Novartis AGSchwarzwaldalle 215 4058 Basel and Lichstrasse 354002 Basel, Switzerland representedby it's v. Union of India

to direct the second respondent to allow the Patent Application bearingNo.1602/MAS/98 filed by the petitioner. Prayer in W.P.No.24760/2006: Writ petition under Article 226 of theConstitution of India praying to issue a writ of declaration declaringthat section 3(d) of the Patents Act, 1970 as substituted by the Patents(Amendment) Act, 2005 (Act 15/2005) is non-complaint with the TRIPSAgreement and / or is unconstitutional being vague, arbitrary andviolative of Article 14 of the Constitution of India. For Petitioner in both W.Ps: Mr.Habuibulla Badsha, SC, : Mr.Soli Sorabjee, SC and : Mr.Shanthi Bhushan, SC for : Mr.C.DanielFor R1 and R2 : Mr.V.T.Gopalan, SC for : Mr.P.Wilson, Asst.Sol.GeneralFor Respondent No.3 : Mr.P.S.Raman, AAG for : Mr.A.A.MohanFor R4, R8 and R9 : Mr.P.Aravind Datar, SC : Mr.R.Thiagarajan, SC & :Mr.K.M.Vijayan, SC for : Mr.A.Ramesh KumarFor Respondent No.5 & 7 : Mr.Lakshmi Kumaran For Respondent No.6 : Mr.Anand Grover for : Ms.R.Vaigai COMMON ORDER(Order of the court was delivered byJustice R.Balasubramanian)The writ petitioner in both the writ petitions is one and the same.In the first writ petition, Novartis – a foreign company represented byit's Indian Power of Attorney holder, is the writ petitioner. In thesecond writ petition, Novartis India represented by it's power agent isthe writ petitioner. The respondents in both the writ petitions are oneand the same. The prayer in both the writ petitions is one and the samenamely, for a declaration that section 3(d) of the Patents Act, 1970,amended by Patents (Amendment) Act 15/2005, is unconstitutional.However, in the first writ petition there was an additional prayer inaddition to the relief asked for. The additional prayer was to directthe second respondent in that writ petition namely, the Controller Generalof Patents and Designs, to allow the patent application bearingNo.1602/NAS/98 filed by the petitioner seeking patent. However at a laterstage, during the pendency of the writ petitions, M.P.No.1/2007 came to befiled in that writ petition seeking to delete the prayer for a directionto the Patent Controller to allow the application and it was accordinglyordered. Therefore as on date in the two writ petitions, theConstitutional validity of section 3(d) alone is in challenge, both on theground that it violates not only Article 14 of the Constitution of Indiabut also on the ground that it is not in compliance to "TRIPS". Both thewrit petitions along with the connected miscellaneous petitions were https://hcservices.ecourts.gov.in/hcservices/ admitted by a learned Judge of this court and before the very same learnedJudge, at a later stage, all the miscellaneous petitions came up fordisposal. We are informed that elaborate arguments were advanced by thelearned senior counsels on either side at that stage and on 26.09.2006learned Judge, who heard these writ petitions with the connectedmiscellaneous petitions, came to the conclusion that the writ petitionsrequire the attention of a Division Bench of this court, as according tothe learned single Judge, the writ petitions involve substantial questionsof law. Therefore learned single Judge passed an order directing theRegistry to place the entire material papers before the Hon'ble ChiefJustice for disposal by a Division Bench. Subsequently, by orders of theHon'ble Chief Justice, these writ petitions are listed before us. HeardMr.Soli Sorabji, Mr.Shanthi Bhushan and Mr.Habibulla Badsha, learnedsenior counsels appearing for the petitioners; Mr.V.T.Gopalan, learnedAdditional Solicitor General for the Government of India and theController of Patents and Designs; Mr.Anand Grover, learned counsel;Mr.P.S.Raman learned senior counsel; Mr.Aravind P Datar learned seniorcounsel; Mr.K.M.Vijayan learned senior counsel and Mr.Lakshmi Kumaran,learned counsel appearing for the various respondents. 2. In this judgment, for convenience sake, we will hereinafter referthe Patents Act as the "Principal Act"; Ordinance 7/2004 introducing anamendment to section 3(d) of the Act as the "Ordinance"; Amending Act of2005 amending section 3(d) of the Act as the "Amending Act"; section 3(d)as the amended section and the Act after the amendment as the "AmendedAct". The challenge to the amended section is mainly on two groundsnamely, (a) it is not compatible to the agreement on Trade Relatedaspects of Intellectual Property Rights, hereinafter referred toas "TRIPS" for convenience sake; and (b) it is arbitrary, illogical, vague and offends Article14 of the Constitution of India.For a better understanding of the attack to the amended section, we feelthat it is desirable to extract hereunder section 3(d) of the PrincipalAct; the nature of amendment to that section sought to be brought in bythe Ordinance and the amended section itself:"Unamended section 3(d): The mere discovery of any newproperty or new use of a known substance or of the mere use of aknown process, machine or apparatus unless such known processresults in a new product or employs atleast one new reactant.Amendment to section 3(d) under Ordinance 7/2004: The merediscovery of any new property or mere new use of a knownsubstance or of the mere use of a known process; machine oraparatus unless such known process results in a new product oremploys atleast one new reactant.Section 3(d) as amended by the Patents (Amendment) Act,2005 with effect from 01.01.2005: The mere discovery of a new https://hcservices.ecourts.gov.in/hcservices/ form of a known substance which does not result in theenhancement of the known efficacy of that substance or the merediscovery of any new property or new use for a known substanceor of the mere use of a known process, machine or apparatusunless such known process results in a new product or employsatleast one new reactant. Explanation: For the purposes of this clause, salts,esters, ethers, polymorphs, metabolites, pureform, particle sizeisomers, mixtures of isomers, complexes, combinations and otherderivatives of known substance shall be considered to be thesame substance, unless they differ significantly in propertieswith regard to efficacy."3. Learned senior counsels appearing for the petitioners took usthrough the various covenants/clauses in "TRIPS" to argue that the amendedsection, as it stands today, runs contra to the various articles foundincorporated in "TRIPS". The main thrust is with reference to article 27of "TRIPS". It is contended that article 1(1) of the "TRIPS" mandatesevery member country to give effect to the provisions of the "TRIPS" andIndia being a member country, in implementing the various provisions of"TRIPS" brought in the amended section violating their obligations under"TRIPS". It is argued by learned senior counsels that the proposedamendment brought in under the Ordinance is compatible to "TRIPS".However, without any rhyme or reason, the proposed amendment sought to beintroduced by the Ordinance had been completely given up and instead, theoffending amended section was brought. The sum and substance of theargument advanced by learned senior counsels for the petitioner companyis, by bringing in the amended section and the Explanation attached toit, the Union of India had infact not carried out it's obligationsarising out of "TRIPS" and instead, by the amended section making thatthe discovery of a new form of a known substance, which does not result inthe enhancement of the known efficacy of that substance as not patentable,the right to have an invention patented guaranteed under section 27 ofthe "TRIPS" is taken away. As far as the attack to the section on theground of arbitrariness and vagueness thereby offending Article 14 of theConstitution of India, it is argued by Mr.Soli Sorabji, learned seniorcounsel, that the amended section as it stands today is unworkable.Section 3 of the Act enumerates what are not inventions. Under Article27 of "TRIPS", all inventions, subject to paragraphs 2 and 3 of thatArticle, are patentable. Reading Article 27 as a whole, it is argued thatthe drug invented in the case on hand is patentable. Under the amendedsection, the patent applicant is required to show that the invention hasenhanced efficacy of the known substance. Though the efficacy of a knownsubstance may be well known, yet, unless there are some guidelines in theamended section itself to understand the expression "enhancement of theknown efficacy" namely, what would be treated as "enhanced efficacy", anuncontrolled discretion is given to the Patent Controller to apply his ownstandards, which may not be uniform, in deciding whether there isenhancement of the known efficacy of that substance. Such wide discretionvested with a Statutory Authority without any guidelines to follow, wouldresult in arbitrary exercise of power. In other words, the PatentController may be in a position to decide any case, based on his whims and https://hcservices.ecourts.gov.in/hcservices/ fancies namely, whether there is enhancement in the known efficacy or not.On this short ground, the section must be held to be violative of Article14 of the Constitution of India. Likewise, in the Explanation attached tothe amended section also, there is vagueness. The Explanation declaresthat all derivatives of a known substance shall be considered to be thesame substance unless they "differ significantly in properties with regardto efficacy". Derivatives need not be the same substance in all cases.Unless the Explanation contains guidelines as to when a derivative can beheld to differ significantly in properties with regard to efficacy, thePatent Controller will have an unguided power to decide the issue, whichonce again would result in arbitrariness. It is argued by learnedsenior counsels that though efficacy of a known substance could beclinically found, any discovery of a new form of the said substance orit's derivatives, though by themselves are inventions as defined in theAct, are denied patent based on the amended section containing specifiedoffending clauses namely, it should show enhancement of the known efficacyand that the derivatives should differ significantly in properties withregard to efficacy. 4. Learned senior counsels on the opposite side would vehementlycontend that the amended section is definitely compatible to "TRIPS".Even assuming that it is not so, the remedy to have the "TRIPS" agreementcomplied with in letter and spirit available to the member countriesdoes not lie before the Indian courts but only before the DisputeSettlement Board, hereinafter referred to as "DSB" created under "TRIPS"itself. According to them, even assuming if "TRIPS" confers rights on anycitizen/legal entity of a member country, then such person should alsoapproach "DSB" only. "DSB" had been constituted to address all disputesthat may arise between member countries and their citizens/legal entityin implementing or not implementing "TRIPS" and that is the exclusiveauthority to go into those controversies. Therefore the challenge to thevalidity of the amended section on the ground that it is not compatible to"TRIPS", cannot be legally sustained before Indian courts. It iscontended by learned senior counsels and the other counsels on theopposite side that in discharging their obligations under "TRIPS",Government of India had brought in several amendments to the Parent Actand the amended section is one such provision. Every member country isgiven enough elbow room to bring in a local law in discharging theirobligation under "TRIPS" having regard to the various needs of theircitizens. India is a welfare country and it's first obligation under theConstitution is to provide good health care to it's citizens. When thatis it's priority commitment under the Constitution of India, the Union ofIndia has every right to bring in any local law in discharging theirobligations under "TRIPS" to suit to the needs and welfare of it'scitizens. On the attack to the amended section that it is vague,arbitrary and therefore unconstitutional, it is argued by learned seniorcounsels and the other counsels in the opposite camp that the amendedsection as it stands is workable. The Patent Controllers are all expertshaving undergone considerable training abroad in this field. Thepetitioner is not a novice to the field but on the other hand it is oneof the pharmaceutical giants in the world. The efficacy of a knownsubstance is well-known and it is definitely known to everyone in thepharmaceutical field. When the efficacy of that substance would stand https://hcservices.ecourts.gov.in/hcservices/ enhanced could also be clinically found by those in the field. Thepetitioner is not a common man but it is having the expertise behind it.When does the properties in a derivative differ significantly with regardto efficacy could also be scientifically established by the people inthe field. Therefore when everyone in the pharmaceutical fieldunderstands what is meant by enhancement in the known efficacy of asubstance or when it can be said that the derivatives differ significantlyin properties with regard to efficacy and the Patent Controller alsounderstands it, the amended section cannot be struck down on the ground ofarbitrariness and vagueness. If the Patent Controller, exercising hisStatutory power, wrongly rejects the patent application on the ground thatthe drug is excluded under the amended section, then such a decision couldalways be corrected by the Appellate Authority and then by the higherforums. In other words, a wrong decision arrived at by the PatentController based on wrong application of the amended section cannot be aground to strike down the said amended section which is otherwise inorder. Case law was cited at the Bar by learned counselMr.Lakshmikumaran appearing for the opposite party that Indian courts haveno jurisdiction to test the validity of a municipal law on the ground thatit is in violation of an International Treaty, assuming it is so. It isargued by Mr.Lakshmikumaran, learned counsel, by citing an English Courtdecision, that a member has a right to make a Law of it's own by breakingan International Treaty, if making such a Law is warranted, to meet thewelfare of it's citizens. Responding to the arguments advanced by thelearned senior counsels and the other counsels for the opposite party thatIndian courts cannot test the validity of the amended section on theground that it is in violation of an International Treaty, learned seniorcounsels appearing for the petitioner in each case contended, by showing aprecedent, that Indian courts do have the power. It is also argued bythem that even assuming for a moment without conceding that an Indian Lawcannot be struck down on the ground that it is in violation of anInternational Treaty, yet, there is no bar, either express or implied,disabling Indian courts to give a declaration that the amended section isin violation of the International Treaty. After broadly stating theirrespective contentions, R3, R4, R5 & R7, R6, R8 and R9 filed theirrespective written submissions. 5. On the submissions made by the learned senior counsels on eitherside, we are of the considered opinion that the following issues arise forconsideration in these two writ petitions:(a) Assuming that the amended section is in clear breach ofArticle 27 of "TRIPS" and thereby suffers the vice ofirrationality and arbitrariness violating Article 14 of theConstitution of India, could the courts in India havejurisdiction to test the validity of the amended section in theback drop of such alleged violation of "TRIPS"? OREven if the amended section cannot be struck down by thiscourt for the reasons stated above, cannot this court grant adeclaratory relief that the amended section is not in complianceof Article 27 of "TRIPS"?. https://hcservices.ecourts.gov.in/hcservices/ (b) If it is held that courts in India have jurisdiction togo into the above referred to issue, then, is the amendedsection compatible or non-compatible to Article 27 of "TRIPS"?(c ) Dehors issues (a) and (b) referred to above, couldthe amended section be held to be violative of Article 14 of theConstitution of India on the ground of vagueness, arbitrarinessand conferring un-canalised powers on the Statutory Authority?6. Let us take the first issue. (a) Assuming that the amended section is in clear breach of Article27 of "TRIPS" and thereby suffers the vice of irrationality andarbitrariness violating Article 14 of the Constitution of India, couldthe courts in India have jurisdiction to test the validity of the amendedsection in the back drop of such alleged violation of "TRIPS" (OR)Even if the amended section cannot be struck down by this court for thereasons stated above, cannot this court grant a declaratory relief thatthe amended section is not in compliance of Article 27 of "TRIPS"?: Insupport of the arguments that Indian courts have jurisdiction to decidethe issue under consideration, learned senior counsels appearing for thepetitioners relied upon the decision of the House of Lords in the casereported in Equal Opportunities Commission & Another Vs. Secretary ofState for Employment [ (1994) 1 AII ER Pg.910]. Employment Protection(Consolidation) Act, 1978 was under consideration in that judgment in thecontext of discrimination against women alleged. Under that Act, full-time workers, who worked for 16 or more hours a week had to be incontinuous employment for two years to qualify for Statutory rights underthe Act whereas, part-time workers, who worked between 8 and 16 hours in aweek had to be in continuous employment for five years to qualify for theStatutory rights under that Act. That judgment noted that a greatmajority of full-time employers in the United Kingdom were men while thegreat majority of part-time workers were women. Equal OpportunitiesCommission took the view that such discrimination conflicted with theobligations of the United Kingdom under EEC Law namely, Article 119 of EECTreaty and Council Directives 75/117 (the Equal Pay Directive) and 76/207(the Equal Treatment Directive). The Secretary of the State declined toaccept that the United Kingdom was in breach of it's obligations underCommunity Law while providing less favourable treatment in the conditionsof employment of full-time workers and part-time workers. Therefore, theEqual Opportunities Commission applied for judicial review of theSecretary of State's decision and sought a declaration that the Secretaryof State and United Kingdom were in breach of Community Law obligationsand an order of mandamus requiring the Secretary of State to introduceLegislation to provide the right for men and women to receive equal payfor equal work. Further reliefs were also asked for. The Secretary ofState raised two objections namely, the claim of an individual applicantis a private law claim, which ought not to have been brought against theSecretary of State by way of judicial review and that the Commission hadno locus standi to bring the proceedings as it 's case did not involve anydecision on justiciable issue susceptible of judicial review. It wasfurther contended by the Secretary of State that the court had nojurisdiction to declare that United Kingdom or the Secretary of State was https://hcservices.ecourts.gov.in/hcservices/ in breach of any obligations under the Community Law and that theDivisional Court was not the appropriate forum to determine thesubstantive issue raised by the applicant. The Divisional Court, amongother things, held that the court only had jurisdiction to declare rightsand obligations enforceable under the existing state of the Law and had nojurisdiction to order mandamus requiring the Secretary of State tointroduce Legislation to amend the 1978 Act or to declare that he wasunder a duty to do so. The Commission as well as the individualapplicant appealed to the Court of Appeal, which dismissed the individualapplicant's appeal on the ground that her application was essentially aprivate law claim, which should have been brought against her employer inan Industrial Tribunal and dismissed the Commission's appeal on the groundthat the Secretary of State had not made any "decision". The Court ofAppeal also held that there was no justiciable issue suitable forconsideration by way of judicial review. The Commission and theindividual appealed to the House of Lords. The House of Lords raisedvarious questions to be addressed by it in that appeal and in ourrespectful opinion, the decision of the House of Lords on one of thequestions raised by it to be addressed, would be relevant for the purposeof the case on hand. We extract that question hereunder:"The question is, whether judicial review is available forthe purpose of securing a declaration that certain UnitedKingdom primary Legislation is incompatible with Community Law?"In deciding that issue, the House of Lords referred to Article 119 of theEEC Treaty, which provides for the following:"Equal pay for equal work to men and women; CouncilDirective (EEC) 75/117 (the equal pay directive); and Article 2(1) of Council Directive (EEC) 76/207 (the equal treatmentdirective)". Section 2 of the European Communities Act, 1972 was also brought to theattention of the House of Lords. It being the telling provision indeciding the issue before us, we extract it hereunder:"(1) All such rights, powers, liabilities, obligations andrestrictions from time to time created or arising by or underthe Treaties and all such remedies and procedures from time totime provided for by or under the Treaties, as in accordancewith the Treaties are without further enactment to be givenlegal effect or used in the United Kingdom shall be recognisedand available in law, and be enforced, allowed and followedaccordingly; and the expression "enforceable Community right"and similar expressions shall be read as referring to one towhich this sub-section applies."The House of Lords dismissed the appeal of the individual claimantagreeing with the decision of the earlier courts that it was only herprivate law claim. But however, in deciding the appeal of EqualOpportunities Commission, the House of Lords gave a declaration thatEmployment Protection (Consolidation) Act, 1978 is incompatible with https://hcservices.ecourts.gov.in/hcservices/ Article 119 of the EEC Treaty and Council Directive (EEC) 75/117 andCouncil Directive (EEC) 76/207. Therefore learned senior counsels Mr.SoliSorabji and Mr.Shanthi Bhushan, relying upon this judgment, argued, asthey have done earlier, that there is no legal bar for this court to givea simplicitor declaratory relief that the amended section is incompatiblewith Article 27 of "TRIPS". It is also argued by the learned seniorcounsels that this court can go into the validity of the amended section,as being not in compliance with Article 27 of "TRIPS", under Article 226of the Constitution of India, since there is neither express nr impliedbar in the Article itself. 7. Learned counsels, in particular, Mr.Anand Grover andMr.Lakshmikumaran, argued with tremendous ease - as they are shown topossess – stating that the judgment referred to above and relied upon bythe learned senior counsels could not be applied to the case on hand onfacts. By taking us through the very same judgment, it is argued by themthat under section 2(1) of the European Communities Act, 1972, Article 119of the EEC Treaty with the two Council Directives referred to earlier havebeen domesticated as a domestic Law in England. When the relevantprovision of the EEC Treaty and the Councils Directives stand domesticatedby an Act of the State, then it becomes Law of that State enforceable inletter and spirit by the citizens of that State. It is their argumentthat "TRIPS" do not become Law in India on it's own force without anydomestic Law legislated by the Indian Government. Only in dischargingtheir obligations under "TRIPS", several amendments, including the amendedsection, were brought into the Statute book namely, Patents Act, by theGovernment. Therefore they argued that when Equal OpportunitiesCommission case can be distinguished on facts, it would be inappropriateto rely upon the same to hold that a declaratory relief can be granted bythis court. As the learned counsels were making their submissions on theabove point, Mr.Shanthi Bhushan, learned senior counsel appearing for thepetitioner in one of the writ petitions, very fairly conceded and statedthat Equal Opportunities Commission's case can be distinguished on facts.We do find, on going through the judgment in Equal OpportunitiesCommission's case, that the provisions of EEC Treaty and the CouncilsDirectives by an Act of the State was domesticated and therefore all therights flowing out of the said Treaty and the Directives were available asLaw in the United Kingdom, which can be enforceable. Only in thatcontext, we state with respect that the House of Lords has given adeclaration as prayed for. Learned counsels appearing for the contestingparties did not rest with the laurel of making us accept and Mr.ShanthiBhushan to concede that Equal Opportunities Commission case isdistinguishable on facts but spared no efforts in advancing arguments intheir own way, supported by case laws, that Indian Courts have nojurisdiction either to test the validity of a State Act as beingincompatible to an International Treaty namely, Article 27 or even to givea declaration simplicitor that such State Act is not compatible to anInternational Treaty. We will be failing in our duty if we do not mentionthat Mr.V.T.Gopalan, learned Additional Solicitor General was leading fromthe forefront the entire band of lawyers in the opposite camp bycontending that this court has no jurisdiction at all to go into the issuereferred to above; in any event the amended section is in compliance withArticle 27 of "TRIPS" and that there is no violation of Article 14 of the https://hcservices.ecourts.gov.in/hcservices/ Constitution of India. Mr.Lakshmikumaran, learned counsel appearing forR5 and R7 relied upon a judgment reported in 1966-3-All England LawReports Pg.871 (Salomn Vs. Commissioner of Customs) to contend that if anydomestic court is approached challenging a municipal law on the groundthat it violates International Law, then, the remedy for that lies in aforum other than the domestic court. In that judgment, the Court ofAppeal through LORD DIPLOCK held as hereunder:"If the terms of the legislation are clear and unambiguous,they must be given effect to whether ornot they carry our HerMajesty's treaty obligations, for the sovereign power of theQueen in Parliament extends to breaking treaties [(see EllermanLines, Ltd. Vs. Murray (4) ], and any remedy for such a breachof an international obligation lies in a forum other than HerMajesty's own courts."The above extracted passage refers to an earlier English decision. Thelearned English Judge, in the latter portion of his judgment, hadreiterated that Ellerman Lines Limited's case is the authority for theproposition that when a domestic law is challenged on the ground of itbeing in violation of an International Treaty, domestic courts would haveno jurisdiction. In our considered opinion, this is the direct judgmenton the point. We have already noted that the judgment in EqualOpportunities Commission case is distinguishable on facts. 8. Even otherwise, we are of the considered view that in whichevermanner one may name it namely, International Covenant, InternationalTreaty, International Agreement and so on and so forth, yet, suchdocuments are essentially in the nature of a contract. In Head Moneycases namely, the judgment of the Supreme Court of the United Statesreported in 112 U.S. 580, it is held as follows:"A treaty is primarily a compact between independentNations, and depends for the enforcement of its provisions onthe honor and the interest of the governments which are partiesto it."Therefore there cannot be any difficulty at all in examining such treatieson principles applied in examining contracts. Under these circumstances,when a dispute is brought before a court arising out of an InternationalTreaty, courts would not be committing any error in deciding the saiddispute on principles applicable to contracts. In other words, the courthas to analyse the terms of such International Treaty; the enforceabilityof the same; by whom and against whom; and if there is violation, is therea mechanism for solving that dispute under the treaty itself? Based onsuch construction of the International Treaty namely, "TRIPS", it isargued very strenuously by the learned counsels appearing for thecontesting parties that there is a settlement mechanism under the Treatyitself and therefore even assuming without conceding that the petitionerhas the right to enforce the terms of the said Treaty, yet, he must goonly before the Dispute Settlement Body provided under the "TRIPS" itself.Article 64 of "TRIPS" is pressed into service to sustain this point. Itis contended by Mr.Anand Grover learned counsel that the settlement https://hcservices.ecourts.gov.in/hcservices/ mechanism provided under Article 64 of "TRIPS" is governed by theprocedure as understood by the World Trade Organisation. Mr.Anand Groverlearned counsel took us through the said Dispute Settlement Understanding.Article 1 of the Dispute Settlement Understanding, defines the areascovered under that Rule. Article 1 declares that the agreements listed inAppendix 1 to the said Rule would be covered by the procedure. "TRIPS" ismentioned as one of the agreements in Appendix 1 (B) – Annexure 1C. Wehave been taken through the above referred to Rules and Proceduresgoverning the settlement of disputes and we find that it containscomprehensive provisions for resolving the disputes arising out of anyagreements enumerated in Appendix 1 to that Rules. Under the Rules thereis a Dispute Settlement Body. The manner of it's constitution is alsoprovided therein. Various steps to sort out the problem arising out of anagreement are provided therein. Article 17 of the Rules referred to aboveprovides an appellate review against the order passed by the panel.Therefore we have no difficulty at all that Article 64 of "TRIPS" readwith World Trade Organisation's understanding on Rules and Proceduresgoverning the settlement of disputes provides a comprehensive settlementmechanism of any dispute arising under the agreement. Article 3 of theRules declares that the dispute settlement system of the World TradeOrganisation is to provide security and predictability to the multilateraltrading system. When such a comprehensive dispute settlement mechanism isprovided as indicated above and when it cannot be disputed that it isbinding on the member States, we see no reason at all as to why thepetitioner, which itself is a part of that member State, should not bedirected to have the dispute resolved under the dispute settlementmechanism referred to above. Several nations in the world are parties to"TRIPS" as well as the "WTO" agreement. The agreements are discussed,finalised and entered into at the higher level of the nationsparticipating in such meeting. Therefore it is binding on them. Whensuch participating nations, having regard to the terms of the agreementand the complex problems that may arise out of the agreement betweennation to nation, decide that every participating nation shall have aCommon Dispute Settlement Mechanism, we see no reason at all as to why wemust disregard it. As we began saying that any International Agreementpossesses the basic nature of an ordinary contract and when courts respectthe choice of jurisdiction fixed under such ordinary contract, we see nocompelling reasons to deviate from such judicial approach when we considerthe choice of forum arrived at in International Treaties. Since we haveheld that this court has no jurisdiction to decide the validity of theamended section, being in violation of Article 27 of "TRIPS", we are notgoing into the question whether any individual is conferred with anenforceable right under "TRIPS" or not. For the same reason, we also holdthat we are not deciding issue No.(b) namely, whether the amendedsection is compatible to Article 27 of "TRIPS" or not.9. We also carefully applied our mind as to whether we can give adeclaratory relief in exercise of the power under Article 226 of theConstitution of India? We have already found that the judgment in EqualOpportunities Commission case is not a precedent for giving such adeclaration. In the judgment reported in AIR 1951 SC Pg.41 (CharanjitLal Vs. Union of India) and the judgment reported in AIR 1959 SC Pg.725(K.K.Kochunni Vs. State of Madras) the Supreme Court was considering the https://hcservices.ecourts.gov.in/hcservices/ power of the court under Article 32 of the Constitution of India to givea declaratory relief. Both the judgments were rendered by twoConstitution Benches of the Supreme Court. The Chief Justice of Indiapresided the Constitution Bench in the latter judgment and the saidHon'ble Judge also constituted the coram in the earlier judgment. Weextract the relevant portion in paragraph No.45 of the earlier judgment ofthe Supreme Court:"As regards the other point, it would appear from thelanguage of Article as of the Constitution that the sole objectof the article is the enforcement of fundamental rightsguaranteed by the Constitution. A proceeding under this Articlecannot really have any affinity to what is known as adeclaratory suit.""Any way, Article 32 of the Constitution gives us very widediscretion in the matter of framing our writs to suit theexigencies of particular cases, and the application, of thepetitioner cannot be thrown out simply on the ground that theproper writ or direction has not been prayed for."In the latter case, the power of the court to grant declaratory reliefcame up for consideration. The Constitutionality of Madras Act 32/55 waschallenged as infringing fundamental rights under Article 19(1)(f) andArticle 31(1). The point that appears to have been argued in favour ofgranting a declaratory decree, as noted therein, is extracted hereunder:"The next argument in support of the objection as to themaintainability of these petitions is thus formulated: Theimpugned Act is merely a piece of a declaratory legislation anddoes not contemplate or require any action to be taken by theState or any other person and, therefore, none of the well knownprerogative writs can afford an adequate or appropriate remedyto a person whose fundamental right has been infringed by themere passing of the Act. If such a person challenges thevalidity of such an enactment, he must file a regular suit in acourt of competent jurisdiction for getting a declaration thatthe law is void and, therefore, cannot and does not affect hisright. In such a suit he can also seek consequential reliefs byway of injunction or the like, but he cannot avail himself ofthe remedy under Article 32. In short, the argument is that theproceeding under Article 32 cannot be converted into or equatedwith a declaratory suit under section 42 of the Specific ReliefAct."The Hon'ble Judges of the Supreme Court in that case referred to theearlier judgment of the Supreme Court referred to above as well as thejudgments reported in AIR 1950 SC 163 (Rashid Ahmed Vs. Municipal Board,Kairana); AIR 1954 SC 440 (Basappa Vs. T. Nagappa); AIR 1954 SC 229(Ebrahim Vadir Mavat Vs. State of Bombay) and held as hereunder:"But on a consideration of the authorities it appears to bewell established that this Court's powers under Article 32 are https://hcservices.ecourts.gov.in/hcservices/ wide enough to make even a declaratory order where that is theproper relief to be given to the aggrieved party. The presentcase appears to us precisely to be an appropriate case, if theimpugned Act has taken away or abridged the petitioners' rightunder Article 19(1)(f) by its own terms and without anythingmore being done and such infraction cannot be justified. If,therefore, the contentions of the petitioners be well founded,as to which we say nothing at present, a declaration as to theinvalidity of the impugned Act together with the consequentialrelief by way of injunction restraining the respondents and inparticular respondents 2 to 17 from asserting any rights underthe enactment so declared void will be the only appropriatereliefs which the petitioners will be entitled to get. UnderArticle 32 we must, in appropriate cases, exercise ourdiscretion and frame our writ or order to suit the exigencies ofthis case brought about by the alleged nature of the enactmentwe are considering."Therefore it is clear that when an enactment infringes the fundamentalrights and a challenge is made to that on that ground, the Hon'ble SupremeCourt of India had said that it should not hesitate to grant adeclaratory relief under Article 32 of the Constitution of India. In AIR1975 SC 1810 (S.G.Films Exchange Vs. Brijnath Singhji) and AIR 1976 SC 888(Vaish Degree College Vs. Lakshmi Narain), the Supreme Court held that therelief of declaration under the provisions of the Specific Relief Act ispurely discretionary. In the latter judgment, the Supreme Court went onto hold that while exercising it's discretionary powers, the court mustkeep in mind the well settled principles of justice and fair play andshould exercise the discretion only if the ends of justice require it, forjustice is not an object which can be administered in vacuum. Asrightly contended by Mr.P.S.Raman learned senior counsel, we have todecide in this case whether the amended section is bad in law for lack oflegislative competency or it violates Part-III of the Constitution ofIndia or any other provisions in the Constitution. We also thoughtwhether ends of justice require giving a helping legal hand to thepetitioner. The amended section does not take away in toto the right ofthe petitioner to carry on the trade. It is contended by Mr.P.S.Ramanlearned senior counsel that the petitioner gets only a proprietary rightover the patent lasting for a fixed tenure and beyond that it does not getanything else. We agree with him on this point. We also find that endsof justice, on the facts of this case, is not in favour of the petitioner,which would disable us from exercising our discretionary jurisdiction. Ithas been held by the Supreme Court in an unreported judgment in KatakisVs. Union of India (W.P.No.54/68 dated 28.10.1968) that no declarationwould be given where it would serve no useful purpose to the petitioner.We thought what will happen if a declaratory relief is given as asked for,assuming for a moment that we have the jurisdiction. It is a settledposition in law that nobody can compel the Parliament to enact a Law. Ifthat is the position, then, assuming that we give a declaration as prayedfor namely, the amended provision is not in the discharge of India'sobligation under Article 27 of "TRIPS", even then, we fail to see for whatuse the petitioner can put it. Even if a consequential relief is notasked for, courts have held, depending upon the facts available in each https://hcservices.ecourts.gov.in/hcservices/ case, that a declaratory relief could be granted, provided, it is shownthat such a declaratory relief would be a stepping stone to claim reliefat some other stage. Having that in our mind, when we again thought aloudas to what use to which such a declaratory relief, if granted to thepetitioner, could be put to and we find that there is no scope at all toput in use the declaratory relief, if granted, at a later point of time.In other words, the declaratory relief, even if granted, would be only onpaper, on the basis of which, the petitioner cannot claim any furtherrelief in the Indian courts. Only in this context, we extract hereunderthe relevant portion in the unreported judgment of the Supreme Court inKatakis case referred to above, which was rendered by a Constitution Benchconsisting of Hon'ble Judges Sikri, Bachawat, Mitter, Hegde and Grover,JJ:"It is not even stated that the petitioner did not applybecause of the canalisation scheme. The Supreme Court inappropriate circumstances can give a declaration that aparticular order or scheme violates the provisions of theconstitution but the Supreme Court will not give such adeclaration unless it is certain that the declaration will servesome useful purpose to the petitioners. Even if the declarationis given the petitioners may possibly not apply for a licence;if they do apply, the conditions of import and export may changedrastically by the time the application is filed, or the policyof the Government may change. But if the petitioners hadapplied for the licence on the basis that the canalisationscheme was invalid, their application would have been processedby the authorities apart from the canalisation scheme but inaccordance with law. The Court declined to go into the questionof the validity of the canalisation scheme."Therefore, for the reasons stated above, we find that the petitioner ineach writ petition is not entitled to even the declaratory relief. 10. Let us now take the last issue for consideration." (c) Dehors issues (a) and (b) referred to above, couldthe amended section be held to be violative of Article 14 of theConstitution of India on the ground of vagueness, arbitrarinessand conferring un-canalised powers on the Statutory Authority?"The main grounds of attack to the validity of the amended section arethat, it is vague, arbitrary and confers uncanalised powers on theStatutory Authority. The Statutory Authority in this case is the Patentcontroller. There is no doubt that he is exercising a quasi-judicialfunction namely, considers the patent claim application in the context ofthe objections received; hears parties on both sides and then passes anorder, either granting the patent or rejecting the patent application, bygiving reasons. Prior to the amended section was brought into the Statutebook by the Patent (Amendment) Act, 2005 (Act 15/2005) with effect from01.01.2005, it was preceded by Ordinance 7/2004 containing the proposedamendment to be made to section 3(d). In the earlier portion of thisjudgment, we have extracted section 3(d) as it originally stood; section 3 https://hcservices.ecourts.gov.in/hcservices/ (d) as sought to be brought in by Ordinance 7/2004 and the amended sectionitself. India is a founder member of the World Trade Organisation, inshort, "WTO" and as such a signatory of "TRIPS", which itself is anAnnexure to the "WTO" agreement. There is no dispute that under "TRIPS"agreement, India has to permit product patent in all fields of technology,including medicines and drugs, with effect from 01.01.2005. Pendingbringing in comprehensive provisions, the Union Government of India madesome temporary provisions in the Act itself, which temporary provisionscame to an end on and with effect from the coming into force of Act15/2005. Prior to Amending Act 15/2005, there were Amending Acts 17/1999and 38/2002. In the affidavits filed in support of both the writpetitions, Parliamentary Debates on Ordinance 7/2004, in the context ofthe amendment to section 3(d) are extensively extracted. A speech fromthe Member of the Parliament from Kottayam in that regard and the reply inregard thereto from the Hon'ble Minister of Commerce are found soextracted. The Parliamentarians appear to have been opposing theamendment to section 3(d) on the ground that, if the amendment asindicated in the Ordinance is allowed to be brought in, then, there is afear of the common man being denied access to life saving medicines andit would encourage evergreening. The reply by the Hon'ble Minister showsthat he was aware of the impending problem namely, "evergreening" and theaction which the Hon'ble Minister intend to take. Admittedly, the amendedsection is not the amendment sought to be introduced by Ordinance 7/2004.It is argued by learned senior counsels appearing for the petitionersthat had the amendment proposed under Ordinance 7/2004 been brought intothe Act in the form in which it was shown, then, it would have been instrict compliance to "TRIPS". But instead, the amended section hasbeen brought into the Statute book. It is clear that the amended sectionappears to have been drafted in a great hurry without realising that itis likely to be struck down on the ground that it is incompatible with"TRIPS" (we have already held that we cannot go into that question) andalso being in violation of Article 14 of the Constitution of India (thelater point alone survives now). Since the ground of attack based onvagueness and arbitrariness and conferring uncanalised power to theStatutory Authority over-lap each other and therefore our points ofdiscussion are also likely to over-lap each other. So we have decided totake up all the three individual grounds raised for decision in aconsolidated manner.11. According to the learned senior counsels, the amended section isbad for the following reasons:Under Ordinance 7/2004 mere discovery of a new property is nottreated as an invention. But however, in the amended section, a furtherclause is added to the effect that the discovery of a new form of a knownsubstance should result in the enhancement of the known efficacy of thatsubstance and if it does not, then, it is not an invention. Therefore theargument goes on the validity of the amended section that, in the absenceof any guideline in the amended section or the Act itself as to how tofind out, when there is enhancement of the known efficacy of the substancefrom which the discoveries are made, then, an unguided discretion isvested with the Statutory Authority and therefore the amended section isbad in law. They would then argue that to make the matter worse, to the https://hcservices.ecourts.gov.in/hcservices/ amended section, an Explanation is added, by which, a deeming fiction iscreated to the effect that all salts, esters, etc., etc., if derivedfrom a known substance, then, such derivatives are also considered to bethe same substance, unless the derivatives are shown to differsignificantly in properties with regard to efficacy. It is argued thatall derivatives need not necessarily be the same substance and thereforethe deeming fiction created by the Explanation is bereft of anyguidelines and is bad in Law. It is argued that there must be someguidance or guideline in the Act itself as to when a derivative shall beheld to be differing significantly in properties with regard to efficacy.In other words, the submission is that, both the amended section as wellas the Explanation to the amended section must prescribe in clear termsfor the Authority constituted under the Act, the guidelines to decide inwhat circumstances it can be held that the discovery of a new form of aknown substance had resulted in the enhancement of the known efficacy ofthat substance and when the derivatives are found to differ significantlyin properties with regard to efficacy. Though the expression "efficacy"has a definite meaning, yet, no definite meaning could be attributed tothe expression "enhancement of the known efficacy" and "differsignificantly in properties with regard to efficacy". These expressionsare ambiguous. Therefore it is argued by learned senior counsels thatwhen it is possible for the Legislature to explain what is meant by"enhancement of a known efficacy" and "differing significantly inproperties with regard to efficacy", the Legislature is duty bound toclear the ambiguity. According to them, if this ambiguity is not cleared,then, there is every chance for the Statutory Authority to exercise it'spower to it's whims and fancies. Therefore the amended section is alsoirrational. Opposing these arguments, learned Additional SolicitorGeneral of India and the other learned senior counsels and learnedcounsels for the contesting parties would submit that having regard to thefield in which the amended section is to operate; the technological andscientific research oriented advances already made and likely to be madein the coming future and which may be a continuing process for all time tocome, the Legislature thought it fit to use only general expressions inthe Act, leaving it for the Statutory Authority to apply it's mind to thevarious facts that are brought to it's notice and then find out whetherthe invented drug is within the mischief of the amended section or outsideit. Therefore it would be unwise to fix any specific formula to beapplied, as a matter of static measure, to find out whether the new formof a known substance resulted in the enhancement of the known efficacy orthe derivatives differ significantly in properties with regard toefficacy. Having regard to the inventions that are made and are likely tobe made in the time to come, it is humanly impossible to prescribe a fixedformula to decide the issue as indicated above and if it is so donewithout even knowing what would be the new discoveries, then, the handsof the Statutory Authority would be completely tied to a fixed anddefinite situation, from which it cannot even wriggle out. Discoveriesthat are likely to be made in the future may not be alike and they mayvary from each other in their therapeutic effect and properties. LearnedAdditional Solicitor General of India and other learned senior counselsappearing for the pharmaceutical companies would argue that in the givensituation, the amended section as it stands today is a classic Legislationby itself thereby giving enough room in the joints for the Statutory https://hcservices.ecourts.gov.in/hcservices/ Authority to evaluate the materials placed before him in a case to casebasis; analyse the comparative details that are likely to be placed beforehim and then arrive at a decision to say whether the discovery /derivative is an invention or not. Therefore the Statutory Authority hasbeen given a discretion, which he has to exercise based on the detailsto be placed before him. In exercising such a discretionary power vestedin the Statutory Authority, if it is found that he has exercised thatdiscretionary power wrongly or abused it, then, such an error can alwaysbe corrected by higher forums, which is provided for in the Act itselfand thereafter, by the courts of law. In other words, a provision of lawcannot be struck down on the ground that the Authority exercising thepower under that provision is likely to misuse it, unless it is shown thatthe said provision itself ex-facie is violative of Article 14 of theConstitution of India, which is not the case here. When there would beenhancement of the known efficacy and when it would be found that thederivatives differ significantly in properties with regard to efficacy,would vary from discovery to discovery. It is then argued that theExplanation to the amended section does not create any additional criteriabut it only explains the amended section itself. Debates in Parliamentcould not be the basis for interpreting the Statute, is their lastsubmission. 12. In the light of the arguments advanced by the learned seniorcounsels all-round, we went through the entire records. We do find thatsection 3(d) as shown in Ordinance 7/2004 had not been reproduced in theform in which it was shown in the Act. Therefore the amended sectiondefinitely differs from the form in which it was put in the Ordinance.The amended section is not confined only to drugs as it deals withmachines and apparatuses as well. But however, we are clear in our mindthat the portions of the amended section and the Explanation under attackis definitely referable only to the pharmacology field namely, drugs.Since Parliamentary debates have been relied upon by the learned seniorcounsels for the petitioners to argue that since the amended sectionappears to be a hurriedly brought out Legislation, the Parliamentarydebates can be looked into to find out whether the amended section is ex-facie violative of Article 14 of the Constitution of India. We wentthrough the case laws brought to our notice by Mr.V.T.Gopalan, learnedAdditional Solicitor General of India; Mr.P.S.Raman learned senior counseland Mr.Anand Grover. Mr.Shanthi Bhushan, learned senior counsel reliedupon one or two judgments so brought to our notice. We also tried tofind out as to whether the "statement of objects and reasons" of an Actwould help the court to analyse the provision which the writ petitioneralleges is violating Article 14 of the Constitution of India. Theearliest judgment of the Indian court brought to our notice in thiscontext by Mr.P.S.Raman learned senior counsel, is the judgment of theSupreme Court reported in AIR 1952 SC Pg.369 (Aswini Kumar Vs. ArabindaBose), in which the law on the subject is laid down as hereunder: "The speeches made by the members of the House in the courseof the debate are not admissible as extrinsic aids to theinterpretation of statutory provisions: AIR 1952 SC 366." https://hcservices.ecourts.gov.in/hcservices/ "The Statement of Objects and Reasons, seeks only to explainwhat reasons induced the mover to introduce the bill in the Houseand what objects be sought to achieve. But those objects andreasons may or may not correspond to the objective which themajority of members had in view when they passed it into law.The Bill may have undergone radical changes during its passagethrough the House or Houses, and there is no guarantee that thereasons which led to the introduction and the objects therebysought to be achieved have remained the same throughout till theBill emerges from the House as an Act of the Legislature, forthey do not form part of the Bill and are not voted upon by themembers. The Statement of Objects and Reasons appended to the Bill should be ruled out as an aid to theconstruction of a statute."Therefore from the above pronouncement, it is clear that when the Bill isdebated, new things are likely to emerge and the emerging new things maybe taken into account while a final shape is given to the Bill before itwas brought into an Act. The statement of objects and reasons also standsexcluded as extrinsic aid to the construction of a Statute. The next inline is the judgment of the Supreme Court reported in (1986) 2 SCC Pg.237(Girdhari Lal & Sons Vs. Balbir Nath Mathur) wherein, on the subject ofinterpretation of Statutes, the Supreme Court had laid down the law ashereunder:"7. Parliamentary intention may be gathered from severalsources. First, of course, it must be gathered from the statuteitself, next from the preamble to the statute, next from theStatement of Objects and Reasons, thereafter from parliamentarydebates, reports of committees and commissions which precededthe legislation and finally from all legitimate and admissiblesources from where there may be light. Regard must be had tolegislative history too.""8. Once parliamentary intention is ascertained and theobject and purpose of the legislation is known, it then becomesthe duty of the court to give the statute a purposeful or afunctional interpretation. This is what is meant when, forexample, it is said that measures aimed at social ameliorationshould receive liberal or beneficent construction. Again, thewords of a statute may not be designed to meet the severaluncontemplated forensic situations that may arise. Thedraftsman may have designed his words to meet what Lord Simon ofGlaisdale calls the "primary situation". It will then becomenecessary for the court to impute an intention to Parliament inregard to "secondary situations". Such "secondary intention"may be imputed in relation to a secondary situation so as tobest serve the same purpose as the primary statutory intentiondoes in relation to a primary situation."Mr.Anand Grover, learned counsel appearing for one of the pharmaceuticalcompanies brought to our notice the judgment of the Supreme Court in the https://hcservices.ecourts.gov.in/hcservices/ case reported in (1994) 5 SCC Pg.593 (K.S.Paripoornan Vs. State ofKerala), wherein, the Supreme Court had held on the Law of Interpretationof Statutes as hereunder:"As regards the Statement of Objects and Reasons appended tothe Bill the law is well settled that the same cannot be usedexcept for the limited purpose of understanding the backgroundand the state of affairs leading to the legislation but it cannotbe used as an aid to the construction of the statute. (SeeAswini Kumar Ghosh Vs. Arabinda Bose; State of West Bengal Vs.Subodh Gopal Bose per Das, J; State of West Bengal Vs. Union ofIndia). Similarly, with regard to speeches made by the membersin the House at the time of consideration of the Bill it has beenheld that they are not admissible as extrinsic aids to theinterpretation of the statutory provisions though the speech ofthe mover of the Bill may be referred to for the purpose offinding out the object intended to be achieved by the Bill. (SeeState of Travancore, Cochin Vs. Bombay Co. Ltd. And Aswini KumarVs. Arabinda Bose)." Learned senior counsels on either side also relied upon a judgment of theSupreme Court reported in (1998) 4 SCC Pg.626 (P.S.Narasimha Rao Vs. State(CBI/SPE), wherein, it has been held as follows:"It would thus be seen that as per the decisions of thiscourt the statement of the Minister who had moved the Bill inParliament can be looked at to ascertain the mischief sought tobe remedied by the legislation and the object and purpose forwhich the legislation is enacted. The statement of the Ministerwho had moved the Bill in Parliament is not taken into accountfor the purpose of interpreting the provisions of the enactment.The decision in Pepper Vs. Hari permits reference to thestatement of the Minister or other promoter of the Bill as anaid to construction of legislation which is ambiguous or abscureor the literal meaning of which leads to an absurdity providedthe statement relied upon clearly discloses the mischief aimedat or the legislative intention lying behind the ambiguous orobscure words and that such a statement of the Minister must beclear and unambiguous."In Narasimha Rao's case referred to supra, the Supreme Court had held thatthe statement of the Minister, who makes the Bill in Parliament can belooked at, to ascertain the mischief sought to be remedied by theLegislation. We now go back to Girdhari Lal's case referred to supra ,wherein, the Supreme Court had held as follows:"Our own court has generally taken the view thatascertainment of legislative intent is a basic rule of statutoryconstruction and that a rule of construction should be preferredwhich advances the purpose and object of a legislation and thatthough a construction, according to plain language, shouldordinarily be adopted, such a construction should not be adoptedwhere it leads to anomalies, injustices or absurdities, vide https://hcservices.ecourts.gov.in/hcservices/ K.P.Varghese Vs. ITO; State Bank of Travancore Vs. Mohd. M.Khan;Som Prakash Rekhi Vs. Union of India; Ravula Subba Rao Vs. CIT;Govindlal Vs. Agricultural Produce Market Committee and BabajiKondaji Vs. Nasik Merchants Co-op. Bank Ltd."If we read the Parliamentary debate on Ordinance 7/2004, it appears thatthere was a wide spread fear in the mind of the members of the House thatif section 3(d) as shown in Ordinance 7/2004 is brought into existence,then, a common man would be denied access to life saving drugs and thatthere is every possibility of "evergreening". The reply by the Hon'bleMinister for Commerce shows that the Hon'ble Minister was sure thatOrdinance 7/2004 would prevent "evergreening". The Parliamentary debatesalso show that the Hon'ble Minister was concerned with the other issues aswell. Therefore it is clear to our mind that section 3(d) brought byAmending Act 15/2005 is as a result of debates on Ordinance 7/2004 in theParliament and due to debates change in the form is unavoidable andpermissible, it is not possible to sustain the arguments advanced by thelearned senior counsels that having shown section 3(d) in a particularform in Ordinance 7/2004 and bringing it in a totally different form inAmending Act 15/2005, the amending section ex-facie stands in violation ofArticle 14 of the Constitution of India. 13. Let us now test the argument advanced before this court bylearned Senior Counsels on the validity of the amended section on thetouchstone of Article 14 of the Constitution of India. As we understandthe amended section, it only declares that the very discovery of a newform of a known substance which does not result in the enhancement of theknown efficacy of that substance, will not be treated as an invention.The position therefore is, if the discovery of a new form of a knownsubstance must be treated as an invention, then the Patent applicantshould show that the substance so discovered has a better therapeuticeffect. Darland's Medical Dictionary defines the expression "efficacy" inthe field of Pharmacology as "the ability of a drug to produce the desiredtherapeutic effect" and "efficacy" is independent of potency of the drug.Dictionary meaning of "Therapeutic", is healing of disease – having agood effect on the body." Going by the meaning for the word "efficacy"and "therapeutic" extracted above, what the patent applicant is expectedto show is, how effective the new discovery made would be in healing adisease / having a good effect on the body? In other words, the patentapplicant is definitely aware as to what is the "therapeutic effect" ofthe drug for which he had already got a patent and what is the differencebetween the therapeutic effect of the patented drug and the drug inrespect of which patent is asked for. Therefore it is a simple exerciseof, though preceded by research, - we state – for any Patent applicant toplace on record what is the therapeutic effect / efficacy of a knownsubstance and what is the enhancement in that known efficacy. The amendedsection not only covers the field of pharmacology but also the otherfields. As we could see from the amended section, it is made applicableto even machine, apparatus or known process with a rider that mere use ofa known process is not an invention unless such a known process results ina new product or employs atleast one new reactant. Therefore the amendedSection is a comprehensive provision covering all fields of technology,including the field of pharmacology. In our opinion, the explanation https://hcservices.ecourts.gov.in/hcservices/ would come in aid only to understand what is meant by the expression"resulting in the enhancement of a known efficacy" in the amended sectionand therefore we have no doubt at all that the Explanation would operateonly when discovery is made in the pharmacology field. In 1989 (4) SCCPg.378 (Aphali Pharma. Ltd. Vs. State of Maharashtra), in laying down thelaw on "Explanation", the Supreme Court held as hereunder: "33. An Explanation, as was found in Bihta Marketing UnionVs. Bank of Bihar, may only explain and may not expand or add tothe scope of the original section. In State of Bombay Vs.United Motors, it was found that an Explanation could introducea fiction or settle a matter of controversy. Explanation maynot be made to operate as "exception" or "proviso". Theconstruction of an Explanation, as was held in Collector ofCustoms Vs. G.Dass & Co., must depend upon its terms and notheory of its purpose can be entertained unless it is to beinferred from the language used. It was said in Burmah ShellOil Ltd. Vs. CTO, that the Explanation was meant to explain thearticle and must be interpreted according to its own tenor andit was an error to explain the Explanation with the aid of thearticle to which it was annexed. We have to remember what washeld in Dattatraya Govind Mahajan Vs. State of Maharashtra, thatmere description of a certain provision, such as "Explanation"is not decisive of its true meaning. It is true that theorthodox function of an Explanation is to explain the meaningand effect of the main provision to which it is an explanationand to clear up any doubt or ambiguity in it, but ultimately itis the intention of legislature which is paramount and mere useof a label cannot control or deflect such intention. State ofBombay Vs. United Motors laid down that the interpretation mustobviously depend upon the words used therein, but this must beborne in mind that when the provision is capable of twointerpretations, that should be adopted which fits thedescription. An Explanation is different in nature from aProviso for a Proviso excepts, excludes or restricts while anExplanation explains or clarifies. Such explanation orclarification may be in respect of matters whose meaning isimplicit and not explicit in the main section itself. InHiralal Ratanlan Vs. State of U.P it was ruled that if on a truereading of an Explanation it appears that it has widened thescope of the main section, effect be given to legislative intentnotwithstanding the fact that the legislature named thatprovision as an Explanation. In all these matters courts haveto find out the true intention of the legislature. InD.G.Mahajan Vs. State of Maharashtra, this court said thatlegislature has different ways of expressing itself and in thelast analysis the words used alone are repository of legislativeintent and that if necessary an Explanation must be construedaccording to its plain language and not on any a prioriconsideration."In 2006 (8) SCC 613 ( (Hardev Motor Transport Vs. State of M.P.), on therole of "Explanation", the Supreme Court held as hereunder: https://hcservices.ecourts.gov.in/hcservices/ "31. The role of an Explanation of a statute is well known.By inserting an Explanation in the Schedule of the Act, the mainprovisions of the Act cannot be defeated. By reason of anExplanation, even otherwise, the scope and effect of a provisioncannot be enlarged. It was so held in S.Sundaram Pillai Vs.V.R.Pattabiraman in the following terms: (SCC p.613, para 53)"53. Thus, from a conspectus of the authorities referred toabove, it is manifest that the object of an Explanation to astatutory provision is-(a) to explain the meaning and intendment of theAct itself, (b) where there is any obscurity or vagueness inthe main enactment, to clarify the same so as to makeit consistent with the dominant object which it seemsto subserve,(c ) to provide an additional support to thedominant object of the Act in order to make itmeaningful and purposeful.(d) an Explanation cannot in any way interferewith or change the enactment or any part thereof butwhere some gap is left which is relevant for thepurpose of the Explanation, in order to suppress themischief and advance the object of the Act it can helpor assist the court in interpreting the true purportand intendment of the enactment, ...."(See also Swedish Match AB Vs. Securities & Exchange Board ofIndia)." In this case we find that the Explanation creates a deeming fiction ofderivatives of a known substance are deemed to be the same substanceunless they differ significantly in properties with regard to efficacy.Therefore it is clear from the amended section and the Explanation thatin the pharmacology field, if a discovery is made from a known substance,a duty is cast upon the patent applicant to show that the discovery hadresulted in the enhancement of a known efficacy of that substance and indeciding whether to grant a Patent or not on such new discovery, theExplanation creates a deeming fiction that all derivatives of a knownsubstance would be deemed to be the same substance unless it differsignificantly in properties with regard to efficacy. In our opinion, theamended section and Explanation give importance to efficacy. We havealready referred to the meaning of "efficacy" as given in Dorland'sMedical Dictionary. Scientifically it is possible to show with certaintywhat are the properties of a "substance". Therefore when the Explanationto the amended section says that any derivatives must differ significantlyin properties with regard to efficacy, it only means that the derivativesshould contain such properties which are significantly different withregard to efficacy to the substance from which the derivative is made.Therefore in sum and substance what the amended section with theExplanation prescribes is the test to decide whether the discovery is aninvention or not is that the Patent applicant should show the discovery https://hcservices.ecourts.gov.in/hcservices/ has resulted in the enhancement of the known efficacy of that substanceand if the discovery is nothing other than the derivative of a knownsubstance, then, it must be shown that the properties in the derivativesdiffer significantly with regard to efficacy. As we stated earlier, dueto the advanced technology in all fields of science, it is possible toshow by giving necessary comparative details based on such science thatthe discovery of a new form a of known substance had resulted in theenhancement of the known efficacy of the original substance and thederivative so derived will not be the same substance, since the propertiesof the derivatives differ significantly with regard to efficacy. Asrightly contended by learned Additional Solicitor General India and theleaned Senior Counsels and learned counsels for the Pharmaceutical Companyopposing the Writ that the writ petitioner is not a novice to thepharmacology field but it, being pharmaceutical giant in the whole of theworld, cannot plead that they do not know what is meant by enhancement ofa known efficacy and they cannot snow that the derivatives differsignificantly in properties with regard to efficacy. Mr.P.S.Raman learnedsenior counsel argued that the Legislature, while enacting a Law, isentitled to create a deeming fiction and for that purpose, brought to ournotice a judgment of the Supreme Court reported in AIR 1988 SC 191(M/s.J.K.Cotton Spinning and Weaving Mills Ltd. Vs. Union of India) where,in paragraph 40, the Supreme Court had said that "the Legislature is quitecompetent to enact a deeming provision for the purpose of assuming theexistence of a fact which does not really exist." It is also stated inthe very same paragraph that "it is well settled that a deeming provisionis an admission of the non-existence of the fact deemed." 14. It is argued by learned Senior Counsels for the writ petitionersthat it is possible for the Parliament to define in the Act itself what ismeant by enhancement of a known efficacy and what is meant by differingsignificantly in properties with regard to efficacy. The above expressionsare vague and ambiguous by themselves and therefore the meaning of suchexpressions ought to have been given in the Act or the amended section.Therefore when the meaning is not so given, then the vagueness andambiguity in the provision would result in arbitrary exercise of power bythe statutory authority. Opposing this argument, learned AdditionalSolicitor General of India would contend that Parliament is not an expert;it cannot foresee the future contingencies which may arise, when theyenact an Act; therefore the Parliament always thinks it wise to use onlygeneral expressions in the Statute leaving it to the Court to interpretit depending upon the context in which it is used and the facts that aremade available in each case. For this purpose, learned AdditionalSolicitor General brought to our notice the judgment of the Supreme Courtreported in 1995 Supp. (1) SCC 235 (Benilal Vs. State of Maharashtra) and1980 (1) SCC 340 (Registrar of Co-op. Societies Vs. K.Kunjabmu).Mr.P.S.Raman, learned senior counsel in supporting the argument oflearned Additional Solicitor General that the Parliament cannot foreseethings that may arise in the future, brought to our notice the judgment ofthe English Court reported in (1949) 2 All England Law Reports 155(Seaford Court Estates Vs. Asher), to understand and realise whether itwould be possible at all to foresee things that may arise in the futurewhen a Statute comes up for consideration before the Houses and what would https://hcservices.ecourts.gov.in/hcservices/ be the duty of the Judge before whom interpretation of such a Statutearise for consideration. The Court of Appeal in that judgment had laiddown the Law in that context as hereunder:"Whenever a statute comes up for consideration, it must beremembered that it is not within human powers to foresee themanifold sets of facts which may arise, and, even if it were, itis not possible to provide for them in terms free from allambiguity. The English language is not an instrument ofmathematical precision. Our literature would be much the poorerif it were. This is where the draftsmen of Acts of Parliamenthave often been unfairly criticised. A Judge, believing himselfto be fettered by the supposed rule that he must look to thelanguage and nothing else, laments that the draftsmen have notprovided for this or that, or have been guilty of some or otherambiguity. It would certainly save the judges trouble if Acts ofParliament were drafted with divine prescience and perfectclarity. In the absence of it, when a defect appears a judgecannot simply fold his hands and blame the draftsman. He mustset to work on the constructive task of finding the intention ofParliament, and he must do this not only from the language of thestatute, but also from a consideration of the social conditionswhich gave rise to it and of the mischief which it was passed toremedy, and then he must supplement the written word so as togive "force and life" to the intention of the legislature. Thatwas clearly laid down (3 Co. Rep. 7b) by the resolution of thejudgdes (SIR ROGER MANWOOD, C.B., and the other barons of theExchequer) in Heydon's case (4), and it is the safest guide to-day. Good practical advice on the subject was given about thesame time by FLOWDEN in his note (2 Plowd. 465) to Eyston Vs.Studd (5). Put into homely metaphor it is this: A judge shouldask himself the question how, if the makers of the Act hadthemselves come across this ruck in the texture of it, they wouldhave straightened it out? He must then do as they would havedone. A judge must not alter the material of which the Act iswoven, but he can and should iron out the creases."In 1980 (1) SCC 340 referred to supra the Supreme Court had held ashereunder:"(1) Parliament and the State Legislatures function bestwhen they concern themselves with general principles, broadobjectives and fundamental issues, instead of technical orsituational intricacies which are better left to better equippedfull time expert executive bodies and specialist publicservants. Parliament and the State Legislatures have neitherthe time or expertise to be involved in detail or circumstance,nor can visualise and provide for new strange unforeseen orunpredictable situations. That is the raison d'etre fordelegated legislation. The power to legislate carries with itthe power to delegate. But excessive delegation may amount toabdication. Delegation unlimited may invite despotismuninihibited. So the theory has been evolved that the https://hcservices.ecourts.gov.in/hcservices/ legislature cannot delegate its essential legislative function.Legislate it must, by laying down policy and principle anddelegate it may to fill in detail and carry out policy. Thelegislature may guide the delegate by speaking through theexpress provision empowering delegation or the other provisionsof the statute such as the preamble, the scheme or even the verysubject-matter of the statute. If guidance there is, whereverit may be found, the delegation is valid. A good deal oflatitude has been held to be permissible in the case of taxingstatutes and on the same principle generous degree of latitudemust be permissible in the case of welfare legislation,particularly those statutes which are designed to further theDirective Principles of State Policy."In 1995 Supp. (1) SCC 235 referred to supra, the Supreme Court had held ashereunder: "It is well settled that the legislative scheme may employwords of generality conveying its policy and intention toachieve the object set out therein. Every word need not bedefined. It may be a matter of judicial construction of suchwords or phrases. Mere fact that a particular word or phrasehas not been defined is not a ground to declare the provisionsof the Act itself or the order as unconstitutional. The word"habitual" cannot be put in a straitjacket formula. It is amatter of judicial construction and always depends upon thegiven facts and circumstances in each case. As to when aninference that a tenant is habitually in arrears disentitlinghim to the protection of the Order could be drawn is a questionof fact in each case. But on that ground or circumstanceitself, the provision of the Act cannot be declared to be ultravires."The commentary on canons – interpretation of broad terms in Bennion –Statutory Interpretation contains the following passage:"For the sake of brevity, or because the enactment has todeal with a multiplicity of circumstances, the draftsman oftenuses a broad term. This has the effect of delegatinglegislative power to the courts and officials who are calledupon to apply the enactment. The governing legal maxim isgeneralia verba sunt generaliter intelligenda (general words areto be understood generally). {3 Co Inst 76.See Examples 78.5,80.5 and 83.1} It is not to be supposed that the draftsmancould have had in mind every possible combination ofcircumstances which may chance to fall within the literalmeaning of general words. {For a detailed discussion of theconcept of the broad term see Bennion Statute Law (2nd edn, 1983)Chap. 13}The broad term which is a substantive has been called anomen generale. {Hunter Vs. Bowyer (1850) 15 LTOS 281.} Otherjudicial descriptions of the broad term include 'open-ended https://hcservices.ecourts.gov.in/hcservices/ expression' {Express Newspapers Ltd Vs. McShane [1980] 2 WLR 89,at p 94.}, 'word of the most loose and flexible description'{Green v Marsden (1853) 1 Drew 646.} and 'somewhat comprehensiveand somewhat indeterminate term'. {Campbell v Adair [1945] JC29.}The broadest terms, such as 'reasonable' or 'just',virtually give the court or official an unlimited delegatedauthority, subject to the remedies available on judicial reviewor appeal. {As to these see s 24 of this Code (judicial review)and s 23 (appeal).}"In Girdhari Lal's case referred to supra, the Supreme Court held ashereunder: "Again, the words of a statute may not be designed to meetthe several uncontemplated forensic situations that may arise.The draftsman may have designed his words to meet what Lord Simonof Glaisdale calls the "primary situation". It will then becomenecessary for the court to impute an intention to Parliament inregard to "secondary situations". Such "secondary intention" maybe imputed in relation to a secondary situation so as to bestserve the same purpose as the primary statutory intention does inrelation to a primary situation."Therefore it is clear from the case laws referred to above thatParliamentarians expresses its object and purpose in general terms whenenacting a Statute and does not foresee the minute details that arelikely to arise in the future and provide a solution for the same at thetime when the Act itself is enacted. On the other hand, they would beacting wiser if they make only general expressions, leaving it to theexperts / Statutory Authorities and then courts, to understand the generalexpressions used in the Statute in the context in which they are used in acase to case basis depending upon the facts available in each case. Usinggeneral expressions in a Statute, leaving the court to understand it'smeaning, would not be a ground to declare a section or an Act ultra vires,is the law laid down by the Supreme Court in Benilal's case referred tosupra. Interpretation of a Statute must be to advance the object whichthe Act wants to achieve. 15. Now, we went through the statements of objects and reasons ofAmending Act 15/2005. As rightly emphasized by Mr.Soli Sorabji learnedsenior counsel for the petitioners, the statement of objects and reasonsfor Amending Act 15/2005 emphasises in more than one place that theamendment is in the discharge of India's obligation to "TRIPS", whichforms part of the "WTO" agreement. Therefore a need has arisen for us tolook into the relevant Articles of "TRIPS" for the limited purpose of whatobligations are created under "TRIPS", which, India was attempting todischarge by bringing in Amending Act 15/2005. Article 7 of "TRIPS"provides enough elbow room to a member country in complying with "TRIPS"obligations by bringing a law in a manner conducive to social and economicwelfare and to a balance of rights and obligations. Article 1 of "TRIPS"enables a member country free to determine the appropriate method ofimplementing the provisions of this agreement within their own legal https://hcservices.ecourts.gov.in/hcservices/ system and practice. But however, any protection which a member countryprovides, which is more extensive in nature than is required under"TRIPS", shall not contravene "TRIPS". Article 27 speaks aboutpatentability. Lengthy arguments have been advanced by learnedAdditional Solicitor General appearing for the Government of India,learned senior counsels and learned counsels appearing for thepharmaceutical companies that India, being a welfare and a developingcountry, which is pre-dominantly occupied by people below poverty line,it has a constitutional duty to provide good health care to it's citizensby giving them easy access to life saving drugs. In so doing, the Unionof India would be right, it is argued, to take into account the variousfactual aspects prevailing in this big country and prevent evergreening byallowing generic medicine to be available in the market. As rightlycontended by the learned Additional Solicitor General of India, theParliamentary debates show that welfare of the people of the country wasin the mind of the Parliamentarians when Ordinance 7/2004 was in theHouse. They also had in mind the International obligations of Indiaarising under "TRIPS" and under "WTO" agreement. Therefore the validityof the amended section on the touchstone of Article 14 of the Constitutionof India must be decided having regard to the object which Amending Act15/2005 wanted to achieve. 16. It is argued by the learned senior counsels for the petitionersthat since the amended section uses only general expressions, leaving itto the Statutory Authority to understand what it means, the StatutoryAuthority is likely to act arbitrarily in exercising it's discretion,since it has no guidelines. We have already held that the amended sectioncannot be said to be vague or ambiguous. We reiterate here at this stagethat the amended section with it's Explanation is capable of beingunderstood and worked out in a normal manner not only by the Patentapplicant but also by the Patent controller. In other words, the patentcontroller would be guided by various relevant details which every patentapplicant is expected to produce before him showing that the new discoveryhad resulted in the enhancement of the known efficacy; the derivativesdiffer significantly in properties with regard to efficacy and thereforeit cannot be said that the patent controller had an uncanalised power toexercise, leading to arbitrariness. The argument that the amended sectionmust be held to be bad in Law since for want of guidelines it gives scopeto the Statutory Authority to exercise it's power arbitrarily, has to benecessarily rejected since, we find that there are in-built materials inthe amended section and the Explanation itself, which would control /guide the discretion to be exercised by the Statutory Authority. Inother words, the Statutory Authority would be definitely guided by thematerials to be placed before it for arriving at a decision.Mr.P.S.Raman learned senior counsel brought to our notice two judgments ofthe Supreme Court reported in AIR 1957 SC 397 (M/s.Pannalal Binjraj Vs.Union of India) and (1974) 1 SCC 549 (State of Punjab Vs. Khan Chand) tohighlight the types of discretions, if exercised, affecting variousrights and the outcome of such exercise of discretion. We extractparagraph 34 of the judgment reported in AIR 1957 SC 397 hereunder:"34. There is a broad distinction between discretion whichhas to be exercised with regard to a fundamental right https://hcservices.ecourts.gov.in/hcservices/ guaranteed by the Constitution and some other right whichisgiven by the statute. If the statute deals with a right whichis not fundamental in character the statute can take it away buta fundamental right the statute cannot take away. Where forexample, a discretion is given in the matter of issuing licencesfor carrying on trade, profession or business or whererestrictions are imposed on freedom of speech etc., by theimposition of censorship, the discretion must be controlled byclear rules so as to come within the category of reasonablerestrictions. Discretion of that nature must be differentiatedfrom discretion in respect of matters not involving fundamentalrights such as transfers of cases. As inconvenience resultingfrom a change of place or venue occurs when any case istransferred from one place to another but it is not open to aparty to say that a fundamental right has been infringed by suchtransfer. In other words, the discretion vested has to belooked at from two points of view, viz., (1) does it admit ofthe possibility of any real and substantial discrimination, and(2) does it impinge on a fundamental right guaranteed by theConstitution? Article 14 can be invoked only when both theseconditions are satisfied. Applying this test, it is clear thatthe discretion which is vested in the Commissioner of Income –Tax or the Central Board of Revenue, as the case may be, unders.5 (7-A) is not at all discriminatory."From the above extracted portion, it is clear that Article 14 can beinvoked only when it is shown that in the exercise of a discretionarypower there is a possibility of a real and substantial discrimination andsuch exercise interferes with the fundamental right guaranteed by theConstitution. This judgment is by a Constitution Bench. The latterjudgment [(1974) 1 SCC 549] is also by a Constitution Bench, which alsoquotes with approval the above extracted passage, in paragraph No.10 ofthat judgment. It is not shown by the learned senior counsels appearingfor the petitioners before us that in the exercise of the discretionarypower by the Patent controller, any of the petitioner's fundamental rightsare violated namely, to carry on the trade or the petitioner standsingularly discriminated. We find that the amended section by itselfdoes not discriminate nor does it prohibit the trade being carried on. 17. It is argued by the learned senior counsels for the petitionersthat the Statutory Authority is likely to misuse the discretion vested init by throwing out the patent application as "not an invention", byrelying upon the amended section, when the amended section itself does notcontain any guidelines. We have already found that the amended sectionhas in-built protection enabling each of the patent applicant to establishbefore the patent controller that his discovery had resulted in theenhancement of the known efficacy of that substance and the derivativesare significantly differing in properties with regard to efficacy.Therefore it boils down to only one question namely, could an arbitraryexercise of a discretionary power invalidate an Act? We have a directanswer for this point in favour of the State from a judgment of theSupreme Court reported in 2006 (8) SCC 212 (M.Nagaraj Vs. Union of India), https://hcservices.ecourts.gov.in/hcservices/ where, in paragraph No.106, the Supreme Court had held as hereunder:"Every discretionary power is not necessarilydiscriminatory. According to the Constitutional Law of India,by H.M.Seervai, 4th Edn., p.546, equality is not violated by mereconferment of discretionary power. It is violated by arbitraryexercise by those on whom it is conferred. This is the theoryof "guided power". This theory is based on the assumption thatin the event of arbitrary exercise by those on whom the power isconferred, would be corrected by the courts."In the judgment reported in 2007-1-LW.Pg.724 (Selvi.J.Jayalalitha & OthersVs. The Union of India & Others), rendered by one of us (Justice PrabhaSridevan), in dealing with such a contention namely, an Act must beinvalidated because of possible misuse and abuse of the law, it was heldas hereunder:"67. It was also contended that there could be flagrantmisuse and abuse of the law. The possibility of flagrant abuseor misuse of law has never been a ground for holding a provisionultra vires. We cannot presume that the authorities willadminister the law "with an evil eye and an unequal hand." Thishas been so held in several cases where the constitutionality ofa legal provision was attacked. The observations of the SupremeCourt in Krishna Lal's case (supra), where the Kerala Abkari Actwas challenged, are squarely applicable to the present case.Merely because the Act requires the assessee to prove that therewere circumstances which prevented the assessee from filing thereturn, it would not amount to violation of Article 20(3) of theConstitution."We have already found that there is no ambiguity or vagueness in theexpressions under attack as found incorporated in the amended section andthe Explanation attached to it. Ultimately, in that case the conclusionswere summed up by saying (See paragraph 75) that "no law can be declaredillegal because there is a possibility of its misuse" and "theLegislature has a duty to safeguard the economic interest of the country."When the validity of any law touching upon the economic interests of acountry comes up before court, what the court should do, had been statedby the Supreme Court in the judgment reproted in (2006) 6 SCC 213 (ReizElectrocontrols (P) Ltd. Vs. CCE). In paragraph No.10 of that judgment,the Supreme Court had extracted paragraph No.10 of it's earlier judgmentreported in (1996) 3 SCC 407 (Union of India Vs. Paliwal Electricals (P)Ltd.), wherein it was found stated as hereunder:"It is equally necessary to determine, as pointed outrepeatedly by this court, that in economic and taxation spheres,large latitude should be allowed to the Legislature."We could see that the Supreme Court, in Paliwal's case namely, (1996) 3SCC 407 had borne in it's mind the observations made by a ConstitutionBench of the Supreme Court in R.K.Garg Vs. Union of India (1981) 4 SCC https://hcservices.ecourts.gov.in/hcservices/

675. In R.K.Garg's case, the following paragraph is found:"Another rule of equal importance is that laws relating toeconomic activities should be viewed with greater latitude thanlaws touching civil rights such as freedom of speech, religion,etc. It has been said by no less a person than Holmes, J. thatthe legislature should be allowed some play in the joints,because it has to deal with complex problems which do not admitof solution through any doctrinaire or straitjacket formula andthis is particularly true in case of legislation dealing witheconomic matters, where, having regard to the nature of theproblems required to be dealt with, greater play in the jointshas to be allowed to the legislature. The Court should feelmore inclined to give judicial deference to legislative judgmentin the field of economic regulation than in other areas wherefundamental human rights are involved. Nowhere has thisadmonition been more felicitously expressed than in Morey Vs.Doud where Frankfurter, J. said in his inimitable style:"In the utilities, tax and economic regulationcases, there are good reasons for judicial self-restraint if not judicial deference to legislativejudgment. The legislature after all has theaffirmative responsibility. The courts have only thepower to destroy, not to reconstruct. When these areadded to the complexity of economic regulation, theuncertainty, the liability to error, the bewilderingconflict of the experts, and the number of times theJudges have been overruled by events – self-limitationcan be seen to be the path of judicial wisdom andinstitutional prestige and stability."The court must always remember that "legislation is directed topractical problems, that the economic mechanism is highlysensitive and complex, that many problems are singular andcontingent, that laws are not abstract propositions and do notrelate to abstract units and are not to be measured by abstractsymmetry" that exact wisdom and nice adaptation of remedy arenot always possible and that "judgment is largely a prophecybased on meagre and uninterpreted experience". Everylegislation particularly in economic matters is essentiallyempiric and it is based on experimentation or what one may calltrial and error method and therefore it cannot provide for allpossible situations or anticipate all possible abuses. Theremay be crudities and inequities in complicated experimentaleconomic legislation but on that account alone it cannot bestruct down as invalid. The courts cannot, as pointed out bythe United States Supreme Court in Secretary of Agriculture Vs.Central Roig Refining Co. be converted into tribunals for relieffrom such crudities and inequities. There may even bepossibilities of abuse, but that too cannot of itself be aground for invalidating the legislation, because it is notpossible for any legislature to anticipate as if by some divine https://hcservices.ecourts.gov.in/hcservices/ prescience, distortions and abuses of its legislation which maybe made by those subject to its provisions and to provideagainst such distortions and abuses. Indeed, howsoever greatmay be the care bestowed on its framing, it is difficult toconceive of a legislation which is not capable of being abusedby perverted human ingenuity. The court must therefore adjudgethe constitutionality of such legislation by the generality ofits provisions and not by its crudities or inequities or by thepossibilities of abuse come to light, the legislature can alwaysstep in and enact suitable amendatory legislation. That is theessence of pragmatic approach which must guide and inspire thelegislature in dealing with complex economic issues."In fact, we find that the above position in law is also spoken to byanother Constitution Bench of the Supreme Court in the judgment reportedin 2001 (4) SCC 139 (Union of India Vs. Elphinstone Spinning & Weaving Co.Ltd.) (See para 11). It is a settled position in law (See (2001) 4 SCC139 - (at page 158 ) that "it must be presumed that the Legislatureunderstands and correctly appreciates the need of its own people, that itslaws are directed to problems made manifest by experience and that itsdiscriminations are based on adequate grounds." We now went through the Patents Act, 1970 as amendedby Act 15/2005. In India there was an Act called Indians Patent & DesignsAct enacted in the year 1911. The statement of objects and reasons of thePatents Act, 1970 (Act 39/1970) noticed that since the 1911 enactment,there had been substantial changes in the political and economicconditions of the country and therefore a need has arisen for acomprehensive law so as to ensure more effectively that patent rights arenot worked out to the detriment of the consumer or to the prejudice oftrade or the industrial development of the country, which was felt asearly as 1948 resulting in the Government appointing the Patents EnquiryCommittee to review the working of the Patents Law in India. Thereforeright from the year 1948 or so, the Parliament was aware about the changein the economic conditions of the country, which made them to change the1911 enactment to suit to the needs of the economic conditions of thecountry. Therefore there cannot be any doubt at all that the Patents Actas it stood then and as it stands today, is designed to safeguard theeconomic interests of this country and if that is so, the amended sectionmust be viewed with greater latitude. 18. In 1996 (3) SCC 709 (State of A.P. Vs. Mc Dowell & Co.) theSupreme Court reiterated the position that "a law made by Parliament orthe Legislature can be struck down by courts on two grounds and twogrounds alone namely, lack of legislative competence and violation of anyof the fundamental rights guaranteed in Part III of the Constitution ofIndia or of any other Constitutional provision." There is no thirdground. In the case before us, learned senior counsels, except arguingthat the amended section must be struck down on the ground of ambiguity,arbitrariness, leading to exercise of uncanalised powers – with which wehave not agreed at all – had not shown any other legal ground toinvalidate the amended section. In the same judgment, the Supreme Courthad held as follows: https://hcservices.ecourts.gov.in/hcservices/ "No enactment can be struck down by just saying that it isarbitrary or unreasonable. Some or other Constitutionalinfirmity has to be found before invalidating an Act. Anenactment cannot be struck down on the ground that court thinksit unjustified. Parliament and the Legislatures, composed asthey are of the representatives of the people, are supposed toknow and be aware of the needs of the people and what is goodand bad for them. The court cannot sit in judgment over theirwisdom."In (2006) 3 SCC 434 (Bombay Dyeing & Mfg. Co.Ltd. (3) Vs. BombayEnvironmental Action Group) (See paragraph 205) it was held by the Supremecourt that "arbitrariness on the part of the legislature so as to make thelegislation violative of Article 14 of the Constitution should ordinarilybe manifest arbitrariness. What would be arbitrary exercise of legislativepower would depend upon the provisions of the statute vis-a-vis thepurpose and object thereof". In AIR 1961 SC 1602 (Jyoti Pershad Vs.Union Territory of Delhi) the Supreme Court held as hereunder:"So long as the Legislature indicates, in the operativeprovisions of the statute with certainty, the policy and purposeof the enactment, the mere fact that the legislation is skeletal,or the fact that a discretion is left to those entrusted withadministering the law, affords no basis either for the contentionthat there has been an excessive delegation of legislative poweras to amount to an abdication of its functions, or that thediscretion vested is uncanalised and unguided as to amount to acarte blanche to discriminate. If the power or discretion hasbeen conferred in a manner which is legal and constitutional, thefact that Parliament could possibly have made more detailedprovisions, could obviously not be a ground for invalidating thelaw."As we have already found, the amended section has in-built measures toguide the Statutory Authority in exercising it's power under the Act. Wehave also found that the amended section does not suffer from the vice ofvagueness, ambiguity and arbitrariness. The Statutory Authority would bedefinitely guided in deciding whether a discovery is an invention or notby the materials to be placed before him by the Patent applicant. If thatis so, then, going by the law laid down by the Supreme Court inM.Nagaraj's case referred to supra, if the Statutory Authority, inexercising his power, mis-directs himself; abuses his power in anarbitrary manner and passes an order, then, the same could be corrected bythe hierarchy of forums provided in the Act itself in addition to thefurther reliefs available before the Courts of Law. When that is theposition, then, we have to necessarily state that the amended sectioncannot be invalidated solely on the ground that there is a possibility ofmisusing the power. 19. Now we refer to the decisions mainly relied upon by the learnedsenior counsel for the petitioners. Mr.Soli Sorabji learned seniorcounsel relied upon the following judgments:(a) AIR 1960 SC 554 (Hamdard Dawakhana & Anr. Vs. The Union https://hcservices.ecourts.gov.in/hcservices/ of India & Others); (b) 1961 Crl.L.J. 442 (The State of Madhya Pradesh & Anr.Vs. Baldeo Prasad); (c ) AIR 1970 SC 1453 (Harakchand Ratanchand Banthia &Others Vs. Union of India); and (d) AIR 1967 SC 829 (Lala Hari Chand Sarda Vs. MizoDistrict Council and Another). We went through the judgments very carefully. In the first case, theLegislation impugned was stated to be in violation of Article 19 –restriction on freedom of speech – of the Constutiton of India. Inconsidering the provisions of the Act challenged, the Supreme Court foundthat sections 3(d) and 8 of the Act are unconstitutional and arbitrary asthey provided uncontrolled power to the executives to do the act. In thesecond case, the validity of Central Provinces and Berar Goondas Act, 1946was in challenge. The Apex Court found various infirmities in theoperative sections of the Act and upheld the order of the High courtinvalidating the offending provisions. In the third case, the validity ofcertain provisions of the Gold Control Act was in challenge. In the lastcase, there was a challenge to the validity of section 3 of the LUSHAIHILLS District (Trading by Non-Tribals) Regulation 2, 1963 was inchallenge, being in violation of Article 19(1)(g) of the Act. In ourrespectful opinion, when the validity of an Act is challenged on thetouchstone of Article 14 of the Constitution of India, the decision has todepend upon the provisions of the concerned Statute itself, which are inchallenge. Of-course, law is well settled that when there is vagueness inany provision of law leading to arbitrary exercise of power / uncanalisedpowers, the Act should be struck down. Therefore whether any provision oflaw is hit by Article 14 of the Constitution of India on the ground statedabove, would depend upon the construction of the provisions in challenge.When a particular Act is found to be suffering the vice of vagueness andarbitrariness, then, it must be held that it was so on the construction ofthat Statute. It cannot be said that whenever arbitrariness and vaguenessare the vices projected as grounds of attack, the court should close it'seyes and simply strike down the law without even finding out whether inthe Act challenged there are such vices. In fact, that is what theSupreme Court itself had said in the first judgment brought to our noticeby Mr.Soli Sorabji learned senior counsel, which in turn quotes withapproval an earlier judgment of the Supreme Court reported in 1954 SCR 674wherein it is stated that "in order to decide whether a particularlegislative measure contravenes any of the provisions of Part III of theConstitution of India, it is necessary to examine with some strictness thesubstance of the legislation in order to decide what the Legislature hasreally done." We again find in the first judgment that the Supeme Courthad held as follows: "Another principle which has to be borne in mind inexamining the Constitutionality of a Statute is that, it must beassumed that the Legislature understands and appreciates theneed of the people and the laws it enacts are directed toproblems which are made manifest by experience and that theelected representatives assembled in a Legislature enact lawswhich they consider to be reasonable for the purpose for which https://hcservices.ecourts.gov.in/hcservices/ they are enacted. Presumption is therefore in favour of theConstitutionality of an enactment." If we have the above referred to principles of law in mind on StatutoryInterpretation, we have to state with great respect that the judgment ofthe Supreme Court brought to our notice by Mr.Soli Sorabji learned seniorcounsel, would not stand attracted to the case on hand. The validity ofthe provisions of law considered in those cases and the validity of theprovision of law in contest before us are not in pari materia. There isdefinitely a difference in the language and wording of the provisionschallenged in those cases and the one before us. The context in which theoffending provisions are used in the Act in challenge is also totallydifferent from the context in which the offending provisions in the casesdecided by the Supreme Court are used. Of course, in those judgments, theSupreme Court had clearly laid down that vagueness / ambiguity andarbitrariness resulting in uncanalised powers are grounds to invalidate anAct. In other words, with great respect, we state that in all the casesbrought to our notice by Mr.Soli Sorabji learned senior counsel, theSupreme Court, analysing the provisions of the Statute before them in thecontext of the arguments advanced, found that they are violative. Westate that in this case we have already found, analysing the allegedoffending provision, that it is not in violation of Article 14 of theConstitution of India. We have borne in mind the object which theAmending Act wanted to achieve namely, to prevent evergreening; to provideeasy access to the citizens of this country to life saving drugs and todischarge their Constitutional obligation of providing good health care toit's citizens. We have also referred to the case laws brought to ournotice by Mr.Habibullah Badsha viz., (1974) 1 SCC Pg.549 (State of PunjabVs. Khan Chand); (1985) 1 SCC 234 (State of Maharashtra Vs. Kamal S.Durgule); (1988) 2 SCC 415 (B.B.Rajwanshi Vs. State of U.P.); (1989) 4 SCC683 (A.N.Parasuraman Vs. State of Tamil Nadu); and (2005) 12 SCC 77 (Stateof Rajasthan Vs. Basant Nahata). On a perusal of the same also, we arein a position to reiterate with respect that our conclusions based on thecase laws brought to our notice by Mr.Soli Sorabji learned senior counselwould equally apply to the case laws brought to our notice byMr.Habibullah Badsha learned senior counsel. For all the reasons statedabove, on issue (c ) we hold that the amended section is not in violationof Article 14 of the Constitution of India and accordingly, both the writpetitions are dismissed with no order as to costs. Sd/Asst.Registrar/true copy/Sub Asst.Registrarvsl https://hcservices.ecourts.gov.in/hcservices/ To1. The Secretary, Union of India, Department of Industry Ministry of Industry and Commerce Udyog Bhavan, New Delhi2. The Controller General of Patents & Designs through the Patent Office Intellectual Property Rights Building G.S.T.Road, Guindy, Chennai – 600 032+ 5 CCs to M/s.C.Daniel, Advocate SR NO 48654+ 1 cc to Mr.A.A.Mohan, Advocate, SR No.48651+ 1 cc to M/s.Lakshmi Kumaran, Advocate, SR No.48640+ 3 ccs to M/s.A.Ramesh Kumar, Advocate, SR No.48666, 48665, 48664+ 1 cc to M/s.Vaigai, Advocate, SR No.48750+ 1 cc to Mr.P.Wilson, ASG of India, SR No.48797 W.P.NOS.24759 AND 24760/2006ms[co]gp/7.8.