CADILA LABORATORIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) .On these two petitions, the petitioner-companies against whom recovery is sought to be made of the dues said to have accrued into the Drug Prices Equalisation Account (D.P.E. Account) under Paragraph 17 read with Paragraph 7(2) of the Drugs (Prices Control) Order, 1979 (hereinafter referred to as "the Control Order of 1979"), have challenged the validity of the provisions of Paragraph 7(1 )(a) of the Control Order of 1979 as being ultra vires the provisions of the Essential Commodities Act, 1955 and Arts. 14, 19, 300-A and 265 of the Constitution of India.

(2.) . In Special Civil Application No. 3032 of 1999, which has been argued as the lead matter, a declaration is sought that the notice dated 8-5-1985 and the revised demand notice dated 17-7-1997 purporting to make recovery under Paragraph 7(2)(a) read with Paragraph 17 of the Control Order of 1979 are without jurisdiction and illegal and that the respondents have no authority or jurisdiction to issue any notice or demand after the repeal of the Control Order of 1979 and coming into force of the Drugs (Prices Control) Order, 1987 on 26-8-1987 and the Drugs (Prices Control) Order, 1995 on its coming into force on 6-1-1995. The impugned recovery under the notice is challenged as illegal and unconstitutional and not warranted by the provisions of Sec. 7-A of the Essential Commodities Act, 1955.

(3.) The recovery under the impugned notice was being effected against the petitioner No. 1-Company (Cadila Laboratories Ltd.) which, as stated in Paragraph 2 of the said petition, was engaged in the manufacture of drugs and pharmaceuticals, was restructured pursuant to the order dated 2-5-1997 under Secs. 391 and 394 of the Companies Act, 1956 and consequently, the petitioner No. 2 and 3 companies had succeeded equally and jointly to the assets, liabilities and business of the petitioner No. 1-Company except land and building mentioned therein, and therefore, the petitioners Nos. 2 and 3 have also joined as the co-petitioners since they would be affected by the result of the present proceedings.