IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWELFTH DAY OF DECEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE L.NARASIMHA REDDY WRIT PETITION NO : 17695 of 2008 Between: ESPI Industries & Chemicals P.Ltd., a company incorporated under the Provisions of the Companies Act 1956, having its registered office at 7-102/25, Sai Enclave colony, Habsiguda, Hyderabad-500007, rep.by its Director Sri J.N.Sastry ..... PETITIONER AND 1 Union of India., rep.by the Secretary, Ministry of Chemicals & Fertilizers, Government of India., New Delhi 2 The National Pharmaceutical Pricing Authority, Department of Chemicals & Petro-Chemicals Ministry of Chemicals And Fertilizers, Government of India, New Delhi .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ order or direction in the nature of Certiorari or otherwise calling for the records and papers pertaining to the impugned letter/order dated 14/15th November 2007 10/19th December 2007, 13th February 2008 and 20/30th June 2008 (ANNEXURES V ,VII,XI,AND XVI) from the file of the 2nd respondent herein and declare the demand of the Respondent No.2 for payment of Rs.2,07,88.847/- together with interest thereon at Rs.58,44612/- based on the order 7th Februaru 2006 Order (ANNEXURE-I) is illegal, and null and void unjust, and against principles of natural justice and contrary to the provisions of the DPCO 95 and as such forbear the Respondents from enforcing the order for collecting the above amount from the petitioner. Counsel for the Petitioner:MR.MPAPA REDDY Counsel for the Respondent No.: MR.DEEPAK BHATTACHARJEE The Court made the following : ORDER: The petitioner is a manufacturer of drugs of different description. In exercise of its power under the Drugs (Price Control) Order 1995 (for short ‘the Control Order’), the Union of India in the Ministry of Chemicals and Fertilizers, the first respondent, issues notifications from time to time stipulating the price for the drugs, which are treated as essential. The object is to maintain the price structure for such of the drugs as are brought within the purview of the Control Order. One such Order was issued on 07.02.2006 in respect of what are known as “Multivitamins and Mineral Tablets and Multivitamins and Mineral Capsules”. The content of the formulation is mentioned in the notification, apart from indicating the combinations. The price of the tablet, which falls within the purview of the notification, is stipulated at Rs.7.02 paise. The petitioner manufactures a drug known as “Rediplex Tablets”. According to the petitioner, Rediplex is not a vitamin tablet and it is mostly anti- coagulant. The price of each tablet is fixed at Rs.26.19 paise. Through a notice, dated 14.12.2006, the first respondent took the view that the petitioner has violated the stipulation under the notification and required the petitioner to deposit the amount collected from consumers, in excess of the prescribed price, quantified at about Rs.2 crores. The petitioner submitted representations one after the other, denying its liability to pay the said amount. It secured experts’ opinion from various agencies and made a representation to the respondents stating that the Rediplex is not covered by the notification. The demands were being repeated and the contention of the petitioner was rejected vide letter, dated 20.06.2008. This Writ Petition is filed with a prayer to declare the action of the respondents in demanding a sum of Rs.2,07,88,847, as illegal and arbitrary. The respondents filed a counter-affidavit denying the allegations of the petitioner. It is stated that the contents of the drugs were found to be predominantly vitamin formulations, and in that view of the matter, it is covered by the notification. It is also stated that the expert body has examined the matter, in detail, with reference to the contents of formulation and no interference is warranted. Sri S.R.Ashok, learned Senior Counsel appearing for the petitioner, submits that the Rediplex manufactured by the petitioner is an anti-coagulant. According to him, though traces of vitamin are also found in the drug, it cannot be brought within the purview of the notification. He contends that the experts have categorically opined that the drug manufactured by the petitioner is not covered by the notification. He further submits that in none of the orders, issued from time to time, by the respondents, they have adverted to the experts’ opinion. Sri Deepak Battacharjee, learned Standing Counsel for the Central Government, on the other hand, submits that the object of issuing notifications is only to ensure that essential drugs are available to the needy public at an affordable cost and that the petitioner has violated the same by selling the drug at a higher price. He submits that the demand was made from the petitioner, only after finding that the drug is covered by the notification. It is the prerogative of the Union Government to issue notifications in exercise of power under the Control Order in respect of drugs, which are found to be essential and needed for common use. The second respondent is conferred with the power to prescribe the price of the drugs so identified. The notification is very elaborate in its content and apart from enlisting 32 formulations, it also mentioned the contents of the medicines brought under its control. A residuary clause is contained in the notice. Learned Senior Counsel submits that the residuary clause needs to be interpreted by taking into account the characteristics of the drugs that are already mentioned in the notification. On its part, the petitioner has obtained an opinion from the Principal of Bombay College of Pharmacy and another opinion from Professor Nitya Gogtay. Though the respondents have examined the claim made by the petitioner, that the drug manufactured by it is not covered by notification, in none of the proceedings the opinions of the experts were discussed. Examination of the experts’ opinion becomes necessary, in view of the fact that no appeal or other remedy is provided for, under the Control Order. The review provided under it is only limited in its scope, namely, for variation of price structure in respect of a drug, which undisputedly falls within the ambit of notification. In view of the fact that serious financial implications are involved, this Court is of the view that respondents 1 and 2 have to examine the matter afresh, with reference to the experts’ opinion made available by the petitioner. Hence, the Writ Petition is disposed of, directing that: a) it shall be open to the petitioner to submit copies of experts’ opinion or any other material in support of its claim that the tablet Rediplex is not covered by the notification, within a period of two weeks from today; b) respondents 1 and 2 shall pass orders on the representation so made within a period of four weeks on receipt thereof; and c) till the exercise indicated above is undertaken, the respondents shall not take any coercive steps against the petitioner, to recover the demanded amount. There shall be no order as to costs. _______________________ L.NARASIMHA REDDY, J Dated:12.12.2008 GJ