S.RAVINDRA BHAT, J. - (1.) This appeal by special leave questions a decision of the Allahabad High Court rejecting a writ petition. In those proceedings, the appellant had challenged the vires of notifications dated 11th July, 2006 and 30th April, 2009, which imposed ceiling prices on a drug formulation, Frusemide.
(2.) The facts necessary for deciding this appeal are that the appellants, i.e. TC Healthcare and Modi Mundipharma Pvt. Ltd. (hereafter "TCH" and "Modi" respectively and "the appellants" collectively), at the relevant time, manufactured drugs. By reason of a notification dated 2nd March, 1995, the appellants were exempted from the regime of price fixation, under the Drugs (Price Control) Order, 1995 (hereafter "DPCO") as they were small scale units. Para 8 of the DPCO prescribed that if the Central Government were to fix the price of any bulk drug under Para 3, and such bulk drug is used by a manufacturer to prepare a formulation, the manufacturer must apply under Form III for price revision of such formulation, upon which the Central Government may fix or revise the price of the formulation.
(3.) TCH, at the relevant time, was manufacturing several drug formulations. It was registered as a smallscale unit (SSU) and therefore, exempt, by reason of Para 8 of the DPCO, from the drug price control regime. Likewise, Modi too was, at the relevant time, exempt, as an SSU, from drug price control. TCH produces and distributes several formulations, including Diucontin K (20mg and 40mg) prepared from the bulk drug Frusemide. Modi on the other hand, manufactures Unicontin (400 mg and 600 mg) derived from the bulk drug Theophylline. For this formulation, (i.e in the 400 mg and 600 mg tablets) drug ceiling prices were fixed by a notification dated 11 th July, 2006. Initially, Modi filed an injunction suit; however, that was dismissed for nonprosecution. Upon receiving demand notices, it sought for quashing of the said notification (dated 11 th July, 2006) and the consequent notifications/ demands, in writ proceedings before the Allahabad High Court. Similarly, TCH's writ petition challenged the notification dated 30 th April, 2009, whereby the ceiling price of formulations containing Frusemide and Potassium were fixed; it also questioned the consequent demands by the Central Government.;