Back
O. CHINNAPPA REDDY AND K.N. SINGH, JJ.
Civil Appeal No. 1603 0f 1985 etc., D/- 10-4-1987.
Union of India and another, Appellants
Versus
Cynamide India Ltd. and another etc., Respondents.
Essential Commodities Act, 1955 - Section 3(2)(c), 3(3C), 3 - Drugs and Cosmetics Act, 1940 – Constitution Of India, 1950 - Article 39(b) - Manufacturers Of Bulk Drugs - Fixing Price - Different problem of alleged exploitation by big manufacturers of bulk drugs - Problem is that of high prices, bearing, it is said, little relation to cost of production to manufacturers - Manufacturer applied for fixation of price - Government, however, fixed price - For moment, ignoring price fixed by Government, see that price of Rs. 24,735 per Kg at which manufacturer was previously selling drug and at which he continues to market drug to this day because of quashing of order fixing price by High Court, is so unconscionably high even compared with price claimed by himself that it appears to justify charge that some manufacturers do indulge in profiteering - Whether relevant considerations have gone in and irrelevant considerations kept out of determination of price - Whether policy and factors are present to mind of authorities specifying price- Whether there was an "excess of power" or an "arbitrary" exercise of it, is really demonstration of a reasonable nexus between matters which are taken into account in exercising a power and purposes of exercise of that power - Whether clause 8B of Import Control Order which empowered Central Government or Chief Controller to keep in abeyance applications for licences or allotment of imported goods where any investigation is pending into an imported goods where any investigation is pending into an allegation - Whether there has been any such arbitrary assumption of facts and figures - Whether relevant considerations have gone in and irrelevant considerations kept out of determination of price – Held, Price of a bulk drug is dependent on many variable factors which keep changing very fast - If time is allowed to lapse whatever price is fixed, it soon becomes out of date - If review applications are not disposed of expeditiously notifications fixing prices must be struck down as having become obsolete - It is difficult to agree with these propositions - It is true that price of a bulk drug is dependant on innumerable variables - But it does not follow that notification fixing maximum price must necessarily be struck down as obsolete by the mere passage of time - Petitions were filed beyond prescribed period of limitation, petitions for condoning delay in filing petitions for special leave to appeal had to be and were filed - These applications are strenuously opposed by manufacturers who contend ordinary rule which is enforced in cases of delay namely that everydays delay must be properly explained should also be rigorously enforced against Government - It is contended that Government is a well versed litigant as compared with private litigants and even if there is justification of adopting a liberal approach in condoning delay in case of private litigants there was no need to adopt such approach in case of Government - In cases like present where parties have acted on the assumption that no appeals had been filed against them and have proceeded to arrange their affairs accordingly it would be unjust to condone delay in filing appeals at instance of Government - Though court see considerable force in submission of Shri Diwan, court think that circumstances of instant cases do justify exercise of our discretion to condone delay - Two important features have weighed with us in condoning delay - One is that all writ petitions were disposed of by a common judgment and an appeal had been filed in principal case - Other is that it is a matter of serious concern to public interest – Petition Allowed.
Judgement
CHINNAPPA REDDY, J.:- It was just the other day that our brothers Ranganath Misra and M. M. Dutt, JJ. had to give directions in a case (Vincent Panikurbangara v. Union of India), (AIR 1987 SC 990) where a public spirited litigant had complained about the unscrupulous exploitation of the India Drug and Pharmaceutical Market by multinational Corporations by putting in circulation low-quality and even deleterious drugs. In this group of cases we are faced with a different problem of alleged exploitation by big manufacturers of bulk drugs. The problem is that of high prices, bearing, it is said, little relation to the cost of production to the manufacturers. By way of illustration, we may straightway, mention a glaring instance of such high-pricing which was brought to our notice at the very commencement of the hearing. Barlagan Ketone, a bulk drug, was not treated as an essential bulk drug under the Drugs (Prices Control) Order, 1970 and was not included in the schedule to that order. A manufacturer was, under the provisions of that Order, free to continue to sell the drug at the price reported by him to the Central Government at the time of the commencement of the order, but was under an obligation not to increase the price without the prior approval of the Central Government. The price which the manufacturer of Barlagan Ketone, reported to the Central Government in 1971 was Rs. 24,735.68/- per Kg. After the 1979 Drugs (Prices Control) Order came into force, the distinction between essential and nonessential bulk drugs was abolished and a maximum price had to be fixed for Barlagan Ketone also like other bulk durgs. The manufacturer applied for fixation of price at Rs. 3,500 per Kg. The Government, however, fixed the price at Rs. 1,810 per Kg. For the moment, ignoring the price fixed by the Government, we see that the price of Rs. 24,735 per Kg. at which the manufacturer was previously selling the drug and at which he continues to market the drug to this day because of the quashing of the order fixing the price by the High Court, is so unconscionably high even compared with the price claimed by himself that it appears to justify the charge that some manufacturers do indulge in profiteering.
2. Profiteering, by itself, is evil. Profiteering in, the scarce resources of the community, much needed fife-sustaining food-stuffs and life-saving drugs is diabolic. It is a menace which had to be fettered and curbed. One of the principal objectives of the Essential Commodities Act, 1955 is precisely that. It must be remembered that Art. 39(b) enjoins a duty on the State towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good. The Essential Commodities Act is a legislation towards that end. Section 3(1) of the Essential Commodities Act enables the Central Government, if it is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair price, to provide for regulating or prohibiting by order, the production, supply and distribution thereof and trade and commerce therein. In particular, S. 3(2)(c) enables the Central Government, to make an order providing for controlling the price at which any essential commodity may be bought or sold. It is in pursuance of the powers granted to the Central Government by the Essential Commodities Act that first the Drugs (Prices Control) Order, 1970 and later the Drugs (Prices Control) Order, 1979 were made. Armed with authority under the Drugs (Prices Control) Order, 1979 the Central Government issued notifications fixing the maximum prices at which various indigenously manufactured bulk drugs may be sold by the manufacturers. These notifications were questioned on several grounds by the manufacturers and they have been quashed by the Delhi High Court on the ground of failure to observ
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
