Administrative authorities must initiate proceedings within a reasonable time. A gross delay of over a decade, which prevents a party from defending itself due to the destruction of records, violates the principles of natural justice and renders the administrative action unsustainable.

ORDER : 

Manish Pitale, J.

. The petitioner No.1 is a company engaged in the business of manufacturing and marketing pharmaceutical products and petitioner No.2 is its authorized representative. They have filed this petition being aggrieved by a demand notice dated 15.02.2016 issued by respondent No.1 i.e. Union of India through Department of Pharmaceuticals as also impugned notice of demand issued to a defaulter by respondent No.3 Tahsildar under Section 267 of the Maharashtra Land Revenue Code, 1966 (for short ‘MLR Code’). The principal contention raised on behalf of the petitioners is that the petitioner No.1 is not liable to pay the amount demanded by the respondents for allegedly overcharging consumers in respect of a specific pharmaceutical formulation and that, in any case, the demand is hopelessly time-barred. The huge delay in raising the demand has resulted in depriving the petitioners from formulating their defence as the records pertaining to the relevant period were not available with the petitioners in the year 2016, when the impugned notices of demand were issued by the respondents.

2. The chronology of events leading to filing of the present writ petition would be relevant for appreciating the rival contentions. On 06.01.1995, respondent No.1 issued Drugs (Price Control) Order 1995 (DPCO 1995) by exercising power under Section 3 of the Essential Commodities Act, 1955. The First Schedule appended to DPCO 1995 specified the bulk drugs and formulations for which the respondent No.1 fixed ceiling price in accordance with paragraph 9 of DPCO 1995. For the present case, inclusion of ‘Theophylline’ in the First Schedule is relevant. The aforesaid DPCO 1995 consisted of 27 paragraphs, inter alia, providing for definitions of various terms used therein and also specified the powers of the respondent No.1 to fix retail price, ceiling price and to recover overcharged amounts from the entities in the business of manufacture and marketing of such bulk drugs and formulations.

3. The petitioner No.1 claims that it was exempted under a Notification dated 02.03.1995 issued by the respondent No.1, meant for small scale units. On 06.11.1995, the respondent No.1 issued Notification, fixing ceiling prices for various formulations of Theophylline. The petitioner No.1 was manufacturing Theophylline CR 300 mg tablets. Since the Notification issued by the respondent No.1, fixing ceiling prices for various formulations of Theophylline did not include Theophylline CR 300 mg tablets, the petitioner No.1 proceeded on the basis that there was no ceiling price. It is to be noted that certain variants of tablets were added by way of subsequent specific Notifications issued on 09.08.1996, but the aforesaid formulation of the petitioner No.1 was not included. Therefore, the petitioner No.1 proceeded on the basis that the ceiling price did not apply to the variant of Theophylline CR 300 mg tablet, as it was never notified by the respondent No.1.

4. After about 9 years, by issuing Notification dated 03.10.2006, the respondent No.1, for the first time, introduced ceiling prices for the variant Theophylline (CR/SR) 300 mg tablets. However, by this time, the petitioner No.1 had discontinued manufacturing its brand of Theophylline CR 300 mg tablet i.e. Phylobid CR 300 mg tablet.

5. Respondent No.1 claims that on 02.06.2008, it had issued a notice to the petitioner No.1 about alleged overcharging with regard to the said Phylobid CR 300 mg tablet i.e. brand name of the said petitioner for Theophylline CR 300 mg tablet. According to the petitioner No.1, it never received the said notice. We find that the documents placed on record by the respondent No.1 in this petition also do not support the assertion of the said respondent that the said notice was ever served upon the petitioner No.1.

6. There was no further action taken by the respondent No.1 and after about 9 years, on 18/20.02.2015, the respondent No.1 issued notice to the petitioner No.1, alleging that