UNION OF INDIA AND ANOTHERversusM/S. SWISS GARNIER LIFE SCIENCES & ORS.

                        (2013] 17 S.C.R. 918

A                UNION OF INDIA AND ANOTHER
                                  v.
         M/S. SWISS GARNIER LIFE SCIENCES & ORS.
               (CIVIL APPEAL NO. 5117 OF 2013)

B                           JULY 4, 2013
                 [G.S. SINGHVI AND SUDHANSU
                   JYOTI MUKHOPADHAYA, JJ.]

        Drugs (Prices Control) Order, 1995 - Paras 2(a), 2(u),
C 2(v), 9, 11; First Schedule - "Bulk drug" - "Scheduled bulk
  drug - "Scheduled formulation" - 'Doxofylline' - Jurisdiction
   of the Government to fix the ceiling price or revise the price
   of Doxofylline - Price fixation notifications issued whereby the
  Government fixed the prices of "Doxofylline formulatiors" -
D Challenge to - Notifications set aside by the High Court -
  Held: Doxofylline is derivative of Theophylline, a bulk drug,
  and Doxofylline in any formulation comes within the definition
  of scheduled formulation - Consequently, it was wel/ within the
  jurisdiction of the Government to fix the ceiling price of
E Doxofyl/ine formulation under para 9 or para 11 of DPCO,
   1995 - Interference with the Notifications by the High Court
   was uncal/ed for - Drugs and Cosmetics Act, 1940 - Second
   Schedule.

F        The respondents filed writ petitions challenging the
    price fixation Notifications dated 30th April, 2009 and 17th
    November, 2009 whereby the Government had fixed the
    prices of "Doxofylline formulations" in exercise of power
    conferred under paras 9 and 11 of the Drugs (Prices
,., Control) Order, 1995. The High Court set aside the
  ' Jforesaid Notifications holding that 'Doxofylline' is not a
    bulk drug within the meaning ascribed to it under para
    2(a) of the DPCO, 1995.
        The questions arising for consideration in the
H                                918
      UNION OF INDIA v. SWISS GARNIER LIFE              919
                   SCIENCES
 present appeal were: (a) whether '.Doxofylline' is a bulk A
 drug within the meaning of para 2(a) of DPCO, 1995; (b)
 whether 'Doxofylline' is a 'scheduled bulk drug' within
 the meaning of para 2(u) of DPCO, 1995; (c) whether
 'Doxofylline' is a "scheduled formulation" within the_
 meaning of para 2(v) of DPCO, 1995; and (d) whether the fr
 appellant has the power to fix the ceiling price or revise
 the price of Doxofylline under the DPCO, 1995.
     Allowing the appeals, the Court
       HELD: 1. In exercise of powers conferred under
. Section 3 of the Essential Commodities Act, 1955, the C
  Central Government made order, namely, the. Drugs
  (Prices Control) ,Order, 1995. It was so issued to control
  the prices of the essential drugs including life saving
  drugs. Para 2 of the order is the definition clause, Bulk
  drug is defined in para 2(a) while "formulation" is defined · D
  in para 2(h). Para 2(U) defines 'scheduled bulk drug'
  whereas 'scheduled formulation' is defined in para 2(v).
  Para 3 relates to power to fix the maximum sale prices of
  bulk drugs specified in the First Schedule of the DPCO,
  1995. Special provisions relating to "fixation of price" are E
  provided under Para 9 and 11. [Paras 18, 20] [930-A, B,
  C, E-F; 931-B-G; 934-B]
       2. The First Schedule of the DPCO, 1995 indicates the
  'bulk drugs' recognized by the Government.
  "Tl)eophylline" has been shown as one of the bulk drugs F
  for the purposP. of para 2 and 3. It is a 'bulk drug' shown
  at Serial No.34 of the First Schedule of DPCO, 1995 and
  is shown in the Indian pharmacopeia and conforms to the
_ standard as per Second Schedule to the Drugs and
  Cosmetics Act, 1940. Therefore, Theophylline comes G
  within the meaning of bulk drug as defined in para 2(a)
  and also comes within meaning of 'scheduled bulk drug'
  [para 2(u)] and 'scheduled formulation' [para 2(v)]. [Paras
  21, 30] [935-E-F; 942-B-C-]
     3. 'Doxofylline' as such has not been shown as one        H
    . 920       SUPREME COURT REPORTS             (2013] 17 S.C.R.

A    of the bulk drugs in the First Schedule of the DPCO,
     1995. However, in reply to a letter written by the
     Department of Chemical and Petro-Chemicals, Ministry of
     Chemical and Fertilizer, New Delhi dated 5th December,
     2008, the Indian Institute of Science (llSc), Bangalore vide
s    letter dated 23rd January, 2009 informed that Doxofylline
     was a derivative of scheduled drug Theophylline. From
     the expert opinion of llSc and the National Institute of
     Pharmaceutical Education and Research (NIPER), the
     details enclosed by the respondent- Mars Therapeutics
c    Ltd. with their Form 44, and the stand taken in their
     application for registration, it is clear that 'Doxofylline' is
     a derivative of 'Theophylline'. [Paras 21, 25, 27 and 28]
     [935-E; 938-C; 939-D-E-H; 940-A-B]
            4. The definition of "bulk drug" contained in para 2(a)
o consists of two parts. The first part is applicable to "base
  drug" i.e. any pharmaceutical, chemicals, biological or
  plant product. The second part, which is inclusive,
  applies to salts, esters, stereo-isomers and derivatives of
  such "base drugs''. The use of the word "includes"
E implies that the definition of bulk drug contained in para
  2(a) is very wide and it not only applies to the base drug
  but also ipso facto applies to its salts, esters, stereo- ·
  isomers and derivatives. By virtue of being, derivative of
  Theophylline, Doxofylline, ipso facto, is itself a bulk drug. '
  Doxofylline is deemed to be a bulk drug within the
F meaning of para 2(a) conforming to pharmacopoeia! and ·
  other standards specified in the Secom! Schedule to the '
  Drugs and Cosmetics Act. In view of the definition of bulk
  drug [para 2(a)], Theophylline if used as such (i.e.
  Theophylline) or as an ingredient (i.e. Doxofylline) in any
G formulation, it will deem to be a bulk drug within the
  meaning under para 2(a). Doxofylline comes within the
  meaning of bulk drug as defined in para 2(a) and also
  within the meaning of 'scheduled bulk drug' as defined
  in para 2(u). [Paras 31, 32, 34 and 35] [943-A, F-H; 944-A-
H B]
      UNION OF INDIA v. SWISS GARNIER LIFE ·            921
                   SCIENCES
     State of Uttarakhand and others vs. Harpal Singh Rawat    A
(2011) 4 sec 575 - referred to.
      5. 'Scheduled formulation' is defined in para 2(v),
  means a formulation containing any bulk drug specified
  in the First Schedule, either individually or in             8
  combination with other drugs, including one or more
  than one drug or drugs not specified in the First
  Schedule. Ooxofylline being the derivative of
  Theophylline, a bulk drug, and Ooxofylline in any
  formulation having held tQ be a bulk drug within the
  meaning of para 2(a), Ooxofylline also comes within the      C
  definition of scheduled formulation under para 2(v). [Para
. 36] [944-B-0]

      6. Under sub-para (1) of para 9, notwithstanding .
 anything contained in OPCO, 1995, the Government is D
 empowered to fix the ceiling price of a scheduled
 formulation. In v.iew of the finding that Ooxofylline
 formulation is a scheduled formulation as defined under
 para 2(v), the Government was very well within its
 jurisdiction to fix the ceiling price of Ooxofylline E
 formulation. It is not the case of the respondents that
 ceiling price has not been fixed as per formula laid down
.in para 7 keeping in view the cost or efficiency or both
 of the major manufacturers of such formulation as laid
 down ip sub-para (1) of para 9. For the reason aforesaid, F
 there was no occasion for the High Court to interfere with
 the impugned Notification Nos.S.0.1124(E) and
 S.0.1084(E), both dated 30th April, 2009 or Notification
 dated 17th November, 2009. [Para 37] [944-0-G]
      7. In the present case, though the appellants called G
 for.details from manufacturers of Ooxofylline formulations
 by letters dated 22nd July, 2008, 16th September, 2008,
 they failed to furnish information as required under
 OPCO, 1995, within the time specified therein. In view of
                                                            H
    922      SUPREME COURT REPORTS                (2013] 17 S.C.R.


A   such refusal to furnish the detailed information, it was .
    well within the jurisdiction of the Government to fix price
    under para 11 on the basis of information as available
    with it, by order fixing a price in respect of Doxofylline or
    its formulation. Since Doxofylline is derivative of
B   Theophylline, a bulk drug, and Doxofylline in any
    formulation comes within the definition of scheduled
    formulation, it is well within the jurisdiction of the
    Government to fix the ceiling price of Doxofylline
    formulation under para 9 or para 11 of DPCO, 1995.
c   Therefore, interference with Notification (s) both dated
    30th April, 2009 and 17th November, 2009 is uncalled for.
    [Paras 38 and 40) [944-H; 945-A-B, G]
                         Case Law Reference:

D         (2011) 4 sec 575          referred to           Para 32
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    5117 of 2013.

        From the Judgment & Order dated 15.03.2011 of the High
E   Court of Delhi at New Delhi in LPA No. 634 of 2010.

                               WITH

    C.A. No. 5118 of 2013

F       Indira Jaising, Rakesh Khanna, ASG, Aman Ahluwalia, A.
    Radhakrishan, Supriya Jain, Shn:~ekant N. Terdal for the
    Appellants.
      S. Ganesh, Aditi Sharma, Umesh Kumar Khaitari, Varun
G Singh for the Respondents.
          The Judgment of the Court was delivered by
       SUDHANSU JYOTI MUKHOPADHAYA, J. Leave
  granted. These appeals are preferred by the Union of India and
H others against the common judgment dated 15th March, 2on
    UNION OF INDIA v. SWISS GARNIER LIFE   923
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

passed by the Division Bench of the Delhi High Court in LPA        A
No. 634 of 2010 with LPA No.790 of 2010. By the impugned
judgment the Division Bench affirmed the order dated 19th
May, 2010 passed by the learned Single Judge of the Delhi
High Court in W.P.(C)No.10277 with W.P.(C)No.12958 of 2009
and dismissed the appeals preferred by the appellants.             B

     2. The respondents filed the aforesaid two writ petitions
challenging the price fixation Notifications dated 30th April,
2009 and 17th November, 2009 whereby the Governme"nt had
fixed the prices of "Doxofylline formulations" in exercise of C
power conferred under paras 9 and 11 of the Drugs (Prices
Control) Order, 1995 (hereinafter referred to as 'DPCO, 1995'
for short). Learned Single Judge set aside the Notifications
aforesaid and held that 'Doxofylline' is not a bulk drug within
the meaning ascribed to it under para 2(a) of the DPCO, 1995.
                                                                D
     3. The factual matrix of the case is as follows:

       On 14th May, 2008 an article appeared in the Newspaper
 'THE HINDU', regarding the sale of 'Doxofylline formulations'
 as a part of tactics to replace less profitable price controlled E
  products i.e. 'Theophylline' with huge profitable alternatives of
 the same class. The article captioned - 'Drug companies
  chasing profits, cheating patients; Costlier asthma drugs duck
  curb, hit market' wherei" the Editor of the Medical Journal,
  Monthly Index of Medical Specialties, Dr. C.M. Gulati., while
  giving various reasons for the real reason for 'Doxofylline' entry F
  into the country, stated that 'Doxofylline' was being offered as
  a more profitable alternative to Theophylline. Further, by
  successive orders in 2006, all loopholes to sell Theophylline
  products at high profit margins have been closed by the National
  Pharmaceutical Pricing Authority (NPPA), the body that G
. monitors medicine prices in India. Therefore, nearly all
  companies selling Theophylline formulations have been scouting
  for similar molecules outside the price control system
  irrespective of whether they are similar, better or even worse
                                                                     H
    924      SUPREME COURT REPORTS                [2013] 17 S.C.R.


A   than their current brands. It was alleged that the core issue is
    profits, not patients.

       4. In the light of aforesaid newspaper report and complex
  of consideration implied in the DPCO, 1995, on 22nd July,
B 2008, the appellants wrote to all the Doxofylline formulation
  manufactures askirig them to provide reasons as to why
  'Doxofylline' should not be classified as derivative of
  Theophylline. Since the requisite information was not furnished
  by the manufacturers /formulators, including the respondents.
  herein, and Industry Associations even after a lapse of·
C substantial time, and the matter being significant, they were
  once again reminded by the appellants vide letter dated 16th
  September, 2008 to furnish the reply latest by 30th September,
  2008.                                     .

D         5. The matter was then considered by Technical
    Committee of the NPPA(2nd ap~ellant). The Technical
    Committee decided to seek the experts opinion of the Indian
    Institute of Science, Bangalore (llSc for short) on whether
    'Doxofylline' is a derivative of 'scheduled bulk drug'
E   Theophylline. The llSc, Bangalore, vide their letter dated 23rd
    January, 2009, informed the appellants that 'Doxofylline', is in
    fact, a derivative of scheduled bulk drug - Theophylline.

         6. On the advice of the II Sc, Bangalore, it was decided by
    the 2nd appellant to fix the price of 'Doxofylline formulations'.
F   A letter dated 17th February, 2009 was addressed by 2nd
    appellant to all known manufacturers of the Doxyfylline
    formulations seeking details of the purchase price of the bulk
    drug 'Doxofylline' necessitated for fixation of price of the
    'Doxofylline formulation'.
G
        As per provisions and paras 4 and 5 of the DPCO, 1995,
  all the manufacturers of the bulk drugs are required to furnish
  details of manufacture, sales and cost of different bulk drugs
  including non-scheduled bulk drugs to the NPPA. However,
H none of the manufacturers of the bulk drug 'Doxofylline'
    UNION OF INDIA v. SWISS GARNIER LIFE   925
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

complied with the mandatory requirement of DPCO provisions. A
In absence of the required information from the manufacturers
of bulk drug 'Doxofylline', 2nd appellant considered the price
of the 'Doxofylline', based on best available information in
terms of para 11 of the DPCO, 1995. Accordingly, the prices
of the 'Doxofylline formulations' were fixed by 2nd appellant vide B
Notification Nos.S.0.1124(E) and S.0.1084(E), both dated
30th April, 2009, as per the provisions of paras 9 and 11 of
the DPCO, 1995.

     7. The 2nd Appellant, vide their letter dated 14th May,      c
2009 requested the llSc, Bangalore for specific views of llSc
on the issue as to whether 'Doxofylline' is a salt or ester or
stereo-isomer or derivative of the bulk drug Theophylline.

     8. In the meantime, the respondents, who are
manufacturers of 'scheduled formulations' of 'Doxofylline', filed D
applications for review, both dated 19th May, 2009 under para
22 of DPCO, 1995 against the notifications aforesaid.
Therefore, the appellants, vide their letter dated 25t
 May, 2009 addressed to the Director, National Institute of
Pharmaceutical Education and Research (NIPER), SAS Nagar, E
Punjab, requested them to give expert-advice as to whether the
drug 'Doxofylline' was a new chemical entity/new drug I
                                                            or a
derivative of Theophylline. The respondents were also given
opportunity of hearing on 9th June, 2009 to discuss the said
review applications.                                              F

       9. During the pendency of the review applications
· aforesaid, by letter dated 28th May, 2009. the llSc clearly
  opined that 'Doxofylline' i~ a 'derivative' of Theophylline.

      The Director, NIPER, Professor P. Rama Rao, vide his G
 letter dated 1st June, 2009 also opined that:

      "1.   Drug Doxofylline is a new chemical entity/new
            drug.
                                                                  H
    926        SUPREME COURT REPORTS                 [2013] 17 S.C.R.


A         2.     Drug Doxofylline is a derivative of Theophylline."

         Going through the review applications filed by the
    respondents-companies and after giving them hearing, 1st
    appellant passed an order on 2nd July, 2009 directing 2nd
    appellant to consider the cost of raw material Doxofylline used
B
    in the formulations whose prices have been fi)(ed by
    Notifications dated 30th April, 2009 in respect of the Doxofylline
    formulations either by obtaining the cost of Doxofylline from the
    respondents or by fixing the cost ofDoxofylline by the authority.

c         10. Aggrieved by the review order dated 2nd July, 2009
    passed in review applications, the respondents approached
    the Delhi High Court by filing writ petitions. During the pendency
    of the writ petitions, 2nd appellant requested the Pharma
    Industry Associations, i.e., Indian Drug Manufacturers'
D   Association (IDMA), Organisation of Pharmaceutical Producers
    of India (OPPI) and the Indian Pharmaceutical Association and
    8 known bulk drug manufacturers to send the cost details of
    Doxofylline bulk drug, within a stipulated period. A reminder
    was also issued on 31st August, 2009. Twelve known
E   manufacturers including Mis Lupin Ltd. were requested on 11th
    August, 2009 to furnish the data I Form-Ill for the fixation of price
    of Doxofylline. Appellant No.2 also requested the manufacturers
    on 9th October, 2009 to furnish the detailed information in
    Form-Ill of the DPCO, 1995 in respect of the revision in the price
    fixation of the Doxofylline based formulation.
F
           11. In line with the review order of the Department o.f
    Pharmaceuticals and in view of the fact that the prices cif
    Doxofylline formulation were very high in the market, 2nd
    appellant decided that the prices of bulk drug Doxofylline may
G   be fixed on the basis of av;iilable information under para 3 and
    para 11 of DPCO, 1995 to bring down the prevaHing market
    price of Doxofylline based products for consumers/patients anq .
    also to provide a reasonable incentive to the manufacturers bY ·
    givir.i9 a better price than that of Theophylline. Vid~..Notification
H
;   UNION OF INDIA v. SWISS GARNIER LIFE   927
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

dated 17th November, 2009 upward price revision had been            A
carried out, based on maximum sale price of Rs.1487/kg for
the Doxofylline bulk drug (as against the earlier adopted price
of Rs.512/kg based on notified price of bulk drug Theophylline)
in respect of Doxofylline formulations including those which were
fixed/notified on 30th April, 2009.                                 B

      12. Subsequent notification was also challenged by the
respondents before the High Court and the learned Single
Judge by judgment dated 19th May, 2010 allowed the writ
petitions with cost of Rs.5,000/- in favour of the respondents C
which has been affirmed by the Division Bench of the High
Court.

    13. Ms. Indira Jaising, learned Additional Solicitor General,
appearing for the appellants submitted as follows:
                                                                    D
      (a) Doxofyl/ine is a bulk drug within the meaning of para
   ·. 2(a) of DPCO, 1995, therefore, maximum sale price of
      such bulk drug can be notified under para 3. and sale
      price of formulations based on such bulk drug can be
      notified under para 9 of DPCO, 1995.
                                                                    E
     (b) Doxofyl/ine is a derivative of Theophylline, it comes
     within the meaning of bulk drug. The salts, esters, stereo-
     is9mers and derivatives of any bulk drug also come
     within the meanif)g of para 2(a) of DPCO, 1995.
                                                                  F
     (c) If the pharmaceutical, chemical, biological or plant
     product conforms the requirement of Second Schedule
     of the Drugs and Cosmetics Act, 1940, it also applies to
     every salts, esters, stereo-isomers and derivatives of
     pharmaceutical, chemical, biological or plant product. But G
     salts, esters, stereo-isomers and derivatives of bulk drug
     need not require to be listed separately ii) First Schedule
     of DPCO, 1995, if the pharmaceutical, chemical,
     biological or plant product is listed in the First Schedule.
                                                                    H
    928        SUPREME COURT REPORTS                 (2013] 17 S.C.R.


A       14. On behalf of the respondents the following broad
    contentions were advanced:

           (1) Doxofylline is a new drug, and has been considered
           as a new drug by the authority under Rule 1228 of the D
           & C Rules. Doxofylline was previously a patented drug
B
           (for which patent has now expired), and therefore clearly
           meets the test of novelty etc. It cannot, therefore, be
           considered a derivative of Theophylline;

           (2) Even if Doxofylline is considered to be a derivative,
c          it is not a bulk drug as it is not mentioned in any official
           Pharmacopoeia. Under para 2(a) of DPCO, even salts,
           esters, stereo-isomers and derivatives must conform to
           the standards laid down in Second Schedule of the Drugs
           and Cosmetics Act, (i.e., being listed in pharmacopoeia);
D
           (3) Even if Doxofylline is considered as a bulk drug it is
           not a 'scheduled bulk drug' within the meaning of para
           2(u) as it is not specified in the First Schedule of DPCO.
           As such it is not amenable to price control; and
E          (4) Doxofylline can only be tamenable to price control if
           it meets the price criteria set out in para 22. 7-2. "Span of
           Control" in the New Drug Policy of 1994.

           15. The contentions which found favour with the High Court
F   are:

           (i) Doxofylline does not conform the pharmacopoeia! or
           other standards specified in the Second Schedule to the
           Drugs and Cosmetics Act, 1940. Therefore, Doxofylline
           could not be regarded as a 'bulk drug' on the dates on
G          which the impugned judgment/notifications were issued.

           (ii) The definition of 'scheduled formulation' [para 2(v) of
           the DPCO, 1995] indicates that the expression -
           'scheduled formation' refers to a formulation containing any
H          bulk drug specified in the First Schedule either individually
    UNION OF INDIA v. SWISS GARNIER LIFE   929
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    or in combination with other drugs etc. As Doxofylline is       A
    not specified in the First Schedule of DPCO, 1995, the
    Doxofylline formulation cannot be regarded as scheduled
    formulation and consequently would not be covered under
    para 9 of the DPCO, 1995 for fixing the ceiling price for
    such formulation.                                               B

    (iii) Theophylline is not contained in the Doxofylline
    formulation either independently or in combination with
    other drugs. Therefore, Doxofylline formulation contains
    Doxofylline and not Theophylline and for that Doxofylline       C
    formulations are not covered under the expression
    scheduled formulation appearing in para 2(v) of DPCO,
    1995.

     16. The High Court did not feel it necessary to go into the
issue whether the impugned Notifications were issued after          D
satisfaction of the criteria specified in para 22.7-2 of the New
Drug Policy.

    17. The questions involved in these cases are:

     (a) Whether 'Doxofylline' is ·a bulk drug within the meaning   E
     of para 2(a) of DPCO, 1995;

     (b)Whether 'Doxofylline' is a 'schedule bulk drug' within
     the meaning of para 2(u) of DPCO, 1995; and
                                                                    F
     (c)Whether 'Doxofyl/ine' is a "scheduled formulation"
     within the meaning of para 2(v) of DPCO, 1995; and

     (d)Whether the appellant has power to fix the ceiling price
     or revise the price of Doxofylline under paras 9 and 10
     of DPCO, 1995 ?                                                G

    18. For determination of the above stated issues it is
necessary at this stage to notice the broad features of the
DPCO, 1995, as discussed below:
                                                                    H
    930       SUPREME COURT REPORTS                   [2013] 17 S.C.R.


A         In exercise of powers conferred under Section 3 of the
    Essential Commodities Act, 1955, the Central Government
    made order, namely, the Drugs (Prices Control) Order, 1995.
    It repealed the earlier the Drugs (Prices Control) Order, 1987.
    It was so issued to control the prices of the essential drugs
s   including life saving drugs. Para 2 is the definition clause. Bulk
    drug is defined in para 2(a) as under:

          "2(a). 'bulk drug' means any pharmaceutical, chemical,
          biological or plant product including its salts, esters,
          stereo-isomers and derivatives, conforming to
c         pharmacopoeia/ or other standards specified in the
          Second Schedule to the Drugs and Cosmetics Act, 1940
          (23 of 1940), and which is used as such or as an
          ingredient in any formulation;"

D        Whereas para 2(f) defines "drug", In this case, we are
    concerned with para 2(f)(iii) which indicates "drug" includes._
    "bulk drugs and formulations". The same is quoted hereunder:

          "2(f)(iii). "bulk drugs and formulations"
E       Then comes to what is defined as "formulation" in para 2(h)
    and reads as follows:

          "2(h).'formulation' means a medicine processed out of,
          or containing one or more bulk drug or drugs with or
F         without the use of any pharmaceutical aids, for internal
          or external use for or in the diagnosis, treatment,
          mitigation or prevention of disease in human beings or
          animals, but shall not include-
                 (i) any medicine included in any bona fide
G                Ayurvedic (including Sidha) or Unani (Tibb)
                 systems of medicines;
                 (ii) any medicine included in the Homoeopathic
                 system of medicine; and
H
    UNION OF INDIA v. SWISS GARNIER LIFE   931
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

           (iii) any substance to which the provisions of the       A
           Drugs and Cosmetics Act, 1940 (23 of 1940) do
           not apply;"

   Para 2(u) defines 'scheduled bulk drug" in the following
manner:                                                             B
    "2(u) 'scheduled bulk drug' means a bulk drug specified
    in the Firs1 Schedule;"

    Whereas "scheduled formation" is defined in para 2(v) as
    follows:                                                        C
    "2(v) 'scheduled formulation' means a formulation
    containing any bulk drug specified in the First Schedule
    either individually or in combination with other drugs,
    including one or more than one drug or drugs not
    specified in the First Schedule except single ingredient D
    formulation based on bulk drugs specified in the First
    Schedule and sold under the generic name;·

      19. From the aforesaid definitions, we find that for the
purpose of coming within the meaning of bulk drug,                  E
pharmaceutical, chemical, biological or plant product including
its salts, esters, stereo-isomers and derivatives should conform
to pharmacopoeia! or other standards specified in the Second
Schedule to the Drugs and Cosmetics Act, 1940, while for the
puri)ose of coming within the purview of "scheduled bulk drug"      F
within the meaning of para 2(u) or "scheduled formulation" within
the meaning of para 2(v), it is not necessary to refer to the
Second Schedule of the Drugs and Cosmetics Act, 1940, the
bulk drug is specified in the First Schedule of DPCO, 1995.

      20. We will now move into para 3 which relates to power       G
to fix the maximum sale prices of bul~ drugs specified in the
First Schedule, which reads as follows:

     "3. Power to fix the maximum sale prices of bulk drugs
     specified in the First Schedule.-(1)The Government             H
        932       SUPREME COURT REPORTS               [2013] 17 S.C.R.

    A         may, with a view to regulate the equitable distribution and
              increasing supplies of a bulk drug specified in the First
              Schedule and making it available at a fair price, from
              different manufacturers, after making such inquiry as it
              deems fit, fix from time to time, by notification in the
    B         Official Gazette, a maximum sale price at which such
              bulk drug shall be sold:

                    Provided that for the purpose of enquiry, in addition
              to the information required to be furn/shed by the
              manufacturers under this Order, the manufacturers shall
    c         provide any such additional information as may be
              required by the Government, and shall allow for
              inspection of their manufacturing premises for verification
              through on the spot study of manufacturing processes
              and faculties and records thereof, by the Government.
    D
                    (2)While fixing the maximum sale price of a bulk
              drug under sub-paragraph (3), the Government shall take
              into consideration a post-tax return of fourteen per cent
              on net worth or a return of twenty-two percent on capital
    E         employed or in respect, of a new plant an internal rate of
              return of twelve per cent based on long term marginal
              costing depending upon t~e option for any of the
              specified rates of return that may be f:!Xercised by the
              manufacturer of a bulk drug:
    F               Provided that where the production is from basic
              stage, the Government shall take into consideration a
,             post-tax return of eighteen percent on net worth oia return
              of twenty-six percent on capital employed :

    G                Provided further that the option with regard to the
              rate of return once exercised by a manufacturer shall be
              final and no change of rates shall be made without the
              prior approval of the Government.

                    (3)No person shall sell a bulk drug at a price
    H
    UNION OF INDIA v. SWISS GARNIER LIFE   933
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    exceeding the maximum sale price fixed under sub-              A
    paragraph (1) plus local taxes, if any:

          Provided that until the price of a bulk drug is fixed,
    by the Government under sub-paragraph (1), the price of
    such bulk drug shall be the price which prevailed              8
    immediately before the commencement of this Order and
    the manufacturer of such bulk drug shall not. sell the bulk
    drug at a price exceeding the price prevailing
    immediately before the commencement of this Order.

            (4)Where, after the commencement of this Order, C
     any manufacturer commences Production of any bulk
     drug specified in the First Schedule, he shall within fifteen
     days of the commencement of production of such bulk
     drug, furnish the details to the Government in Form I, and
     any such additional information as may be required by D
    .the Government and the Government may after receipt
     of the information and after making such inquiry as it may
     deem fit, may fix the maximum sale price of bulk drug
     by notification in the Official Gazette.
                                                                   E
             (5)Any manufacture!, who desires revision of the
     maximum sale price of a bulk drug fixed under sub-
     paragraph (1) or (4) or as permissible under sub-
     paragraph (3), as the case may be, shall make an
     application to the Government in Form 1, and the
     Government shall after making such inquiry, as it deems F
     fit within a period of four months from the date of receipt
     of the complete information, fix a revised price for such
     bulk drug or reject the application for revision for reasons
     ~o be recorded in writing."
                                                                   G
     In the present case, it is not necessary for us to go into
the details of para 4 and para 5 except to state that the
manufacturers producing "scheduled bulk drugs" are required
to furnish details under para 4 as per the said order to tht>
Central Government. Similarly, manufacturers of "non-              H
    934       SUPREME COURT REPORTS                 [2013] 17 S.C.R.


A   schJ:!duled bulk drugs" are also required to furnish details as
    per para 5 to the Central Government.

        We will now deal with the special provisions relating to
  "fixation of price" as provided under para 9 and 11, which read
B as follows:

                 9. Power to fix ceiling price of Scheduled
          formulations.- (1)Notwithstanding anything contained in
          this Order, the Government may, from time to time, by
          notification in the Official Gazette, fix the ceiling price of
c         a Scheduled formulation in accordance with the formula
          laid down in paragraph 7, keeping in view the cost or
          efficiency, or both, of major manufacturers of such
          formulation and such price shall operate as the ceiling
          sale price for all such packs including those sold under
D         generic name and for every manufacturer of such
          formulations.

         (2)The Government may, either on its own motion or on
       . application made to it in this behalf by a manufacturer
         in Form II/ or Form IV, as the case may be, after calling
E
       · for such information as it may consider necessary, by
         notification in the Official Gazette, fix a revised ceiling
         price for a Scheduled formulation.

          (3)With a view to enabling the manufacturers of similar
F         formulations to sell those formulations in pack size
          different to the pack size for which ceiling price has been
          notified under the sub-paragraphs (1) and (2),
          manufacturers shall work out the price for their respective
          formulation packs in accordance with ·such norms, as
G         may be notified by the Government, from time to time,
          and he shall intimate the price of formulation pack, so
          worked out, to the Government and such formulation
          packs shall be released for sale only after the expiry of
          sixty days after such intimation.
H
    UNION OF INDIA v. SWISS GARNIER LIFE   935
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

     Provided that the Government may, if it considers A
     necessary, by order revise the price so intimated by the .
    ·manufacturer and upon such revision, the manufacturer
     sha/l .m:it sell such formulation at a price exceeding the
     price so revised.
                                                                B
     Explanation - For the purpose of.this paragraph the
     "Scheduled formulation" includes single ingredient
     formulation based on bulk drugs specified in the· First
     Schedule and sold under the generic name."

    11. Fixation of price under certain cirdumstances. - C
    Where any manufacturer or imporlf!r of bulk drug or .
    formulation fails to submit the application for price fixation
    or revision, as the case may be, or to furnish information ·
    as required under this Order, within the time specified
    therein, the Government. may, on the basis_ of such D
    information as may be available with it, by order fix a price
    in respect of such bulk drug or formulation as the case
    may be."·

      21. First S_chedule of the DPCO, .1995 indicates the 'bulk· E
 drugs' recognised by the Government. There are 75 Bulk Drugs
 shown therein. At Serial No.34 "Theophylline" has been shown
 as one of the bulk drugs for the purpos~ of para 2 and 3.
 'Doxofylline' as such has not been shown as one ofthe bulk
 drugs in the First Schedule of the OPCO, 1995.
                                                                  F
      22. The Second Schedule of the Drugs and Cosmetics
 Act, 1940 provides "Standards to be complied with by
·imported drugs and by drugs _manufactured for sale,
 stocked or exhibited for sale or distributed". The class of
 drugs and the standards to be complied with has been shown G
 therein. For the purpose of the present case, we would refer
 Item Nos.1 and 5 of the class of drug and standards to be
 complied with, which read as .,under:

                                                                 H
    936     SUPREME COURT REPORTS             [2013] 17 S.C.R.


A                    "THE SECOND SCHEDULE
                       (See sections 8 and 16)
    STANDARDS TO BE COMPLIED WITH BY IMPORTED
    DRUGS AND BY DRUGS MANUFACTURED FOR SALE,
    STOCKED OR EXHIBITED FOR SALE OR DISTRIBUTED
B
     Class of drug                  Standard to be complied
                                    with

    1. Patent or proprietary        The formula of list of
       medicines [other than        ingredients displayed in
c      Homoeopathic medicines]      the prescribed manner on
                                    the label or container and
                                    such other standards as
                                    may be prescribed.

D   5. Other drugs-                 Standards of identity,
       (a) Drugs included in the    purity and strength
       Indian Pharmacopoeia         specified in the edition of
                                    the Indian Pharmacopoeia
                                    for the time being in force
E                                   and such other standards
                                    ~s may be prescribed.

                                    In case the standards of
                                    identity, purity and strength
                                    for drugs are not specified
F                                   in the edition of the Indian
                                    Pharmacopoeia for the
                                    time being in force but are
                                    specified in the edition of
                                    the Indian Pharmacopoeia
G                                   immediately preceding the
                                    standards of identity, puri!j
                                    and strength shall be those
                                    occurring in such
                                    immediately preceding
                                    edition of the Indian
    .UNION OF INDIA v. SWISS GARNIER LIFE  937
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

                                    Pharmacopoeia and such           A
                                    other standards as may be
                                    prescribed.

(b) Drugs not included in the       Standards of identity, purity
    Indian Pharmacopoeia but        and strength specified for       B
    which are included in the       drugs in the edition of such
   official Pharmacopoeia of        official Pharmacopoeia of
 · any other country.               any other country for the
                                    time being in force and such
                                    other standards as may be        c
                                    prescribed. In case the
                                    standards of identity, purity
                                    and strength for drugs are
                                    not specified in the edition
                                    of such official
                                                                     D
                                     Pharmacopoeia for the
                                    time being in force, but are
                                    specified in the edition
                                     immediately preceding the
                                    standards of identity, purity
                                    and strength shall be those      E
                                     occurring in such
                                     immediately preceding
                                     edition of such official
                                     Pharmacopoeia and such
                                     other standards as may be       F
                                     prescribed.

     23. According to the respondents 'Doxofylline' is a new
drug; it is not a 'bulk drug' as 'Doxofylline' is not mentioned in
the official pharmacopeia. Even salts, ester, stereo-isomers and     G
derivatives of Doxofylline do not conform to the standards laid
down in the Second Schedule to the Drugs and Cosmetics Act,
1940. 'Doxofylline' cannot be considered as a derivative of
'Theophylline'.
                                                                     H
    938      SUPREME COURT REPORTS                  [2013] 17 S.C.R.


A       24. In answer to this, the stand of the appellants is that
    'Doxofylline' is derivative of Theophylline, therefore, by virtue of
    being a derivative, ipso facto, is itself a bulk drug.

         25. In view of such stand taken by the parties, it is
    necessary to decide on the question whether the 'Doxofylline'
8
    is a derivative of 'Theophylline'.

      In reply to a letter written by the Department of Chemical
  and Petro-Chemicals, Ministry of Chemical and Fertilizer, New
  Delhi dated 5th December, 2008 in connection with Doxofylline
C as a derivative of Theophylline, Indian Institute of Science,
  Bangalore vide letter dated 23rd January, 2009 informed that
  Doxofylline, was in fact, a derivative of scheduled drug
  Theophylline. The said letter is quoted herein:

D         "Dear Mr. Jagdish Kumar
          Thank you for your letter of December 5, 2008 in
          connection of Doxophylline as a derivative of
          Theophylline a scheduled bulk drug under DPCO 1995.

E         I have gone through the structures of both the
          compounds and the methods of preparation of
          Doxophy/line from Theophylline. My recommendation is
          as follows.
          While Doxophylline is a new compound it is prepared by
F
          N-alkylation of Theophylline by treatment with 2-
          boromethy -13- dioxalane. Instead of replacement of
          hydrogen with methyl or ethyl or propyl group it is being
          replaced by 1.3 dixalan 2-yl methyl group. Therefore it
          should be considered as an N-a/kyl derivative of
G         Theophylline.
          My recommendation is that Doxophylline is a derivative
          of scheduled drug Theophy/line. If you need any others
          clarification feel free to in tough with me.
H
    UNION OF INDIA v. SWISS GARNIER LIFE   939
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    With kind regards (SD)                                            A

    S. Chandrasekartan."
     26. The National Institute of Pharmaceutical Education and
Research (NIPER) by its letter dated. 1st June, 2009 informed
                                                                      B
as follows:

          "After going through your letter and the information
    as provided by Prof. A.K. Chakraborti, I am of the opinion
    that:
                                                                      c
            1.Drug Doxofylline is a new chemical entity/new
    drug.

            2.Drug Ooxofylline is a derivative of Theophylline."

     27. The aforesaid opinions of the experts of Indian Institute    D
of Science (llSc), Bangalore, and Director, National Institute of
Pharmaceutical Education and Research (NIPER) have not
been disputed by the respondents.

    28. In .the present case, what we find is that the present
stand taken by the respondents is contrary to their stand taken       E
before the authorities while they applied for grant of registration
of Doxofylline 400 mg. tablets. Th.e record as enclosed by the
respondent-Mars Jherapeutics Ltd. reveals the following facts:

     (i) Application for grant of registration of Doxofylline 400     F
     mg. tabs. formulation was filed on 3rd October, 2003.
     Therein the respondents enclosed a number of documents
                        .
     including reports in its support. Item No.3 is "a copy of the
                                                    .

     letter from Mis. Suven Pharmaceuticals Ltd., Hyderabad
     relating to supply of 'Bulk Drug Doxofylline'. This shows        G
     that the respondents had knowledge that Doxofylline is a
     bulk drug.

     (ii) In Form-44 the composition of the formulation of
     Doxofylline 400 mg. as shown at Serial No.8 the active           H
    940       SUPREME COURT REPORTS                 (2013] 17 S.C.R.


A         ingredients and inactive ingredients as Annexure I and II
          and which is specification and standard test procedures
          over 'active and inactive ingredients'. The analytical control
          schedule shows that Doxofylline is the ingredient of
          Theophyllin and the relevant portion of the same is
B         extracted below:

          "7-Theophyllin acetaldehyde                     <0.2%

           Theophylline                                    2.91- 0.5%

c          Theophyllinemethyl - 1.3-dioxolane"

          (iii) Under the heading denomination while common
          denomination has been shown "Doxofylline" , which ha.s
          been mentioned as follows:

D         "Denomination

       Common denomination
    Doxofyl/ine

          Systematic demonation : 2-7' - Theophyl/inemethyl-1,3-
E dioxolane"
          (iv) In Annexure II attached with Form 44 Chemical
          Pharmaceutical information has been supplied therein.
          Chemical information has been shown as follows:
F
           ''Name of the material/Code:Doxofylline
          .category:Finished Formulation

          Chemical Information

G         General Name                   Doxofylline

          Chemical Name (s) 2-7' -Theophyl/inemethyl-1. 3-
          dioxolane"


H
    UNION OF INDIA v. SWISS GARNIER LIFE   941
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    (v) On tffe Toxicological and Pharmacological (Pre- A
    Clinical) documentation of 'Doxofyl/ine' _has been shown
    in the expert report enclosed with Form 44, relevant
    portion of which reads as follows:

    "1. INTRODUCTION                                                  B
    Doxofylline or 2(7'-theophyllinmethyl)-1.3"dioxolane is a
    theophylline derivative with the following structural formula.
                                                  _,-CJ---i
                                  D
                                  II    I<"-~
                                                ,,/
                                        cr-1~-CI-!     J  !

                                                                      c
                 H3C-,/CJ=N'1                         0
                      ./, C::               N
                     Dy         '-.N
                                   I
                                                                      D .
                                       ooxo;= v LL1NE
    Dqxofylline was synthesized with the aim of reducing the
    typical theophyfline side effects, without affecting
    antibronchospastic and bronchodilator effects that are the
    main pharmacological activities of methylxanthines
    useful for the therapy of asthma."                                E
     From the expert opinion of llSc and NIPER which has been
submitted by the appellants, details enclosed by the
respondent- Mars Therapeutics Ltd. with their Form 44, and the
stand taken in their application for registration, we find and hold   F
that Doxofylline is a derivative of Theophylline.

     29. The difference between 'bulk drug' [para 2(a) ],
'scheduled bulk drug' [para 2(u)] and 'scheduled formulation'
[para 2(v)] has already been noticed in the preceding G
paragraphs. As per definition the bulk drug should conform to
the pharmacopoeia! or other standards specified in Second
Schedule tp the Drugs and Cosmetics Act, 1940. On the other
hand, to find out whether a drug is a 'scheduled bulk drug' within
the meaning of para 2(u) or 'scheduled formulation' within the
                                                                   H
    942      SUPREME COURT REPORTS               [2013] 17 S.C.R.


A   meaning of para 2(v), one has to find out whether the bulk drug
    is specified in the First Schedule of DPCO, 1995, individually
    or in combination with other drugs.

          30. Theophylline is a 'bulk drug' shown at Serial No.34 of
    the First Schedule of DPCO, 1995. It is also not in dispute that
8
    Theophylline is shown in the Indian pharmacopeia and conforms
    to ttie standard as per Second Schedule to the Drugs and ·
    Cosmetics Act, 1940. Therefore, Theophylline comes within the
    meaning of bulk drug as defined in para 2(a) and also comes
C   within meaning of 'scheduled bulk drug' [para 2(u)] and
    'schedul~d formulation' [para 2(v)].

       31. From the experts opinion of llSc, Bangalore and
  NIPER, Punjab and opini<rn enclosed with the Form 44
                       •
  submitted by the respondent-Mars       Therapeutics Ltd., we have
D noticed and held that Doxofylline is a derivative of Theophylline.
  In the preceding paragraph we have noticed that Theophyline-
  is a bulk drug, therefore, and by virtue of being derivative of
  Theophylline, Doxofylline, ipso facto, is itself a bulk drug. Where
  a certain "pharmaceutical, chemical, biological or plant .
E product", i.e. the "base drug" satisfies the test laid down under
  para 2(a), its "salts, esters, stereo-isomers and derivatives" are·
  also automatically included and to be treated as bulk drug in
  terms of para 2(a). Therefore, if the "base drug" conforms the
  requirement of Second Schedule to the Drugs and Cosmetics
F Act, 1940, it automatically applies to every salts, esters, stereo-
  isomers and derivatives of such "base drug".

          32. As per Para 2(a) 'bulk drug' means any
    pharmaceutical, chemical, biological or plant product including
    its salts, esters, stereo-isomers and derivatives, conforming to
G   pharmacopoeia! or other standards specified in the Second
    Schedule to the Drugs and Cosmetics Act, 1940 , and which
    is used as such or as an ingredient in any formulation. The
    words "includes also" in the context of definition of lease was
    considered by this Court in State of Uttarakhand and others
H   vs. Harpal Singh Rawat, (2011) 4 SCC 575. If the ratio of the
    UNION OF INDIA v. SWISS GARNIER LIFE  943
SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.] /

said case is followed, we find and hold that the definition of A
"bulk drug" contained in para 2(a) consists of two parts. The
first part is applicable to "base drug" i.e. any pharmaceutical,
chemicals, biological or plant product. The second part, which
is inclusive, applies to salts, esters, stereo-isomers and.
derivatives of such "base dn,1gs". The use of the word "includes" B
implies that the definition of bulk drug contained in para 2(a)
is very wide and it not only applies to the base drug but also
ipso facto appli~s to its salts, esters, stereo-isomers and
derivatives.

     33. In view of the definition of 'bulk drug' [para 2(a)] and C
our finding as recorded above, we hold that if any
pharmaceutical, chemical, biological or plant product conforms
to pharmacopeial or other standards accepted under the Drugs
and.Cosmetics Act, 1940, and thus comes within the meaning
of bulk drug, as defined in para 2(a), all salts, esters, stereo· D
isomers and derivatives ofsuch bulk drug are, ipso facto,
deemed to be conforming to the. pharmacopoeia! or other
standards accepted under the Drugs and Cosmetics Act and
are deemed to be bulk drug within the meaning of para 2(a) of
DPCO, 1995.                                                       E

     34. We have already held that Doxofylline is a derivative
of Theophylline and admittedly, Theophylline is a bulk drug
 shown in First Schedule (Item No.34) of DPCO, 1995 and is
 conforming to pharmacopoeia! and other standards specified F
 in the Drugs and Cosmetics, Act. We hold that Doxofylline is
 deemed to be a bulk drug within the meaning of para 2(a)
 co_nforming to pharmacopoeia! and other standards specified
 in the Second Schedule to the Drugs and Cosmetics Act.
 Further, in view of the definition of .bulk drug [para 2(a)], G
 Theophylline if used as such (i.e. Theophylline) or as an
 ingredient (i.e. Doxofylline) in any formulation, it will deem. to
-be a bulk drug within the meaning under para 2(a).

     35. 'Scheduled bulk drug' means a bulk drug specified in
the First Schedule of DPCO, 1995 [Para 2(u)]. Theophylline has H
                                                      /

    944      SUPREME COURT REPORTS                [2013] 17 S.C . R.


A   been shown as one of the scheduled drug at Serial No.34 of
    the First Schedule. In view of our finding that Doxofylline is a
    derivative of Theophylline, we hold that Doxofylline comes within 1
    the meaning of bulk drug as defined in para 2(a) and also within
    the meaning of 'scheduled bulk drug' as defined in para 2(u).
B
          36. 'Scheduled formulation' is defined in para 2(v), means
    a formulation containing any bulk drug specified in the First
    Schedule, either individually or in combination with other drugs,
    including one or more than one drug or drugs not specified in
    the First Schedule. In view of the finding recorded above,
C   Doxofylline being the derivative of Theophylline, a bulk drug,
    and Doxofylline in any formulation having held to be a bulk drug
    within the meaning of para 2(a), we hold that Doxofylline also
    comes within the definition of scheduled formulation under para
    2(v).
D
          37. Under sub-para (1) of para 9, notwithstanding anything
    contained in DPCO, 1995, the Government is empowered to
    fix the ceiling price of a scheduled formulation. In view of our
    finding that Doxofylline formulation is a scheduled formulation
E   as defined under para 2(v), we hold that the Government was
    very well within its jurisdiction to fix the ceiling price of
    Doxofylline formulation.

         It is not the case of the respondents that ceiling price has
    not been fixed as per formula laid down in para 7 keeping in
F   view the cost or efficiency or both of the major manufacturers
    of such formulation as laid down in sub-para (1) of para 9. For
    the reason aforesaid, there was no occasion for the High Court
    to interfere with the impugned Notification Nos.S.0.1124(E)
    and S.0.1084(E), both dated 30th April, 2009 or Notification
G   dated 17th November, 2009.

        38. In the present case we have noticed that though the
    appellants called for details from manufacturers of Doxofylline
    formulations by letters dated 22nd July, 2008, 16th September,
H   2008, they failed to furnish information as required under
     UNION OF INDIA v. SWISS GARNIER LIFE   945
 SCIENCES [SUDHANSU JYOTI MUKHOPADHAYA, J.]

 DPCO, 1995, within the time specified therein. In view of such        A
 refusal to furnish the detailed information, it was well within the
 jurisdiction of the Government to fix price under para 11 on the
 basis of information as available with it, by order fixing a price
 in respect of Doxofylline or its formulation.
                                                                       8
        39. In this case, we have noticed the news appeared in
  the newspaper insinuating that drug companies were cheating
  patients, by following a strategy by way of which, they would
  stop selling less profitable, price controlled products and
  replacing them with highly profitable alternatives of the same
  class. The article captioned - 'Drug companies chasing profits,
                                                                       c
  cheating patients; Costlier asthma drugs duck curb, hit market'.
  Dr. C.M. Gulati have given various reasons for Doxofylline entry
  into the country, stated that" 'Doxofylline' has been offered as
  a more profitable alternative to Theophylline. Further, by
  successive orders in 2006, all loopholes to sell Theophylline        D
  products at high profit margins have been closed by the National
  Pharmaceutical Pricing Authority (NPPA), the body that
  monitors medicine prices in India. Therefore, nearly all
  companies selling Theciphylline formulations have been scouting
  for similar molecules outside the price control system               E
   irrespective of whether they are similar, better or even worse
   than their current brands" adds Dr. Gulati. On the basis of such
' report, the Government suo moto took the matter under para
   11 of the DPCO, 1995, called for reports and opinion of experts
   and then fixed the price.                                           F

      40. In this view of the matter and having regard to the facts
 that we have held that Doxofylline is derivative of Theophylline,
 a bulk drug, and Doxofylline in any formulation comes within the
 definition of scheduled formulation, we hold that it is well within   G
 the jurisdiction of the Government to fix the ceiling price of
 Doxofylline formulation under para 9 or para 11 of DPCO,
 1995. Therefore, interference with Notification (s) both dated
 30th April, 2009 and 17th November, 2009 is uncalled for.

      41. Consequently, the appeals are allowed; the judgments         H
    946      SUPREME COURT REPORTS               [2013] 17 S.C.R.


A   and orders dated 19th May, 201 O and 15th March, 2011
    passed respectively by the Single Judge and the Division
    Bench of the Delhi High Court are set aside. The writ petitions
    preferred by the respondents in the High Court are dismissed.
    The parties shall bear their own cost.
B
    Bibhuti Bhushan Bose                             Appeal allowed.