Mr. Arnav Kumar, Ms Savi Garga Mr. Adit Garg, Advs v. BEST LABORATORIES PVT. LTD

Through: Mr. Piyush Sharma, Mr.Anuj Kumar Sharma & Mr. Aditya Dikshit, Advs. versus UNION OF INDIA & ANR. .....Respondents Through: Mr. Arnav Kumar, Ms Savi Garga & Mr. Adit Garg, Advs. + LPA 96/2019 M/S AMKAY LABORATORIES PVT. LTD. .....Appellant Through: Mr. Piyush Sharma, Mr. Anuj Kumar Sharma & Mr. Aditya Dikshit, Advs. versus UNION OF INDIA & ANR. .....Respondents Through: Appearance not given. + LPA 132/2019 & CM APPL. 9401/2019 (stay) UNION OF INDIA & ANR. .....Appellants Through: Mr. Vikram Jetly, CGSC with Ms. Shreya Jetly, Adv. versus M/S HESA PHARMACEUTICA .....Respondent Through: Mr. R Sudhinder, Ms. Prerana Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.12.2025 17:13:57 LPA 891/2011 & connected matters Page 2 of 27 Amitabh & Ms. Anushka Sharma, Advs. + LPA 151/2019 & CM APPL. 10054/2019 (stay) UNION OF INDIA & ANR. .....Appellants Through: Mr. Arnav Kumar, Ms Savi Garga & Mr. Adit Garg, Advs. versus M/S AMKAY LABORATORIES PRIVATE LTD. .....Respondent Through: Mr. Piyush Sharma, Mr.Anuj Kumar Sharma & Mr. Aditya Dikshit, Advs. + LPA 157/2019 & CM APPL. 10150/2019 (stay) UNION OF INDIA & ANR. .....Appellants Through: Mr. Arnav Kumar, Ms Savi Garga & Mr. Adit Garg, Advs. versus M/S AMKAY LABORATORIES PRIVATE LTD. .....Respondent Through: Mr. Piyush Sharma, Mr. Anuj Kumar Sharma & Mr. Aditya Dikshit, Advs. CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR J U D G M E N T HARISH VAIDYANATHAN SHANKAR J.

1. The present batch of Appeals primarily raises challenges on two issues, which are stated to stand covered by the Judgment of the Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.12.2025 17:13:57 LPA 891/2011 & connected matters Page 3 of 27 Allahabad High Court in T.C. Healthcare Pvt. Ltd. and Ors. v. Union of India1. The said Judgment was subsequently affirmed by a three- Judge Bench of the Hon‟ble Supreme Court in T.C. Healthcare Pvt. Ltd. and Ors. v. Union of India2. 2. As the present batch of Appeals raises common issues which are stated to have already been conclusively settled by the aforesaid Judgments and no further adjudication is asserted to be necessary, we propose to dispose of the present batch of Appeals by way of this common Judgment. 3. For the sake of clarity and consistency, in the present Judgment, we propose to refer to the governmental authorities collectively as the “Union of India”, while the pharmaceutical companies approached the learned Single Judge by way of writ petitions shall be referred to as the “Private Parties”. 4. The Judgment of the Hon‟ble Supreme Court in T.C. Healthcare (supra) was thereafter sought to be reviewed by the Union of India; however, the Review Petition came to be dismissed by the Hon‟ble Supreme Court both on the ground of delay as well as on merits. 5. The matter did not conclude at the stage of review, as the Union of India proceeded to file a Curative Petition before the Hon‟ble Supreme Court, which too was dismissed vide order dated 24.08.2022. 6. The two main issues that Union of India has raised in these Appeals are as follows: (a) The issue with respect to the recovery of the trade margin of 16% as overcharge amount, and 1 2010 SCC OnLine All 834 2 2020 15 SCC 117. Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.12.2025 17:13:57 LPA 891/2011 & connected matters Page 4 of 27 (b) The issue with respect to liability to pay interest in respect of the period prior to the order directing the deposit of overcharged amount.

7. Learned Counsel appearing for the Union of India would fairly concede that the issues raised in the present Appeals were duly considered by the Allahabad High Court and were conclusively decided against the Union of India. However, he would submit that although these issues were examined by the Allahabad High Court, they did not find express articulation or consideration in the Judgment of the Hon‟ble Supreme Court. Consequently, it is contended that the said Judgment does not operate as a binding precedent on this Court in respect of the issues raised herein. 8. The issues arising in the present Appeals, which had earlier fallen for consideration before the Allahabad High Court in T.C. Healthcare (supra), were examined and decided in the following terms: “48. The next submission of the petitioners that maximum retail price is fixed giving trade margin of 16% and the petitioners never received the aforesaid margin. The said amount had never received by it, it cannot be recovered as overcharge amount. Under paragraph 13 the manufacturer is liable to deposit the amount accrued due to charging of price higher than those fixed. The word "accrue" has been defined in Webster Comprehensive Dictionary Encyclopedic Edition in following manner: - "ac-crue v.i. -crued, cru-ing 1 To come as a natural result or increment, as by growth: with to. 2 To arise as an addition, accession, or advantage; accumulate, as the interest on money: with from. 3 Law To become established as a permanent right - n. A loop or false mesh in network which increases the number of meshes in a given row. [< obs. n. accrue an accession

49. The word "accrued" has been used in relation to manufacturer who is being asked to deposit the overcharge amount. By overcharge the amount accrued has to be determined and realised. Paragraph 13 of the DPCO 1995 does not use the phrase "deposit of overcharge amount". Paragraph 19 of the DPCO 1995 deals with Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.12.2025 17:13:57 LPA 891/2011 & connected matters Page 5 of 27 price of formulation sold to the dealer. Paragraph 19 of the DPCO 1995 is as follows:- "19. Price of formulations sold to the dealer: (1) A manufacturer, distributor or wholesaler shall sell a formulation to a retailer, unless otherwise permitted under the provisions of this Order or any order made thereunder, at a price equal to the retail price, as specified by an order or notified by the Government, (excluding excise duty, if any) minus sixteen percent thereof in the case of Scheduled. drugs. (2) Notwithstanding anything contained in sub-paragraph (1), the Government may be a general or special order fix, in public interest, the price of formulation sold to the wholesaler or retailer in respect of any formulation the price of which has been fixed or revised under this Order. 50. Under paragraph 19 of the DPCO 1995 the manufacturer is obliged to sell a retailer at a price equal to the retail price as specified by an order or notified by the Government minus 16% thereof in case of scheduled drug. For example, retail price of a drug is Rs. 100/-, the manufacturer is obliged to sell the drug to retailer for an amount of Rs. 84/ as 16% has been treated to be trade margin. The amount of 16% which is statutorily provided as trade margin for a retailer cannot be said to be accrued to the manufacturer. Thus while computing the overcharge amount the allowance of amount of 16% as provided under sub-paragraph (1) of Paragraph 19 has to be given to the manufacturer. The amount which has never accrued to the manufacturer cannot be recovered as overcharge amount. Thus the submission of the petitioners that while calculating the overcharge amount 16% has to be deducted, which had never accrued to the manufacturers, is accepted. 51. The last submission of the petitioners is that the petitioners are not liable to pay interest prior to the date of issue of orders dated 12th September, 2008 and 20th October, 2008 directing deposit of the overcharge amount. Paragraph 13 of the DPCO 1995 is enabling power given to the Government to require the overcharge amount to be deposited by notice. The notice for deposit of the overcharge is, thus, contemplated by paragraph 13 of the DPCO 1995 itself. 52. The liability to pay interest has been specifically provided under Section 7-Commodities Act. 1955 is quoted as below: - "7-A. Power of Central Government to recover certain amounts as arrears of land revenue (or as a public demand). (1) Where any person, liable to- (a) pay any amount in pursuance of any order made under Section 3, or (b) deposit any amount to the credit of any Account or Fund constituted by or in pursuance of any order made under that section, Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.12.2025 17:13:57 LPA 891/2011 & connected matters Page 6 of 27 makes any default in paying or depositing the whole or any part of such amount, the amount in respect of which such default has been made shall [whether such order was made before or after the commencement of the Essential Commodities (Amendment) Act, 1984, and whether the liability of such person to pay or deposit such amount arose before or after such commencement] be recoverable by Government together with simple interest due thereon computed at the rate of [fifteen per cent) per annum, from the date of such default to the date of recovery of such amount, as an arrear of land revenue [or as a public demand].'

53. Section 7A of the Essential Commodities Act, 1955 contemplates recovery by Government with simple interest on the due amount in case any default is committed in payment by a person liable to pay any amount. The order has been passed in this case by respondent No. 2 directing for deposit of overcharge amount by orders dated 12th September, 2008 and 24th October, 2008. The said orders direct deposit of the said amount within fifteen days from issue of the letter falling which recovery proceedings under the provisions of the day Essential Commodities Act, 1955 were to be initiated. The default of the petitioner to pay overcharge amount shall arise after fifteen days from issue of the order. The liability to pay simple interest shall arise after a default is committed as per Section 7A(1). Thus no interest could have been charged prior to issue of the order dated 12th September, 2008 and 24th October, 2008. The orders dated 12th September, 2008 and 24th October, 2008 insofar as it demands respective amount towards interest cannot be sustained.”

9. It is the contention of the learned counsel for the Union of India that these two issues have not been decided by the Hon‟ble Supreme Court in so far as there is no discussion on these aspects in the Judgment of the Hon‟ble Supreme Court. 10. He would thus contend that these issues were sub silentio and as no determination on merits had been accorded by the Hon‟ble Supreme Court, the same would not operate as the law of the land under Article 141 of the Constitution of India3 and resultantly, would require a determination by this Court. 3 Constitution Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.12.2025 17:13:57 LPA 891/2011 & connected matters Page 7 of 27

11. In support of his contention that the issues that have not been expressly determined by the Hon‟ble Supreme Court, and that the same could not operate as binding law, the learned counsel for the Union of India has relied upon the Judgments of the Hon‟ble Supreme Court in S. Shanmugavel Nadar v. State of Tamil Nadu and Another4 [paragraphs 2-5 and 7], Secunderabad Club v. CIT5 [paragraphs 14-17, 23 and 24], Odisha State Financial Corporation v Vigyan Chemical Industries & Ors.6 [paragraph 13], Kunhayammed and Ors v. State of Kerala and Anr7 [paragraphs 27 and 40] and the judgement of the Allahabad High Court in Paresh Yadav & Ors. v. State of U.P & Ors. 8 [paragraphs 2, 6-8, 31-32]. 12. He would further contend that since the said issues were not accorded consideration by the Hon‟ble Supreme Court, the Judgment of the Allahabad High Court could not be held to have merged into the Judgment of the Hon‟ble Supreme Court and, therefore, these issues have not been conclusively decided. 13. The arguments of the learned Counsel for the Union of India were limited to this aspect and no others. 14. Per Contra, learned counsel for the Private Parties would strenuously contend that there arises no occasion for a determination on these issues since, after the adjudication of the same by the Allahabad High Court, the matter having travelled all the way up to the Hon‟ble Supreme Court, and thereafter sought to be reviewed and further being the subject matter of a Curative Petition, no further