LexUNION OF INDIA versus M/S. RANBAXY LABORATORIES LTD. AND OTHERS
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[2008] 8 S.C.R. 315 -~ ...I. UNION OF INDIA A v. M/S. RANBAXY LABORATORIES LTD. AND OTHERS (Civil Appeal No. 3497 of 2008) MAY 12, 2008 B [S.B. SINHA AND V.S. SIRPURKAR, JJ.] ~ Drugs (Price Control) Order, 1995: Paragraphs 8(6), 23 and 25 - Scheduled bulk drug - c Exemption from operation of Order - Notification dated 29. 8. 1995 - HELD: By reason of Notification the drug which was manufactured by company has been exempted and area of exemption is operation of price control - They have a direct nexus and are co- related with each other - If the Company ' was entitled to benefit of notification ti/131.1.1979, some time D ---~ )\ would be necessary for it to market the same - Essential Com- modifies Act, 1955 - s. 3 - Interpretation of Statutes - Purpo- sive construction. Respondent no. 1, a pharmaceutical company was E engaged in manufacture of bulk drug including Pentazo- cine in the formulation of Pentazocine injection. Sale and marketing of the said drug was controlled by the Drugs (Price Control) Order, 1995 issued by the Central Govern- ,, ment in exercise of its powers u/s 3 of the Essential Com- ~ modities Act, 1955. By Notification dated 29.8.1995 the F drug in question was exempted from operation of the price control stipulated in the 1995 Order. The exemption granted in favour of respondent no. 1 expired on 31.10.1999. Respondent no. 1, by notice dated 29.4.2002 was required to deposit Rs. 2,59,76,070/- with 15% inter- G .... est. The writ petition filed by respondent no. 1 was dis- missed by Single Judge, but its Letters Patent Appeal was allowed by the Division Bench of the High Court. 315 H 316 SUPREME COURT REPORTS [2008] 8 S.C.R. ~ - A In the instant appeal filed by the Union of India, it was contended for the appellant that the High Court failed to take into consideration that the 1995 Order was concerned with distribution and not manufacture and as a manufacturer, respondent no. 1 could sell its products since exemption B was in regard to sale only and not to manufacture; and that after 31.10.1999 respondent no. 1 was at liberty to sell the drug at any price and not at the stipulated one. .,.. The question for consideration before the Court was: whether the exemption Notification dated 29.8.1995 would c apply in respect of drugs which were manufactured upto 31st October, 1999 or manufactured and sold upto the said date. Dismissing the appeal, the Court D HELD: 1.1 The principle of purposive construction )( ,>- may be applied so as to give full effect to the exemption notification. The exemption notification must be construed to be a workable one. The Court while construing an ex- emption notification cannot lose sight of the ground re- E alities including the process of marketing and sale. In view of Clause (6) of Paragraph 8 of the Drugs (Price Con- trol) Order, 1995 what is prohibited is market of a new pack without obtaining prior approval of its price from the Gov- ernment. The exemption Notification dated 29th August, • F 1995 is clear and unambiguous. By reason thereof what i has been exempted is the drug which was manufactured by the company and the area of exemption is from the ,. operation of the price control. They have a direct nexus. They are co-related with each other. [para 16,25 and 27] G [327-D, 325-E,F, 322-C,D,E] New India Assurance Co. Ltd.. vs. Nusli Neville Wadia and another 2007 (14) SCALE 556; Oriental Insurance Co. ._ . Ltd. vs Brij Mohan and others 2007 (7) Scale 753 - relied on. H 1.2 It is true that 1995 Order was to control the price ~ ' UNION OF INDIAV. M/S. RANBAXY 317 LABORATORIES LTD. AND OTHERS - .J. and not the manufacture. But there cannot be any doubt A that the price is that of a manufactured drug. Process of marketing the drug as also the maximum price which can be charged have direct relation with manufacture and also the date thereof. The wrapper/foil/containers in which the drug is marketed contains several informations for the B general public, one of them being the date of manufac- ;( ture and the retail price. Not only in terms of the Essential Commodities Act, 1955 but also under various other stat- utes applicable several informations are required to be furnished. If it is held that the first respondent was bound c not only to manufacture but also to sell at a price upto 31s1 October, 1999, the same would lead to an absurdity. Such an anomaly and absurdity mu
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