Nppa Ordered To Recover Rs 3 Crore From Ranbaxy Firm

The Delhi High Court has directed the National Pharmaceutical Pricing Authority (NPPA) to recover Rs 3,29,71,014 from Shimal Investment & Trading, a Ranbaxy holding company, for overcharging in respect of Gramogyl tablets after two weeks from the date of passing of the order.

The orders follows a writ petition filed by Shimal Investment challenging the demand of Rs 4,38,92,663 (with interests) as per a recovery notice on May 8, 2001. The notice was based on a demand notice of February 24, 2000, issued by NPPA.

The notice by NPPA informed Shimal Investment that it had been manufacturing Gramogyl tablets as a pack of eight tablets (500 mg) and thus was required to adopt the prorata ceiling price of Rs 16.80 with effect from 1998.

The notice further stated that since Shimal Investment continued to charge Rs 24.65 for a strip of six tablets and Rs 31.80 for an eight-tablet strip, the prices charged by Shimal Investment amounted to overcharging.

And, since no information was furnished by the petitioner regarding the actual quantity of Gramogyl tablets sold, the amount was worked out on the basis of the ORG data.

Additional solicitor general Kirit Rawal, Maninder Singh, Pratibha M Singh and Ankur Talwar appeared for the government and NPPA.

Kapil Sibal, counsel for Shimal Investment, submitted that the manufacture of Gramogyl tablets in packs of six had been stopped way back in August 1996, and only one plain film-coated Gramogyl tablet batch was being manufactured at the time of notification of January 27, 1998.

Shimal Investment further submitted that one batch of Gramogyl tablets in packs of eight was already in an advanced stage of production and to avoid wastage of packing material, it was released in the market.

Thereafter, it switched over to dispersible tablets for which no ceiling prices have been fixed.

Justice Mukul Mudgal observed that the earlier notification was wide enough to cover both the Gramogyl tablets as well as the dispersible tablets, and as such directed NPPA to recover the amount.