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TMI Blog2008 (5) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... s, esters, stereo-isomers and derivatives, conforming to pharmacopoeial or other standards specified in the Second Schedule to the Drugs and Cosmetics Act, 1940 (23 of 1940), and which is used as such or as an ingredient in any formulation; 2.(c) "ceiling price" means a price fixed by the Government for scheduled formulation in accordance with the provisions of para. 9. 2(f) "drug" includes- (i) .... .... (ii) .... .... (iii) bulk drugs and formulations; 2(l) "manufacture" in relation to any drug, includes any process or part of a process for making, altering, finishing, packing, labelling, breaking or otherwise treating or adapting any drugs with a view to its sale and distribution, but does not include the compounding or dispensing of any drug or the packing of any drug in the ordinary course of retail business, and "to manufacture" shall be construed accordingly; 2(r) "price list" means a price list referred to in paragraphs 14 and 15 and includes a supplementary price list; 2(s) "retail price" means the retail price of a drug arrived at or fixed in accordance with the provisions of this Order and includes a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The High Court opined that the exemption Notification dated 29th August, 1995 clearly show that the same related to drugs manufactured by 31st October, 1999 and thus the same would apply even if the drugs have been sold after the said date. 11. Mr. Gopal Subramaniam, learned Additional Solicitor General of India appering on behalf of the appellant, would submit :- i) That the High Court committed a serious error in passing the impugned judgment in so far as it failed to take into consideration that 1995 Order is concerned with distribution and not manufacture. ii) An exemption Notification must be strictly construed and so construed, it must be held that no benefit could be claimed by the first respondent beyond the period of 31st October, 1999 as by reason of the said exemption Notification it could sell the drug at any price and not at the stipulated one and thus, as soon as the period of exemption expired, the price provided for under the 1999 Order was required to be charged. iii) As a manufacturer the first respondent could sell its products but the exemption was in regard to sale only and not to manufacturer, the impugned judgment cannot be sustained. 12. Mr. S. Ganesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder :- 25. Power to exempt.- (1) Government may, having regard to the factors mentioned in sub-paragraph (2) and subject to such conditions as it may specify by an order in the Official Gazette, exempt any manufacturer from the operation of all or any of the provisions of this Order. (2) While granting exemption under sub-paragraph (1), the Government shall have regard to all or any of the following factors,- (a) number of workers employed: (b) amount of capital invested; (c) range/group and type of products manufactured; a) sales turnover; b) .... ..... c) production of a new drug which has not been produced elsewhere, if developed through indigenous research and development." 20. We may, at this juncture, also notice the exemption Notification dated 29th August, 1995, which reads thus :- " ORDER S.O. No./ 7153 (E), in exercise of the powers conferred by sub-paragraph (1) of Paragraph 25 of the Dugs (Price Control) Order, 1995, the Central Government having regard to the factors specified in the clause(e) of sub- paragraph (2) of paragraph 25 of the said order and also having been satisfied for the need to do so in the public interest hereby exempts the bulk d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the retail price. Various other informations are also required to be furnished. 26. The contention of learned Additional Solicitor General that the drug could be manufactured upto 31st October, 1999 but on and from 1st November, 1999 it could be sold only at the price specified in the order, in our opinion, cannot be accepted. If the first respondent was entitled to avail the benefit of the exemption notification till the midnight of 31st October, 1979, sometime would be necessary for it to market the same. There must be some time lag between the period the drug is manufactured and the actual sale by a retail dealer to the customer. 27. The Court while construing an exemption notification cannot lose sight of the ground realities inclduing the process of marketing and sale. The exemption order dated 29th August, 1995 is clear and unambiguous. By reason thereof what has been exempted is the drug which was manufactured by the company and the area of exemption is from the operation of the price control. They have a direct nexus. They are co related with each other. While construing an exemption notification not only a pragmatic view is required to be taken but also the practical a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable goals in a reasonable manner; and second, the interpreter should accept the non-rebuttable presumption that members of the legislative body sought to fulfill their constitutional duties in good faith. This formulation allows the interpreter to inquire not into the subjective intent of the author, but rather the intent the author would have had, had he or she acted reasonably." (Aharon Barak, Purposive Interpretation in Law, (2007) at pg. 87) While referring to its decision in Oriental Insurance Co. Ltd. vs. Brij Mohan and others : 2007 (7) Scale 753 it applied the doctrine of purposive construction. Applying the principle of doctrine of purposive construction, we are of the opinion that meaningful purpose could be achieved only if the construction of the notification as indicated hereinbefore is adopted and no other. 30. There is no merit in this appeal which fails and is accordingly dismissed with costs. Counsel's fee assessed at ₹ 50,000/- ( S.B. SINHA ), J. ( V.S. SIRPURKAR ) New Delhi April , 2008 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. __________OF 2008 (Arising out of SLP (C) No. 8362 of 2006) Union of India .. ..... 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