Softech Pharma Private Ltd., a company incorporated V. The Union of India

WP/2624/2010

AI Insights

The case involves two writ petitions filed by Sai Mirra Innopharm Private Limited and Softech Pharma Private Ltd., against the Union of India and the National Pharmaceutical Pricing Authority (NPPA). The petitions challenged the demand for interest on overcharged amounts related to pharmaceutical products, which were sold at prices exceeding the ceiling fixed by the NPPA under the Drugs (Price Control) Order, 1995. The main legal contention was whether interest could be charged on the overcharged amounts from the date of overcharge or only after the issuance of a demand notice. The court examined the provisions of the Essential Commodities Act, 1955, and the Drugs (Price Control) Order, 1995, along with relevant case law, to determine the legality of the interest demands.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 732420 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 24-08-2023
• Assessment Year: misc
• Other Referred Cases: Subba Rao Vs. IT Commissioner, Pachanatha Chettiar Vs. C.I.T, Smt. Gulbanu Razack Vs. The Assistant Commissioner of Income Tax (Inv), M/s. TC Healthcare Pvt. Ltd. Vs. Union of India, Best Laboratories Pvt. Ltd Vs. Union of India, Shimal Investment and Trading Co. Vs. Union of India, Franco Indian Pharmaceuticals Ltd Vs. Union of India, Secretary, Ministry of Chemicals & Fertilizers, Govt of India Vs. M/s. Cipla & Others, Union of India Vs. Cynamide India Pvt. Ltd, Johnson & Johnson Ltd. Vs. M/s. NR Jet Enterprises Ltd, Amkay Laboratories Pvt. Ltd. Vs. Union of India
• Laws Referred To: Article 226 of the Constitution of India, Essential Commodities Act, 1955, Drugs (Price Control) Order 1995
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANJALI AGARWAL; GADI KUMAR
• Assessee Lawyers: M S IYENGAR
• Keywords: Writ of Certiorari; Interest on Overcharged Amount; Pharmaceutical Pricing; DPCO Compliance
• Section: 7(a); 151 CPC

Judgement Text

"[ 3168 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FOURTH DAY OF AUGUST TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE K. LAKSHMAN WRIT PETITION Nos.: 26260 oF 2009 AND 2624 0F 2010 WRIT PETITION NO: 26260 OF 2009 Between: 1. Sai Mirra lnnopharm Private Limited, a company incorporated under the C.ompanies Act, 1956 and having its registered office at: No.23, L.B. Road, 4\"' Floor, Pizza Corner Building, Adyar, Chennai - 600 020, lndia. 2. Dr. Reddy's Laboratories Limited, a company incorporated under the Companies Act, 1956, having its Registered office at: 7-1-27, Ameerpet, . Hyderabad - 500 0'15, Andhra Pradesh. ...PETITIONERS AND 1. The Union of lndia, through the Secretary, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Shastri Bhavan, New Delhi - 110 001 . 2. National Pharmaceutical Pricing Authority, through the Secretary, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, 5'n/3'o Floor, YMCA Cultural Centre, Building, 1 , Jai Singh Road, New Delhi - 1 10 001 . ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ or any other appropriate Writ, Order or Directions more particularly in the nature of Writ of Certiorari quashing the demand of interest made in the order dated 18-07-2008 of Rs. 11,76,588/- passed by the 2nd Respondent. I.A. NO: 1 OF 2009(WPMP. NO: 34174 OF 2009 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased stay of all further proceedings pursuant to the impugned Notice dt 18-07-2008 levying interest of Rs.11,76,588i- passed by the 2nd respondent, pending disposal of the writ petition, in the interest of justice. Counsel for the Petitioners: SRI M.S. SRINIVASA IYENGAR Counsel for the Respondents: SMT. ANJALI AGARWAL WRIT PETITION NO: 2(24 OF 2010 Between: 1. Softech Pharma )rivate Ltd., a company incorporated, uncler th() Companies Act, 1956 and haring its registered office at Plot No. 708/6 Bahind Somnmath Temple Dabel, N;rni, Daman - 396215 2. Dr. Reddy's Laboratories Ltd., a Company incorporated, unde:r tl'e compa Act, 1956 having its Registered office at 7-1-27, Ameetpel, llyderabad - 015 Andhra Prad :sh ntes 500 ...P =TITIONERS AND 1- The Union of lndia, through the Secretary Department of Chemicals and Fertilizers Shastr bhavan, New Delhi - 1 10001 2. National Pharma:eutical Pricing Authority, through the, Sec:retar),, Department of Plrarmaceuticals, Ministry of Chemicals and Fr:rtilizers, Sth / 3rd Floor, YMCA Cultural Centre Building 1, Jai Singh road, I'lew Delhi - 110 001 3. Govemment of Andhra Pradesh, Revenue Department Offi:e of l.he Tahsildar, Ameerpet, Hyder abad ..,REIJPONDENTS Petition under lrrticle 226 of the Constitution of lndia 1:raying that in the circumstances stated in the affidavit filed therewith, the Higtr Court may be pleased to issue writ, rrder or directions more particular y in the na:ure of writ of Certiorari quashing th: demand of interest made in the order dateC 04.09.2008 of Rs. 77,20,352/- pas sed by the 2nd respondent hereirr as illel;al, arbitrary and without jurisdiction. l.A. NO:3 OF 2010(Wt'MP. NO:3479 OF 2010) Petition under liection 151 CPC praying that in the cirrumstances stated in the affidavit filed in support of the petition, the High (lourt m ay be pleased to stay all further proceelings pursuant to the notice vide lt:tter No. fu1938/2009 dt. 24.09.2OO9 for Rs. 4,''0,79,939/- issued by the 3rd respondent perding disposal of the writ petition in tlre interest of justice. Petition under iection 151 CPC praying that in the circumstances stated in the affidavit filed ir support of the petition. the High Court may be pleased to stay all further procee dings including the appearance oi the trrel.itioners pursuant to the impugned Notir;e dated. 04.09.2008 of Rs. 77,2O 3521- pirss3d by the 2nd respondent pending disposal of the writ petition in the interestr; of jr-rstice. l.A. No: 4 oF 201o(Wl,l\"!e.._Noi!4!S_4891!l l.A. NO: 1 OF 20'1O(WVMP. NO: 1814 OF 2010) Government of Andhra Pradesh, Revenue Department, Office of the Tahsildar, Ameerpet, Hyderabad ...PETITIONERYRESPONDENT No.3 AND 1 Softech Pharma Private Ltd., a company incorporated, under the Companies Act, 1956 and having its registered office at Plot No.708/6 Bahind Somnmath Temple Dabel, Nani, Daman - 396215 Dr. Reddy's Laboratories Ltd., a Company incorporated, under the companies Act, 1956 having its Registered office at 7-1-27, Ameerpet, Hyderabad - 500 015 Andhra Pradesh ...RESPONDENTS/PETITIONERS 3. The Union of lndia, through the Secretary Department of Chemicals and Fertilizers Shastri bhavan, New Delhi - 110001 4. National Pharmaceutical Pricing Authority, through the, Secretary, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, 5th / 3rd Floor, YMCA Cultural Centre Building 1 , Jai Singh road, New Delhi - 1 10 001 ...RESPONDENTS/RESPONDENTS 1 and 2 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim order granted on 9.2.2010 in WPNo.2624 of 2010 Counsel for the Petitioner: SRI M.S. SRINIVASA IYENGAR Counsel forthe Respondent No.1 & 2: SRI GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.3: GP FOR REVENUE The Court made the following: COMMON ORDER 2 Between: THE IION OUITABLE SITI JUSI'ICE K. t AI llay interest arises till th: demand notice under paragraph No. I 3 ir; issued and a defaul is made in payment of interest. According to Section 7-A of the Act, no inter€'st is rnade payable on the ove ^charged amount unless a deftLult irr pa'ring or depositing is made after issue of demand under paragraph No. I 3 ol the DPC,) order. It is only in the event sf 5ur:h default in making the rayment or depositing the said amoun: of c.emand, the liability rf such person to pay or deposit rruch arnourrt arises to pay sanle together with simple interest due therecr computed al l5oh per irnnurn. No interest could be cha'ged r\"nder DPCO, 1995 read rv th section 7A of the Act if the amount is pai