RANBAXY LABORATORIES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) CM.No.7859/2005: Allowed, subject to all just exceptions. WP(C) No.10700/2005 & CM No. 7858/2005: 1. In this Petition a challenge has been laid to the Demand dated 13.6.2005 of Rs.4,65,08,333/- on the subject of - 'Recovery of overcharged amount under Para 13 of DPCO'95 read with Section 7A of Essential Commodities Act, 1955 - Cloxacillin based formulations.'

(2.) It has been observed by the Hon'ble Supreme Court in Union of India v. Cynamide India Ltd., (1987) 2 SCC 720, "It is primarily from the consumer public's point of view that the Government is expected to make its inquiry. The need of the consumer public is to be ascertained and making the drug available to them at a fair price is what it is all about........In fixing the price of a bulk drug, the Government is expressly required by the Order to take into account the average cost of production of such bulk drug manufactured by 'an efficient manufacturer' and allow a reasonable return on 'net worth'. For this purpose too, the Government may gather information from any source including the manufacturers." The Court also opined that price fixation under the Drugs (Prices Control) Order, 1979 is a legislative activity and not a quasi-judicial activity.

(3.) Mr.Nayyar, learned Senior Counsel for the petitioner, has very forcefully contended that the respondents have been shifting their stands from year to year and are attempting to make recoveries from the petitioner, although fully aware that if any liability has been incurred, it must be laid at the doors of Oscar Laboratories (P) Ltd. (not impleaded as a party). It has also been contended that no notice has been issued to Oscar Laboratories (P) Ltd.; Mr. P.P. Malhotra, learned Additional Solicitor General, has countered that notices were not sent out but the Report stated that the factory had closed down.