The court affirmed that all formulations of a scheduled drug, including gel, are subject to price regulations, emphasizing NPPA's authority in price control over the formulations.

JUDGMENT :

Subhendu Samanta, J.

1. Petitioner No. 1 is a company incorporated under Companies Act, 1956, carries on business of manufacture and sale of various pharmaceutical products including manufacture of medicines of dermatological elements from the year 1985. Respondent No. 1 & 2 are the Officers of National Pharmaceutical Pricing Authority (NPPA), a statutory body authorised under Essential Commodities Act, 1995 and Drug Pricing Control Order 1995 [(DPCO)] 1995 to implement and enforces the selling price of identified scheduled Drugs and Scheduled Formulations.

2. (DPCO) 1995 seeks to control and restrict maximum selling price of scheduled bulk drugs enumerated in the scheduled attached to DPCO 1995. One of such drug included in the scheduled DPCO 1995 is “Betamethasone Dipropionate”. By such order NPPA fixed the upper selling price at which the formulations containing scheduled bulk drug can be sold. Accordingly on December 14, 2007 NPPA issued a notification being Standing Order 226 (F) enumerating the maximum selling price of formulations of the scheduled bulk drug “Betamethasone Dipropionate”.

3. In 1997 petitioner No. 1 had started manufacturing a product called “Kancel-B gel” a gel formulation of “Betamethasone Dipropionate”. The standing order specifically covered only the cream, ointment and lotion format of the said scheduled drug but did not include get formulation. Therefore, petitioner No. 1 continue manufacturing “Kancel-B gel” without adhering to any price restrictions provided in the standing order.

4. The petitioner No. 1 served with a letter dated 14.01.2010 containing inter alia that it was illegally retailing “Kancel-B gel” without adhering to the selling price restriction imposed in the standing order. Similar letters were sent by NPPA on 06.12.2012 and 01.08.2013. Petitioner replied to the aforesaid letter and informed NPPA that the standing order included only “Betamethasone Dipropionate” in its cream and ointment and not the gel formulation manufactured by the petitioner. It has been further contended by the petitioner that “Kancel-B gel” was distinctly different from ointment and cream and therefore, Standing Order could not anyway applicable to “Kancel-B gel”. NPPA only denied the reasons provided by the petitioner, and on 02.02.2015 raised a demand of Rs. 1,15,61,016/- as the overcharge amount and interest therein. Against the said demand letter, this petitioner approached this court in a writ petitioner being WP 11039 (W) of 2015. A Co-ordinate Bench vide its order dated 08.06.2015 disposed of the writ petition and directed Directors NPPA to examine the issued deeper and passed a reasoned order after granting reasonable opportunity of hearing to the petitioner thereby the impugned order dated 2nd February 2015 and 17th March 2015 along with of a consequential orders thereto are kept in abeyance. In terms of such direction, the concerned NPPA allowed the petitioner to submit a written representation and allowed the petitioner for hearing thereafter passed the impugned order whereby, respondent authority found representation of petitioner to be devoid of merit and directed petitioner to pay Rs.1,19,62,329/- as demand for price overcharge amount along with interest therein.

5. Issue involved First:- whether “Betamethasone Dipropionate” in gel formulation is included in the standing order dated February 14, 2007.

6. Second:- whether petitioner entitled to trade di