INDIAN DRUGS & PHARMACEUTICAL LTD.versusFAMY CARE & ORS.

                        [2010] 5 S.C.R. 646


A          INDIAN DRUGS & PHARMACEUTICAL LTQ.
                                v.
                       FAMY CARE & ORS.
                 (Civil Appeal No. 3977 of 2010)
                          APRIL 30, 2010
B
         [V.S .. SIRPURKAR AND DEEPAK VERMA,. JJ.]

          Administrative law - Government policy - Purchase
    preference policy - Entry of medicines in the list -
C    Interpretation of - Invitation of tender for supply of Oral
     Contraceptive Pills by Government - Companies seeking
     tender enquiry documents - Meanwhile, Purchase Preference
    Policy for medicines exclusively from Pharma Central Public
     Sector Enterprises by Government - OCPs listed at serial no.
o    51, as OCP (Mala D and Mala N) - Rate of contract of entire
     quantity of 275 lakh cycles of OCPs placed by Government
    on Pharma CPSEs - Challenge to - High Court quashing
    the rate of contract as regards the award of 175 /akhs cycles,,
     of other brands of OCPs apart from Mala D to the extent of
E    25 /akh cycles - On appeal held: Order of High Court 'was
    justified - Entry in the bracket was not illustrative - Entry is
    specific and is to be restrictive to Mala D and Mala N - Ora/.
     Contraceptive Pills only of that brand were obviously included
    in the list - Tender - Family Welfare.
F     The respondent companies are engaged in the
  business of manufacture and supply of family planning
  products including Oral Contraceptive Pills (OCPs). The
  respondent no. 3-Union of India floated an open tender
  to procure the OCPs. Respondent nos. 1 and 2 requested
G respondent No. 3 to .issue the tender inquiry documents.
  Meanwhile, the appellant-IDPL pointed out to the
  respondent no. 3 that the Government had introduced a
  Purchase Preference Policy for 102 medicines exclusively
  from Pharma Central Public Sector Enterprises (CPSEs)
H                            646
INDIAN DRUGS & PHARMACEUTICAL LTD. v. FAMY 647
               CARE & ORS.
and their subsidiaries and the OCPs were listed at serial A
No. 51 of that list. Thereafter, respondent no. 3 issued
                                             ~

corrigendum to the tender notice for OCPs that the tender
enquiry documents for OCPs would not be opened as
promised. Respondent no. 3 then awarded the rate
contract of the entire quantity of 275 lakh cycles of OCPs B
to the appellant. Aggrieved, respondents filed writ petition
that the award of the rate contract was in violation of the
tender notice and was contrary to the Purchase
Preference Policy. The High Court partly allowed the writ
petition and quashed the rate of contract awarded to the C
extent of 175 lakh cycles of other OCPs brands apart from
Mala D to the extent of 25 lakh cycles. Hence the appeal.

    Dismissing the appeal, the Court

     HELD: 1.1. The customer would not be given Mala D D
and Mala N legitimately if he goes to a medial shop and
demands some other brand of Oral Contraceptive Pills.
Even the price of Mala D and Mala N differs from the ottrer
Oral Contraceptive Pills. The whole world knows and
presumably the Union of India also knew what an Oral E
Contraceptive .Pill is. The Union of India, therefore, in
branding the particular entry at serial No. 51 could have
simply stated Oral Contraceptive Pills. That would have
been the end of the matter and that would have been the
complete answer to the original writ petitioner's claim F
before the High Court. However, if the list specifically
mentions Mala D and Mala N, there was no question of
jumping back and explaining that it was only an
illustrative entry. [Para 14] [654-G-H; 655-A-B]

    1.2. The whole list is scanned very carefully and no G
such illustrations are found which would lead to some
other meaning to the entry. Wherever an illustration is
required, it has been specifically given. The explanations
are also to be found in that list. The present entry is
specific and tends to be restrictive to Mala D and Mala N. H
    648      SUPREME COURT-REPORTS                [2010] 5 S.C.R.


A   That is the true and correct meaning of entry at serial
    No.51. The High Court committed no mistake in giving
    the correct explanation of the entry. It cannot be said that
    the entry in the bracket was illustrative as there was no
    necessity to give any illustrations for the general and
B   commonly well understood words 'Oral Contraceptjve
    Pills'. Once a specific brand name was included, it was
    obvious that it would be only the Mala D and Mala N
    which would be covered under the entry. [Paras 15, 16
    and 17) (655-C-H; 656-A-B]
c       1.3. Where two views are possible, the view of the
   policy maker should be adopted. However, in the instant
   case, two vi_ews cannot be possible. The mention of Mala
   D and Mala N in the bracket was specific, and, therefore,
  ,;the Oral Contraceptive Pills only of that brand were
D obviously included in the list. The entry cannot mean
   anything else and it has to be restricted only to Mala D
   and Mala N. Thus, the judgment of the High Court is
   upheld. (Paras 18, 19 and 20) (656-C-F]

E        Secretary, Ministry of Chemicals & Fertilizers
    Government of India v. Mis. Gip/a Ltd. and Ors., 2003 (7) SCC
    1, referred to.

                           Case Law Reference:

F         2003 (7) sec 1          Referred to.         Para 18
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    3977 of 2010.

        From the Judgment & Order dated 26.3.2009 of the High
G   Court of Delhi at New Delhi in W.P. No. 8746 of 2008.

          L.N. Rao, Meera Mathur for the Appellants.

        Prag P. Tripathi, ASG, Indira Sawhney, Asha G. Nair,
    Manpreet Singh Doabia, D.S. Mahra, Abhimanyu Mahajan and
H   Shally Bhasin Maheshwari for the Respondent.
INDIAN DRUGS & PHARMACEUTICAL LTD. v. FAMY 649
               CARE & ORS.
    The Judgment of the Court was delivered by                      A

     V.S. SIRPURKAR, J. 1. Leave granted.

     2. In this appeal, the appellant Indian Drugs &
Pharmaceutical Ltd. (IDPL) challenges the judgment of Delhi
High Court whereby the Writ Petition filed bJ".respondent, Famy     B
Care and another was allowed. The Hig Court passed the
folfowing operative order while-allowing the writ petition:

     "We quash the Rate Contract No. S-140013/4/2008-0P/
     100 dated 2nd December, 2008 awarded by respondent             c
     No.1 in favour of IDPL, respondent No.2 herein, to the
     extent .that it awards 175 lakhs cycles of other OCP brands
     apart from Mala-D in the abovestated quantity of 25 laktls
     cycles. The writ petition is partly allowed in the aforesaid
     terms."                                                        D
     3. The respondent, Famy Care Company is engaged in
the business of manufacture and supply of family planning
products including Oral Contraceptive Pills (hereinafter "OCPs").
They have been supplying these OCPs to the Union of India.
Respondent Nos. 1 and 2 distribute these OCPs under the             E
family welfare programmes by Union of India (respondent No.3)
free of cost ~nd/or at substantially subsidized rates. It was
claimed in the petition that for OCPs in India, almost 85-90%
of the market is only through family welfare programmes of
respondent No.3. Respondent No.3 used to procure the OCPs           F
through open tender where all companies who fulfilled the
eligibility criteria were permitted to participate. Tender was
invited for the supply of OCPs on 14.03.2005 and a rate
contract was awarded to various parties including Famy Care
Ltd. on 18.10.2005, initially for the period of two years which     G
was subsequently extended for another year, till 17 .10.2008.

    4. One open tender was floated on 18.09.2008 by the
Union of India (respondent No.3) and for that, notice inviting
tender was published in various newspapers. Following were
                                                                    H
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    650     SUPREME COURT REPORTS                  [2010] 5 S.C.R.


A   the requirements:
                                                              --
    S. No. Items                  Unit           Tentative
                                                 Quan~ity required
                                                 during 2008-2009
B
    1.     Condoms                Million Pcs.   663

    2.     Oral Contraceptive     Lakh Cycles 275
           Pills
c   3.     IUD Cu-T 380 A         Lakh Pcs.      25
    4.     Emergency              Lakh Packs     5.5
           Contraceptive Pills    of 2 Pills

D       5. The date of sale of tender inquiry document was from
  24.09.2008 to 05.11.2008. The respondent companies herein
  were desirous of participating in the tender. On being unable
  to download the tender inquiry document, respondent Nos.1
  and 2 wrote letters to the Union of India (respondent No.3
E herein) on 29.09.2008 requesting respondent No. 3 to issue
  the tender inquiry documents. However, it is claimed in the Writ
  Petition that the Union of India refused to accept the pay orders
  and instead stated that the tender documents had not been
  issued by the Department and the same were likely to be
  issued shortly.
F
        6. Again, letters were written on 22.10.2008 and
  23.10.2008 by respondent Nos.1 and 2, respectively,
  requesting the Union of India to issue tender documents to
  enable them to participate in the tender for the OCPs. The
G original writ petitioners, respondent companies herein also
  contacted the concerned officers of the Union of India and were
  informed that the date of sale of tender inquiry documents had
  been extended and they would be informed of the finalization
  of the date. In the meantime, Mis. IDPL (appellant herein)
H pointed out to the Union of India and claimed that the
INDIAN DRUGS & PHARMACEUTICAL LTD. v. FAMY 651
       CARE & ORS. [V.S. SIRPURKAR, J.]
Government had introduced a Purchase Preference Policy for             A
102 medicines exclusively from Pharma Central Public Sector
Enterprises (CPSEs) and their subsidiaries. Reliance was
made on letter dated 07.08.2006 issued by the Ministry of
Chemicals & Fertilizers, Department of Chemicals &
Petrochemicals, bearing No. 50013/1/2006-SO(Pl-IV). It was             B
pointed out that the OCPs were listed at serial No. 51 of that
list under the said Purchase Preference Policy and, therefore,
the purchases should be made exclusively from Pharma
CPSEs. On this, corrigendum dated 04.11.2008 came to be
effected by the Union of India to the tender notice for OCPs to        c
the effect that the tender enquiry documents for OCPs would
not be opened on 05.11.2008 as was promised. The
respondent companies herein contacted the Union of India
again on 03.12.2008, when they were informed that the rate
contract of the entire quantity of 275 lakh cycles of OCPs had         D
already been placed by the respondent No. 3 on appellant
 IDPL. In short, the whole contract went in favour of the appellant.
This was challenged before the High Court by way of a Writ
 Petition filed by Famy Care Ltd. and Phaarmasia Ltd., the
 respondents herein. It was urged before the High Court that the
 impugned rate contract dated 02.12.2008 was awarded in
                                                                       E
 flagrant violation of the tender notice dated 18.09.2008 and was
also contrary to the Purchase Preference Policy. The High
 Court, by its impugned judgment, has allowed the Writ Petition
 and quashed the said rate contract dated 02.12.2008 insofar
 as it awards 175 lakh cycles of the other brands of OCPs apart        F
 from Mala D to the extent of 25 lakh cycles.

      7. In its judgment, the High Court quoted the order dated
26.08.2005 passed by the Joint Secretary to the Government
of India as also the Office Memorandum dated 07.08.2006. In            G
the first referred order, the Government of India had made a
proposal to make Mis Hindustan Latex Ltd. (HLL) the captive
unit of the Ministry of Health and Family Welfare and expressed
that the Department would utilize 75 per cent installed capacity
of HLL or 75 per cent of the annual procurement of the Ministry        H
    652       SUPREME COURT REPORTS                 [2010) 5 S.C.R.


A   from HLL, whichever is lower for condoms. In so far as the
    OCPs are concerned, the reservation for HLL was fixed at 55
    per cent. It had also been decided that the order for the private
    sector could be realized only after the finalization of the rate
    contract through tendering process.
B
       8. In the second referred office Memorandum dated
  07.08.2006, a policy was formulated that the Government had
  decided to grant purchase preference exclusively to Pharma
  CPSEs and their subsidiaries in respect of 102 medicines
  manufactured by them as per the list. Thus, in all, 102 products
C were covered in the Purchase Preference Policy. This list was
  eventually to be reviewed or revised by the Department of
  Chemicals and Petro-Chemicals as and when required, taking
  care not to include any item reserved for SSI units. The entry
  at serial No.51 in this list is as under:
D
          "51) Oral Contraceptive Pills (Mala 'D' and Mala 'N')"

          (Emphasis supplied by us)

       9. The High Court noted that in case of contraceptives
E other than reservation in favour of HLL was required to be 55
  per cent and the balance of 45 per cent was to be opened for
  private sector and could be released only after finalization of
  the rate contract through tendering process. The High Court
  further noted that the Purchase Preference Policy was to be
F applicable to the purchases of maximum 102 medicines, which
  was to be valid for a period of five years up to 06.08.2011. The
  High Court also noted that, before it, the original petitioners/
  present respondents did not challenge the validity of the
  Purchase Preference Policy. The only contention raised was
G that in so far as the OCPs were concerned, the Purchase
  Preference Policy set out only specifically Mala D and Mala N
  in the category of OCPs as the medicines covered under the
  said Policy. In other words, the other branded contraceptive pills
  apart from Mala D and Mala N were not covered under the
H purchase preference policy in favour of Pharma CPSEs and
INDIAN DRUGS & PHARMACEUTICAL LTD. v. FAMY 653
       CARE & ORS. [V.S. SIRPURKAR, J.]
their subsidiaries and as such the Uni,on of India could not have A
placed an order for all other branded OCPs on the appellant
herein, IDPL under the said Purchase Preference Policy. The
High Court also noted the defence raised by the Union·of India
that the entry at serial No.51 was only illustrative and not
exhaustive and in fact the said Purchase Preference Policy in B
favour of CPSEs extended to all the OCPs. The High Court
further noted the stand taken by the Union of India that the
Purchase Preference Policy ousted all private players from
selling medicines therein to the Union of India. The High Court
rejected the stand taken by the Union of India. It went on the c
plain language of entry at serial No.51 in the list and held that
it was clear from the language of entry that it was only in respect
of Mala D and Mala N that the Purchase Preference Policy was
applicable and in fact the Policy was formulated by the
Government only in respect of these two brands in mind in D
respect of OCPs and it was not possible to countenance the·
submission that the specific mention of Mala D and Mala N was
only illustrative. It was on this basis that the High Court came
to the conclusion that the entry related only to Mala D and Mala
N and it did not cover the other brands of OCPs, the purchase
of which was bound to be effected by the Union of India through E
tendering process which was the earlier policy.

     10. In that view, the High Court further approved of the
Purchase Preference Policy and held that the orders could be
placed on private sector, once the preference in favour of         F
Pharma CPSEs had been exhausted.

     11. This judgment was severely commented upon by Shri
L.N. Rao, Learned Senior Counsel appearing on behalf of the
appellant herein. We were taken through the whole facts            G
including the initial orders and the Purchase Preference Policy.
The basic contention raised was that it was for the Union of
India to decide as to from whom it would purchase the OCPs
and it made quite clear in the list of 102 items that those 102
items would be purchased directly without any tendering
.:                                                                 H
        654     SUPREME COURT REPORTS                   [2010] 5 S.C.R.

    A   process. Therefore, the High Court should not have interfered
        with the policy making exercise of the Union of India.

              12. When we see the impugned judgment, it is clear that
        the policy of the Union of India was not in question in any
    8 manner before the High Court. In fact, even the writ petitioners
        before the High Court i.e. the respondents herein had relied
        upon that policy and their only contention was that the policy
        should be implemented in its true spirit. In that, the contention
        was that the bare reading of entry at serial No.51 was clear that
      · the Government had decided to purchase these products
    C directly without any tendering process and had decided so only
        in case of Mala D and Mala N. There will be no question of
        finding fault with the policy nor can it be argued that the policy
        was being tinkered with. The argument raised by Shri Rao,
        Learned Senior Counsel and Shri Prag Tripathi, Learned ASG
    D has to be rejected. The basic question that fell for consideration
        was the interpretation of the entry at serial No.51 and that is
        correctly decided.

           13. The contention raised on behalf of Shri Rao as well
    E as Shri Tripathi was that the entry was only illustrative. To
      buttress this argument, it was tried to be contende~ that the
      chemical formulation bf Mala D and Mala N was identical with
      the other brands and, therefore, mere mention of Mala D and
      Mala N did not make any difference and the entry related to all
    F the Oral Contraceptive Pills. The argument is quite attractive,
      however, it lacks substance.

           14. A simple question was asked during the debate as to
      whether if a customer went to a medical shop and demanded
      some other brand of Oral Contraceptive Pills, could Mala D and
    G Mala N, as the case may be, given to that customer legitimately.
      This is obviously answered in the negative. It was also found
      that even the price of Mala D and Mala N differed from the other
      Oral Contraceptive Pills. But even more than that, the basic
      argument on behalf of the a'ppellant is that the entry was only
    H



/
INDIAN DRUGS & PHARMACEUTICAL LTD. v. FAMY 655
       CARE & ORS. [V.S. SIRPURKAR, J.]
illustrative. We do not see any merit in this argument. The whole      A
world knows and presumably the Union of India also knew what
an Oral Contraceptive Pill is. The Union of India, therefore, in
branding the particular entry at serial No. 51 could have simply
stated Oral Contraceptive Pills. That would have been the end
of the matter and that would have been the complete answer             B
to the original writ petitioner's claim before the High Court.
However, if the list specifically mentions Mala D and Mala N,
there was no question of jumping back and explaining that it
was only an illustrative entry.

     15. We have scanned the whole list very carefully and we          C
do n9i find any such illustrations which would lead to some other
me(l_ning to the entry. Wherever an illustration is required, it has
been specifically given. The explanations are also to be found
in that list. The entries at serial No.12, fluconazole and at serial
No.2, Ampicillin IP so also the entries at serial Nos. 13, 72 and      D
78 are clear enough to suggest that wherever the authorities
wanted to be specific, they have been very specific. Ho"Yever,
in so far as the present entry is concerned, it is specific and
tends to be restrictive to Mala D and Mala N. In short, the
controversy here is quite simple and that is the true and correct      E
meaning of entry at serial No.51. In our opinion, the l:ligh Court
has committed no mistake in giving the correct explanation of
the entry. We are not prepared to accept the argument that th.e
entry in the bracket was illustrative, as, in our opinion, there was
no necessity to give any illustrations for the general and             F
commonly well understood words 'Oral Contraceptive Pills'.

      16. Learned Counsel, in support of their argument, further
argued that entry at serial No. 51 was relating to a generic
medicine and did not refer to any branded product. We were             G
also taken·to the position prior to the introduction of this entry.
The entry then read was Nishchint Emergency Contraceptive
Pills Livonorgestrel. It was argued that Nishchint was an Oral
Contraceptive Pill. However, it was a pill to be taken after the
sexual intt;!rcourse, as opposed to the type of Oral
                                                                       H
    656      SUPREME COURT REPORTS                   [2010] 5 S.C.R.


A   Contraceptive Pills in categories similar to Mala D and Mala
    N, which are to be used in one complete cycle for efficacy.

          17. This argument does not impress us. There was no
    necessity on the part of the Union of India to explain or make
    illustration of OCPs because the whole world knows what an
8
    OCP is. Once a specific brand name was included, it was
    obvious that it would be only the Mala D and Mala N which
    would be covered under the entry.

       18. It was further tried to be suggested -that where two
C views are possible, the view of the policy maker should be
  adopted. For this purpose, reliance was made on Secretary,
  Ministry of Chemicals & Fertilizers
   Government of India v. Mis. Gip/a Ltd. & Ors. [2003 (7) SCC
  1]. We have absolutely no quarrel with the proposition laid down
D by this Court in the aforementioned judgment. However, in this
  case, we do not think that two views could be possible. The
  mention of Mala D and Mala N in the bracket was specific, and,
  therefore, the Oral Contraceptive Pills only of that brand were
  obviously included in the list.
E
         19. It was further suggested that the argument based on
    the notings on the file on behalf of the present respondent cannot
    be accepted. We do not want to go into that question, since
    we have already held that on merits the entry cannot mean
    anything else and it has to be restricted only to Mala D and Mala
F N.

       20. In view of what we have held above, we do not find any
  merits in the appeal. We, therefore, confirm the judgment of the
  High Court. The appeal is, thus, dismissed but with no order
G as to costs.

    N.J.                                         Appeal dismissed.