Notifications under Section 26A of the Drugs and Cosmetics Act declared legally untenable

454 petitions were filed against the 344 Notifications dated 10th March, 2016 of the Government of India, all in exercise of power under Section 26A of the Drugs and Cosmetics Act, 1940 (Drugs Act) prohibiting the manufacture, distribution and sale in the territory of India of drugs 344 Fixed Dose Combination (FDC) Drugs. The petitions have been declared legally untenable.

Section 26A of the Drugs Act, in exercise of powers whereunder the Central Government has issued the impugned Notifications, is as under:-

 26A. Power of Central Government to prohibit manufacture, etc., of drug and cosmetic in public interest.— Without prejudice to any other provision contained in this Chapter, if the Central Government is satisfied, that the use of any drug or cosmetic is likely to involve any risk to human beings or animals or that any drug does not have the therapeutic value claimed or purported to be claimed for it or contains ingredients and in such quantity for which there is no therapeutic justification and that in the public interest it is necessary or expedient so to do, then, that Government may, by notification in the Official Gazette, [regulate, restrict or prohibit] the manufacture, sale or distribution of such drug or cosmetic.

The question raised in the petition was that, is the Central Government entitled to exercise the power under Section 26A without consulting or even involving the Drug Testing Advisory Board (DTAB) and the Drug Control Committee (DCC). Further question which arises is, whether the Central Government can exercise the said power in consultation with and on the advice and recommendation of, another Committee, though also of technical persons only, constituted by the Central Government.

The court held that, undoubtedly Section 26A does not require the satisfaction thereunder of the Central Government to be in consultation with or on the aid, advice or recommendation of DTAB and/or DCC or after having the requisite tests carried out from the Central Drugs Laboratory but a mere absence of the said words from Section 26A would not mean that Section 26A is to be read in isolation.

As per the decision, the functions to be performed by the Central and the State Governments under the Drugs Act are not administrative, but largely technical, and therefore the Drugs Act has devised the machinery for advising the Central and the State Governments on such technical matters arising out of the administration of the Act and to carry out the functions assigned to them under the Act. Merely because the powers vested in the Central Government vide some other Sections of the Act expressly provide for exercise thereof on advice of or in consultation with DTAB and/or DCC does not take away from the wide language used in Sections 5&7 while prescribing the purpose of constitution of DTAB & DCC, to advise the Central Government on technical matters arising out of  administration of the Act and to carry out other functions assigned to Central Government by the Act.

The provision in the Drugs Act for constitution of DTAB and DCC is to ensure institutional integrity and compliance of public law principles in discharge of functions and exercise of power thereunder. Though the legislature, in the Drugs Act, vested the Central Government with the powers to be exercised thereunder but at the same time constituted DTAB to advice the Central Government on technical matters arising out of administration of the Drugs Act and to carry out other functions assigned to the Central Government by the Act and the DCC, also to advice the Central Government and the DTAB on any matter tending to secure uniformity throughout India in administration of the Act.

The Court cited 6 judgments delivered by various High Courts in support of the proposition that the DTAB and DCC play a central role in the decision making process envisaged by Section 26A. On the basis of these judgments, it drew the inference that a decision made under Section 26A without consulting these bodies would be legally untenable.

The court also held that the Central Government, though acting in public interest, seems to have gone about it in a haphazard manner. It claims that the FDCs for manufacture of which licences were issued by SLAs between September, 1988 and 1st October, 2012 without the same having approval of the Drugs Controller were wrongly granted such licences. However instead of taking action for cancellation of said licences, the manufactures were asked to apply for licences to be Drugs Controller, while continuing to manufacture the drugs for which according to the Central Government licence was wrongly given. When such applications were received, instead of the same being considered by the Drugs Controller, who is vested with the power of approval, ten committees were constituted for considering the applications. After the said committees failed to examine all the applications, the Kokate Committee was constituted. The said Kolkata Committee, instead of considering the applications for approval, went into the aspects of risk to consumers and therapeutic value and therapeutic justification and on receiving report whereof impugned Notifications were issued.