W.P.(C)/9739/2018 of WOCKHARDT LIMITED AND ANR Vs UNION OF INDIA AND ANR

IN THE HIGH COURT OF DELHI AT NEW DELHI%Judgment delivered on: 07.01.2019+W.P.(C) 9739/2018

WOCKHARDT LIMITED AND ANR

..... Petitioners

versus

UNION OF INDIA AND ANR.

..... Respondents

Advocates who appeared in this case:

For the Petitioner:Mr Parag P. Tripathi, Senior Advocate withMs Saman Ahsan, Mr Sanjeev K Kapoor.For the Respondents:Ms Maninder Acharya, ASG, Mr KirtimanSingh, CGSC and Mr Anil Soni, CGSC withMr Waize Ali Noor, Mr Prateek Dhanda, MsShruti Dutt, Mr Sahil Sood, Mr ViplavAcharyaandMrHarshulChoudhary,Advocates.

CORAMHON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

1.The petitioners have filed the present petition impugning thenotification No. S.O. 4379 (E) 07.09.2018 (hereafter ‘the impugnednotification’) issued by respondent no.1 (Central Government) underSection 26A of the Drugs and Cosmetics Act, 1940 (hereafter ‘theAct’). By the impugned notification, the Central Government hasprohibited the manufacture for sale, sale or distribution for human useoftheFixedDoseCombination(FDC)oftheformulationsAceclofenac + Paracetamol + Rabeprazol (hereafter referred to as ‘thesaid FDC’).

2.The petitioners have challenged the impugned notification onseveral grounds including : (i) that the same has been issued inviolation of principles of natural justice; (ii) that the impugnednotification are based on the recommendations of the sub-committee ofDrug Technical Advisory Board (DTAB), which has been madewithout application of mind; (iii) that the impugned notification hasbeen passed without following the directives issued by the SupremeCourt in Union of India v. Pfizer Limited and Ors. : 2018 (II) SCC39; and (iv) that the said FDC has sound therapeutic justification andposes no risk to human beings.

3.The respondents dispute the aforesaid grounds. They contendthat exercise of power under Section 26A of the Act is legislative innature and principles of natural justice have no application. It iscontended that respondent no.1 (Central Government) is neitherobliged to afford the petitioners any hearing nor indicate any reasonsfor its satisfaction to issue such orders.

4.Briefly stated, the controversy in this case arises in the followingfactual context:

4.1Petitioner no.1 distributes and markets drug under the name‘Aceproxyvon Tablet 10 T’. The said drug combines the dosage ofAceclofenac 100 mg, Paracetamol 325 mg and Rabeprazole 10 mg.Petitioner no. 2 is the manufacturer of the said FDC.

4.2The petitioners state that the said FDC is typically administeredfor relief of pain and inflammation associated with Rheumatoid

Arthritis, Osteoarthritis and Ankylosing Spondylitis. It is to beadministered twice day for the aforesaid indication.

4.3On 15.01.2013, respondent no.2 (the Drug Controller General ofIndia – DCGI) issued letter to all Drug Controllers of States/UnionTerritories requesting them to call upon the manufacturers of variousFDCs in their respective States/Union Territories to prove the safetyand efficacy of FDCs for which licences were issued prior to01.10.2012 without the approval of DCGI. This was followed byanother letter dated 05.07.2013 setting time line for submission ofthe applications for establishing efficacy and safety of “New Drugs”not approved by DCGI.

4.4Pursuant to the above, petitioner no.2 – by way of letter dated13.08.2013 – submitted all the details as sought for and further statedthat no adverse side effects had been noticed in respect of the FDC.

4.5Thereafter, with the approval of Ministry of Health and FamilyWelfare, the Central Drugs Standard Control Organisation (CDSCO)constituted Expert Committee (of ten experts) for examination of theapplications received from various manufacturers.

4.6The Expert Committee, in its third meeting dated 04.06.2014,observed that the said FDC was already approved by DCGI earlier andwas being marketed without any adverse drug reaction. It opined thatfirms manufacturing such drugs should generate data through Phase-4trials and submit the same to the Expert Committee. The relevantextract of the recommendations is set out below:-

“TheCommitteenotedthatAceclofenac+Paracetamol and Aceclofenac + Rabeprazole isalready approved by DCG(I) earlier. As these arealready being marketed and no ADR [adverse drugreaction] has been reported so far, the Committeeopined that the firms shall generate data throughPhase IV Trial within one year and accordinglyprotocol shall be submitted before the committeewithin 3 months.....”

4.7DCGI considered the aforesaid recommendations and issued aletter dated 08.08.2014 calling upon petitioner no.2 to submit adetailed reply in respect of certain points along with study protocol andother details.

4.8Petitioner no.2 responded to the aforesaid letter and submittedthe details as sought for by DCGI.

4.9Thereafter, on 16.09.2014, the Central Government (respondentno.1) constituted Committee under the Chairmanship of ProfessorC.K. Kokate, Vice-Chancellor of KLE University of Belgaum,Karnataka (hereafter ‘the Kokate Committee’) for examining the safetyand efficacy of various FDCs. The terms of reference, inter alia,required the Kokate Committee to categorise the FDCs into fourcategories : (a) FDCs, which are considered grossly irrational/unsafebased on pharmacokinetic and pharmacodynamic interaction, dosagecompatibilities of FDCs vis-a-vis that of single ingredients present inthe FDC and available literature/evidence; (b) FDCs that requirefurther deliberations; (c) FDCs, which are considered as safe andeffective based on pharmacokinetic and pharmacodynamic interaction,

dosage compatibilities of FDCs present in the FDC, availableliterature/evidence, clinical experience and other data; (d) FDCs thatare considered as rational based on available data and knowledge.

4.10The petitioners state that the Kokate Committee decided not toevaluate FDCs which had already been approved earlier by the ExpertCommittee and the same was mentioned in the first assessment reportsubmitted by the Kokate Committee on 19.01.2015. However, thereport submitted by the Kokate Committee subsequently included areference to the said FDC and the same was classified as irrational.

4.11Thereafter, respondent no.1 proceeded to issue notification –being SO No. 705(E) on 10.03.2016 – prohibiting the manufacture,distribution and sale of the said FDC.

4.12The petitioners challenged the foresaid notification by filing awrit petition – being W.P. (C) No. 2368/2016 – before this Court onseveral grounds including that the said notification had been issuedwithout consultation with DTAB which, the petitioners contended, wasmandatory.

4.13While the said petition was pending consideration, DCGIwithdrew its letter dated 24.08.2014 regarding conducting Phase-IVtrials in view of the notification under Section 26A of the Actproscribing the manufacture and sale of the said FDC.

4.14The said writ petition was considered along with batch of otherpetitions challenging several other notifications issued under Section

26A of the Act. This Court accepted the contention that consultationwith DTAB was necessary and allowed the said batch of petitions by acommon judgment dated 01.12.2016. The notifications impugned inthose petitions were set aside. The respondents carried the matterbefore the Supreme Court (by filing appeals and transfer petitions)impugning the judgment dated 01.12.2016. The said batch ofpetitions/appeals was disposed of by the Supreme Court by commonjudgment.TheSupremeCourtdidnotaccepttheviewthatconsultation with DTAB was mandatory prior to issue of anynotification under Section 26A of the Act. However, in the peculiarfacts of the case, the Supreme Court remitted the matter to DTAB forexaminingeachcaseandsubmitting areporttothe CentralGovernment. The Supreme Court also issued certain other directions toDTAB. The relevant extract of the said decision is as under:-

“31. On the facts of these cases, suggested course ofaction was stated by learned counsel appearing onbehalf of the appellants/ petitioners. This course is thatinstead of now remitting the matter back to the DelhiHigh Court for an adjudication on the other pointsraised in the writ petitions, the case of 344 FDCs thathave been banned, plus another 5 FDCs that have beenbanned, which comes to 349 FDCs, [barring 15 FDCsthat are pre- 1988 and 17 FDCs which have DCG(I)approval] pursuant to the Kokate Committee report, bynotifications of the Central Government under Section26A of the Drugs Act, should be sent to the DTAB,constituted under Section 5 of the Drugs Act, so that itcan examine each of these cases and ultimately send areport to the Central Government. We reiterate thatonly on the peculiar facts of these cases, we think thatsuch course commends itself to us, which would

obviate further litigation and finally set at rest all othercontentions raised by the petitioners. We say sobecause we find that the Kokate Committee diddeliberate on the 344 FDCs plus 5 FDCs and did cometo conclusion that the aforesaid FDCs be banned, butwe are not clear as to what exactly the reasons for suchconclusions are, and whether it was necessary in thepublic interest to take the extreme step of prohibitingsuch FDCs, instead of restricting or regulating theirmanufacture and supply. In order that an analysis bemade in greater depth, we, therefore, feel that thesecases should go to the DTAB and/or Sub-Committeeformed by the DTAB for the purpose of having arelook into these cases. It is important, however, thatthe DTAB/Sub-Committee appointed for this purposewill not only hear the petitioners/appellants before us,but that they also hear submissions from the All IndiaDrugs Action Network. The DTAB/Sub-Committee setup for this purpose will deliberate on the parameters setout in Section 26A of the Drugs Act, as follows.

32. First and foremost in each case, the DTAB/Sub-Committee appointed by it must satisfy itself that theuse of the Fixed Dose Combinations (FDC) in questionis likely to involve any one of the aforesaid threethings:

(a) that they are likely to involve any risk tohuman beings or animals; or

(b) that the said FDCsdo not havethetherapeutic value claimed or purported to beclaimed for them; or

(c) that such FDCs contain ingredients and insuch quantity for which there is no therapeuticjustification.

33. The DTAB/Sub-Committee must also apply itsmind as to whether it is then necessary or expedient, inthe larger public interest, to regulate, restrict or prohibitthe manufacture, sale or distribution of such FDCs. Inshort, the DTAB/Sub-Committee must clearly indicatein its report:

(1) as to why, according to it, any one of thethree factors indicated above is attracted;

(2) post such satisfaction, that in the largerpublic interest, it is necessary or expedient to (i)regulate,(ii)restrict,or(iii)prohibitthemanufacture, sale or distribution of such FDCs.34. The DTAB/Sub-Committee must also indicate inits report as to why, in case it prohibits particularFDC, restriction or regulation is not sufficient tocontrol the manufacture and use of the FDC. Werequest the DTAB/Sub-Committee to be set up for thispurposetoaffordthenecessaryhearingtoall concerned, and thereafter submit consolidatedreport, insofar as these FDCs are concerned, to theCentral Government within period of six monthsfrom the date on which this judgment is received by theDTAB.WemayalsoindicatethattheCentralGovernment, thereafter, must have due regard to thereport of the DTAB and to any other relevantinformation, and ultimately apply its mind to theparameters contained in Section 26A of the Drugs Actand, accordingly, either maintain the notificationsalready issued, or modify/substitute them or withdrawthem.”

4.15DTAB considered the matter and recommended constituting thesub-committee under the Chairmanship of Dr Nilima Kshirsagar toreview the ban on 344 (+5) Fixed Dose Combination Drugs. In

accordance with the said recommendations, the Sub-committee wasconstituted by an Office Memorandum dated 19.02.2018.

4.16On 12.03.2018, notice was issued on the website of CDSCOrequesting the drug manufacturers and other concerned parties tosubmit information in the prescribed format by 07.04.2018 for furtherdeliberation in compliance with the directions of the Supreme Court.

4.17The respondents further state that separate letters were also sentto various parties who had challenged the notifications issued underSection 26A of the Act. The said parties were afforded an opportunityof hearing as per the schedule fixed by the Sub-committee.

4.18It is stated that the Sub-committee also provided an opportunityto All India Drug Action Network (AIDAN) to make its submissions.

4.19It is stated that the Sub-committee reviewed the FDC in questionon 18.06.2018 and afforded full opportunity to the petitioners to beheard. The Sub-committee, thereafter, submitted its report andrecommended the said FDC to be irrational. The reasons for itsrecommendations, as indicated in the report, are set out below:-

“1. Pharmacokinetic mismatch: Aceclofenac is giventwo times day, Rabeprazole is administered once aday and Paracetamol four times day.

2.Patientsmaynotneedalltheingredientssimultaneously and use of this FDC may lead tounnecessary exposure to other ingredients and theirside effects.

Thereisnoconvincingscientific/clinicalevidence/justification for the FDC.”

5.The said report was accepted and the Central Government issuedthe impugned notification. Aggrieved by the same, the petitioners havepreferred the present petition.

Submissions

6.MrTripathi,learnedSeniorCounselappearingforthepetitioners contended that the impugned notification had been issuedin violation of principles of natural justice. He submitted that thereport of the Sub-committee indicates no reason for recommendingwhy the said FDCs should be proscribed. Although, it is concludedthat there is no therapeutic justification for the said FDC, the saidconclusion is not supported by any reason. He referred to the detailedsubmissions made by the petitioners before the Sub-committee forestablishing the therapeutic justification for the said FDC. Hesubmitted that the petitioners had also supported its submissions byextensive material. However, the report of the Sub-committee has noreference to either the submissions made by the petitioners or thematerial furnished by them. He contended that the decision underSection 26A of the Act was administrative and, therefore, theprinciples of natural justice could not be excluded. He referred to thedecision of the Supreme Court in Godawat Pan Masala Products I.P.Ltd. & Anr. v. Union of India & Ors.: (2004)7 SCC 68 and submittedthatmerelybecausetheimpugnednotificationisofgeneralapplication does not necessarily mean that it is legislative in nature.

He further submitted that notwithstanding the same, the impugnednotification could be challenged on several grounds including thatrelevantconsiderationshavebeenexcluded;ifirrelevantconsiderations were taken into account and there was credible materialfor the Central Government to be satisfied as to the conditionsspecified in Section 26A of the Act.

7.He relied on the decisions of the Supreme Court in SystopicLaboratories (Pvt.) Ltd. v. Dr. Prem Gupta: 1994 SCC Supl. (1) 160;the decision of the Bombay High Court in Roussel Pharmaceuticals(India) Ltd. v. Union of India: 1989 SCC OnLine (Bom) 450; thedecision of the Karnataka High Court in Lundbeck India Pvt. Ltd. v.Union of India and Ors.: 2013 SCC OnLine (Kar) 622 and thedecision of this Court in E. Merck (India) Ltd. v. Union ofIndia:2001 (90) DLT 60.

8.Ms Acharya, learned ASG appearing for the respondentscountered the submissions made on behalf of the petitioners. Shecontended that the powers exercised by the Central Government underSection 26A of the Act are legislative powers and, therefore,necessarily exclude the principles of natural justice. She contendedthat it was not necessary for the Sub-committee or the CentralGovernment to give any reason for banning the said FDC. Shesubmitted that the Sub-committee constituted on 19.02.2018 had, afterexamining all material, concluded that there was no therapeuticjustification for the said FDC.She stated that this was sufficientmaterialfortheCentralGovernmenttoissuetheimpugned

notification. She also contended that the said conclusion also clearlyindicated the reasons for recommending ban on the FDC. Next, shecontended that the Sub-committee was constituted by experts in thegiven subject and the Courts would not re-examine their decision orsubject the same to judicial review. She referred to the decision of theSupreme Court in Academy of Nutrition Improvement v. Union ofIndia: (2011) 8 SCC 274; Vincent Panikurlangara v. Union of Indiaand Ors. 1987 SCC (2) 165; and Systopic Laboratories (Pvt.) Ltd.(supra) in support of the aforesaid contention.

Reasoning and Conclusion

9.Before proceeding further, it would be relevant to refer to theprovisions of Section 26A of the Act, which reads as under:-

“26A.PowerofCentralGovernmenttoprohibitmanufacture,etc.,ofdrugandcosmetic in public interest.— Without prejudiceto any other provision contained in this Chapter, ifthe Central Government is satisfied, that the use ofany drug or cosmetic is likely to involve any riskto human beings or animals or that any drug doesnothavethetherapeuticvalueclaimedorpurportedtobeclaimedforitorcontainsingredients and in such quantity for which there isno therapeutic justification and that in the publicinterest it is necessary or expedient so to do, then,that Government may, by notification in theOfficial Gazette, prohibit the manufacture, sale ordistribution of such drug or cosmetic.]”

10.It is clear from the language of Section 26A of the Act that adrug or cosmetic can be banned or restricted only if the Central

Government is satisfied that (i) use of the said drug/cosmetic is likelyto involve any risk to human beings or animals; or (ii) the drug doesnot have the therapeutic value claimed or purported to be claimed; or(iii) contained ingredients and in such quantity for which there is notherapeutic justification. If the Central Government is satisfied thatany of the said condition existed and it is not necessary or expedient inthe public interest, the Central Government may regulate, restrict orprohibit the sale of such drug or cosmetic.

11.It is clear that the notifications issued in exercise of powersunder Section 26A of the Act are of general application and the powerexercised by the Central Government under Section 26A of the Act islegislative in nature. In Merck India Ltd (supra), Division Benchof this Court had, in the light of the principles laid down by theSupreme Court in Cynamide India Ltd. (supra) expressed its primafacie view that the powers exercised by the Central Government underSection 26A of the Act, are legislative in nature.

12.Having stated the above, it is not necessary for this Court todelve further into the aforesaid issue, essentially, for two reasons.First, that the Supreme Court had ‒ without going into the question as to whether the power under Section 26A of the Act is legislative or not‒ issued directions for the DTAB/Sub-committee to examine the issue regarding banning of certain FDCs and including the said FDC. Thus,there is no dispute that the issue was to be examined in accordancewith the directions issued by the Supreme Court.

13.Second, even if it is expected that the powers to be exercisedunder Section 26A of the Act are legislative in nature, there is nodispute that such powers can be exercised only on the CentralGovernment is satisfied that it is necessary to exercise the same inlarger public interest. Plainly, the Central Government’s satisfactionwould be required to be based on the relevant considerations; cogentmaterial; and by excluding irrelevant considerations.

14.The controversy involved in the present petition, thus, falls in avery narrow compass. The first and foremost aspect of the controversyis whether the Central Government’s decision to proscribe the saidFDC is based on relevant material and second, whether the impugnednotification has been issued by due compliance of the directions of theSupreme Court.

15.Concededly, the only material considered by the CentralGovernment for issuing the impugned notification was the report ofthe Sub-committee. The report of the Sub-committee in respect of thesaid FDC reads as under:-

“1. Pharmacokinetic mismatch: Aceclofenac is giventwo times day, Rebeprazole is administered once aday and Paracetamol four times day.two times day, Rebeprazole is administered once aday and Paracetamol four times day.

2.Patients may not need all the ingredientssimultaneously and use of this FDC may lead tounnecessary exposure to other ingredients and theirside effects.simultaneously and use of this FDC may lead tounnecessary exposure to other ingredients and theirside effects.

There is no convincing scientific/clinical evidence/justification for the FDC.”/justification for the FDC.”

16.This Court is of the view that the said report could not beconsidered by the Central Government in isolation without referenceto the context in which the Sub-committee came to examine the issue.The matter was referred to the Sub-committee pursuant to thedirections issued by the Supreme Court in Pfizer Ltd. (supra). Theoperative directions issued by the Supreme Court are set out below:-

“31. On the facts of these cases, suggested courseof action was stated by the learned counsel appearingon behalf of the appellant-petitioners. This course isthat instead of now remitting the matter back to theDelhi High Court for an adjudication on the otherpoints raised in the writ petitions, the case of 344FDCs that have been banned, plus another 5 FDCsthat have been banned, which comes to 349 FDCs[barring 15 FDCs that are pre-1988 and 17 FDCswhich have DCG(I) approval) pursuant to the KokateCommittee report, by notifications of the CentralGovernment under Section 26-A of the Drugs Act,should be sent to the DTAB, constituted underSection 5 of the Drugs Act, so that it can examineeach of these cases and ultimately send report tothe Central Government. We reiterate that only onthe peculiar facts of these cases, we think that such acourse commends itself to us, which would obviatefurther litigation and finally set at rest all othercontentions raised by the petitioners. We say sobecause we find that the Kokate Committee diddeliberate on the 344 FDCs plus 5 FDCs and didcome to conclusion that the aforesaid FDCs bebanned, but we are not clear as to what exactly thereasons for such conclusions are, and whether it wasnecessary in the public interest to take the extremestep of prohibiting such FDCs, instead of restrictingor regulating their manufacture and supply. In orderthat an analysis be made in greater depth, we,

therefore, feel that these cases should go to theDTAB and/or sub-committee formed by the DTABfor the purpose of having relook into these cases. Itis important, however, that the DTAB/sub-committeeappointed for this purpose will not only hear thepetitioners-appellants before us, but that they alsohear submissions from the All-India Drugs ActionNetwork. The DTAB/sub-committee set up for thispurpose will deliberate on the parameters set out inSection 26-A of the Drugs Act, as follows.

32. First and foremost in each case, the DTAB/Sub-Committee appointed by it must satisfy itself that theuse of the Fixed Dose Combinations (FDC) inquestion is likely to involve any one of the aforesaidthree things:

(a) that they are likely to involve any riskto human beings or animals; orto human beings or animals; or

(b) that the said FDCs do not have thetherapeutic value claimed or purported tobe claimed for them; or

(c) that such FDCs contain ingredients andin such quantity for which there is notherapeutic justification.

33. The DTAB/Sub-Committee must also apply itsmind as to whether it is then necessary or expedient,in the larger public interest, to regulate, restrict orprohibit the manufacture, sale or distribution of suchFDCs. In short, the DTAB/Sub-Committee mustclearly indicate in its report:

(1) as to why, according to it, any one ofthethreefactorsindicatedaboveisattracted;

(2) post such satisfaction, that in the largerpublic interest, it is necessary or expedient

to (i) regulate, (ii) restrict, or (iii) prohibitthe manufacture, sale or distribution ofsuch FDCs.

34. The DTAB/Sub-Committee must also indicate inits report as to why, in case it prohibits particularFDC, restriction or Regulation is not sufficient tocontrol the manufacture and use of the FDC. Werequest the DTAB/Sub-Committee to be set up forthis purpose to afford the necessary hearing to allconcerned, and thereafter submit consolidatedreport, insofar as these FDCs are concerned, to theCentral Government within period of six monthsfrom the date on which this judgment is received bythe DTAB. We may also indicate that the CentralGovernment, thereafter, must have due regard to thereport of the DTAB and to any other relevantinformation, and ultimately apply its mind to theparameters contained in Section 26A of the DrugsActand,accordingly,eithermaintainthenotifications already issued, or modify/substitutethem or withdraw them.”

17.It is apparent from the above that the controversy whether FDCsin question were required to be proscribed, was referred to the Sub-committee because the reasons provided by the Kokate Committee forsuch an action was clear. In the circumstances, the Supreme Court wasof the view that analysis was required to be made in greater depth. TheSupreme Court had expressly directed that DTAB/Sub-committee tonot only hear the appeals before the Supreme Court but also hearsubmissions from All India Drug Action Network. The Subcommitteewas required to deliberate whether any of the parameters as set out inSection 26A of the Act were met. The Supreme Court also expresslydirected that the Sub-committee must apply its mind as to whether it

was necessary or expedient in larger public interest to regulate, restrictor proscribe the manufacture, sale and distribution of the FDCs inquestion. The Subcommittee was also required to clearly indicate in itsreport as to why any of the three factors as indicated in Section 26A ofthe Act, were attracted. In addition, the Sub-committee was alsorequired to indicate in its report as to why restriction or regulationswere not sufficient to control the manufacture and use of the FDCs inquestion in case the same were recommended to be proscribed.

18.The Court also directed the Central Government to apply itsmind to the parameters set out in Section 26A of the Act having dueregard to the report of the Sub-committee or any other relevantinformation.

19.In view of the above, this Court is unable to accept thecontention that the Sub-committee was not required to indicate itsreasons for recommending that the said FDC be proscribed. It is clearthat the entire exercise of remitting the matter to DTAB/Sub-committee for hearing the parties before the Supreme Court, andsubmitting report, was directed to afford the Central Government totake an informed decision.

20.Ms Acharya had contended that since the exercise of powersunder Section 26A of the Act are legislative in nature and principles ofnatural justice are excluded, there was no requirement for the Sub-committee to indicate any elaborate reasons. She had earnestlycontended that the Sub-committee was constituted by experts and,

therefore, their conclusions (which she also described as brief reasons)must be accepted.

21.This Court is unable to accept the aforesaid contention. TheCentral Government may not require indicating its reasons in thenotification but surely the material on which the decision is based ‒ in this case the report of the Sub-committee ‒ must provide clear justification for issuing an order proscribing or manufacture and saleof drug. Apart from being part of the principles of natural justice,providing reasons is also necessary to indicate that the authorityexpressing its conclusion has done so after due application of mind.Thus, notwithstanding whether the principles of natural justice areapplicable, the report of the Sub-committee was required to givesufficient reason for its recommendation, as that report was required tobe considered by the Central Government for determining the questionwhether to proscribe or restrict an FDC.

22.In the case of the said FDC, the principal controversy to beexamined by the Sub-committee was whether the said FDC ought tobe banned on account of pharmacokinetics incompatibility among thethree constituent drugs. The petitioners had disputed the same and hadsubmitted therapeutic justification for the said FDC and also extensivematerial in this regard. At this stage, it would be relevant to mentionthat the Kokate Committee had made the following observations withregard to the said FDC:-

“1. There is pharmacokinetics incompatibility amongthe three drugs as the dosing intervals are BD for

aceclofenac, OD for rabeprazole and TDS/QID forparacetamol.

2. This FDC is not approved anywhere in the world.

3. The literature regarding safety and efficacy of thecombination is not available in Pubmed and Googlescholar.”

23.As noticed above, the aforesaid reasons were not found to beclear and, therefore, the Supreme Court had directed the Sub-committee to examine the same. Pursuant to the notice dated12.03.2018, petitioner no.1 made detailed submission including atherapeutic justification for the said FDC. The relevant extract of thestatement indicating the therapeutic justification of the said FDC, assubmitted by petitioner no.1, is set out below:-

“Aceclofenac belongs to the class of Non-steroidalanti-inflammatorydrugs(NSAID).Likeothernonsteroidal anti-inflammatory drugs (NSAIDS),aceclofenacisaprostaglandinsynthetase(cyclooxygenase)inhibitor,whichdecreasesprostaglandin and leukotriene production, thereforeinhibiting the inflammatory process. Aceclofenachas been shown to have potent anti-inflammatory,analgesic, and antipyretic properties. The onset ofaction of Aceclofenac is 30 to 60 minutes after oraladministration. The maximum serum concentrationis achieved in 1.25-2hours and has half life of 4hours. The usually recommended dose is 10mgtwice day. Several studies have proven superiorefficacyandbettersafetyincomparisontoDiclofenac, gold standard NSAID.

Paracetamol belongs to the class of centrally actinganalgesicandantipyreticwithminimalanti-

inflammatory properties. Paracetamol reduces feverbyinhibitingtheformulationandreleaseofprostaglandins in theCNSandby inhibitionendogenouspyrogensatthehypothalamicthermoregulator center.The maximum serumconcentration after oral administration is achievedin 1 hour and has half life of 2.25 hours. Whenused alone the recommended dosing is 650 to 1000mg orally every 4 to 6 hours as needed; maximum4000 mg/24 hours.However, the purpose ofcombining pracetamol with NSAIDs is solely toenhance the analgesic effect. Several randomisedcontrol trials and systematic review concludedthat combination of paracetamol and an NSAIDmay offer superior analgesia compared with eitherdrug alone.

Rabeprazole is gastric proton pump inhibitor thatdoes not possess anticholinergic or histamine H(2) -receptor antagonist properties. It suppresses gastricacid secretion by inhibiting the gastric H+, K+-ATPase at the secretory surface of pariental cells.The onset of action of Rabeprazole is within 1 hourof oral administration. Rabeprazole absorption isnot altered by food and hence can be administeredanytime.WhiletherecommendeddosingofRabeprazole is 20 mg once day, studies haveproven either non-inferiority of dividing the doseto 10mg twice day, studies have proven either anon-inferiority of dividing the does to 10mg twice aday or superiority of the divided regimen over oncedailyinnighttimegastricacidsecretion.Accordingly,ourproposedFDR,includeRabeprazole in dose of 10 mg.It is relevant to note that although NSAIDs are themostwidelyusedtherapeuticagentsinthemanagement of pain, their use is associated withgastrointestinal(GI),cardiovascular,andrenal

adverse events (AEs. One of the commonest sideeffects reported with NSAID use is gastrointestinalside effects. Owning to this fact, several guidelinessuch as by National Institute of health and CareExcellence (NICE), UK recommends the use ofproton pump inhibitors along with NSAIDs.”

24.It was petitioner no.1’s case before the FDC that the tablet drugparacetamol would be combined with NSAID (non-steroidal anti-inflammatory drugs) to offer superior analgesia. Petitioner no.1 hadalso claimed that even though the recommended dose for rabeprazoleis 20 mg once day, the said dose divided into dose of 10 mg twicea day.

25.It does not appear from the report of the Sub-committee that anyof the aforesaid contentions were considered. The Sub-committeepersisted on the basis that rabeprazole is administered once day;however, it fails to consider the petitioners’ claim that the ordinarydose of 20 mg once day could be split into two doses of 10 mg.

26.Petitioner no.1 had also stated that two other FDCs, namely, (i)Aceclofenac (100 mg) + Paracetamol (500 mg) and (ii) Aceclofenac200 mg/200 mg SR + Rabeprazole 10mg/20mg Capsule were alreadyapproved. It is not for this Court to consider whether the therapeuticjustification as provided by the petitioners was merited or not. Clearly,this Court cannot embark on the said inquiry. The scope of judicialreview would not extend supplanting this Court’s opinion over of theconcerned authorities. However, if the expert Sub-committee hadconsidered the aforesaid justification and rejected the same, no further

interference would be called for. However, it would be important toascertain whether the Sub-committee had applied its mind to the saidjustification provided by the petitioners.

27.In this regard, this Court had called upon the respondents toindicate whether there was any material before the Sub-committee tocounter such assertions made by the petitioners. In response to theaforesaid direction, the respondents had filed counter affidavitindicating that the Subcommittee had taken note of the standard textbooks “Martindale”. The said text is standard text which indicatesthe ordinary dosages of drug. Thus, it also does not appear that anyspecific material considered by the Sub-committee on the basis ofwhich it could be assumed that the petitioners’ claim for therapeuticjustification was rejected.The respondents have also produced theminutes of the meeting of the Sub-committee which also does notindicate whether the petitioners’ explanation was considered by theSubcommittee.The minutes of the meeting of the Sub-committeeheld on 18.06.2018 merely indicates that “the committee heard thepresentations by the companies, replies given by the companies to anyqueries by the members and also any additional information that theywished to provide.” Thus, neither the minutes nor the report submittedby the Sub-committee indicates that the explanation provided by thepetitioners was considered and was rejected after due application ofmind. It was contended by learned ASG that the Sub-committee wasnot expected to give detailed reasons and elaborate explanation as towhy they did not accept the petitioners’ contention. This contention ismerited. Surely, the Sub-committee was not expected to provideexplanations for rejecting the explanation provided by petitioner no.1.However, it was incumbent on the Sub-committee to indicate that theSub-committee had considered the petitioners’ claim for therapeuticjustification and briefly indicate why the same was not acceptable.However, in the present case, it does not appear that the Sub-committee had even considered the presentation made by petitionerno.1. Clearly, the directions given by the Supreme Court to offerparties hearing cannot be an empty formality. The Sub-committeewas required to give reasons for its recommendations and why theclaim put up by the petitioner was not acceptable. In this case, theSubcommittee had not even expressly indicated that it did not find anymerit that the petitioners’ claim.As stated above, the CentralGovernment was required to apply its mind and take an informeddecision, and since the sole material on which the Central Governmenthad relied was the report of the Sub-committee, it was necessary thatthe said report briefly indicate the reasons as to why the claims of themanufacturers of FDCs in question were recommended to be rejected.

28.At this stage, it would also be relevant to refer to the decision ofthe Supreme Court in Cellular Operators Association of India andOrs. v. Telecom Regulatory Authority of India and Ors.: (2016) 7SCC 703. In that case, the Court examined the Regulation framed bythe Telecom Regulatory Authority of India (TRAI) in exercise ofpowers under Section 11(4) of the Telecom Regulatory Authority ofIndia Act, 1997. The said Section required the TRAI to ensure

transparency while exercising its powers and discharging its functions.TRAI had held consultations with all the stakeholders and alsoallowed them to make submissions before the TRAI. The Court foundthat although the consultations have been held, there was nodiscussion or reasoning dealing with the arguments put forth byservice providers as regards to the reasons for call drops.

29.Since the conclusion was bereft of any reasoning in this regard,the Supreme Court set aside the same. It is relevant to note that therewas no dispute that the powers exercised by TRAI were legislative innature and the Court also noted its earlier decisions in Union of Indiav. Cynamide India Ltd. (supra) and MRF Ltd. v. State of Kerala:(1998) 8 SCC 227, wherein it was held that the principles of naturaljustice cannot be read into legislative activity. The Supreme Courtheld that the definition of “transparency” under Section 13 of theAirports Economic Regulatory Authority of India Act, 2008 provide agood working test of transparency as referred to under Section 11(4)of the TRAI Act, 1997 and applied the same. The Court also referredto the provisions of the US Administrative Procedure Act andobserved as under:-

“74. We find that, subject to certain well definedexceptions, it would be healthy functioning of ourdemocracy if all subordinate legislation were to be"transparent" in the manner pointed out above.Since it is beyond the scope of this judgment to dealwithsubordinatelegislationgenerally,andinparticular with statutes which provide for Rulemaking and Regulation making without any added

requirement of transparency, we would exhortParliament to take up this issue and frame alegislationalongthelinesoftheU.S.Administrative Procedure Act (with certain welldefinedexceptions)bywhichallsubordinatelegislation is subject to transparent process bywhich due consultations with all stakeholders areheld, and the Rule or Regulation making power isexercised after due consideration of all stakeholders'submissions,togetherwithanexplanatorymemorandum which broadly takes into accountwhat they have said and the reasons for agreeingordisagreeing with them. Not only would suchlegislationreducearbitrarinessinsubordinatelegislation making, but it would also conduce toopenness in governance. It would also ensure theredressal, partial or otherwise, of grievances of theconcerned stakeholders prior to the making ofsubordinate legislation. This would obviate, inmany cases, the need for persons to approach courtsto strike down subordinate legislation on the groundof such legislation being manifestly arbitrary orunreasonable.”

30.In Sitaram Sugar Mills Company v. Union of India: (1990) 3SCC 223, the Supreme Court considered the scope of judicial reviewin the context of zone-wise fixation of price of levy sugar under therelevant statutory order in terms of the Essential Commodities Act,1955 and held as under:-

“47. Power delegated by statute is limited by itsterms and subordinate to its objects. The delegatemust act in good faith, reasonably, intra vires thepower granted, and on relevant consideration ofmaterialfacts.Allhisdecisions,whethercharacterised as legislative or administrative or

quasi-judicial,must beinharmony withtheConstitution and other laws of the land. They mustbe “reasonably related to the purposes of theenabling legislation”. If they are manifestly unjustor oppressive or outrageous or directed to anunauthorised end or do not tend in some degree tothe accomplishment of the objects of delegation,court might well say, “Parliament never intended togive authority to make such rules; they areunreasonable and ultra vires.

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51. repository of power acts ultra vires eitherwhen he acts in excess of his power in the narrowsense or when he abuses his power by acting in badfaith or for an inadmissible purpose or on irrelevantgroundsorwithoutregardtorelevantconsiderations or with gross unreasonableness.”

31.In recent decision rendered by this Court in BGP ProductsOperations GMBH & Anr. v. Union of India and Ors.: W.P.(C)6084/2018 and other connected matters, decided on 14.12.2018, theDivision Bench of this court examined the scope of judicial review inthe context of notification issued under Section 26A of the Actproscribing the manufacture and sale of the drug Oxytocin. The Courtheld as under:-

“90.TheUnion had contended,with someemphasis, that notification under Section 26A ispursuant to exercise of legislative power and thecourts should therefore, exercise restraint whileinterfering with it. This court is of opinion thatthere is no per se bar to reviewing regulatoryprovisions, even if they are made in the exercise

of subordinate legislative power. Such rules orregulations do not per se carry threshold ofimmunity greater than what any other instrument,either statutory or non-statutory would. Therelevant public law standards applicable would beno different, to adjudge their validity…..”

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93. In view of the above discussion and given thenature of the authorities, it is held that the Union’sargument that the impugned notification, as it isthe product of subordinate legislative exercise,carries greater immunity than executive policy iswithout merit. The threshold of immunity in thecase of both: executive policy or norms andstatutory regulations is the same. The submissionis therefore, rejected.”

32.The Court accepted the view that the Courts do not and cannotenter into “merits review” of an executive decision and observed thatthe scope of judicial review in determining the validity of thenotification in question “is narrow and confined to examining whetherthe measure is manifestly arbitrary or vitiated because it did not takeinto account relevant considerations.”The Court, thereafter,proceeded to examine whether the notification prohibiting existinglicenses from manufacturing Oxytocin was “justified, legal and areasonable restriction”.

33.In cases of subordinate legislation, the principal legislation mayitself provide certain safeguards requiring the concerned authority tocomply with certain conditions. Under Section 26A of the Act, the

Central Government is required to be satisfied as to the parameters setout therein. Although, such satisfaction cannot be questioned onmerits, it cannot be disputed that the same must be made on credibleand cogent material and after due application of mind.

34.In the present case, the Sub-committee was to provide thecomprehensive material for enabling the Central Government to takesuch decision. Although, the Sub-committee had received therepresentations from the petitioners and had also afforded thepetitioners hearing, the report does not indicate that any of it wasconsidered and no reason, whatsoever, have been provided forrejecting the explanations provided by the petitioners.

35.In view of the above, this Court is of the view that theimpugned notification cannot be sustained. The same is set aside. Thematter is remanded to DTAB/Subcommittee constituted by it toexamine the issue regarding the said FDC in accordance with thedirections issued by the Supreme Court in Pfizer Ltd. (supra). TheDTAB/Sub-committeeshallsubmitareporttotheCentralGovernment. The Central Government may take an informed decisionwhether to restrict or approve the said FDC.

36.The petition is disposed of in the above terms.

JANUARY 7, 2019RK/pkv/MK

VIBHU BAKHRU, J