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Order of Division bench, Without considering the issue of balance of convenience is error: SC

M/S GENENTECH INC. & ORS. APPELLANT(S) V DRUG CONTROLLER GENERAL OF INDIA & ORS., CIVIL APPEAL NO. 9491 OF 2019 (ARISING OUT OF SLP(C) NO.24727 OF 2019)

The appeal was brought to the Supreme Court of India before the bench consisting of Honourable Justice R. Banumathi, Honourable Justice A.S. Bopanna and Honourable Justice Hrishikesh Roy.

This appeal has been preferred against the interim order dated 18.09.2019 passed by the Division Bench of High Court of Delhi in C.M. Application No. 22510/2016 in FAO (O.S) No.181/2016. Under the impugned order, the Division Bench allowed the application filed by respondent No.3-M/s Reliance Life Sciences Pvt. Ltd. The CS(OS) No. 3284/20152 before the High Court of Delhi was filed by appellant no.1-

M/s Genentech Inc. together with appellant nos. 2 and 3 namely Roche Products (India) Pvt. Ltd. and F. Hoffmann-La Roche, AG respectively.

APPELLANTS CONTENTION

The appellants projected that the Reliance had been successful in participating in government tenders with their drug ‘TrastuRel’ and therefore, the conditions imposed by the learned Single Judge on 25.4.2016, should not have been interdicted without the final decision in the Reliance suit, pending before the Court instead the appeal filed by appellant ought to have been considered, allowed and absolute injunction should have been granted. According to Mr. Divan the issue of International Non-Proprietary Name (“INN”) goes to the very root of the dispute between the parties. He contended that Reliance was not entitled to use the INN, since their drug has been approved without undergoing the required testing, prescribed under the Act, the Rules and the 2012 Guidelines.

In their challenge to the impugned order, the appellants have contended that in passing the impugned order, the Division Bench had failed to simultaneously consider and dispose of the pending appeals and the interim applications filed by the plaintiffs. The court had earlier referred to the order passed by this Court on 8.3.2019 in SLP (C) No.6203/2019 which required the High Court to simultaneously take up the appeals and the interim applications filed by both sides.

RESPONDENTS CONTENTION

The learned senior counsel for respondent no.3 submitted that non mentioning of the FAO and the IA of the appellants was an inadvertent omission. On the other hand, Mr. Sajan Poovayya, learned Senior Counsel submitted that the Division Bench while passing the impugned order had considered elaborate arguments advanced by the counsel representing the appellants and all their contentions were duly considered and therefore, there was adequate compliance with this Court’s order dated 8.3.2019 in SLP(C) No. 6203 of 2019. According to the respondent no. 3, the Division Bench was conscious of this Court’s order and therefore, dealt with the submissions of the appellants as can be seen from paragraphs 41 to 50 in the impugned order. The learned Senior Counsel would therefore argue that the impugned order of the Division Bench cannot be said to be in violation of the direction issued for analogous consideration of the appeals and interim applications, of the rival parties.

The learned Senior Counsel submitted that the appellants’ patent right on the product ‘Trastuzumab’ had lapsed in 2013 and therefore, in the Reliance’s suit, the conditions imposed by the learned Single Judge on 25.4.2016 should not be allowed to continue to the prejudice of respondent No. 3. Mr. Poovayya submitted that respondent No. 3 had faced considerable difficulties in participating in tenders where the required product is described in its generic name ‘Trastuzumab’ and therefore, despite being identically placed with other Indian manufacturers like Biocon, Mylan, Zydus, the respondent No. 3 is unfairly restricted to market their bio similar drug. Respondent No. 3 next contended that the condition imposed by the learned Single Judge on the packaging/labelling on the drug manufactured by the Reliance is contrary to Rule 96 of the Drugs and Cosmetic Rules, 1945 and accordingly, he argued that the Division Bench order which allows respondent No. 3 to manufacture and market their bio similar product with the labelling direction given in the Reliance’s suit, would not enable respondent No. 3 to conform to the statutory rules. The learned counsel appearing for Union of India makes no specific submissions in the appeal but only submitted that DCGI has granted the approval to respondent No. 3. Before we consider the rival contentions, at the outset it was noted that the Reliance suit was now pending for final disposal in the High Court.

OBSERVATION AND JUDGMENT DELIVERED

Thereby, this Honourable Court after inferring the facts and circumstances of the case, gave its judgment as under,

“Because of the foregoing, and more particularly because the Division Bench did not keep in view the order of this Court dated 8.3.2019 to ensure analogous consideration of the interim applications of both sides in terms of this Court’s earlier direction and having regard to the fact that the position prevailing since last three and a half years (pursuant to the learned Single Judge’s order dated 25.4.2016) have been upset without considering the issue of balance of convenience, we are persuaded to hold that the Division Bench was in error. Without analogous consideration of the appellant’s applications, the Court should not have unsettled the prevailing situation for the last three and half years, without final conclusion of the Reliance suit.”

In view of the aforesaid, the impugned order is set aside and appeal is allowed. The interim direction given by the learned Single Judge on 25.4.2016 is accordingly made operational. At the same time, as the Reliance’s suit is pending since 2016, the High Court is requested to dispose of the CS (OS) No. 3284/2015 expeditiously and preferably within 12 months of receipt of this order. In the meantime, to avoid prejudice to respondent No. 3, whenever government procurement is proposed for the drug by its generic name ‘Trastuzumab’, the Reliance should be allowed to participate with their biosimilar product, without any impediment. It is made clear that the views expressed here is only for the purpose of this appeal and should have no bearing in the proceeding pending in the High Court. With the above order, the appeal stands allowed without any order on cost.”

– Tanvi Srivatsan

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