UNION OF INDIA v. M/S. RANBAXY LABORATORIES LTD & Ors.

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 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] [327-D, 325-E,F, 322-C,D,E] G 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.

1.2 It is true that 1995 Order was to control the price H ~ - .,.. )( ,>- • i ,.. ._ . ~ ' - .J. ;( " )4 \" .it .. -+ UNION OF INDIAV. M/S. RANBAXY LABORATORIES LTD. AND OTHERS 317 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 must be avoided. [para 23 and 26] (325-B-C, 326.D]

1.3 While construing an exemption notification not D only a pragmatic view is requ!red to be taken but also the practical aspect of it. A manufacturer would not know as to when the drug would be sold. It has no control over it. Its control over the drug would end when it is despatched to the distributor. All statutes have to be considered in E the light of the object and purport of the Act. If the first respondent was entitled to avail the benefit of the exemp- ti on notification till the midnight of 31st October, 1999, sometime would be necessary for it to market the same. There must be some time lag between the period the drug F is manufactured and the actual sale by a retail dealer to the customer. Applying the principle of doctrine of purpo- sive construction, meaningful purpose could be achieved only if such construction of the notification is adopted and no other. [para 23-25] 325,G; 326,A; 325,D; G