bipin prithiani

1

wp-2216.15 & anr.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO. 2216 OF 2015

M/s. Franco Indian Pharmaceuticals

Pvt. Ltd. & Anr. … Petitioners

Versus

Union of India & Ors. … Respondents

WITH

WRIT PETITION NO. 885 OF 2015

Indian Drug Manufactures Association … Petitioner

Versus

Ministry of Chemicals and Fertilizers & Ors.… Respondents

WITH

NOTICE OF MOTION NO. 257 OF 2015

IN

WRIT PETITION NO. 885 OF 2015

******

Mr. Navroz Seervai, Senior Advocate a/w. Ms. Arti Raghavan and

Ms. Tavleen Saini i/by Crawford Bayley & Co. for Petitioners in

WP/2216/2015.

Mr. Dheeraj Nair a/w. Mr. Pratik Pawar, Ms. Shanaya Cyrus Irani,

Ms. Avni Sharma and Ms. Sanjana Pandey i/by J. Sagar Associates

for Petitioner in WP/885/2015.

Mr. M. S. Bhardwaj for Respondents in WP/2216/2015.

Mr. G. R. Sharma (through V.C.) a/w Mr. D. P. Singh for

Respondents in WP/885/2015.

******

CORAM:MANISH PITALE AND

SHREERAM V. SHIRSAT, JJ.

RESERVED ON:7

th

MARCH 2026

PRONOUNCED ON : 10

th

APRIL 2026

Judgment (Per Manish Pitale, J.) :

. The petitioner No.1 in Writ Petition No.2216 of 2015 is an

entity engaged in the manufacture, marketing and distribution of

bipin prithiani

2

wp-2216.15 & anr.doc

pharmaceutical formulations and petitioner in Writ Petition No.

885 of 2015 is the Indian Drug Manufacturers Association

(IDMA), which is a registered association of manufacturers of

drugs and pharmaceuticals in India. Both the petitions raise issues

pertaining to the interpretation and implementation of the Drugs

(Price Control) Order 2013 (hereinafter referred to as ‘DPCO

2013’ for short). The petitioners contend that the respondent

No.3 i.e. the National Pharmaceutical Pricing Authority (NPPA) is

wrongly interpreting DPCO 2013 to insist on price ceiling for

formulations that do not form part of the first schedule appended

to DPCO 2013 and that such insistence is not only arbitrary, but it

is in the teeth of various clauses of the DPCO 2013 itself. The

petitioner-IDMA in Writ Petition No.885 of 2015 has also

challenged communication dated 20.06.2014 issued by respondent

No.3-NPPA to the Department of Pharmaceutical, which purports

to interpret DPCO 2013, contrary to the interpretation of the

respondent No.1 through Ministry of Chemicals and Fertilizers

(Department of Pharmaceutical).

2.Since the respondent No.3-NPPA proceeded on the basis

that formulations, not specifically mentioned in the first schedule

to DPCO 2013, were also amenable to price ceiling, certain claims

were being made against manufacturers of pharmaceuticals, drugs

and formulations for recovery of allegedly overcharged amounts.

In that light, the petitioners in both the petitions pressed for

interim relief. In both the petitions, interim relief was granted to

bipin prithiani

3

wp-2216.15 & anr.doc

the effect that no coercive steps would be taken by the

respondents in pursuance of demand notices issued against such

manufacturers of drugs and formulations. The interim relief

continued to operate in favour of the petitioners. Upon

completion of pleadings, the writ petitions were taken up for final

hearing.

3.The respondent-Union of India had been issuing drug price

control orders from time to time. On 07.12.2012, the respondent-

Union of India through Ministry of Chemicals and Fertilizers,

issued a notification, specifying the National Pharmaceutical

Pricing Policy 2012. In the said policy, after taking into

consideration orders passed by the Supreme Court and considering

the recommendations submitted by a committee established by the

respondent-Union of India, certain principles for regulation of

prices of drugs and formulations were laid down. The key

principles were identified as essentiality of drugs, control of prices

of formulations only instead of specific bulk drugs and market

based pricing. It was specifically laid down that the criteria of

essentiality for drugs would be met by considering the list of

medicines specified in the National List of Essential Medicines

(NLEM), as revised from time to time by the Ministry of Health

and Family Welfare of the respondent-Union of India. In this

regard, reliance was placed on NLEM of the year 2011, as regards

price regulation of formulations only instead of bulk drugs and

span of price control was specified on the basis of dosages and

bipin prithiani

4

wp-2216.15 & anr.doc

strengths as listed in NLEM 2011. It was further specified that

formulations only would be priced by fixing a ceiling price and

that manufacturers would be free to fix any price equal to or

below the ceiling price.

4.It is in the backdrop of the said policy of 2012 that on

15.05.2013, the DPCO 2013 was notified. In the first schedule

appended to DPCO 2013, NLEM 2011 was incorporated, thereby

specifying the formulations to which the ceiling prices applied.

DPCO 2013 defined crucial terms, such as ceiling price,

formulation, schedule, scheduled formulation, non-scheduled

formulation, price list and other such expressions to assist in

interpretation. DPCO 2013 further laid down the manner in

which ceiling prices would be fixed for the scheduled formulations

and the manner in which the prices even for the non-scheduled

formulations would be monitored. Paragraph 31 of DPCO 2013

provided for a power of review in the Government to consider the

grievance of any person, who was aggrieved by notification issued

under the DPCO 2013. Paragraph 32 of the same, pertained to

non-application of provisions in certain cases. It is to be noted that

the first schedule to DPCO 2013 virtually reproduced NLEM

2011 and stated the formulations of various pharmaceutical

products and drugs in detail, which were covered under the

expression ‘scheduled formulation’, as per DPCO 2013.

5.The respondent-Union of India through the Ministry of

Chemicals and Fertilizers, issued orders from time to time, as per

bipin prithiani

5

wp-2216.15 & anr.doc

powers conferred under paragraphs 4, 11 and 14 of DPCO 2013,

for including specific formulation and also to specify ceiling price

for the same.

6.On 21.06.2013, the said respondent issued one such order

under DPCO 2013, specifying the formulation ‘Metformin

Tablets’ of strength 500 mg with the ceiling price of Rs.1.56 per

tablet. The petitioner No.1 in Writ Petition No. 2216 of

2015-M/s. Franco Indian Pharmaceuticals Pvt. Ltd., which was

manufacturing the said formulation, implemented the same in the

light of the said order, for its Metformin 500 mg plain tablet. The

said petitioner was also manufacturing ‘Glyciphage SR 500 mg

tablet’ being a specific formulation. It contained the ingredient

Metformin, but since the same was not mentioned in the first

schedule to DPCO 2013, the said petitioner proceeded on the

basis that there was no ceiling price fixed for the same. The

petitioners contend that this is based on a correct interpretation of

DPCO 2013.

7.It is the case of the petitioners in both the writ petitions that

the formulations of plain conventional tablet of Metformin also

known by its name of Glyciphage, are based on simple wet

granulation manufacturing technology, wherein the drug is

released at one go in the gastrointestinal tract. In some

patients/consumers, it can lead to side effects like diarrhea and

nausea. It is further claimed that a different formulation by

sustained release was developed in the case of Metformin and

bipin prithiani

6

wp-2216.15 & anr.doc

other drugs entailing a sustained release of the drug over a specific

timeline. It is claimed that this is based on a sophisticated

technology, which utilizes biphasic polymer matrix diffusion

technology. In other words, in sustained release formulation, the

drug delivery system is different and the dosage form has a

prolonged gastric residence. On this basis, the petitioners contend

that unless such Sustained Release Formulation (SR) and/or

Controlled Release Formulation (CR) are specifically included in

the first schedule appended to DPCO 2013, there is no question

of the respondent No.3-NPPA insisting on ceiling price on such

SR/CR formulations.

8.In the context of the aforesaid issue, the petitioner in Writ

Petition No. 885 of 2015 i.e. the IDMA had approached the

respondent-Union of India in August 2013, in pursuance of which

interactive meetings were held between the parties for discussing

DPCO 2013 and the issues arising therefrom. On 19.08.2013, the

petitioner-IDMA through its President sent a letter to the

Secretary of Department of Pharmaceuticals, Ministry of

Chemicals and Fertilizers of respondent-Union of India, recording

the issues discussed in the interactive meetings and assurances

given by the regulatory authorities, including respondent No.3-

NPPA, that no untoward action would be taken against

manufacturers. A detailed record note of the discussion was

enclosed therewith. The petitioners rely upon the same,

particularly on responses of the respondent-Union of India

bipin prithiani

7

wp-2216.15 & anr.doc

through the Ministry of Chemicals and Fertilizers, which had

issued the DPCO 2013, stating that formulations involving

innovations and dosages such as SR/CR etc., would be kept out of

price control and if they were inadvertently included, the ceiling

price would be reworked.

9.On 19/20.09.2023, the respondent-Union of India through

Ministry of Chemicals and Fertilizers, sent a letter to the President

of the petitioner-IDMA, specifically clarifying that innovative

dosage form of scheduled formulations were opined not to be kept

under price control, as per the provisions of the DPCO 2013. It

was further recorded that since NLEM 2011 was prepared by the

Ministry of Health and Family Welfare, the said Ministry was

requested to confirm the said aspect of the matter.

10.On 06.12.2013, the Ministry of Health and Family Welfare

of respondent-Union of India, in the context of DPCO 2013,

issued an office memorandum, specifically stating that

conventional forms of drugs like tablets/capsules/injections, as

mentioned in NLEM 2011, would be considered as a part thereof

and not dosage forms like modified release forms, dispersible,

effervescent, soluble, etc., unless they were specified in non-

conventional dosage form in NLEM 2011. According to the

petitioners, the said communication from the Ministry of

Chemicals and Fertilizers dated 19/20.09.2013 and the office

memorandum issued by the Ministry of Health and Family Welfare

dated 06.12.2013, sufficiently clarify the interpretation of DPCO

bipin prithiani

8

wp-2216.15 & anr.doc

2013 and that therefore, there ought not to have been any

confusion in the matter.

11.Yet, members of the petitioner-IDMA started receiving

notices, claiming that they had overcharged in respect of

formulations that were not even included in the first schedule

appended to DPCO 2013. In this backdrop, the petitioner-IDMA

filed Writ Petition No. 855 of 2015 before this Court. The

petitioners in Writ Petition No. 2216 of 2015 also approached this

Court in the light of notice dated 22.01.2014 received from

respondent No.3-NPPA, claiming that the said petitioners/

manufacturers were not following prices fixed for specific

formulations i.e. Glyciphage SR 500 mg tablet, as the Maximum

Retail Price (MRP) was much more than the ceiling price. In

response, on 08.03.2014, the petitioner No.1 in Writ Petition No.

2216 of 2015, sent a letter to respondent No.3-NPPA, stating that

since Sustained Release (SR) formulation of Glyciphage SR 500

mg tablet was not covered in the first schedule to DPCO 2013, the

notice ought not to have been issued. Thereafter, a series of such

notices and responses were exchanged, but the respondent No.3-

NPPA did not consider the responses of the said petitioner.

12.Eventually, on 04.12.2014, respondent No.3-NPPA issued a

show cause notice to the said petitioner-M/s. Franco Indian

Pharmaceuticals Pvt. Ltd., alleging that it had overcharged to the

extent of about Rs.3,85,69,773/- in respect of the formulation of

Glyciphage SR 500 mg tablet, calling upon the said petitioner to

bipin prithiani

9

wp-2216.15 & anr.doc

pay the amount along with interest. On 22.04.2014, the said

petitioner sent a detailed reply to the same. On 16.01.2015, the

respondent No.3-NPPA sent the impugned demand notice dated

16.01.2015, calling upon the said petitioner to deposit the alleged

overcharged amount of Rs.7,88,37,886/- along with 15% interest,

upto 31.01.2015 with the Government, failing which the matter

would be referred to the Collector for recovery of amount as

arrears of land revenue, under the Essential Commodities Act,

1955. Aggrieved by the same, the petitioners approached this

Court by filing Writ Petition No. 2216 of 2015, wherein this

Court, while issuing notice by order dated 24.03.2015, granted

interim relief, staying the impugned demand notice. As noted

hereinabove, this Court also granted interim direction that no

coercive steps would be taken in pursuance of notices issued to

members of the petitioner-IDMA in Writ Petition No. 885 of

2015.

13.Thereafter, the pleadings in the writ petitions were

completed, while the interim orders continued to operate. The

writ petitions were taken up for final hearing.

14.Mr. Seervai, learned senior counsel appearing for the

petitioners in Writ Petition No. 2216 of 2015, submitted that the

aforesaid policy of 2012 brought about a fundamental change in

the principles for regulation of prices of drugs by specifying ceiling

price for formulations only, instead of bulk drugs. It was submitted

that NLEM 2011 was appended as schedule-I to DPCO 2013 and

bipin prithiani

10

wp-2216.15 & anr.doc

the paragraphs of DPCO 2013, specifically defined key terms,

such as formulation, scheduled formulation, non-scheduled

formulation, schedule, ceiling price, etc. It was submitted that a

proper reading of the paragraphs of DPCO 2013 demonstrated

that only those formulations specifically included in the first

schedule appended to DPCO 2013, were subject to ceiling price. It

was submitted that the respondent-Union of India through the

Ministry of Chemicals and Fertilizers and Department of

Pharmaceuticals, exercised power under DPCO 2013 to issue

orders from time to time, to specifically add formulations with

ceiling prices. On this basis, it was submitted that unless a specific

formulation was included in the first schedule appended to DPCO

2013 or unless it was added by way of an order specifically issued

under DPCO 2013, it could not be subjected to ceiling price under

DPCO 2013.

15.It was submitted that the aforesaid interpretation of DPCO

2013 was clearly supported by the stand of the parent Ministry of

the respondent-Union of India, under which respondent No.3-

NPPA functions i.e. the Ministry of Chemicals and Fertilizers,

manifested in the communication dated 19/20.09.2013 issued to

the President of petitioner-IDMA and office memorandum dated

06.12.2013 issued by the Ministry of Health and Family Welfare

of respondent-Union of India. Yet, the respondent No.3-NPPA

proceeded to issue show cause notices and demand notices alleging

overcharging by the petitioners, despite the fact that the specific

bipin prithiani

11

wp-2216.15 & anr.doc

formulation Glyciphage SR 500 mg was neither part of the first

schedule appended to DPCO 2013 when it was issued, nor was it

added by way of a subsequent order issued by exercising powers

under DPCO 2013. On this basis, it was submitted that

respondent No.3-NPPA could not have acted in defiance of plain

reading of DPCO 2013 and the manner in which the parent

Ministry had clarified its interpretation and implementation.

16.It was further submitted that the stand taken before this

Court on behalf of the respondents was in the teeth of the DPCO

2013. The learned senior counsel appearing for the petitioners in

Writ Petition No. 2216 of 2015 referred to a recent judgment of a

Division Bench of this Court in the case of Pfizer Ltd. & Anr. vs.

Union of India & Ors., 2025 SCC OnLine Bom 3821 . He

submitted that although, the said judgment concerned an

explanation appended NLEM 2015, certain observations made in

the said judgment could assist this Court in considering the

contentions raised on behalf of the petitioners herein.

17.It was submitted that in the said judgment, this Court

considered the specific drug delivery systems like Sustained

Release (SR) and Controlled Release (CR), other than an ordinary

tablet. This Court found that when such a specific drug delivery

system, other than the ordinary tablet, was intended to be covered

under the NLEM, a specific reference to that particular drug

delivery system was made in the NLEM. It was submitted that this

Court found the stand of NPPA, to the effect that ordinary tablets

bipin prithiani

12

wp-2216.15 & anr.doc

would cover sustained release or extended release or dispersible

tablets, was not in consonance with the explanation appended to

NLEM 2015.

18.It was submitted that in that context, this Court may

consider the aforementioned judgment of this Court in the case of

Pfizer Ltd. & Anr. vs. Union of India & Ors. (supra), while

disposing of these petitions.

19.Mr. Dheeraj Nair, learned counsel appearing for the

petitioner-IDMA in Writ Petition No. 885 of 2015, adopted the

submissions made by the learned senior counsel appearing for the

petitioners in Writ Petition No. 2216 of 2015. He specifically

referred to illustrations from the documents annexed to Writ

Petition No. 885 of 2015, to contend that whenever the

respondent-Union of India through the Ministry of Chemicals and

Fertilizers, Department of Pharmaceuticals, consciously decided to

include a formulation under DPCO 2013 for price ceiling, a

separate order was issued, specifying the formulation as well as the

ceiling price. On this basis, it was submitted that the respondent

No.3-NPPA could not insist upon price ceiling even in respect of

formulations that were not added in the schedule. The learned

counsel for the petitioner in Writ Petition No. 885 of 2015 also

relied upon the clarification given by the parent Ministry in

respect of DPCO 2013, to contend that the respondent No.3-

NPPA was not justified in taking a stand contrary to the same. On

this basis, it was submitted that this Court may consider allowing

bipin prithiani

13

wp-2216.15 & anr.doc

the writ petition.

20.Mr. Sharma, learned counsel appeared for respondents in

Writ Petition No. 885 of 2015 and Mr. Bhardwaj, learned counsel

appeared for the respondents in Writ Petition No.2216 of 2015.

They submitted that the writ petitions are without any merit and

that an unnecessary confusion is sought to be created with regard

to the interpretation of DPCO 2013. A plain reading of the same

would show that the petitions deserve to be dismissed. It was

emphatically submitted that the fundamental principle for pricing

under DPCO 2013 was essentiality, in line with the policy of

2012. On this basis, it was submitted that when the schedule did

not mention a specific drug delivery system like SR or CR, all

forms of drug delivery systems of that medicine stood included in

the schedule and where there was a specific mention of drug

delivery system in addition to the ordinary tablet, separate ceiling

price was applied to the same. On this basis, it was asserted that as

per DPCO 2013 when a product prepared from a particular salt

was stated in the schedule, a formulation providing for a new drug

delivery system would not cease to be a scheduled drug or an

essential commodity merely because such new drug delivery

system was not specifically mentioned in the schedule.

21.It was further claimed that the purpose of NLEM was

relevant for procuring medicines under the public health system

i.e. public hospitals and it had no relevance to price control as

scheduled under DPCO 2013. It was further submitted that the

bipin prithiani

14

wp-2216.15 & anr.doc

petitioners never approached the authorities for prior price

approval under DPCO 2013 and they cannot escape the liability of

overcharging merely because the specific drug delivery system used

by them, was not included in the schedule, so long as the

particular salt/drug was mentioned in the schedule to DPCO 2013.

It was submitted that a new drug delivery system cannot cease to

be essential medicine and that the office memorandum dated

06.12.2013 issued by the Ministry of Health and Family Welfare

of the respondent-Union of India, cannot be binding on the

respondent No.3-NPPA.

22.The learned counsel for the respondents relied upon

judgments of Supreme Court in the cases of Union of India & Anr.

vs. Cynamide India Ltd. & Anr., (1987) 2 SCC 720 ,

Glaxosmithkline Pharmaceuticals Limited vs. Union of India &

Ors., (2014) 2 SCC 753, T.C. Healthcare Private Limited & Anr.

vs. Union of India & Anr., (2020) 15 SCC 117 and judgment of

this Court in the case of Indian Pharmaceutical Alliance & Anr. vs.

Union of India & Ors., 2016 SCC OnLine Bom 11541.

23.By relying on the said judgments, emphasis was placed on

the need to have ceiling price for essential medicines and the role

of expert body like the respondent No.3-NPPA in the matter of

fixing price of drugs and formulations, which ought not to be

interfered with in writ jurisdiction.

24.We have considered the rival submissions in the light of the

documents placed on record, particularly DPCO 2013 issued in

bipin prithiani

15

wp-2216.15 & anr.doc

the backdrop of the policy of 2012. The respondent-Union of

India has been issuing drug control price orders from time to time.

Prior to DPCO 2013, the earlier order i.e. DPCO 1995 was in

vogue. In the light of the policy of 2012, as per notification dated

07.12.2012 issued by the respondent-Union of India through

Ministry of Chemicals and Fertilizers (Department of

Pharmaceutical), the key principles for pricing of pharmaceuticals

and formulations underwent a change. Apart from essentiality of

drugs, the pricing was for control of formulations only, instead

bulk drugs. This is a crucial factor in the present case.

25.The contents of DPCO 2013 need to be evaluated and

interpreted in the backdrop of the aforesaid policy change

manifested in the said policy issued in the year 2012.

Subsequently, the said DPCO 2013 was issued under Section 3 of

the Essential Commodities Act, 1955. It is crucial to note that

DPCO 2013 opens with the words that it has been issued in

exercise of powers under Section 3 of the Essential Commodities

Act, 1955 and in supersession of DPCO 1995.

26.Paragraph 2 of the DPCO 2013 pertains to definitions and

some of the definitions are required to be perused for considering

the rival submissions. These are as follows :

“(d)“ceiling price” means a price fixed by the Government

for Scheduled formulations in accordance with the provisions

of this Order;

(i)“formulation” means a medicine processed out of or

containing one or more drugs with or without use of any

bipin prithiani

16

wp-2216.15 & anr.doc

pharmaceutical aids, for internal or external use for or in the

diagnosis, treatment, mitigation or prevention of disease and,

but shall not include – (i) any medicine included in any

bonafide Ayurvedic (including Sidha) or Unani (Tibb) systems

of medicines; (ii) any medicine included in the Homeopathic

system of medicine; and (iii) any substance to which the

provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940)

do not apply;

(j)“generic version of a medicine” means a formulation

sold in pharmacopeial name or the name of the active

pharmaceutical ingredient contained in the formulation,

without any brand name;

(v)“non-scheduled formulation” means a formulation, the

dosage and strengths of which are not specified in the First

Schedule;

(zb)“scheduled formulation” means any formulation,

included in the First Schedule whether referred to by generic

versions or brand name;

(zc)“schedule” means a Schedule appended to this Order;”

27.Paragraph 4 of the DPCO 2013 relates to calculation of

ceiling price of a scheduled formulation and it states that the

ceiling price of a scheduled formulation of specified strength and

dosages, as given under the first schedule, shall be calculated as per

the formula specified thereunder. Thus, the first schedule

appended to DPCO 2013 assumes great significance. The

definition of schedule read with scheduled formulation, shows that

a formulation, included in the first schedule, would be subject to

ceiling price fixed by the respondent, as per the definition of

ceiling price. Non-scheduled formulation clearly means a

formulation, the dosage and strength of which are not specified in

the first schedule.

bipin prithiani

17

wp-2216.15 & anr.doc

28.Paragraph 17 of the DPCO 2013 pertains to amendment of

the list of scheduled formulations. It provides for power in the

respondent to amend the first schedule, revising the same to add

or delete formulations and fixing ceiling prices. Clause 2 of

paragraph 17 of DPCO 2013, specifically records that the

medicines omitted from the first schedule shall fall under the

category of non-scheduled formulations. Paragraph 20 of the

DPCO 2013 pertains to monitoring the prices of non-scheduled

formulations and it specifies that the respondent-Government shall

monitor the MRPs of all drugs, including non-scheduled

formulations to ensure that no manufacturer increases the MRP of

a drug more than ten percent of the MRP during the preceding

twelve months and where the increase is beyond ten percent of

MRP, it shall be reduced to the level of ten percent of MRP for the

next twelve months. In other words, for the scheduled

formulation, included in the first schedule appended to DPCO

2013, the ceiling price would apply and even for non-scheduled

formulation, the respondent No.1 would have power under

paragraph 20 to regulate the same in the context of MRP.

29.Thus, on a conjoint and plain reading of the expressions

ceiling price, formulation, schedule, scheduled formulation and

non-scheduled formulation, it becomes clear that ceiling price

would apply to the formulations specifically included in the first

schedule of DPCO 2013. The documents on record show that the

respondent-Union of India through the Ministry of Chemicals and

bipin prithiani

18

wp-2216.15 & anr.doc

Fertilizers (Department of Pharmaceutical) exercised powers under

paragraphs 4, 11 and 14 of the DPCO 2013, pertaining to

calculation of ceiling price of a scheduled formulation, ceiling

price or retail price of a pack and fixation of ceiling price of a

scheduled formulation respectively, to issue orders for the purpose

of adding formulations with ceiling prices to the first schedule of

DPCO 2013. This clearly shows that where ceiling prices were

applied and fixed for specific formulations, such formulations

were added by way of specific orders to that effect issued by the

said respondent by exercising powers under paragraphs 4, 11 and

14 of the DPCO 2013. This makes it abundantly clear that

formulations otherwise not forming part of the schedule, upon

such orders being issued, became scheduled formulations under

paragraph 2(zb) of the DPCO 2013, for which ceiling price as

defined in paragraph 2(d) thereof, was fixed.

30.We are of the opinion that the said documents and the

manner of exercise of power and interpretation by the parent

Ministry itself shows that if a formulation was not specifically

included in the first schedule to DPCO 2013, respondent No.3-

NPPA could not insist on such a formulation being covered by a

ceiling price.

31.The documents on record show a number of illustrations

strengthening the said interpretation and implementation of

DPCO 2013. For instance, the formulation of medicine Nifedipine

was originally included in the first schedule to DPCO 2013, which

bipin prithiani

19

wp-2216.15 & anr.doc

came into force on 15.05.2013. But, thereafter, the respondent-

Union of India through the Ministry of Chemicals and Fertilizers

(Department of Pharmaceutical) i.e. parent Ministry considered it

necessary to invoke powers in paragraphs 4, 11 and 15 of the

DPCO 2013 to issue a specific order on 14.06.2013 to include

Nifedipine tablets of 10 mg with ceiling price. A few days

thereafter, on 28.06.2013, the said respondent again exercised the

said power under DPCO 2013 to issue a specific order to include

the Nifedipine sustained release tablets 10 mg in the first schedule

along with ceiling price. Again a few days thereafter, the said

respondent exercised the said power under DPCO 2013 to issue a

specific order on 05.07.2013 to include Nifedipine sustained

release tablets 20 mg with ceiling price, in the first schedule to

DPCO 2013. In the interregnum, on 28.06.2013 also such powers

were exercised by issuing order to add Nifedipine capsules 5 mg in

the first schedule to DPCO 2013. Thereafter, on 20.09.2013, the

said respondent issued separate orders for including Nifedipine

sustained release capsules 10mg and 20mg in the said schedule

with ceiling price. Similarly, such a specific order was also issued

on 28.06.2013 by the said respondent to include Diclofenac 50

mg tablets with ceiling price, in the said schedule. As regards the

petitioner in Writ Petition No. 2216 of 2015, it is specifically

pointed out that while Metformin 500 mg tablets were specifically

included in the schedule by a separate order issued by the said

respondent on 21.06.2013, no such order was ever issued for

Metformin/Glyciphage SR 500 mg tablet with ceiling price.

bipin prithiani

20

wp-2216.15 & anr.doc

32.We find substance in the contention of the petitioners that

the said actions of the parent Ministry clearly show as to the

manner in which DPCO 2013 is required to be interpreted in the

light of the specific policy of 2012. We find that a plain reading of

DPCO 2013 and the first schedule appended thereto, as also the

subsequent specific orders issued by the parent Ministry i.e.

Ministry of Chemicals and Fertilizers (Department of

Pharmaceutical) of the respondent-Union of India, show that

unless a specific formulation with the drug delivery system was

expressly included in the first schedule, the respondent No.3-

NPPA could not have insisted on price ceiling. As a matter of fact,

the separate ceiling prices for the specific formulations included in

the first schedule demonstrate that the methodology and technique

used for manufacturing distinct formulations was taken into

account, while fixing the ceiling price.

33.This demonstrates the fallacy in the stand taken by the

respondents before this Court that where specific drug delivery

systems such as Sustained Release (SR) and Controlled Release

(CR) were not mentioned in the first schedule of DPCO 2013,

then all forms of drug delivery systems of that medicine stood

included in the schedule. This is completely unworkable in the

light of the separate ceiling prices fixed, while including

formulations with different drug delivery systems for the same

medicine by issuing specific subsequent orders for including them

in the first schedule appended to DPCO 2013. Hence, the said

bipin prithiani

23

wp-2216.15 & anr.doc

37.We also find substance in reliance placed to a limited extent

on behalf of the petitioners on the recent judgment of this Court

in the case of Pfizer Ltd. & Anr. vs. Union of India & Ors. (supra).

Although, the said case was decided in the context of subsequent

notifications and an explanation appended to NLEM 2015, this

Court had an occasion to consider a similar argument to the effect

that all tablets would cover sustained release or extended release

or dispersible tablets and it was found that the same was not in

consonance with the specific explanation. In the process, this

Court also considered specific drug delivery systems as distinct

from an ordinary tablet and in that context, made certain

observations. We find that the observations made therein, do

support the stand taken on behalf of the petitioners in these writ

petitions. Although, according to us, even a plain reading of

DPCO 2013 along with specific subsequent orders issued for

adding formulations with different drug delivery systems to the

first schedule, demonstrates that unless a formulation with a

specific drug delivery system stood included in the first schedule

with price ceiling, the respondent No.3-NPPA could not insist

upon ceiling price and that the allegation of overcharging was

rendered unsustainable.

38.As regards the judgments relied upon by the respondents in

the cases of Union of India & Anr. vs. Cynamide India Ltd. & Anr.

(supra), Glaxosmithkline Pharmaceuticals Limited vs. Union of

India & Ors. (supra) and judgment of this Court in the case of

bipin prithiani

24

wp-2216.15 & anr.doc

Indian Pharmaceutical Alliance & Anr. vs. Union of India & Ors.

(supra), there can be no quarrel with the general proposition that

the Court should not interfere when prices or ceiling prices are

fixed by the Government under such drug price control orders

issued under the provisions of the Essential Commodities Act,

1955. But, the fixing of such ceiling prices obviously has to be in

accordance with the policy and the drug price control orders

issued by the respondent-Union of India. It cannot be that when

the policy and the drug price control order specifies a particular

manner of identifying medicines for fixing ceiling prices, the

NPPA can insist on price ceiling in the teeth of the same. Hence,

where it is found that such policy is being arbitarily implemented,

the writ Court can certainly interfere.

39.We find that in the present case, the stand taken by the

respondent No.3-NPPA is against the interpretation of the DPCO

2013 issued by the parent Ministry i.e. respondent-Union of India

through the Ministry of Chemicals and Fertilizers (Department of

Pharmaceutical) and hence, the impugned notices and demands

are rendered unsustainable.

40.Reliance placed on judgments of the Supreme Court in the

case of T.C. Healthcare Private Limited & Anr. vs. Union of India

& Anr. (supra) is also misplaced because in the said case, the

Supreme Court was considering the contentions of the rival parties

in the context of DPCO 1995. As noted hereinabove, in DPCO

2013, a clear departure was made from DPCO 1995, in the light

bipin prithiani

25

wp-2216.15 & anr.doc

of the National Pharmaceutical Pricing Policy 2012 issued by the

respondent-Union of India, as per notification dated 07.12.2012.

The contentions of the rival parties in these writ petitions have to

be considered on the basis of such changed policy and the specific

contents of DPCO 2013, read with the first schedule.

41.In view of the above, the writ petitions deserve to be

allowed.

42.Accordingly, Writ Petition No. 885 of 2015 is allowed in

terms of prayer clauses (a), (b) and (c). Writ Petition No.2216 of

2015 is allowed in terms of prayer clause (a). As regards prayer

clause (b), it is held that the notification dated 21.06.2013 at

Exhibit ‘B’ to the said petition cannot be the basis for issuing the

impugned demand notice dated 16.01.2015.

43.Pending applications and notices of motion, if any, also stand

disposed of.

(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)