IMPORTANT POINT
The court established that price control provisions for scheduled drugs do not apply to non-scheduled formulations, particularly when distinct packaging technologies are involved.

ORDER :

1. Draft amendment is formal in nature. The amendment sought to be made is, thus, granted. Necessary incorporation be made in the array of parties within 48 hours.

2. Present appeals preferred under Clause-15 of the Letters Patent assail the correctness and validity of the judgment dated 26.12.2017 passed by the learned Single Judge in SCA No. 11459/2008 as well as SCA No. 13797/2011. As the issue arise in both the writ-petitions is common, we are taking the facts of SCA No. 13797 of 2011 as a lead matter to adjudicate the matter.

3. The prayers as made in the writ-petition preferred by the respondent-original petitioner was to issue a writ of certiorari or any other writ or direction to quash and set-aside the impugned order dated 25.5.2011 as well as praying for direction restraining the appellant from applying notification S.O 725(E) dated 27.8.1998 and the prices fixed therein to the product of the petitioner being Sodium Chloride/Dextrose Injection IP (0.9% W/V) 500 ml packed in NON-PVC “UNIBAG.”

4. Learned Single Judge after hearing the contentions raised by both the parties was pleased to allow the writ- petition by observing that the issue involved in the petition regarding demand of the notices with regard to penalty cannot be sustained. It is this order of the learned Single Judge which is assailed in the present Letters Patent Appeal.

5. Factual matrix which has led to filing of the writ- petition is that by order No. S.O 725 (E) dated 27.8.1998, the respondent in exercise of powers conferred under Sub-Para-(b) of Para-10 of the Drugs (Price Control) Order, 1995 (hereinafter referred to as “order”) fixed the retail prices (and not the ceiling prices) excluding excise duty and local taxes of the Non-Scheduled formulation of IV Fluids packed either in Plastic bottles or Glass bottles as per the details given therein.

6. Petitioner is a Pharmaceutical Company with product offering comprises of 113 products across multiple markets and therapeutic areas. In May, 2007, the petitioner started manufacturing and marketing of Non-Scheduled Formulation being Sodium Chloride Injection IP (0.9% W/V) 500 ml and Dextrose Injection in special bag in NON PVC “UNIBAG” (hereinafter referred to as 'the product'). It was the case of the petitioner that NON-PVC bags have special advantages for patients as compared to IV Fluids available in plastic or glass bottle. It was the case of the petitioner that material used for making of the packages of the product by the petitioner is completely different from the material that is taken as the basis for fixing the price and, therefore, that could not form basis for fixing the price in notification of 1998. As the product is different and distinct from the 'plastic bottles' or 'glass bottles' in terms of the material and in terms of the technology used thereof, the cost incurred for making of the said package was higher.

7. In view of the special distinction between material used and technology with regard to products, the petitioner vide its letter dated 4.4.2006, submitted its price-list in Form-V to the respondent and indicated the retail prices of the product. It is an undisputed fact that the respondent has never responded to the communication dated 4.4.2006 initiated by the petitioner. On 1.7.2008, i.e. nearly after a span of 2 years, respondent informed the petitioner that as per the information available with the respondent it was observed that the petitioner company was not following the price fixed by NPPA/Government in respect of the formulation of Dextrose Injection provided in notification of 1998. Therefore, petitioner was given show-cause notice and called upon to explain the reasons for non-compliance of the ceiling prices. The communication dated 1.7.2008 referred to the petitioner as a Scheduled formulation despite it being a Non-Scheduled Formulation.

8. Pursuant to the communication dated 1.7.2008, petitioner gave clarification on 30.7.2008 and also provided explanation to th