Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Del) 351

IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN, NAJMI WAZIRI, JJ.
Union Of India - Appellant
Versus
Panacea Biotec Limited - Respondent
FAO(OS) (COMM) 81 of 2020
Decided on : 04-06-2021

Advocates:
Advocate Appeared:
For the Appellant : Mr.Tushar Mehta, SGI with Mr.Balbir Singh, ASG with Ms.Monikabenjamin Mr. Bhagavn Swarup Shukla, CGSC, Mr. Rajesh Ranjan, Mr.Joel, Mr.Shyam Gopal and Mr.Sarvan Kumar, Advs.
For the Respondent: Mr.Sandeep Sethi, Sr. Adv. with Mr.Kawal Nain, Mr.Bhavya Nain, Mr.Rohit Dadwal and Ms.Kavita Sharma, Advs.

Point of Law: Interim order modified - It is settled law Court always has power to vary or modify any interim order for good and cogent reason. Respondent-Applicant had made a voluntary statement that in meantime; it would not prosecute its execution application.

Headnote:
Arbitration and Conciliation Act 1996 - Section 34 - Drugs and Cosmetics Act, 1940 - Section 26B - Drugs Rules, 1945 - Rules 122-A and 122B - New Drugs and Clinical Trials Rules, 2019 - Rule 80 (7) - Power of Central Government - Permission to import new drug - Application for setting aside arbitral award - Rejected on ground of limitation - Challenged - Ground of delay terming it as merely a ‘bunch of papers' and that by time it was re-filed along with a copy of Award, period of limitation had expired, although initial application had been filed with registry within period of limitation - Seeking modification of interim order as well as for a direction to Appellant to release awarded amount along with interest to Respondent-Applicant.
Finding of the court: Court finds that sub-rule 2 of Rule 122-A and sub-rule 3 of Rule 122-B of the Rules, 1945 and sub-rule 7 of Rule 80 of New Drugs and Clinical Trials Rules, 2019 are pari materia as they grant power to the Union of India to exempt the manufacturer or importer, as the case may be, from submitting results of local clinical trials in certain circumstances. Respondent-Applicant’s application for emergency use and authorisation under Section 26B of Act 1940 read with relevant Rules and OM’s/Policies/Schemes framed thereunder in accordance with law. It is always open to Respondent-Applicant to file an application, as has been done in present instance, to withdraw its statement for good reason. Appellant is directed to release Awarded sum along with interest as directed by Arbitrator to Respondent-Applicant subject to condition that it obtains permission from the Appellant to manufacture vaccines in India. List the appeal before regular Roster Bench.
Result: Application is allowed.

JUDGMENT :

MANMOHAN, J.

C.M.No. 16526/2021

1. Present application has been heard by way of video conferencing.

FACTS

2. The present appeal has been filed by the Appellant challenging the judgment and order dated 18th March, 2020, passed by learned Single Judge whereby the application filed by the Appellant herein under Section 34 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as “the Act 1996”) was rejected on the ground of delay terming it as merely a ‘bunch of papers’ and that by the time it was re-filed along with a copy of the Award, the period of limitation had expired, although the initial application had been filed with the registry within the period of limitation.

3. On 22nd July, 2020, learned counsel for the Respondent-Applicant had stated that the Respondent-Applicant, in the meantime, would not prosecute the execution proceedings instituted by it before the learned Single Judge.

4. Subsequently, present application being CM Appl.16526/2021 was filed by the Respondent-Applicant seeking modification of the interim order dated 22nd July, 2020 as well as for a direction to the Appellant to release the awarded amount along with interest to the Respondent-Applicant within two weeks.

5. It was averred in the application that the Respondent-Applicant had manufactured trial batches of COVID-19 vaccine Sputnik V in collaboration with Russian Direct Investment Fund (for short 'RDIF') and the process of manufacturing scale-up batches is on. It was further averred that if the awarded amount is not released by the Appellant to the Respondent-Applicant, the whole process of manufacturing of vaccine may get derailed and delayed which would not be in the larger interest of the country.

6. When the application was taken up for hearing on 18th May, 2021, learned ASG appearing for Appellant/non-applicant had stated that manufacture of Sputnik V vaccine by the Respondent-Applicant would not benefit the country as its manufacture is to be for global supply by RDIF and it cannot be used for domestic use in India.

7. As this Court was of the prima facie opinion that as there is an acute shortage of COVID-19 vaccines in India and the collaboration between the Respondent-Applicant and the RDIF may give India a window of opportunity to ensure that the vaccines manufactured by the Respondent-Applicant are used in India, it issued notice in the present application, as well as asked the Appellant/non-applicant to examine the present application from the aforesaid perspective and also asked the parties to complete the pleadings. However, as there has been no amicable resolution of the disputes, the application has been taken up for hearing.

ARGUMENTS ON BEHALF OF RESPONDENT-APPLICANT

8. The learned senior counsel for the Respondent-Applicant states that technology has been granted to the Respondent-Applicant for manufacture of Sputnik V vaccine by RDIF of Russia through its affiliate company “LLC Human Vaccines” of Russia ("HV"). He further states that as per the terms of Agreement, HV has granted an advance amount against supply of Sputnik-V vaccine to meet the partial fund requirement for fulfilling its obligations pursuant to the Agreement, including towards capital expenditure and the cost of materials & other expenses to be incurred in connection with transfer of technology, production of initial proof of concept/trial batches, validation/registration batches and initial commercial batches production. To safeguard the interest of the Appellant, he states that the Respondent-Applicant shall deposit twenty per cent of the sale proceeds of the Sputnik V vaccine with the Registry of this Court till the said awarded amount along with interest is fully secured, subject to the outcome of the present appeal.

ARGUMENTS ON BEHALF OF APPELLANT-NON APPLICANT

9. In rebuttal, the learned ASG states that no modification of the order dated 22nd July, 2020 passed by this Court can be prayed for having regard to the fact that the Respondent-Applican