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M/S Sun Pharmaceutical Industries Ltd. vs. Union of India

Not available · 2024 INSC 521Decided 15 Jul 2024
Not available
Justice Sanjay Kumar · Justice Augustine George Masih

Background

The National Pharmaceutical Pricing Authority (NPPA) demanded that Sun Pharmaceutical repay over Rs. 4.65 crore (principal plus interest) for selling a drug called Roscilox above the government-fixed price under the Drugs (Price Control) Order, 1995. The company argued it was merely a "dealer" and not a "manufacturer," "importer," or "distributor," and therefore fell outside the reach of the DPCO provision used to recover overcharged amounts. The Delhi High Court rejected this argument at both the single-judge and Division Bench stages.

Decision Breakdown

The Supreme Court held that the company's own replies to the NPPA admitted it purchased the drug directly from the manufacturer, which brought it within the scope of a "distributor" under the DPCO, regardless of the technical overlap between the terms "dealer," "distributor," and "wholesaler." The Court also noted the company had given inconsistent accounts of its supplier at different stages of litigation, undermining its credibility, and refused to let it raise a fresh challenge to the DPCO's validity for the first time at this late stage. Finding the price-control recovery provision must be read broadly to serve its purpose of protecting consumers from overcharging, the Court dismissed the appeal and upheld the recovery demand.

Lesson Learnt

A business cannot avoid drug price-control recovery liability by hiding behind technical definitional labels ("dealer" versus "distributor") when its own conduct shows it operated within the regulated supply chain, and courts will not entertain new factual defenses raised for the first time on appeal.

Official source (sci.gov.in)View Judgment (PDF)

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