Interest is payable under Section 7A of the Essential Commodities Act only after the expiry of 15 days from the date of the demand, and the charging of interest is limited to the specific period of default.

JUDGMENT

(Prayer: Writ petition filed under Article 226 of the Constitution of India praying for issuance of a writ of certiorarified mandamus calling for the records of the 2nd respondent in Demand Notice F.No.21(2292)/2012/Div.IV/NPPA dated 7th/8th March, 2016 read with Order bearing Pro.No.G2/7291/2017 dated 25.05.2017 of the 3rd respondent at the behest of the 2nd respondent and quash the same and consequently forbear the respondents, their officers, men, agents and servants from demanding or collecting alleged interest amount/ arrears of interest amount from the petitioner by taking any coercive action against the petitioner, directly or through the revenue authorities in pursuance thereof.)

1. Challenge in the writ petition is to the order of the 2nd respondent requiring the petitioner to pay a sum of Rs.38,37,517/- towards interest on the over charged amount. The order impugned dated 07/08-03-2016 also states that action for recovery under the Revenue Recovery Act will be launched, if the amount demanded is not paid within 10 days from the date of receipt of the said notice.

2. The petitioner which is a Pharmaceutical Company had produced and marketed certain drugs. The respondents claim that one of the drugs manufactured by the petitioner viz., Ecosprin Gold 20 Forte capsules has been sold by the petitioner at a price higher than the price fixed under the Drugs (Price Control) Order, 1995.

3. A notice was issued to the petitioner under Section 3 of the Essential Commodities Act demanding a sum of Rs.2,86,08,105/-. The petitioner responded to the said notice claiming that the product viz., Ecosprin Gold 20 Forte capsules is a different drug combination from the products for which price have been fixed by the respondents under the Drugs (Price Control) Order, 1995. The petitioner also claimed that if at all it is liable to pay the difference in price that would only be to the extent of Rs.67,94,993/- and not Rs.2,86,08,105/- as demanded in the notice dated 08.10.2015. It appears that the respondents accepted the calculation of the petitioner and the amount as calculated by the petitioner viz., Rs.67,94,993/- was required to be paid and the same was paid on 30.11.2015.

4. After receipt of the entire amount on 30.11.2015, the Authority viz., Director of National Pharmaceutical Pricing Authority issued present impugned demand claiming an interest of Rs.38,37,517/-. The petitioner claimed that the interest charged is against the terms of the provisions of the enactment. However, the respondents issued the order impugned in the writ petition on 07/08-03-2016 requiring the petitioner to pay the interest.

5. Mr.T.D.Selvan Babu, learned counsel appearing for the petitioner would contend that the liability to pay interest would arise only on the commission of default in payment of any amount due and payable to the Government. Relying upon Section 7A of the Essential Commodities Act which reads as follows:-

7A. Power of Central Government to recover certain amounts as arrears of land revenue:-

(1) Where any person, liable to –

(a) pay any amount in pursuance of any order made under section 3 or,

(b) deposit any amount to the credit of any Account of Fund constituted by or in pursuance of any order made under that section, makes any default in paying or depositing the whole or any part of such amount, the amount in respect of which such default has been made whether such order was made before or after the commencement of the Essential Commodities (Amendment) Act, 1984, and whether the liability of such person to pay or deposit such amount arose before or after such commencement be recoverable by Government together with simple interest due thereon computed at the rate of fifteen per cent per annum from the date of such default to the date of recovery of such amount, as an arrear of land revenue or as a Public Demand.

(2) The amount recovered under sub-section (1) shall be dealt with in accordance with the order which the l