Delhi High Court
Cipla Limited & Anr. vs Union Of India & Ors. on 24 November, 2015
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 24.11.2015
+ W.P.(C) 4374/2013 & CM Nos.10106/2013, 11985/2013,
21360/2015, 21361/2015
CIPLA LIMITED & ANR. ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 4805/2013 & CM 22977/2015
SUN PHARMACEUTICAL INDUSTRIES
LTD & ANR ..... Petitioners
versus
UNION OF INDIA & OTHERS ..... Respondents
AND
+ W.P.(C) 4877/2013 & CM No.11066/2013
MACLEODS PHARMACEUTICALS LIMITED
& ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 4883/2013 & CM No.11079/2013
EMCURE PHARMACEUTICALS LTD & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
WPC 4374.2013 & Ors Page 1 of 22
+ W.P.(C) 4888/2013 & CM No.11089/2013
MICRO LABS LIMITED & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 4897/2013 & CM Nos.11107/2013 & 11988/2013
WOCKHARDT LIMITED ..... Petitioner
versus
UNION OF INDIA & ANR. ..... Respondents
AND
+ W.P.(C) 4907/2013 & CM No.11125/2013
LUPIN LIMITED AND ANOTHER ..... Petitioner
versus
UNION OF INDIA AND OTHERS ..... Respondents
AND
+ W.P.(C) 4917/2013 & CM No.11139/2013
INTAS PHARMACEUTICALS LIMITED & ANR. ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 4918/2013 & CM No.11141/2013
ALEMBIC PHARMACEUTICALS LIMITED
WPC 4374.2013 & Ors Page 2 of 22
& ANR ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 4948/2013 & CM No.11176/2013
SANDOZ PRIVATE LIMITED & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 4959/2013 & CM No.11204/2013
CHIRON BEHRING VACCINES PRIVATE
LIMITED & ANR ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 4964/2013 & CM No.11211/2013
NOVARTIS INDIA LIMITED & ANR. ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 4965/2013 & CM Nos.11214/2013 & 11986/2013
ALKEM LABORATORIES LIMITED & ANR ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
WPC 4374.2013 & Ors Page 3 of 22
AND
+ W.P.(C) 4969/2013 & CM No.11227/2013
NIRMA LTD. & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 4998/2013 & CM No.11281/2013
MANKIND PHARMA LIMITED & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 4999/2013 & CM Nos.11285/2013 & 11286/2013
KUSUM HEALTHCARE PVT. LTD ..... Petitioner
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 5031/2013 & CM No.11346/2013
DR. REDDYS LABORATORIES LTD & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 5063/2013 & CM No.11409/2013
USV LTD ..... Petitioner
versus
WPC 4374.2013 & Ors Page 4 of 22
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 5129/2013 & CM No.11542/2013
M/S. RANBAXY LABORATORIES LIMITED
& ANR. .... Petitioners
versus
UNION O INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 5130/2013 & CM No.11544/2013
GLAXO SMITH KLINE PHARMACEUTICALS
LTD. & ANR. ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 5229/2013 & CM No.11734/2013
GLENMARK PHARMACEUTICALS LIMITED
& ANR. ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 5230/2013 & CM No.11736/2013
M/S MANEESH PHARMACEUTICALS LTD ..... Petitioner
versus
UNION OF INDIA AND ORS ..... Respondents
AND
WPC 4374.2013 & Ors Page 5 of 22
+ W.P.(C) 5290/2013 & CM No.11845/2013
CADILA HEALTHCARE LTD & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 5292/2013 & CM No.11848/2013, , 24092/2015,
24093/2015
ZYDUS HELATHCARE & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 5295/2013 & CM No.11854/2013
BIOCHEM PHARMACEUTICALS INDUSTRIES
LTD. & ANR ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
AND
+ W.P.(C) 5638/2013 & CM No.12467/2013
FDC LIMITED & ANR ..... Petitioners
versus
UNION OF INDIA & ORS. ..... Respondents
AND
+ W.P.(C) 5991/2013 & CM No.13196/2013
GALPHA LABORATORIES LIMITED AND ANR ..... Petitioners
versus
WPC 4374.2013 & Ors Page 6 of 22
UNION OF INDIA AND OTHERS ..... Respondents
AND
+ W.P.(C) 6373/2013 & CM Nos.13927/2013, 13928/2013
AJANTA PHARMA LTD ..... Petitioner
versus
UNION OF INDIA AND ORS ... Respondents
AND
+ W.P.(C) 7802/2013 & CM No.16587/2013
MERCK LIMITED ..... Petitioner
versus
UNION OF INDIA AND ORS. ..... Respondents
+ W.P.(C) 8566/2014 & CM 19765/2014
CADILA PHARMACEUTICALS LTD ..... Petitioner
versus
UNION OF INDIA AND ORS .... Respondents
Advocates who appeared in this case:
For the Petitioner : Ms Saman Ahsan for petitioner in WPC 4897/2013.
Mr Rajeev Saxena with Ms Mehak Tanwar for
petitioner in WPC 5230/2013.
Mr Gaurav Chauhan for petitioner in WPC 8566/2014
Ms Ishani Chandra with Ms Niharika
Swaroop for WPC 4965/2013
Mr Anuj Sarma for the petitioner in WPC 7802/2013.
Mrs Prathiba M. Singh, Sr Advocate with Ms Archana Sahadeva
and Mr Kapil Midha for petitioner in WPC 4374/2013
Ms Manjira Dasgupta for petitioner 4883/2013
Mr Ankur Sangal with Ms Sucheta Roy for
petitioner in WPC 4907/2013
Mr Manoj with Ms Aparna Sinha, Advocates for the petitioners in
W.P.(C) Nos.4948/2013, 4959/2013 & 4964/2013.
WPC 4374.2013 & Ors Page 7 of 22
Mr Jayant K. Mehta with Ms Madhavi Khare, Mr Sukant Vikram
and Mr Saurabh Dev Karan Singh for the petitioners in WPC
4969/2013.
Mr Rishi Agrawala for the Petitioner in WP(C) 5063/2013.
Mr Gopal Jain, Sr. Adv. with Mr Ajay Bhargava and Mr Jeevan
B. Panda for the petitioners in WPC 4805/2013.
Mr Rajiv Nayyar, Sr. Adv. with Ms Archana Sachdeva, Mr Kapil
Midha, for the petitioner in WPC 5292/2013.
Ms Neelima Tripathi with Ms Deb Deepa for petitioner in WPC
5031/13
Ms Archana Sahadeva with Mr Kapil Midha for petitioner in
WPC 4877/2013, 4888/13, 4917/13, 5129/13, 5229/13, 5290/13,
5295/13 & 5638/13.
Mr U.A. Rana with Mr Vineet Mohan for petitioner in
WPC 5130/2013.
Mr Shiv Gupta with Mr Anoop Kandari for
petitioner in WPC 4999/2013
For the Respondent : Mr Arun Bhardwaj with Ms Rishi Kapoor and Mr Abhishek for
UOI in WP(C) 5991/2013.
Mr Jasmeet Singh with Ms Astha Sharma, Mr Srivats Kaushal
and Mr Vidur Mohan for UOI.
Mr Amit Mahajan for UOI in WPC 5129/2013, 8566/2014.
Mr Manik Dogra for UOI in WPC 5031/2013, 5230/2013.
Mr Sanjeev Narula for UOI in WPC 4918/2013, 4948/2013,
4959/2013, 4969/2013, 4998/2013, 6373/2013 & 7802/2013.
Mr Peeyoosh Kalra for R-1 & 2 in WPC 5295/2013
Mr Anil Soni with Mr Naginder
Benipal for UOI in WPC 5063/13
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
1. We have heard the learned counsel for the parties on the writ
petitions as well as on the pending applications. Initially, the grievance of
the petitioners was with regard to the proviso to paragraph 13 (1), Proviso
to paragraph 24(1) and part of paragraph 16(4) of the Drugs (Price Control)
Order, 2013 (hereinafter referred to as 'DPCO, 2013'). There was also a
challenge to the notification dated 26.06.2013.
2. The focus of the petitions was on the drugs manufactured prior to the
date of the notification for which a new and lower ceiling price had been
prescribed. In this connection, one of the counter-affidavits filed in WP(C)
4888/2013 (Micro Labs Limited and Another v. Union of India and Others)
is relevant. The stand taken by the respondents was indicated in paragraph
53 thereof as under:-
"53. It is submitted that the manufacturers are required to
issue price lists in accordance with paragraph 24 of the DPCO,
2013. As aforementioned, in implementation of ceiling price
fixed by the Government, no person can sell essential medicines
at a price higher than the price mentioned in current price list or
label whichever is less. It is submitted that manufacturers can
do stickering, reprinting or labeling if they do desire to comply
with the provisions of DPCO, 2013. However, for stocks
manufactured prior to the issuance of the respective
notifications there would be sufficient compliance if the
manufacturers issue price list/revised price list and follow
paragraph 24 of DPCO, 2013 towards that end. If for their own
convenience or otherwise, manufacturers desire to restick/re-
label to avoid any confusion, purported of conceived, the
notification dated 26.06.2013, to allay the apprehensions of the
manufacturers, was issued."
(underlining added)
Paragraph 56 of the very same affidavit would also be relevant and the
same reads as under:-
"56. In view of the above, the manufacturers are required to
issue price list in implementation of notified price in respect of
stocks manufactured prenotification. In case the manufacturers
choose to do relabeling, restickering they are also exempted from
the provisions of excise as well as Legal Meteorology Act, 2009.
The whole exercise is aimed to provide the essential medicines to
the consumers at a reduced price."
(underlining added)
3. On a plain reading of the said paragraphs, it is evident that the stand
of the respondents is that if the manufacturers, for the stocks manufactured
prior to the date of issuance of the respective notifications, issue price lists /
revised price lists in terms of the notifications, then such manufacturers
would be in sufficient compliance of DPCO, 2013, provided they follow
the procedure given in paragraph 24 of DPCO, 2013. It is also indicated in
the said counter-affidavit that if for their own convenience, the
manufacturers desire to restick/re-label the drugs in question, to avoid any
confusion, the notification dated 26.06.2013 was issued to allay the
apprehensions of the manufacturers. It is evident that relabeling of
manufactured stocks prior to the date on which the notifications are issued,
is not obligatory. What is necessary is that the pharmaceutical preparations
be sold at the revised price or the labelled price, whichever is lower. This
is also evident from paragraph 26 of the DPCO, 2013 which specifically
provides as under:-
"26. Control of sale prices of formulations.- No person shall sell
any formulation to any consumer at a price exceeding the price
specified in the current price list or price indicated on the label of
the container or pack thereof, whichever is less."
(underlining added)
4. We may also take note of the Supreme Court decision in the case of
Glaxosmithkline Pharmaceuticals Limited v. Union of India: (2014) 2
SCC 753. In that case, one of the arguments put forth on behalf of the
manufacturers concerning paragraph 15 of the DPCO, 1995 was that it was
incumbent upon them to print the maximum retail price on the product and
that too indelibly and that there was no provision for reprinting of the labels
or of return of drugs once they leave the factory premises. The argument
was that in such eventuality, the batches, which had been manufactured and
stamped with old prices, could continue to be sold at those prices. We may
note that paragraph 24(2) of DPCO, 2013 also requires the manufacturer of
a scheduled formulation to display in indelible print mark on the label of
the container of the formulation, the maximum retail price of that
formulation based on the ceiling price notified in the official Gazette or
ordered by the Government in this behalf. But, in the present case, the
argument of the petitioners is not that they can continue to sell the
formulation at the old price, but that they would not be in a position to
recall or relabel the formulations although they are and have abided by the
notification issued under DPCO, 2013 with regard to issuance of a price list
in terms of the new notification.
5. It is pertinent to note that, in the context of the argument raised in the
case before the Supreme Court, it was observed by the Supreme Court as
under:-
"47. The Senior Counsel for the manufacturer contends that
under paragraph 15 of the 1995 DPCO, it is incumbent to print
the maximum retail price on the product and that too indelibly.
There is no provision for reprinting of the labels or of return of
drugs once they leave the factory premises. Thus, the batches
which have been manufactured and stamped with old prices can
continue to be sold at those prices. We do not find any merit in
the argument. The DPCO defines 'dealer', 'distributor',
'manufacturer', 'retailer' and 'wholesaler'. The provisions
contained in paragraphs 3, 8, 9 and other relevant provisions
clearly show that DPCO effectively covers the chain from
manufacture of the bulk drug by the manufacturer to sale of
formulation to consumer though there may be several persons in
the distribution chain. The ultimate object of the DPCO is that
there is no deception to a consumer and he is sold the formulation
at a price not exceeding the price specified in the current price list
or price indicated on the label of the container or pack thereof,
whichever is less. Logically it follows that there cannot be two
prices at the end point of the distribution chain depending on the
batch number. A consumer approaching a chemist/retailer can
hardly be offered two prices for the very same product based only
on the difference in batch numbers. Consumer must get the
benefit of the notified price. That is the ultimate objective of
DPCO. The batch number cannot override the benefit to which a
consumer is entitled on price reduction of a formulation. A fair
reading of DPCO leaves no manner of doubt that a formulation
cannot be sold to the consumer at the higher price (for earlier
batch numbers). In this view of the matter, we find merit in the
submission of the learned Additional Solicitor General that the
provisions of DPCO requires not just the end point sale to be at
the notified price, but also every sale within the distribution chain
must be at the notified price, if such sale is made after the date on
which sale price is operative."
(underlining added)
6. From the above extract, it is evident that the Supreme Court held that
the ultimate object of the DPCO was that there should be no deception to a
consumer and that he is sold the formulation at a price not exceeding the
price specified in the current price list or the price indicated on the label of
the container or pack thereof, whichever is less. It is further clear from this
that there could be a situation during the period of transition, where the
price list indicates a price different from that which has been indelibly
marked on the container or pack in respect of formulations manufactured
just prior to the dates of the notifications. Whatever be the situation, this
much is clear that the consumer cannot be charged a price higher than what
is indicated in the current price list or what is marked on the container,
whichever is less. We may also point out that the proviso to paragraph
24(1) of DPCO, 2013 requires a manufacturer to ensure that within a period
of forty-five days of the date of the notification, the maximum retail price
of the concerned formulation does not exceed the ceiling price (plus local
taxes as applicable). But, paragraph 26 also makes it clear that no person,
which includes the manufacturer, wholesaler, dealer and retailer, shall sell
any formulation to any consumer at a price exceeding the price specified in
the current price list or price indicated on the label of the container or pack
thereof, whichever is less.
7. In this context, all the petitioners have stated that they issued the
revised price list to all their distributors and retailers, as required under the
new notifications. The learned counsel also state that all the manufacturers
have done whatever they could do to ensure that the formulations are sold
at the revised prices or the prices marked on the containers, whichever are
lower.
8. It has also been brought to our notice that in most of the writ
petitions, demand notices have been sent by the Director NPPA (National
Pharmaceutical Pricing Authority) raising demands in respect of various
formulations. One such demand notice is dated 02.07.2015 and is in
connection with the scheduled formulation - 'Acivir 200 DT Tablet'. For
the sake of convenience, the said demand notice is reproduced herein
below:-
"F.No. 25(11)2013/Div.IV(OC-II)/NPPA
National Pharmaceutical Pricing Authority
Department of Pharmaceuticals
Ministry of Chemicals & Fertilizers
Government of India
5th /3rd Floor,
YMCA Cultural Centre Building,
No.1, Jai Singh Road,
New Delhi-110 001
Date: 02.07.2015
To
M/s Cipla Limited M/s Cipla Limited
Mumbai Central, Kumrek, Rangpo,
Mumbai - 400 008, Sikkim-737 132,
(MAHARASHTRA) (SIKKIM)
DEMAND NOTICE
Sub: DPCO, 2013: Manufacturing/marketing of scheduled
formulation 'Acivir 200 DT Tablet' at a price higher than
notified price- reg.
Sir,
This has reference, to this office notice dated 30.09.2013
followed by reminder-dated 27.08.2014 for your having
manufactured/sold the above referred scheduled formulation 'Acivir
200 DT Tablet' at a price of Rs.88.50/- per strip of 10 tablets as
against the ceiling price of Rs.7.30 per tablet notified vide
S.O.No.1590(E) dated 14.06.2013 (i.e. Rs.73.00 for 10's tabs on pro-rata
basis). The company was directed to furnish the quantitative details in
respect of the subject formulation duly certified by a Chartered/Cost
Accountant in the format given in the said notice.
2. Due to non-receipt of the quantitative details from the company,
a Show Cause Notice was issued on 21.04.2015 based on Pharmatrac
data from the period June, 2013.to February, 2015. However, NPPA has
not received any response from the company after the issue of reminder
till date. The said formulation was available in the market on 09th
August 2013, well after the expiry of 45 days from the date of
notification of the ceiling price notified by the Govt./NPPA.
3. The OPCO, 2013 has, been issued by the Central Government
in exercise of the powers conferred by Section 3 of the Essential
Commodities Act, 1955 and any contravention at the provisions of the
DPCO, 2013 is punishable in accordance with the provisions of the
Essential Commodities Act, 1955.
4. It is pertinent to state here that under the DPCO, 2013, once
the price notification is issued it takes immediate effect. In this
connection, your attention is invited to the judgment of the Hon'ble
Supreme Court dated 09.12.2013 in M/s Glaxo Stithkline vs. UOI
reported in (2014) SCC VOI.II 753, wherein it was inter-alia, held
that once the price notification is gazetted, it takes effect immediately
in sale of all available stock in market. From the above judgment it is
also clear that the companies should not sell the formulations at a
price higher than the notified selling price or the label of pack
whichever is less after the date of notification. As the said
formulation was purchased from the market at higher MRP well after
the issuance of notification for which the company is liable to deposit
the overcharged amount in respect of the quantity sold during this
period under the provisions of DPCO, 2013 and Essential
Commodities Act, 1955.
5. Based on the available information, the overcharged amount
was estimated at Rs 1,09,74,235/- (Rupees One Crore Nine Lakh
Seventy Four Thousand Two Hundred And Thirty Five Only) for the
period from June, 2013 to March, 2015 and the same is required to be
deposited with the Government of India. In addition, the company is
also liable to pay interest @15% on overcharged amount which
amounts to Rs 21,99,307/- upto 20.07.2015.
6. Thus, the company is liable to deposit the total amount of
Rs. 1,31,73,541/- (Rupees One Crore Thirty One Lakh Seventy Three
Thousand Five Hundred And Forty One Only) consisting of
overcharged amount along with interest thereon calculated upto
20.07.2015 as per Annexure-I by way of demand draft drawn in
favour of "The Pay and Account Officer (NPPA), Deptt. of
Pharmaceuticals, Ministry of Chemicals and Fertilizers, New Delhi"
within 15 days from the date of issue of this letter positively.
7. The amount indicated above is provisional and is without
prejudice to any further amount that may be assessed by this office
under the provisions of DPCO, 2013 based on further information. It
may be noted that the company is liable to pay interest @ 15% per
annum on the overcharged amount till the date of its actual deposit in
the Government Account.
8. The company is also required to submit control sample of the
referred formulation and price list in Form-V in support of
compliance of the notified ceiling price.
9. This demand notice may not be treated as a coercive action
taken by NPPA against the company. It is only an advance intimation
to the company towards the liability likely to arise after the court case
reaches its finality.
10. Kindly acknowledge the receipt.
Yours faithfully,
Sd/-
(A.K.KHURANA)
Director
Encl: As above
Copy to: The SDC, Maharashtra and SDC, Sikkim."
(underlining added)
9. From the above notice, it can be seen that the demand that is sought
to be raised is purely provisional and it has also been stated in paragraph 9
that the demand notice may not be treated as a coercive action taken by the
NPPA against the company. It is only an advance intimation to the
company towards the liability likely to arise after the court case (meaning
thereby the present petitions) reaches its finality. But the matter did not
stop here. Another set of demand notices have been issued and by way of
sample, we can take the demand notice with regard to Cipladline Solution,
which was issued on 17.07.2015 and the same reads as under:-
"F.No. 25(63)2013/Div.IV(OC-II)/NPPA
National Pharmaceutical Pricing Authority
Department of Pharmaceuticals
Ministry of Chemicals & Fertilizers
Government of India
5th /3rd Floor,
YMCA Cultural Centre
Building, No.1, Jai Singh
Road,
New Delhi-110 001
Date: 17.07.2015
To
M/s Jeps Pharmaceuticals M/s Cipla Limited
Rampur Ghat, Mumbai Central,
Paonta Sahib, Mumbai-400 008
Distt. Sirmour-173025
(HIMACHAL PRADESH) (MAHARASHTRA)
DEMAND NOTICE
Sub: DPCO, 2013: Manufacturing / marketing of scheduled
formulation 'Cipladine Solution' at a price higher than
notified price- reg.
Sir,
This has reference to this office notice dated 24.12.2013 followed
by reminder dated 27.02,2014 and 09.06.2014 for your having
manufactured/sold the above referred scheduled formulation
'Cipladine Solution' at a price of Rs.99.50/- for 100 ml. plastic bottle
as against the ceiling price. of Rs.0.39 per ml notified vide
S.O.No.1651(E) dated 14.06.2013(i.e. Rs.39.00 for 100 ml. on pro-
rata basis). The Companies were directed to furnish the quantitative
details in respect of the subject formulation duly certified by a
Chartered / Cost Accountant in the format given in the said notice.
2. Due to non-receipt of the quantitative details from the
companies, a Show Cause Notice was issued to them based on
Pharmatrac data from the period June, 2013 to December, 2014.
However, NPPA has not received any response from the company till
date.
3. The DPCO, 2013 has been issued by the Central Government
in exercise of the powers conferred by Section 3 of the Essential
Commodities Act, 1955 and any contravention of the provisions of the
DPCO, 2013 is punishable in accordance with the provisions of the
Essential Commodities Act, 1955.
4. It is pertinent to state here that under the DPCO, 2013, once
the price notification is issued it takes immediate effect. In this
connection, your attention is invited to the judgment of the Hon'ble
Supreme Court dated 09.12.2013 in M/s Glaxo Stithkline vs. UOI
reported in (2014) SCC VOI.II 753, wherein it was inter-alia, held
that once the price notification is gazetted, it takes effect
immediately in sale of all available stock in market. From the
above judgment it is also clear that the companies should not sell
the formulations at a price higher than the notified selling price or
the label of pack whichever is less after the date of notification.
As the said formulation was purchased from the market at higher
MRP well after the issuance of notification for which the company
is liable to deposit the overcharged amount in respect of the
quantity sold during this period under the provisions of DPCO,
2013 and Essential Commodities Act, 1955.
5. Based on the available information, the overcharged amount
was estimated at Rs.1,75,14,810/-(Rupees One Crore Seventy Five
Lakh Fourteen Thousand Eight Hundred and Ten only) for the period
from June, 2013 to May, 2015 and the same is required to be
deposited with the Government of India. In addition, the companies
are also liable to pay interest @15% on overcharged amount which
amounts to Rs.33,29,406/- upto 20.07.2015.
6. Thus, the company is liable to deposit the total amount of
Rs.2,08 44,217/-(Rupees Two Crore Eight Lakh Forty Four
Thousand Two Hundred and Seventen only) consisting of
overcharged amount alongwith interest thereon calculated upto
20.07.2015 as per Annexure- I by way of demand draft drawn in
favor of "The Pay and Account Officer (NPPA), Deptt. of
Pharmaceuticals,. Ministry of Chemicals and Fertilizers, New
Delhi" within 15 days from the date of issue of t6s letter positively.
7. The amount indicated above is provisional and is without
prejudice to any further amount that may be assessed by this office
under the provisions of DPCO, 2013 based on further information. It
may be noted that the companies are liable to pay interest @ 15% per
annum on the overcharged amount till the date of its actual deposit in
the Government Account.
8. The companies are also required to submit control sample of
the referred formulation and price list in Form-V in support of
compliance of the notified ceiling price.
9. If the above amount is not deposited within the stipulated
period alongwith the documentary evidences, the matter will be
referred to Collector for recovery of the amount as arrears of land
revenue under Essential Commodities Act, 1955 without any further
correspondence with the company.
10. Kindly acknowledge receipt.
Yours faithfully,
Sd/
(A.P.S.S HNEY)
Director (OC-II)
End: As above
Copy to: The SDC, Himachal Pradesh and SDC, Maharashtra -
with a request to insist the company to deposit the
demanded overcharged amount alongwith interest
thereon with this office within the stipulated time"
(underlining added)
10. From the above extract, it is clear that the notice is not just a notice
indicating a provisional demand but, the manufacturer has been required to
deposit the amount demanded within the stipulated period along with
documentary evidence otherwise the matter would be referred to the
collector for recovery of the amount as arrears of land revenue under the
Essential Commodities Act, 1955 without any further correspondence with
the company. Similar demand notices have been issued to the other
petitioners as well.
11. The learned counsel for the respondents submit that the said demand
notices may be treated as show cause notices. We direct accordingly. The
petitioners would, therefore, be entitled to file their replies to the said show
cause notices within four weeks from today. The show cause notices shall
be disposed of in accordance with law after considering the replies
submitted by the petitioners as also after granting an opportunity of
personal hearing to the petitioners in their individual cases. The same shall
be disposed of in accordance with the observations made in this order as
also the portions referred to in this order pertaining to the observations of
the Supreme Court in Glaxosmithkline Pharmaceuticals Limited (supra).
No coercive action shall be taken by the respondents till the disposal of the
show cause notices.
12. In the view that we have taken in the backdrop of the directions
given above, we do not deem it necessary to go into the question with
regard to the constitutional validity of the provisions which have been
challenged in these petitions. All the pending applications and the writ
petitions stand disposed of.
BADAR DURREZ AHMED, J
NOVEMBER 24, 2015 VIBHU BAKHRU, J
SR
