IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.BALAKRISHNAN NAIR & THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN THURSDAY, THE 25TH MARCH 2010 / 4TH CHAITHRA 1932 WP(C).No. 38494 of 2003(Y) ---------------------------------------- PETITIONER(S): ------------------------ 1. QUALIFIED PRIVATE MEDICAL PRACTITIONERS' ASSOCIATION, REPRESENTED BY ITS SECRETARY, DR.N.MADHU M.S., VALLAMATTOM BUILDING, KOCHI-682 015 2. DR.BABU VASUDEVAN, DIRECTOR, P.N.V.M.HOSPITAL, BANERJEE ROAD, ERNAKULAM, KOCHI-18. 3. DR.T.A. ABDUL JALEEL, MANAGING PARTNER, SUBURBAN HOSPITAL, PALARIVATTOM, KOCHI-682 025. 4. DR.MUHAMMAD BABU, DR. KUNHALU'S NURSING HOME, T.D.ROAD, ERNAKULAM, KOCHI-682 011. 5. DR.K. BHARATHAN, VIJAYAKUMARA MENON HOSPITAL, TRIPUNITHURA- 682 301. 6. DR.V.V. HARIDAS, CHIEF MEDICAL OFFICER, K.V.M.HOSPITAL, CHERTHALA-688 524, ALAPPUZHA DISTRICT. BY ADV. MR.EASWARAN. RESPONDENT(S): -------------------------- 1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM 2. UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF HEALTH, NEW DELHI-110 001 WP(C) NO. 38494/2003-G 3. THE DRUGS CONTROLLER, THIRUVANANTHAPURAM. * ADDL. R4 IMPLEADED ADDL.R4: KERALA STATE PHARMACY COUNCIL, THIRUVANANTHAPURAM, REPRESENTED BY ITS REGISTRAR. * IS IMPLEADED AS ADDITIONAL 4TH RESPONDENT AS PER ORDER DATED 12/12/2007 IN I.A.NO.16013/2007. R2 BY ADV. MR.T.P.M. IBRAHIM KHAN, ASST. SG. OF INDIA, MR.E.S.MUHAMMED KABIR, ADD.CGSC, MR.ABRAHAM THOMAS, CGC. R1 & R3 BY GOVERNMENT PLEADER MR.BENNY GERVACIS. ADDL. R4 BY MR.S.GOPAKUMARAN NAIR, SENIOR ADVOCATE, ADV. MR.M.CHANDRA BOSE. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/03/2010, ALONG WITH WP(C) NO. 3016 OF 2004 AND WP(C) NO.23733 OF 2007,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 38494/2003-G APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE PROCEEDINGS NO.DL6.16001/90/DC DATED 6TH DECEMBER, 1990 ISSUED BY THE 3RD RESPONDENT EXT.P2: COPY OF THE JUDGMENT DATED 8TH AUGUST, 1991 IN O.P. NO. 2179 OF 1991. EXT.P3: COPY OF THE PROCEEDINGS NO.L.17323/94/DC DATED 17/03/1995 ISSUED BY THE 3RD RESPONDENT. EXT.P4: COPY OF THE ORDER DATED 8TH OCTOBER, 2003 IN CIVIL APPEAL NO.8216 OF 2001 OF THE HONOURABLE SUPREME COURT. RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.S. TO JUDGE rs. C.R. K.BALAKRISHNAN NAIR & P.N.RAVINDRAN, JJ. ---------------------------------------- W.P(C)Nos.38494 of 2003, 3016 of 2004 & 23733 of 2007 ---------------------------------------- Dated 25th March, 2010 JUDGMENT Balakrishnan Nair, J. W.P.(C)No.38494 of 2003 The first petitioner is an Association of Qualified Private Medical Practitioners. Petitioners 2 to 6 are its members. The members of the first petitioner are running private hospitals/nursing homes. The grievance raised in this Writ Petition is concerning the insistence of the third respondent that the petitioners' hospitals should take out licence for dispensing medicines/drugs. 2. The brief facts of the case are the following. The manufacture and sale of drugs and cosmetics in India are governed by the Drugs and Cosmetics Act, 1940 (hereinafter referred to as `the Act'). Under section 18(c) of the Act, for sale of drugs, it is mandatory to obtain licence from the competent authority. The Central Government have been authorised by the Act to frame rules, granting exemption from various provisions of the Act in Chapter IV thereof subject to appropriate conditions. Section 18(c) comes under the said Chapter. The Central Government have framed Drugs and Cosmetics Rules, 1945, invoking its power under the provisions of the WP(C).No.38494/2003 & connection 2 Act. Rule 123 of the Drugs and Cosmetics Rules, 1945, deals with the exemption. The said rule states that the drugs specified in Schedule `K' shall be exempted from the provisions of Chapter IV of the Act and the Rules made thereunder, to the extent and subject to the conditions specified in that schedule. Item 5 of Schedule `K' exempts drugs supplied by a registered medical practitioner to his own patient or any drug specified in Schedule C supplied by a registered medical practitioner, at the request of another such medical practitioner, if it is specifically prepared with reference to the condition and for the use of an individual patient. The said item also specifies the conditions, subject to which the exemption is granted. Item 5A exempts drugs supplied by a hospital or dispensary maintained or supported by the Government or local body. The petitioners claim that they should also be included under the purview of item 5A of Schedule `K' of the aforementioned Rules. 3. When the local Drug Inspectors started inspecting their hospitals and pressed the petitioners to take licence, they moved the Government by filing a representation before the Hon'ble Chief Minister, on 27.10.1990. The said representation was forwarded by the Government to the third respondent. The third respondent replied to the first petitioner, by issuing Ext.P1 communication dated 6.12.1990. The first petitioner was informed that its members are not WP(C).No.38494/2003 & connection 3 exempted from the liability to take licence. That order was challenged before this Court, by filing O.P.No.2179 of 1991. The said Original Petition was disposed of by Ext.P2 judgment. This Court directed the Government to consider the matter, as undertaken by the learned Government Pleader. Later, the Government rejected the claim of the petitioners and the Drugs Controller granted time to the members of the first petitioner up to 30.4.1995 to take licence. This is evident from Ext.P3 communication issued by the third respondent to the Secretary of All Kerala Chemists & Druggists Association. By Ext.P3, the Secretary of All Kerala Chemists & Druggists Association was advised to inform its members to quote the Drug Licence numbers of the hospitals in the invoice/bills issued for supply of medicines/drugs. The petitioners challenged Ext.P3 before this Court. The said challenge was repelled by a Division Bench of this Court, by the decision reported in Thomas v. Union of India (2000 (2) KLT 459). Though the Original Petitions were dismissed, certain directions adverse to the Government were also issued in that judgment. So, both sides appealed before the Supreme Court, challenging the said decision. The Apex Court, by Ext.P4 order permitted to withdraw the Writ Petitions, with liberty to file fresh Writ Petitions, with proper pleadings. In the light of Ext.P4, the present Writ Petition is filed, seeking the following reliefs: WP(C).No.38494/2003 & connection 4 “a) issue a writ of mandamus or other appropriate writs, directions or orders declaring that the petitioners are not obliged to take out a drug licence under Section 18(c) of the Drugs and Cosmetics Act, 1940 and the Rules framed thereunder; b) issue writ of mandamus or other appropriate writs, directions or orders declaring that the petitioners are exempted under Rule 123 of the Drugs and Cosmetics Rules, 1945 and Schedule K to the said Rules from the provisions of Chapter IV of the Drugs and Cosmetics Act, 1940; c) issue a writ of mandamus or other appropriate writs, directions or orders declaring that the provisions of Item 5 and 5A of Schedule K to the Drugs and Cosmetics Rules, 1945 are ultra vires the Act apart from being unconstitutional; d) issue a writ of certiorari or other appropriate writs, directions or orders calling for the records leading up to Ext.P3 order issued by the 3rd respondent and quash the same; e) issue a writ of mandamus or other appropriate writs, directions or orders restraining the respondents from insisting the private hospitals/clinics in the State of Kerala from obtaining drug licence under Section 18(c) of the Drugs and Cosmetics Act, 1940 and Rules framed thereunder; f) issue a writ of mandamus or other appropriate writs, directions or orders directing the respondents to include private hospitals/clinics for exemption under Schedule K to the Drugs and Cosmetics Rules, 1945; g) to award the costs of the petitioners of these proceedings; and h) to grant such other reliefs as this Hon'ble Court WP(C).No.38494/2003 & connection 5 may deem just and proper in the circumstances of the case.” 4. The petitioners contended that their establishments are also liable to be exempted, along with the hospitals covered by item 5- A of Schedule `K' of the Rules framed by the Central Government. According to them, they are similarly placed. Their non-inclusion in item 5-A violates their fundamental rights under Article 14 of the Constitution of India. The respondents filed a detailed counter affidavit, resisting the prayers in the Writ Petition. 5. We heard the learned counsel on both sides. The learned counsel for the petitioners pointed out that item 5-A of Schedule `K' suffers from the vice of under-inclusiveness. The petitioners' hospitals are similarly placed like the hospitals run or funded by the Government or local bodies. Private hospitals do not sell any medicines to their patients. Medicines are administered as part of the treatment, for which a fee is collected. So, there is no reason why their hospitals also should not be exempted. The learned Government Pleader, on the other hand, submitted that all the hospitals sell medicines to their patients and receive consideration for the same. The sale clearly comes under the definition of `retail sale' under rule 2(f) of the aforementioned Rules. Item 5 exempts only individual medical practitioners, subject to the stipulations contained therein. Item 5-A deals with hospitals run out of public funds. They WP(C).No.38494/2003 & connection 6 form a different class and cannot be equated with private hospitals. If private hospitals are also included, the classification will be vitiated by over-inclusiveness. The hospitals run with the aid of public funds form a separate class. The classification is based on an intelligible differentia, it is submitted. 6. We considered the rival submissions made at the Bar and also went through the relevant statutory provisions. Section 18 (c) of the Drugs and Cosmetics Act reads as follows: “18.(c) manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale, or distribute any drug or cosmetic, except under, and in accordance with the conditions of, a licence issued for such purpose under this Chapter: Provided that nothing in this section shall apply to the manufacture, subject to prescribed conditions, of small quantities of any drug for the purpose of examination, test or analysis: Provided further that the Central Government may, after consultation with the Board, by notification in the Official Gazette, permit, subject to any conditions specified in the notification, the manufacture for sale or for distribution, sale, stocking or exhibiting or offering for sale or distribution of any drug or class of drugs not being of standard quality.” Section 33(q) of the Act enables the Central Government to frame rules exempting any specified drug or class of drugs or cosmetic or class of cosmetics from all or any of the provisions of that chapter (Chapter IV). Invoking that power, the Central Government have WP(C).No.38494/2003 & connection 7 framed Rule 123 of the Drugs and Cosmetics Rules, which reads as follows: “123. The drugs specified in Sch. K shall be exempted from provisions of Chapter IV of the Act and the rules made thereunder to the extent and subject to the conditions specified in that schedule.” All drugs specified in Schedule `K' shall be exempted from the provisions of Chapter IV of the Act and the Rules made thereunder, to the extent and subject to the conditions specified in that schedule. Item 5-A, which is relevant in this case, reads as follows: “5-A. Drugs supplied by a hospital or The provision of Chapter IV of the Act dispensary maintained or supported and the Rules thereunder which by Government or local body require them to be covered by a sale licence, subject to the following conditions: (1) the dispensing and supply of drugs shall be carried out by or under the supervision of a qualified person; (2) the premises where drugs are supplied or stocked shall be open to inspection by an inspe- ctor appointed under the Drugs and Cosmetics Act who can, if necessary, take samples for test; (3) the drugs shall be stored under proper storage conditions.” The grievance of the petitioners is that they should also have been included in the said item. But, we think, a private hospital cannot be equated with a hospital maintained or supported by the Government or local body. They form different classes and they have been classified separately, on valid grounds. So, the claim of the petitioners WP(C).No.38494/2003 & connection 8 that the said classification suffers from the vice of under-inclusiveness cannot be accepted. The learned counsel for the petitioners pointed out various inconveniences that may be caused, if licence is insisted. But, such inconveniences caused to persons are not grounds to interfere with the operation of the rules, especially in the field of drugs. We are of the view that none of the grounds raised in the Writ Petition is tenable and the petitioners are not entitled to any of the reliefs prayed for. The challenge against Ext.P3 is also untenable. In the result, the Writ Petition fails and it is accordingly dismissed. W.P(C)Nos. 3016 of 2004 & 23733 of 2007 In view of the dismissal of W.P.(C)No.38494 of 2003, these Writ Petitions are also dismissed. K.BALAKRISHNAN NAIR Judge P.N.RAVINDRAN Judge TKS