Case: Union Of India Vs. M/S. Ranbaxy Laboratories Ltd.

clause 25 of the Order. 22. The relevant considerations inter alia are the sales turnover as also production of a new drug which was not produced elsewhere, if developed through indigenous research and development. 23. Pentazocine is used for a patient suffering from traumatic pain. The Central Government must be held to have applied its mind before issuing the exemption notification. 24. What must have been taken into consideration for that purpose is that respondent No.1 fulfilled the requisite criteria. The area of exemption is from the operation of the price control. Such exemption admittedly had been granted upto 31st October, 1999. Indisputably the Central Government had the power to extend the period of exemption. It could have granted further exemption subject to any condition. 25. The short question which arises for our consideration is as to whether the exemption Notification would apply in respect of drugs which were manufactured upto 31st October, 1999 or manufactured and sold upto the said date. The exemption granted is in respect of what. It is in respect of a drug manufactured by a company. What is marketed for sale is the drug manufactured. Manufacture of a drug is controlled by a different statute, namely the Drugs and Cosmetics Act, 1940. Process of marketing the drug as also the maximum price which can be charged have direct relation with manufacture and also the date thereof. The wrapper/foil/containers in which the drug is marketed contains several informations for the general public; one of them being the date of manufacture and the retail price. Various other informations are also required to be furnished. 26. The contention of learned Additional Solicitor General that the drug could be manufactured upto 31st October, 1999 but on and from 1st November, 1999 it could be sold only at the price specified in the order, in our opinion, cannot be accepted. If the first respondent was entitled to avail the benefit of the exemption notification till the midnight of 31st October, 1979, sometime would be necessary for it to market the same. There must be some time lag between the period the drug is manufactured and the actual sale by a retail dealer to the customer. 27. The Court while construing an exemption notification cannot lose sight of the ground realities inclduing the process of marketing and sale. The exemption order dated 29th August, 1995 is clear and unambiguous. By reason thereof what has been exempted is the drug which was manufactured by the company and the area of exemption is from the operation of the price control. They have a direct nexus. They are co related with each other. While construing an exemption notification not only a pragmatic view is required to be taken but also the practical aspect of it. A manufacturer would not know as to when the drug would be sold. It has no control over it. Its control over the drug would end when it is despatched to the distributor. The distributor may despatch it to the whole seller. A few others may deal with the same before it reaches the hands of the retailer. The manufacturer cannot supervise or oversee as to how others would be dealing with its product. All statutes have to be considered in light of the object and purport of the Act. Thus, the decision relied upon by the learned Additional Solicitor General in Union of India vs. Cynamide India Ltd. : (1987) 2 SCC 720 ; Prag Ince & Oil Mills vs. Union of India : (1978) 3 SCC 459 and Sree Meenakshi Mills vs. Union of India : (1973) 1 SCC 129 will have no application. 28. It is true that 1995 Order was to control the price and not the manufacture. But there cannot be any doubt that the price is that of a manufactured drug. Not only in terms of the Essential Commodities Act, 1955 but also under various others, for example Customs and Central Excise Act and Weights and Measures Act (if applicable) several informations are required to be furnished. If the submission of Mr. Gopal Subramaniam that the first respondent was bound not only to manufacture but also to sell at a price upto 31st October, 1999 is correct, the same in our opinion lead to an absurdity. Such an anomaly and absurdity must be avoided. 29. Learned counsel wants us to apply the principle of purposive construction. It may be applied so as to give full effect to the exemption notification. The exemption notification must be construed to be a workable one. In New India Assurance Co. Ltd.. vs. Nusli Neville Wadia and another : 2007 (14) SCALE 556 this Court opined :- "51. Barak in his exhaustive work on `Purposive Construction explains various meanings attributed to the term "purpose". It would be in the fitness of discussion to refer to Purposive Construction in Baraks words: "Hart and Sachs also appear to treat "purpose" as a subjective concept. I say "appear" because, although Hart and Sachs claim that the interpreter should imagine himself or herself in the legislators shoes, they introduce two elements of objectivity: First, the interpreter should assume that the legislature is composed of reasonable people seeking to achieve reasonable goals in a reasonable manner; and second, the interpreter should accept the non-rebuttable presumption that members of the legislative body sought to fulfill their constitutional duties in good faith. This formulation allows the interpreter to inquire not into the subjective intent of the author, but rather the intent the author would have had, had he or she acted reasonably." (Aharon Barak, Purposive Interpretation in Law, (2007) at pg. 87) 30. While referring to its decision in Oriental Insurance Co. Ltd. vs. Brij Mohan and others : 2007 (7) Scale 753 it applied the doctrine of purposive construction. Applying the principle of doctrine of purposive construction, we are of the opinion that meaningful purpose could be achieved only if the construction of the notification as indicated hereinbefore is adopted and no other. 31.

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

Explanation:
0[ds]The exemption granted is in respect of what. It is in respect of a drug manufactured by a company. What is marketed for sale is the drug manufactured. Manufacture of a drug is controlled by a different statute, namely the Drugs and Cosmetics Act, 1940. Process of marketing the drug as also the maximum price which can be charged have direct relation with manufacture and also the date thereof. The wrapper/foil/containers in which the drug is marketed contains several informations for the general public; one of them being the date of manufacture and the retail price. Various other informations are also required to be furnished.The contention of learned Additional Solicitor General that the drug could be manufactured upto 31st October, 1999 but on and from 1st November, 1999 it could be sold only at the price specified in the order, in our opinion, cannot be accepted. If the first respondent was entitled to avail the benefit of the exemption notification till the midnight of 31st October, 1979, sometime would be necessary for it to market the same. There must be some time lag between the period the drug is manufactured and the actual sale by a retail dealer to the customer.The Court while construing an exemption notification cannot lose sight of the ground realities inclduing the process of marketing and sale. The exemption order dated 29th August, 1995 is clear and unambiguous. By reason thereof what has been exempted is the drug which was manufactured by the company and the area of exemption is from the operation of the price control. They have a direct nexus. They are co related with each other. While construing an exemption notification not only a pragmatic view is required to be taken but also the practical aspect of it. A manufacturer would not know as to when the drug would be sold. It has no control over it. Its control over the drug would end when it is despatched to the distributor. The distributor may despatch it to the whole seller. A few others may deal with the same before it reaches the hands of the retailer. The manufacturer cannot supervise or oversee as to how others would be dealing with its product. All statutes have to be considered in light of the object and purport of the Act. Thus, the decision relied upon by the learned Additional Solicitor General in Union of India vs. Cynamide India Ltd. : (1987) 2 SCC 720 ; Prag Ince & Oil Mills vs. Union of India : (1978) 3 SCC 459  and Sree Meenakshi Mills vs. Union of India : (1973) 1 SCC 129 will have no application.It is true that 1995 Order was to control the price and not the manufacture. But there cannot be any doubt that the price is that of a manufacturedonly in terms of the Essential Commodities Act, 1955 but also under various others, for example Customs and Central Excise Act and Weights and Measures Act (if applicable) several informations are required to be furnished. If the submission of Mr. Gopal Subramaniam that the first respondent was bound not only to manufacture but also to sell at a price upto 31st October, 1999 is correct, the same in our opinion lead to an absurdity. Such an anomaly and absurdity must be avoided.Learned counsel wants us to apply the principle of purposive construction. It may be applied so as to give full effect to the exemption notification. The exemption notification must be construed to be a workableNew India Assurance Co. Ltd.. vs. Nusli Neville Wadia and another : 2007 (14) SCALE 556  this Court opinedBarak in his exhaustive work on `Purposive Construction explains various meanings attributed to the term "purpose". It would be in the fitness of discussion to refer to Purposive Construction in Baraksand Sachs also appear to treat "purpose" as a subjective concept. I say "appear" because, although Hart and Sachs claim that the interpreter should imagine himself or herself in the legislators shoes, they introduce two elements of objectivity: First, the interpreter should assume that the legislature is composed of reasonable people seeking to achieve reasonable goals in a reasonable manner; and second, the interpreter should accept the non-rebuttable presumption that members of the legislative body sought to fulfill their constitutional duties in good faith. This formulation allows the interpreter to inquire not into the subjective intent of the author, but rather the intent the author would have had, had he or she actedBarak, Purposive Interpretation in Law, (2007) at pg.referring to its decision in Oriental Insurance Co. Ltd. vs. Brij Mohan and others : 2007 (7) Scale 753  it applied the doctrine of purposive construction. Applying the principle of doctrine of purposive construction, we are of the opinion that meaningful purpose could be achieved only if the construction of the notification as indicated hereinbefore is adopted and no