by the subsequent impugned Office Memorandum dated 18.2.2008. In this regard, it is contended that though termed a clarification, the subsequent impugned order cut down the effect and virtually took away the benefit granted by the previous Memorandum dated 30.10.2007. 17. It is submitted that having conferred advantage by the guidelines of 30.10.2007 during the currency of the petitioner’s registration under Section 9 (3),