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M/s T.C. Healthcare P. Ltd. & Anr. v. Union of India & Anr.

Civil Appeal · 2019 INSC 1254Decided 15 Nov 2019
Civil Appeal No. 4687 of 2010
Justice Arun Mishra · Justice Vineet Saran · Justice S. Ravindra Bhat

Background

The appellants, small-scale drug manufacturers TC Healthcare and Modi Mundipharma, were originally exempt from price-control regulation under the Drugs (Price Control) Order, 1995 because of their small-scale status. The government later issued notifications fixing ceiling prices for the bulk drug Frusemide, which the appellants used in their formulations (Diucontin and Unicontin). The appellants challenged these notifications before the Allahabad High Court, arguing their formulations used a distinct "sustained release" delivery system not covered by the price-fixing notifications; the High Court rejected their writ petition, leading to this appeal (along with two connected appeals) before the Supreme Court.

Decision Breakdown

The Supreme Court examined the technical and regulatory materials and found that the Drugs (Price Control) Order was already aware of different drug-delivery systems, including "sustained release," when the price notifications were framed. It held that if the appellants believed their formulations used a genuinely unique or different delivery system exempting them from the ceiling price, the burden was on them to demonstrate this with evidence, which they failed to do. Since they could not establish such a distinction, their obligation to comply with the fixed ceiling prices stood unaffected. The Court agreed with the High Court's reasoning and found no basis to interfere, dismissing all connected appeals without any order as to costs.

Lesson Learnt

A party seeking to be exempted from a general regulatory price-control notification on the basis of a supposedly unique product feature bears the burden of proving that distinction with evidence: a bare assertion of uniqueness, without technical substantiation, will not succeed.

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

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