Delhi High Court
Amkay Laboratories Pvt Ltd vs Union Of India And Anr on 12 October, 2018
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 12.10.2018
+ W.P.(C) 7348/2015
AMKAY LABORATORIES PVT LTD ..... Petitioner
versus
UNION OF INDIA AND ANR ..... Respondents
Advocates who appeared in this case:
For the Petitioner : Mr Piyush Sharma and Mr K. G. Mishra,
: Advocates.
For the Respondent : Mr Kirtiman Singh, CGSC, Mr Manish
: Mohan, CGSC with Ms Manisha Saroha,
: Mr Waize Ali Noor, Mr Prateek Dhanka,
: Ms Shruti Dutt and Mr Vikramaditya
: Singh, Advocates.
CORAM
HON'BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J
1. The petitioner has filed the present petition, inter alia, impugning
the notification - S.O. No. 607(E) dated 27.05.2003 (hereafter „the
impugned notification‟) - issued by respondent no.2 (hereafter „NPPA‟)
fixing the ceiling price of Dexametosone plus Gentamycin Eye/Ear
Drops. The petitioner also impugns the order dated 27.11.2008 passed by
NPPA, inter alia, demanding a sum of ₹26,536/- from the petitioner on
account of charging a price in excess of the ceiling price fixed for the
formulation in question and further, to pay interest quantified at ₹9,288/-
on the aforesaid amount up to November, 2008.
2. The petitioner owns a Small Scale Industrial Unit located in the
State of Uttar Pradesh and, on 04.12.1986, a license to this effect was
issued to the petitioner. In 1994, the petitioner was granted the license by
the Drug Controller State of Uttar Pradesh for manufacture of Dexogen
Eye/Ear Drops.
3. On 27.05.2003, the NPPA issued a price fixation order modifying
an earlier order dated 19.02.1997 and 29.06.2000 wherein, the price for
formulations containing Dexamethasone Sodium Phosphate were fixed.
4. It is the petitioner‟s case that since it is a Small Scale Industry, it
is exempt from the rigors of the Drugs (Price Control) Order (hereafter
„the DPCO‟) issued in exercise of the powers under the Essential
Commodities Act, 1955. In is further contended by the petitioner that the
formulation manufactured by it - "Dexogen Eye/Ear Drops" (hereafter
„the Product‟) - is not covered under the impugned notification, as the
Product is not packaged in glass vial with a dropper but in a plastic bottle
(FFS).
5. In addition, the petitioner contends that there is a substantial
difference between the Product and the formulation for which the ceiling
price has been fixed in terms of the impugned notification.
6. The petitioner also impugns the ceiling price fixed under
Paragraph 7 of the DPCO on the ground that the Central Government
had not specified the norms for costs as required in terms of Paragraph 7
of the DPCO.
7. The decision in Amkay Laboratories v. Union of India &Anr:
W.P.(C) 12351/2009 delivered today, is also determinative of the issues
raised in the present petition.
8. In Amkay Laboratories (supra), this Court held that since the
Product contains a drug specified in the Schedule to the DPCO, the same
would fall within the definition of the term "scheduled formulation" as
defined in paragraph 2 (v) of the DPCO. Consequently, the petitioner is
liable to pay the price it has charged in excess of the ceiling price fixed
for the formulation in question. However, while deciding on the issue of
interest payable on the impugned demand, this Court held that the
liability to pay interest would arise only once a default is committed in
making a payment of the demanded amount within the time stipulated
therein.
9. In the present case, the demand was raised for the first time by the
impugned order dated 27.11.2008 and the petitioner was called upon to
pay the amount demanded within a period of fifteen days from the date
of the said letter. Thus, the liability to pay interest would arise with
effect from 12.12.2008 (that is, on expiry of fifteen days after the date of
the impugned letter).
10. Thus, for the reasons stated in Amkay Laboratories (supra), the
impugned order to the extent it seeks recovery of interest prior to the
date of the impugned order, is set aside.
11. The petition is disposed of in the above terms.
VIBHU BAKHRU, J
OCTOBER 12, 2018
pkv
