Delhi high court has quashed 344 Notifications dated 10th March, 2016 of the Government of India, all in exercise of power under Section 26A of the Drugs and Cosmetics Act, 1940 (Drugs Act) in respect of 344 Fixed Dose Combination (FDC) Drugs whereby the manufacture for sale, sale and distribution for human use of these 344 FDC drugs had been prohibited. This means that there would no ban or prohibition on manufacture, sale and distribution of these drugs, which include popular brands such as Corex, Vicks Action 500, Phensedyl, Saridon, and many more. The decision of the Delhi high court was pronounced today on 1 December 2016 by a single-judge bench of Justices Rajiv Sahai Endlaw in the case of Pfizer Limited & Anr Versus Union of India & Anr [W.P.(C) No.2212/2016] and 453 other writ petitions. To reiterate, there were a total of 454 writ petitions that were heard together for about 3 months. In fact, merely the list of these 454 petitions runs into 31 pages, which was annexed to the above order of the high court. As many as 344 Notifications, all of 10 March 2016, have been quashed.
For example, W.P.(C) No.2212/2016 (which is the main petition in this group of cases, filed by Pfizer Limited) challenged Notification No.SO-909 (E) with respect to FDC of Chlopheniramine Maleate + Codeine Syrup. Pfizer sells this combination drug under the brand name of Corex and it is cough syrup. The reasoning given in the said Notification for banning this combination drug was that-
- it is likely to involve risk to human beings whereas safer alternatives to the said drug are available;
- Expert Committee has recommended to the Central Government that the said drug is found to have no therapeutic justification;
- the Central Government is satisfied that it is necessary and expedient in public interest to regulate by way of prohibition of manufacture for sale, sale and distribution for human use of the said drug in the country.
Similar reasoning was given in 343 other Notifications banning one FDC drug in each individual Notification.
The high court raised a question as to whether the Central Government entitled to exercise the power under Section 26A of the Drugs and Cosmetics Act, 1940, without consulting or even involving the Drugs Technical Advisory Board (DTAB) and the Drugs Consultative Committee (DCC). Further question which arises is, whether the Central Government can exercise the said power in consultation with and on the advice and recommendation of, another Committee, though also of technical persons only, constituted by the Central Government.
The high court held that it does not agree with the contention of the ASG that exercise of power under Section 26A is only partially technical, whether it be legislative or not. Section 26A does not vest the Central Government with a carte blanche to regulate, restrict or prohibit the manufacture, sale or distribution of a drug. The Central Government can exercise power thereunder only when satisfied that the drug involves risk to the consumers thereof or does not have any therapeutic value or contains ingredients of which there is no therapeutic justification and that in public interest it is necessary or expedient to regulate, restrict or prohibit that drug. Thus, power of regulation, restriction or prohibition under Section 26A cannot be exercised in public interest, for any reason other than the drug posing a risk to consumers thereof or having no therapeutic value or no therapeutic justification. This is evident from the use of the word “and” instead of “or”. The decision on the question, whether a drug is risky or does not have therapeutic value or does not have therapeutic justification cannot be a matter of policy but has to be based on scientific technical reasons.
Though Section 26A starts with the words ―Without prejudice to any other provision contained in this Chapter‖ but Sections 5, 6 & 7 aforesaid providing for constitution of DTAB, Central Drugs Laboratory and DCC ―to advise the Central Government and the State Governments on technical matters arising out of the administration of this Act and to carry out the other functions assigned to it by this Act‖ and ― to carry out the functions entrusted to it by this Act or any Rules made thereunder‖ or ―to advise the Central Government, the State Governments and DTAB on any other matter tending to secure uniformity throughout India of this Act‖ are not to be found in Chapter-IV in which Section 26A has been placed and are placed in Chapter II and thus the provisions of Section 26A do not override the provisions of Sections 5 to 7 and/or are not without prejudice thereto, as was suggested by the learned ASG.
When Section 26A uses the words “Without prejudice to any other provision contained in this Chapter”, all that the same means is that conferment of power on Central Government under Section 26A does not have the effect of depriving the Central Government from expressing other powers under other Schemes in the same Chapter of the Act.
The high court held that though undoubtedly Section 26A does not require the satisfaction thereunder of the Central Government to be in consultation with or on the aid, advice or recommendation of DTAB and/or DCC or after having the requisite tests carried out from the Central Drugs Laboratory but a mere absence of the said words from Section 26A would not mean that Section 26A is to be read in isolation. Realising that the functions to be performed by the Central and the State Governments under the Drugs Act are not administrative, but largely technical, the Drugs Act has devised the machinery for advising the Central and the State Governments on such technical matters arising out of the administration of the Act and to carry out the functions assigned to them under the Act. Merely because the powers vested in the Central Government vide some other Sections of the Act expressly provide for exercise thereof on advice of or in consultation with DTAB and/or DCC does not take away from the wide language used in Sections 5&7 while prescribing the purpose of constitution of DTAB & DCC, to advise the Central Government on technical matters arising out of administration of the Act and to carry out other functions assigned to Central Government by the Act. The said words are of general application and it will be in the domain of DTAB to advise the Central Government in exercise of all technical powers under the Act, whether the relevant Section prescribes for the Central Government to before exercising of power thereunder take advice of Central Government or not. The need, notwithstanding the generality of the language of Sections 5&7, to expressly provide for advice/consultation appears to have been felt to remove any doubt whether in discharge of power thereunder DTAB/DCC were to be consulted or not. A statute establishing a body/institution to advise the Central Government in exercise of powers thereunder ipso facto places a reciprocal obligation on the Central Government to take the advice of such body/institution.
Great care has been taken in the Drugs Act to describe the constitution of DTAB and the DCC. The Drugs Act is a pre-Constitution law made by the Central Legislature under the Government of India Act, 1935. The subject matter of the Act, on coming into force of the Constitution of India falls under Entry 19 List 3 of the Seventh Schedule to the Constitution of India. Under the said Act the regulation of manufacture, sale and distribution of drugs is primarily the concern of the State Authorities while the Central Authorities are responsible for approval of new drugs, clinical trials in the country, laying down the standards of drugs. It is for this reason that in DTAB as well as DCC representation of the State Governments has been provided. Both DTAB and DCC are broad based bodies having representation also from other statutory institutions and institutions set-up by the Government and having the knowledge and role to play in the functions for discharging which DTAB and DCC have been constituted. Though the Drugs Act does not lay down the procedure for appointment of the Director of the Central Drugs Laboratory but the very fact that the same has been provided to be established to carry out functions entrusted to it by the Act or the Rules thereunder and by its very name suggests i.e. to carry out the analysis tests and submit reports on the drugs, it is evident that as to what will be the criteria for such appointment.
It was further held that the role of DTAB thus is not qua technical matters only but extends to advising the Central Government in carrying out other functions assigned to it by the Act also. Without such institutions, the Central Government in the discharge of various functions including of a technical nature which it is required to discharge under various statutes or its Governmental functions would be left with a discretion to choose and appoint whosoever it may at that point of time desire for advising it on the matter and which may render the decision of the Central Government open to challenge on the grounds of bias and competence in the matter of selection. Even otherwise it defies logic as to why would the Central Government, when has available to it the machinery provided under the Drugs Act itself to discharge the functions of a technical nature under Section 26A, would, instead of using the said machinery choose to follow another course of action (Note: this was in reference to the Kokate Committee).
The high court also took note of the fact that the respondents, in their counter affidavit have not disclosed any reason for the Central Government, before issuance of the Notifications impugned in these petitions, not taking the advice of and consulting DTAB or DCC or to not have the FDCs which were proposed to be prohibited under Section 26A tested, examined and analysed by the Central Drugs Laboratory.
Moreover, it was not the contention then of the respondents that DTAB and DCC were incapable of rendering such services. If it is the case of the respondents today that DTAB and DCC as constituted are incapable of rendering the services as Kokate Committee has rendered to the respondent no.1 (i.e., Union of India), then that shows a serious flaw in the constitution of DTAB and DCC. The contention thus of the ASG that DTAB and DCC were incapable of rendering such services cannot be accepted.
The court held that the whole purpose of constitution of DTAB, DCC and setting up of Central Drugs Laboratory would be lost if it were to be held that the Central Government, even in exercise of technical powers under Section 26A or in carrying out other functions assigned to it under the Act is not required to consult them and is free to choose the person from whom it may at that point of time take consultation. No such power has been vested under the Drugs Act with the Central Government.
It was also held that once Sections 5&7 of the Drugs Act provide that the purpose of constitution of DTAB is to advice the Central Government on technical matters arising out of administration of the Act and to carry out other functions assigned to the Central Government under the Act and that the purpose of constitution of the DCC is to advice the Central Government and the DTAB on any matter tending to secure uniformity throughout India in the administration of the Act, the other provisions of the Act vesting powers in the Central Government were not required to expressly provide that the Central Government will exercise the said power with the advice of and in consultation with the DTAB and DCC. Which-so-ever provision of the Drugs Act provides for exercise of powers, technical or otherwise by the Central Government, obtaining advice from and holding consultation with DTAB and DCC would axiomatically become mandatory. Moreover the function prescribed of DTAB in Section 5 is not only to advice on technical matters but also to carry out ―other functions assigned‖ to the Central Government under the Act. If the Central Government of its own was found fit to exercise the functions under the Act including of a technical nature and have the wherewithal therefor, there was no need for constituting the DTAB and DCC.
The high court further noted that it is not as if powers under Section 26A have been exercised by the Central Government for the first time. The counsels, during the hearing cited following judgments, in all of which the exercise of power was on advice and in consultation and/or on recommendation of DTAB/DCC:
- Systopic Laboratiries (Pvt.) Ltd. Vs. Dr. Prem Gupta 1994 Supp(1) SCC 160.
- Merck (India) Ltd. Vs. Union of India AIR 2001 Del 326 (DB).
- Uni-San Pharmaceuticals Vs. Union of India AIR 2002 Ker 72.
- Drug Controller General of India Vs. West Bengal Small Scale Manufacturers Association AIR 2000 Cal 133 (DB).
- Cipla Ltd. Vs. Union of India (2011) 5 CTC 640.
- Social Jurist, A Lawyers Group Vs. Union Of India (2004) 73 DRJ 578 (DB).
Referring to certain other instances, the high court noted that it appears that while in these proceedings it is contended that the Central Government before issuing the Notification under Section 26A was not required to consult the DTAB but has itself been seeking the advice of DTAB and acting thereon in exercise of powers thereunder. Such inconsistent stand is not understandable.
The high court held that what emerges is that in the decision making process leading to the impugned notifications there was a total exclusion of DTAB, DCC and Central Drugs Laboratory and which cannot be permitted.
It was held that thus, the exercise of power by the Central Government in issuing the impugned Notifications is held to be not in consonance with the provisions of the Drugs Act and that the petitions have to succeed on this ground.
All 344 Notifications dated 10th March, 2016 purportedly in exercise of power under section 26A of the Drugs Act were accordingly found by the high court to have been issued without following the procedure statutorily prescribed to be followed prior to issuance thereof and resultantly it was held that the Notifications are not based on satisfaction of the Central Government prescribed to be on the advice of an in consultation with the DTAB and DCC. Resultantly the said Notifications were quashed by the high court.
Read full order of the court: