Notified drug pricing under price-control orders takes effect on notification; adjustment time does not permit old-price sales.

A notified drug price under the Drugs (Prices Control) Order was construed as becoming operative on notification, with the fifteen-day period treated only as a short adjustment window for unsold stock and business arrangements. It was not read as permission to sell pre-notification stock at the old price, because the scheme was designed to secure the consumer benefit of the notified price and avoid dual pricing in the distribution chain. The 1979 departmental circular and the concept of an effective batch number were treated as subordinate administrative matters and could not override later price-control orders or justify continued sale at the earlier price.

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Issues: (i) Whether the fifteen-day period for carrying into effect a notified price under the Drugs (Prices Control) Order permits sale of pre-notification stock at the old price. (ii) Whether the 1979 departmental circular and the notion of "effective batch number" control the operation of the later price-control orders.

Issue (i): Whether the fifteen-day period for carrying into effect a notified price under the Drugs (Prices Control) Order permits sale of pre-notification stock at the old price.

Analysis: The price-control scheme was held to be designed to secure the benefit of the notified price to consumers and to prevent two different prices for the same formulation in the distribution chain. The fifteen-day period was construed as a grace period for adjustment of unsold stock and business arrangements, not as a window during which manufacturers could continue to clear goods at pre-notification prices. The expressions used in the relevant paragraphs, including the obligation to carry into effect the notified price and the prohibition against sale above the current price list or label price, were read purposively so as not to defeat the regulatory object.

Conclusion: The notified price applies once it becomes operative, and pre-notification stock cannot be sold at the higher old price merely because of the fifteen-day period.

Issue (ii): Whether the 1979 departmental circular and the notion of "effective batch number" control the operation of the later price-control orders.

Analysis: The circular was treated as subordinate to the statutory scheme and incapable of overriding clear provisions of the later orders. The reference to effective batch number in the prescribed form was held to be of administrative relevance only and not a basis for creating different consumer prices depending on batch number. The earlier circular, being inconsistent with the later orders as interpreted, could not govern the outcome.

Conclusion: The 1979 circular and effective batch number cannot override the later price-control orders or justify sale at the old price.

Final Conclusion: The manufacturer appeals failed and the Union of India appeals succeeded, with the Karnataka view affirmed and the contrary Delhi view rejected.

Ratio Decidendi: A notified drug price under the price-control order becomes operative on notification, subject only to a short adjustment period, and neither pre-notification stock nor an administrative circular can defeat the consumer's entitlement to the notified price.

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