JUDGMENT - SHAH A.P. J.: - Rule. Respondents waive service. By consent, Rule made returnable forthwith. 2. The 1st petitioner is a company registered under the Companies Act, 1956 and engaged in manufacture and distribution of drugs and pharmaceuticals, including life saving and essential drugs. The 2nd petitioner is a shareholder of the 1st petitioner company and he is a national and citizen of India. The petitioners seek to challenge the show-cause notice dated 16th June, 1997 and orders dated 7th October, 1998, 9th April, 1999 and 23rd April, 1999 where the petitioner company has been directed to deposit overcharged sum of Rs. 1,90,71,795 in relation to Betnelan tablets for the period 1st January, 1995 to 17th July, 1995 with penal interest under Drugs (Price Control) Order, 1995, hereinafter referred to as DPCO, 1995, read with Essential Commodities Act, 1955. We may hasten to add that the amount of Rs. 1,90,71,795 on fresh calculation is fixed at Rs. 1,20,42,312. The brief facts and circumstances giving rise to this petition are stated hereinafter. 3. The Drugs (Price Control) Order, 1987, hereinafter referred to as DPCO, 1987, was promulgated by the Central Government on 26th August, 1987 in exercise of the powers under section 3 of the Essential Commodities Act, 1955. As Betamethasone was classified as scheduled bulk drug under Schedule II of DPCO, 1987, Central Government was empowered to notify the price of the said scheduled bulk drug and related formulation. The manufacturer of a scheduled bulk drug and formulation has to adopt the price so notified by the Central Government within the prescribed period. The petitioner company was granted exemption from the price control under Para 28 of DPCO, 1987 in respect of the said, drug Betamethasone by the Central Government on 28th February, 1992 and the period of exemption was upto 31st December, 1994. In the meanwhile the Central Government notified the ceiling price of Rs. 2.98 per strip for formulations relating to bulk drug Betamethasone on 11th February, 1992. The petitioner company was not required to adopt the ceiling price as notified on 11th February, 1992 upto 31st December, 1994, as it was exempted from price control by the Central Government . However, even after the expiry of the exemption period w.e.f. 1st January, 1995, the petitioner company continued to adopt its own price of Rs. The petitioner company was not required to adopt the ceiling price as notified on 11th February, 1992 upto 31st December, 1994, as it was exempted from price control by the Central Government . However, even after the expiry of the exemption period w.e.f. 1st January, 1995, the petitioner company continued to adopt its own price of Rs. 3.74 per stip for Betamethasone formulations which was higher than prevailing ceiling price for the said formulation. Therefore a show cause notice was issued to the petitioner company by the Department of Chemicals and petrochemicals on 10th June, 1997 in which the amount overcharged was initially calculated as Rs. 1,90,71,795 during the period from 1st January, 1995 to 17th July, 1995 and the company was directed to deposit the overcharged amount under Para 15 of DPCO, 1987 alongwith interest at the rate of 15% p.a. In reply to the said notice it was contended by the petitioner company that under Guideline 1 of 1989 dated 14th February, 1989 there was no specific provision requiring the manufacturer of the scheduled bulk drug/formulation, to adopt the then prevailing ceiling price of the scheduled bulk drug/formulation after the period of exemption under Para 28 of the DPCO, 1987. It was further contended by the petitioner that in the absence of specific provision in Guideline 1 of 1989 the company was at liberty to charge any price till the revision of the price by the Government of India. Secondly, the petitioner company contended that the quantity of the said formulation manufactured by it during the period from 1st January, 1995 to 17th July, 1995 should only be considered for the purpose of calculation of overcharged amount. Subsequent to the formation of NPPA, the case was transferred to NPPA and letters were issued by the department to the petitioner company to deposit the overcharged amount. At the request of the petitioner company a personal hearing was granted to them. By the impugned orders the petitioner company was called upon to deposit a sum of Rs. 1,90,71,795 in relation to the Betamethasone tablets for the period from 1st January, 1995 to 17th July, 1995 with interest at the rate of 15% p.a. The said sum on recalculation was reduced to Rs. 1,20,42,312/- 4. The learned Advocate General appearing for the petitioner company raised two submissions before us. 1,90,71,795 in relation to the Betamethasone tablets for the period from 1st January, 1995 to 17th July, 1995 with interest at the rate of 15% p.a. The said sum on recalculation was reduced to Rs. 1,20,42,312/- 4. The learned Advocate General appearing for the petitioner company raised two submissions before us. First, the learned Advocate General contended that under Guideline 1 of 1989 dated 14th February, 1989 it was specifically provided that before expiry of the period of exemption the manufacturer should submit an application in Form 1 for fixation of the price of such bulk drug under the provisions of DPCO, 1987. Therefore the petitioner was obliged to make the necessary application, which the petitioner company did and respondents were equally obliged to fix the price. Till such time the application was pending, price at which the petitioners were selling the goods would continue. The learned Advocate General urged that there was no provision in DPCO, 1987 or in Guideline 1 of 1989 compelling the petitioner company to follow any other price. Therefore according to the learned Advocate General the show cause notice is contrary to the express provisions of DPCO, 1987 and the impugned orders are wholly illegal. Secondly, the learned Advocate General submitted that the petitioner company had legitimate expectation that the drugs manufactured by the petitioner company during the exemption period would be allowed to be sold at the price fixed by the petitioner company. In fact the demand raised by the department on the alleged sale of formulation of Bentein made by the petitioner company during the period 1st January, 1995 to 17th July, 1995 includes tablets manufactured even prior to 1st January, 1995 i.e. when the exemption was valid. Therefore he urged that the very premise on which the show cause notice quantifying the demand was issued is erroneous and contrary to law. It was urged that the correct computation of the demand would have been to multiply the difference in price of Rs. 0.76 (Rs. 3.74 and Rs. 2.98) by the quantity produced or manufactured between 1st January, 1995 and 17th July, 1995. According to the learned Advocate General this would work out only Rs. 29.64 lacs. Therefore at the highest the petitioner company would be liable to pay an amount of Rs. 29.64 lacs only. 5. On the other hand Mr. 0.76 (Rs. 3.74 and Rs. 2.98) by the quantity produced or manufactured between 1st January, 1995 and 17th July, 1995. According to the learned Advocate General this would work out only Rs. 29.64 lacs. Therefore at the highest the petitioner company would be liable to pay an amount of Rs. 29.64 lacs only. 5. On the other hand Mr. S.M. Shah, learned Counsel appearing for the respondents submitted that under the provisions of DPCO, 1987, the ceiling price in respect of scheduled formulations was notified under Paras 8 and 9(6) of DPCO, 1987 and all the manufacturers of the said formulation had to adopt the ceiling price within 15 days from the date of notification. It was further submitted by Mr. Shah that in this case also the petitioner company had to adopt the ceiling price in respect of the formulation with effect from 1st January, 1995 like all other manufacturers of the said formulation. Mr. Shah urged that it is not open to any manufacturing company to contend that it will not adopt the ceiling price fixed by the Central Government till the price is specifically fixed in case of that particular company. As regards the submission of the learned Advocate General that only quantity manufactured by the petitioner company during the period 1st January, 1995 to 17th July, 1995 ought to have been considered for calculation of overcharged amount, Mr. Shah submitted that this is against the spirit and objective of the Drugs Policy and against DPCO provisions. According to Mr. Shah as per the Drug Policy the essential drugs should be made available to the public at affordable prices. Hence the entire quantity sold to the public during the period from 1st January, 1995 to 17th July, 1995 is liable to be considered for calculating overcharged amount. 6. Before adverting to the submissions advanced at the Bar, we may briefly refer to the provisions of the Essential Commodities Act, 1955 and DCPO, 1987. The Essential Commodities Act, 1955 was enacted by the Parliament with an objective to provide, in the interest of the general public for the control of production, supply and distribution of trade and commerce in commodities which are specified in the said Act as essential commodities. Section 2(a) of the said Act defines essential commodities and the item drug finds place in Clause 2(a)(iv) of the said Act. Section 2(a) of the said Act defines essential commodities and the item drug finds place in Clause 2(a)(iv) of the said Act. Section 3(1) of the Essential Commodities Act enables the Central Government, if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair price, to provide for regulating or prohibiting by order, the production, supply and distribution thereof and trade and commerce therein. In particular, section 3(2)(c) enables the Central Government, to make an order providing for controlling the price at which any essential commodity may be bought or sold. It is in pursuance of the powers granted to the Central Government by the Essential Commodities Act, that Drugs (Prices Control) Order, 1987 was promulgated by the Central Government on 26th August, 1987. Under DPCO, 1987, 167 bulk drugs were initially classified as scheduled bulk drugs under Schedule II and the Central Government was empowered to notify the price of the scheduled bulk drugs and related formulations. All the manufacturers of the scheduled bulk drugs and formulations have to adopt the price so fixed by the Central Government within the prescribed period. If the manufacturers were to charge more than the notified price, they had to deposit the amount so overcharged with the Central Government under para 15 of the DPCO, 1987. Under Para 28 of the DPCO, 1987, the Central Government was empowered to grant exemption to the manufacturing unit from price control in case the said bulk drug was manufactured by the unit from the basic stage and based upon indigenous R and D. Para 28 of the DPCO, 1987 reads as under : "28. Power to exempt. - (1) The Government may, having regard to the factors mentioned in sub-paragraph (2) and subject to such conditions, if any, as it may specify, by order in the Official Gazette, exempt any drug manufacturing unit or a class of such units from the operation of all or any of the provisions of this order and may, as often as may be, revoke or modify such order. (2) While granting exemption under sub-paragraph (1), the Government shall have regard to all or any of the following factors relating to the drug manufacturing unit or a class of such units, namely; (a) number of workers employed; (b) amount of capital invested; (c) range and type of products manufactured; (d) sales turnover (e) production of bulk drug basic stage by process developed through indigenous Research and Development". 7. The relevant portion of Guideline 1 of 1989, which is heavily relied upon by the petitioners, is also reproduced herein below : "In exercise of the powers conferred by paragraph 25 of the Drugs (Price Control) Order, 1987, (hereinafter called the "said Order"), the Central Government hereby issues guidelines for the purpose of grant of exemption under para 28 of the Order to such bulk drug manufacturing unit from the provisions of para 3 of the said Order, in respect of such bulk drugs as is/are produced by that unit from the basic stage by a process of manufacture developed through its own Research and Development effort, for a specified period not exceeding five years reckoned from the date of commencement of commercial production of such bulk drugs subject to the following namely...." 8. The learned Advocate General relying upon the above Guidelines urged that the exemption granted by the Central Government is qua the manufacturing of drug and not sale of the drugs. Therefore according to him the drug which was manufactured by the petitioner company prior to 1st January, 1995 would continue to be exempt from operation of the provisions of DPCO, 1987, although the drug so manufactured during the exemption period was sold after the expiry of exemption period. He submitted that the guidelines would not be interpreted in a manner which would conflict with the provisions of DPCO, 1987 and the correct computation of the demand would have been to multiply the difference in price by the quantity produced or manufactured between 1st January, 1995 and 17th July, 1995. We are unable to accept the submission of the learned Advocate General. In our opinion such an interpretation would run counter to the object of the Essential Commodities Act as also DPCO, 1987. We are unable to accept the submission of the learned Advocate General. In our opinion such an interpretation would run counter to the object of the Essential Commodities Act as also DPCO, 1987. In the land mark judgment in the case of (Union of India v. Cynamide India Ltd)1, 1987(2) S.C.C. 720 , the Supreme Court held that price fixation is neither the function nor the forte of the Court. The Court is concerned neither with the policy nor with the rates. However, if the legislature has decreed the pricing policy and prescribed the factors which should guide the determination of the price, the Court will, if necessary, enquire into the question whether the policy and the factors are present to the mind of the authorities specifying the price. But the examination will stop there and the Court will go no further. It was, however, added that the question of any hostile discrimination will be examined by the Court. In Cynamide case the Court specifically held that the price fixation is in the nature of subordinate legislation and is not subject to rules of natural justice. The Court then proceeded to observe in para 7 as follows : "A price fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transactions. It is a direction of a general character, not directed against a particular situation. It is intended to operate in the future. It is intended to operate in the future. It is conceived in the interests of the general consumer public. The right of the citizen to obtain essential articles at fair prices and the duty of the State to so provide them are transformed into the power of the State to fix prices and the obligation of the producer to charge no more than the price fixed. Viewed from whatever angle, the angle of general application, the prospectiveness of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question the price fixation is ordinarily a legislative activity. Price fixation may occasionally assume an administrative or quasi judicial character when it relates to acquisition or requisition of goods or property fro individuals and it becomes necessary to fix the price separately in relation to such individuals. Price fixation may occasionally assume an administrative or quasi judicial character when it relates to acquisition or requisition of goods or property fro individuals and it becomes necessary to fix the price separately in relation to such individuals. Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the Government or its nominee and the price to be paid is directed by the legislature to be determined according to the statutory guidelines laid down by it. In such situation the determination of price may acquire a quasi judicial character. Otherwise, price fixation is generally a legislative activity. We also wish to clear a misapprehension which appears to prevail in certain circles that price fixation affects the manufacturer or producer primarily and therefore fairness requires that he be given an opportunity and that fair opportunity to the manufacturer or producer must be read into the procedure for price fixation. We do not agree with the basic premise that price fixation primarily affects manufacturers and producers. Those who are most vitally affected are the consumer public. It is for their protection that price fixation is resorted to and any increase in price affects them as seriously as any decrease does a manufacturer, if not more." (emphasis supplied) 9. In an earlier decision of the Supreme Court in the case of (M/s. Prag Ice and Oil Mills and another v. Union of India)2, 1978(3) S.C.C. 459 , a seven Judge Bench of the Supreme Court held that reasonable profit of dealer is not a sine qua non but the interest of consumer a primary consideration. The Court while dealing with the Mustard Oil (Price Control) Order, 1977 observed in para 39 as follows : "We may also mention that the view we have taken dominant purpose of section 3(1) of the Act is in accordance with the following elucidation of its purpose in Meenakhi Mills case (supra) : The question of fair price to the consumer with reference to the dominant object and purpose of the legislation claiming equitable distribution and availability at fair price is completely lost sight of if profit and the producers return are kept in the forefront. The maintenance or increase of supplies of the commodity or the equitable distribution and availability at fair prices are the fundamental purposes of the Act." 10. The maintenance or increase of supplies of the commodity or the equitable distribution and availability at fair prices are the fundamental purposes of the Act." 10. We may now proceed to examine the relevant provisions of DPCO, 1987 in the light of these well established principles. Para 2 of DPCO, 1987 contains definition of bulk drug, drug, and formulation. Clause (j) of Para 2 defines ceiling price to mean a price fixed by the Government for formulations specified in Category I or Category II of the Third Schedule in accordance with the provisions of paragraphs 6 and 7 keeping in view the cost or efficiency, or both, or major manufactures of such formulations. Clause (q) defines price list to mean a price list referred to in the Order and includes a supplementary price list. Clause (r) defines retail price to mean the retail price of a drug arrived at or fixed in accordance with the provisions of the Order and includes a ceiling price. Para 15 of DPCO, 1987 lays down as follows : "15. Power to recover dues. - Notwithstanding anything contained in this Order, the Government may, if it considers necessary, by notice, require the manufacturers, importers, or distributors, as the case may be, to deposit the amount accrued due to charging of prices higher than those fixed or notified by the Government as per the provisions of this Order." Para 16 deals with the price list and Clauses 3 and 4 thereof which are material for our purpose read as follows : "(3) Every manufacturer or importer shall give effect to the price of a bulk drug or formulation, as the case may be, as fixed by the Government from time to time, within fifteen days from the receipt by such manufacturer or importer of the communication in this behalf from the Government and issue a supplementary price list in this regard to the dealers, State Drugs Controllers, and the Government and indicate necessary reference to such price fixation. (4) Every dealer shall display the price list on a conspicuous part of the premises where he carries on business in a manner so as to be easily accessible to any person wishing to consult the same." 11. Paras 17 and 18 of DPCO, 1987 are also material and read as follows : "17. Retail price to be displayed on lable of container. Paras 17 and 18 of DPCO, 1987 are also material and read as follows : "17. Retail price to be displayed on lable of container. - Every manufacturer, importer or distributor of a formulation intended for sale shall display in indelible print mark, on the lable of container of the formulation and the minimum pack thereof offered for retail sale, the maximum retail price of that formulation with the words "retail price not to exceed" preceding it, and "local taxes extra" succeeding it; Provided that in the case of container consisting of smaller saleable packs, the retail price of such smaller pack shall also be displayed on the lable of each smaller pack and such price shall not be more than the pro-rata price of the main pack rounded off to the nearest paisa. 18. Control of sale prices of bulk drugs and formulation-No person shall sell any bulk drug or formulation to any consumer at a price exceeding the price specified in the current price list or price indicated on the lable of the container or pack thereof whichever is less plus the local taxes, if any, payable. Explanation. - For the purposes of this paragraph "local taxes" shall include sales tax and octroi actually paid by the retailer under any law for the time being in force in a particular area)." 12. Para 28 of the DPCO, 1987 contains power to exempt any unit from the operation of all or any such provisions of the Order. However, this provision cannot be read in isolation but will have to be read alongwith other relevant provisions of DPCO, 1987. On a conjoint reading of the provisions of DPCO, 1987 it is clear that exemption from the price control would operate for the period of the exemption only. If the benefit of exemption is to be extended to those quantities of formulation after the period of exemption, the company would continue to enjoy the benefit of price exemption even after the period of exemption. This would render the provisions of paras 15 and 17 of DPCO, 1987 nugatory. The DPCO, 1987 which was promulgated under section 3 of the Essential Commodities Act is primarily made to protect the public interest and to ensure that the scheduled bulk drugs/formulations are available to the public at affordable prices. This would render the provisions of paras 15 and 17 of DPCO, 1987 nugatory. The DPCO, 1987 which was promulgated under section 3 of the Essential Commodities Act is primarily made to protect the public interest and to ensure that the scheduled bulk drugs/formulations are available to the public at affordable prices. If the interpretation placed by the petitioner company on the provisions of the DPCO, 1987 is accepted, it would mean that petitioner company by distorted production pattern of bulk drug/formulation would continue to charge higher price for the said formulation beyond the period of exemption and thereby would be acting against the public interest. In this regard the learned Counsel for the respondents particularly highlighted the fact that the quantity manufactured by the petitioner company during 1st January, 1995 to 17th July, 1995 was only 38, 32, 975 strips whereas the quantity sold during the said period as per the Org Was 1, 58, 45, 148 Strips. The purpose of Guideline 1 of 1989 is to subserve the provisions of DPCO and the guidelines should not be interpreted in such a manner as to conflict with the provisions of DPCO itself. If the interpretation suggested by the petitioners is accepted it would make the provisions of the DPCO especially paras 15 and 17 completely meaningless. The DPCO, 1987 specifically provides that the ceiling price has to be adopted by all the units within the prescribed period and Guideline 1 of 1987 cannot be interpreted contrary to the said provisions of DPCO, 1987. 13. In (B.K. Industry others v. Union of India)3, A.I.R. 1993 S.C. 2123, the Supreme Court applying the previous decision in (Keshavanand Bharti Sripadagalvaru v. State of Kerala)4, A.I.R. 1973 S.C. 1461 case held that the power of exemption cannot be utilized for, nor can it extend to the scrapping of the very Act itself. Applying the same analogy the Court observed that the power of exemption cannot be utilized to dispense with the very levy created under section 3 of the Essential Commodities Act and for that matter section 3 of the Central Excise Act. In the light of this settled position of law, we are inclined to hold that the interpretation suggested by the petitioner company cannot be accepted as it would render or frustrate the object of DPCO, 1987. In the light of this settled position of law, we are inclined to hold that the interpretation suggested by the petitioner company cannot be accepted as it would render or frustrate the object of DPCO, 1987. Primarily the objective behind the essential Commodities Act, 1955 and DPCO, 1987 is to ensure that essential commodities are made available and accessible to the consumers at large at a reasonable and fair price and with this objective that the Central Government has been empowered to fix the ceiling price. Thereof it would be open for the company to sell a drug beyond the ceiling price once exemption comes to an end. We have therefore no hesitation in rejecting the submission that recovery should be restricted only to the drug manufactured during the period from 1st January, 1995 to 17th July, 1995. 14. The next submission made on behalf of the petitioner company is that there was no provision in DPCO, 1987 compelling the petitioner company to adopt ceiling price fixed by the Government of India. DPCO, 1987 specifically contemplated that before expiry of the exemption period a manufacturer would submit an application in Form 1 for fixation of the price of such a bulk drug under the provisions of the DPCO, 1987. Our attention was also drawn to Clause (L) of Guideline 1 of 1995, which reads as under : "The manufacturer who has been given such price exemption for a bulk drug shall submit application(s) in Form I and Form II of the Drugs (Price Control) Order, 1995 for fixation of price of such bulk drug (s) and formulations respectively under the provisions of the said Order, four months before the expiry of the period of exemption. However, if there is an existing notified price for bulk drug or ceiling price for formulations, the manufacturer shall follow the same on the expiry of the exemption and obtain price approval for non-ceiling packs of for mulation(s) based on that bulk drug" It is submitted that in the absence of similar provision in DPCO, 1987 the company was not bound to accept the ceiling price fixed by the Government and till the ceiling price was fixed in accordance with the guidelines the company was entitled to sell the drug at such price fixed by it. 15. In our opinion, the submission is devoid of any substance. 15. In our opinion, the submission is devoid of any substance. Under the substantive part of DPCO, 1987 the ceiling price in respect of scheduled formulation was included in paras 8 and 9(6) and all the manufacturers of the formulations had to adopt ceiling price within 15 days of the date of notification. Paras 8 and 9(6) are reproduced hereinbelow : "8. Power of Government to fix ceiling prices of formulations specified in Category I of the Third Schedule. - (1) The Government may, from time to time, by notification in the Official Gazette, fix the ceiling price of a formulation specified in Category I of the Third Schedule in accordance with provisions of paragraphs 6 and 7 and such price shall operate as the ceiling sale price for every manufacturer of such formulations. (2) The Government may, of its own motion or on application, made to it in this behalf by a manufacturer in Form 2 or Form 3 as the case may be, after calling for such information as it may consider necessary, by notification in the Official Gazette for a revised ceiling price for a formulation. 9(6). Without prejudice to the provisions of the preceding sub-paragraphs- (a) The Government may, if it considers necessary or expedient so to do, by notification in the Official Gazette, fix or revise a ceiling price for any formulation specified in the Third Schedule and any manufacturer of such formulation may sell such formulation may sell such formulation at a price not exceeding the price so notified and intimate the Government accordingly. (b) With a view to enabling the manufacturers of similar formulations in pack sizes other than those for which ceiling prices referred to in the above sub-paragraphs have been notified, to market such formulation packs at worked out prices, the Government may, by notification in the Official Gazette fix norms from time to time and such manufacturer shall work out the price of their respective formulation packs in accordance with such norms and marks such formulation packs after thirty days of intimation to the Government in this behalf. Provided that the Government; may, if it considers necessary by order, revise the price so intimated by the manufacturer and upon such revision, such manufacturer shall not sell such formulation at a price exceeding the price so revised". 16. Provided that the Government; may, if it considers necessary by order, revise the price so intimated by the manufacturer and upon such revision, such manufacturer shall not sell such formulation at a price exceeding the price so revised". 16. In view of the above specific provision contained in DPCO, 1987 the petitioner company had to adopt the then prevailing ceiling price in respect of the formulation with effect from 1-1-1995 like other manufacturers of the said formulation. In the result petition fails and is dismissed with no order as to costs. On the request of the learned Advocate General ad interim order of status quo is extended for a period of 8 weeks. Petition dismissed. -----