judgement:
No. 3492 of 1983.
Under Article 32 of the Constitution of India.
Petitioner in person.
A.K. Ganguli, M.S. Rao, S.N. Kacker, A.B. Divan, G.V. Iyer, C.V.S. Rao, G. Chandra, P. Parmeswaran, H.K. Puri, Vimal Dave, Swaraj Kaushal, R.K. Mehta and M.K.D. Namboodiri for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The petitioner, an advocate by profession is the General Secretary of Public Interest Law Service Society, Cochin.
In his application as amended on 7th February, 1983, under Article 32 of the Costitution he has asked for directions, in public interest, banning im port, manufacture, sale and distribution of such drugs which have been recommended for banning by the Drugs Consultative Committee and has also asked for cancellation of all li cences authorising import, manufacture, sale and distribu tion in respect of 471 such drugs.
He has also asked for a direction to the Central Government to constitute a high powered Authority to go into the hazards suffered by people of the country on account of such drugs being in circulation and suggest remedial meas ures including award of compensation.
He has further prayed that directions should be given for framing of strict regu lations to ensure the quality and standard of approved drugs and to ensure weeding out of same, harmful as also injurious drugs from the market.
The petitioner has alleged that the drug industry in India is dominated by multi national Corpo rations originally based in U.S.A.U.K., Federal Republic of Germany, Swedon, Japan, France and the like.
According to the petitioner these Corporations have large resources and make huge profits.
The control exercised by the Government in this country on such Corporations is minimal and inade quate.
The disease prone sub continent of India has been used as pasture ground by these Corporations.
The Hathi Committee, appointed by the Central Government in its Report submitted in 1974, highlighted the havoc played by these Corporations in the Indian scene and pleaded for nationalis ing the drug industry in the best interest of the Indian people.
The recommendation has not been accepted by the Government.
According to the petitioner several drugs banned in the advanced west after appropriate analytical research are routed into India and on account on lack of control and sluggish enforcement of the law conveniently find their way into the market.
What is poison to the human body in the west is equally poison to people in India but not knowing the repercussion thereof on the human system, such drugs freely circulate and are even prescribed for patients.
The Central Government announced its drug policy in 1979 and set out a guideline covering the relevant aspects of the trade.
According to the petitioner no attempt has been made to give effect to the policy and there has really been no enforcement.
The objectives outlined therein have remained on paper.
Though the policy indicated that Government in tended to develop indigenous drug technology so as to become self sufficient, no effective steps have been taken in this direction.
The poor illiterate people of India are often misled and misguided as they are not aware of the evil effects of certain drugs available in the market and often become a tool in the hands of quacks and inexperienced doctors.
Often they fall a victim to publicity and not known how dangerous the result of taking the particular drug could be they take it.
According to the petitioner, almost half of the drugs used in India are still being imported into the country, notwithstanding indigenous manufacture both by local as also the multi national Corporations.
The petition er has contended that modern drugs reach 472 only one fifth of the Indian population.
According to him, the drug industry is totally profit oriented and no care or attention is bestowed upon good health of the citizens of India.
In 1980, the Drug Consulative Committee set up a subCom mittee of experts for screening the formulations of drugs prevalent in the Indian market from the point of therapeutic rationale in order that irrational and harmful combinations of drugs could be banned.
The said Committee of experts recommended banning of twenty fixed dose combinations of drugs.
According to the petitioner, 400 500 drugs with different trade names belong to the group of these twenty fixed dose combinations.
The sub Committee 's report was duly approved by the Committee as also the Ministry of Health in 1981.
The Central Drugs Controller issued directions to the State authorities to strictly enforce the ban of drugs pertaining to these combinations.
On account of slackness in the enforcement machinery these drugs are still prevalent in the market.
The Legislation in the field is the (hereinafter referred to as the Act).
The act was amended in 1982 and the definition of 'drug ' was amended and sections 10 A and 26 A were inserted into the Act conferring power on the Central Government to prohibit import of drugs and cosmetics in public interest as also to prohibit manu facture, sale or distribution thereof.
The amended Act came into force with effect from 1st February, 1983, but on account of proceedings taken in Court by manufacturers challenging the vires of Section 26 A of the Act and interim directions given by the Courts, the benefit of the new power conferred on the Central Government is not yet available.
According to the petitioner, Article 21 of the Constitution guarantees fight to life and this Court has interpreted the guarantee to cover a life with normal amenities ensuring good living which include medical attention, life free from diseases and longavity upto normal expections.
On account of both want of appropriate enforcement of the law as also strict measures necessary to eradicate the existing evils.
the fundamental right to life is not available to the citi zens of the country.
In his writ petition the petitioner originally impleaded the Union of India, the Central Drugs Controller as also the Drugs Controller of Kerala as Respondents 1, 2 and 3 respec tively.
The Assistant Drugs Controller of India filed an affida vit by way of joint return to the Rule Nisi on behalf of the Union of India and the 473 Central Drugs Controller.
He pointed out that 19 categories of fixed dose combinations were recommended for withdrawal from the market and named them in Annexure I to the counter affidavit.
According to him, the provisions of the Act and the rules made thereunder confer sufficient legislative authority and power on the Central Government as also the Central Drugs Controller to effectively operate in the field.
In paragraph 8 of the counter affidavit it has been stated that the report of the sub Committee was considered by the Drugs Consultative Committee as also by the Drugs Technical Advisory Board and the recommendations of the Board had been accepted by the Ministry of Health in 1982.
A circular letter was issued to all the State Drug Controllers on 22nd of April, 1982 asking them to ban manufacture and sale of the named categories of fixed dose combinations and the cut off date being 30th September, 1982 for stopping for manufacture of these combinations and 3 1st March, 1983 for sale of these combinations was stipulated.
On June 26, 1982, a further circular letter was issued by the Central Drugs Controller to the State Drugs Control Authorities in the matter of banning of Oestrogens and Progestins.
That circu lar letter has clearly indicated the cut off dates for stopping the manufacture and sale of these drugs as 31.12.1982 and 30.6.
1983 respectively.
These respondents have taken the further stand that reports regarding prevalence of standard drugs as stated in the Writ Petition have come to light as a result of action taken by the State Drugs Control Authorities.
As regards combinations of Oestrogens and Progestins, in February 1975 the World Health Organisation informed all the member Gov ernments about the action taken by the Australian Department of Health for withdrawal from the market of a number of hormonal pregnancy testing preparations.
On the basis of such information supplied by the World Health Organisation, the Indian Drugs Controller held consultations with a number of gynaecologists within the country who opined that al though in advanced countries hormonal preparations for pregnancy testing had been discontinued on account on better methods for detection of pregnancy being available, the prevailing situation in India did not require complete withdrawal from the market of the preparations and it recom mended that a warning to the effect that there was possibil ity of congental malformation in case the preparations were administered in the earlier stage of pregnancy should be indicated.
Accordingly, a decision was taken that combina tions of Oestrogens and Progestins may be continued for pregnancy test but a warning to the following effect was 474 asked to be put on the package as also in any other promo tional literature regarding the drugs: "Warning: There is some evidence to show that hormonal preparations when used during preg nancy may lead to foetal abnormalities and as such these should not be used during pregnancy or for pregnancy diagnosis." The Director General of India Council of Medical Research communicated the following recommendations: "Fixed dose combinations of oestrogens and progesterone may be totally banned in the country even for the treatment of secondary amenorrhoea as other, substitutes are avail able in the market for management of secondary amenorrhoea. ' ' On the basis of same the Ministry of Health took a decision to ban fixed dose combinations of these medicines in the country and cut off dates for manufacture and sale were fixed as 31st December 1982 and 30th of June 1983, respec tively.
From time to time the Drugs Controller of India has been advising the State Drugs Controller for stopping of manufac ture of combinations which have been found to be bad or injurious to health and instances thereof have been given in the counter affidavit.
With the amendment of the Act in 1982, the Central Government has now been armed with power to prohibit, in public interest, the import, manufacture, sale and distribution of any drug or cosmetic which is likely to involve any risk to human beings or it would not have the theapeutic value claimed in respect of such prepa ration.
The counter affidavit points out that M/s Nicholas Laboratories of India Ltd. of Bombay and M/s Unichem Labora tories Ltd., respondent No. 9 before us filed writ petitions before the High Court at Bombay and obtained interim orders of stay; similarly in M/s Organon (India) Ltd., respondent No. 8 before us moved the Calcutta High Court and obtained an interim order of stay in regard to their preparations.
Challenge in these writ petitions is to the vires of Sec tions 10 A and 26 A of the Act.
The counter affidavit fur ther points that some of the medicines which are alleged to have been banned in some developed countries are allowed to continue in the market of the other developed countries and there is no uniformity.
475 The second counter affidavit of these respondents has been filed after the writ petition was amended.
On this occasion, the Assistant Drugs Controller of India has stated that it is a fact that the Hathi Committee recommended 116 drugs to be sufficient to treat more than 90 per cent of the diseases prevalent in the country.
It was, however, found out that this position was not correct and many other drugs were required to meet the situation.
It pointed out that though the Hathi Committee identified 116 essential drugs, it did not recommend banning of the remaining.
The WHO Expert Committee in its report (serial No. 722 of 1985) has indicated that 285 basic drugs and 358 single ingredient formulations should be considered to be most important for the health and care of the human race.
It is asserted that all these companies manufacture medicines within the frame work of the list published by the World Health Organisation.
It is.
pointed out that there are about 8000 small scale manufacturers and 214 big manufacturers in the organised sector for manufacture of medicines.
When for some reason one particular brand of drug is not available in the market, a substitute thereof has got to be looked for.
According to them, all appropriate steps have been taken by the Union of India and the Central Drugs Controller and the petitioner is not entitled to any relief in this writ petition.
The respondent No. 4 is the Association of the Drug manufacturers and respondent No. 5 is the organisation of pharmaceutical producers the remaining respondents are manufacturers of specified drug preparations.
In their respective affidavits, respondents No. 4 and 5 have pleaded against maintainability of the writ petition.
This court as early as 11.4.1983 directed issue of notice to the Medical Council of India, the Indian Medical Association and the Drugs Medical Council of India, the Indian medical Association and the Drugs Control authorities of the States except that of Kerala as it was already made a respondent to the writ petition.
Obviously such notice was given as in the opinion of the Court, the matter was one of great importance and the Court looked for participation of these authorities in the debate with a view to assisting the Court in the disposal of the matter.
We are surprised that the notice from the Court has not evoked response excepting the State of Karnataka.
(Statutory bodies when called upon by a Court, in particular the apex Court of the Country, are duty bound to respond and join the proceedings before the Court.
as required by Article 144 of the constitution.
These bodies are not litigants and do not have the choice of keeping away from the Court like private parties in ordinary litigations opting to go 476 ex parte.
The present matter is certainly one which is sufficiently important and the stake of the entire nation is high when the Court suo moto extended the opportunity of being heard and invited the named statutory or other author ities to come forward and place their view points on rele vant aspects, an attitude of callous indifference cannot be appreciated.
We hope and trust that there would be no repe tition of such a situation.
It must be remembered that this is not a normal litiga tion with adversaries pitted against one another.
What this Court said in P. Nalla Thampy vs Union of India, ; has full application.
There it said: "The lis before us is not of the ordinary type where there are two contending parties, a claim is raised by one and denied by the other, issues are struck, evidence is led and the findings follow .
The writ petition is essentially in the nature of public inter est litigation and the petitioner has attempt ed to voice the grievances of the community.
" The issues in this petition are of vital importance as they relate to maintenance of approved standards of drugs in general; the writ petition involves the claim for withdrawal of 7000 fixed dose combinations and withdrawal of licences of manufacturers engaged in manufacture of about 30 drugs which have been licensed by the Drugs Control Authorities; the issues that fall for consideration are not only relating to technical and specialised matters relating to therapeutic value, justification and harmful side effect of drugs but also involve examination of the ectness of action taken by the respondents 1 and 2 on the basis of advice; the matter also involves the interest of manufacturers and traders of drugs as also the interest of patients who require drugs for their treatment.
The respondent No. 5 has made references to the recom mendations of the Drugs Consultative Committee and the ultimate consideration of DTAE to plead against the prayer of banning of preparations.
As already.
stated the remaining respondents are manufacturers of specific preparations and have supported in their respective counter affidavits their claim that drugs manufactured or handled by them should not be banned.
Having regard to the magnitude, complexity and technical nature of the enquiry involved in the matter and keeping in view the far 477 reaching implications of the total ban of certain medicines for which the petitioner has prayed, we must at the outset clearly indicate that a judicial proceeding of the nature initiated is not an appropriate one for determination of such matters.
There is perhaps force in the contention of the petitioner that the Hathi Committee too was not one which could be considered as an authoritative body competent to reach definite conclusions.
No adverse opinion can, therefore, be framed against the Central Government for not acting upon its recommendations.
A healthy body is the very foundation for all human activities.
That is why the adage "Sariramadyam Khaludharma Sadhanara".
In a welfare State, therefore, it is the obliga tion of the State to ensure the creation and the sustaining of conditions congenial to good health.
This Court in Band hua Mukti Morcha vs Union of India, ; aptly observed: "It is the fundamental right of everyone in this country, assured under the interpretation given to Article 21 by this Court in Francis Mullin 's case [1981] 1 SCC 608 to live with human dignity, free from exploitation.
This right to live with human dignity enshrined in Article 21 derives its life breath from the Directive Principles of State Policy and particularly clauses (e) and (f) of Article 39 and Articles 41 and 42 and at the least, therefore, it must include protection of the health and strength of the workers, men and women, and of the tender age of children against abuse, opportunities and facilities for children to develop in a healthy manner and in conditions of freedom and dignity, educational facilities, just as humane condi tions of work and maternity relief.
These are the minimum requirements which must exist in order to enable a person to live with human dignity, and no State neither the Central Government has the right to take any action which will deprive a person of the enjoyment of these basic essentials".
While endorsing what has been said above, we would refer to Article 47 in Part IV of the Constitution.
That Article provides: "The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohi 478 bition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health." This Article has laid stress on improvement of public health and prohibition of drugs injurious to health as one of the primary duties of the State.
In Akhil Bharatiya Soshit Karmachari Sangh vs Union of India, ; this Court has pointed out that, "the Fundamental Rights are intended to foster the ideal of a political democracy and to prevent the establishment of authoritarian rule but they are of no value unless they can be enforced by resort to courts.
So they are made justifiable.
However, it is also evident that notwithstanding their great importance, the Directive Principles cannot in the very nature of things be enforced in a Court of Law, but it does not mean that Directive Principles are less important than Fundamental Rights or that they are not binding on the various organs of the State.
" In a series of pronouncements during the recent years this Court has culled out from the provisions of Part IV of the Constitution these several obligations of the State and called upon it to effectuate them in order that the resultant pictured by the Constitution Fathers may become a reality.
As pointed out by us, maintenance and improvement of public health have to rank high as these are indispensable to the very physical existence of the communi ty and on the betterment of these depends the building of the society of which the Constitution makers envisaged.
Attending to public health, in our opinion, therefore, is of high priority perhaps the one at the top.
None of the parties before us claimed, and perhaps tightly, that the prevailing state of affairs in this regard is a commendable one.
The technical aspects which arise for consideration in a matter of this type cannot be affectively handled by a court.
Similarly the question of policy which is involved in the matter is also one for the Union Govern ment keeping the best of interests of citizens in view to decide.
No final say in regard to such aspects come under the purview of the court.
Yet there are certain contentions raised by the petitioner which deserve serious consideration and we would now proceed to deal with them.
The branch with which we are now dealing, namely, health care of citizens, is a problem with various facets.
It involves an everchanging challenge.
There appears to be, as it were, a constant competition between Nature (which can be said to be responsible for new ailments) on one side and human ingenuity engaged in research and 479 finding out curative processes.
This being the situation, the problem has an ever shifting base.
It is common place that what is considered to be the best medicine today for treatment of a particular disease becomes out of date and soon goes out of the market with the discovery or invention of new drugs.
Again what is considered to be incurable at any given point of time becomes subjected to treatment and cure with new finds.
There is yet another situation which must be taken note of as human knowledge expands and marches ahead.
With the onward march of science and complexities of the living process and hitherto unknown diseases are no ticed.
To meet new challenges, new drugs have to be found.
In this field, therefore, change appears to be the rule.
We have already taken note of the position that the Hathi Committee was of the view that a fixed number of formulations were enough to meet the demand.
From the coun ter affidavit of respondents 1 and 2, we have gathered that this conclusion of the Hathi Committee was not accepted as on analysis it was not found to be a correct statement of the position.
The World Health Organisation in its report, on the basis of expert advice, is of the view that human ailments can be treated effectively with 285 basic drugs.
We assume and it is not disputed that the expertise available to the World Health Organisation was of a higher order and perhaps more accurate than what was at the disposal of the Hathi Committee.
While we are cognizant of the position that the problem is a shifting one and one cannot have a fixed process to deal with the situations that would arise from time to time, the Central Government on the basis of the expert advice can indeed adopt an approved national policy and prescribe an adequate number of formulations which would on the whole meet the requirement of the people at large.
Obviously, instant attention has to be bestowed to keep abreast of the changing situations and make proper and timely amends.
While laying the guidelines on this score, injurious drugs should be totally eliminated from the mar ket.
Great care in this regard has to be taken.
Such drugs as are found necessary should be manufactured in abundance and availability to satisfy every demand should be ensured.
Undue competition in the matter of production of drugs by allowing too many substitutes should be reduced as it introduces unhealthy practice and ultimately tends to affect quality.
The State 's obligation to enforce production of qualitative drugs and elimination of the injurious ones from the market must take within its sweep an obligation to make useful drugs available at reasonable price so as to be within 480 the common man 's reach.
That would involve regulating the price.
It may be that there may be an improved quality of a particular medicine which on account of its cost of produc tion will have to sell at a higher price but for every illness which can be cured by treatment, the patient must be in a position to get its medicine.
This, in our view, is an obligation which the Court has already found in the relevant articles of Part IV of the Constitution.
The prescribed preparations must maintain their quality, and for ensuring it, strict regulations are necessary.
Provision in statutes or rules or instructions issued by executive authorities do not meet the demands of today 's situation.
The process of regulation has to be strengthened.
Law must be provided with sufficient biting teeth and there must be genuine apprehension in the mind of every person engaged in the trade that any infraction would be visited with exemplary punishment.
In the prevailing situation in the country, unless the law is properly enforced, it would be difficult to regulate the quality of the drugs.
Standar disation of the preparations will also introduce a healthy atmosphere in the market.
The practising doctor should be acquainted with the drug policy, availability of drugs and take care to prescribe available medicine to his patient.
There must be due emphasis on indigenous production so that in due course, what the Government contemplated in 1979 in its then drug policy may be effectuated by India.
We have made large strides in our advancement in the field of science as also manufacture of drugs since independence.
Drugs prepared in India today have an international market in a limited way.
There does not seem to be any lack of ability to manufacture drugs.
We commend to Government, therefore, that the drug policy of the Government should emphasise upon a time bound switch over to indigenous pro duction.
Research in this field is of vital importance.
Constant attention has to be devoted to get the best of results at the laboratories and put to use all useful findings.
The traditional indigenous system of treatment in India had once upon a time made a lot of advancement.
There is, therefore, sufficient scope for research on the basis of our own knowl edge.
Herbal preparations, as far as practicable, should be encouraged and appropriate laboratories should be set up, both in the public and the private sector to continue the system of research into every branch in this field relevant to gathering of knowledge and proper utilisation thereof in the field of treatment and manufacture of drugs.
We reiter ate that it is not for the Court to lay down the drug policy of 481 the Government.
We are aware of the fact that the State is concerned and anxious to improve the general condition and is willing to exercise adequate control; Parliament has in several legislations in recent years enhanced the penalities with a view to ensure elimination of injurious drugs and maintenance of the quality and standard of drug prepara tions.
There is, however, no scope for complacency in this field and constant and regular attention has to be bestowed in order that the flow into the market may be only of ac ceptable drugs.
Every indigenous drug manufacturer must have an obliga tion by law to disclose the formula of preparation and other statutory information in the national language and at least one or two other languages, keeping in view the place of manufacture of the drug and the area of its circulation.
Any statutory warning to be administered should also follow the same course.
We would like to indicate that it is for the Government on the basis of expert advice to decide whether use of poisonous medicine may not be reduced; after all administering the warning is not a sufficient excuse to circulate poison by way of medicine.
We hope and trust that the Union of India would come forward with a declaration of its drug policy at a very early date.
It appears to us that there is an immediate need for a central enforcement machinery in the interest of community at large.
We hope and expect that every State Government would cooperate with the Central Government in this regard and the Central Government would take a lead to establish such an authority which would have jurisdiction all over the country with a view to regulating manufacture and punishing defaults and lapses.
Licencing of manufacture should also be centralised so that uniformity can be maintained.
These are matters of common concern and we hope that the Central Government, without loss of time, would take care to evolve a system which would effectively operate.
Leave is granted to the Central Government to apply to the Court, if there be any difficulty experienced in implementation of such a scheme.
Section 5 of the Act authorises constitution of a Cen tral Drugs Technical Advisory Board as also a State Board for each State.
The object of setting up of such Boards is to advise the respective Governments on technical matters arising out of the administration of the Act and to carry out such other functions as are assigned to the Boards by the Act.
Sub section (2) provides for the manning of the Central Board.
We are of the view that adequate representa tion should be, provided to consumers and at least two capable representatives from 482 out of their category should be nominated by the Central Government.
The manning of this Board should be such that in its functioning it would be in a position to effectively advise the Central Government on all technical matters.
Section 7 provides for the setting up of the Drugs Consultative Committee and its statutory purpose is to advise the Central Government, the State Governments and the Drugs Technical Advisory Board on any matter tending to secure uniformity throughout India in the administration of the Act.
We are of the view that on this Committee too there should be adequate representation on behalf of the consuming public.
If necessary, prompt steps may be taken to bring about suitable amendments to authorise such representation both on the Technical Board as also the Consultative Commit tee.
The Central Government should set up regional Drug Laboratories in addition to the Central Laboratory as pro vided by section 6 of the Act to facilitate and promote research and coordinate activity in that regard.
We have no doubt that the existing Drug Consultative Committee is a useful body but the Central Government should consider whether it requires to be broad based and confined with larger scope of operation or it is necessary to consti tute another high powered authority, as prayed for by the petitioner so that such a vital matter like public health does not go without adequate attention.
Before we part with the case, we must point out that the amending provisions of 1982 which were brought into force in 1983 have remained mostly inoperative on account of orders of injunction granted by High Court.
The Central Government may get impleaded in the pending proceedings before the different High Courts and request the said High Courts for expeditious disposal of the matters.
At one point of time, we were thinking of making an order dissolving the interim directions but that would have necessitated impleading these parties in this case and hearing them.
We have, therefore, thought it proper to suggest that the Central Government may get impleaded in the pending proceedings, if they are al ready not parties and apply to the High Courts.
We sincerely hope that when any such application is moved before the High Court where a dispute of this type is pending, the High Court would make every endeavour to expedite the disposal of the proceedings and have the same disposed of as early as possible and preferably within a period of two months from the date when it is 483 approached so that the dispute may end.
If there be any difficulty in giving effect to this part of the judgment, the Central Government has leave of this Court to make an appropriate application for directions.
The objection raised by the petitioner with reference to specific medicines has not been examined by us mainly for the reason that we have found this proceeding not an appro priate one for such purpose.
We, however, hope that the Central Government shall take into consideration the objec tions raised by the petitioner and have the same referred to the Consulative Committee or to such other body as it con siders expedient for immediate examination and a decision in that regard shall be taken, not later than six months.
The petitioner has indeed done a commendable job in bringing the matter before the Court.
We appreciate his move and are inclined to think that he should be suitably compen sated with a view to reimbursing him for the expenses.
We direct the Ministry of Health of the Central Government to deposit a sum of Rs.5000 (Rupees Five Thousand only) in this Court within two months hence which the petitioner will be at liberty to withdraw.
Petition disposed of.

summary/full:
The petitioner, an advocate by profession has moved the Supreme Court in public interest seeking directions banning import, manufacture, sale and distribution of such drugs which have been banned in Western countries or recommended to be banned by the Drugs Consultative Committee under the .
The petitioner has also sought directions, (i) for cancellation of licences autho rising import, manufacture, sale and distribution of such drugs; (ii) for Constitution of a high powered Authority to go into the hazards suffered by people of the country on account of such drugs being in circulation and suggest remedial measures including award of compensation.
Disposing of the petition, the Court, HELD: 1.
Statutory bodies when called upon by a Court, in particular the apex Court of the Country, are duty bound to respond and join the proceedings before the Court, as required by Article 144 of the Constitution.
These bodies are not litigants and do not have the choice of keeping away from the Court like private parties in ordinary litigations opting to go ex parte.
The present matter is certainly one which is sufficiently important and the stake of the entire nation is high when the Court suoe moro extended the oppor tunity of being heard and invited the named statutory or other authorities to come forward and place their view points on relevant aspects, an attitude of callous indif 469 ference cannot be appreciated.
It is hoped that there would be no repetition of such a situation.
[475G H; 476A B] P. Nalla Thampy vs Union of India, ; , followed.
Having regard to the magnitude, complexity and tech nical nature of the enquiry involved in the matter and keeping in view of the far reaching implications of the total ban of certain medicines for which the petitioner has prayed, it is clear that a judicial proceeding of the nature initiated is not an appropriate one for determination of such matters.
[476H; 477A] 2.2 The issues raised in this petition are of vital importance as they relate to maintenance of approved stand ards of drugs in general; the writ petition involves the claim for withdrawal of 7000 fixed dose combinations and withdrawal of licences of manufacturers engaged in manufac ture of about 30 drugs which have been licensed by the Drugs Control Authorities; the issues that fall for consideration are not only relating to technical and specialised matters relating to therapeutic value, justification and harmful side effect of drugs but also involve examination of the ectness of action taken by the respondents 1 and 2 on the basis of advice; the matter also involves the interest of manufacturers and traders of drugs as also the interest of patients who require drugs for their treatment.
The techni cal aspects which arise for consideration in a matter of this type cannot be effectively handled by a Court.
Similar ly the question of policy which is involved in the matter is also one for the Union Government keeping the best of interests of citizens in view to decide.
No final say in regard to such aspects come under the purview of the Court.
[476D F; 478F G] 2.3 This branch namely, Health Care of citizens, is a problem with various facets.
It involves and over changing challenge.
There appears to be, as it were, a constant competition between Nature (which can be said to be respon sible for new ailments) on the side and human ingenuity engaged in research and finding out curative processes.
This being the situation, the problem has an ever shifting base.
It is common place that what is considered to be the best medicine today for treatment of a particular disease becomes out of date and soon goes out of the market with the discov ery or invention of new drugs.
Again what is considered to be incurable at any given point of time becomes subjected to treatment and cure with new finds.
There is yet another situation which must be taken note of as human knowledge expands and marches ahead.
With the onward march of science and complexities of the living 470 process and hitherto unknown diseases are noticed.
To meet new challenges, new drugs have to be found.
In this field, therefore, change appears to be the rule.
[478G H; 479A C] Therefore, such drugs as are found necessary should be manufactured in abundance and availability to satisfy every demand should be ensured.
Undue competition in the matter of production of drugs by allowing too many substitutes should be reduced as it introduces unhealthy practice and ultimate ly tends to affect quality.
The State 's obligation to en force production of qualitative ' drugs and elimination of the injuries ones from the market must take within its sweep an obligation to make useful drugs available at reasonable price so as to be within the common man 's reach.
That would involve regulating the price.
It may be that there may be an improved quality of a particular medicine which on account of its cost of production will have to sell at a higher price but for every illness which can be cured by treatment, the patient must be in a position to get its medicine.
This is an obligation under Article 47 of the Constitution.
[479G H; 480A B] Bandhua Mukti Morcha vs Union of India, ; , referred to.


judgement:
vil Appeal No. 3118 of 1982.
From the Judgment and Order dated 11.8.1982 of the Delhi High Court in Civil Writ Petition No. 112 of 1981.
487 S.N. Kackar and H.K. Puri for the Appellant.
Shanti Bhushan, Mr. S.S. Jauhar, C.L. Sahu and M.L. Verma for the Respondents.
The Judgment of the Court was delivered by KHALID, J.
The coal mines were nationalised by the , (for short 'the Act ').
Under this Act, the mines vested in the Govern ment with effect from 1st May, 1972.
The Act contains a schedule showing the various mines which come under the nationalisation scheme.
The mines involved in this appeal are shown as serial Nos. 112 to 116 in the First Schedule to the Act.
The Schedule, in addition shows, the location of the mines,name and address of the owners of the mines and the amount of compensation.
The owners ' name in the fourth column of the mines involved in the appeal is shown as East India Coal Company Limited, the appellant before us and the total compensation as Rs. 93,23,500.
Respondent nos.
1 and 2 were carrying on the business as raising contractors and selling agents of coking coal of working coal mines.
According to them, Messrs Jardine Hand erson Limited, who were the managing agents of the appel lant company, appointed them as contractors to raise and sell coal and manufacture hard coke in respect of the un worked mines, as per an agreement.
It was alleged that they were entitled under the agreement to instal plant, machinery and other equipment for efficient discharge of their func tions as raising contractors.
Pursuant to this agreement, they installed valuable machinery, utensils and coke ovens at a heavy cost.
After nationalisation, they felt that there would be difficulty for getting apportionment from the appellant company, of their due share in the compensation.
Therefore, they filed a claim under Section 26 of the Act before the 4th respondent, the Commissioner of Payment, Coking Coal Mines, a statutory authority constituted under the Act.
They also moved the High Court by way of writ petition and contended that they were also owners of the mines under the Act and were entitled to their share in the compensation and prayed for a direction that they be paid compensation at the market value for machinery, plant, equipment, building, stores etc.
and in addition challenged the validity of the Act.
The challenge against the validity of the Act became infructuous since the Act had been placed in the 9th Schedule.
A Division Bench of the High Court accepted the plea of the writ petitioners, who are respond ents 1 and 2 here, held that these two were owners under the Act, and 488 directed the 4th respondent to proceed with the claim ac cording to law.
It is against this Judgment that this appeal is filed, by special leave.
The appellants before us in their challenge against the judgment of the High Court dispute the finding that respond ents 1 and 2 were also owners under the Act and deny that they owned any part of the plant and machinery or equipment which had been taken over under the Nationalisation Act The matter is now pending before the 4th respondent, a statutory authority under the Act.
He has to decide about the claims and if necessary to refer the matter to a compe tent civil court, if any dispute arises as to the right of any person to receive the whole or any part of the amount.
We cannot go into the apportionment part of the claim.
All that we have to do in this appeal is to resolve the dispute between the appellant and respondent Nos. 1 and 2, as to who is the owner of the mines under the Act.
In other words, whether the appellants are the owners of the mines to the exclusion of respondents 1 and 2 or not.
Then we will have to indicate the manner in which the debts due by the owners have to be paid and which debt has priority over other debts.
This we will have to do after examining the scheme of the Act with reference to some of the sections.
The first question to be answered is as to who is the owner of the mine in question.
The appellants contend that they have exclusive fight over the compensation amount while respondents 1 and 2 claim that they have a share in it.
We will refer to the sections brought to our notice to resolve this dispute.
Sections 4, 5, 3(n), 10 and 12 can be usefully looked into for this purpose.
Section 4(1) declares that the right, title, interest of the owners in relation to the mines shall stand transferred to the Central Government on the appointed day, free from all encumbrances.
It reads thus: "4(1) On the appointed day, the fight, title and interest of the owners in relation to the coking coal mines specified in the First Schedule shall stand transferred to, and shall vest absolutely in the Central Government, free from all encumbrances.
" Similarly, Section 5 refers to the acquisition of fights of owners of coke oven plants specified in the Second Sched ule by the Central 489 Government by virtue of operation of this Section.
Section 5 reads as follows: "5.
On the appointed day, the rights, title and interest of the owners of each of the coke oven plants specified in the Second Schedule being the coke oven plants which are situated in or about the coking coal mines specified in the First Schedule, shall stand transferred to, and shall vest absolutely in the Central Government free from all encumbrances.
" A combined reading of these two sections, therefore, makes it abundantly clear that the right, title, interest of the owners in relation to the mines and the coke oven plants prescribed in the First Schedule and the Second Schedule vest in the Central Government, free from all encumbrances on the appointed day.
That takes us to the question as to who is the owner contemplated by these two sections.
The term 'owner ' has been defined in Section 3(n).
It reads as follows: " "3(n) 'Owner ' (i) When used in relation to a mine, has the meaning assigned to it in the , (ii) When used in relation to a coke oven plant, means any person who is the imme diate proprietor of lessee or occupier of the coke oven plant or any part thereof or is a contractor for the working of the coke oven plant of any part thereof.
" For the purpose of the definition of the word 'owner ' in relation to a mine, therefore, we have to examine the defi nition in the .
It reads as follows: "2(1)(1) 'Owner ' when used in relation to a mine, means any person who is the immediate proprietor of lessee or occupier of the mine or of any part thereof and in the case of a mine the business whereof is being carried on by a liquidator or receiver such liquidator or receiver and in the 490 case of a mine owned by a company, the busi ness whereof is being carried on by a managing agent, such managing agent; but does not include a person who merely received a royali ty, rent or fine from the mine, or is merely the proprietor of the mine subject to any lease, grant or licence for the working there of, or is merely the owner of the said mine and not interested in the minerals of the mine; but any contractor for the working of a mine or any part thereof shall be subject to this Act in like manner as if he were an owner, but not so as to exempt the owner from any liability.
" It is clear from the definition that it takes within its ambit 'occupier of the mine or any part thereof '.
It cannot be disputed that respondents 1 and 2 here, admittedly a raising contractor, were in occupation of at least a part of the mine for their operation and thus an occupier within the definition.
They do not come within the exclusion clause in the definition section.
We have no hesitation, therefore, to hold that respondents 1 and 2 is a owner within the defini tion of section 3(n) of the Act.
For this conclusion of ours, we are supported by a decision of this Court rendered by a bench of three Judges, to which one of us was a party, in the case of Industrial Supplies Private Limited vs Union of India, ; Construing the indentical sec tion, AP Sen, J, speaking for the bench held thus: "22.
It was asserted that the petitioners were really not the managing contractors, but wrongly described as such in the agreement . . .
The petitioners were conferred all the fights to work the mine for winning, getting and raising coal.
The so called remuneration payable to them was virtu ally the price of coal supplied leaving to the owners a margin of profit . .
The petitioners having bound them selves by the terms of the agreement, cannot be permitted to escape from the provisions of sub section (1) of Section 4, as they come within the purview of the definition of 'owner ' in section 3(n) of the Nationalisation Act.
It is then argued, in the alter native, that the term 'owner ' as defined in Section 3(n) of the Nationalisation Act read with Section 2(1) of the , does not in any event include a raising contractor.
It is not suggested that a raising contractor does not come within the description of a contractor in Section 2(1), but it is argued that the 491 word 'includes ' is not there.
There was no need for Parliament to insert the word 'in cludes ' because of the words 'as if he were '.
Although the term 'owner ' in common parlance, in its usual sense, connotes ownership of a mine, the term has to be understood in the legal sense, as defined.
Parliament, with due delibera tion, in Section 3(n) adopted by incorporation the enlarged definition of owner in Section 2(1) of the , to make the Nationalisation Act all embracing and fully effective.
The definition is wide enough to include three categories of persons; (i) in relation to a mine, the person who is the immediate proprietor or a lessee or occupier of mine or any part thereof, (ii) in the case of a mine the business whereof is carried on by a liquidator or a receiver, such liquidator or receiver, and (iii) in the case of a mine owned by a company, the business whereof is carried on by a managing agent, such managing agent.
Each is a separate and distinct catego ry of persons and the concept of ownership does not come in.
Then come the crucial last words; "but any contractor for the working of a mine or any part thereof shall be subject to this Act in like manner as if he were an owner, but not so as to exempt the owner from any liability.
" The insertion of this clause is to make both the owner as well as the contractor equally liable for the due observ ance of the Act.
It is needless to stress that the , contains various provi sions for the safety of the mines and the persons employed therein.
In the case of a mine, the working whereof is being carried on by a raising contractor, he is primarily responsible to comply with the provisions of the Act.
Though a contractor for the working of a mine or any part thereof is not an owner, he shall be subject to the provisions of the Act, in the like manner as if he were an owner, but not so as to exempt the owner from any liability." The learned counsel for the appellants in his attempt to deny to respondents 1 and 2 any right in the compensation, sought support from the names shown in the first and second schedules which according to him clearly indicated who the owner of the coal mines was and made his submission as follows: The first schedule gives the location of the mine and the name of the owner.
Section 4 refers to the owners specified in the First Schedule to be a person whose right, title and 492 interest shall vest in the Central Government on the ap pointed day.
Section 4(3) which is an amended section gives the Central Government powers to correct any error, omission or misdescription in relation to the particulars of a coking coal mine included in the First Schedule or the name and address of the owner of any such coking coal mine.
Section 5 also refers to the owner of each of the coke oven plants specified in the second Schedule.
He wants to emphasise the fact that these sections by referring to owners mentioned in the schedule by name, seek to exclude those who are not mentioned therein.
Then he relies upon Section 10 of the Act for the same purpose;, Section 10 reads as follows: "10.
Payment of amount to owners of coking coal mines: The owner of every coking coal mine or group of coking coal mines specified in the second column of the first schedule, shall be given by the Central Government, in cash and in the manner specified in section 21, for vesting in it, under section 4, the right title and interest of the owner in relation to such coking coal mine or group of coking mines, an amount equal to the amount specified against it in the corresponding entry in the fifth column of the said Sched ule.
" Here also, the section shows that the amount of compensation is to be paid to the owner of the coking coal mine specified in the second column of the First Schedule.
Reliance was also placed on Section 12 for the same purpose.
Section 12(1) and Section 12(2) also refer to the owner mentioned in the first schedule.
It is better to quote Section 12(1) and 12(2): "12(1) In consideration of the retrospective operation of the provisions of section 4 and section 5, there shall be given by the Central Government in cash, to the owner of every coking coal mine specified in the First Schedule of the owner of every coke oven plant specified in the Second Schedule, an amount equal to the amount which would have been, but for the provisions of the said section 4 or section 5, as the case may be, payable to such owner under the , for the period commencing on the 1st day of May, 1972, and ending on the date of assent.
493 (2) In addition to the amount speci fied in sub section (1), there shall be given by the Central Government, in cash, to the owner of every coking coal mine specified in the First Schedule and the owner of every coke oven plant specified in the Second Schedule, simple interest at the rate of four per cent, per annum on the amount specified against such owner in the corresponding entry in the fifth column of the First Schedule or the Second Schedule, as the case may be, for the period commencing on the date of assent and ending on the date of payment of such amount to the Commissioner.
" Emboldened with these submissions, specious though, and the sections he ventured to meet the difficulty pased by Section 20 of the Act which does not use the same phraseolo gy as in Sections 4, 5, 10 and 12.
Chapter VI deals with Commissioner of Payments.
By Section 20(1), in this chapter, the Central Government is given power to appoint the Commis sioner of Payments.
It is necessary to read this Section, to see how it is worded.
"20(1) For the purpose of disbursing the amounts payable to the owner of each coking coal mine or coke over plant the Central Government shall appoint such person as it may think fit to be the Commissioner of Payments.
" The phraseology used in this section catches one 's eyes immediately.
Here the words used are "the amounts payable to the owner of each coking coal mine or coke oven plant".
The word 'owner ' is not qualified with the expression "specified in the second column of the First Schedule".
Section 21 in the same chapter is also useful for this discussion.
It reads: "21(1).
The Central Government shall, within thirty days from the specified date, pay, in cash, to the Commissioner, or payment to the owner or a coking coal mine or coke oven plant, a sum equal to the sum specified against the coking coal mine or coke oven plant, as the case may be, in the First Sched ule or the Second Schedule together with the amount and interest, if any, referred to in section 12.
(2) In addition to the sum referred to in sub section (1), the Central Government shall pay, in cash, to the Commissioner, such amount as may become due to the owner of a coking coal mine or coke oven plant in rela tion 494 to the period during which the management of the coking coal mine or coke oven plant re mained vested in the Central Government." In Section 21(1) and 21(2) the owner of a coking coal mine or coke oven plant is not qualified with the expression "as specified in the First Schedule or the Second Schedule".
Section 21(3) directs the Commissioner appointed under the Act to open and operate an account in a scheduled bank in respect of each coking coal mine or coke oven plant.
Section 21(4) stipulates that the Commissioner shall deposit the amount of compensation to the credit of the account of the coking coal mine or coke oven plant to which the payment relates, and section 21(5) states that interest accruing on the amount standing to the credit of the account shall ensure to the benefit of the owner of coking coal mine or coke oven plant, as the case may be.
It is necessary to note that in these sub sections the owner is not specified by name as the owner specified in the second column of the First Schedule.
Absence of this specification in the above sections, thus, creates difficulty for the appellants.
Mr. Kacker tried to get out of this difficulty by contending that the 'expression owner specified in the First Schedule ' must be read into these sections also though they are absent there.
This attempt to deny any fights to the respondents 1 and 2, on such a plea, cannot, in our view, succeed.
The sections occurring in Chapter VI have deliberately avoided the ex pression "the owners in the First Schedule" so as to achieve the object of the definition 'owner ' in the , which definition has been bodily borrowed by this Act.
We conclude this discussion holding, agreeing with the decision of this Court referred to above, that respondents 1 and 2 as occupiers are also owners.
If the owner whose name is men tioned in column 4 is alone entitled to the compensation, then there was no need for the remaining sections in Chapter VI, for apportionment of the amount after considering the various clauses.
What remains now is to lay down the guide lines to the Commissioner regarding the priorities in which the debts due by the mine owners have to be paid.
Section 12 A deals with the workers ' dues.
It reads: "12 A Workers dues to be paid out of the amount: (1) Out of the amount payable (a) under section 10 and section 12 to the owner of 495 every coking coal mine or group of coking coal mines; (b) under section 11 and section 12 to the owner to every coke oven plant, there shall be paid to every person employed by such owner a sum equal to the amount of arrears due, on the appointed day, to such employee, (i) in relation to a provident fund, pen sion fund; gratuity fund or any other fund established for the welfare of such employee; and (ii) as wages.
(2) Every employee to whom the whole or any part of the arrears referred to in sub section (1) is due shall file the proof of his claim to the Commissioner within such time, after the commencement of the Coking and Noncoking Coal mines (Nationalisation) Amendment Act, 1973, as the Commissioner may fix.
(3) The provisions of Section 23 shall, as for as may be, apply to the filing, admission or rejection of the proofs referred to in sub section (2).
(4) The Commissioner shall, after the admis sion or rejection of the claims made under sub section (2), determine the total amount of the arrears referred to in sub section (1), and shall, after such determination, deduct, in the first instance, out of the amount paid to him under section 21, a sum equal to the total amount of such arrears.
(5) All sums deducted by the Commissioner under subsection (4) shall, in accordance with such rules as may be made under this Act, be credited by the Commissioner to the relevant fund or be paid to the persons to whom such sums are due, and on such credit or payment, the liability of the owner of the coking coal mine or group of coking coal mines or coke even plant, as the case may be, in respect of the amounts of arrears 496 due as aforesaid, shall stand discharged.
(6) The deduction made by the Commis sioner under sub section (4) shall have prior ity over all other debts, whether secured or unsecured.
(7) Save as otherwise provided in the foregoing subsections, every secured debt due from the owner of a coking coal mine or group of coking coal mines or coke oven plant, as the case may be, shall have priority over all other debts and shall be paid in accordance with the rights and interests of the secured creditors.
" This section makes the owner, who has employed the workers, liable for their wages and other dues.
This section contains the procedure for making the claim, its proof and determina tion.
The important fact to be noted regarding these dues is, as provided in sub section (6) that the payment under this section shall have priority over all other debts wheth er secured or unsecured.
This is made further clear by Section 23(2) also.
Secured creditors come next in priority.
They will have priority regarding their dues subject to the amounts payable to the workers.
Now coming to the other claims, we will briefly examine the relevant sections.
The amount of compensation payable under the Act is kept at the disposal of the Commissioner of Payment by the Central Government.
Section 23 provides that every person who has a claim against the owner may prefer the same before the Commissioner within the stipulated period.
We have already noted that section 23(2) provides for priority of payments for debts, in the nature of wages and salary, amounts due towards contribution payable under the Provident Fund Act, amounts due under the Workmen 's Compensation Act, amounts due to the employees from pension, gratuity.
This section in addition speaks of sums due to the State Government as royalty, rent or dead rent.
Section 23(3) provides that the amount payable under sub section (2) mentioned above shall rank equally among themselves and be paid in full and if the assets are not sufficient, the balance amount payable shall abate.
This section should be read subject to Section 12A(6) and (7).
The sums due to the State Government shall be subject to amounts payable to employees and secured creditors, because Section 23(2) speaks of payment of debts mentioned therein in priority to all other unsecured debts.
Section 23(4) to (9) lays down the procedure for entertaining and hearing of the claims against the 497 Owner.
There is provision for giving a heating to the claim ants as well as to the owner before the Commissioner.
The decision of the Commissioner is subject to appeal, the Appellate Court being the Principal Civil Court of original Civil Jurisdiction within whose local limits the relevant mine is situated.
Section 24 provides that where the total amount of claim admitted by the Commissioner does not exceed the amount of money payable to the owner under the Act then the amount of admitted claim shall be paid in full and the balance remaining shall be paid to the owner.
It also pro vides that when the amount payable to the owner falls short to meet the full and total demand of the admitted claim then every such claim is to abate in equal proportion and shall be paid accordingly.
Section 25 makes provision for payment of amounts advanced by the Central Government for the man agement of the mine.
It is stipulated therein that such amounts can be recovered either out of the income derived by the mine in the period during which the same remained under the management by the Central Government till the ownership vested in it or if the amount advanced is not so recovered then the Central Government is enabled to make a claim before the Commissioner and this claim will have priority over the claim of all other unsecured creditors of the mine.
In considering this claim, the Commissioner, will have to see to which owner advances were made, and after ascertain ing this fact, make such owner liable for the advances.
Section 26 deals with cases where doubt or dispute arises as to the right of the person who is entitled to receive the compensation.
The section provides that the Commissioner shall refer the claim to the Court of competent jurisdiction, which in relation to a coking coal mine or coke oven plant means the Principal Civil Court of original jurisdiction within the local limits of whose jurisdiction the coking coal mine or the coke oven plant is situated, in the event of there being a doubt or dispute as to the fight of a person to receive whole or any part of the amount referred to in sections 10, 11 and 12.
After reading the scheme of the Act, it is now necessary to lay down further guide lines to the Commissioner as to how the amount of compensation has to be apportioned.
We have seen above that raising contractors will also come within the ambit of the expression 'owner ' in the Act.
Therefore, they are also entitled to pro rata distribution of the compensation deposited.
Before the High Court, re spondents 1 and 2 pleaded that out of the amount which is payable, all the claims admitted by the Commissioner under Section 23 cannot be deducted from the share of the compen sation amount.
In other words, the con 498 tention was that debts due by the company should not be taken into account when the amount due to the raising con tractors is ascertained.
That is, the share of the raising contractors in the amount of compensation should not be burdened with the debts of the original owner.
It is submit ted that there are huge claims against the company.
If those debts were to be deducted from the gross amount specified in column 5 of the First Schedule, it would work serious hard ship to the raising contractors and would be doing violence to the scheme of the section and at the same time doing injustice to those who are not liable for the said debts.
The definition of the word 'owner ' clearly indicates that there may be more than one owner within the meaning of the section 2(n) in relation to a mine.
Each of them would be entitled to a portion of the amount shown in column 5 of the First Schedule.
Claims admitted can be deducted only from the amount payable to that owner against whom the admitted claim relates.
To read sections 23 and 24 to mean that all the owners must bear burden of the admitted claim irrespec tive of the fact as to who is liable under these claims, would be to do injustice to the section and doing violence to the language of the section.
The proper manner in which these sections have to be understood is that the admitted claims can be deducted from the amount payable only when such claim relates to the owner concerned.
In other words, it is only the owner who has incurred the said debt that would be liable to pay the same.
Care should be taken to see that the amounts of debts of one owner is not deducted from the compensation amount payable to the other owner who does not owe that money.
The apprehension expressed by the learned counsel for respondents 1 and 2 that his clients should not be visited by adverse consequences by burdening their share of compen sation with the company 's debts is well founded.
The section cannot be read to create such an undesirable situation.
Care should be taken in ascertaining the debts of each owner not to identify the debts, the burden of which will fall on which owner.
Then comes section 25 A which enables the Commissioner to make payment to the owners.
It reads: "25 A Notice to owners of coking coal mines of coke oven plants and managing contractors, etc.
(1) After meeting the liabilities of persons whose claims have been admitted under this Act, the Commissioner shall notify in such manner as he may think fit, the 499 amount of money available with him and specify in such notification a date within which the owners of the coking coal mines or coke oven plants, the managing contractors and the owners of any machinery, equipment or other property which was vested in the Central Government company under this Act and which does not belong to the owners of the coking coal mines or coke oven plants may apply to him for payment.
(2) Where any application is made under sub section (1), the Commissioner shall, after satisfying himself as to the right of the applicant to receive the whole or any part of the amount, pay the amount to the person concerned and in the event of there being a doubt or dispute as to the right of the person to receive the whole or any part of the amount, the Commissioner shall deal with the application in the manner specified in sub section (1) of Section 26.
" This section deals with the distribution of the balance amount after meeting the liabilities.
This has to be dis tributed according to the fight of each owner determined by the Commissioner and in case of dispute refer the dispute to a competent court.
In this case, there are five mines.
The appellants claim to be the exclusive owner of all the five mines.
We have held that respondents 1 and 2 are also owners.
But they do not claim right in all the mines.
Under Section 26(3), newly inserted by the Coal Mines Nationalisation Laws (Amendment) Act, 1986, No. 57 of 1986, it is for the Commissioner to apportion the amount as indicated therein.
The amended clause (3) reads as under: "(3) Where the amount specified in the fifth column of the First Schedule is relata ble to a group of coking coal mines, the Commissioner shall have power to apportion such amount among the owner of such group, and in making such apportionment, the Commissioner shall have regard to the highest annual pro duction in the coking coal mine during the three years immediately preceding the appoint ed day.
" The Commissioner will have to determine the share of the compensa 500 tion of the mine claimed by respondents 1 and 2 in accord ance with this section.
We have indicated above, the guidelines to be adopted in apportioning the compensation.
We find that the High Court was correct in its conclusions.
The appeal has therefore to fail and accordingly is dismissed with costs of Respondents 1 & 2.
M.L.A. Appeal dis missed.

dataset_name: IN-Abs

summary/full:
Respondent Nos. 1 and 2 were carrying on business as raising contractors and selling agents of Coking Coal of working coal mines.
Pursuant 10 an agreement with the appel lant company appointing them us contractors to raise and sell coal and manufacture hard coke in respect of the un worked mines, they installed valuable machinery, utensils and cake ovens at a heavy cost.
On the nationalisation of the coal mines by the all the mines vested in the Government.
Respondent Nos. 1 and 2 flied a claim under s.26 of the Act before the 4th respondent, the Commis sioner of Payment, the statutory authority constituted under the Act and also moved the High Court by way of a writ petition contending that they were also owners of some of the mines in dispute and were entitled to their shares in the compensation and prayed for a direction that they he paid compensation at the market value for machinery, plant, equipment, building, stores etc.
A Division Bench of the High Court allowed the writ petition and held that respond ent Nos. 1 and 2 were owners under the Act and directed respondent No. 4 to proceed with the claim according to law.
Dismissing the appeal by the appellant, this Court, HELD: 1.
A combined reading of ss.4 and 5 of the Act makes it abundantly clear that the right, title, interest of the owners in relation to the mines and the coke oven plants prescribed in the First Schedule and the Second Schedule vests in the Central Government free from all encumbrances on the appointed day.
[491H; 492A] 2.1.
The term 'owner ' has been defined in section 3(a).
It is clear 485 from the definition that it takes within its ambit, occupier of the mine or any part thereof.
The definition of the word 'owner ' clearly indicates that there may be more than one 'owner ' within the meaning of s.3(n) in relation to a mine.
Each of them would be entitled to a portion of the amount shown in column 5 of the First Schedule.
Raising contractors will also come within the ambit of the expression 'owner ' in the Act.
Therefore, they are also entitled to pro rata distribution of the compensation deposited.
[497G H] In the instant case, it cannot be disputed that respond ent Nos. 1 and 2 admittedly a raising contractors, were in occupation of at least part of the mines for their operation and thus an occupier within the definition.
They do not come within the exclusion clause in the definition section.
Therefore, respondent Nos. 1 and 2 are 'owners ' within the definition of section 3(n) of the Act.
[490C D] Industrial Supplies Private Limited vs Union of India, ; , relied upon.
Sections 20(1) and 21(1) to (5) of the Act occur ring in Chapter VI of the Act have deliberately avoided the expression 'the owners in the First Schedule ' so as to achieve the object of the definition 'owner ' in the Minos Act, 1952, which definition has been bodily borrowed by this Act.
If the owner whose name is mentioned in column 4 is alone entitled to the compensation, then there was no need for the remaining sections in Chapter IV for apportionment of the amount.
[494E F] 3.1.
Section 12 A makes the owner, who has employed the workers, liable for their wages and other dues and contains the procedure for making the claim, its proof and determina tion.
The important fact to be noted regarding these dues is, as provided in sub section(6) that the payment under this section shall have priority over all other debts wheth er secured or unsecured.
This is made further clear by Section 23(2) also.
[496C D] 3(ii) Secured creditors come next in priority, and will have priority regarding their dues subject to the amounts payable to the workers.
[496D] 3(iii) The amount of compensation payable under the Act is kept at the disposal of the Commissioner of Payment by the Central Government.
Section 23 provides that every person who has a claim against the owner may prefer the same before the Commissioner within the stipulated period.
[496E F] 486 3(v) Section 23(4) to (9) lays down the procedure for entertaining and hearing of the claims against the owner.
There is provision for giving a hearing to the claimants as well as to the owner before the Commissioner.
The decision of the Commissioner is subject to appeal, the Appellate Court being the Principal Civil Court of original Civil Jurisdiction within whose local limits the relevant mine is situated.
[496H; 497A B] 4.
Section 25 makes provision for payment of amounts advanced by the Central Government for the management of the mine.
It is stipulated therein that such amounts can be recovered either out of the income derived by the mine in the period during which the same remained under the manage ment by the Central Government till the ownership vested in it or if the amount advanced is not so recovered then the Central Government is enabled to make a claim before the Commissioner and this claim will have priority over the claim of all other unsecured creditors of the mine.
[497C D] 5.
Section 26 deals with cases where doubt or dispute arises as to the fight of the person who is entitled to receive the compensation and provides that the Commissioner shall refer the claim to the court of competent jurisdic tion.
[497E F] 6.
The proper manner in which sections 23 & 24 have to be understood is that the admitted claims can be deducted from the amount payable only when such claim related to the owner concerned.
In other words, it is only the owner who has incurred the said debt that would be liable to pay the same.
Care should be taken to see that the amounts of debts of one owner is not deducted from the compensation amount payable to the other owner who does not owe that money.
[498D E] 7(1) Section 25A deals with the distribution of the balance amount after meeting the liabilities.
This has to be distributed, according to the right of each owner determined by the Commissioner and in case of dispute refer the dispute to a competent court.
[499D E] 7.2.
The Commissioner will have to determine the share of the compensation of the mine claimed by respondents 1 and 2 in accordance with section 26(2).
[499H; 500A]


judgement:
vil Appeal No. 350 (NT) of 1987.
632 From the Judgment and Order dated 19.11.
1985 of the Allahabad in S.T.R. No. 401 of 1985.
S.C. Manchanda and Ashok K. Srivastava for the Appellant.
Raja Ram Agarwal, Ajay Kumar Jain, Pramod Dayal and A.D. Sanger for the Respondent.
The Order of the Court was delivered by THAKKAR, J. A transaction of sale or purchase which takes place 'in the course of export ' falling within the purview of sub section (3) of Section 51 of the Central Sales tax Act.
1956 (hereinafter called the 'Act ') cannot be subjected to sales tax by any State.
The said provision inter alia provides that the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export.
(i) provided such last sale or purchase took place 'after ' and (ii) was for the purpose of complying with, the agreement or order for or in relation to such export Such a transaction cannot be subjected to sales tax/purchase tax by any State in view of the embargo imposed by article 286(1) (a).1 The controversy centering around this question has been set at rest in Consolidated Coffee Ltd. v .
Coffee Board, Bangalore, A.I.R. (Vol. 46) p. 164.
Under the circum stances, if the last sale in favour of the respondent who is a dealer in hides and skins and exports the same out of the territory of India has taken place (1) after an agreement was entered When a sale or purchase of goods said to take place in the course of import or export (1) X X X X (2) X X X (3) Notwithstanding anything contained m ' sub section(1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after and was for the purpose of complying with, the agree ment or order for or in relation to such export.
" 1. "286(1) (a) No law of a State shall impose, or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods, or export of the goods out, of the territory of India.
633 into for such export or order for such export had been accepted by him.
(2) last sale made in his favour was for the purpose of complying with the obligation undertaken under the said agreement or order, the transaction reflected in such last sale or purchase cannot be lawfully taxed under the Sales Tax Act.
It cannot be taxed because of the consti tutional bar embodied in Article 286 (1) (a) of the Consti tution of India.
The view taken by the High Court in the Judgment under appeal that such transactions are not exigi ble to sales tax/purchase tax under the U.P. Sales Tax Act, is unexceptionable in the light of the aforesaid provisions of the Constitution and sub section (3) of Section 5 of the Act and the law declared by this Court in Consolidated Coffee Ltd. We, therefore, see no reason to interfere with the order of the High Court.
It is no doubt true that Form III A under Rule 12 A of the U.P. Sales Tax Act is not an appropriate form to use in the context of such a transaction of last sale or purchase for the purpose of complying with an agreement or order for export which has already come into existence.
However, it is equally true that an appropriate form to meet the situation in relation to such last sales which are not exigible to sales/ purchase tax under the U.P. Sales Tax Act having regard to the constitutional bar and having regard to the provision contained in sub section (3) of Section 5 of the Act has not been devised under the afore said Rules.
It was under these circumstances that the respondent has furnished to his vendors form III A which is not appropriate except in regard to purchases made for sales of undressed hides as such within the State or in the course of inter State trade.
But the mere fact that such a form has been given will not empower the State to collect or levy the sales tax/purchase tax in respect of a transaction in the course of export which satisfies the aforesaid tests prescribed by Section 5 (3) of the .
It would be unconstitu tional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not.
The transactions entered into by him which are such on which sales tax/purchase tax cannot be levied on account of the constitutional bar read with sub section (3) of Section 5 of the cannot become exigible to tax merely because a wrong form is used (particularly when the appropriate form has not been devised by the Rule making authority).
Liability for tax in respect of such transactions cannot be fastened on the respondent for the very good reason that the State has no power to collect or levy sales tax/purchase tax on such transactions.
The U.P. Sales Tax authorities should have devised an appropriate form in this behalf.
They can do so even now (as has 634 been done under the Delhi Sales Tax Act by prescribing Form 49 to meet such a situation).
Learned counsel for the appel lant submits that till such a form is prescribed the re spondent who claims to have entered into these transactions in the course of export as defined by sub section (3) of Section 5 of the Act may furnish to his vendor a copy of Form H as provided by the .
The respondent has no objection and is prepared to do so.
Under the circumstances, for the future purposes instead of fur nishing form III A under Rule 12 A of the Sales Tax Act, .the respondent will furnish a photostat copy of form H under the .
Learned counsel for the respondent states that if such a copy is furnished to the vendor it will be accepted by the competent authority and the vendor will not be held liable for payment of sales tax/purchase tax in respect of such transactions subject to the rider that respondent will be held liable in case the purchases made by him do not satisfy the conditions and tests prescribed by sub section (3) of Section 5 of the and are not made in the course of export within the meaning of the said provision.
So far as the past transactions are concerned the respondent will not be liable provided he satisfies the aforesaid tests and the transactions of last sales made to him are in the course of export within the deeming clause of sub section (3) of Section 5 of the Act.
The appeal is disposed of accordingly.
There will be no order as to costs.
N.P. V Appeal dis posed of.

summary/full:
The respondent, a dealer in hides and skins and export ing the same out of the territory of India, entered into transactions failing within the purview of sub section (3) of Section 5 of the and which could not be taxed because of constitutional bar under Article 286( 1 )(a) of the Constitution of India, furnished Form III A under Rule 12 A of the U.P. Sales Tax Act, as an appropriate form to meet the situation was not devised under the U.P. Sales Tax Act, and sought a clarification from the Commissioner, Sales Tax, as to whether the firm was liable to tax under Section 3 AAAA of the U.P. Sales Tax Act on the purchases made against Form III A or H under the , when such dressed hides and skins were ex ported beyond the territory of India.
The Commissioner, Sales Tax clarified and held that the purchases of dressed hides and skins made against Form H were not liable to purchase tax under Section 3 AAAA of the U.P. Sales Tax Act provided the same were exported outside the territory of India and the conditions laid down in Section 5(3) of the were satisfied, but if the purchases were made against Form III A and exported outside the terri tory of India, they shall be liable to purchase tax under Section 3 AAAA.
On appeal, the Sales Tax Tribunal held that the respond ent was not liable to any purchase tax under Section 3 AAAA of the U.P. Sales Tax Act whether they were purchased against or without Form III A or H, as the same were export ed outside the territory of India in compliance with the order received from the foreign buyers and those transac tions were exempted under Section 6 of the .
631 A Revision Petition filed before the High Court by the appellant Revenue, contending that the decision of the Tribunal was bad in law was dismissed.
Disposing of the appeal by the U.P. Sales Tax authori ties, this Court, HELD: 1.1 The mere fact that Form III A has been given will not empower the State to collect or levy the sales tax/purchase tax in respect of a transaction in the course of export which satisfies the tests prescribed by Section 5(3) of the .
It would be unconstitu tional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not.
[633E F] 1.2 The transactions entered into by the respondent which are such on which sales tax/purchase tax cannot be levied on account of the constitutional bar read with sub section (3) of Section 5 of the , cannot become exigible to tax merely because a wrong form is used (particularly when the appropriate form has not been devised by the rule making authority).
[633F G] 1.3 Liability for tax in respect of such transactions cannot be fastened on the respondent for the very good reason that the State has no power to collect or levy sales tax/purchase tax on such transactions.
The U.P. Sales Tax authorities should have devised an appropriate form in this behalf.
They can do so even now (as has been done under the Delhi Sales Tax Act, by prescribing Form 49 to meet such a situation).
[633G H; 634A] 1.4 For the future purposes instead of furnishing Form III A under rule 12 A of the U.P. Sales Tax Act, the re spondent will furnish a photostat copy of Form H under the .
[634B] So fas as the past transactions are concerned, the respondent will not be liable provided the tests prescribed under Section 5(3) of the , are satis fied.
[634D] Consolidated Coffee Ltd. vs Coffee Board, Bangalore, A.I.R. (Vol. 46) p. 164 refferred to.