Case: Hyderabad Chemical And Pharmaceuticalworks Ltd. Etc Vs. State Of Andhra Pradesh And Ors

by the pharmaceutical laboratories. Now the work done by a pharmaceutical laboratory is to manufacture medicinal preparations. Rule 36 therefore provides that expenses of the establishment for the supervision of the work of medicinal preparations manufactured by pharmaceutical laboratories have to be paid by the laboratory concernedThe supervisory staff which has to be paid for under R. 36 therefore is meant for the supervision of the manufacture of medicinal preparations and it is for that purpose only that expenses have to be borne by the laboratory concerned. The purpose of the rule therefore is clearly covered by the Act and the Rules framed thereunder and it cannot survive the Act and the Rules in view of S. 21 of the Act and R. 143 of the 1956 Rules, and the proviso to S. 21 cannot be availed of by the State.7. This brings us to the alternative argument on behalf of the State, namely, that in any case the rule still remains good because it is meant to carry out the general purpose of the Hyderabad Abkari Act, namely to see that unauthorised sale of alcohol is not made for human consumption by the laboratory to which it is supplied for purposes of manufacture of medicinal preparations. Therefore it is said that the rule is good inasmuch as it is concerned with the enforcement of the general law relating to alcohol and intoxicating drugs contained in the Hyderabad Abkari Act. We are of opinion that there is no force in this contention either. In the first place, as we have already indicated, the main object of the supervisory staff mentioned in R. 36 is to supervise the manufacture of medicinal preparations. In that connection the supervisory staff will certainly see that alcohol supplied is used for the purpose for which it is supplied and it not used in any other manner. Rule 36 is only concerned with seeing that the manufacture of medicinal preparations is made properly and is done under the supervision of the establishment attached to each laboratory; and it is only incidentally that in that connection the establishment is also to see that the alcohol supplied is not used otherwise than for the purpose of manufacture. That however will make the rule good under the Hyderabad Abkari Act, which deals with alcohol and intoxicating drugs generally.8. What we have said above is borne out if we look at the 1956 Rules. Rule 20 provides that in case of manufacture in bond (and we are concerned in the present appeals with such manufacture) alcohol on which duty has not been paid shall be used under excise supervision. Rule 42 provides that "it shall be open to the Excise Commissioner to determine the size of the supervisory staff in consultation with the licensee." It is clear therefore that under the 1956 Rules supervisory staff is attached to bonded manufactories which manufacture medicinal preparations. This is also the purpose of R. 36. Further R. 141 provides that "the licencee of a bonded manufactory or warehouse shall, where so required by the Excise Commissioner, provide the officer and the staff posted to the manufactory or bonded warehouse with suitable lodgings conveniently situated to the factory or bonded warehouse premises at a rent not exceeding 10 per cent of the pay of each officer so accommodated. If for any reason the licencee is not able to provide such accommodation he shall provide suitable accommodation to the satisfaction of the Excise Commissioner near the manufactory or bonded warehouse recovering only 10 per cent of the pay of the occupant". Then R. 45 provides that "the officer-in-charge shall exercise such supervision as is required to ensure that alcohol issued for a certain preparation is added to the materials which go to make that preparation and that no portion of such alcohol is diverted to other purpose."It is clear therefore from these rules that the supervisory staff is attached to a bounded manufactory for the purpose of supervision to see that the manufacture is carried on properly and also to see that alcohol issued for the purpose of manufacture is not diverted to any other use. We cannot therefore accept the argument that simply because the supervisory staff has got to see that alcohol supplied, assuming it to be liquor, is not misused, R. 36 is still good law because its purpose is to see that the general law relating to alcohol and intoxicating drugs contained in the Hyderabad Abkari Act is carried out. As the 1956-Rules show it is the duty of the supervisory staff attached to a bonded manufactory to see that the manufacture is properly made and the alcohol supplied is not diverted to any use except that of the manufacture of the preparation. This being the purpose of the 1956 Rules, the levy under R. 36 of 1345-F cannot be justified on the ground that under that rule the supervisory staff has to see that the general law relating to the alcohol and intoxicating drugs is not violated.9. There is no doubt that the filed covered by R. 36 of the 1345F-Rules is completely covered by the Rules framed under the Act and therefore R. 36 can no longer be justified as good under the general law relating to alcohol and intoxicating drugs. We may add that the Act on the 1956-Rules make no provision for any such charge as is provided in R. 36 of 1345-F Rules, the intention being that the duty under the Act will cover all expenses for enforcing it. The fact that members of the supervisory staff are the servants of the respondent makes no difference because they function under the Act and the rules framed thereunder and not under the Hyderabad Act. We are therefore of opinion that reading S. 21 of the Act and R. 143 of the Rules framed thereunder, R. 36 of 1345-F Rules must be held to have been repealed and it is not saved by the proviso to S. 21.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It is not in dispute that the Act came into force from April 1, 1957 and is a law made otherwise by Parliament within the meaning of Art. 277, and therefore duties and other charges levied by the State in connection with medicinal preparations could no longer be levied by it. Further the Act specifically provides in S. 21 that "if, immediately before the commencement of this Act, there is in force in any State any law corresponding to this Act, that law is hereby repealed". It is true that the Hyderabad Abkari Act was a general law which was concerned with liquor and intoxicating drugs generally; it thus applied to alcohol also (treating it as liquor) used for manufacturing medicinal preparations. The effect of S. 21, therefore, is that so far as the Hyderabad Abkari Act applied to the use of alcohol, treating it to be liquor, in the manufacture of medicinal and toilet preparations, the Hyderabad Abkari Act must be deemed to have been repealed to that extent only by S.are of opinion that there is no force in this contention. Rules were framed under the Act in 1956 and came into force along with the Act. Rule 143 of these Rules provides that all rules made under any law corresponding to the Act in force in any State are hereby repealed except as respects things done or omitted to be done before such repeal. Consequently all rules framed for the purpose of the manufacture of medicinal preparations came to an end in view of R. 143 of 1956 Rules. Therefore, R. 36 of 1345-F rules, which appears in the Medicinal Preparations and Spirituous Rules must be held to be no longer good law so far as it applies to medicinal preparations. That is one reason why we consider that R. 36 must be held to have been repealed after the coming into force of the Act and the Rules framed thereunder.The proviso to S. 21 on which reliance has been placed cannot change the position in view of the new Rules framed in 1956 with respect to medicinal preparations. As soon as the new Rules came into force the old rules must fall and there is a specific provision in the new Rules (namely R. 143) which says that all rules made under any law corresponding to the Act are hereby36 therefore provides that expenses of the establishment for the supervision of the work of medicinal preparations manufactured by pharmaceutical laboratories have to be paid by the laboratory concernedThe supervisory staff which has to be paid for under R. 36 therefore is meant for the supervision of the manufacture of medicinal preparations and it is for that purpose only that expenses have to be borne by the laboratory concerned. The purpose of the rule therefore is clearly covered by the Act and the Rules framed thereunder and it cannot survive the Act and the Rules in view of S. 21 of the Act and R. 143 of the 1956 Rules, and the proviso to S. 21 cannot be availed of by theare of opinion that there is no force in this contention either. In the first place, as we have already indicated, the main object of the supervisory staff mentioned in R. 36 is to supervise the manufacture of medicinal preparations. In that connection the supervisory staff will certainly see that alcohol supplied is used for the purpose for which it is supplied and it not used in any other manner. Rule 36 is only concerned with seeing that the manufacture of medicinal preparations is made properly and is done under the supervision of the establishment attached to each laboratory; and it is only incidentally that in that connection the establishment is also to see that the alcohol supplied is not used otherwise than for the purpose of manufacture. That however will make the rule good under the Hyderabad Abkari Act, which deals with alcohol and intoxicating drugsis clear therefore from these rules that the supervisory staff is attached to a bounded manufactory for the purpose of supervision to see that the manufacture is carried on properly and also to see that alcohol issued for the purpose of manufacture is not diverted to any other use. We cannot therefore accept the argument that simply because the supervisory staff has got to see that alcohol supplied, assuming it to be liquor, is not misused, R. 36 is still good law because its purpose is to see that the general law relating to alcohol and intoxicating drugs contained in the Hyderabad Abkari Act is carried out. As the 1956-Rules show it is the duty of the supervisory staff attached to a bonded manufactory to see that the manufacture is properly made and the alcohol supplied is not diverted to any use except that of the manufacture of the preparation. This being the purpose of the 1956 Rules, the levy under R. 36 of 1345-F cannot be justified on the ground that under that rule the supervisory staff has to see that the general law relating to the alcohol and intoxicating drugs is not violated.9. There is no doubt that the filed covered by R. 36 of the 1345F-Rules is completely covered by the Rules framed under the Act and therefore R. 36 can no longer be justified as good under the general law relating to alcohol and intoxicating drugs. We may add that the Act on the 1956-Rules make no provision for any such charge as is provided in R. 36 of 1345-F Rules, the intention being that the duty under the Act will cover all expenses for enforcing it. The fact that members of the supervisory staff are the servants of the respondent makes no difference because they function under the Act and the rules framed thereunder and not under the Hyderabad Act. We are therefore of opinion that reading S. 21 of the Act and R. 143 of the Rules framed thereunder, R. 36 of 1345-F Rules must be held to have been repealed and it is not saved by the proviso to S. 21.