Section 26A of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as “the Drugs Act”). = A Section 33 ban, which was imposed on 294 FDCs in these cases, has been stayed by the Madras High Court, and the very exercise that we have proposed in the Delhi cases has apparently been carried out in this group of cases. A report of the expert committee of the DTAB to review the rationality and safety of 294 FDCs is taken on record. The report indicates that 42 FDCs reportedly were repeated or duplicate; 44 were already prohibited for manufacture in the country; 83 were considered rational; 56 were considered not rational; 49 required further generation of data; 17 were considered inadequate so far as rationality, safety and efficacy is concerned; and 3 other cases were sent for further examination by an expert committee constituted by the Ministry of Health and Family Welfare. The DTAB after review of the report and deliberations recommended that the FDC Ofloxacin and Prednisolone at serial number 75 under the category of GI in Annexure C does not appear to be rational 53 and should be re-examined. The list of the drugs mentioned in Annexure D are required to be prohibited/withdrawn from the market as these are not rational.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 22972 OF 2017
(ARISING OUT OF SLP (C) NO.7061 OF 2017
UNION OF INDIA AND ANR. …APPELLANTS
VERSUS
PFIZER LIMITED AND ORS. ...RESPONDENTS
WITH
CIVIL APPEAL NOS. 22973-22981 OF 2017
(ARISING OUT OF SLP (C) NO.10170-10178 OF 2017)
CIVIL APPEAL NOS. 22982-23404 OF 2017
(ARISING OUT OF SLP (C) NO.28960-29382 OF 2017)

TRANSFERRED CASE (C) NO.29 OF 2017
TRANSFERRED CASE (C) NO.30 OF 2017
TRANSFERRED CASE (C) NO.31 OF 2017
TRANSFERRED CASE (C) NO.32 OF 2017
TRANSFERRED CASE (C) NO.33 OF 2017
TRANSFERRED CASE (C) NO.34 OF 2017
TRANSFERRED CASE (C) NO.35 OF 2017
TRANSFERRED CASE (C) NO.36 OF 2017
1
TRANSFERRED CASE (C) NO.38 OF 2017
TRANSFERRED CASE (C) NO.39 OF 2017
TRANSFERRED CASE (C) NO.40 OF 2017
TRANSFERRED CASE (C) NO.41 OF 2017
TRANSFERRED CASE (C) NO.42 OF 2017
TRANSFERRED CASE (C) NO.43 OF 2017
TRANSFERRED CASE (C) NO.44 OF 2017
TRANSFERRED CASE (C) NO.45 OF 2017
TRANSFER PETITION (C) NOS.1176-1182 OF 2017
TRANSFERRED CASE (C) NO.258 OF 2017
TRANSFERRED CASE (C) NO.259 OF 2017
TRANSFERRED CASE (C) NO.260 OF 2017
TRANSFERRED CASE (C) NO.261 OF 2017
TRANSFERRED CASE (C) NO.262 OF 2017
TRANSFERRED CASE (C) NO.263 OF 2017
TRANSFERRED CASE (C) NO.264 OF 2017
TRANSFERRED CASE (C) NO.265 OF 2017
TRANSFERRED CASE (C) NO.266 OF 2017
CIVIL APPEAL NOS. 23405-23472 OF 2017
(ARISING OUT OF SLP (C) NOS. 36044-36111 OF 2017
Diary No.28274 of 2017
2
TRANSFERRED CASE (C) NOS. 308-317 OF 2017
(ARISING OUT OF T.P. (C) NOS.2108-2117 OF 2017)
J U D G M E N T
R.F. Nariman, J.
1. Leave granted.
2. The present appeals and transfer petitions relate to the
interpretation of Section 26A of the Drugs and Cosmetics Act,
1940 (hereinafter referred to as “the Drugs Act”). By the
impugned judgment of the learned single Judge of the Delhi
High Court dated 1.12.2016, the learned single Judge has held
that the mandatory condition precedent for the exercise of the
power by the Central Government under Section 26A of the
Drugs Act is the prior consultation of the Drugs Technical
Advisory Board (DTAB) set up under Section 5 of the said Act.
It must be stated that the learned single Judge differed from
judgments of the Karnataka and Madras High Courts in this
regard, wherein two other learned single Judges of two other
3
High Courts have held that such consultation with the DTAB is
not mandatory before exercise of such power under Section
26A. Since we are concerned only with this narrow question
that has been decided by the learned single Judge of the Delhi
High Court, we are not going into any other contentions that
have been raised by learned counsel for the parties.
3. The issue regarding the prevalence of many Fixed Dose
Combinations (hereinafter referred to “FDCs”) that were
flooding the Indian market and had not been tested for efficacy
or safety was considered by the Parliamentary Standing
Committee on Health and Family Welfare in its 59th Report in
May, 2012. The Standing Committee observed that some of
the State Licensing Authorities have issued manufacturing
licenses for a very large number of FDCs without prior
clearance from the Central Drugs Standard Control
Organization (CDSCO). Such FDCs can pose significant risks
to persons and need to be withdrawn immediately in that
human lives can be at risk. The Committee recommended that
a clear and transparent policy may be framed for approving
FDCs based on scientific principles, and that, at present,
4
Section 26A of the Drugs Act is adequate to deal with the
problem of FDCs not cleared by the CDSCO. Pursuant to the
aforesaid report, the Ministry of Health in October, 2012 issued
directions to States and Union Territories under Section 33P of
the Drugs Act not to grant licenses to FDCs falling under the
definition of “new drugs” and not approved by the Drug
Controller General of India (DCG(I)). The DCG(I), in turn, had
requested all States/Union Territories Drug Controllers to ask
concerned manufacturers in their respective States/Union
Territories to prove the safety and efficacy of such FDC licenses
issued prior to 1.10.2012, without due approval of the DCG(I),
within a period of 18 months, failing which such FDCs would be
considered for being prohibited, both qua manufacture and
marketing in the country. On 5.7.2013, the DCG(I) vide its
communication to the State Drug Controllers asked
manufacturers to make applications as per the procedure
prescribed within this 18 month period. We have been informed
that a large number of applications were received from the
manufacturers within the 18 month period for 2911 products,
which had to be subjected to examination.
5
4. With the approval of the Ministry of Health and Family
Welfare, the CDSCO constituted 10 different Committees for
examination of the said applications which were received on
3.2.2014. As the said Committees could examine only about
295 applications, on 16.9.2014, the Ministry of Health and
Family Welfare constituted a Committee under the
Chairmanship of Professor C.K. Kokate, Vice Chancellor of KLE
University, Belgaum, Karnataka for examining the safety and
efficacy as per the following terms of reference:
a. Those FDCs which are considered grossly
irrational/unsafe based on pharmacokinetic and
pharmacodynamic interaction, dosage
compatibilities of FDCs vis-a-vis that of single
ingredients present in the FDC and available
literature/evidence.
b. Those FDCs which the Committee may
consider necessary for further deliberation with any
of the 10 Expert Committees already constituted.
c. Those FDCs which are considered as safe
and effective based on pharmacokinetic and
pharmacodynamic interaction, dosage
compatibilities of FDCS vis-a-vis that of single
ingredients present in the FDC, available
literature/evidence, clinical experience and other
data available.
d. Those FDCs which may be considered as
rational, based on present data and knowledge
available. However, data in post market scenario is
6
required to be generated within a period of 1 to 2
years to confirm the same.
e. All the FDCs falling, under category “b” above
would be referred to the respective Expert
Committee out of 10 Expert Committees already
constituted.
Composition of Expert Committee for examining the
safety & efficacy of Fixed Dose Combinations
(FDCs) is as under:
S.No. Name of
Expert
Name &
Address of
Institutions
Qualificati
on
Status in the
Committee
1 Prof.
Chandrakant
Kokate
Vice-Chancellor,
KLE University,
Belgaum,
Karnataka &
Ex-President of
Pharmacy
Council of India.
M. Pharm,
Ph.D.
Chairman
2 Dr. C.L. Kaul Former Director,
NIPER, 432,
Mahatma
Society, Koth
Road, Pune-38.
B. Pharm,
Ph.D.
Member
3 Prof. Sanjay
Singh
Deptt. of
Pharmaceutics,
IIT, BHU,
Varanasi.
M. Pharm,
Ph.D.
Member
4 Dr. C.D.
Tripathi
Prof. & HOD
(Pharmacology),
Safdarjung
Hospital, New
MD,
Pharamacol
ogy
Member
7
Delhi.
5 Dr. Bikash
Medhi
Deptt. of
Pharmacology,
PGIMER,
Chandigarh.
MD,
Pharmacolo
gy
Member
6 Dr. Sanjeev
Sinha
Prof. (Medicine),
AIIMS,New Delhi
MD,
Medicine
Member
7 Dr. R.K. Khar Former Dean &
Head, Jamia
Hamdard,
403,Lalleshwari
Vatika, GH-12,
Sector-21D,
Faridabad-1210
01.
M. Pharm,
Ph.D.
Co-opted
Member
A series of meetings were conducted by the
Committee (6 meetings corresponding to 11 days)
as well as by a sub-group of the Committee (2
meetings) for examination of these approx. 6320
applications.
5. The first assessment report of the aforesaid Committee
was submitted to the Ministry of Health and Family Welfare on
19.1.2015 and was presented before the Ministry on 4.3.2015,
wherein the Committee was requested to mention detailed
reasons against each FDC considered as “irrational” by the
Committee. The Committee did not discuss FDCs already
approved by the DCG(I) and FDCs which were licensed pre
8
21.9.1988 i.e. before the introduction of Schedule Y to the
Drugs Act. The Committee stated, “in case the Committee
made any comment with respect to the above inadvertently, it
shall be treated as not discussed.”
6. On 16.4.2015, a detailed report in this regard was
submitted by the Kokate Committee to the Ministry stating the
reasons for declaring FDCs as irrational. We have been
informed that for the FDCs which were considered as irrational
by the Committee, the Committee wrote to various
manufacturers/associations calling upon them to submit
material to establish the therapeutic justification/rationality of
the FDCs. Replies received from such associations were
examined by the Expert Committee and final recommendations
therein were given only on 10.2.2016. In category A, following
the final recommendations of the Expert Committee, the Central
Government has banned 344 FDCs. In category B, 944 FDCs
needed to be considered/deliberated upon further, which meant
that they would be referred to the respective Expert
Committees out of the 10 Expert Committees already
constituted for further examination. In category C, 1493 FDCs
9
have been declared “rational” and we are informed that
approvals have since been issued by the DCG(I) in respect of
these FDCs. In category D, 126 FDCs have to be considered
for further generation of data by the prospective applicants. It is
only after carrying out of this exercise, that by notifications
dated 10.3.2016 issued under Section 26A, the Central
Government banned manufacture and sale of 344 FDCs.
 7. In March 2016, a large number of writ petitions were filed
in the Delhi High Court against the aforesaid notifications. The
impugned judgment then followed on 1.12.2016 disposing of
454 petitions, followed by an order dated 21.12.2016, in which
the Delhi High Court disposed of 51 further writ petitions in
terms of the judgment dated 1.12.2016.
8. Letters Patent Appeals were filed before the Delhi High
Court. Meanwhile, the Union of India filed transfer petitions in
this Court. This is how these matters have been heard by us in
civil appeals arising out of SLPs against the judgment of the
single Judge dated 1.12.2016 and in transfer cases in which the
10
LPAs pending before the Delhi High Court have been
transferred to us.
9. Ms. Pinky Anand, learned Additional Solicitor General,
took us through various provisions of the Drugs Act, and
emphasized that Section 26A does not expressly refer to the
DTAB. According to her, a large number of provisions of the
Drugs Act expressly refer to the DTAB in various contexts and,
therefore, it is not permissible for the Court to read a mandatory
requirement of consultation with the DTAB into Section 26A,
when such mandatory consultation is present in other
provisions, but is conspicuous by its absence in Section 26A.
She further went on to state that the provisions of Section 26A
are legislative in nature, and ultimately, once the Central
Government arrives at a satisfaction based on relevant
materials, judicial review of the Central Government decision
taken on the basis of Expert Committee reports is extremely
limited. She launched an all out attack against the single
Judge’s judgment and stated that the Madras and Karnataka
view, with which the Delhi High Court differed, is the correct
view in law. Shri Colin Gonsalves, learned senior counsel,
11
supported her arguments, and appeared in civil appeal arising
out of SLP(C) Nos.10170-10178 of 2017.
10. By way of reply, Shri C.S. Vaidyanathan, learned senior
counsel, argued that the impugned single Judge judgment was
based on an earlier Division Bench judgment in E. Merck
(India) Ltd. and another v. Union of India and another,
(2001) 90 DLT 60, which upheld the constitutional validity of
Section 26A on the ground that since the DTAB had to be
consulted before passing an order under Section 26A, the said
Section would pass constitutional muster. He also referred us
to this Court’s judgment in Systopic Laboratories (Pvt) Ltd. v.
Dr. Prem Gupta & Ors., 1994 Supp (1) SCC 160 in furtherance
of the same proposition. According to learned counsel, it is
clear on a reading of Section 5 of the Drugs Act, that it will
apply to both the Central Government and the State
Governments on all technical matters that arise out of the
administration of the Drugs Act. Since Section 26A deals only
with such technical matters, it is obvious that the DTAB’s advice
has to be taken in every such case as otherwise, if it were open
to the Central Government to pick and choose in which case
12
they would take such advice and which case they would not
take such advice, the provision itself would become arbitrary
and unreasonable. According to the learned senior counsel,
Section 5(5) of the Drugs Act is very important in that it is the
DTAB alone who may constitute sub-committees consisting of
persons who are not members of the DTAB, who may consider
particular matters, thereby making it clear that the DTAB alone
can induct experts who are outside Section 5 and not the
Central Government. He further referred to the Drugs and
Cosmetics Rules, 1945 (hereinafter referred to as the “Drugs
Rules”), in particular Rules 21, 68A, 122A, 122D and 122DA, to
buttress his submission that a detailed filtration process has to
be gone through before a drug can be manufactured and put on
the market and that the Central Government cannot ban such
drug without consulting the technical expert under the Drugs
Act namely, the DTAB, that is set up under Section 5. He also
argued that Sections 10A and 26A were introduced by way of
an amendment in 1982 and this being so, it is clear that it is
assumed by Parliament that Section 5 of the Drugs Act will be
13
read along with both of them so as to make the DTAB a
mandatory consultee before action is taken under Section 26A.
11. Shri Vashisht, learned senior counsel appearing for some
of the respondents, adverted to Section 5 and stated that it was
in two parts, the first being advice to the Central Government
on all technical matters arising out of the administration of the
Drugs Act and the second (and distinct part) being to carry out
other functions assigned to it by the Drugs Act. It is clear,
therefore, that in all matters which fall within the first part, the
advice of the Board would be mandatory before the Central
Government were to take action under Section 26A. He also
referred us to Section 7A of the Drugs Act and argued that
when the said Drugs Act expressly states that nothing in
Section 5 is to apply, it is expressly so stated and that,
therefore, the necessary inference would be that Section 5
would apply in all situations other than those covered by
Section 7A. He further argued that Section 26A does not have a
non obstante clause which puts out of harm’s way Section 5,
but only a “without prejudice” clause and that too restricted only
to Chapter IV, making it clear that Section 26A would have to be
14
read along with Section 5. According to him, therefore, there is
no reason to interfere with the judgment of the Delhi High
Court.
12. Dr. A.M. Singhvi, learned senior counsel, argued that on a
cursory look at the persons who constitute the DTAB under
Section 5, it is an extremely high ranking body which is the
technical expert set up by the statute and, therefore, the High
Court judgment is right in stating that in all cases arising under
Section 26A prior consultation with the DTAB is a must. He
argued, in the alternative, that on a purposive and harmonious
construction of the Drugs Act as a whole, a middle approach
could be that the Central Government may, in emergent
situations, not consult the DTAB, but in all other situations
should give reasons why the DTAB was not consulted,
otherwise the exercise under Section 26A would be found to be
constitutionally infirm. According to the learned senior counsel,
hearing is mandatory under the said Section and the High
Court’s reading in the requirement of hearing into the said
Section was absolutely correct. He also referred us to
judgments dealing with not only how hearing must be added
15
when it is absent, but to a judgment of this Court which stated
that conditional legislation, of which Section 26A is a clear
instance, would also require hearing the affected parties.
13. In answer to these submissions, the learned Additional
Solicitor General, in rejoinder, went through the 1982
amendment, which introduced Section 26A, and stated that
Sections 29 and 35 thereof make it clear that amendments
were made in certain Sections with reference to the DTAB
under Section 5 and that, therefore, the omission of any
reference to the DTAB in Section 26A is deliberate. She also
went on to state that Rule 66 of the Drugs Rules, which deals
with cancellation of individual licenses and which requires
compliance with natural justice, should be contrasted with
Section 26A of the Drugs Act which, according to her, is a
legislative power as opposed to an administrative power.
14. Having heard learned counsel for the parties, it is first
important to set out some of the provisions of the Drugs Act.
“5. The Drugs Technical Advisory Board.—
(1) The Central Government shall, as soon as may
be, constitute a Board (to be called the Drugs
Technical Advisory Board) to advise the Central
16
Government and the State Governments on
technical matters arising out of the administration of
this Act and to carry out the other functions
assigned to it by this Act.
(2) The Board shall consist of the following
members, namely:—
(i) the Director General of Health Services, ex
officio, who shall be Chairman;
(ii) the Drugs Controller, India, ex officio;
(iii) the Director of the Central Drugs Laboratory,
Calcutta, ex officio;
(iv) the Director of the Central Research Institute,
Kasauli, ex officio;
(v) the Director of the Indian Veterinary Research
Institute, Izatnagar, ex officio;
(vi) the President of the Medical Council of India, ex
officio;
(vii) the President of the Pharmacy Council of India,
ex officio;
(viii) the Director of the Central Drug Research
Institute, Lucknow, ex officio;
(ix) two persons to be nominated by the Central
Government from among persons who are in
charge of drugs control in the States;
(x) one person, to be elected by the Executive
Committee of the Pharmacy Council of India, from
among teachers in pharmacy or pharmaceutical
chemistry or pharmacology on the staff of an Indian
university or a college affiliated thereto;
(xi) one person, to be elected by the Executive
Committee of the Medical Council of India, from
among teachers in medicine or therapeutics on the
17
staff of an Indian university or a college affiliated
thereto;
(xii) one person to be nominated by the Central
Government from the pharmaceutical industry;
(xiii) one pharmacologist to be elected by the
Governing Body of the Indian Council of Medical
Research;
(xiv) one person to be elected by the Central
Council of the Indian Medical Association;
(xv) one person to be elected by the Council of the
Indian Pharmaceutical Association;
(xvi) two persons holding the appointment of
Government Analyst under this Act, to be nominated
by the Central Government.
(3) The nominated and elected members of the
Board shall hold office for three years, but shall be
eligible for re-nomination and re-election:
Provided that the person nominated or elected, as
the case may be, under clause (ix) or clause (x) or
clause (xi) or clause (xvi) of sub-section (2) shall
hold office for so long as he holds the appointment
of the office by virtue of which he was nominated or
elected to the Board.
(4) The Board may, subject to the previous approval
of the Central Government, make bye-laws fixing a
quorum and regulating its own procedure and the
conduct of all business to be transacted by it.
(5) The Board may constitute sub-committees and
may appoint to such sub-committees for such
periods, not exceeding three years, as it may
decide, or temporarily for the consideration of
particular matters, persons who are not members of
the Board.
18
(6) The functions of the Board may be exercised
notwithstanding any vacancy therein.
(7) The Central Government shall appoint a person
to be Secretary of the Board and shall provide the
Board with such clerical and other staff as the
Central Government considers necessary.
6. The Central Drugs Laboratory.—
(1) The Central Government shall, as soon as may
be, establish a Central Drugs Laboratory under the
control of a Director to be appointed by the Central
Government, to carry out the functions entrusted to
it by this Act or any rules made under this Chapter:
Provided that, if the Central Government so
prescribes, the functions of the Central Drugs
Laboratory in respect of any drug or class of drugs
or cosmetic or class of cosmetics shall be carried
out at the Central Research Institute, Kasauli, or at
any other prescribed Laboratory and the functions
of the Director of the Central Drugs Laboratory in
respect of such drug or class of drugs or such
cosmetic or class of cosmetics shall be exercised by
the Director of that Institute or of that other
Laboratory, as the case may be.
(2) the Central Government may, after consultation
with the Board, make rules prescribing—
(a) the functions of the Central Drugs Laboratory;
********
(d) the procedure for the submission of the said
Laboratory under Chapter IV or Chapter IVA of
samples of drugs or cosmetics for analysis or test,
the forms of Laboratory’s reports thereon and the
fees payable in respect of such reports;
19
(e) such other matters as may be necessary or
expedient to enable the said Laboratory to carry out
its functions;
(f) the matters necessary to be prescribed for the
purposes of the proviso to sub-section (1).
7. The Drugs Consultative Committee.—
(1) The Central Government may constitute an
advisory committee to be called “the Drugs
Consultative Committee” 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 this Act.
(2) The Drugs Consultative Committee shall consist
of two representatives of the Central Government to
be nominated by that Government and one
representative of each State Government to be
nominated by the State Government concerned.
(3) The Drugs Consultative Committee shall meet
when required to do so by the Central Government
and shall have power to regulate its own procedure.
7A. Sections 5 and 7 not to apply to Ayurvedic,
Siddha or Unani drugs.—
Nothing contained in sections 5 and 7 shall apply to
Ayurvedic, Siddha or Unani drugs.
8. Standards of quality.—
(1) For the purposes of this Chapter, the expression
“standard quality” means—
(a) in relation to a drug, that the drug complies with
the standard set out in the Second Schedule, and
(b) in relation to a cosmetic, that the cosmetic
compiles with such standard as may be prescribed.
20
(2) The Central Government, after consultation with
the Board and after giving by notification in the
Official Gazette not less than three months’ notice of
its intention so to do, may by a like notification add
to or otherwise amend the Second Schedule, for the
purposes of this Chapter, and thereupon the
Second Schedule shall be deemed to be amended
accordingly.
10. Prohibition of import of certain drugs or
cosmetics.—
From such date as may be fixed by the Central
Government by notification in the Official Gazette in
this behalf, no person shall import—
(a) any drug or cosmetic which is not of standard
quality;
(b) any misbranded drug or misbranded or spurious
cosmetic;
(bb) any adulterated or spurious drug;
(c) any drug or cosmetic for the import of which a
licence is prescribed, otherwise than under, and in
accordance with, such licence;
(d) any patent or proprietary medicine, unless there
is displayed in the prescribed manner on the label
or container thereof the true formula or list of active
ingredients contained in it together with the
quantities thereof;
(e) any drug which by means of any statement,
design or device accompanying it or by any other
means, purports or claims to cure or mitigate any
such disease or ailment, or to have any such other
effect, as may be prescribed;
(ee) any cosmetic containing any ingredient which
may render it unsafe or harmful for use under the
directions indicated or recommended;
21
(f) any drug or cosmetic the import of which is
prohibited by rule made under this Chapter:
Provided that nothing in this section shall apply to
the import, subject to prescribed conditions, of small
quantities of any drug for the purpose of
examination, test or analysis or for personal use:
Provided further that the Central Government may,
after consultation with the Board, by notification in
the Official Gazette, permit, subject to any
conditions specified in the notification, the import of
any drug or class of drugs not being of standard
quality.
12. Power of Central Government to make rules.
—
(1) The Central Government may, after consultation
with or on the recommendation of the Board and
after previous publication by notification in the
Official Gazette, make rules for the purpose of
giving effect to the provisions of this Chapter:
Provided that consultation with the Board may be
dispensed with if the Central Government is of
opinion that circumstances have arisen which
render it necessary to make rules without such
consultation, but in such a case the Board shall be
consulted within six months of the making of the
rules and the Central Government shall take into
consideration any suggestions which the Board may
make in relation to the amendment of the said rules.
(2) xxx xxx xxx
16. Standards of quality.—
(1) For the purposes of this Chapter, the expression
“standard quality” means—
(a) in relation to a drug, that the drug complies with
the standard set out in the Second Schedule, and
22
(b) in relation to a cosmetic, that the cosmetic
complies with such standard as may be prescribed.
(2) The Central Government, after consultation with
the Board and after giving by notification in the
Official Gazette not less than three months’ notice of
its intention so to do, may by a like notification add
to or otherwise amend the Second Schedule for the
purposes of this Chapter, and thereupon the
Second Schedule shall be deemed to be amended
accordingly.
18. Prohibition of manufacture and sale of
certain drugs and cosmetics.—
From such date as may be fixed by the State
Government by notification in the Official Gazette in
this behalf, no person shall himself or by any other
person on his behalf—
(a) manufacture for sale or for distribution, or sell, or
stock or exhibit or offer for sale, or distribute—
(i) any drug which is not of a standard quality, or is
misbranded, adulterated or spurious;
(ii) any cosmetic which is not of a standard quality
or is misbranded, adulterated or spurious;
(iii) any patent or proprietary medicine, unless there
is displayed in the prescribed manner on the label
or container thereof the true formula or list of active
ingredients contained in it together with the
quantities thereof;
(iv) any drug which by means of any statement,
design or device accompanying it or by any other
means, purports or claims to prevent, cure or
mitigate any such disease or ailment, or to have any
such other effect as may be prescribed;
23
(v) any cosmetic containing any ingredient which
may render it unsafe or harmful for use under the
directions indicated or recommended; and
(vi) any drug or cosmetic in contravention of any of
the provisions of this Chapter or any rule made
thereunder;
(b) sell, or stock or exhibit or offer for sale, or
distribute any drug or cosmetic which has been
imported or manufactured in contravention of any of
the provisions of this Act or any rule made
thereunder;
(c) manufacture for sale or for distribution, or sell, or
stock or exhibit or offer for sale, or distribute any
drug or cosmetic, except under, and in accordance
with the conditions of, a licence issued for such
purpose under this Chapter:
Provided that nothing in this section shall apply to
the manufacture, subject to prescribed conditions,
of small quantities of any drug for the purpose of
examination, test or analysis:
Provided further that the Central Government may,
after consultation with the Board, by notification in
the Official Gazette, permit, subject to any
conditions specified in the notification, the
manufacture for sale, or for distribution, sale,
stocking or exhibiting or offering for sale or
distribution of any drug or class of drugs not being
of standard quality.
26A. Powers of Central Government to prohibit
manufacture, etc., of drug and cosmetic in
public interest.—
Without prejudice to any other provision contained
in this Chapter, if the Central Government is
satisfied, that the use of any drug or cosmetic is
likely to involve any risk to human beings or animals
24
or that any drug does not have the therapeutic value
claimed or purported to be claimed for it or contains
ingredients and in such quantity for which there is
no therapeutic justification and that in the public
interest it is necessary or expedient so to do, then,
that Government may, by notification in the Official
Gazette, regulate, restrict or prohibit the
manufacture, sale or distribution of such drug or
cosmetic.
33. Power of Central Government to make rules.
—
(1) The Central Government may after consultation
with, or on the recommendation of, the Board and
after previous publication by notification in the
Official Gazette, make rules for the purpose of
giving effect to the provisions of this Chapter:
Provided that consultation with the Board may be
dispensed with if the Central Government is of
opinion that circumstances have arisen which
render it necessary to make rules without such
consultation, but in such a case the Board shall be
consulted within six months of the making of the
rules and the Central Government shall take into
consideration any suggestions which the Board may
make in relation to the amendment of the said rules.
(2) Without prejudice to the generality of the
foregoing power, such rules may—
(a) provide for the establishment of laboratories for
testing and analysing drugs or cosmetics;
(b) prescribe the qualifications and duties of
Government Analysts and the qualifications of
Inspectors;
(c) prescribe the methods of test or analysis to be
employed in determining whether a drug or
cosmetic is of standard quality;
25
(d) prescribe, in respect of biological and
organometallic compounds, the units or methods of
standardisation;
(dd) prescribe under clause (d) of section 17A the
colour or colours which a drug may bear or contain
for purposes of colouring;
(dda) prescribe under clause (d) of section 17E the
colour or colours which a cosmetic may bear or
contain for the purpose of colouring;
(e) prescribe the forms of licences for the
manufacture for sale or for distribution, for the sale
and for the distribution of drugs or any specified
drug or class of drugs or of cosmetics or any
specified cosmetic or class of cosmetics, the form of
application for such licences, the conditions subject
to which such licences may be issued, the authority
empowered to issue the same, the qualifications of
such authority and the fees payable therefor; and
provide for the cancellation or suspension of such
licences in any case where any provision of this
Chapter or the rules made thereunder is
contravened or any of the conditions subject to
which they are issued is not complied with;
(ee) prescribe the records, registers or other
documents to be kept and maintained under section
18B;
(eea) prescribe the fees for the inspection (for the
purposes of grant or renewal of licences) of
premises, wherein any drug or cosmetic is being or
is proposed to be manufactured;
(eeb) prescribe the manner in which copies are to
be certified under sub-section (2A) of section 22;
(f) specify the diseases or ailments which a drug
may not purport or claim to prevent, cure or mitigate
26
and such other effects which a drug may not purport
or claim to have;
(g) prescribe the conditions subject to which small
quantities of drugs may be manufactured for the
purpose of examination, test or analysis;
(h) require the date of manufacture and the date of
expiry of potency to be clearly or truly stated on the
label or container of any specified drug or class of
drugs, and prohibit the sale, stocking or exhibition
for sale, or distribution of the said drug or class of
drugs after the expiry of a specified period from the
date of manufacture or after the expiry of the date of
potency;
(i) prescribe the conditions to be observed in the
packing in bottles, packages, and other containers
of drugs or cosmetics, including the use of packing
material which comes into direct contact with the
drugs and prohibit the sale, stocking or exhibition for
sale, or distribution of drugs or cosmetics packed in
contravention of such conditions;
(j) regulate the mode of labelling packed drugs or
cosmetics, and prescribe the matters which shall or
shall not be included in such labels;
(k) prescribe the maximum proportion of any
poisonous substance which may be added or
contained in any drug, prohibit the manufacture,
sale or stocking or exhibition for sale, or distribution
of any drug in which that proportion is exceeded,
and specify substances which shall be deemed to
be poisonous for the purposes of this Chapter and
the rules made thereunder;
(l) require that the accepted scientific name of any
specified drug shall be displayed in the prescribed
manner on the label or wrapper of any patent or
proprietary medicine containing such drug;
27
[****]
(n) prescribe the powers and duties of Inspectors
and the qualifications of the authority to which such
Inspectors shall be subordinate and specify the
drugs or classes of drugs or cosmetics or classes of
cosmetics in relation to which and the conditions,
limitations or restrictions subject to which, such
powers and duties may be exercised or performed;
(o) prescribe the forms of report to be given by
Government Analysts, and the manner of
application for test or analysis under section 26 and
the fees payable therefor;
(p) specify the offences against this Chapter or any
rule made thereunder in relation to which an order
of confiscation may be made under section 31;
(q) provide for the exemption, conditionally or
otherwise, from all or any of the provisions of this
Chapter or the rules made thereunder, of any
specified drug or class of drugs or cosmetic or class
of cosmetics; and
(r) sum which may be specified by the Central
Government under section 32-B.
33EED. Power of Central Government to prohibit
manufacture, etc., of Ayurvedic, Siddha or Unani
drugs in public interest.—
Without prejudice to any other provision contained
in this Chapter, if the Central Government is
satisfied on the basis of any evidence or other
material available before it that the use of any
Ayurvedic, Siddha or Unani drug is likely to involve
any risk to human beings or animals or that any
such drug does not have the therapeutic value
claimed or purported to be claimed for it and that in
the public interest it is necessary or expedient so to
do then, that Government may, by notification in the
28
Official Gazette, prohibit the manufacture, sale or
distribution of such drug.
33N. Power of Central Government to make
rules.—
(1) The Central Government may, after consultation
with, or on the recommendation of, the Board and
after previous publication by notification in the
Official Gazette, make rules for the purpose of
giving effect to the provisions of this Chapter:
Provided that consultation with the Board may be
dispensed with if the Central Government is of
opinion that circumstances have arisen which
render it necessary to make rules without such
consultation, but in such a case, the Board shall be
consulted within six months of the making of the
rules and the Central Government shall take into
consideration any suggestions which the Board may
make in relation to the amendment of the said rules.
(2) Without prejudice to the generality of the
foregoing power, such rules may—
(a) provide for the establishment of laboratories for
testing and analysing Ayurvedic, Siddha or Unani
drugs;
(b) prescribe the qualification and duties of
Government Analysts and the qualifications of
Inspectors;
(c) prescribe the methods of test or analysis to be
employed in determining whether any Ayurvedic,
Siddha or Unani drug is labelled with the true list of
the ingredients which it is purported to contain;
(d) specify any substance as a poisonous
substance;
(e) prescribe the forms of licences for the
manufacture for sale of Ayurvedic, Siddha or Unani
29
drugs, and for sale of processed Ayurvedic, Siddha
or Unani drugs, the form of application for such
licences, the conditions subject to which such
licences may be issued, the authority empowered to
issue the same and the fees payable therefor; and
provide for the cancellation or suspension of such
licences in any case where any provision of this
Chapter or rules made thereunder is contravened or
any of the conditions subject to which they are
issued is not complied with;
(f) prescribe the conditions to be observed in the
packing of Ayurvedic, Siddha and Unani drugs
including the use of packing material which comes
into direct contact with the drugs, regulate the mode
of labelling packed drugs and prescribe the matters
which shall or shall not be included in such labels;
(g) prescribe the conditions subject to which small
quantities of Ayurvedic, Siddha or Unani drugs may
be manufactured for the purpose of examination,
test or analysis;
(gg) prescribe under clause (d) of section 33EE the
colour or colours which an Ayurvedic, Siddha or
Unani drug may bear or contain for purposes of
colouring;
(gga) prescribe the standards for Ayurvedic, Siddha
or Unani drugs under section 33EEB;
(ggb) prescribe the records, registers or other
documents to be kept and maintained under section
33 KB; and
(h) any other matter which is to be or may be
prescribed under this Chapter.”
15. Having heard learned counsel for the parties, it is clear
that Section 26A has been introduced by an amendment in
30
1982. A bare reading of this provision would show, firstly, that it
is without prejudice to any other provision contained in this
Chapter (meaning thereby Chapter IV). This expression only
means that apart from the Central Government’s other powers
contained in Chapter IV, Section 26A is an additional power
which must be governed by its own terms. Under Section 26A,
the Central Government must be “satisfied” that any drug or
cosmetic is likely to involve (i) any risk to human beings or
families; or (ii) that any drug does not have the therapeutic
value claimed or purported to be claimed for it; or (iii) contains
ingredients in such quantity for which there is no therapeutic
justification. Obviously, the Central Government has to apply its
mind to any or all of these three factors which has to be based
upon its “satisfaction” as to the existence of any or all of these
factors. The power exercised under Section 26A must further be
exercised only if it is found necessary or expedient to do so in
public interest. When the power is so exercised, it may
regulate, restrict or prohibit manufacture, sale or distribution of
any drug or cosmetic.
31
16. Undoubtedly, Section 26A has to be read with the rest of
the Drugs Act. So read, it is clear that unlike Section 6(2),
Section 8(2), second proviso to Section 10, proviso to Section
12(1), Section 16(2), proviso to Section 18(2), Section 33 and
Section 33N, there is no explicit requirement to consult the
DTAB set up under Section 5 of the Drugs Act. The question is
did the Parliament do so deliberately or is it something that the
Court should read into the provision?
17. As has been stated hereinabove, Section 26A was
brought in by an amendment in 1982. The amendment
specifically made changes in Sections 33 and 33N in which it
added the words “on the recommendation of the Board”. From
this, it is clear that Parliament in the very Amendment Act which
introduced Section 26A made certain changes which involved
the DTAB under Section 5 of the said Act. It is clear that the
additional power that is given to the Central Government under
Section 26A does not refer to and, therefore, mandate any
previous consultation with the DTAB. On the contrary, the
Central Government may be “satisfied” on any relevant material
that a drug is likely to involve any risk to human beings etc. as a
32
result of which it is necessary in public interest to regulate,
restrict or prohibit manufacture, sale or distribution thereof. So
long as the Central Government’s satisfaction can be said to be
based on relevant material, it is not possible to say that not
having consulted the DTAB, the power exercised under the said
Section would be non est. Take the case of an FDC that is
banned in 50 countries of the world owing to the fact that the
said FDC involved significant risk to human beings. Assuming
that the Central Government is satisfied based on this fact
alone, which in turn is based on expert committee reports in
various nations which pointed out the deleterious effects of the
said drug, can it be said that without consulting the DTAB set up
under Section 5, the exercise of the power under Section 26A
to prohibit the manufacture or sale or distribution of a drug that
is banned in 50 countries would be bad only because the DTAB
has not been consulted? The obvious answer is no inasmuch
as the Central Government’s satisfaction is based upon
relevant material, namely, the fact that 50 nations have banned
the aforesaid drug, which in turn is based on expert committee
reports taken in each of those nations. Take another example.
33
Suppose the Central Government were to ban an FDC on the
ground that, in the recent past, it has been apprised of the fact
that the FDCs taken over a short period of time would lead to
loss of life, which has come to the notice of the Central
Government through reports from various district authorities, in
let us say, a majority of districts in which the said FDC has been
consumed. Could not the Central Government then base its
ban order on material collected from district authorities which
state that this particular drug leads to human mortality and
ought, therefore, to be prohibited? The obvious answer again is
yes for the reason that the Central Government has been
satisfied on relevant material that it is necessary in public
interest to ban such drug. Examples of this nature can be
multiplied to show that the width of the power granted under
Section 26A cannot be cut down by artificially cutting down the
language of Section 26A.
18. We were referred to a judgment of this Court in Systopic
Laboratories (supra) at 169. Paragraph 19 of the said
judgment reads as follows:-
34
“19. Having considered the submissions made by
the learned counsel for the petitioners and the
learned Additional Solicitor General in this regard,
we must express our inability to make an
assessment about the relative merits of the various
studies and reports which have been placed before
us. Such an evaluation is required to be done by the
Central Government while exercising its powers
under Section 26-A of the Act on the basis of expert
advice and the Act makes provision for obtaining
such advice through the Board and the DCC.”
19. It is clear that a stray sentence in a judgment without a
focused argument cannot be considered as the ratio of such a
judgment. Also, on a careful reading of the second sentence in
paragraph 19, it is clear that all that is stated by this Court is
that, while exercising its power under Section 26A of the Drugs
Act, the basis of the Central Government’s decision must be
“expert advice”. The sentence then goes on to add that the
Drugs Act makes provision for obtaining such advice through
the Board and the DCC. According to us, there was no focused
argument on whether such advice is or is not mandatory before
powers under Section 26A of the Drugs Act can be exercised,
and merely reading a stray sentence in this judgment does not
lead to such a conclusion. Equally, the single Judge’s reliance
upon a Division Bench judgment contained in E. Merck (supra),
35
where, in holding Section 26A to be constitutional, the Court
stated:
“Before the Government records its satisfaction to
prohibit the manufacture, sale, distribution etc. of a
particular drug, opinion of the DTAB and/or Drugs
Consultative Committee is obtained.”
This is an equally stray sentence and what has been
stated with respect to Systopic Laboratories (supra), applies
equally to this sentence.
20. We have now to consider certain other arguments made
on behalf of the respondents. One argument was that Section
5 is in two parts and that the first part necessarily applies to all
technical matters that arise out of the administration of the
Drugs Act, and that, therefore, the Central Government is
bound to take the advice of the DTAB in all such matters. We
must first advert to the fact that the DTAB is only an advisory
body. No doubt, it would be desirable for the Central
Government to take its advice on technical matters arising out
of the administration of the Drugs Act, but this does not lead to
the conclusion that if such advice is not taken power under
Section 26A cannot be exercised. Indeed, the Central
36
Government’s satisfaction may be based on a number of
factors, one of which may be advice tendered to it by the DTAB
under Section 5. There is no warrant to read Section 26A to
constrict the wide powers granted to the Central Government
by a so-called harmonious construction of the statute. Another
argument made is that Section 5 makes it clear that the DTAB
alone can constitute sub-committees which may have persons
who are not members of the Board on them. We are afraid that
this again does not lead us very far. It is clear that the reason
for Section 5(5) is completely different. Sub-committees may
be appointed for such periods not exceeding three years or
temporarily for the consideration of particular matters. Such
sub-committees may be set up in the wisdom of the DTAB for
short periods of time or temporarily to consider certain matters
and make reports which the DTAB may then utilize. This is a
power of the DTAB which can be exercised when the DTAB
deems it desirable. From this power, it cannot be inferred, as a
matter of logic, that since Section 5(5) permits persons who are
not members of the board to sit on sub-committees, the Central
Government may not, under Section 26A, refer to any persons
37
other than those who are board members. This argument,
therefore, is also rejected.
21. Yet another argument has been made that since Section
10A and 26A were brought in together by an Amendment Act in
1982, it must, therefore, somehow be assumed that the
Amendment Act necessarily included a mandatory consultation
with the DTAB set up under Section 5. We have already
pointed out how the very amendment Act of 1982 also
amended Sections 33 and 33N by referring to the DTAB and
that, therefore, it is obvious that the omission of any reference
to the DTAB under Sections 10A and 26A cannot but be said to
be deliberate. This argument also need not detain us further.
22. A negative argument was made stating that Section 7A of
the Drugs Act makes it clear that Section 5 will not apply to
Ayurvedic, Siddha or Unani drugs and that, therefore, it will
apply to all other drugs. The reason for Section 7A is again
something very different from what has been argued. It must
first be pointed out that under Chapter IVA, which is a separate
Chapter introduced by Act 13 of 1964, Ayurvedic, Siddha and
38
Unani drugs are completely separately dealt with. Indeed,
Section 33A, which must be read with Section 7A, expressly
provides that save as provided in this Drugs Act, nothing
contained in this Chapter, i.e. Chapter IV, shall apply to
Ayurvedic, Siddha or Unani drugs. Chapter IVA consists of a
separate and distinct drill to be followed in the case of
Ayurvedic, Siddha and Unani drugs. Under Section 33C, there
is a separate technical advisory board for Ayurvedic and Unani
drugs and a separate consultative committee for Ayurvedic,
Siddha and Unani drugs (see Section 33D). When Section 7A
says that nothing in section 5 shall apply to Ayurvedic, Siddha
or Unani drugs, all that it affirms is that the DTAB set up under
Section 5 will apply to all drugs except Ayurvedic, Siddha or
Unani medicines. The Latin maxim “expressio unius est
exclusio alterius” cannot apply, as has been held in State of
Karnataka v Union of India & Ors., (1977) 4 SCC 608 at 662,
making it clear that the said maxim should be very carefully
applied and when misapplied would turn out to be a “dangerous
master” as opposed to a “useful servant”. This has also been
held in Assistant Collector of Central Excise, Calcutta
39
Division v. National Tobacco Co. of India Ltd., (1972) 2 SCC
560 at 575 as follows:
“The High Court's view was based on an application
of the rule of construction that where a mode of
performing a duty is laid down by law it must be
performed in that mode or not at all. This rule flows
from the maxim: “Expressio unius ast exclusio
alterius”. But, as was pointed out by Wills, J.,
in Colguoboun v. Brooks [(1888) 21 QBD 52, 62]
this maxim “is often a valuable servant, but a
dangerous master….”. The rule is subservient to the
basic principle that Courts must endeavour to
ascertain the legislative intent and purpose, and
then adopt a rule of construction which effectuates
rather than one that may defeat these. “
This argument, therefore, also need not detain us.
23. It was also argued that Section 26A had no non obstante
clause to keep Section 5 out of harm’s way. On our
construction of Section 26A, it is clear that no such non
obstante clause was necessary in that the width of the
expression “is satisfied” contained in Section 26A cannot be cut
down by reference to Section 5. As has been stated by us
hereinabove, the expression “without prejudice” makes it clear
that Section 26A is an additional power given to the Central
Government which must be exercised on its own terms.
40
24. An argument was made that unless the provisions of
Section 5 requiring consultation with the DTAB are read into
Section 26A, the said Section would be arbitrary. In our
opinion, there are sufficient indicators in the Section to eschew
any ground of arbitrariness. The power can only be exercised
based on satisfaction of material that is relevant to form an
opinion that the drug in question falls within any of the three
categories outlined by the Section and that, further, it is
necessary or expedient to either regulate, restrict or prohibit
manufacture, sale or distribution of the said drug in public
interest. Indeed, this is made explicit in Section 33 EED of the
Drugs Act, wherein a similar power is given to the Central
Government qua Ayurvedic, Siddha or Unani drugs, where the
Section states:
“… the Central Government is satisfied on the basis
of any evidence or other material available before it
that …”
25. If the power under Section 26A is exercised on the basis
of irrelevant material or on the basis of no material, the
satisfaction itself that is contemplated by Section 26A would not
41
be there and the exercise of the power would be struck down
on this ground. Further, it is argued that the provision may be
read down to make it constitutionally valid, but in so doing,
words cannot be added as a matter of constitutional doctrine.
26. In Cellular Operators Association of India and others
v. Telecom Regulatory Authority of India and others, (2016)
7 SCC 703 at 740-741, this Court held as under:
“50. But it was said that the aforesaid Regulation
should be read down to mean that it would apply
only when the fault is that of the service provider.
We are afraid that such a course is not open to us in
law, for it is well settled that the doctrine of reading
down would apply only when general words used in
a statute or regulation can be confined in a
particular manner so as not to infringe a
constitutional right. This was best exemplified in one
of the earliest judgments dealing with the doctrine of
reading down, namely, the judgment of the Federal
Court in Hindu Women’s Rights to Property Act,
1937, In re [Hindu Women’s Rights to Property Act,
1937, In re, AIR 1941 FC 72]. In that judgment, the
word “property” in Section 3 of the Hindu Women’s
Rights to Property Act was read down so as not to
include agricultural land, which would be outside the
Central Legislature’s powers under the Government
of India Act, 1935. This is done because it is
presumed that the legislature did not intend to
transgress constitutional limitations. While so
reading down the word “property”, the Federal Court
held:
42
“… If the restriction of the general words
to purposes within the power of the
legislature would be to leave an Act with
nothing or next to nothing in it, or an Act
different in kind, and not merely in
degree, from an Act in which the general
words were given the wider meaning,
then it is plain that the Act as a whole
must be held invalid, because in such
circumstances it is impossible to assert
with any confidence that the legislature
intended the general words which it has
used to be construed only in the
narrower sense: Owners of SS Kalibia v.
Wilson [(1910) 11 CLR 689 (Aust)],
Vacuum Oil Co. Pty. Ltd. v. Queensland
[(1934) 51 CLR 677 (Aust)], R. v.
Commonwealth Court of Conciliation
and Arbitration, ex p Whybrow & Co.
[(1910) 11 CLR 1 (Aust)] and British
Imperial Oil Co. Ltd. v. Federal Commr.
of Taxation [(1925) 35 CLR 422 (Aust)].”
51. This judgment was followed by a Constitution
Bench of this Court in DTC v. Mazdoor Congress
[1991 Supp (1) SCC 600 : 1991 SCC (L&S) 1213].
In that case, a question arose as to whether a
particular regulation which conferred power on an
authority to terminate the services of a permanent
and confirmed employee by issuing a notice
terminating his services, or by making payment in
lieu of such notice without assigning any reasons
and without any opportunity of hearing to the
employee, could be said to be violative of the
appellants’ fundamental rights. Four of the learned
Judges who heard the case, the Chief Justice alone
dissenting on this aspect, decided that the
regulation cannot be read down, and must,
therefore, be held to be unconstitutional. In the lead
43
judgment on this aspect by Sawant, J., this Court
stated: (SCC pp. 728-29, para 255)
“255. It is thus clear that the doctrine of
reading down or of recasting the statute
can be applied in limited situations. It is
essentially used, firstly, for saving a
statute from being struck down on
account of its unconstitutionality. It is an
extension of the principle that when two
interpretations are possible — one
rendering it constitutional and the other
making it unconstitutional, the former
should be preferred. The
unconstitutionality may spring from
either the incompetence of the
legislature to enact the statute or from
its violation of any of the provisions of
the Constitution. The second situation
which summons its aid is where the
provisions of the statute are vague and
ambiguous and it is possible to gather
the intentions of the legislature from the
object of the statute, the context in
which the provision occurs and the
purpose for which it is made. However,
when the provision is cast in a definite
and unambiguous language and its
intention is clear, it is not permissible
either to mend or bend it even if such
recasting is in accord with good reason
and conscience. In such circumstances,
it is not possible for the court to remake
the statute. Its only duty is to strike it
down and leave it to the legislature if it
so desires, to amend it. What is further,
if the remaking of the statute by the
courts is to lead to its distortion that
course is to be scrupulously avoided.
One of the situations further where the
44
doctrine can never be called into play is
where the statute requires extensive
additions and deletions. Not only it is no
part of the court’s duty to undertake
such exercise, but it is beyond its
jurisdiction to do so.”
(emphasis supplied)
52. Applying the aforesaid test to the impugned
Regulation, it is clear that the language of the
Regulation is definite and unambiguous — every
service provider has to credit the account of the
calling consumer by one rupee for every single call
drop which occurs within its network. The
Explanatory Memorandum to the aforesaid
Regulation further makes it clear, in Para 19 thereof,
that the Authority has come to the conclusion that
call drops are instances of deficiency in service
delivery on the part of the service provider. It is thus
unambiguously clear that the impugned Regulation
is based on the fact that the service provider is
alone at fault and must pay for that fault. In these
circumstances, to read a proviso into the Regulation
that it will not apply to consumers who are at fault
themselves is not to restrict general words to a
particular meaning, but to add something to the
provision which does not exist, which would be
nothing short of the court itself legislating. For this
reason, it is not possible to accept the learned
Attorney General’s contention that the impugned
Regulation be read down in the manner suggested
by him.”
27. Also, as a matter of statutory interpretation, words can
only be added if the literal interpretation of the Section leads to
an absurd result. As has been stated by us, the construction of
45
Section 26A on a literal reading thereof does not lead to any
such result. Dr. Singhvi’s argument to read in words to save
Section 26A must, therefore, be rejected.
28. We may also mention that the Madras High Court in its
judgment in Macleods Pharmaceuticals Limited v. Union of
India & Ors., Writ Petition Nos.21933 and 25442 of 2011,
specifically held as under:
“38. Thus, the Act gives in every Chapter, an
indication of the functions to be exercised by the
DTAB. In other words, the territory within which the
DTAB is to operate and exercise its functions, is
clearly demarcated in various provisions of the Act
such as 5(1), 6(2), 7(1), 8(2), second proviso to
Section 10, 12(1) and 33(1). But Section 26-A is
completely silent about any consultation with DTAB.
It is so even with Section 26-B.
39. While the advisory role of DTAB is indicated in
broad and general terms in Section 5(1), it is
indicated in specific terms in Sections 6(2), 7(1),
8(2), second proviso to Section 10, 12(1) and 33(1).
Therefore, the absence of any reference to such
requirement of consultation in Section 26-A
assumes great significance. It is a well settled
principle of interpretation of statutes that the Courts
are not expected to supply the omission. The
Parliament had consciously incorporated the
expressions “after consultation with the Board” or
“on the recommendation of the Board”, in certain
provisions of the Act such as Sections 5(1), 6(2),
7(1), 8(2), second proviso to Section 10, 12(1) and
33(1). But it has deliberately omitted to include any
46
of those expressions while inserting Sections 26-A
and 26-B. It is a case of casus omisus. Therefore,
the argument that the Central Government ought to
have taken the consultation of the DTAB before
issuing the ban order, can hold good only if I can
supply into Section 26-A, what was deliberately left
out by the Parliament. This cannot be done by me
and hence the first contention has to be rejected.”
29. To similar effect is the judgment of a single Judge of the
Karnataka High Court in Lundbeck India Pvt. Ltd. v Union of
India, (2014) 5 Kant LJ 440.
30. We approve of these two judgments as having laid down
the correct law on the construction of Section 26A of the Drugs
Act.
31. Though arguments have been made as to whether
Section 26A is legislative in nature and therefore excludes
natural justice, we do not propose to go into the same
inasmuch as since the learned single Judge’s judgment is being
set aside on one point and one point alone. In this view of the
matter, we are of the opinion that the impugned judgment dated
1.12.2016 deserves to be set aside.
47
32. On the facts of these cases, a suggested course of action
was stated by learned counsel appearing on behalf of the
petitioners/appellants. This course is that instead of now
remitting the matter back to the Delhi High Court for an
adjudication on the other points raised in the writ petitions, the
case of 344 FDCs that have been banned, plus another 5 FDCs
that have been banned, which comes to 349 FDCs, (barring 15
FDCs that are pre 1988 and 17 FDCs which have DCG(I)
approval) pursuant to the Kokate Committee report, by
notifications of the Central Government under Section 26A of
the Drugs Act, should be sent to the DTAB, constituted under
Section 5 of the Drugs Act, so that it can examine each of these
cases and ultimately send a report to the Central Government.
We reiterate that only on the peculiar facts of these cases, we
think that such a course commends itself to us, which would
obviate further litigation and finally set at rest all other
contentions raised by the petitioners. We say so because we
find that the Kokate Committee did deliberate on the 344 FDCs
plus 5 FDCs and did come to a conclusion that the aforesaid
FDCs be banned, but we are not clear as to what exactly the
48
reasons for such conclusions are, and whether it was
necessary in the public interest to take the extreme step of
prohibiting such FDCs, instead of restricting or regulating their
manufacture and supply. In order that an analysis be made in
greater depth, we, therefore, feel that these cases should go to
the DTAB and/or a Sub-Committee formed by the DTAB for the
purpose of having a relook into these cases. It is important,
however, that the DTAB/Sub-Committee appointed for this
purpose will not only hear the petitioners/appellants before us,
but that they also hear submissions from the All India Drugs
Action Network. The DTAB/Sub-Committee set up for this
purpose will deliberate on the parameters set out in Section
26A of the Drugs Act, as follows.
33. First and foremost in each case, the
DTAB/Sub-Committee appointed by it must satisfy itself that the
use of the Fixed Dose Combinations (FDC) in question is likely
to involve any one of the aforesaid three things:
(a) that they are likely to involve any risk to human beings or
animals; or
49
(b) that the said FDCs do not have the therapeutic value
claimed or purported to be claimed for them; or
(c) that such FDCs contain ingredients and in such quantity for
which there is no therapeutic justification.
34. The DTAB/Sub-Committee must also apply its mind as to
whether it is then necessary or expedient, in the larger public
interest, to regulate, restrict or prohibit the manufacture, sale or
distribution of such FDCs. In short, the DTAB/Sub-Committee
must clearly indicate in its report:
(1) as to why, according to it, any one of the three factors
indicated above is attracted;
(2) post such satisfaction, that in the larger public interest, it is
necessary or expedient to (i) regulate, (ii) restrict, or (iii) prohibit
the manufacture, sale or distribution of such FDCs.
35. The DTAB/Sub-Committee must also indicate in its report
as to why, in case it prohibits a particular FDC, restriction or
regulation is not sufficient to control the manufacture and use of
the FDC. We request the DTAB/Sub-Committee to be set up
for this purpose to afford the necessary hearing to all
50
concerned, and thereafter submit a consolidated report, insofar
as these FDCs are concerned, to the Central Government
within a period of six months from the date on which this
judgment is received by the DTAB. We may also indicate that
the Central Government, thereafter, must have due regard to
the report of the DTAB and to any other relevant information,
and ultimately apply its mind to the parameters contained in
Section 26A of the Drugs Act and, accordingly, either maintain
the notifications already issued, or modify/substitute them or
withdraw them.
36. With these directions given on the peculiar facts and
circumstances of these cases, the appeals are disposed of.
37. Insofar as the drugs that have been banned and which
were manufactured pre 21st September, 1988, a list of 15 such
drugs has been given to us by Mr. Kapil Sibal, learned senior
counsel for the respondents. We set aside the Central
Government notifications banning them as these cases were
never meant to be referred to the Kokate Committee. It will be
open, however, for the Central Government, if it so chooses, de
51
novo, to carry out an inquiry as to whether such drugs should
be the subject matter of a notification under Section 26A of the
Drugs Act.
38. Insofar as the list of 17 cases handed over by Shri Sibal,
in which DCG(I) approvals have allegedly been granted, we are
of the view that since the Parliamentary Standing Committee
itself refers to DCG(I) approvals and the manner in which they
were granted, we do not accede to Mr. Sibal's request that
these 17 cases be kept outside the purview of the fresh look
that has to be given by the DTAB/Sub-Committee in these
cases.
39. Insofar as the status quo, obtaining as on today, is
concerned, that will continue in all cases (including the 5 FDCs
which are not the subject matter of stay orders already made)
until the Central Government issues fresh notifications in this
behalf.
MADRAS CASES (TRANSFERRED CASES)
T.C.(C)Nos. 308-317_of 2017 @ T.P.(C)Nos.2108-2117 of 2017
52
40. Mr. Gopal Subramanium, learned senior counsel
appearing on behalf of the original petitioners in these cases,
stated that these cases have been transferred to this Court
from the Madras High Court. A Section 33 ban, which was
imposed on 294 FDCs in these cases, has been stayed by the
Madras High Court, and the very exercise that we have
proposed in the Delhi cases has apparently been carried out in
this group of cases. A report of the expert committee of the
DTAB to review the rationality and safety of 294 FDCs is taken
on record. The report indicates that 42 FDCs reportedly were
repeated or duplicate; 44 were already prohibited for
manufacture in the country; 83 were considered rational; 56
were considered not rational; 49 required further generation of
data; 17 were considered inadequate so far as rationality, safety
and efficacy is concerned; and 3 other cases were sent for
further examination by an expert committee constituted by the
Ministry of Health and Family Welfare. The DTAB after review
of the report and deliberations recommended that the FDC
Ofloxacin and Prednisolone at serial number 75 under the
category of GI in Annexure C does not appear to be rational
53
and should be re-examined. The list of the drugs mentioned in
Annexure D are required to be prohibited/withdrawn from the
market as these are not rational. Considering that an expert
body has already deliberated upon and decided these cases,
we accept the report, and accordingly dispose of these petitions
in accordance therewith.
……………………….J.
(R.F. Nariman)
……………………….J.
(Sanjay Kishan Kaul)
New Delhi;
December 15, 2017.
54

petition for consent divorce - one of the party not turned up - family court dismissed - High court too dismissed - apex court held that First, the parties have admittedly entered into an Agreement/MOU dated 30.12.2014 (Annexure-P8) agreeing therein to get their marriage dissolved by obtaining decree from the Court. Second, the Agreement/MOU bears the signatures of the appellant and respondent. Third, respondent never denied her signature on the Agreement/MOU nor its execution and nor its contents. Fourth, both the parties pursuant to Agreement/MOU actually filed an application under Section 13-B of the Act seeking dissolution of their marriage duly signed. Fifth, the respondent never stated before the Family 5 Court during the cooling period of six months that she wants to wriggle out of the application and does not wish to give her consent for mutual divorce. Sixth, the respondent also did not appear in person before the High Court and nor filed any affidavit except to say through her lawyer. Seventh, parties have been living separately for the last four years due to which their marriage has become irretrievable and there is no point in keeping such marriage alive because when asked the appellant whether he is prepared to continue with the marriage and would like to live with the respondent, his lawyer declined. Lastly, despite service of the notice of this appeal, the respondent too has also not appeared in this Court on any of the dates of hearing and nor sent any letter/affidavit/application or written request of any kind so as to know her stand in the appeal. This shows that the respondent is also not interested in 6 keeping the marital relations alive with the appellant. It is for all these reasons, the appeal succeeds and is allowed. Impugned judgment is set aside. As a consequence, the joint petition (O.P. No.9 of 2015) filed by the appellant and the respondent under Section 13-B of the Act in the Family Court (City Civil Court) at Hyderabad is allowed.The marriage between the appellant and the respondent performed on 11.08.2013 is accordingly dissolved by decree of divorce.

 NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 22913 OF 2017
 (ARISING OUT OF SLP (C) No.31476/2016)
A.V.G.V. Ramu ...Appellant(s)

VERSUS
A.S.R. Bharathi ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is filed by the husband against the
final judgment and order dated 29.08.2016 passed
by the Division Bench of the High Court of
Judicature at Hyderabad for the State of Telangana
and the State of Andhra Pradesh in F.C.A. No. 131
of 2016 whereby the High Court dismissed the
appeal filed by the appellant herein against the
1
order dated 14.09.2015 passed by the Family Court,
Hyderabad in O.P. No.9 of 2015 dismissing the
petition filed by both the parties for mutual divorce
under Section 13-B of the Hindu Marriage Act, 1955
(hereinafter referred to as “the Act”).
3. Facts of the case lie in a narrow compass so
also the issue involved in the appeal is very short. It
would be clear from the narration of the facts infra.
4. The appellant is the husband whereas the
respondent is the wife. Both have married second
time. The husband has one daughter aged around 7
years from his first marriage whereas the
respondent has no issue from the first marriage or
the second one. The marriage in question took place
on 11.08.2013.
5. Unfortunately, the second marriage also did
not go well. The appellant and the respondent had
several differences soon after the marriage, which
2
eventually resulted in their living separately which
continued till date.
6. On 30.12.2014, the appellant and the
respondent with a view to end all disputes and their
marriage entered into an Agreement/MOU
(Annexure-P-8) for dissolution of their marriage with
consent and agreed to make an application under
Section 13-B of the Act.
7. Pursuant thereto both, the appellant and
respondent, filed an application under Section 13-B
of the Act before the Family Court at Hyderabad on
31.12.2014 being O.P.No. 9/2015. Thereafter the
case was adjourned for 06.07.2015, 07.07.2015 and
12.09.2015. The respondent, however, did not
appear on any of these dates. The Family Judge,
however, on 14.09.2015 took up the case on expiry
of six months’ cooling period and finding that the
respondent did not appear in the proceedings
dismissed the application.
3
8. The appellant felt aggrieved and filed appeal
under Section 28 of the Act in the High Court of
Andhra Pradesh out of which this appeal arises. In
the said appeal, learned counsel appearing for the
respondent (wife) stated that her client (wife) does
not give consent for dissolution of marriage. The
High Court, therefore, dismissed the appeal by
impugned judgment, which has given rise to filing of
this appeal by way of special leave in this Court by
the husband.
9. Notice of this appeal was sent to the
respondent. Despite service, no one appeared for the
respondent on any of the dates of hearing of this
appeal.
10. Having heard the learned counsel for the
appellant and on perusal of the record of the case,
we are of the considered opinion to allow the appeal
and while setting aside of the judgment/order of the
Family Court and the High Court allow the
4
application made by the appellant and the
respondent under Section 13-B of the Act and
dissolve their marriage in terms of the
Agreement/MOU dated 30.12.2014. This we prefer
to do with the aid of our powers under Article 142 of
the Constitution and also for the reasons given
below.
11. First, the parties have admittedly entered into
an Agreement/MOU dated 30.12.2014 (Annexure-P8)
agreeing therein to get their marriage dissolved by
obtaining decree from the Court. Second, the
Agreement/MOU bears the signatures of the
appellant and respondent. Third, respondent never
denied her signature on the Agreement/MOU nor its
execution and nor its contents. Fourth, both the
parties pursuant to Agreement/MOU actually filed
an application under Section 13-B of the Act
seeking dissolution of their marriage duly signed.
Fifth, the respondent never stated before the Family
5
Court during the cooling period of six months that
she wants to wriggle out of the application and does
not wish to give her consent for mutual divorce.
Sixth, the respondent also did not appear in person
before the High Court and nor filed any affidavit
except to say through her lawyer. Seventh, parties
have been living separately for the last four years
due to which their marriage has become
irretrievable and there is no point in keeping such
marriage alive because when asked the appellant
whether he is prepared to continue with the
marriage and would like to live with the respondent,
his lawyer declined. Lastly, despite service of the
notice of this appeal, the respondent too has also
not appeared in this Court on any of the dates of
hearing and nor sent any
letter/affidavit/application or written request of any
kind so as to know her stand in the appeal. This
shows that the respondent is also not interested in
6
keeping the marital relations alive with the
appellant.
12. In a situation like the one arising in the case,
there is no reason for us to doubt the genuineness
of the Agreement/MOU and its contents. Keeping in
view the conduct of the respondent and further in
the light of eight reasons set out above, we find this
case to be fit one where we invoke our powers under
Article 142 for passing a decree for dissolution of
marriage between the parties in terms of the joint
petition dated 30.12.2014 (Annexure -P-8).
13. It is for all these reasons, the appeal succeeds
and is allowed. Impugned judgment is set aside. As
a consequence, the joint petition (O.P. No.9 of 2015)
filed by the appellant and the respondent under
Section 13-B of the Act in the Family Court (City
Civil Court) at Hyderabad is allowed.
7
14. The marriage between the appellant and the
respondent performed on 11.08.2013 is accordingly
dissolved by decree of divorce.


 ………...................................J.
[R.K. AGRAWAL]

 …...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
December 14, 2017
8

1. Who is the prior user of the word “Orchid/Royal Orchid” ? 2. Whether the trademark “Orchid” of the third respondent are deceptively similar and the adoption of the said trademark by the third respondent is dishonest ?” - it cannot be said that the two logos/marks would not give rise to confusion amongst the customers using the Hotels. As the marks/logos were largely similar, the High Court took the view that even on the second question formulated by it the writ petition has to be allowed and the order of the IPAB set aside.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (C) NO.6131 OF 2015
ROYAL ORCHID HOTELS LTD. … PETITIONER(S)
 VERSUS
KAMAT HOTELS (INDIA) LTD. & ORS. … RESPONDENT(S)
J U D G M E N T
RANJAN GOGOI, J.
1. After hearing the matter elaborately we
arrive at the conclusion that the Special Leave
Petition ought not to be entertained. However, in
view of the extensive arguments at the Bar we
deem it appropriate to support our aforesaid
conclusion with the reasons therefor.
2
2. The brief facts are as follows:
The petitioner – 'Royal Orchid Hotels
Limited' got registration of its trademark ‘Royal
Orchid’ and 'Royal Orchid Hotels' in class 16
sometime in the year 2005. The aforesaid
registration was challenged by the Respondent
No.1 before the Intellectual Property Appellate
Board (for short, 'IPAB') which dismissed the
challenge on 04.10.2011. The respondent No.1
approached the High Court of Madras by
instituting Writ Petition Nos.26544-26545 of
2011, which was dismissed by the High Court on
07.02.2014. The special leave petition against
the order of the High Court was also dismissed by
this Court on 01.09.2014. The dispute with regard
to registration of the trademarks 'Royal Orchid'
and Royal Orchid Hotels in class 16, therefore,
has attained finality in law.
3. It appears that the petitioner sometime in
the year 2004 applied for registration of its
aforesaid trademarks in class 42. This was
3
refused by the Deputy Registrar of the
Trademarks. In appeal, the IPAB by order dated
18.06.2013 set aside the order of the Deputy
Registrar and allowed the registration of the
petitioner's trademark in class 42. The
respondent No.1 had approached the High Court by
instituting a Writ Proceeding registered and
numbered as Writ Petition No.22691 of 2013. The
same has been allowed by the impugned order dated
11.02.2015. Aggrieved, this special leave
petition has been filed seeking leave to appeal
against the aforesaid order of the High Court
dated 11.02.2015.
4. It may be necessary to notice at this stage
that the respondent No.1 had got its trademark
'Orchid' registered in class 42 sometime in the
year 2007.
5. A reading of the order of the Deputy
Registrar dated 29.06.2009 would go to show that
the refusal of registration of trade mark “Royal
Orchid” to the petitioner in class 42 was on a
4
consideration of the evidence and materials laid
before the said authority. On such consideration
the Deputy Registrar concluded that the
petitioner was not the first user of the
logo/mark 'Royal Orchid' as claimed and, in fact,
the mark/logo 'Orchid' was being used by the
respondent No.1 from an anterior date.
6. The similarity of the two logos/marks was
also taken into account by the Deputy Registrar
in refusing registration to the petitioner.
7. The IPAB, in appeal, reversed the aforesaid
conclusion of the Deputy Registrar primarily on
the ground that the petitioner-company had been
incorporated as 'Royal Orchid Hotels Limited'
after effecting a change of its name in the year
1997 pursuant to the company's resolution dated
30.09.1996 which is prior in point of time to the
use of the mark of the respondent no.1.
8. The IPAB also was of the view that
considering the class of customers that would be
serviced by the parties before it, no confusion
5
is likely to be caused by use of two logos/marks
i.e. 'Royal Orchid Hotels Limited' and 'Orchid'
respectively. This is an additional ground on
which the petitioner’s claim for registration in
class 42 was allowed by the learned IPAB.
9. In appeal by the respondents, the High
Court framed the following two questions for
decision ;
1. Who is the prior user of the word
“Orchid/Royal Orchid” ?
2. Whether the trademark “Orchid” of the
third respondent are deceptively similar
and the adoption of the said trademark
by the third respondent is dishonest ?”
10. A reading of the discussions on question
No.1 by the High Court goes to show that the
conclusion recorded in the impugned order of the
High Court dated 11.02.2015 is based on a
detailed consideration of the materials brought
on record by both the parties. The conclusion
that the petitioner had not demonstrated that it
was the first user of the logo/mark and that it
6
is the respondent who is the first user was
arrived at on such consideration. In fact, from
the very application for registration filed by
the petitioner on 22.06.2004 it is evident that
the petitioner had claimed user since 03.11.1999.
The High Court also came to the conclusion that
'Royal Orchid Hotels Limited' though came to be
incorporated on 10.04.1997 on the basis of the
company's resolution dated 30.09.1996 had, in
fact, commenced its business in the year 2001 in
which year the flagship hotel of the petitioner
company i.e. Royal Orchid Hotels Limited was set
up on land leased by the Karnataka State Tourism
Development Corporation. The claim of use of a
banquet hall in hotel Harsha by naming it as
Orchid in the year 1990 and use thereof till the
year 1993 was also considered by the High Court.
The said plea urged was rejected on the ground
that there was no evidence brought on record to
show continuous use of the aforesaid banquet hall
by use of the word/mark ‘Orchid’.
7
11. How far and to what extent the order of the
High Court dated 07-02-2014 in favour of the
present petitioner in the earlier litigation
between the parties relating to registration in
class 16 would foreclose the dispute with regard
to registration in class 42 was also considered
by the High Court. In this regard, the High Court
took note of the order of this Court dated
01-09-2014 in Special Leave Petition (C) Nos.
8902-8903 of 2014 filed by the present respondent
No.1 against the said order of the High Court
(dated 07.02.2014) to hold that there was no
embargo imposed on the High Court by the order of
this Court in so far the issue relating to
registration of class 42 is concerned.
12. The order of this Court dated 01.09.2014 in
Special Leave Petition (C) Nos. 8902-8903 of 2014
is in the following terms:
“We are not inclined to interfere with
the order impugned herein. The Special
Leave Petitions are dismissed. Moreover,
the Division Bench has already made it
very clear in paragraph 31 that whatever
observations made by it in the judgment
8
would not have any bearing on the appeals
pending before the Appellate Board or any
decision taken therein. We make it clear
that the said observations will be
applicable even to any other civil suit
pending between the parties.”
13. If the High Court, in view of the above,
understood to be uninhibited in deciding the
rival claims so far as registration in Class 42
is concerned, such an understanding and the
decision on basis thereof cannot be faulted.
14. The High Court was also of the view that
notwithstanding the class of customers serviced
by the parties before it, it cannot be said that
the two logos/marks would not give rise to
confusion amongst the customers using the Hotels.
In this regard, the High Court observed that the
view expressed by the IPAB that having regard to
the class of customers serviced by the hotels
(High Income) there could be no possibility of
being misled cannot be accepted as a general
proposition and will always depend on individual
customers. As the marks/logos were largely
similar, the High Court took the view that even
9
on the second question formulated by it the writ
petition has to be allowed and the order of the
IPAB set aside.
15. If the High Court on an elaborate
consideration of the materials and evidence
adduced by the parties before it had thought it
proper to reach a conclusion consistent with the
findings of the primary authority i.e. the Deputy
Registrar and the reasons for reversal of the
view of the primary authority by the IPAB being
summary, as noticed, the present petition really
turns on the question of appreciation of the
evidence on record. Having considered the matter
we are of the view that the conclusions reached
by the High Court cannot be said to be, in
anyway, unreasonable and/or unacceptable.
Rather, we are inclined to hold that the view
recorded by the High Court is a perfectly
possible and justified view of the matter and the
conclusion(s) reached can reasonably flow from a
balanced consideration of the evidence and
materials on record. We will, therefore, not
10
consider the present to be a fit case for
interference with the order of the High Court.
Accordingly, we dismiss the Special Leave
Petition and refuse leave to appeal.
....................,J.
 (RANJAN GOGOI)
....................,J.
 (R. BANUMATHI)
NEW DELHI
DECEMBER 14, 2017

seeking a decree of permanent injunction for infringement of trade mark, =in order to protect the plaintiff’s trade marks ‘TOYOTA’, ‘TOYOTA INNOVA’, ‘TOYOTA DEVICE’ and the mark ‘Prius’ of which the plaintiff claimed to be a prior user. = If goodwill or reputation in the particular jurisdiction (in India) is not established by the plaintiff, no other issue really would need any further examination to determine the extent of the plaintiff’s right in the action of passing off that it had brought against the defendants in the Delhi High Court. = eventually agree with the conclusion of the Division Bench of the High Court that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner.- We cannot help but also to observe that in the present case the plaintiff’s delayed approach to the Courts has remained unexplained. Such delay cannot be allowed to work to the prejudice of the defendants who had kept on using its registered mark to market its goods during the inordinately long period of silence maintained by the plaintiff.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs.5375-5377 OF 2017
TOYOTA JIDOSHA KABUSHIKI KAISHA ...APPELLANT(S)
VERSUS
M/S PRIUS AUTO INDUSTRIES LTD.
& ORS. ...RESPONDENT(S)
J U D G M E N T
RANJAN GOGOI, J.
1. The appellant (hereinafter referred to
as ‘the plaintiff’) is an automobile manufacturer
incorporated under the laws prevailing in Japan.
The first respondent is a partnership firm
engaged in the manufacture of automobile spare
parts of which the second and third respondents
are partners. The partnership firm of the
respondents was constituted in the year 2001.
The fourth respondent is a Private Limited
Company in which the second and third respondents
are majority shareholders.
2
2. Civil Suit [CS (OS) No. 2490 of 2009]
was instituted by the plaintiff in the Delhi High
Court seeking a decree of permanent injunction
for infringement of trade mark, passing off and
for damages against the respondents (hereinafter
referred to as ‘the defendants’) in order to
protect the plaintiff’s trade marks ‘TOYOTA’,
‘TOYOTA INNOVA’, ‘TOYOTA DEVICE’ and the mark
‘Prius’ of which the plaintiff claimed to be a
prior user.
3. In the plaint filed, it was averred by
the plaintiff that it is a renowned carmaker
having its presence in many countries across the
world. The plaintiff claimed an enviable goodwill
and reputation as one of the foremost automobile
manufacturers in the world. According to the
plaintiff it had acquired registration in India
in different classes for its trade marks
‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE’
3
during the years 1989-2003. It was specifically
averred by the plaintiff that the goods
manufactured and sold by the defendants bore the
plaintiff’s registered trade marks thereby
clearly constituting infringement of the said
registered marks.
Furthermore, according to the plaintiff,
it had launched the world’s first commercial
hybrid car called ‘Prius’ in Japan in the year
1997 and in other countries like U.K., Australia,
the U.S.A. etc. during the year 2000-2001. The
plaintiff also claimed registration of the trade
mark ‘Prius’ in different countries as early as
the year 1990 (in Japan) and eventually in other
jurisdictions all over the globe. So far as India
is concerned, however, the car was released in
the year 2009 and until that point of time the
plaintiff had not obtained registration of the
mark ‘Prius’ in the Indian jurisdiction.
However, the car was displayed in the car shows
4
in Delhi and Bangalore held in the year 2009 and
it was formally launched in India in the year
2010.
The plaintiff claimed that various
advertisements and news reports about ‘Prius’ and
publications in car magazines in India and across
the globe has made ‘Prius’ a well known trade
mark within the meaning of the said expression
under Section 2(1)(zg) of the Trade Marks Act,
1999 (hereinafter referred to as ‘the Act’).
According to the plaintiff, in the year 2009, it
discovered that the defendants not only had got
the mark ‘Prius’ registered way back in the year
2002-2003 for all types of auto parts and
accessories but that they had also been using the
said trade mark in carrying out their trade in
such auto parts and accessories. The plaintiff,
therefore, approached the Trade Mark Registry for
cancellation of the registered trade mark of the
defendants and also filed the suit in question on
the ground that the defendants had been using the
5
well known trade marks of the plaintiff without
any authorization thereby taking an unfair
advantage of the reputation and goodwill of the
plaintiff which it had earned over a period of
time across the globe. Accordingly the plaintiff
prayed for:
(i) Permanent injunction restraining the
defendants from using the plaintiff’s
registered trade marks (‘TOYOTA’, ‘TOYOTA
INNOVA’ and ‘TOYOTA DEVICE’); and
(ii) Permanent injunction restraining the
defendants from using the well known
(unregistered) trade mark ‘Prius’ so as to
prevent passing off the defendants’ goods
as that of the plaintiff.
4. The defendants contested the claim of
the plaintiff by contending that they have been
using the words ‘TOYOTA’, ‘TOYOTA INNOVA’ and
‘TOYOTA DEVICE’ on the packaging materials in
which the auto parts manufactured by them
6
are/were packed for the purpose of item
identification and nothing more. According to the
defendants, since they were in the business of
manufacturing spare parts of automobiles, they
are/were entitled to indicate the cars for which
the spare parts have been manufactured by
displaying the same name on the packaging of the
products. The use of the words ‘TOYOTA’, ‘TOYOTA
INNOVA’ and ‘TOYOTA DEVICE’ etc. were, therefore,
for the purpose of honest use in an industrial
matter and thus protected under Section 30 of the
Act.
5. Insofar as the mark ‘Prius’ is
concerned, according to the defendants, they had
obtained registration of the said mark in the
year 2002 and have been continuously using the
same since the year 2001. They have been
regularly supplying auto accessories to various
automobile giants like Hyundai Motors, General
Motors. The defendants claimed that, over a
7
period of time, they have built up a considerable
market reputation. According to the defendants,
the mark ‘Prius” had not been registered in
favour of the plaintiff for any of its products;
nor had any Prius Car sold been in India so as to
enable the plaintiff to claim goodwill in respect
of such cars in the Indian market. As the product
itself was not in existence in the Indian market,
according to the defendants, it was impossible
for the people in India to identify and recognize
or associate the defendants’ registered trade
mark ‘Prius” with any of the products of the
plaintiff. In fact, in the written statement
filed, the defendants claimed that as they were
the first in India to manufacture add-on chrome
plated accessories, they had conceptualized their
attempt as ‘pehela prayas’ (Hindi word meaning
first attempt). It was on that basis that they
had adopted the name ‘Prius’ and got the same
registered in the year 2002 as ‘PRIUS’
(Registration No. 1086682 dated 13.03.2002) and
8
‘PRIUS - The name you can trust’ (Registration
No. 1163594 dated 2.1.2003).
6. The learned trial Judge of the High
Court by Order dated 22.12.2009 granted ex-parte
ad-interim injunction restraining the defendants
from using the registered trade marks of the
plaintiff i.e. ‘TOYOTA’, ‘TOYOTA INNOVA’ and
‘TOYOTA DEVICE’ and the mark ‘Prius’ in respect
of auto accessories manufactured by the
defendants. This order was vacated on 19.03.2010
on the basis of an application filed by the
defendants. Aggrieved, the plaintiff had filed an
appeal before the Division Bench of the High
Court and by Order dated 10.08.2010, the Division
Bench permitted the defendants to use the
registered as well as un-registered trade marks
of the plaintiff subject to the following
conditions:
“(i) The defendants were restrained from
9
using the plaintiff’s registered
trade marks (TOYOTA, INNOVA) except
for the purpose of identifying that
the defendants’ products can be used
in these cars;
(ii) the defendants were to ensure that
the words ‘TOYOTA’ and ‘INNOVA’ were
not written in the same font as
written by the plaintiff and the
logos of the plaintiff;
(iii) the defendants would have to replace
the words “Genuine Accessories” with
“Genuine Accessories of PRIUS Auto
Industries Limited;
(iv) the defendants were to ensure that
the words – “the vehicle name (i.e.
the appellant’s trade mark) is used
for item identification only.”
7. It does not appear that the defendants
had carried the aforesaid Order dated 10.08.2010
10
of the Division Bench of the High Court in any
further appeal. Consequently, the said order
governed the parties during the pendency of the
suit. Allegations of the breach of the order
were, however, brought before the Court by the
plaintiff.
8. At the conclusion of the trial, the
learned trial Judge by judgment dated 08.07.2016
held that the impugned acts of the defendants
constituted infringement of the trade marks
‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE’
registered in favour of the plaintiff. The
learned Judge also held that such acts of the
defendants amounted to passing off of the
defendants’ goods under the trade name ‘Prius’,
which, though registered in favour of the
defendants in the year 2002-2003, the plaintiff
was the first user thereof having marketed its
hybrid car all over the globe under the name
‘Prius’ at least from the year 1997.
11
Consequently, the learned trial Judge restrained
the defendants from using the plaintiff’s trade
marks (‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA
DEVICE’ marks) except in accordance with the
terms of the conditional injunction order passed
by the Division Bench dated 10.08.2010. So far as
the mark ‘Prius’ is concerned, on the basis of
the finding that the plaintiff was the prior user
of the mark ‘Prius’ in various countries, if not
in India, and that goodwill and reputation of the
plaintiff so far as the mark ‘Prius’ is concerned
having permeated to the Indian jurisdiction, it
was held that the plaintiff was entitled to an
injunction against the defendants restraining
them from passing off the said mark. Punitive
damages quantified as Rupees ten lakhs was also
awarded in favour of the plaintiff.
9. Both sides appealed against the
aforesaid order of the learned Single Judge.
While the appeal of the plaintiff was with regard
12
to the quantum of the damages awarded, the appeal
filed by the defendants was in respect of the
order of injunction granted against them.
However, in the course of hearing of the appeal
filed by the defendants, the grievance with
regard to the conditional use of the trade marks
‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE’ (in
terms of the interim Order dated 10.08.2010) was
not persisted with and the sole grievance
expressed was in respect to the permanent
injunction granted by the learned trial Judge
with regard to the use of the name ‘Prius’.
10. The Division Bench of the High Court by
the impugned judgment dated 23.12.2016, on
grounds and reasons, that will be noticed in the
course of deliberations and discussions that
follow, took the view that grant of injunction in
favour of the plaintiff insofar as the trade name
‘Prius’ is concerned was not justified.
Accordingly the aforesaid part of the order of
13
the learned trial Judge was set aside.
Consequently, the appeal filed by the plaintiff
with regard to quantum of damages was also
dismissed. Aggrieved, the plaintiff has filed
the instant appeal.
11. At the very outset it must be clarified
that in view of the virtual acceptance of the
conditional order of injunction with regard to
the ‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA DEVICE
MARKS’ by the defendants, the truncated scope of
the present appeal would be confined to the
correctness of the views of the Division Bench
of the High Court with regard to the use of the
name ‘Prius’ and specifically whether by use of
the said name/mark to market the automobile spare
parts manufactured by them, the defendants are
guilty of passing off their products as those of
the plaintiff thereby injuring the reputation of
the plaintiff in the market.
14
12. The learned trial Judge in taking the
view that the plaintiff was entitled to an
injunction against the use of the trade mark
‘Prius’ by the defendants, took into account,
inter alia, the global sales of Prius Cars
(ranging upto over a million sales globally); the
exponential hike in the sales of cars (300 units
in 1997 to 285600 units in 2008); and that the
plaintiff’s trade mark ‘Prius’ which had acquired
an excellent global goodwill had already spilled
over to India much before the direct sales of the
car in India in the year 2010. The fact that the
plaintiff’s web sites have been visited by many
Indians seeking information about Prius cars was
held by the learned trial Judge to be evidence of
the fact that people in India were aware of the
car and its popularity. The exhibitions of the
car held in India and other countries; various
advertisements published in different automobile
magazines and cover stories published in
international magazines and journals were taken
15
into account by the learned trial Judge to hold
that the car in question had a stellar reputation
in the world market including India. The learned
trial Judge also took into account the
availability of information regarding the car in
information-disseminating portals like Wikipedia
and online Britannica dictionary. Consequently,
it was held that the physical presence of the car
in India at a later point of time was immaterial.
In fact, the learned trial Judge went on to hold
that the mark ‘Prius” had satisfied the
definition of a “well-known trade mark” under
Section 2(1)(zg) read with Section 11(6) & 11(9)
of the Act. Relying on the decision of this Court
in S. Syed Mohideen vs. P. Sulochana Bai1, the
learned trial Judge took the view that if the
plaintiff could successfully prove that its case
was covered by “passing off” the registered trade
mark of the defendants would not remain protected
under the Act. Proceeding further, the learned
1 2016 (2) SCC 683
16
trial Judge took the view that the plaintiff was
the prior user/adopter of the mark ‘Prius’,
though it may not have been such prior user so
far as the Indian market is concerned. In this
regard, the learned trial Judge relied on the
decision of this Court in N.R. Dongre vs.
Whirlpool Corporation2 wherein this Court had
approved the views of the Delhi High Court
holding that wide advertisement of a trade mark
without the existence of the goods in the local
market can well be considered as use of the trade
mark in the said local market. Again, relying on
the decision of this Court in Milmet Oftho
Industries & Ors. vs. Allergan Incorporated3
the learned trial Judge held that the real test
of establishing prior use is to determine who is
the first in the world market. Adopting the
tests laid in Reckitt and Colman Ltd. vs.
Borden Incorporated4 the learned trial Judge came
to the conclusion that the goods of the plaintiff
2 1996 (5) SCC 714
3 2004 (12) SCC 624
4 1990 (1) All E.R. 873
17
enjoy transborder reputation and goodwill which
had permeated the Indian market and that as the
defendants had used an identical mark in relation
to more or less an identical product(s) having a
common market, the likelihood of confusion was
unavoidable. The learned trial Judge further held
that, as both the parties had advertised their
respective products in the same magazines and
periodicals, any person reading such an
advertisement would be bound to be misled to
believe that the defendants goods emanates from
the plaintiff’s organization and that there is a
nexus between the two. Accordingly, the learned
trial Judge came to the conclusion that the
adoption of the mark ‘Prius’ by the defendants,
though they were the registered proprietor
thereof, was misleading, as the plaintiff was the
true and first user of the trade mark all over
the world and the reputation of the mark and the
goodwill of the plaintiff on that basis had
permeated to the Indian Market well before the
18
use of the mark by the defendants in 2001 and its
registration thereafter in 2002-2003. The trial
Judge further held that the defendants had
adopted the mark ‘Prius’ with the sole intention
of enjoying the benefits from the use of the said
mark. The explanation given as to why and how the
defendants had adopted the name ‘Prius’ was found
to be wholly untenable by the learned Single
Judge. Accordingly, the finding that the
defendants were guilty of passing off their goods
under the mark, of which the plaintiff was the
first user, was arrived at. Consequently,
permanent injunction restraining the use of the
mark ‘Prius’ by the defendants in order to
prevent passing off the defendants’ goods as the
plaintiffs’ was issued and damages quantified at
0.25% of the total sales, amounting to Rs.10
lakhs, was awarded.
13. In appeal, the Division Bench reversed
the conclusion(s) of the learned Single Judge
19
holding that the findings with regard to spread
of the transborder reputation of the mark ‘Prius’
had not been correctly arrived at by the learned
trial Judge as facts and materials beyond the
relevant point of time i.e. first date of use
(April, 2001) of the mark by the defendants in
India was taken into consideration. The Division
Bench of the High Court while holding that the
launching of the car ‘Prius’ in the year 1997 was
widely reported and advertised, however, held
that such publication in the print media was not
ground breaking and in fact in the issue of
Economic Times dated 27.03.1997 and 15.12.1997,
small news items with regard to the launching of
the product in Japan had been published, which
could not have impacted the Indian public at
large. Relying on one of its own judgments in the
case of Trans Tyres India Pvt. Ltd. vs. Double
Coin Holdings Ltd. & Anr.5 the Division Bench of
the High Court took the view that the
5 2012 SCC Online Delhi 596
20
Universality Doctrine (which posits that a mark
signifies the same source all over the world) has
not been accepted by courts. Modern day trade;
globalization have brought in multi-channel modes
of sale of goods in the market and therefore it
is the Territoriality Doctrine (a trade mark
being recognized as having a separate existence
in each sovereign country) would hold the field.
The Division Bench further held that prior use of
the trade mark in one jurisdiction would not ipso
facto entitle its owner or user to claim
exclusive rights to the said mark in another
dominion. It was, therefore, necessary for the
plaintiff in the case to establish that its
reputation had spilled over to Indian market
prior to April, 2001.
14. The aforesaid issue was decided by the
Division Bench of the High Court against the
plaintiff on the ground that not only the
publicity and advertisement surrounding the
21
launching of the product by the plaintiff in the
international market was scanty, internet
penetration in India at that point of time (prior
to April 2001) was limited and, therefore, it
cannot be said that prior to April 2001 the
plaintiff had established its goodwill and
reputation in the Indian market, which the
defendants had taken advantage of. The Division
Bench of the High Court further held that the
test of possibility/ likelihood of confusion
would be valid at the stage of quia timet actions
and not at the stage of final adjudication of the
suit, particularly when the defendants had used
the impugned mark for a long period as in the
instant case. The test, therefore, would be one
of actual confusion. No evidence was led by the
plaintiff to show that any section of the
consuming public was misled by the use of the
trade mark ‘Prius’ by the defendants.
15. Laches and delay on the part of the
22
plaintiff in instituting the suit in the year
2009 was also held against the plaintiff to
reverse the decree passed by the learned trial
Judge. In this regard, the Division Bench held
that the plaintiff was aware of the defendants’
mark at least from April, 2003. Publications in
Pioneer magazines (like Autocar, Overdrive)
contained defendants’ advertisements under the
name ‘Prius’ and in fact both the parties have
been advertising their products in the same
magazines. In fact, the plaintiff, at no relevant
point of time, had applied for registration of
the trade mark, which was done only on 3.12.2009,
followed by the institution of the suit on
21.12.2009, and that too on a ‘proposed to be
used basis’. The Division Bench of the High Court
in reversing the conclusion of the learned trial
Judge also took the view that the word ‘Prius’ is
publici juris and that the explanation given by
the defendants for adopting the said word as
their trade mark is logical and acceptable. It is
23
on the aforesaid broad basis the decree passed by
the learned trial Judge was reversed by the
Division Bench of the High Court.
16. The arguments advanced on behalf of the
rival parties may now be noticed.
17. Shri P. Chidambaram, learned senior
counsel, who had argued the case of the appellant
before us, submitted that recognition and
reputation of a trade mark is not contingent upon
the actual sale of goods in India bearing the
mark in question. Advertisement and promotion of
the mark through different forms of media is
sufficient to establish reputation and goodwill
within a particular geographical area, i.e.,
India. It is urged that in the present case the
car Prius was widely publicized and advertised in
leading newspapers and magazines with wide
circulation all over the world since the year
1997. It is also urged that to establish goodwill
24
and reputation it is not necessary that the mark
should be recognized by every member of the
public and it would be sufficient if persons
associated with the industry/goods are aware of
the mark. In this regard learned counsel has
urged that the Division Bench of the High Court
in the impugned judgment accepted the fact that
the launch and sale of the car Prius had been
widely advertised. However, the Division Bench
took the view that such publications were not
groundbreaking and did not have the necessary
prominence to show that the public at large would
be aware of the trade mark. Learned counsel has
further urged that the Division Bench of the High
Court did not deal with the issue of the trade
mark ‘Prius’ being a well known mark. The
entitlement of such a well known mark is to a
higher statutory protection against misuse under
the Act. The finding that the trade mark ‘Prius”
did not have transborder reputation permeating
into India is, therefore, incorrect. He has also
25
urged that the test of passing off always rest
upon a likelihood of confusion irrespective of
the stage at which the matter may be considered.
The fact that the trade mark ‘Prius’ was
registered in favour of the defendants was
irrelevant insofar as the plaintiff’s claim for
passing off is concerned. The triple identity
test laid down in Reckitt and Colman Ltd. (supra)
would govern the instant adjudication. The use by
the defendants of the multiple trade marks of the
plaintiff (‘TOYOTA’, ‘TOYOTA INNOVA’ and ‘TOYOTA
DEVICE MARKS’); the conditional injunction Order
dated 10.08.2000; the violation thereof; all have
been urged by Shri Chidambaram to contend that
the aforesaid facts are strong evidence of
dishonest intention on the part of the defendants
to defraud the plaintiff to derive undue benefit
from the goodwill and reputation of the trade
mark of which the plaintiff is the first user.
18. Shri Chidambaram has additionally urged
26
that the story put forward by the defendants
surrounding the adoption of the word ‘Prius’ is
on the face of it absurd. The possibility of
conjuring a word in the Hindi language and then
looking for it in the English dictionary and
finally selecting a Latin word is too far fetched
for acceptance as a bona fide act of adoption of
a mark. If the initial use of the mark ‘Prius’ by
the defendants in April, 2001 is dishonest, as it
certainly is, no amount of user of the said mark
after April, 2001, can sustain any claim of
goodwill and reputation of the defendants in the
mark in question. Shri Chidambaram has also
struck an issue with regard to the trade mark
‘Prius’ being publici juris. It is urged that
the said finding has been arrived at without
there being an issue before the Court and without
any evidence being led on the point.
19. In reply, Shri Sai Krishna, learned
counsel for the respondents/defendants has
27
submitted that as a manufacturer of spare parts,
the defendants are entitled to inform the
consumer the name of the specific vehicles for
which the particular spare part is suitable and
useful. This is precisely what has been done and
nothing more. Such action on the part of the
defendants is protected under Section 30 of the
Act. It is urged that the conduct of the
plaintiff in belatedly moving the Registry of
Trade Mark for registration and that too on a
“proposed to be used basis” and the amendment to
the said prayer made, after filing of the suit,
are crucial circumstances for determination of
the plaintiff’s claim. On the other hand, the
mark was adopted by the defendants in the year
2001 and registration thereof was obtained in the
year 2002-2003 whereas this mark was adopted by
the plaintiff in India in the year 2009 and the
car in question was launched in the year 2010.
The documents proved by the plaintiff to
establish goodwill and reputation are all post
28
April, 2001 (date of adoption of the mark by the
defendants). Furthermore, the evidence of the
plaintiff’s witnesses make it clear that not only
the mark was adopted by the plaintiff for the
first time in India in 2009 but also that no
advertisements were published by the plaintiff
prior to April 2001. From the evidence of the
plaintiff’s witnesses it is clear that since the
launch of the car in 2010, only 130 cars were
sold. Learned counsel for the defendants have
further urged that it is the Territoriality
Principle as opposed to the Universality Doctrine
which has been accepted by the courts all over
the world as the correct test to determine
goodwill and reputation within any particular
jurisdiction. It is therefore necessary that the
trade mark is recognized and has a separate
existence in each sovereign Country. Positive
evidence of spill over of reputation and goodwill
of the plaintiff’s mark ‘Prius’ to the Indian
market, prior to April, 2001, is absent. In this
29
regard reference is made to the several passages
in the book “The Law of Passing-Off” by Prof.
Christopher Wadlow to urge that the test whether
a foreign claimant (in this case, the plaintiff;
Toyota) may succeed in a passing off action is
whether his business has a goodwill in India;
that even the most internationally renowned
business owns not one goodwill, but a bundle of
many different ones. The nature of goodwill as a
legal property with no physical existence means
that when a business is carried on in more than
one country, there must be separate goodwill in
each. It is submitted on the strength of the
decision of the Federal Court of Australia in
ConAgra vs. McCain Foods6 that in the last
resort the test is whether the owner of the goods
has established a ‘sufficient reputation’ with
respect to his goods within the particular
country in order to acquire a sufficient level of
consumer knowledge of the product and attraction
6 (1992) 23 IPR 193
30
for it to provide customers, which if lost, is
likely to result in damage to him.
20. The delay and latches on the part of the
plaintiff in tolerating the defendants using the
trade mark ‘Prius’ since April, 2001 in spite of
due knowledge has also been urged to contend that
the claim of the plaintiff has been rightly
rejected by the Division Bench of the High Court.
21. At the very outset, certain principles
that govern the law of passing off may be
usefully noticed. Such principles, in fact, have
been considered by this Court in its decision in
S. Syed Mohideen (supra), though in a somewhat
different context, i.e., the right of a
registered owner of a particular mark to bring an
action for passing off against another registered
owner of an identical or largely similar trade
mark. In S. Syed Mohideen (supra), this Court on
a collective reading of the provisions of the Act
31
held “that the action for passing off which is premised on
the rights of prior user generating a goodwill shall be
unaffected by any registration provided under the Act,” which
proposition actually stood approved in an earlier
decision of this Court in N.R. Dongre (supra).
The trinity test laid down in Reckitt and Colman
Ltd. (supra) was reiterated by this Court in S.
Syed Mohideen (supra) by holding that to prove
and establish an action of passing off, three
ingredients are required to be proved by the
plaintiff, i.e., his goodwill, misrepresentation
and damages.
22. The following passage from Kerly’s ‘Law
of Trade Marks and Trade Names’7 noticed in S.
Syed Mohideen (supra) may be reiterated herein
for a clear exposition of the principles laying
down the test for judging an action of passing
off in the Indian jurisdiction. The provisions in
the Indian Trade Marks Act, 1999 incidentally are
7 14th Edn., Thomson, Sweet & Maxwell South Asian Edition
32
analogous to those in the U.K. Trade Marks Act,
1994
“15-034. Subject to possibly
one qualification, nothing in the
Trade Marks Act, 1994 affects a
trader’s right against another in
an action for passing off. It is,
therefore, no bar to an action for
passing off that the trade name,
get up or any other of the badges
identified with the claimant’s
business, which are alleged to
have been copies or imitated by
the defendant, might have been,
but are not registered as, trade
marks, even though the evidence is
wholly addressed to what may be a
mark capable of registration.
Again, it is no defence to passing
off that the defendant’s mark is
registered. The Act offers
advantages to those who register
their trade marks, but imposes no
penalty upon those who do not. It
is equally no bar to an action for
passing off that the false
representation relied upon is an
imitation of a trade mark that is
incapable of registration. A
passing off action can even lie
against a registered proprietor of
the mark sued upon. The fact that
a claimant is using a mark
registered by another party (or
even the defendant) does not of
itself prevent goodwill being
generated by the use of the mark,
or prevent such a claimant from
relying on such goodwill in an
33
action against the registered
proprietor. Such unregistered
marks are frequently referred to
as ‘common law trade marks’.”
 (Underlining is ours)
23. Whether a trade mark is to be governed
by the territoriality principle or by
universality doctrine? Prof. Cristopher Wadlow in
his book “The Law of Passing-Off8” has analysed
the problem and its possible resolution in the
following words:
“in the worst case, an
international company seeking to
expand into a new territory may
find itself blocked by a small
business already trading under the
same name or style, perhaps on a
miniscule scale; and perhaps
having been set up for the very
same purpose of blocking
anticipated expansion by the
claimant or being bought out for a
large sum. On the other hand, a
rule of law dealing with this
situation has to avoid the
opposite scenario of bona fide
domestic traders finding
themselves open to litigation at
the suit of unknown or barelyknown
claimants from almost
anywhere in the world. Some of the
more radical proposals for
8 5th Edn., Sweet & Maxwell
34
changing the law to assist foreign
claimants ignore the need for this
balancing exercise, without which
the opportunities for abuse are
simply increased, and further
uncertainty created”
24. The view of the courts in U.K. can be
found in the decision of the U.K. Supreme Court
in Starbucks vs. British Sky Broadcasting9
wherein Lord Neuberger observed as follows:
“As to what amounts to a
sufficient business to amount to
goodwill, it seems clear that mere
reputation is not enough...The
claimant must show that it has a
significant goodwill, in the form
of customers, in the jurisdiction,
but it is not necessary that the
claimant actually has an
establishment or office in this
country. In order to establish
goodwill, the claimant must have
customers within the jurisdiction,
as opposed to people in the
jurisdiction who happen to be
customers elsewhere. Thus, where
the claimant’s business is carried
on abroad, it is not enough for a
claimant to show that there are
people in this jurisdiction who
happen to be its customers when
they are abroad. However, it could
be enough if the claimant could
show that there were people in
9 2015 UK SC 31
35
this jurisdiction who, by booking
with, or purchasing from, an
entity in this country, obtained
the right to receive the
claimant’s service abroad. And, in
such a case, the entity need not
be a part or branch of the
claimant: it can be someone acting
for or on behalf of the
claimant...”
25. It seems that in Starbucks vs. British
Sky Broadcasting (supra), the Apex Court of UK
had really refined and reiterated an earlier view
in Athletes’ Foot Marketing Associates Inc. vs.
Cobra Sports Ltd.10 to the following effect:
“…no trader can complain of
passing-off as against him in any
territory...in which he has no
customers, nobody who is in trade
relation with him. This will
normally shortly be expressed by
stating that he does not carry on
any trade in that particular
country...but the inwardness of it
will be that he has no customers
in that country…”
26. A passing reference to a similar view of
the Federal Court of Australia in Taco Bell vs.
10 (1980) R.P.C. 343
36
Taco Co. of Australia11 may also be made.
27. Prof. Cristopher Wadlow’s view on the
subject appears to be that the test of whether a
foreign claimant may succeed in a passing-off
action is whether his business has a goodwill in
a particular jurisdiction, which criterion is
broader than the “obsolete” test of whether a
claimant has a business/place of business in that
jurisdiction. If there are customers for the
claimant’s products in that jurisdiction, then
the claimant stands in the same position as a
domestic trader.
28. The overwhelming judicial and academic
opinion all over the globe, therefore, seems to
be in favour of the territoriality principle. We
do not see why the same should not apply to this
Country.
11 1981 60 FLR 60
37
29. To give effect to the territoriality
principle, the courts must necessarily have to
determine if there has been a spill over of the
reputation and goodwill of the mark used by the
claimant who has brought the passing off action.
In the course of such determination it may be
necessary to seek and ascertain the existence of
not necessarily a real market but the presence of
the claimant through its mark within a particular
territorial jurisdiction in a more subtle form
which can best be manifested by the following
illustrations, though they arise from decisions
of Courts which may not be final in that
particular jurisdiction.
30. In SA Anciens Etablissements Panhard et
Levassor v. Panhard Levassor Motor Co12, the
plaintiffs were French car manufacturers who had
consciously decided to not launch their cars in
England (apprehending patent infringement).
12 1901 2 Ch. 513
38
Nevertheless, some individuals had got them
imported to England. It was seen that England was
one of the plaintiff’s markets and thus, in this
case, permanent injunction was granted. Similarly
in Grant v. Levitt13, a Liverpool business concern
trading as the Globe Furnishing Company, obtained
an injunction against the use of the same name in
Dublin as it was observed that advertisements by
the plaintiff had reached Ireland and there were
Irish customers. C&A Modes v. C&A (Waterford)14
,
was a case where the plaintiffs operated a chain
of clothes stores throughout the U.K. and even
in Northern Ireland but not in the Republic of
Ireland where the defendants were trading. The
Court held that, “a very substantial and regular
custom from the Republic of Ireland was enjoyed
by this store. Up to that time an excursion train
travelled each Thursday from Dublin to Belfast,
and so great was the influx of customers from the
Republic as a result of that excursion that the
13 1901 18 RPC 361
14 1976 I.R. 198 (Irish)
39
store ordinarily employed extra part-time staff
on Thursday on the same basis as it did on
Saturday which were normally the busiest shopping
days.” The said view has since been upheld by the
Irish Supreme Court.
31. Whether the second principle evolved
under the trinity test, i.e., triple identity
test laid down in Reckitt and Colman Ltd. (supra)
would stand established on the test of likelihood
of confusion or real/actual confusion is another
question that seems to have arisen in the present
case as the Division Bench of the High Court has
taken the view that the first test, i.e.,
likelihood of confusion is required to be
satisfied only in quia timet actions and actual
confusion will have to be proved when the suit or
claim is being adjudicated finally as by then a
considerable period of time following the
initiation of the action of passing off might
have elapsed. Once the claimant who has brought
40
the action of passing off establishes his
goodwill in the jurisdiction in which he claims
that the defendants are trying to pass off their
goods under the brand name of the claimant’s
goods, the burden of establishing actual
confusion as distinguished from possibility
thereof ought not to be fastened on the claimant.
The possibility or likelihood of confusion is
capable of being demonstrated with reference to
the particulars of the mark or marks, as may be,
and the circumstances surrounding the manner of
sale/marketing of the goods by the defendants and
such other relevant facts. Proof of actual
confusion, on the other hand, would require the
claimant to bring before the Court evidence which
may not be easily forthcoming and directly
available to the claimant. In a given situation,
there may be no complaints made to the claimant
that goods marketed by the defendants under the
impugned mark had been inadvertently purchased as
that of the plaintiff/claimant. The onus of
41
bringing such proof, as an invariable
requirement, would be to cast on the claimant an
onerous burden which may not be justified.
Commercial and business morality which is the
foundation of the law of passing off should not
be allowed to be defeated by imposing such a
requirement. In such a situation, likelihood of
confusion would be a surer and better test of
proving an action of passing off by the
defendants. Such a test would also be consistent
with commercial and business morality which the
law of passing off seeks to achieve. In the last
resort, therefore, it is preponderance of
probabilities that must be left to judge the
claim.
32. The next exercise would now be the
application of the above principles to the facts
of the present case for determination of the
correctness of either of the views arrived at in
the two-tier adjudication performed by the High
42
Court of Delhi. Indeed, the trade mark ‘Prius’
had undoubtedly acquired a great deal of goodwill
in several other jurisdictions in the world and
that too much earlier to the use and registration
of the same by the defendants in India. But if
the territoriality principle is to govern the
matter, and we have already held it should, there
must be adequate evidence to show that the
plaintiff had acquired a substantial goodwill for
its car under the brand name ‘Prius’ in the
Indian market also. The car itself was introduced
in the Indian market in the year 2009-2010. The
advertisements in automobile magazines,
international business magazines; availability of
data in information-disseminating portals like
Wikipedia and online Britannica dictionary and
the information on the internet, even if
accepted, will not be a safe basis to hold the
existence of the necessary goodwill and
reputation of the product in the Indian market at
the relevant point of time, particularly having
43
regard to the limited online exposure at that
point of time, i.e., in the year 2001. The news
items relating to the launching of the product in
Japan isolatedly and singularly in the Economic
Times (Issues dated 27.03.1997 and 15.12.1997)
also do not firmly establish the acquisition and
existence of goodwill and reputation of the brand
name in the Indian market. Coupled with the
above, the evidence of the plaintiff’s witnesses
themselves would be suggestive of a very limited
sale of the product in the Indian market and
virtually the absence of any advertisement of the
product in India prior to April, 2001. This, in
turn, would show either lack of goodwill in the
domestic market or lack of knowledge and
information of the product amongst a significant
section of the Indian population. While it may be
correct that the population to whom such
knowledge or information of the product should be
available would be the section of the public
dealing with the product as distinguished from
44
the general population, even proof of such
knowledge and information within the limited
segment of the population is not prominent. All
these should lead to us to eventually agree with
the conclusion of the Division Bench of the High
Court that the brand name of the car Prius had
not acquired the degree of goodwill, reputation
and the market or popularity in the Indian market
so as to vest in the plaintiff the necessary
attributes of the right of a prior user so as to
successfully maintain an action of passing off
even against the registered owner. In any event
the core of the controversy between the parties
is really one of appreciation of the evidence of
the parties; an exercise that this Court would
not undoubtedly repeat unless the view taken by
the previous forum is wholly and palpably
unacceptable which does not appear to be so in
the present premises.
33. If goodwill or reputation in the
45
particular jurisdiction (in India) is not
established by the plaintiff, no other issue
really would need any further examination to
determine the extent of the plaintiff’s right in
the action of passing off that it had brought
against the defendants in the Delhi High Court.
Consequently, even if we are to disagree with the
view of the Division Bench of the High Court in
accepting the defendant’s version of the origin
of the mark ‘Prius’, the eventual conclusion of
the Division Bench will, nonetheless, have to be
sustained. We cannot help but also to observe
that in the present case the plaintiff’s delayed
approach to the Courts has remained unexplained.
Such delay cannot be allowed to work to the
prejudice of the defendants who had kept on using
its registered mark to market its goods during
the inordinately long period of silence
maintained by the plaintiff.
34. For all the aforesaid reasons, we deem
46
it proper to affirm the order(s) of the Appellate
Bench of the High Court dated 23.12.2016 and
12.01.2017 and dismiss the appeals filed by the
appellant/plaintiff.
................,J.
 (RANJAN GOGOI)
................,J.
 (NAVIN SINHA)
NEW DELHI;
DECEMBER 14, 2017
47
ITEM NO.1503 COURT NO.3 SECTION XIV
[FOR JUDGMENT]
 S U P R E M E C O U R T O F I N D I A
 RECORD OF PROCEEDINGS
CIVIL APPEAL NO(S). 5375-5377/2017
TOYOTA JIDOSHA KABUSHIKI KAISHA APPELLANT(S)
 VERSUS
M/S PRIUS AUTO INDUSTRIES LIMITED & ORS. RESPONDENT(S)
Date : 14-12-2017 These appeals were called on for pronouncement of
judgment today.
For parties:
 Mr. Aditya Verma, AOR
Ms. Archana Sahadeva, AOR
Mr. Kapil Midha, Adv.

Hon'ble Mr. Justice Ranjan Gogoi pronounced
the judgment of the Bench comprising His
Lordship and Hon'ble Mr. Justice Navin Sinha.
The appeals are dismissed in terms of the
signed reportable judgment.
[VINOD LAKHINA] [TAPAN KUMAR CHAKRABORTY]
AR-cum-PS BRANCH OFFICER
[SIGNED REPORTABLE JUDGMENT IS PLACED ON THE FILE]

Institute of Nano Science and Technology Campus at Knowledge City, Sector 81, Mohali,=We have already noticed that three expert committees have scrutinized Respondent No.1’s tender and found Respondent No.1 to be ineligible. The impugned judgment of the Division Bench of the High Court expressly states that no malafides are involved in the present case. Equally, while setting aside the judgment of the learned Single Judge, the Division Bench does not state that the three expert committees have arrived at a perverse conclusion. To merely set aside the judgment of the learned Single Judge and then jump to the conclusion that Respondent No.1’s tender was clearly eligible, would be directly contrary to the judgments aforestated. The Division Bench, in setting aside the aforesaid judgment, has clearly gone outside the bounds of judicial review. We, therefore, set aside the judgment of the Division Bench and restore that of the learned Single Judge.- We record the aforesaid statement and order that the tender awarded to Respondent No.1 dated 20th August, 2017, based upon the Division Bench judgment, must be set aside, and the award of the tender to the Appellant must be restored. We hasten to add that it will be open to Respondent No.2 to accept Dr. Singhvi’s offer that the project will be executed at the amount indicated by Respondent No.1.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 21858 OF 2017
(Arising out of Special Leave Petition (Civil) No.22055 of 2017)
M/s Sam Built Well Pvt. Ltd. … Appellant
Versus
Deepak Builders & Ors. … Respondents
J U D G M E N T
R.F. Nariman, J.
1. Leave granted.
2. The present appeal involves a notice inviting tenders
(NIT) dated 16th March, 2017 by which the director of the
Institute of Nano Science and Technology, Mohali, invited
percentage rate composite bids from eligible firms/contractors
in a two bid system for construction of the Institute of Nano
1
Science and Technology Campus at Knowledge City, Sector 81,
Mohali, consisting of research, academic and administrative
buildings together with hostel, residential, amenity and utility
buildings. The estimated cost of the said project was Rs.162.18
crores, with earnest money payable being Rs.1.72 crores. The
period of completion was stated to be 20 months and the last
date for submission of tender was 10th April, 2017. Clause 8 of
the said NIT is important and states as under:
“8. Contractors/bidders who fulfill the following
minimum criteria shall be eligible to apply. Joint
ventures/consortium are not accepted.
(a) Should have satisfactorily completed the
works as mentioned below during the last date
of submission of bids.
(i) Three similar completed works each costing
not less than Rs.64.9 crores, or
(ii) Two similar completed works each costing not
less than Rs.97.3 crores,
(iii) One similar completed work of aggregate cost
not less than Rs.129.7 crores.
Similar work shall mean work of “construction of
institutional/educational buildings campus with
minimum five storeys RCC framed structure building
including electrical, plumbing, fire fighting, HVAC
2
works under composite contract executed in India in
a single contract.”
3. Several persons submitted their bids, including
Respondent No.1, who claimed that it had done “similar work”
as follows:
Sr.
No.
Name of
work
Completion
date
Current cost
after addition of
7% per annum
Remarks
1 Construction
of District
Administrative
complex at
Sector-76,
SAS Nagar,
Mohali
31.03.2016 Rs. 97.76 Cr.
Current
enhanced value
as per clause
2.2.4
Rs. 97.76 cr x
107% =
Rs.104.60 Cr.
It has
basement
plus 5
storeys RCC
framed
structure
2. Construction
of Office
Building of
Punjab Mandi
Board,
Phase-11, SA
Nagar, Mohali
05.10.2011 Rs.62.65 cr.
Current
enhanced value
as per clause
2.2.4
Rs. 62.25cr x
114% =70.96cr.
It has
basement
plus six
storeys RCC
framed
structure
3
3 Construction
of Jang-eAzadi

Memorial
Project at
Kartarpur,
Jalandhar
(Phase-1)
16.03.2015 Rs.172.32 cr It has height
of 42 meters
i.e. more
than 8
storeys RCC
framed
structure
4 Construction
of Judicial
Court
Complex at
Sector 76,
SAS Nagar,
Mohali
23.12.2015:
14 courts out
of 25 courts
were
inaugurated
on 23rd Dec.,
2015 and are
functioning
from the
building.
Work of
Phase 2 for
remaining
courts in
progress.
Work of Phase 2
for remaining
courts in
progress. Work of
Rs. 75.28 cr. was
completed upto
31.03.2017 and
balance work in
progress
It has
basement
plus 5
storeys RCC
framed
structure
5 Total Value Rs.423.16 Cr.
4. Pre-bid meetings were conducted in March, 2017 and
ultimately Respondent No.1 submitted its tender on 7th April,
2017. 5 out of 16 bidders, who initially came forward,
participated in the tender process. Admittedly, a technical
4
evaluation report dated 24th April, 2017 stated that the eligibility
criteria contained in Clause 8 of the NIT was not met by
Respondent No.1. This was reiterated by two other expert
bodies, namely, Tata Consultancy Services and the Building
Works Committee of the Institute. Respondent No.2 then
addressed a letter to Respondent No.1 informing it about its
ineligibility. On 3rd May, 2017, Respondent No.1 filed a Writ
Petition which was dismissed by the learned Single Judge
stating that “similar work”, which requires to be considered
under Clause 8 of the NIT, would be work which involves not
only construction of administrative blocks, but also several
other buildings. Looking at the four projects, the last of which
was admittedly kept out of consideration, it was found that none
of the work could be said to be “similar” in nature and referring
to the fact that three specialists had stated that Respondent
No.1 was ineligible, the Court adopted the hands-off posture,
considering the limited parameters of judicial review. However,
by the impugned judgment dated 4th August, 2017, the Division
Bench of the High Court allowed the appeal of Respondent
5
No.1 and set aside the judgment of the learned Single Judge
stating that though there was no malafides in the present case,
the judgment of the learned Single Judge was incorrect and
that, therefore, Respondent No.1 was clearly eligible. The
appeal was then disposed of by directing Respondent No. 2 to
consider Respondent No.1’s bid, along with other eligible bids,
and award the contract after assessing the bids on all
permissible criteria.
5. Pursuant to the said judgment, we have been informed
that the tender was ultimately awarded on 20th August, 2017 to
Respondent No.1, inter alia, for the reason that Respondent
No.1 quoted a figure of roughly 4 to 5 crores less than that of
the Appellant. Further, even though we are in December,
2017, the Appellant has, admittedly, not yet left the site of
construction and resultantly Respondent No.1 has not yet
commenced work.
6. Dr. A.M. Singhvi, learned senior counsel appearing on
behalf of the Appellant, has taken us through three expert
6
committee reports in the present case. According to the
learned senior counsel, it is incorrect to state that the National
Building Code of India, 2016, which is framed by the Bureau of
Industrial Costs and Prices, does not apply to the facts of the
present case inasmuch as the special conditions of the tender
specifically make the said Code applicable and that, therefore,
the expert committee reports based, inter alia, on the provisions
of the Code, cannot be interfered with. Also, according to the
learned senior counsel, the learned Single Judge correctly
appreciated that in tender matters, judicial review is very limited
and argued before us that the Division Bench, while setting
aside the judgment of the learned Single Judge, has not kept in
view the parameters of judicial review of tenders. Equally,
according to the learned senior counsel, it being clear that there
are no malafides or perversity involved, it would not be possible
for a Writ Court, sitting in judicial review, to interfere with the
tender process as has been done by the Division Bench.
7
7. Per contra, Shri Mukul Rohatgi, learned senior counsel
appearing for Respondent No.1, supported the impugned
judgment and stated that the National Building Code of India
was only made applicable in so far as safety aspects of the
buildings are concerned. This being the case, according to
him, all the expert committee reports in relying upon the
provisions of the said Code could not have done so. Also,
according to him, one look at the three projects that have been
carried out by Respondent No.1 would show that they are all
projects consisting of buildings which have basement plus 5 or
more storeys and that, therefore, it is clear that they were
“similar works” within the meaning of the expression contained
in Clause 8 of the NIT, as these were nothing other than
institutional buildings that were constructed by Respondent
No.1.
8. Dr. Singhvi, in rejoinder, stated that none of the three
works could possibly be called “similar work” because an entire
complex had to be constructed, and similar work was also
8
defined to mean, “construction of institutional/educational
buildings campus with minimum five storeys RCC framed
structure building…”. According to the learned senior counsel,
one building, albeit of 5 storeys or more, would not suffice.
9. Having heard learned counsel for both parties, it is
important to set out the parameters for judicial review in cases
like the present one. In a similar case, namely, Afcons
Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016)
16 SCC 818 at 825-26, paragraph 4.2(a) of Section III of the
tender conditions in that case again spoke of a certain minimum
number of “similar contracts” as previous work experience.
The question before this Court was whether an inter-state high
speed railway project could be similar to metro civil construction
work. After laying down the parameters of judicial review and
referring to various judgments for the same, this Court held:
“15. We may add that the owner or the employer
of a project, having authored the tender documents,
is the best person to understand and appreciate its
requirements and interpret its documents. The
constitutional courts must defer to this
9
understanding and appreciation of the tender
documents, unless there is mala fide or perversity in
the understanding or appreciation or in the
application of the terms of the tender conditions. It is
possible that the owner or employer of a project
may give an interpretation to the tender documents
that is not acceptable to the constitutional courts but
that by itself is not a reason for interfering with the
interpretation given.
16. In the present appeals, although there does
not appear to be any ambiguity or doubt about the
interpretation given by NMRCL to the tender
conditions, we are of the view that even if there was
such an ambiguity or doubt, the High Court ought to
have refrained from giving its own interpretation
unless it had come to a clear conclusion that the
interpretation given by NMRCL was perverse or
mala fide or intended to favour one of the bidders.
This was certainly not the case either before the
High Court or before this Court.”
10. In Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272 at
288, this Court referred to various judgments, including the
judgment in Afcons Infrastructure Ltd. (supra), and concluded
as follows:
“26. We respectfully concur with the aforesaid
statement of law. We have reasons to do so. In the
present scenario, tenders are floated and offers are
invited for highly complex technical subjects. It
requires understanding and appreciation of the
nature of work and the purpose it is going to serve.
10
It is common knowledge in the competitive
commercial field that technical bids pursuant to the
notice inviting tenders are scrutinised by the
technical experts and sometimes third-party
assistance from those unconnected with the
owner's organisation is taken. This ensures
objectivity. Bidder's expertise and technical
capability and capacity must be assessed by the
experts. In the matters of financial assessment,
consultants are appointed. It is because to check
and ascertain that technical ability and the financial
feasibility have sanguinity and are workable and
realistic. There is a multi-prong complex approach;
highly technical in nature. The tenders where public
largesse is put to auction stand on a different
compartment. Tender with which we are concerned,
is not comparable to any scheme for allotment. This
arena which we have referred requires technical
expertise. Parameters applied are different. Its aim
is to achieve high degree of perfection in execution
and adherence to the time schedule. But, that does
not mean, these tenders will escape scrutiny of
judicial review. Exercise of power of judicial review
would be called for if the approach is arbitrary or
mala fide or procedure adopted is meant to favour
one. The decision-making process should clearly
show that the said maladies are kept at bay. But
where a decision is taken that is manifestly in
consonance with the language of the tender
document or subserves the purpose for which the
tender is floated, the court should follow the
principle of restraint. Technical evaluation or
comparison by the court would be impermissible.
The principle that is applied to scan and understand
an ordinary instrument relatable to contract in other
spheres has to be treated differently than
interpreting and appreciating tender documents
11
relating to technical works and projects requiring
special skills. The owner should be allowed to carry
out the purpose and there has to be allowance of
free play in the joints.”
11. We have already noticed that three expert committees
have scrutinized Respondent No.1’s tender and found
Respondent No.1 to be ineligible. The impugned judgment of
the Division Bench of the High Court expressly states that no
malafides are involved in the present case. Equally, while
setting aside the judgment of the learned Single Judge, the
Division Bench does not state that the three expert committees
have arrived at a perverse conclusion. To merely set aside the
judgment of the learned Single Judge and then jump to the
conclusion that Respondent No.1’s tender was clearly eligible,
would be directly contrary to the judgments aforestated. Not
having found malafides or perversity in the technical expert
reports, the principle of judicial restraint kicks in, and any
appreciation by the Court itself of technical evaluation, best left
to technical experts, would be outside its ken. As a result, we
find that the learned Single Judge was correct in his reliance on
12
the three expert committee reports. The Division Bench, in
setting aside the aforesaid judgment, has clearly gone outside
the bounds of judicial review. We, therefore, set aside the
judgment of the Division Bench and restore that of the learned
Single Judge.
12. Dr. Singhvi, learned senior counsel appearing for the
Appellant, has stated that the Appellant is willing to match the
offer of Respondent No.1. We record the aforesaid statement
and order that the tender awarded to Respondent No.1 dated
20th August, 2017, based upon the Division Bench judgment,
must be set aside, and the award of the tender to the Appellant
must be restored. We hasten to add that it will be open to
Respondent No.2 to accept Dr. Singhvi’s offer that the project
will be executed at the amount indicated by Respondent No.1.
13
13. The appeal is allowed in the aforesaid terms with no order
as to costs.
…………………………..J.
(R.F. Nariman)
…………………………..J.
(Navin Sinha)
New Delhi;
December 14, 2017.
14