Delegated price fixation remains a legislative function; natural justice does not apply, though relevant material must be disclosed on review.

Price fixation under the Drugs (Prices Control) Order, 1979 was treated as subordinate legislation operating generally in the public interest, so the rules of natural justice did not apply absent express statutory incorporation. The Court held that the enquiry into cost factors and reasonable return did not make the exercise quasi-judicial, and no pre-decisional hearing was required. The review mechanism under paragraph 27 was also characterised as a legislative review, not an adjudicatory appeal, although relevant material reasonably needed for an effective review had to be disclosed. The High Court's quashing of the price notifications was set aside and the writ petitions failed.

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Issues: (i) Whether fixation of maximum prices under the Drugs (Prices Control) Order, 1979 was a legislative function not attracting the rules of natural justice; (ii) whether the review mechanism under paragraph 27 required prior disclosure of the entire basis of price fixation and amounted to a quasi-judicial hearing.

Issue (i): Whether fixation of maximum prices under the Drugs (Prices Control) Order, 1979 was a legislative function not attracting the rules of natural justice.

Analysis: Price fixation under the control order was held to be subordinate legislation operating generally upon a class of commodities and transactions, directed to future conduct, and enacted in the public interest to secure equitable distribution and availability at fair prices. The Court reiterated that legislative action, whether plenary or delegated, is not subject to rules of natural justice unless the statute expressly so provides. The mere fact that the order required enquiry and consideration of cost factors and reasonable return did not convert the exercise into a quasi-judicial one.

Conclusion: Price fixation under paragraph 3 was legislative in character and was not invalid for want of a pre-decisional hearing or other rules of natural justice.

Issue (ii): Whether the review mechanism under paragraph 27 required prior disclosure of the entire basis of price fixation and amounted to a quasi-judicial hearing.

Analysis: The review under paragraph 27 was treated as a review of subordinate legislation by the same subordinate law-making authority rather than as a quasi-judicial appeal. It was held that the Government was not bound to disclose every item of information collected, but was obliged to furnish relevant material reasonably required to make the review remedy effective, particularly information relating to average cost of production by an efficient manufacturer and reasonable return on net worth. The hearing contemplated by the review provision was not an adjudication confined to an individual manufacturer, but a legislative review whose outcome would affect all manufacturers and consumers. The Court also held that the challenge to interim stays could not outweigh the public interest in implementation of controlled prices.

Conclusion: Paragraph 27 provided a legislative review mechanism, not a quasi-judicial hearing, though relevant information reasonably sought by the aggrieved manufacturer had to be disclosed at the review stage.

Final Conclusion: The appeals were allowed, the High Court's quashing of the price notifications was set aside, and the writ petitions failed, subject to directions for expeditious hearing and disposal of the review applications.

Ratio Decidendi: Price fixation under delegated legislation for essential commodities is ordinarily a legislative function governed by the statutory scheme alone, and natural justice does not apply unless expressly incorporated; a review provided within that scheme may require disclosure of relevant material, but it does not convert the price-fixation exercise into a quasi-judicial determination.

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