Delhi HC directs Dr. Reddy’s to pay Rs9 lakh penalty for selling 11 drugs above price ceiling
Dr. Reddy’s Laboratories was found to be in violation of the Essential Commodities Act under which the central government can fix a maximum price ceiling for certain essential commodities
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New Delhi: Dr. Reddy’s Laboratories was on Thursday directed by the Delhi high court to pay a penalty of Rs9 lakh for selling 11 drugs—whose names were undisclosed—at a price over and above the maximum fixed by the government.
Dr. Reddy’s was found to be in violation of the Essential Commodities Act, 1955 under which the central government can fix a maximum price ceiling for certain essential commodities.
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The counsel for the government argued, “They must follow the price (set by the central government under the provisions of the Essential Commodities Act) for the drugs, out of the total amount of Rs77 crores, Rs60 crores is the overcharged amount (amount charged by the Labs on the 11 drugs above the price ceiling).
The court also directed the government to give a hearing to Dr. Reddy’s regarding alleged conflicts in computation of the penalty amount.
The pharma company argues that the penalty amount comes to Rs9 lakh as opposed to Rs77 crore, as claimed by the government. It also submitted that it was now complying with the price ceiling and selling the drugs at a price below the ceiling.
Justice Bakhru ordered Dr. Reddy’s to pay the admitted amount of Rs9 lakh while directing the government to deal with issues raised on computation in a hearing to be held on 21 July.