Judgment

S.K. Mishra, J.

In these two writ petitions, the petitioners being Orissa Campus Chemists Association and M/s. Oracle Drugs, M.K.C.G. (MCH) Campus and others have assailed Clause 16 of the Resolution of the Government issued on 17.11.2012 by the Health and Family Welfare Department of the Government of Orissa, whereby directions have been given that the allottees shall supply drugs at a discount price to the public in a given percentage.

2. In the first writ petition, the petitioner is the Orissa Campus Chemists Association represented by its Joint Secretary has prayed the Court to quash the Resolution dated 17.11.2012, in so far as it imposes for supply of drugs at discounted price being without any 'authority in law and violative of Articles 14, 19 and 21 of the Constitution of India and in second writ petition M/s. Oracle Drugs, M.K.C.G. (MCH) Campus represented through its Proprietor has filed the writ petition seeking quashing of the order dated 17.11.2012 under Annexure-4.

3. It is apparent from the records that in the year 2004, as per the Government of Orissa in Health and Family Welfare notification dated 28.01.2004, certain guidelines were issued for opening of 24 hours Day and Night Medicine shop within the premises of the Hospital. Such a guideline was issued in suppression of all previous circulars and orders the Government have passed earlier. It was directed that the allottee shall be an unemployed registered pharmacist or a person who is willing to engage registered pharmacists and young persons who are just above the maximum age limit admissible for Government employment and just below 45 years may be given preference over older persons. At clause 7, the license fee structure has been given for renewal of existing medicine shop and fresh medicine shop within the campus of three medical college and hospitals at Rs. 75,000/- per annum was fixed as the licence fee. Similarly, for the District Headquarters Hospital, the fee is Rs. 30,000/- per annum. The allottee has to construct their structure in the land provided by the Hospital. It should be furnished and Air-conditioned and should be fit for use as a Day and Night shop. There are also other conditions also to that allotment.

4. On 17.11.2012, the Government of Orissa in Health and Family Welfare Department issued another Resolution regarding revision of guidelines for opening of 24 hours medicine shop inside the campus of Government Health Institutions. Among other things, at Clause 16, the Government have stipulated that the allottee shall supply drugs at a discounted price to the public as under:

(a) Medical College Hospital & Capital Hospital

15% on maximum retail price

(b) District Headquarters Hospital and Hospitals equivalent in the status of DHH

10% on maximum retail price

(c) Sub-Divisional Hospital

7.5% on maximum retail price

(d) C.H.C./PHC (N)/Ayurvedic/Homeopathic Hospitals

5% on maximum retail price.

The petitioners assail this provision of prescribing a discount for sale of medicine to the general public.

5. In course of hearing, the issues boiled down to two important aspects of the case. Firstly, it is stated that as per the previous guidelines, they have entered into an agreement with the Government and lease has been granted to them and that lease period is valid for five years. So during the subsistence of a contract an unilateral decision cannot be made by the Government changing the conditions of the contract and thereby asked the petitioners to supply the medicines at a discounted rate.

6. The second aspect that arose in course of hearing is that the Central Government in Ministry of Chemicals and Fertilizers (Department of Pharmaceuticals) on 15th May, 2013, in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 and supersession of the Drug (Prices Control) Order, 1995, made a new order. At Clause 7, the Central Government has fixed the margin to the retailer at 16% at the price of the retailer, in other words,