UNION OF INDIA & ORS. versus M/S. CIPLA LTD. & ANR.

Citation: [2016] 7 S.C.R. 523 · Decided: 21-10-2016 · Supreme Court of India · Bench: MADAN B. LOKUR · Disposal: Disposed off

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2016] 7 S.C.R. 523 
UNION OF INDIA & ORS. 
v. 
MIS. CIPLA LTD. & ANR. 
(Civil Appeal No.329 of2005) 
OCTOBER 21, 2016 
[MADAN B. LOKUR AND R.K. AGRAWAL, JJ.] 
Drugs (Prices Control) Order, 1995 - Paragraphs 7, 8, 9: 
Notification dated 13. 0 7.1999 - Issuance by the Central 
government under Paragraph 7 prescribing of norms for conversion 
cost, packing charges and process loss of raw materials (other than 
packing materials in conversion) and packing and process loss of 
packing materials in packaging - Validity of - Held: Notification is 
valid - They were issued after due application of mind and based 
on available material duly examined by an expert body -
Notifications were not arbitrarily issued nor were they discriminatory 
in any manner at all nor were they issued mechanically. 
Notifications dated 12.07.2000, 12.07.2001, 12.07.2002 and 
11.07.2003 - Issuance by Central Government under Paragraph 7 
re-notifYing the norms prescribed on 13.07.1999 - Validity of-
Held: Are valid and were not issued mechanically or without any 
application of mind and it was not necessary to re-determine the 
norms every year as required by DPCO, 1995. 
Issuance of notifications by the Central Government fixing 
the retail price or ceiling price of formulations under Paragraphs 
8 and 9 without determining the norm for cost of packing material 
as required by Paragraph 7 - Validity of - Held: Are valid. 
Fixation of retail price of a formulation under Paragraph 8 
without first fixing the sale price of a bulk drug under Paragraph 3 
utilized in the manufacture of a formulation - Validity of - Held: ls 
valid in law. 
Judicial review: Power of - Notification issued by Central 
Government under Paragraph 8 or 9 - Held: Action of a repository 
of power is also amenable to judicial review if it is contrary to or 
violates the mandatory requirement of a subordinate legislation - If 
523 
A 
8 
c 
D 
E 
F 
G 
H 
524 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2016] 7 S.C.R. 
Central Government does not adhere to the formula given in 
Paragraph 7 and fixes the retail price or ceiling price of 
formulations, notification issued under Paragraph 8 or 9 is liable 
to quashed being contrary to law - However, no instance pointed 
out to use the power of judicial review and quash the notifications 
- Drugs (Prices Control) Order, 1995 - Paragraphs 7, 8, 9. 
Alternative remedy: Availability of - Manufacturer or 
formulator aggrieved by fixing of retail or ceiling price of any 
for111ulation - Alternative remedy available under the DPCO 1995 
- Submission that norms not prescribed to 111ake effective case for 
revision or review of price notification - Held: lf any manufacturer 
or formulator had preferred a revision or review application, all 
necessary material would have been 111ade available to the 
complainant for an effective representation - None of the parties 
were precluded, in fact, some of them did - In view of the availability 
of an alternative and efficacious remedy under the DPCO 1995, 
the writ petitions by the manufacturers and formulators ought not 
to have been entertained by the concerned High Courts, but it is 
left at that - Drugs (Prices Control) Order, 1995. 
Forum shopping: Court to adopt a functional test vis-a-vis the 
litigation and the litigant - It is to be seen whether there is any 
functional similarity in the proceedings between one Court and 
another or whether there is so111e sort of subterji1ge on the part of a 
litigant - Functional test would determine whether a litigant is 
indulging in forum shopping or not - On facts, on examination of 
relief claimed by 'C' Company in the different High Courts, it is 
found that they have no substantive connection whatsoever with 
the relief claimed in the Allahabad High Court -
'C' company s 
petitions do not fall under any category of forum shopping. 
Practice and procedure: Practice of placing scanty material 
before the High Courts, and placing volumes of documents before 
this Court - Held: Such practice degrade the importance of 
proceedings in the High Court and could subsequently embarrass 
the High Court which might inadvertently base its decision on 
insufficient material resulting in possibility of an incorrect decision 
which is liable to be set aside - Such practice is to be discouraged 
- For better adjudication of disputes, it is appropriate for all litigants 
to place 011 record all the material before the court of first instance. 
UNION OF INDIA 

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