Case: Secy.,Ministry Of Chemicals &Fertilizers Vs. M/S. Cipla Ltd.


Decision reasoning: 1[ds]The sales of the bulk drugs as such to the institutions etc., will be negligible i.e., about 15%, as per the certificate issued by ORG in one of the cases. It is, therefore, commenced that the contention that the ORG data does not afford the basis for ascertaining the annual turnover of the bulk drug, is untenable.5.4 The High Court, substantially agreeing with the contentions of the respondents- writ petitioners held that the expressionoccurring in Drugs Policy can only mean domestic sales figures and nothing else. Export sales cannot be included within the ambit of turnover. The High Court observed that the concepts ofare interrelated and inter-dependent. The expressionif interpreted in a contextual and purposive manner, would not include exports. The extent of usage of the bulk drug in the country would be determinative of turnover. By taking the export sale figures and the value of entire production of bulk drugs into account, the Central Government had acted contrary to its own guidelines contained in Drug Policy, 1994. The High Court then proceeded to discuss whether each of the drugs concerned could be brought within the purview of DCPO, 1995 and answered that question in favour of the writcan be no doubt that the meaning of the expressioneither in its ordinary or legal sense includes export sales. But, we must have regard to the terms and objectives of the policy and try to understand that expression accordingly. Para 9 of the Drug Policy, 1994 makes it clear that the high turnover of a drug is an index of its extent of usage.has obvious reference to consumption and consumption within the domestic market. Whether the drug is extensively used within the country is one of the considerations kept in view to clamp price control. The export potential of the drug or its usage in foreign countries could not have been the reason to notify the specified drugs for price control. If there is any doubt in this regard, it is dispelled by what is stated in paragraph 10 of the rejoinder affidavit which we quoted supra. To repeat, it was stated therein that the intent behind using the wordhas been to determine the extent of usage of a bulk drug in the country. It is also pertinent to note that the Govt. of India has not come forward with any explanation as to why export sales also should be taken into account in assessing the turnover as per the criteria laid down in the Drug Policy. For all these reasons, we are in agreement with the High Court that the export sales ought to have been excluded while calculating the turnover. How far the exclusion of export sales would make any difference is a differentour view, the clarification given by the Government of India reflects a reasonable view point and it cannot be said that by adopting such approach, a distorted meaning is given to the expressionmuch against the spirit of the policy. At any rate, two views are possible and it is not for the Court to decide which view isplea of discrimination was aimed at the drug known as Glibelclamide, which was excluded from the DPCO of 1987 and continued to remain excluded from the DPCO of 1995. The respondent did not even aver that the said drug had the turnover of more than 100 lacs and therefore it would fall within the mischief of clause (ii). On the basis of a bald plea, the infraction of Article 14 ought not to have been countenanced. The finding of the High Court in this regard is palpably wrong.9. We now summarize the conclusions as under:1. Where the Central Government as the delegate of legislative power announces a rational policy in keeping with the purposes of enabling legislation and even lays down specific criteria to promote the policy, the criteria so evolved become the guide-posts of its legislative action. While classifying the drugs for the purpose of price control, it is not open to the Government to flout or debilitate the set norms which it professed to follow in the interest of transparency and objectivity. Otherwise, there will be an element of arbitrariness and the delegated legislation will not withstand the test of Article 14.2. The expression turnover in Drug Policy, 1994 represents the sale value of bulk drug sold as such or in the form of formulations.3. Export sales should not be taken into account while computing turnover.4. The sum total of production and imports of bulk drug cannot be equated to turnover, though they are not altogether irrelevant in calculating the turnover.5. ORG data does not give exhaustive account of turn over of bulk drug. It may furnish the basis for estimating the turnover, but is not the sole guide.6. For the purpose of criterion No. (iii) of the Drug Policy, the single ingredient formulators alone ought to be taken into account as clarified by the Govt. of India.7. Burden lies on those who challenge the legislation on the ground of violation of Article 14 to make out their case by furnishing all the relevant material which is within their reach and knowledge. There should be frank disclosure of material facts, more so, when the plea is founded on certain factual aspects. The mere vagueness or lack of clarity in the stand taken by the Union of India does not by itself advance the case of the writ petitioners.8. The plea of writ petitioners ought to have been tested and subjected to scrutiny in the light of all relevant factors instead of merely considering whether the particulars furnished by the petitioners were effectively controverted or not. Such an approach of the High Court is wholly impermissible while deciding the validity of legislation-plenary or delegated, from the stand point of Article 14.9. The plea of discrimination between one drug and another is unfounded and should not have been accepted by the High Court.