Bombay High Court Allows Petitions Challenging NPPA's Interpretation of DPCO 2013 — Price Ceiling Applicable Only to Formulations in First Schedule. The court held that NPPA cannot impose price ceiling on non-scheduled formulations under DPCO 2013, as the order's language is clear and unambiguous.

High Court: Bombay High Court Bench: BOMBAY In Favour of Accused

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2026-05-19 02:42:15

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Case Note & Summary

The petitioners, M/s. Franco Indian Pharmaceuticals Pvt. Ltd. and the Indian Drug Manufacturers Association (IDMA), challenged the interpretation and implementation of the Drugs (Price Control) Order, 2013 (DPCO 2013) by the National Pharmaceutical Pricing Authority (NPPA). The NPPA had been insisting on price ceiling for formulations not listed in the First Schedule to DPCO 2013, leading to demands for recovery of overcharged amounts. The petitioners argued that DPCO 2013, by its plain language, only applies to scheduled formulations. The court analyzed the relevant provisions, including paragraphs 2(1)(a), 3, 4, and 19, and found that the order clearly restricts price control to formulations in the First Schedule. The court also examined a communication dated 20.06.2014 from NPPA to the Department of Pharmaceuticals, which attempted to interpret DPCO 2013 contrary to its text. The court held that NPPA's interpretation was ultra vires and that the doctrine of reading down could not be applied to expand the scope of the order. Consequently, the court allowed the petitions, quashed the impugned communication, and directed that no coercive steps be taken against the petitioners based on demands for non-scheduled formulations.

Headnote

A) Drugs Price Control - Interpretation of DPCO 2013 - Price Ceiling Applicability - The core issue was whether NPPA could fix ceiling prices for formulations not included in the First Schedule to DPCO 2013. The court held that the language of DPCO 2013, particularly paragraphs 2(1)(a), 3, 4, and 19, clearly restricts price control to scheduled formulations. Any attempt to extend it to non-scheduled formulations is ultra vires the order. (Paras 1-30)

B) Administrative Law - Ultra Vires - NPPA's Communication - The court examined the communication dated 20.06.2014 issued by NPPA to the Department of Pharmaceuticals, which purported to interpret DPCO 2013 contrary to its plain language. The court held that such interpretation was beyond NPPA's powers and inconsistent with the order. (Paras 15-25)

C) Constitutional Law - Doctrine of Reading Down - The court declined to read down DPCO 2013 to include non-scheduled formulations, as the language was clear and unambiguous. Reading down would amount to rewriting the order, which is impermissible. (Paras 26-30)

Issue of Consideration

Whether the National Pharmaceutical Pricing Authority (NPPA) can impose price ceiling on formulations not listed in the First Schedule to the Drugs (Price Control) Order, 2013 (DPCO 2013).

Final Decision

The court allowed the petitions, quashed the communication dated 20.06.2014, and directed that no coercive steps be taken against the petitioners based on demands for non-scheduled formulations.

Law Points

Interpretation of DPCO 2013
Price ceiling applicability
First schedule formulations
NPPA jurisdiction
Doctrine of reading down
Ultra vires

Case Details

2026:BHC-OS:9091-DB

Writ Petition No. 2216 of 2015; Writ Petition No. 885 of 2015

2026-04-10

Manish Pitale, Shreeram V. Shirsat

2026:BHC-OS:9091-DB

Mr. Navroz Seervai, Ms. Arti Raghavan, Ms. Tavleen Saini; Mr. Dheeraj Nair, Mr. Pratik Pawar, Ms. Shanaya Cyrus Irani, Ms. Avni Sharma, Ms. Sanjana Pandey; Mr. M. S. Bhardwaj; Mr. G. R. Sharma, Mr. D. P. Singh

M/s. Franco Indian Pharmaceuticals Pvt. Ltd. & Anr.; Indian Drug Manufactures Association

Union of India & Ors.; Ministry of Chemicals and Fertilizers & Ors.

Nature of Litigation

Writ petitions challenging the interpretation and implementation of DPCO 2013 by NPPA.

Remedy Sought

Petitioners sought a declaration that price ceiling under DPCO 2013 applies only to formulations in the First Schedule, and quashing of NPPA's communication dated 20.06.2014.

Filing Reason

NPPA insisted on price ceiling for non-scheduled formulations and issued demand notices for recovery of overcharged amounts.

Previous Decisions

Interim relief was granted in both petitions restraining coercive steps.

Issues

Whether NPPA can impose price ceiling on formulations not listed in the First Schedule to DPCO 2013. Whether the communication dated 20.06.2014 issued by NPPA is ultra vires DPCO 2013.

Submissions/Arguments

Petitioners argued that DPCO 2013, by its plain language, applies only to scheduled formulations. Respondents argued that NPPA's interpretation was correct and necessary to control drug prices.

Ratio Decidendi

The language of DPCO 2013 clearly restricts price control to formulations in the First Schedule; NPPA cannot extend it to non-scheduled formulations. The doctrine of reading down cannot be applied to expand the scope of the order.

Judgment Excerpts

The petitioners contend that the respondent No.3 i.e. the National Pharmaceutical Pricing Authority (NPPA) is wrongly interpreting DPCO 2013 to insist on price ceiling for formulations that do not form part of the first schedule appended to DPCO 2013. Since the respondent No.3-NPPA proceeded on the basis that formulations, not specifically mentioned in the first schedule to DPCO 2013, were also amenable to price ceiling, certain claims were being made against manufacturers.

Procedural History

Writ Petition No. 2216 of 2015 and Writ Petition No. 885 of 2015 were filed challenging NPPA's interpretation. Interim relief was granted in both petitions. The court heard the matters and reserved judgment on 7th March 2026, pronouncing on 10th April 2026.