JUDGMENT

VERMA, J.— The respondents were found guilty by the trial court for contravention of para 21 read with para 18 of the Drugs (Prices Control) Order, 1979 (hereinafter referred to as the Order) issued under Section 3 of the Essential Commodities Act, 1955 (hereinafter referred to as the Act) and accordingly convicted under Section 7 of the Act. Respondent 1 firm was sentenced to a fine of Rs 2000 while respondents 2 and 3 who were the managing partner and pharmacist of the firm were sentenced to three months simple imprisonment. The High Court of Kerala at Ernakulam (hereinafter referred to as the High Court allowed their appeal against the conviction and sentence and acquitted all of them. Hence, this special leave petition against their acquittal.

2. Leave granted.

3. The allegation on which the prosecution of the respondents was based is that they collected Rs 90 in excess of the maximum retail price fixed for the sale of 15 tablets of Largactil of 100 mg. each and 60 p. in excess for 100 tablets of Hipnotex of 5 mg. each from one Sebastian Joseph, a Nursing Assistant in the Medical College Hospital, Kottayam, on February 4, 1985. It is alleged that recovery of the amount in excess of the maximum retail price fixed for the sale of these medicines under the Drugs (Prices Control) Order, 1979 was a contravention of the provisions contained therein which is punishable under Section 7 of the Essential Commodities Act, 1955. The trial court rejected the several defences raised by the respondents and found them guilty of contravention of para 18 read with para 21 of the Order which is an offence punishable under Section 7 of the Essential Commodities Act, 1955. The respondents were accordingly convicted and sentenced as aforesaid.

4. As earlier stated, the respondents appeal to the High Court has succeeded and they have all been acquitted. The High Court has taken the view that on these allegations, contravention of para 18 of the Order is not made out. The High Court has summarised its conclusion as under:

"The upshot of the above discussion is that Largactil and Hipnotex - Chlorpromazine and Nitrazepam - are only bulk drugs and not formulation. The appellants, none of whom is a manufacturer or distributor, cannot be convicted for contravention of paragraph 18 of the Order. (The position is seemingly different in the Order of 1987 because paragraph 18 of the Order of 1987 contains inhibition against sale of bulk drugs also.)

In the result, I allow this appeal and set aside the conviction and sentence. The appellants are acquitted and are directed to be set at liberty."

5. The real question for decision in the present case is the correctness of the construction made by the High Court of the provisions of the Order. Shri P.S. Poti, learned counsel for the appellants contended that the grievance in this appeal is really to the construction made by the High Court of the provisions of the Order which is affecting a large number of similar matters and not to the outcome of individual matter before us. Learned counsel contended that the appellants are not much interested in assailing the acquittal in the present individual matter, but the correct construction of the provisions of the Order is necessary for future guidance. In our opinion, it is necessary to examine the provisions of the Order and to indicate their correct meaning in view of the general importance thereof.

6. The Order was made by the Central Government in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955. Para 2 of the Order contains the definitions, some of which may be referred. Clause (a) of para 2 defines bulk drug to mean any substance ... which is used as such, or as an ingredient in any formulations. Dealer is defined in clause (b) to mean a person carrying on the business of purchase or sale of drugs, whether as a wholesaler or retailer and includes an agent of a dealer. Drug is defined in clause (d) to include bulk drugs and