Authority: High Court of Judicature at Bombay

Order Date: 22 September 2026

Case Overview

  • Petitioners: M/s. Pharmed Limited (manufacturer of pharmaceutical formulations) and its director/shareholder.
  • Respondents: Union of India (Central Government), National Pharmaceuticals Pricing Authority (NPPA), State of Maharashtra (Collector), and others.
  • Core dispute: NPPA issued notifications fixing ceiling prices for the formulation "Cartigen Forte Tablets" (used for osteoarthritis) under the Drugs (Price Control) Order, 1995 (DPCO 1995). The petitioners alleged the ceiling price was never lawfully fixed and that the notifications were ultra‑vires, leading to demand notices for alleged over‑charging amounting to ₹10.97 cr, ₹11.24 cr, ₹11.42 cr, ₹12.05 cr, ₹12.73 cr, ₹12.93 cr and ₹13.41 cr over several years.
  • Key dates:
  • 27 Sep 2007 – NPPA notification fixing ceiling price for multivitamin/mineral tablets & capsules.
  • 30 Jan 2009 – NPPA blanket notification covering any formulation containing a scheduled bulk drug.
  • 13 Oct 2010 – NPPA show‑cause notice demanding ₹10,97,86,227.
  • 22 Sep 2014 – Final hearing; NPPA recalculated demand to ₹6,33,62,316 plus interest ₹4,90,71,525 (total ₹11,24,33,841).
  • Subsequent demand notices issued in 2014‑2016 totalling up to ₹13.41 cr.
  • Procedural history: Multiple hearings, personal hearing on 20 Oct 2014, ad‑interim relief granted on 5 Dec 2016, and earlier Writ Petition 2804 of 2015 partially allowed with direction that no demand notice be enforced until a fresh order.
  • Legal provisions examined: DPCO 1995 paragraphs 3‑5, 7‑9, 11; definition of “scheduled formulation”; formula for retail/ceiling price (R.P. = (M.C.+C.C.+P.M.+P.C.) × (1+MAPE/100)+E.D.); power of Central Government vs. NPPA; requirement of a gazette notification fixing ceiling price.
  • Petitioners argued: (i) the 27 Sep 2007 notification pertained only to multivitamin/mineral products and could not apply to Cartigen Forte; (ii) the 30 Jan 2009 notification was ultra‑vires because it omitted the statutory formula; (iii) NPPA never applied the DPCO 1995 formula to compute a ceiling price for Cartigen Forte; (iv) natural‑justice violations as no speaking order preceded demand notices; (v) interest should not accrue for periods of NPPA delay.
  • Respondents argued: inclusion of any bulk drug from the First Schedule (e.g., vitamin C, vitamin E) made the formulation a “scheduled formulation” subject to ceiling price; NPPA had power under paragraph 11 to fix price when manufacturer failed to apply; demand notices were lawful.

Final Outcome

  • The Court held that NPPA lacked authority to fix a ceiling price for Cartigen Forte without a specific gazette notification applying the DPCO 1995 formula.
  • The 27 Sep 2007 notification was quashed to the extent of its applicability to the petitioners’ formulation.
  • The 30 Jan 2009 notification was entirely set aside as ultra‑vires.
  • All demand notices issued by NPPA and the subsequent notice issued by the Collector under the Maharashtra Land Revenue Code were declared unenforceable; respondents were directed not to act upon them.
  • The petitioners’ prayer clauses (a)‑(e) were granted, and pending applications and chamber summons were disposed of.

Topics: Drug Price Control, Judicial Review of Regulatory Action