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2019 Supreme(Del) 867
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Sanofi India Ltd And Anr. - Appellants
Vs.
Union Of India And Ors. - Respondents
Writ Petition (Civil) No. 7589 of 2018, 7619 of 2018, 7632 of 2018, 7634 of 2018; Civil Miscellaneous No. 28999 of 2018, 44988 of 2018, 29189 of 2018
Decided On : 20-03-2019
Gaurab Banerji, Adv., Manoj, Adv., Aparna Sinha, Adv., Mohit Pandey, Adv., S.P. Mukherjee, Adv., Kirtiman Singh, Adv., Ajay Digpaul, Adv., Madhuri Dhingra, Adv., Waize Ali Noor, Adv., Parth Semwal, Adv.
Headnote:
DPCO - Pharmaceutical Products - Drugs (Prices Control) Order, 2013 - Paragraph 5, Paragraph 15
Fact of the Case:
The petitioner, a pharmaceutical company, challenged the notifications issued by the National Pharmaceutical Pricing Authority (NPPA) fixing the ceiling price of certain pharmaceutical products under the Drugs (Prices Control) Order, 2013 (DPCO). The principal controversy was whether the drugs in question were to be considered as 'New Drugs' within the meaning of the DPCO.
Finding of the Court:
The court held that the drugs in question could not be considered as 'new drugs' as the petitioner was not an existing manufacturer of a drug of specified dosages and strengths as listed in the National List of Essential Medicines at the time of the launch of the drugs. The court set aside the impugned price notifications, show cause notices, demand notices, and the order of NPPA.
Issues: The principal issue was whether the drugs in question were to be considered as 'New Drugs' within the meaning of the DPCO.
Ratio Decidendi: The court interpreted the provisions of the DPCO, particularly the definitions of 'scheduled formulation' and 'new drug', and held that the drugs in question could not be considered as 'new drugs' as the petitioner was not an existing manufacturer of a drug of specified dosages and strengths as listed in the National List of Essential Medicines at the time of the launch of the drugs.
Final Decision: The petition was allowed, and the impugned notifications, show cause notices, demand notices, and the order of NPPA were set aside.
Vibhu Bakhru, J.
Petitioner no. 1 (Sanofi India Ltd. - hereafter "the petitioner") is a company, inter alia, engaged in the manufacture and supply of pharmaceutical products, which includes "Amaryl MV- 1 mg" and "Amaryl MV- 2 mg". The petitioner has filed the present petitions, inter alia, impugning the order dated 2.07.2018 (No. 31015/1/2018 - hereafter the "impugned order") passed by respondent no. 1. The petitioner had filed a review application under paragraph 31 of the Drugs (Prices Control) Order, 2013 (hereafter "the DPCO"), challenging the notifications issued by the National Pharmaceutical Pricing Authority (hereafter the "NPPA"),fixing the ceiling price of the aforesaid pharmaceutical products - "Amaryl MV- 1 mg" and "Amaryl MV- 2 mg" - under paragraph 5 of the DPCO. By the said impugned order, respondent no. 1 has rejected the aforementioned review application filed by the petitioner.
2. The petitioner also impugns the price notification dated 23.11.2017 (S.O. no. 3727 (E) - hereafter the "impugned notification dated 23.11.2017"), wherein the retail price for Amaryl MV 1 mg and Amaryl MV 2 mg was fixed at Rs. 7.14 and Rs. 9.05 per tablet, respectively. The petitioner also impugns the price notification dated 20.12.2017 (S.O. no. 3946 (E) - hereafter "the impugned notification dated 20.12.2017"), wherein the price of Amaryl MV- 1 mg and Amaryl MV- 2 mg was fixed at Rs. 6.85 and Rs. 8.68 per tablet, respectively (Post GST).
3. In addition, the petitioner also impugned the following show cause notices:
(i) Show cause notice dated 19.12.2017 (F. No. 30 (23)/2017/Div IV (OC-II)/NPPA - hereafter "the impugned show cause notice dated 19.12.17") calling upon the petitioner to show cause as to why an amount of Rs. 1,92,09,822/- (inclusive of interest) be not recovered from the petitioner on account of manufacturing and marketing the drugs in question, without obtaining prior approval.;
(ii) Show-cause notice dated 19.12.2017 (F. No. 30 (24)/2017/Div IV (OC-II)/NPPA - hereafter "the impugned show cause notice dated 19.12.17") calling upon the petitioner to show cause as to why an amount of Rs. 4,73,44,016/- (inclusive of interest)be not recovered from the petitioner on account of manufacturing and marketing the drugs in question without obtaining prior approval.
(iii) Show cause notice dated 20.12.2017 (F. No. 30 (25)/2017/Div IV (OC-II)/NPPA - hereafter " the impugned show cause notice dated 20.12.17") issued by the NPPA, wherein the petitioner was asked to show cause as to why the overcharged amount of Rs. 1,16,66,824/- (inclusive of interest) with reference to manufacture of Amaryl MV -2 mg (10 strips), should not be recovered; and
(iv) Show cause notice dated 21.12.2017 (F. No. 30 (26)/2017/Div IV (OC-II)/NPPA - hereafter "the impugned show cause notice dated 21.12.17") issued by the NPPA, wherein the petitioner was asked to show cause as to why the overcharged amount of Rs. 28,01,39,782/- (inclusive of interest) with reference to the manufacture of Amaryl MV - 2 mg (15 strips), should not be recovered from it.
4. The petitioner has also challenged the following demand notices issued by the NPPA, subsequently:
(i) demand notice dated 20.02.2018 (F. No. 30 (23)/2017/Div IV (OC-II)/NPPA - hereafter "the impugned demand notice dated 20.02.2018") issued by the NPPA, wherein the petitioner was directed to deposit an amount of Rs. 2,25,06,249/- for manufacturing Amaryl MV- 1 mg, (10 strips), without obtaining prior approval.
(ii) The demand notice dated 22.02.2018 (F. No. 30 (24)/2017/Div IV (OC-II)/NPPA - hereafter "the impugned demand notice dated 22.02.2018") issued by the NPPA, wherein the petitioner was directed to deposit an amount of Rs. 5,15,39,351/- for manufacturing Amaryl MV- 1 mg (15 strips), without obtaining prior approval.
(iii) demand notice dated 18.05.2018 (F. No. 30 (23)/2017/Div IV (OC-II)/NPPA - hereafte
