COMPAT sets-aside penalty imposed on Himachal Pradesh Chemist & Druggist Alliance (HPCDA) on account of failure to observe principles of natural justice during investigation by the DG |

COMPAT, by its order dated January 13, 2016, has set-aside the penalty imposed by the CCI on HPCDA and ordered re-investigation into allegations of cartelisation by the HPCDA.

The case was filed by Rohit Medical Store against HPCDA alleging that pharmaceutical companies were not appointing stockists in the absence of NOC from HPCDA, charging of product information charges before introduction of new medicines in the market, etc.

One of the defences that HPCDA took before the CCI was that the DG had violated principles of natural justice in so far as he had relied on allegedly forged and fabricated documents without providing an opportunity to the HPCDA to cross-examine the Informant. It was alleged that despite the request for cross-examination by the OPs, the DG himself cross-examined the witness, thus posing himself as the Informant, pleader and judge all at the same time. Another plea taken by the HPCDA was that the DG had relied upon his personal knowledge for recording a finding against them and this was contrary to the basic principle that ‘no one should be a judge in his own cause’.

The COMPAT noted that though the Commission did very briefly noticed some of the objections raised by the appellants but did not at all deal with the specific pleas raised by the appellants that the investigation conducted by the DG was vitiated due to violation of the principles of natural justice and the findings recorded by him were perverse. The COMPAT considered the allegation of violation of principles of natural justice as quite serious and merited further investigation by the DG for affording cross-examination of the Informant. The CCI’s failure to adopt the course had resulted in grave miscarriage of justice.

In light of the above, the COMPAT directed the DG to conduct fresh investigation into the matter with a further direction that the CCI shall pass fresh orders after giving opportunity to the parties to file their objections/submissions in respect of the findings which may be recorded by the DG and hearing their advocates/representatives.

(Source: COMPAT: Order dated January 13, 2016. For full text see COMPAT website)

About the author

M M SHARMA

 Comdt. (Retd.) M. M. Sharma heads the Competition Law & Policy team in VA since 2009 and has over 30 years’ experience as an Advocate of Delhi High Court and holds a Post Graduate Diploma in Economics of Competition Law from Kings College, London. He has worked in the Competition Commission of India (CCI) as Additional Registrar during 2006-2008 and was responsible for drafting the Implementing Regulations under the Competition Act, 2002. He has experience of working as Head-Legal /In-house Counsel for a large Corporate Group in the Steel and Power sector before joining VA in 2009. He has represented clients as an independent arguing Counsel in landmark cases decided by CCI, the Competition Appellate Tribunal (COMPAT) , High Courts and the Supreme Court. As a prolific writer, he contributes articles and is regularly quoted on competition issues in National Newspapers and interviewed by TV Channels. He also teaches as a visiting faculty in various Universities and Institutions and is widely regarded as a subject expert in various Committees of Apex Business Chambers, such as FICCI, CII, ASSOCHAM and PHD CCI.  Mr. Sharma has been mentioned as a “Notable Practitioner” in the “Competition/Antitrust” category of Chambers & Partners (Asia Pacific) Ranking of Leading Lawyers for Business in India for the year 2012 and 2013. VA’s competition law and policy team has also been awarded the Law Firm of the Year Award for “Competition/Antitrust Law” for 2013 by the Indian Business Law Journal. Included as a ‘Recognised Practitioner’ in Individual Lawyers’ranking by Chamber’s Asia Pacific Guide 2020 for Antitrust/Competition Law.