Pay Compensation if police fail to crack cases

While passing interim orders, on a petition filed by the father of a 15-year-old girl, who was murdered for gain in Pudukottai district in March 2011, Justice S Nagamuthu of the Madras High Court held that, the State government is liable to pay compensation to the victims even in cases which remain unsolved for years together and recover the money from the criminals after the police succeed in nabbing them and held that, under the Victim Compensation Scheme, framed by the State government in 2013 following the introduction of Section 357A to the Code of Criminal Procedure in 2009, provides for a compensation of Rs. 3 lakh in cases of death, the judge ordered that a cheque for the amount should be handed over to the present petitioner and his wife in open court on July 27.

Court further opined that, “when a citizen’s right is infringed by an unscrupulous criminal and when the crime could not be even detected by the State agencies, then the State government is liable to pay compensation.” While hearing the parties, Court observed that, “The State is constitutionally obliged to guarantee a dignified life to its citizens and it includes sufficient safety and safeguard to their person and property… but here is a man who has been waiting for justice for the past four years having lost his lovable daughter in her teenage.

He is crying for justice at least to know the perpetrator of the crime. Court further observed that, “The sufferings of the petitioner and his other family members and the mental agony and trauma caused to them as a result of the occurrence cannot be viewed lightly. Article 21, considered to be heart and soul of the Constitution, guarantees a very precious fundamental right to life which includes fair investigation and fair trial as against any crime.”

Madras HC enhances compensation awarded in motor accident case

Justice S. Vimala of Madras HC while slamming a motor accident claims tribunal in the state which considered Rs 15,000 as ‘notional income’ of a house wife, awarded Rs 1.62 Lacs as compensation for her death said such a view cannot be tolerated and has enhanced the compensation to Rs 6.76 Lacs. Court observed the Order of the Tribunal as “narrow minded order” in awarding compensation to the next of kin of an accident victim, the Madras High Court.
Court observed that the victim’s daughter must be “missing her mother’s lap”. Further, “the primary responsibility of the homemaker is to ensure that the family is happy, healthy and prosperous. To make the home as heart of the family giving total relaxation and complete freedom and joy to members of the family, is the critical role willingly undertaken and delightfully discharged. As it is voluntary, it is quite often neglected, forgotten and devalued,” Court said.

Though the government was expected to be a model litigant, it had not even paid the meagre compensation awarded by the tribunal, Court ruled. It was claimed by the petitioner before the Tribunal that, the deceased was earning around Rs. 5,000 per month. However, it was not supported by any documents. Hence, the tribunal concluded that her ‘notional income’ as a homemaker was Rs 15,000 annually and awarded a paltry Rs 1.62 Lacs as compensation.

However, Madras High Court, while slamming the tribunal for its narrow mindedness and saying such a view cannot be tolerated, Court said that a house wife’s services, described as gratuitous service, has not been considered by the tribunal. “When the child was aged 5 it lost the lap of the mother, which nobody can afford. The guidance and support needed from the mother, especially for a girl child, need not be emphasised. The tribunal, unmindful of the consequences of the death, has quantified the compensation in a way which nobody can tolerate,” Court said.

Madras High Court relied on the Supreme Court ruling and considered, Rs 36,000 as annual ‘notional income’ of the woman, and arrived at a compensation figure of Rs 6.76 Lacs and directed the authorities to deposit it within three weeks.

Madras HC directs Health Department to pay Family Pension

Justice D Hariparanthaman of Madras High Court has directed the Health Department authorities to pay the sum of family pension with 10% interest to a widow and said that she was eligible for family pension even though her husband had died within a year after joining the government service. Court also directed the authorities to pay the sum with 10% interest.

Court further ordered that, “there cannot be any further delay in payment of family pension to her, as she is a widow agitating for family pension since 1988.” Death-cum-retirement gratuity amount for the service period also should be given with interest, if it is not already paid.

It was a case where, the deceased husband joined the Health Department as office assistant way back in November 25, 1987, but died on June 13, 1988. In spite of a civil court order declaring the widow as well as her daughter as legal heirs of the deceased in the year 1995, Health Department did not pay the pension as well as gratuity to the widow as well as her daughter.

Court observed that, as per Rule 49 (2) of the Tamil Nadu Pension Rules, even if a government servant had rendered less than one year of service, his widow was entitled to family pension. Court further noted that, “since the rule provides for family pension, the department is directed to send necessary proposal for family pension and for death-cum-retirement gratuity to the principal accountant general within four weeks, since the government servant died long back in 1998. The department is also directed to pay interest on the belated settlement of pension at 10%.”

Madras High Court rejected PIL on festival holidays

Bench comprising Chief Justice Sanjay Kishan Kaul and Justice M Sathyanarayanan of Madras High Court while dismissing a Public Interest Petition (PIL) which objected to the court granting four to five days of holidays on occasion of ‘north Indian’ festivals like Diwali, held that, “there is no north-south divide, but for the endeavours of persons like the petitioners, who seek to raise divisive issues only to gain publicity and create unrest among people. It is necessary for this court to come down with heavy hands on such endeavours“.  Court even imposed an exemplary cost of Rs 20,000 on the petitioner.

In the given petition, petitioner claimed that, “till a couple of decades ago, the High Court had been granting just a day’s leave on Diwali, said successive Chief Justices from north India had increased the number of holidays after the north Indian festival had been thrust on Tamils. Long holidays would render advocates jobless”.

While dismissing the Public Interest Litigation, court observed that, the petitioner is raising divisive issues for publicity. Court also criticized the content as well as attitude displayed in the petition. It was also told that, court’s calendar was prepared after a lot of deliberations, including discussions with representatives of advocates.

Court further ruled that, “Whether Advocates are rendered jobless or not is not the concern of the petitioner, as advocates and their representatives are consulted during the framing of the calendar. It need not be the concern of all and sundry, who want to gain public importance through such means”.

Court further observed that, India being a vast country with various cultures, language and food habits, which is something the nation should be proud of, and said, “All these cultures combined together form the nation of India. It is something to be celebrated. It should not segregate the country into two parts by raising divisive issues, as the petitioner seeks to do.”

The Court asked the petitioner to deposit the cost of Rs. 20000/- within 15 days at the mediation centre of the court.

There is no north-south divide, says Madras HC

Bench comprising Chief Justice Sanjay Kishan Kaul and Justice M Sathyanarayanan of Madras High Court while dismissing a Public Interest Petition (PIL) which objected to the court granting four to five days of holidays on occasion of ‘north Indian’ festivals like Diwali, held that, “there is no north-south divide, but for the endeavours of persons like the petitioners, who seek to raise divisive issues only to gain publicity and create unrest among people. It is necessary for this court to come down with heavy hands on such endeavours“.  Court even imposed an exemplary cost of Rs 20,000 on the petitioner.

In the given petition, petitioner claimed that, “till a couple of decades ago, the High Court had been granting just a day’s leave on Diwali, said successive Chief Justices from north India had increased the number of holidays after the north Indian festival had been thrust on Tamils. Long holidays would render advocates jobless”.

While dismissing the Public Interest Litigation, court observed that, the petitioner is raising divisive issues for publicity. Court also criticized the content as well as attitude displayed in the petition. It was also told that, court’s calendar was prepared after a lot of deliberations, including discussions with representatives of advocates.

Court further ruled that, “Whether Advocates are rendered jobless or not is not the concern of the petitioner, as advocates and their representatives are consulted during the framing of the calendar. It need not be the concern of all and sundry, who want to gain public importance through such means”.

Court further observed that, India being a vast country with various cultures, language and food habits, which is something the nation should be proud of, and said, “All these cultures combined together form the nation of India. It is something to be celebrated. It should not segregate the country into two parts by raising divisive issues, as the petitioner seeks to do.”

The Court asked the petitioner to deposit the cost of Rs. 20000/- within 15 days at the mediation centre of the court.

Novartis AG v. Union of India and Glivec patenting

Reasons, Results and Repercussions of India’s fight against evergreening

Preena Salgia, Student of Law, NLIU, Bhopal

Glivec, an anti-cancer drug developed by the pharmaceutical giant Novartis, created a furore in the Indian drug industry when its patent application was rejected by the highest court of appeal in the country. The rejection was largely a result of Section 3(d) which was introduced in the Indian Patents Act in 2005. This section was included to combat the anti-competitive practice of ‘evergreening’ of patents, by making derivatives of known substances, not showing enhanced properties, ineligible for grant of patent. To analyse the ramifications of this decision, a brief understanding of the Indian patent regime and its evolutionary past is indispensible.

The Indian Patent Regime: A Brief Outlook

Indian IP system today affords protection to intellectual properties like patents, trademarks, copyrights, geographical indications, plant varieties, industrial designs, and designs of integrated circuits. India is a member of several international organizations and a signatory to several treaties, including the World Intellectual Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, and the Patent Cooperation Treaty (PCT).

During the first half of the nineteenth century, when most countries in the world were developing their pharmaceutical industries, its presence in India, under the British Colonial rule, was virtually non-existent ((Janice Mueller, “The Tiger Awakens: The Tumultuous Transformation of India’s Patent System and the Rise of Indian Pharmaceutical Innovation”, 68 U. PITT. L. REV. 491,495)). The patent laws enacted during that time technically provided for product patents, however their provisions and policies only served British interests. The little market which existed in the country was dominated by multinational corporations selling drugs at exorbitant prices ((Id)). It was in this backdrop that the Patents Act of 1970 was enacted to protect the domestic pharmaceutical industry and give a boost to its development. Patent for products was disallowed, which enabled generic drug manufacturers to reverse engineer patented drugs and produce them in India at cheap rates.

Thus these generic manufacturers gained tremendous importance by not only fulfilling the domestic demand but also exporting such drugs to poorer nations ((Vijay Yalamanchili, “State of India’s TRIPS-compliant Patent Regime”, 26 Biotech. L. Rep., 211 (2007).)). They sustained the economy by ensuring the availability of drugs at a price which were within the purchasing power of a poor majority ((Supra note 1, page 514)).

On the Path to Becoming TRIPS Compliant

India’s entry into the WTO in 1995, marked a new era of growth and integration with the world economy. The Indian patent regime had to undergo various compliances mandated by TRIPS, like introduction of product patents, which it did by amending the Patents Act in 2005. Among these, lifting the ban on product patents in the field of pharmaceuticals and agro-chemicals is considered one of the most significant amendments. The reason being: it has far-reaching consequences which affect a large portion of the population. This is so because of the large scale unaffordability among people and the agriculture-dominated rural economy of India ((Contribution of Agriculture to India’s GDP (in 2009-2010) was 14.62% (last visited 16th June 2014).)).

Inventors generally prefer to have stronger patent protection through product rather than process patents, and the patent regimes of developed countries predominately protect end products ((When they come up with the same product innovation, under product patenting only one firm is granted the patent for the product and so it emerges as monopoly, but under process patenting both the firms can get the patent for the product if they have different processes of production. Thus process patenting leads to more competition whereas product patenting lessens product market competition. Indian Statistical Institute, Economic Research Unit, Discussion Paper Series, Tarun Kabiraj, “Product vs. Process Patenting and R&D Incentives (last visited 25 May 2014).)). However, the patent system of India faces the challenge of balancing the interests of multinational corporations with that of the common public. Patents motivate companies to engage in capital-intensive and inherently risky biomedical research, because of the possibility of charging monopoly prices and reaping high profits ((Rebecca S. Eisenberg, “Patents, Product Exclusivity, and Information Dissemination: How Law Directs Biopharmaceutical Research and Development”, 72 FORDHAM L. REv. 477, 479 (2003).)).On the other hand, that very monopoly prevents generic manufacturing and affects the price and availability of the finished medicine to consumers ((Carlos M. Correa, “Public Health and Patent Legislation in Developing Countries”, 3 TUL. J. TECH. & INTELL. PROP. 1, 3 (2001).)).

The 2005 amendment benefits the multinational giants and adversely affects the domestic generic manufacturers. Therefore, while introducing these changes, the Parliament decided to add certain riders to this change. They inserted Section 3 (d) which essentially acted as a safeguard against certain drugs and agro-chemical patents. A successful patent regime must balance all interests. The provision of Section 3(d) is able to achieve that balance to a large extent by ensuring that while inventors get their product patent on pharmaceuticals, they do not exploit their rights by ‘evergreening’ their patents.

Further, every country has a right to modify the contours of this balance according to its situational needs and interests. For instance, it is more essential for developing countries like India to focus on transfer of technology rather than creating monopolies. And for that reason, their patent laws cannot be compared and considered inferior to those of developed nations. While TRIPS aims to bring uniformity in IP laws of its member countries, it gives enough flexibility to them to alter these laws as per the needs of their individual societies. Today, India’s transition from imitator to innovator is under way, but the process needs time to run its course.

This research paper aims to discuss ­­­­­the journey of Glivec in India, the reasons for refusing grant of a patent to this drug by the Patent Controller, the issues arising before various appellate courts (including the Madras High Court and the Supreme Court), and the impact of Supreme Court’s judgement on the pharmaceutical industry in India.

An Overview of Facts

About The Drug: Glivec

Glivec (Gleevec in the U.S.A.), the drug presently in question, is derived from the free-base compound Imatinib ((Official website of Gleevec, United States of America, (last visited 26th May 2014).)). Jürg Zimmermann invented a number of derivatives of N-phenyl-2-pyrimidine-amine, one of which was later given the International Non-proprietary Name ‘Imatinib’ by the World Health Organisation ((Novartis AG v. Union of IndiaAIR 2013 SC 1311)). These derivatives are capable of inhibiting certain protein kinases and thus have valuable anti-tumour properties. The patent granted for this compound in the U.S. was termed as ‘Zimmerman Patent’ ((‘Pyrimidine derivatives and processes for the preparation thereof’ US 5521184 A)).

According to Novartis, ‘Gleevec’ is produced by applying two inventive steps to free-base Imatinib: producing its methanesulfonic acid addition salt – Imtinib Mesylate, and then creating that salt’s beta-crystalline form, which is orally administrable.

Significance of the drug in India

Imatinib Mesylate’s known uses include treatment for Chronic Myeloid Leukaemia [CML] (( last visited 26th May 2014))and acute lymphoblastic leukaemia in adults and children ((Consumer Medicine Information, Glivec, Imatinib,$File/nvcglitb.pdf last visited 26th May 2014)). CML is the commonest adult leukaemia in India and the annual incidence ranges from 0.8–2.2/100,000 population in males and 0.6–1.6/100,000 population in females in India ((National Cancer Registry Programme. Two year report of the population based cancer registries 1999-2000. New Delhi: Indian Council of Medical Research; 2005.)).

Considering these figures, the importance of availability of such a drug cannot be denied in the Indian market. However, the cost of the drug for the treatment of this disease comes to about Rs.1,20,000 (around $ 2,000) per month in India ((Novartis pleaded before the Supreme Court that even though their drug is heavily priced, they ran several charitable programs under which the drug was provided free of cost to needy persons. However, when the Court asked the Company why they could not close the charitable program and use the same resources to bring down the price of the drug in general (without any adverse impact on their revenue) the Company could not give a satisfactory reply)), where at the same time, the generic versions (like the one provided by CIPLA) are available in the country which cost only Rs.8,000 to Rs.10,000 [$ 140 to 170] ((Supra note 10)). The significance of these generic manufacturers gains prominence primarily due to the unfortunate fact that 68.8% population of India live on less than $ 2 a day ((World Bank’s poverty headcount ratio at $2 a day (Purchasing Power Parity), at 2005 international prices last visited 26th May 2014)), thereby raising serious affordability concerns.

Glivec’s Journey in India

TRIPS was introduced in 1995 to narrow the gaps in the way intellectual property rights were protected around the world, and to bring them under common international rules (( last visited 11th June, 2014)). Considering the magnitude of change which the agreement was set to bring to developing countries, it gave such countries the power to delay application of its provisions for a maximum of ten years ((Article 65 of TRIPS)). However for availing such an exception, the country was obligated to fulfil two requirements: establish a procedure for mailbox applications ((Means a metaphorical “mailbox” where all applications received post 1st January 1995 shall be stored. However, they shall be decided upon only once the country enforces TRIPS.))and provide exclusive marketing rights ((Chapter IVA of Patents Act, 1970 (Omitted by the Patents (Amendment) Act, 2005))to the applicant.

Novartis filed an application ((Application No.1602/MAS/1998))with the Chennai Patent Office on July 17, 1998 for grant of product patent for Imatinib Mesylate in beta crystalline form. While that application was pending, Novartis obtained Exclusive Marketing Rights (EMR) by an order dated November 10, 2003. This allowed Novartis to prohibit generic manufacturers and raise the price of Glivec almost ten-fold ((Ganapati Murdur, “Indian Patients Go to Court Over Cancer Drug”, 329 BRIT. MED. J. 419 (2004). One month’s dose of Gleevec costs $2,600, roughly ten times more than the generic versions.)). Its application was taken up for consideration in 2005 thereafter the Patent Office rejected it in 2006.

In the application Novartis claimed that the invented product i.e. the beta crystal form of Imatinib Mesylate, has:

        i.            more beneficial flow properties;

      ii.            better thermodynamic stability; and

    iii.            lower hygroscopicity; than the alpha crystal form of Imatinib Mesylate.

It further claimed that the beta crystal form showed increased bioavailability than Imatinib free-base. The aforesaid properties make the invented product “new” as it “stores better and is easier to process ((Supra note 10)),” inter alia.

By the time the Patent Office took the application for consideration, it had already received five ((The oppositions were made by M/s. Cancer Patients Aid Association, NATCO Pharma Ltd., CIPLA Ltd., Ranbaxy Laboratories Ltd., and Hetro Drugs Ltd.))pre-grant oppositions ((Under Section 25(1) of Patents Act, 1970)). Deciding on all the applications, the Assistant Controller of Patents and Design held that the invention claimed by the appellant was:

  1. anticipated by prior publication, i.e., the Zimmermann patent;
  2. obvious to a person skilled in the art in view of the disclosure provided in the Zimmermann patent specifications; and
  3. not patentable under section 3(d) of the Act.

Aggrieved by the rejection of its application, Novartis filed writ petitions before the Madras High Court. The five petitions questioning the decision of the Assistant Controller were transferred to the Intellectual Property Appellate Board (IPAB). The other two petitions, challenging the validity of Section 3(d) on the grounds that it violated Article 14 of the Constitution and was not compliant with TRIPS, were heard by a Division Bench of the Madras High Court.

Approaching the Appellate Forum: Issues at the Madras High Court

Whether Section 3(d) was Compliant with TRIPS

The Madras High Court did not evaluate the merits of this issue by citing lack of jurisdiction to determine whether Section 3[d] ((Section 3: “The following are not inventions within the meaning of this Act,- (d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant. Explanation.—For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy;”))was TRIPs compliant. It stated that the appropriate forum for determination of the same should be the Dispute Settlement Body of the WTO. The underlying reason for ruling so was that TRIPs determined the contractual relationship between countries and it should be interpreted according to normal contractual principles ((Shamnad Basheer & Prashant Reddy, ““Ducking” TRIPS in India: A Saga Involving Novartis and the Legality of Section 3(d)”, National Law School of India Review, vol. 20(2), 2008)). The court stated, “International Agreement possesses the basic nature of an ordinary contract and when courts respect the choice of jurisdiction fixed under such ordinary contract, we see no compelling reasons to deviate from such judicial approach when we consider the choice of forum arrived at in International Treaties ((Novartis AG v. Union of India (2007) 4 MLJ 1153)).”

However, it must be stated here that there exists no express or implied bar on Indian courts to declare that a provision is not in compliance with an international treaty. In Equal Opportunities Commission and Anr. v. Secretary of State for Employment ((Equal Opportunities Commission and Anr. v. Secretary of State for Employment, (1994) 1 AII ER. 910)), the House of Lords, held that an English Legislation ((Equal Protection (Consolidation) Act, 1978))is not in compliance with a specific Article of an International Treaty ((EEC Treaty and Council Directives)).

Further, had the court evaluated the merits it could have held that, since the terms “novelty,” “inventive step” and “industrial application” are not defined in TRIPS, member countries have reasonable flexibility in applying these three criteria ((UNCTAD-ICTSD, “Resource Book on TRIPS and Development”, 358 (2005).)). Under Paragraph 1, Article 27 ((Article 27, TRIPS Agreement, 1869 UNTS 299; 33 ILM 1197 (1994).))the grant of a patent to a patentable subject matter is subject to the provision of Paragraph 3 ((Ibid.))of the same article which gives the Member states the power to exclude the patentability of certain kinds of inventions specified under clauses (a) and (b). Also, under Article 1 ((Article 1, TRIPS Agreement, 1869 UNTS 299; 33 ILM 1197 (1994).)), Member States are free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice. Hence, section 3(d) is clearly in consonance with the principles laid down under the TRIPS Agreement.

As per another line of argument, Section 3(d) could be seen as an extension of the non-obviousness test ((Intervention petition by S. Basheer, before the Supreme Court in Novartis v. Union of India AIR 2013 SC 1311, (last visited 2nd July, 2014).)), which would also make it TRIPs compliant.

Whether Section 3(d) was Constitutionally Valid

Novartis’ main grounds of attack to the constitutional validity of Section 3(d) were that it was vague, arbitrary and violated Article 14 of the Constitution of India ((Id)). Novartis further argued that the Patent Controller was granted uncanalised powers to determine what constituted “enhancement of efficacy”, which amounted to delegation of an essential legislative function.

The Madras High Court reiterated that in India, presumption lies in favour of the Constitutionality of an enactment ((Hamdard Dawakhana and Anr. v. Union of India and Ors., AIR 1960 SC 554)). In a plethora of judgments it has been upheld that, Article 14 of the Constitution will be violated only when differential treatment is meted out to individuals without the existence of a reasonable basis for the differentiation ((Ameeroonissa Begum v. Mehboob Begum, 1953 SCR 404 (414); Babulal Amthalal Mehta v. Collector of Customs, Calcutta, AIR 1957 SC 877; Gopi Chand v. Delhi Administration, AIR 1959 SC 609; Ashoka Smokeless Coal (P.) Ltd. v. Union of India, (2007) 2 SCC 640, 697)). In the instant matter the provision aims to create a distinction between pharmaceutical products and their derivatives which do not differ significantly in their properties. And the rational basis for doing so is to prevent ever-greening.

With regard to the argument of excessive delegation, the position of law which is well settled is that Parliament cannot delegate ‘essential legislative functions’ to administrative authorities ((In re Delhi Laws Act, AIR 1951 SC 332)). In other words, the Parliament must lay down the broad policy, after which it may delegate rule-making power to implement such a policy. Thus the question which surfaces here is when the power to determine what constituted “enhancement of efficacy” was delegated to the Patent Controller, did it amount to excessive delegation?

The policy behind an Act is the legislative intent with which it has been legislated. The legislative intent may be gathered from several sources like the combined reading of all the provisions of the statute, from the Preamble of the statute, from the Objects and Reasons, from parliamentary debates, reports of committees and commissions etc. ((Girdhari Lal & Sons v. Balbir Nath Mathur, [1986] 1 SCR 383))The legislative intent behind enactment of section 3(d) was curbing ‘ever-greening’ of patents ((See Lok Sabha Debates (March 22, 2005), available at (last visited 7th July 2014).)), and ensuring that patent rights were not worked to the detriment of consumers’ interest, trade, or industrial development of the country ((Statement of Objects and Reasons, Patents Act, 1970)).

It could be further argued that the amendment of 2005 was a skeletal legislation, not containing definitions or guidelines, which made it arbitrary. However, if the Parliament clearly indicates the policy and purpose of the Act in its operative part, the mere fact that the Act is skeletal in nature does not make such delegation excessive ((Jyoti Pershad v. Union Territory of Delhi, AIR 1961 SC 1602)). The amended section had in-built measures to guide the Statutory Authority in exercising its discretion by analysing the materials placed before it. The Madras High Court stated:

Further, in exercising such a discretionary power vested in the Statutory Authority, if it is found that he has exercised that discretionary power wrongly or abused it, then, such an error can always be corrected by higher forums, which is provided for in the Act itself and thereafter, by the courts of law.

In other words, a provision of law cannot be struck down on the ground that the Authority exercising the power under that provision is likely to misuse it ((Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536))or its possible abuse ((J.K. Industries Ltd. v. Chief Inspector of Factories Boilers, (1996) 6 SCC 665)).

When a law indicates the policy which inspired it, the mere fact that it does not itself make a complete and precise classification of the subject-matter, but leaves it for other authorities to apply the provisions having regard to the circumstances of each case ((Balbir Singh v. M.C.D., AIR 1985 SC 339)), guided by the policy of the Act, there is no contravention of Article 14 ((Ramkrishna Dalmia v. Tendolkar, Justice S.R., 1959 SCR 279; Jyoti Pershad v. Union territory, Delhi, AIR 1961 SC 1602 (1609);  Neimla Textile Furnishing Mills v. 2nd Punjab Tribunal, AIR 1957 SC 329)).

The judgement stated:

Having regard to the field in which the amended section is to operate; the technological and scientific research oriented advances already made and likely to be made in the coming future and which may be a continuing process for all time to come, the Legislature thought it fit to use only general expressions in the Act, leaving it for the Statutory Authority to apply its mind to the various facts that are brought to its notice and then find out whether the invented drug is within the mischief of the amended section or outside it. Therefore it would be unwise to fix any specific formula to be applied, as a matter of static measure, to find out whether the new form of a known substance resulted in the enhancement of the known efficacy or the derivatives differ significantly in properties with regard to efficacy.

Issues at Intellectual Property Appellate Board [IPAB]

The IPAB ((The Patents (Amendment) Act, 2002 inserted Chapter XIX, which conferred IPAB with the jurisdiction to hear all cases pertaining to patents subject to the provisions of the Patents Act, 1970))while holding that the requirements of novelty and non-obviousness were met, stated that Novartis’ patent application was hit by Section 3(d). It ruled that Section 3(d) merely represented a “higher standard of inventive step” particularly for pharmaceutical substances. The IPAB further stated that inclusion of such a standard was permissible under the TRIPS Agreement, as the Doha Declaration gives the WTO member states “the right to protect public health” and, in particular, to “promote access to medicines for all”.

The Final Lap: Appeal to the Supreme Court

After the amendment in 2005, the Supreme Court was faced with a novel task of interpreting some of the provisions so amended or introduced. It raised and attempted to answer the following questions:

What is the true import of section 3(d) of the Patents Act, 1970? How does it interplay with clauses (j) and (ja) of section 2(1)? Does the product for which the appellant claims patent qualify as a “new product”, and does that make the invention “not obvious” to a person skilled in the art? In case the appellant’s product satisfies the tests and thus qualifies as “invention”, can its patentability still be questioned and denied on the ground posed by section 3(d)?

Whether Section 3(d) was Interpreted and Applied Correctly

Section 3(d) which was introduced in 2005 states that, inventions that are mere “discovery” of a “new form” of a “known substance”, and which do not result in increased efficacy of that substance, are not patentable. For instance, the paracetamol has antipyretic property. Further discovery of new property of paracetamol as analgesic cannot be patented.

Section 3(d) also states that, a “new use” for a “known substance” or of the mere use of a known process, machine or apparatus, unless such known process results in a new product or employs at least one new reactant, is not patentable. For instance, new use of Aspirin for treatment of the cardio-vascular disease, which was earlier used for analgesic purpose, is not patentable. However, a new and alternative process for preparing Aspirin is patentable.

In this case, we are concerned with the first half of this definition, and whether the invented product in question attracts the application of this section. For this, a detailed understanding of the following terms is imperative:

“Mere Discovery”

The Zimmermann patent application ((Zimmermann Patent, Patent Number 5521184, (May 28, 1996).))makes express mention of beta-crystalline salt form of imatinib mesylate, and also divulges in detail, the method of preparation of imatinib mesylate. It categorically identifies methanesulfonic acid as a candidate to form a pharmaceutically acceptable salt of Imatinib. Based on such disclosures in the prior art, it was obvious to a person skilled in the art to prepare the beta-crystalline form of imatinib mesylate from free-base imatinib. Further, in Synthon B.V. vs. Smithkline Beecham Plc ((Synthon B.V. vs. Smithkline Beecham Plc, [2005] UK HL 59)), Lord Hoffman clarified that ‘‘even where a disclosure in a prior art reference is, by itself, not sufficient to produce the claimed invention, it is nonetheless anticipating if all that is required are ordinary methods of trial and error which involve no inventive step and are generally necessary in applying any discovery to produce a practical result.’’ Thus, it can be deduced that all relevant prior art taken together provided ample information for one skilled in the art to produce imatinib mesylate.

Invention’ has been defined under the Black’s Law Dictionary ((Black’s Law Dictionary, 9th edition, Pg. 901))as, “A patentable device or process created through independent effort and characterized by an extraordinary degree of skill or ingenuity; a newly discovered art or operation.” Also, Oxford Advanced Learner’s Dictionary ((Oxford Advanced Learner’s Dictionary, Oxford University Press,Pg. 818))defines ‘invention’as, “A thing or an idea that has been invented”. Further ‘invent’has been defined as, “to produce or design something that has not existed before ((Ibid.)).”

The arguments in favour of Novartis put before the Supreme Court emphasised on interpreting Section 3(d) as ex majore cautela ((Out of abundant caution)). They asserted that the opening words “mere discovery of new form of known substance” would anyway never meet the criteria of “invention” under Section 2(1)(j) and 2(1)(ja), and thus they were inserted only on cautionary basis. However, rejecting such a submission, the Court held that “the importance of the amendment made in section 3(d)…cannot be under-estimated. The amended portion…clearly sets up a second tier of qualifying standards for chemical substances/pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious grounds.

“Known substance”

For deciding whether imatinib mesylate is a known substance or available to the public, it is not necessary that it has to be actually known or available to the public.  It is sufficient if the information given in a prior art document enables a skilled person in the art to prepare the same substance. Moreover, in Asahi Kogyo KK’s Application ((Asahi Kogyo KK’s Application, [1991 RPC 485]))it was observed, “The mere disclosure of a product without any directions as to how to make it, where such is not inevitable made plain from the mere disclosure of the product, does not make the product “available to the public”.  If the public do not know and are not told how to make something, then it is not available to them.  Only an “enabling disclosure” suffices to anticipate.”

The method of preparation of imatinib mesylate has been disclosed in detail in the Zimmermann Patent application,hence making it the ‘know substance’ for the purposes of section 3(d).

“Enhancement in efficacy”

To not attract the restriction as to patentability under Section 3 (d), the new form of the know substance should show an “enhancement in the efficacy” of the know substance. The definition of ‘efficacy’ determines the overall effect of section 3(d). Oxford Advanced Learner’s Dictionary ((Oxford Advanced Learner’s Dictionary, Oxford University Press,Pg. 489))defines ‘efficacy’as, “The ability of something, especially a drug or a medical treatment, to produce the results that are wanted”. Further, Dorland’s Medical Dictionary defines the expression “efficacy” as “the ability of a drug to produce the desired therapeutic effect ((Dorland’s Medical Dictionary, 32nd Edition, Pg. 536)).” Also, “therapeutic” is defined as “is healing of disease – having a good effect on the body ((Ibid.)).” Going by the meaning for the word efficacy’ and ‘therapeutic’ extracted above, what the patent applicant is expected to show is, how effective would the drug be in healing a disease or having a good effect on the body. Therapeutic efficacy refers to “the ability of a drug to produce an effect, and refers to the maximum such effect ((John P Grif & John O’Grady, “The Textbook of Pharmaceutical Medicine”, 4th edition, (2002), Pg. 283)).”

Applying the above to the present facts, the new substance, beta-crystalline form of imatinib mesylate, and the known substance, imatinib mesylate, both contain imatinib in its free base form from which both these substances derive their cancer-curing properties. To prove that there has been an enhancement in the efficacy of the know substance, the appellant would have to show that the enhancement is in relation to the property which cures or heals cancer. But such an argument will be flawed as the cancer curing ability in all the three forms is similar ((Supra note 10)).

The appellants claimed enhancement in efficacy of beta crystalline form of imatinib mesylate on the basis of physico-chemical properties like: (i) more beneficial flow properties, (ii) better thermodynamic stability, and (iii) lower hygroscopicity, as compared to its alpha crystal form. However, so far as Section 3(d) is concerned, not all advantageous or beneficial properties are relevant, but only such properties that directly relate to therapeutic efficacy. Thus, the above mentioned properties are irrelevant in judging enhancement in efficacy.

Following this, the Court considered the issue of bioavailability, and whether the presence of that alone can help determine the existence of efficacy. Considering the submissions of Prof. Basheer ((An intervenor-cum-amicus in this case)), the Court concluded that an increase in bioavailability alone may not result in increased efficacy ((Cf. Moffitt, Jane, “Appropriateness of Bioavailability and Bioequivalency as Pre-Market Clearance Considerations”, 34 Food Drug Cosm. L.J. 640 (1979) “It is not the intent of a bio-availability study to demonstrate effectiveness, but to determine the rate and extent of absorption. If a drug product is not bioavailable, it cannot be regarded as effective. However a determination that a drug product is bio-available is not in itself a determination of effectiveness.”)).This was a question of fact whose answer would vary from case to case. In the present situation, no material was put forth to establish the same, and hence the product in question failed the test of Section 3(d).

Whether the Requirement of Novelty was Satisfied

Novelty As A Pre-Requisite For Grant Of Patent In India

Section 2[l] ((Section 2(l) of the Patents Act, 1970))defines a ‘new invention’ as:

“‘new invention’ means any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of patent application with complete specification, i.e., the subject matter has not fallen in public domain or that it does not form part of the state of the art.

Section 14 ((Section 14 of The Patents Act, 1970- “Consideration of the report of examiner by Controller- Where, in respect of an application for a patent, the report of the examiner received by the Controller is adverse to the applicant or requires any amendment of the application, the specification or other documents to ensure compliance with the provisions of this Act or of the rules made there under, the Controller, before proceeding to dispose of the application in accordance with the provisions hereinafter appearing, shall…”))and 15 ((Section 15 of The Patents Act, 1970- “Power of Controller to refuse or require amended applications, etc., in certain case- Where the Controller is satisfied that the application or any specification or any other document filed in pursuance thereof does not comply with the requirements of this Act or of any rules made there under, the Controller may refuse the application or may require the application, specification or the other documents, as the case may be, to be amended to his satisfaction before he proceeds with the application and refuse the application on failure to do so.”))empower the Controller to refuse an application on the ground that the invention is not new. The definition of invention under Section 2[j] ((Section 2(j) of The Patents Act, 1970- invention” means a new product or process involving an inventive step and capable of industrial application))itself mentions that invention is something new. Section 64(1)[e] ((Section 64(1)(e) of The Patents Act, 1970- “…that the invention so far as claimed in any claim of the complete specification is not new, having regard to what was publicly known or publicly used in India before the priority date of the claim or to what was published in India or elsewhere in any of the, documents referred to in section 13.”))provides a ground for revocation based on lack of novelty. Lack of novelty i.e. anticipation is also a ground available for opposing the grant of patent under Section 25(1)[d] ((Section 25(1)(d) of The Patents Act, 1970- “…that the invention so far as claimed in any claim of the complete specification was publicly known or publicly used in India before the priority date of that claim.”)).

Hence novelty is a mandatory requirement for grant of a patent in India. However, whether an alleged invention involves novelty and an inventive step is a mixed question of law and fact, depending largely on the circumstances of the case ((Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, (1979) 2 SCC 511; Polar Industries v. Jay Engineering, (1991) IPLR 150 (Cal); Unique Transmission v. ESBI Transmission, (1990) IPLR 216 (CA).)).

Evaluation Of Prior Art

For being a ‘prior art’ it is not necessary that the product must be specifically named in the previous application. The prior art must have made the invention claimed in the patent available to the public. However, the fact that the public did not know how the process worked or what was the product produced, is irrelevant. Although nobody had known that the product existed, it would still form a part of the prior state of art ((Merrell Dow v. Norton, [1994] RPC 1 at 10.)).

The information must have been made available to at least one member of the public who was free in law and equity to use it ((Genentech Inc’s Patent, [1989] RPC 147.)). It is sufficient if it is known to the persons who are engaged in the pursuit of the knowledge of the patented product or process either as men of science or men of commerce or consumers ((Monsato v Coramandal, AIR 1986 SC 712.)).

“Experiment” in the context of novelty means experiments with a view to discovering something not disclosed and does not mean ordinary methods of trial and error which involve no inventive step and generally are necessary in applying any discovery to produce a practical result ((Van der Lely N.V. v. Bamfords, [1963] RPC 61; Bugges Insecticide v. Herbon, [1972] RPC 197)). In Goodyear Tire and Rubber Company Application, it was observed that a later process claim is anticipated in the strict sense if the result of carrying out a process described in a prior document in fact inevitably results in something fairly falling within that claim even if the description itself may not be sufficient to act as anticipation alone ((The General Tire and Rubber Co. v. The Firestone Type and Rubber Co. Ltd. and Orson’s) Application, [1975] RPC 127)).

To determine whether a patentee’s claim has been anticipated by an earlier publication it is necessary to compare the earlier publication with the patentee’s claim. The earlier publication (and the claim) must, for this purpose, be interpreted as at the date of its publication, having regard to the relevant surrounding circumstances which then existed, and without regard to subsequent events. If the earlier publication, so construed, discloses the same device as the device which the patentee by his claim, so construed, asserts that he has invented, the patentee’s claim has been anticipated, but not otherwise ((Ibid)).

Anticipation Of The Alleged Invention By Zimmerman Patent

The Zimmermann patent application states the following: “Owing to the close relationship between the novel compounds in free form and in the form of their salts, including those salts that can be used as intermediates, for example in the purification of the novel compounds or for the identification thereof, hereinbefore and hereinafter any reference to the free compounds should be understood as including the corresponding salts, where appropriate and expedient ((Supra note 50)).”

The application further states (with regard to pharmacological properties): “Owing to the properties described, compounds of formula I can be used not only as tumour-inhibiting active ingredients but also as drugs against non-malignant proliferative diseases, e.g. atherosclerosis, thrombosis, psoriasis, sclerodermitis and fibrosis. They are also suitable for the further applications mentioned above for protein kinase C-modulators and can be used especially in the treatment of diseases that respond to the inhibition of PDGF-receptor kinase ((Ibid.)).”

The US Board of Appeals decision regarding the Zimmermann patent specifically held that the specifications in the Zimmerman patent teach any person ordinarily skilled in the art to use imatinib for treating tumors ((US Board of Patent Appeals, Application No. 09/463, 097, (November 23, 2003).)). Further, Imatinib Mesylate as an acid-addition compound of Imatinib free-base, directly emanates from the Zimmerman patent. Thus, converting it into a beta-crystalline from was an obvious mechanical work which could’ve been anticipated.

Whether the Said Invention Stood the Test of Non-Obviousness

What Constitutes Obviousness

The concept of non-obviousness can be found under Section 2(1)[ja] ((Section 2(1)(ja): “Inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.))of the Patents Act in India. Further, the expression ‘obvious’ and ‘does not involve any inventive step’ appearing in Sections 25(1)(e) and 64(1)(f) bear the same meaning ((P. Narayanan, “Patents Law”, 6th Edition, Pg. 403.)). The term ‘obvious’ comes from the Latin term ob via meaning something ‘which lies in the way’. In the context of the Act it means something which is plain or open to eye or minds or perfectly evident to a person thinking on the subject ((Olin Mathieson Chemical Corporation v. Biorex Laboratories Ltd., [1970] RPC 157; General Tire & Rubber v. Firestone Tyre & Rubber, [1971] RPC 173.)). Obviousness is the antithesis of inventiveness. What is obvious cannot be inventive and what is inventive cannot be obvious ((Beecham Group Ltd.’s (Amoxycillin) Application, [1980] RPC 261)).

Broader In Scope Than Novelty

The philosophy behind this provision relating to non-obviousness is different from that behind Section 64(1)(c) (anticipation) to the extent that a person is granted a patent only for an invention, and that which is obvious is not an invention ((Windsurfing International v. Tabur Marine, [1985] RPC 59.)). The area of inquiry in obviousness is wider than that in anticipation. The court looks at the prior art as a whole having regard to everything which was known or used before the priority date. The court does not confine itself to looking at the particular prior art documents ((Ibid.)). The court also held that the person notionally skilled in the art has at least sufficient interest to address his mind to the subject and to consider the practical application of the information he is deemed to have ((Ibid.)).

Ascertaining The Of Craft Of “Person Skilled In The Art”

Before delving into the existence of non-obviousness, one needs to ascertain the level of craft or skill which this “person skilled in the art” must have. The question is therefore whether in accordance with the policy of the enactment, the patent discloses something sufficiently inventive to deserve the grant of monopoly ((Societe Technique De Pulverisation Step v. Emson Europe, [1993] RPC 513 (CA).)). The person to whom it must be obvious must have an unlimited capacity to assimilate the contents of, it may be, scores of specifications but to be incapable of a scintilla of invention ((Technigraph Printed Circuits Ltd. v. Mills & Rockley (Electronics) Ltd., [1972] RPC 346)).

Where the difference between the old mechanism and the alleged invention consists only in matters of design, it is not subject-matter for patent ((Safveans Aktic- Bolag v. Ford Motor Co., (1927) 44 RPC 49)). Ordinary workshop improvement of a well-known type of apparatus does not constitute an invention within the recognized principles of the patent law ((Curtis & Son Ltd. Heward, (1923) 40 RPC 53)). Similarly a workshop improvement of a well-known character or something made in a well-known way is not an invention ((Shaw v. Burnet, (1924) 41 RPC 432)).

In recognising the difference between that which is inventive and that which is obvious, it must be kept in mind that “the uninventive expert should not be supposed to be attempting to discover something new, that is, to be striving for inventiveness ((Beecham Group Ltd.’s (Amoxycillin) Application)).”

The conversion of imatinib mesylate into a particular salt form does not involve an ‘inventive step’ but mere basic chemistry. It is common knowledge that most chemical compounds can be crystallized into various salt forms by following a set procedure in chemistry.

Impact of the Decision on Indian Pharmaceutical Industry

First Of Its Kind

This is the first decision of its kind, as it involved interpretation of Section 3(d) for the first time. Since this provision is unparalleled throughout the world, it craves a strong jurisprudence to guide it to its goal. The Supreme Court was able to achieve this to some extent, by tracing the history of Section 3(d) and analysing the legislative intent of the Parliament behind enacting it. It also helped in Re-establishing India’s stance against ever-greening of patents. It ensured that the policies enacted in social interest, were kept intact, and did not bow down under pressure from multinational corporations.

Clearing The Air, Yet Creating Uncertainty

While Section 3(d) introduces the term “efficacy”, it does not provide any definition to assist the courts in its interpretation, nor does the Manual of Patent Practice and Procedure ((Published by the Office of Controller General of Patents, Designs & Trademarks, available at (last visited 2nd July, 2014).)). This raises several questions such as: what does “efficacy” mean? Does increased bioavailability qualify as enhanced “efficacy”? What is the standard of proof required to establish “efficacy”? When must proof of efficacy be produced? ((S. Basheer raised these questions in his petition as an intervener. See Supra note 36.))The Supreme Court failed to give a satisfactory answer to these questions. It accepted Madras High Court’s interpretation of “efficacy” to mean “therapeutic efficacy”. However, some scholars believe that this approach is too restrictive, and certain practical or physical properties (such as lower hygroscopicity or enhanced heat stability) may also render the drug more efficacious.

Further, without settling the position of law, the court stated that, whether or not an increase in bioavailability leads to an enhancement of therapeutic efficacy in any given case must be specifically claimed and established by research data ((Supra note 10)).

Changes in patent law or the legal environment significantly affects the value of a patent ((Alan C. Marco, “The Value of Certainty in Intellectual Property Rights: Stock Market Reactions to Patent Litigation”, Vassar College Economics Working Paper No. 82, November 2005. (last visited 2nd July, 2014).)). Thus, more the certainty, better it is for the patent regime of a country ((J. O. Lanjouw and J. Lerner, “The Enforcement of Intellectual Property Rights: A Survey of the Empirical Literature”, NBER Working Paper No. 6296, December 1997.)). The aim of judiciary should be to enhance that certainty, which it couldn’t fulfil in this case. The meaning and applicability of this unique provision and its operative term “enhanced efficacy” still hangs in the balance.

Blocking Of Incremental Inventions

In pharmaceutical industry, innovations don’t often involve new chemical entities. If the standard of non-obviousness through Section 3(d) is set so high, it might not allow many incremental innovations which might be worthy of patenting ((Linda L. Lee, “Trials and TRIPS-ulations: Indian Patent Law and Novartis AG v. Union of India”, Berkeley Technology Law Journal, vol. 23, Issue 1, February 2014 pp. 310.)). This can also be construed by some as a violation of TRIPs ((India would be in breach of Article 27.1 if its non-obviousness standards were so rigid such that an invention would require an “inventive leap” rather than an “inventive step”. Rochelle C. Dreyfuss & Andreas F. Lowenfeld, “Two Achievements of the Uruguay Round: Putting TRIPS and Dispute Settlement Together”, 37 VA. J. INT’L L. (1997), pp. 298.)).

Decline In Investment In India

The initial practice of MNCs of exporting drugs to India has been replaced in the past few years by their direct investment in drug production in India. The low cost of production, research and relatively relaxed norms for clinical testing have attracted them to the Indian markets ((Janice Mueller, “The Tiger Awakens” Supra note 1 pp. 533)). However, the continued investment of such companies in any country depends on several other factors such as its legal framework, ease of gaining Intellectual Property rights, measures awarded for their protection etc.

In light of the above facts, a judicial pronouncement of such magnitude interpreting provisions of patent law in India is bound to have future ramifications. By discouraging ever-greening of patents and incremental innovations, pharmaceutical giants might feel discouraged in investing in Indian markets. Further, they may also shy away from introducing new variants of drugs which under Indian laws shall be immune from patent protection. Such a situation shall be detrimental for the entire drug industry in India.

Need For Incentivising Indian Pharmaceutical Companies

With the growth of indigenous R&D in the country, not only MNCs but the domestic companies would also prefer a stringent patent regime, which can ensure that their resources and efforts spent are well awarded. Moreover, they shall look for such incentives for further developments. However, the Indian socio-economic scenario has not reached the desired stage where such considerations may take precedence over the necessities of the majority.


Progress is as important in crowded arts as in those which are in the pioneer stage and such progress is usually made in small increments ((In re Hummer, 44 CCPA 814, 241 F2d 742, 112 USPQ 66 (1957).)).”

This is most true for pharmaceutical industry. Successive innovations coupled together may give the resultant product enhanced properties compared to the original product. Their importance must therefore not be ignored. At the same time, establishing a standard for measuring this enhancement is a task in itself. The efforts of the Supreme Court, in clarifying the position of law regarding Section 3(d) to some extent, are laudable.

With the exponentially developing technology, India is shifting its position from being an imitator to becoming an innovator. Therefore, the problem addressed in this decision is not limited to multinational companies and the adverse effects shall also reflect on pharmaceutical businesses in India. Along with this, the country is also expected to suffer a loss of infrastructure relating to the innovation process, like clinical trials, setting up of laboratories, academic research, etc.

India is a welfare state governed by a Constitution which holds the pride of place in the hearts of its citizens. It lays special emphasis on the protection and well-being of the weaker sections of society and seeks to improve their economic and social status on the basis of constitutional guarantees spelled out in its provisions ((Vikram Deo Singh Tomar .v. State of Bihar , AIR 1988 SC 1782)).”

The decision reflects Indian society’s value judgements and economic interests more than the technicalities of patent law. It is in concurrence with the constitutional obligation to promote social welfare and balance interests of stakeholders within the limited resources available with the country. It is also in consonance with Bentham’s view that law must aim at maximising the amount of pleasure enjoyed and minimising the amount of pain suffered by the society ((Jeremy Bentham, “An Introduction to the Principles of Morals and Legislations”, 1, Dover Publications (2007).)).

However, in reality a majority of the generic produce is exported to developing countries and less consideration is given to the domestic demand, since the former is more profitable. Thus, to what extent will these benefits ultimately reach the poor masses of India, is a question which begs for attention.

CCI not to take any action against Hyundai

Madras High Court has asked the Competition Commission of India (CCI) not to proceed with any action against Hyundai. Hyundai is among one of the 14 carmakers slapped with a combined penalty of Rs 2,554 crore for failing to sell spare parts in the open market.

Hyundai moved the High Court against the summons issued by the Competition Commission of India (CCI). Upon hearing the submissions made by Hyundai, the Court reversed the Order and directed the Competition Commission of India not to proceed further with the matter till the final order is pronounced by the court.

Hyundai contended before the Court that, Director General of Competition Commission of India did not have the power to initiate investigation and that no materials, facts or figures were produced by Competition Commission of India. Hyundai further questioned the “selective approach” by Competition Commission of India, whose order excluded 12 original equipment manufacturers, including Renault, Jaguar and Volvo.

As reported by the Business Standard, other Original Equipment Manufacturers (OEM), which includes, Maruti, Hyundai, Nissan, Mercedes-Benz, BMW etc. have approached other various courts on the same issue. BMW, Maruti Suzuki India and Mercedes-Benz approached the Delhi High Court against the order. Delhi High Court in turn stayed a Rs 471.14 crore fine imposed on Maruti Suzuki, by the Competition Commission of India. Further, staying the Competition Commission of India’s order against BMW and Mercedes-Benz for three weeks Court asked them to move the Madras High Court, which was already hearing the matter for other OEMs.

Competition Commission of India earlier imposed penalties on Mahindra, Tata Motors, Hyundai Motor India Pvt Ltd, Toyota Kirloskar, Honda, Volkswagen India, Fiat, Ford India, General Motors India, Nissan Motor India, Hindustan Motors, Mercedes-Benz India, Maruti Suzuki, Skoda Auto India and BMW.

Supreme Court lifted the ban on sale and use of Hookah in smoking zones

A bench headed by justice Ranjan Gogoi of the Apex Court held that smoking prohibition only extended to public places and not spaces earmarked for smoking. In a landmark judgment, the Apex Court on Monday lifted a three-year-old ban on hookah smoking holding that prohibition on ‘facilitating’ Hookah smoking in strictly smoking spaces is impermissible in law.

However, the court said ashtrays, match sticks, lighters and other things designed to facilitate smoking are not to be provided in public places. The judgment came on three separate appeals filed against the decisions of the High Courts of Bombay, Gujarat and Madras in 2011. The order could have implications in Delhi also. Supreme Court while setting aside judgments passed by three High Courts struck down the ban on sale and use of hookahs in hotels, restaurants and even airports where smoking is otherwise legally permitted.

First appeal was against the Bombay High Court’s judgment which upheld the validity of an administrative circular issued in 2011 and opined that, smoking areas meant exclusively for the purpose and cannot have any “apparatus designed to facilitate smoking.” In the same year Gujarat High Court endorse a similar circular which prohibited hookah bars and hookah smoking in hotels and restaurants. Similarly, Madras High Court upheld a circular dated July 5, 2011 prohibiting owners of restaurants from providing tobacco to adults.

While delivering the judgment, apex court clarified the Rule 3 of the Prohibition of Smoking in Public Places Rules, 2008 and explained that it is incumbent for owners of a public place to ensure that no person smokes there. Court further opined that ban on hookah smoking in smoking areas is outside the purview of the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply & Distribution) Act, 2003 or the Cigarettes Act.

Lingaa release, producers to deposit 10 Crore rupees

Madurai bench of Madras High Court Bench while hearing a writ appeal filed by an aspiring filmmaker, K.R. Ravi Rathinam permitted the release of the Rajinikanth starrer Tamil movie Lingaa on a condition that, the producer deposit Rs.5 crore, besides providing a bank guarantee for an equal sum to the credit of the Registrar (Administration) of the Bench. The Division Bench of Justices V. Dhanapalan and V.M. Velumani ordered that the movie be released by 1 a.m. Friday, if the producer could deposit Rs.3 crore in the bank account of the Registrar through online transfer by Thursday evening. The rest of the money as well as the bank guarantee could be handed over by Monday.

In this case, appellant, alleged theft of his script for making the movie Lingaa. Though, the appellant could not invoke the writ jurisdiction of the High Court to redress his grievance, the judges gave him four weeks to initiate civil as well as criminal proceedings before the lower courts. However, “in the interest of justice and taking into consideration the principles of equity, justice and good conscience,” the Bench directed the film producer to deposit Rs. 10 crore as a pre-condition for permitting the release of the movie. Assuming that the film was scheduled for release on Friday afternoon, the judges initially ordered him to deposit the entire sum at least an hour before the release.


Government cannot run Liquor Business

While passing an interim order in a motor accident compensation case, Madras High Court said that, if Governments cannot bring about total prohibition on sale of liquor, they should at least restrict it. High Court also questioned how a Government could run the liquor business when the Constitution advocated total prohibition. Article 47 of the Constitution says the government should endeavour to achieve total prohibition in the country, and Section 185 of the Motor Vehicles Act, 1988 prohibits drunken driving.

Blaming alcoholism for road deaths and many social evils, the Madras High Court asked whether money from liquor outweighed the duty of the State to ensure public safety and health. Court observed that, since there is a direct connection between liquor and deaths in road accidents, matrimonial disharmony and personal relationships, governments should come forward at least to cap liquor vending hours to eight hours from 12 hours a day.

Court further pointed out that, “Even drinking water is scarce in most parts of our country, but alcohol flows aplenty in every nook and corner of the nation. Liquor is poison to society. Many families are drowned. Liquor is the basic reason for many social evils. In spite of that, governments are opening as many liquor shops/bars as possible with the sole aim of getting revenue”.

Noting that women and children were adversely affected by alcoholism, the Court said that, alcohol hit them physically as well as economically. Court further said that, juveniles were also increasingly becoming addicts, and said the ‘dangerous problem’ should be fought jointly by policy makers, bureaucrats, NGOs, political parties and people.

Court was also of the view that full details of road accidents, including those caused by drunk driving, are not available because such cases are either not correctly filed or under-reported or unreported.

Court then suo motu impleaded the Union Cabinet Secretary, besides Tamil Nadu’s Revenue Secretary, Managing Director of the state-owned liquor retailer in TN, i.e., TASMAC and Director General of Police, and asked them to file their replies by December 11. They shall also answer a set of 16 queries, which included: Whether states could open liquor shops and bars encouraging drunken driving, and whether in the opinion of the government, the money derived from liquor shops outweighs the right to protection of life enshrined in the Constitution?

Court also asked as to why the government could not find an alternative source of revenue and why the Centre not make drunken driving a non-bailable offence.