Varca Druggist & Chemist & Ors vs Chemists And Druggists Association, ... on 11 June, 2012

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Competition Commission of India

Varca Druggist & Chemist & Ors vs Chemists And Druggists Association, ... on 11 June, 2012

3. QQQREATHE {ION§PET§Tiﬂ§\5 CGM§'si'iiSS;§QN C8? ENEM. NEW DELHE in Re: §V§RTPCase Na. C~3.2".?f2G§°3iDGiR {»2i;°23) 6 infarmant: Varca Druggis'£8a. Chaamist 8: C}*;?2e»rs Gpgmsite Party: ' Chemésts & B:'uggistsgg§s5,Q£%ati0n, G03 Bate cf deaésimz } ',3 c«{~§' §:'.::>1 '12,."

QRQER ' 3.. Eiﬁzﬂﬁﬁﬁ RQEENQ 1.1 This 635% was initiated an a Campiaim fiied by Varca Druggisrt & Chemist through its gérapriatar Mr Hemant éai Angie and we ather praprietssrs of ;3%1arma::eut§:aE dmgg andmeciicineg firms (hereinafter referred to as "informants"}, befcsre the {)E§'Ef.'€€3i" Generaé iinxzestigaticm 8: Reg'istraticms), Mmopmies S: Restritiive Trade Practices Cemmissézzm {hereinafter referred ta as "£2-GER, MRTPC'"}a§ieging that the C};3;3'o3§te Party, namaiy, Che:--:mEst 8; Bruggigt Assaciataon, Goa {heréeénafter referred in as "CDAG" or "';'--\ss0c.iatic3n") is 'mduiging m'£c:+-~r' §I:§§:£E"Ei§?E\tfa{i8 g3ract%CeS. }.-A {ii} Tu.) The infmmants have ciaimed that they are memﬁers cm' CDAG which has been "formed by chemésts, druggists, disfzrﬁbutars, stackisia and reizaiiers sf varimas pha:'mae::eutica§ companies in é':-}:3é. The aiiegatticms made by the infarmants in the wmpiaéént ,1' Tmfarmation are summarized as Eéeiow:

CBAG has farmed \;a§*ia:.:$ guigieéénes, wiiiggz ﬁzesnhers are mound ts abide; The said guideiines were: fermeﬁ bx'; the members cf the CDAG for the Qbsenefit cf its members SC} that the business 0? stackirxg, w%*:a§e~ seiiing and retaiiing c{r>u3:33 he s%mc:st§3§y facéiitated amang Eta members. However ever 3 periad m' térna due 22:; the unfair gractices m' Some 2:? the members 0:' 'its Exewtive Cczmmittee, CDAG has became a monmgsmistic bady and has started practicmg certain restrictive trade practices. Ag ;3<-2:' the ncrmai §}¥"3{It§CeS, whenever a new pﬁarmacéuiicai company estabiiahes its 'mdust:'y in Sea, 0:' is inteeresteci in distributing its maducts 'in Sea, it has to appcimi; smckist and whoiesahars for the varietms regazzsnzs 35 per its requ':ren'zents. These si0c§<istg"w%z%:;iesa§eers than 591% these medicines is tha retaiiars whee pmssess a tirug Eicensa. Hawexmg as per the {ZDA8 guicﬁeiimss, the CQAG has met arm; directed but aha farced aii such mmpanies ta agspnént theﬁr gm-ckist and wh0%esa§ers (mix; frem these inwviduais and farms, whs are memixers cf the EQAE, thuszw-

' Whit) is mm'; 23 member 0? ihe M {V3} CDAG is eﬁgibie far being, acpaiwzeci as the stackist or whoéesaier m' such a camparw.

Furthsrrmre, even when such as czemgangsvwisheg is 2-:;m»o%n': stcsckigt and retaiiers fmm tbs members cf the CDAG, it ig insisted and directecﬁ that rm such stockist cvr whoicsaier ccruid be appc:'mtecE unk-93$ they receive a 'Na Dbjecctisn Certiﬁcate' fmm the CEZBAG. The company Gesimus ta E-§§13§}C3'iﬁi 3 thircj wh:;Ee:§_fa§er__cu' stacécist hang in fuifiii the cconciiticms qsiacczcf by tins': CQAS that the sake: cf the previmac stockista has ta ba abova Rs. 2 Eakh per mcnth. The ccmciitiezms furthar an an is resirict the crzimpany from appcinﬁng the 8}" S'3£{)C§~fiS--'£ t's§§ the saie exceeds Rs. 4 iakh per mcsntwh. Sémiiariy, cmiy if the average Essie cresses Rs. 5 Eakéa per mcmtéx than the ccmpam: can appiy to the was far agapaintment of their 5"' stuckist.

The gcsideiinas iaid éown by CDAS do mt mimic appaiming mare than ﬁve 'Si:Q{:R§StS by any charmaceuticaﬁ cerrmany. A cmcmznittee has baen fcsrmecﬁ E23: {DAG which has recemmencieci huge Encresae in the abcwa merztictmezd siabs vvéﬁaout taking retaiiers mm ccnfidence. The getaiiers and the w?:::>§e$a§er5 mgether farm this assecaation. Théaiab czf agapaintment 0'? stackist nmw starts fmm Rs. 6 Mich and ends at Rs. 49 iakh far a 8"' smckigt which tataaiigr extinguishes the chancea c3jfms.ma§§ whoiesaéers whe ccmid gat a cﬁfer hatter Q? a particuiar company :0 be its smckiat as the {DAG barﬁ any new .-

appointmesit even t§*2c)Lsgh__..5;;if:'i;'-:&7' ';:;§,;'3.j§'s:a\"{e3§-'sis the hem}.

(vii) {*«.e'ii':) The cunzgaany is restﬁcted ta apgmmt armther stockist for we year after it appoints a stockist, even if the -::cs%m;:3any fsseis the need. K; has aiso been the practicae 4:25' the CEZEAG that even cases whes'e the: 2 stockists have Us be agqzpcﬁnteizi, 'N43 Q¥:.1jec%t§0r:' by thee Cm'-Xfi is given csnigr far em": stockigt, and the reason far such an action cammt be questicmed by any member sf {ha CBAG as" the pha'rma::§3:utic:aE mm;3am;. Eu':

ezariier, twa stackésts, wha were an their gmzad bockg, have been apgaainteci.

As per the market trends in the gharmaceutitai business, the gzharmace-ut's:a% companies intrcduce schemes far retaﬁers. Hawever, same ﬁnamciaiiy pzzawerfzﬂ stt::s€,kEst«member5 3% the {lam} whs are 335::

an the executive czoamcii refuse 3:0 pass an the beneﬁts of the schemes is their rataiiers.

K is aistz: a settied practice in the pharmaceuticaé business that if a gsarticuiar batch :3'? drugs or medmnes has crossed its Expiry date, then such dmgs ans: to be returned 'my 'thé retaiier its the smckist whn in tum returns 5': t0 the respective campam; and can ciaim refund. Hawever such refund is never passed an in 'ghez retaiiars. Same stmiiasts 3333 svercharge the retaiiers when sum pradurtts are ssuppiied to the retaiier and the retaiéer has no fmmm ta mmpiain against such 3 atackist as they are agzpointed by the mmparzy an remmmemiatians :::»fCiié:1XG, and even if the mmpam; desires ta take action, '5: cannai dc: 33, because in thai case 'they: sshaii nm: have any smckist to {§§St¥ibU'£E their garcsducis, urﬁess {xii} _' NEE} Ew} Even a new individuai 0:' firm which gzmssesses aii the cguaiiﬁezations ant} means for being app{3'mted as smckist, distributor or a whstsiesaier can": be amcyinted by any campany, aithmsgh there may be dire' need for apgointing such a new stgckést, uniess and untié such a firm as' 3 whoiesaier cbtaiaas 3 ma Vobjectien {mm the %CE}AiEi. Further such an mtﬁixziduai «:3: ﬁrm has ta becasne a member of the Cﬂﬁaﬁ, first __W'h_§n any firm £3?" imiivTa'dua§ wishes in bid for any goverrunentfzendars, than the CSAG dérecézs that such tensieris are is be routed onﬁgs through the 'authorized stackist', and such 'au*:§mri2:e::i $tc)::i<ist" are the members cf Ciizﬁxﬁi; who tantra? the affairs sf the CQAG being '?ina:':(:i3§§y gaaweriisé and infﬁuemting the executive comm}.

The wmganies are threatened with manitive actions by the office bearers and therefare, re5uc:tant%y ma ctzmpasw has its ﬁziixtsw the direttimzs es? the mmmittee ﬁn fear 0°'? bmycﬁtt anci the smaii whakesaﬁers whm wand: to participate in the gsvernment *:endes'5 are éiiegaiéy iaarraci fmm ﬁning Se.

The members wha are w'r2:)i=asa§ers and whiz are c;ua§i§'"2s.=:.<:i to quote anti bid far the gc:\:ern:neni tenciera are mraateneci {sf {ﬁre cmsequenceg if they Ck} mt route the supgaiy fram the 'autheriseiﬁ stmciiist'. The mmpanﬁes are aiso threatened s:.z§ dke cunsecguences 'sf they dz": not foiiszsw the guiﬁeiénezs sf CDAG.

it is aiso a cmnmzsn practice» C§'HI?3E CD3-\{«} in {area am temgei any new \~.\'*\\?' >2', .. ..

{xvi} {xvii} 5 retaéiez' of any pharmaceutécai praziucét ta» became its member. if such a new entrarri: refuseg to became a membm, than the <;§,sx{a dimcts 13%! its members not to purchasa stocks from such 3 satocédsi: and 'sf ha i3 3 retailér then rm': ta s:,:;:sp§«,r him with stacks :31' anther c0%m;:aanieVs, Sﬁiiariy if a company wishes ta ap;3o':nt a mm: or a acicistionai s%:¢::c:E<§si: than they C3§'BF'é0?C day 3:: without the 'consent' of the CDAC3, which is against the fzmdamentai rights as enshrineézd in Articie 19 {1} {g} Q'? The Cs::m3*;itui:i0n Of imz':-Ea.

The €:::%:a<3 353:3 <:2§:'ec*t5 that nu credit be given its retaiier aii:hm.2g%*z as per the market gsractice, a .::'e~§it of 2% ciays to {ma mamth $5 mrmaiéy given to settie aﬁi ﬁues. Hawever, if a mmparw a§:.3pi3'mts a Si§Js'1§<i5'§ withaut the comsem «:3? the CDAG, than the EEWZS tiirects the existing stacizist :33' such a csmgaany it: give credit Q3' 3% mcenths tn :"etai§er5 SE3 that :he retaiiers do mt purchase stacks from tbs new steckist and asism ciiracts its existing smckist Whi) am members :3? the iliiilutxﬁ min: in purchase stacks ﬁam 3242?': a campam; $413 mat eventuaiiy the mmgaany %:rc=w§ down tea the: demanda of the CDAG. S0 aﬁse 'if the mmgsany wﬁshes ta sugapiy Ets stmzka ﬁirectiy to :3 retaiier, than in such 3 case *-:hey are d'§r&:cié:-32:3 E33; the «SEAS ma': its da SE} and demand that a§§ stocks shm,:§::§ be muted through the stmckista who are members af CDAG.

{Zi}Ai3'5 governing baziy Le. E'-is Executive Committee, (:{;sm§)ri:",~£es :33' one President, fear Vice Wesitients, {me Chairmar: sf wheiesaiers, acme Chairman sf r'&taE§er.=.= amt: sever: Members and taka zarbitrary de:'§sim*as \ and *%:m:e its views an 3% its ﬁiém \ % eii as nor1~rn£=:n'1bers. The Executive Cemmittee ccmsists cf same very finamziaﬁigz infiuentiai perscms who are themseives steckist sf various cempanées and are A therefore not aﬁewing companies to apgzmim new as" addi::'2cma§ smckist (xvii?) fer fear sf iesing their business so much 3:3 that they have even tried ta ememi the assocéesticsn gtsideﬁnes so that new cmmqsasnies cannot appeént new stockist. Ne new smstikist has been appainted by any cemparsy, xazéthout NSC, far the 335%: nine years in See as the CDAG (mes net give its 'No Objectizz-'H'. ~-

Some of the wheiesaiers are harassed by the Assecﬁetian te reiinquish the smckisiz shin of e ;:sa:'tE::eE;ar {2{)'§'B'3}'.§£§§'§'.yj, because some ef the members of the Executive Cemsnsittee were interested "ts grab the cempany sf that particuiar stockist.

The retaiiers are he-rasseezé by such steekiss by unnecessariiy making' them stand En QUEBES, atﬁemendéng immediate payrnent, nee :'eﬁ.,:m$ can madness that haves messed expiry eates, nee supspéy (sf stack even when such stack is in surpﬁus, neneassséng of schemes tsrrs such reteﬁers, even when the ccsmgsami has fioateci vasious, schemes, As same ef the steckisss enjoy positien of menopeiy, the reigaikws are attheéir wits end. A: the time of the Ammsé Genera? Meeting {AGM}, mes': of the members are net intimated, oniy 'these members are imtirnated about the date and téme af meeting whiz: are in gcmd beaks with the exeazutixre cauncii members 0f the EDAG. This is done with the uiterior meme sf \,.\\ 1.33% 1.5 1.6 the members. in case members wish in maize» certain 5uggE:5ti0ns, which are contrary to the opinicm mi the members of the E:>£eCi.£'i§\f€ committee :3? the CDAGE tiien the {I.{§i'i'imi"{.ii€-32 uniawfuiiy adicmms; the meeting and the next ciate ex' rm-:~et'mg is never communicated is sad': membersi.

The informants priayeci fer faiiawing reiiefs :

{i} After szmiducting inquiry into the working :3?' CDA6 and making mm guicieiines isgueci by it, the current e':v:ecui;i\;e cauncii be dabarred fmm taking any decisiions with z'es;3eci; is any amendment cu' CQAG V guideiinea and aisa that ths provisions in tha guideiines which §'€S'3Ci'§C'{ the companies is 3§};23€.':eH§§"i'i' the number if stockists shouici he scrapped.

(ii) {ZSAE shmsid be barred fmm interfering ii": the free hiciciing and suppiy of gitsatis by 'the whsiesaiar ii: the Smiernnient.

After' receiving the cciiiipiiaint, the DEER, NERTPC iincieﬁmzwic an meiiminary invesitigatien intc: the aiiegatimns macie in the csmpiaint and smjght the comments from CDAG. = The CDMS submitteizi its imiectiens an i3E%A3.{3.2{}G§ i3ie"fm'e BGER, MRTFC dengxing the aiiegatistms macie in the czompisint and szsbmitmé that guizrieiines. issued by Ciféslxﬁ ﬁici mt ammmi to inansgieiistic and nagtrictiire

-r traciea practice. it was aiso 5 \\ IEQAG that the gsharmaceuiticai EKJ Camgaanies are at §ibe:"£y 1:0 erppoint as many smcicists and cieaiers of their choice as they wish and CBAG is net piaaing any restriction can agzmointment af stockists car :'eta':§es's.

At thés stage, ccmsequent upcm the regseai of Menepmies and Restréctéws:

Tratis: Practices Act; 1959 {the §vERTP Act} the case was transferred to the Cumpetéticxn Commission 9% Emilia {the Commigsicm} Lmcﬁer secticm 85 {6} <3? the Competiticn Act, 2332 {the Act}.

'fine Cemmissitsn, after Vconsidsaﬂng the materiai an 'regard 'fm'me<:': an opinion that 3 gzrfma fascia case existeﬁ sad referreci the matter tea the iisirectsr Generai {£38} for ::0ndm:t§ng invastigatimn. in pursuance <3'? the ciirectian ca'? the Cemrnisgimn the '£36 cmnciuciced §nve5t§gatEo%n and submitteé the énvestigaiéan r&mrt_ s'.>n15.{3E.2GlG.

During the ::m.sz'se of Envestigatien the S6 gaﬁxered facts csui: {if g:3r§mary and seccsrxdiary sources, <:o1%ec:tc~3d eviderzces by sending cguegtiasanaim to the cencerrxeed parties intiuding infarmatémx prcaviciers, anaiyze-ad the Camrnigsiam and recarded thee statements of ﬁnformaitirm garcwiders as weii 33 members :3? CQAEB.

F§né§ng$ af 9% Repmt ' ' "ma obs:ar\ratic3ns and the finciings in the {:26 Report can be summarised as Tandsn 5.1.9.5 yer the report of 36, from the ea-xamina:tima of varémzs céauges $3' the guidelines of CDAG it is Lzndﬁsgauted "that L:n§ess the CQAG grants NOE, pharmaceuticai campanies canmt appa°::'at 3 who§esa3e:*fsta3r.:kEst cm its own. Further, it is aiso stmuiateﬁ that in carzzier in beztama a whcsiesaier as a retaéier in 603,, one has "to became a member as? the assmtiation. These conditions, in effect, iimit the Sugzspiy cf pharma gsrsducts in the territery af Goa. The {)6 in this regard has csbserved that had it net been for the gui{iei'mes, the pharma mmpanfies mum have apgsaénteﬁ mare wﬁmiesaiers and there wauﬁci have {men meme retaiﬁers Beading ta mare sugmiieas in the market.. By regtrictmg the 'numbers 93' wimiesaierg and retaﬁerg, the ass::»:::§a'ti<m has reatricted we supgyiy of meciicinees in the market of Goa. 5.2. After examining the conciitiana gresgrébeci in the guideiines ma as has '\ \

- *-='A~=§~\'gc:»»::%<s$%;~ ship» 0:' any «::om;:3any 11 wE'£hs:sL.:t 'taking permission 9'? the association. ﬁimﬁariy, whaiesaierés can suppiy is retaiiers cmiy if retaiiers are the memiaers of the asscaciatitme Thus, there has; been L:nde:'stanc£ing amzmg the smckist not is aééezzw ether pia~,rer's some in the mari<e~: and «tcampete against "them. Further, as per s"v'Eemc.)randu;m cf Ljnderstanding, 'maxirnﬁzm :35}: disaount offered is reta3ie:rs; shmd be 2% {my and whaﬁesaigrs sjjaouid net omserate any mdirect bezneficiary schemea is: get Eargar" mrders from Retaiﬁers. As per guideéﬁma-5, any vmoiesaier fczaumi viaﬁaﬁng the abmre miss wiii be 3%.:-sbﬁe to strhtt acticsix by CQAG an the reccmmentriatian; 0'? the ﬁiscépiinary cenxmmee agmainted far the pu:'p:3se, The guiéeiines aim state theft retaﬁers shauiti not reaort 'is? any unheaithy azampetéticm by giving d§sm~uni; is their cuatomers and shauid mt operate any beneﬁciary schemes 'ta attract ﬂue cusmmers and retaiiers fmsnd vicmating the Eibf3\I& ruies wiii %3e iiabie to stréct autism taken by {BAG 0:": the réezsmmendatéan cf the Discipiﬁnary Committee appmnted far the purpitaae.

The DE has absersseﬁ that the gu§de§ine5 :3?' the associaticm and undr::~::'standéng among the whstesaierg anti reatai§z-ar are anti--c0m;::e2:%tive since they am acting in canes}? 'iterms :3'? Section 3{3}(a} Qf SE.

5.4 he the Act by ms': allowing the whsaiasaiers and retaiterza 1:0 g-give discmmts or extend any beneﬁciary schemes to the customers. msteaﬁ of the market forces (ietermining the priaze U? the cirugs, ban' has been imposed on Eaweréng prices or suffering incentives. The {:16 has quested the statesmen? of Aibert fire 53, President :2? CBAG conﬁrming "that assmciatian in its meefmgs dams tiiscugs issuez reiateé is price margéns a-*.':c:.. .Fur':her, as $38? D63, the gzzicieiines are edge in vicriatimn <31' Semen 3(3',2 {£33 an' the Act, since by wt aﬁswirzg any autsider {wbe is hat 3 member :3? assaciatéon} ta icgeazame smckist C3!" retaiier restréatien hag %been gsiatzeﬁ an the mzmbez' cf gzxiayers, tixereby, iimﬁting the supgiy sf cirugg in the market. Mme pi:-wars wauéci mean mare axraiiabiiity cf the drugs in the markat and cans&2::guem§y mare garovisians af goods and ssmrices. {X3 has noted that the memhers cs'? CDACS are meeifmg during Annuai Genera! i\fiee':§n;gs and Executive bmdy meetings an reguiar basis. smart from iha discussian on the topics :3? cismmcm interest of members, certain hich shew that the Chemists and

5.:

'J5 raguiating the conduct am behavkraur (sf members amci disczépiine them. From the axterpts :3'? thee meetings, 'rt wag aim mtzted that -:3'sre<:'i: SL:;3;3iEes from the pharma comgmnies is tha hospitais Gr retaiiers were severéiy discouraged. Unity of whaéggaéers am retaﬁers far a cammon came was T3330" ﬁiscmsed éfn .5e\:er'a§ 0*? *i:he:»'.a meatingsz. The mimﬁces aisce shew that w':*:§1out the: exmess apmava? of the ﬁxsgaciatﬁtm, pharma cganimnies cannot engage wheiesaﬁers and retai§er_s.

5.8.,The 5136 has came in the concﬁusian that actions sf Ass:':>{:iat§an hawe :30 positive marks: ouizcames anaé its conﬁne: and actians, an the contrary, are against pubﬁic mterast. The repart games; are to Show that three factczrs ﬁsted in Se«::i".i0:'a 19 {3} Wm conic? have been advam:eci as jaisiifirzatien far' téweér ?3Cf§{I}E'§S as Eyeing pr0~%::V0mp&3'"i:i'£§ve ané ca-nsumer §r%enCE§\;, nameﬁv, {2} accmaé 0'? benefits to cansumerg, {ii} immovements in ;:3%:'od:.:z:t'se:3n er diaitrébuticm (:1?

gwds or prcwiséon 0? sezrvices anﬁ iii} pmm:3t':0n af technéazai, scéentiﬁc and eccmornéc deveiapment by means 0? prz:m¥uct§an er ﬁistributian :3? gmtis 0:

previsimn :3? services, {is no': offer any kénci cf defence to them. The {)6 hag aka stiteiﬁ the'.- rain: iaéd dawn in the Casey; of Cavnaten iimnéif V €Z<3mmis;si0r:

6.1 ECRiE~2959{2CiB6},whE-rssin it has iaeen haici that time beinefits produced by an agreement must bé semetiiirig. {Bf Csiaiective vaiiiie to the Cammimiiy as Ei whoie, mm: a private beneﬁt ice the parties ihemseixies. Thus, acwrding to the f'€-3-;ZiOi"iZ 0'? DE tiieie is a case against the CDAES is say that their guitzieiini-33, mées and reguiaticms COi.i§3§E'.*d with tiiiceir Z?:CfE§3ﬁ§~ contribiite ti} ' apmeciahie aiivarse affect an C{3£'I"i§)t'3'€it§OE"§ {AA.EC} in the marimi iii' giiiarmacauiicais.

Ara members {if QQAS actiingiiike Carteis?

The SE5 has 'further investigated iiie aspect as ta whether the activities of Cmiﬁjmembers Q? EBAG were iﬁiiiﬁ to cartei withiin the meaning mi Sectien 3(3) of the Act. The BS in this regard obsemeid that it is imdeniaisie that the trade or pmiessimiai 3S5i1iCiﬁ'{iQi§S in mizsniem times izserieﬁt their meiribers aiiiti may BEE? be beneficiai in increasing the efficis.=:n»::y iii' the market. Most trade assiaciaiiciia tai<e an aciiive riziia in siiaising the wag: their industries w:iri<.'i'i1ey pmmete pradiict St32'i€§ai'*C§S and best practices, and ciafiiia and promate staiiciarci terms and miiditions of sazie. "iiiey aiiso §S'~'i§e .3' i"€§CO¥}'i§TiE:R{'§&3T.§GﬁS to their meimbers cm a variety tn' mmmerciai anti ?'iGT3~ 8.2 members can Eegésiatisn, reguia't§<:ms_, ta>:at.icm and peiicy rnatters iiiaeﬁy to affect them, According to QECB, "a§t§mugh their gmncigsai ﬁsnctiah gs ta fimvigie servEcs:5 ta tﬁsér memberszs tratie asgociaticms a§s«::s §'1E¥'u'é§§'§"'§§I}{3i'§CE3£"s"€ "'industria§ po§§cy" and ";:;c2§it'eca§ functions"? However, thgzj {rage :3; grofessionaﬁ associaticam hava to iimiat their activities; in Such a manner that they dc mm: run af»;;:u¥ 0»? the competition Eaw. Qften discussians of such associatigna, even' if they are meant to pursue iegétimate assaaziatkzsn ebgéctives, bring mgethar direct cmnps-:t"zte:':«: and p:'e;wi::§e them with appsrtunities fear exchange :33' W-:m:s an the market, which csuid easﬁy 5;:3§§§ over ii'3"'£C ﬁllegai coordirratisng Casuai discussiams (sf ;3ria':es, quantities and future business strategies can head is agreaememts gr infmmai understandings 'm dear viaiaticen cf armtrusﬁc ruies. Frequentiy businesses use trade associations as a means 9%' ;;r<>v§{§E:3g "cover" for €:§ie'sr carts? activities. it is far this reagcn that trasie asgzazfsaticms and thair a<:t§x:3t§es are subject in siege scrutiny by competitien authorities arcaund the worici. 0&3 has furtmzr absesrveci that the trade assaciatisns after: have been fauna? tcs serve as a VE!§'i§C§£-2% far practices; that prc3§":i%:a§': C{)mp&'tit§Oﬁ in the market as .}\\\ has been seen in cases cf scm ,§ine carteﬁs where activities .- \ .0, -.-.-...,,_'_h 2;.) 1&5 were £:ar:'ie::i {mt under the garb £3? a5'3S'{}{:§at-§{}?~§Sn- The campetitian agencies acmzss the wczrici have frowned upmn trade associaticms for their iiirect or indirect imxoivement in ccmduct whéch harm or remain ::e:>mpet'::*:ic:m. Office rm' Fair Trade (UK) has been 0%' the view that functicms :23? trade asscaatiamans are Lzsefm ta n'ae3mi:sEsrs ~ espeetiaéigr, gyerhaps, '£20 smaiiez' ﬁrms »~ and they may M30 be heneﬁgiai in increasing the efficiency 9f the market system 35 a whoﬁe. Activities sf tracie assxmaticsns which have mes agmreciaéaﬁe adverse affect an cczmpetiﬁon may he (3% :13 ccmzsstam. A traﬁe as;so::%3t'az:>n may, hcmrever,' pmvide éirécﬂwg or inciirectiy the vahicie far ant§~cm'npetitive, gr even z:<:.2¥§+s.s5ive activity. 'Whgn assaciaticms act as a mnduit fer the csrganizaticm of csncarted §+c'z:i::»ns by its members: « 'Em emmpﬁe by making iemmmﬁndations as in the mites at mmi:c§": its memberg seii their gczsods or servéces or £33: giving a staii cf :::;>§§a£'tive heycstt wbeth the mnztituent menwbers and the? trades asVs0c:§ati+:m itseif may face wndemnatian under Articia S1 {sf EC er Secticm 1 3%' Sherman Act.

Many assaciatiens inc§uc§§:":g, law and an:'ccsmey firms, vvmﬁwéde, have issued guidaiéms for the asaociaticsns as that their bahavisur 'is mmpatibie with the arm--irust iaws. ﬁt has beg-,3 6.3%-

atsociatims surf: as generaﬁ assemizsiées anti meetings can be a forum fur concentration matweten the memtzert. Such {:O$'1£Ef§i'.¥'E3t§0n {ices mat necessariiy have to 'be reiatezd to the subjects that are fermaity an the :

agenda 0*? the asstmiatian. As members tn'? the asstteciatitm wit! usuaiéy aiss be the competitors, informatttm atsncarning the meetings of the aSSf.':C§E":i§C>n might be ccmsiderad as an Endtcatim or tame? that the Ententécm 'ta restrict ::::smpet§ticsr; €31" regtticttve gratctices exists amcmgtat certain membea*s. Thte atganizatimt cestt of 3 cartei Es sigstitécantiy itzwereci where a trade 35SGC33t§{}F§ ex§sts. Trade asseciatisnsg by Euwering the ctzst of met-attngs and c.<;>ordinat'mg activities among firms in 2-: market, fargﬁitate the estabéisinment and enfercement sf 3 cartei.

Heare, cm this asgect the DB hag sabsewed that ttge wheiesalerg ant'; tetaééera usteci CQAG as gﬁatform amt issued gutcie§inez;,'t§irtectives which restrict the supply at i"{':E3diC§¥'3ES in "ifhéét market. it is aaigntificant that rttam; gmwerftai w§1QEesa§er's are retaiiets as wet? and such wtsoietaters maid tttwe theta' Qwn interest in creating such type at guicieiines $53 that e;}t%zers may mist get E§'§"L2'\; 5.5 5} 1:;

issues} by CDAE, foiiowing aciivities :3? whc«§esaier's and retaiiars carrieci mat thmugh CD!-W3, as per the D63 may be 'taken as carte§--Ei¥<e:

Gu%deE§nes]D'::'ec:t§ves issued in the members Em; the asseciatkm to sbtain n0--ab3'ee:ti0n certificate to get stsckist sh§;:: cs'? am; phsarsma wmpany.

Qrganizisig meeténgs tn pursue their agenda.

Taiking about arming margéns in the sneetings as has been conﬁrmeci in the staternent of Mr. i-saibert Se Ba.

Taking co'§§e<:t%va acticsns in terms sf deciding issues of tracﬁe, ;::ric:es, ciismunts and aisca awarding gmzishment ti: the vicziatars. ilenymg business urﬁess we hacames memines sf Cmkié and agrees wit%':

the terms anti cessditiazzs Cr?' $3353 assgciatmn, The BS in his report emphasized that ieoking at the naturg of atfwities 0f thg whsoiesmers and retaihars when are the membérs. sf CEBAQ {engaged in simiiar <3: identécaé trade}, it can be stated that they reached an agreement Varnongsi themseives am} ﬁeciejed ta :'est:'ic:t the mama: 0%' pharmaceutécai '\\ prmiucsts by iimiting it arrwngafir' per 38,, fc:§i+:3w%ng fae:tm's ,,.,»'/"

3.9 whéch have been identéfied in generai as facmrs far ezxisteenae of cartais, faciiitated the cartei iéks: behaviaur of the wheiesaiers. and reta':'ae:'s:

':) Barriers to entry have been gafst by CUAG by mming Gut. with the guicziemzes which state that iii? one becomes member of QSAG, he <3: she wiéi not get n{::~c;b}eCt'm.n 1:0 get stackist ship freixm any pharma ccxmgsrami in case :3? a whuiesa§er~::r -guppiy fmm any *zft'§'i€}§ESE§§.éE5F in case «:3? a retaiém. Tm: is clear 'fmmL the: faéﬁuwsng ciauses m guid&iime5,?¥»'§<3U:

"PGL§C's' TO MAKE '3UP¥*LEEST{3 NEW RET!"-'s.iL {EUTLETS Faiéawing c<3n:iitE0ns a;:>;3§y ta new Retaiia-art: étmﬁets far 3 ;3e:'i:3<;i of minimum {me year.

3} SLEPHY: Na suppiy ts he mad& is any Retaéier by any wimieﬁaier Lmiess such Rss:tai§er hemmes member sf C§'.)A{Ss" {Gauge 8 of M:::ai.3}."' Wkpgaaintment ,1 '¥"erminat.%:m <3? new stsckiesi gshaii sixty 13% dame with the per%miss§0n of the i1xss0ciation."{C§ause 1 :2'? Pres::r'a;3-fawn <3u§c.ie§ine5} ii} The pharma camp;-mées mum have agsminteiri mczre w§'m§esa%ez'5 and there maid have been mi; -A ' .- retaiiers but far' the existing guideiines. Nat (my members but mzampanies aims are habie far p:.mis§":ment as per the guideeﬁénes :3? :5xS$OCL33L§Oi}, if whc«iesa¥<5rrs and retaiiers are agmointeci without seeking parmissian from the Assaciatian. The mmpameaa are aisa Eaarreci fmm direct suppiias its the dactars, nursing hames, chemigts. étiause 7 under the headirxg {Zsenerain Prestrimicsr: Suideiines}. CD333 E22,, thus, contraiiing the market arr? meciicmes.

The cartei Eike iczehaviceur at' whc;§esaiers~re*.:ai§ers was faciiétated ha; 'aha existence 0"? szssociaiézms and %n°§:e:'acti0n sf 'me wh0§esaEe:is--retai%ers 3:': thcsse aasociatians. The manwbers cs'? CBAE are unéted mgether and Exhiézait miiectéve acticxn.

Smcé the wh::2Zesa§ea's and retaiierss are 3%? ccmcentrated in smaii staie {sf Gaza, Gemgraphizzaﬁ advantage sf' being meizent. at a smaii comzessntraiezi area aisc heipssd the wheiesaierswetaiiers iii} organize and act together. The guideiines $3'? assocéatinn camtain ciauses which try is =:§§s«:.i;3§%ne the vioiamrs, an act quite typicaﬁ :3'? the Earteis. The cﬁauses mntain in C§E:&"st"

terms the gm:-2naE {:33 uses in terms :3? monetary ﬁnes in case of xriaiatiens of guédeiines of asssciation. Ca; 3 wziause 9 under the heading ., .-'/ I 1.4 21 gzsrocedure sf Preacriptiarz Guideiines}. Thus, poiicéng cs"? activities cf members is being dome typécaé of 33% carteés.

Low expectation :32' severe gaunishmem becauie mg' the fact that £v?RTP:'5 {which was in sxiﬁence em'£i:3r} did net have powers of penaiizing the ﬁrms far an§:i~mm,aefft§ve behmréizur aim faciéitated the cams? éike behavicyur.

Ccaiiuskm amzimg imriegaenéent farms in ma s'ams=: industry it} a::0-or::i?'ma.t§ ;;:ri::§ng, gzreriaxctim car marketing Qacticas in arder ta §En1§t cempeiitian, maximisa maréussi newer and affect naarket prices has itseen reﬁarred til} 33 a "s:artei". {Canadian Eccmamy amine, avaiiabie at h'ttt;v:ffwww.+a:anasiiamemomgagc.cafeng%Esh,;'ecz:sn0my;'ca:'tai.h%;m§)Ifhe mm: cezammsrm practice unt§e:"take=:n by carteis is g>ri::e--ﬁ>e:§ng. This 'is the term genericaﬁy agrapiied $0 a wide varieiy 0%' cancerteci actions taken by mmgaetitarsg whiah have a ti§res:t effeci an price. The Qmpiest form is an agreement an the price var prices in be chargeci ta same 95* aii szustamersg. in additimn tsisimpw agreemants on what--p:'E:e ta charge, the ﬁﬁiswing are am} C()F"§5§§I§€~3§'{.~';'C§ p:'§c:E-f'sx§ng:

6,3 2?.

9 Agreement on a standard fermuia, eeearding te vmich prices wiii be cemented;

as Agreement ta maintain a ﬁxefi ratie eetweee the prices of cempeting izsmi ee_n~1dentica§ precincts;

ea Ageemeni to eilminate d':s::e:m':s ex' is estabﬁiaéx uniform disczaumzs incsiucﬁeg agreement cm Credit termg that wiii be extended to CLSSTQWEFS;

s Agreement to remeve graduate efferecé at iaw prﬁees. {mm the eneyket so as to {Emit gzzepiy and keep prices high; a Agreement not its fedete §;3é"§rt¥3S wmieet ec»ti*Pg:mg ether eartei members ieciuding agreement is adhere is the pehiished eréces; Agreeement net tea see ueiess agreed prﬁce terms are met; and agreement ':0 age 3 umferm mice as starting point for negetiatiens. As eer the report :3? DE, it eenee sees": frem tee nieeses centainee ie the guidelines 9%' CDAG that disetxuetg are being severeﬁy dieteureged. Restrictiens have been impesee on the members not be eess on heeeficiaery Schemes is the cirmsumers. Further, as hag been ecimittee by Mr. Aiees't Ge 53 in his statement, in meetings of asszecietiee, issues 3'? pricing, mice margins are eiecussed. 86 has mentienee tea': the feiiewéng clauses 'm MGU 23 discounts inciudéng agreement can credit terms that w§§§ be extended its CUSEOETEEVSZ "1. §1'*urcE':as~e and ﬁaymeéi éﬁiamse ii. cu' Mom) 3} Ci} ASE Whcziesaiers sheuid Vmake cash ibiiés 0? minimum Rs. 13%!» However the mhﬁmzsm am::mnt for credit tziiis is at éhe tiéscretion cf the Wha§e%sai:ers.

ﬁt is agreed that maximumétash ciisecsgsnt effered 'iii Retaéiers; sfxoumﬁ be 2% saw. The minimum purchaga E33: Retaéierss for eiigibiiibg €33' cash discount is ta be decided by the concerned \.~*':'§m§esé§e:*. my other inciirect discsmnt shczuid be given zzmch as seﬁing in Retaiiers. and Docwra wé*'£E'z<:>ut $.51"/' giving free offer eithsr in excess to the trade offer afﬁciaéiy eperated E33: the cempamv Gr gwing free aﬁher pmducts where no trade affer is csperated by the mmgsany. Any such things wiii be <:ansi:dered as indirect ﬁiszzazmt.

Vxlhcieaaier shcmid mat: isperate any imiireci: beneficiary schemes 1:0 get iarger meiers frczm Retailer.

a) Any whoiesaier fmmd \xi0§a'5mg the abcsve ruies; WEN be {same tn strict amen taécen by CEDAG on the recmmmendation of the ziiscipiinary ccsmmittee appointed far the srzurpase, 1} F02" ﬁrgt vieiaticsm a fine Rs. 250C}/~ M}: be imposed beskie wamimg ietter W233 be written tn the Whsiesaies'.

2} Far seccznd viaiatien a ﬁne of Rs. 5G'{3£}/'-- wi§§ ha imgmsed and 3153 esxecutive commimae wiii mat issue any NSC ta Such a whaiesaéer fear a peried 3f 1 year far being appainteﬂ as. a steckiest any company, fr Retaiiers ghouid not m=:s:J:'t is any unheaithy c0mg:2cet2t%am by giving 'dis.::0L:nt ta their custamera and shcyuici not Csperate any baneﬁcéary SC§".£EET3E'S $0 Z-3"£"£€"§C'§ the {'.'.E.£St!'Z)§"i'EE'l"S. gr} Any Retailer's fcmnti via§at'mg the above ruies W18 be Eiabie ta stmt amen taken by EEEAG cm the remmmenciaﬁon of the Eiiscipimary Committee a;Z1§3DE§'fi"€~ZEi for the surpass.

1) Far first viciatimn a ﬁne Rs. 25980;-\ wiii be imgosed beside %v»rarmng 5.13 2} Fer second véoiaticm a fme <3'? Rs. EGGS/~ wéii be Esnpeged and aii Whc>¥esaEer wiéi bmvcati such retaﬁer for as pe:'im:E sf 3 mcmthsf' E36 has c:E3serve::i that aénce carteis 0pe:'ats~:~ Er: secrecy, they gen 2.2;.) is great Eengths ta hide their actﬁviizies. Using trade aaseciatistms as 3 waver usuaiiy means using an umbreiia gczretectism "E0 avasici amusing any suspicien. Baaed upmw guideiines discussed abcwe am the activities :33' the bmiies Eike CBAG, {JG mnciuded that these agsaciatian exhibiteﬂ carted iike bahaviaur. The Ex; has mncﬁzsdecﬁ that the facts brought cu': ziuring the éswvezzfsgatimaz are imitative mat the guinsieiirses of CDME are wssstrictﬁve and anti~ cempetitive in nature. The SS has recommended that apart 'Eran':

cunaidering actian against the CEEAG fix' their anti--cc:»mpetit§ve cmaduct, the_ Commission may sign thraugh Degartmemt of Pharmaceuticaész, 80%. of india, consider getting aﬁirectiorxs Ssuema aiﬁ such agsaciaticms inciuding Aii Emﬁia Chemists and Eéruggists Assmzﬁaiicm 'to desist tfmm such pyactiécea. The E36 repmt was mnsiciered by the Camméssisrm in 3:5 meeting ham or:

°g.*°:*se::«:"3i£; ,-' €3§3j\'3E3'.§i3§'§S is the .\_\\ ' \ report £2315 £36..

3 T3.' § Q. :

1"' '\ S {K3 Remy csf CEEAG ta SQ remrt The s'Z2L'.1Af£: fiied its reﬁiy dated 13.i39.?_G1€} befare the Eammassisn and aim maiiéﬁ urai submissions an 12.':tG.2O1{3.T%1e gist of the ob§eci§::sns of CDAG is as under:

Thea Cilmﬁ has ccmtenéed that the acts aiiegeai in the campﬁaint féied wéth the EIGER, MRTPC an 1€~3.B6.2i'.¥i39 against cum ﬁnder the MRTP Act, 1%? are for the period pzrim it: 15"' }une2£)G§. Consequent {man the repseai cf MET? Act, the Saki case was transferred ta the Commissian under Smtion 65(5) (2% the Camgaetitian Act, ZQBZ. in ms regard R is perizinem: to note {hat the notice for investigatimz dated 2Q.G.8.2D09 sent by tha E3{5iR, MRTFC was repwsd on 82.16.3039. The:'ea'¥'?:er, on 1-<i.1.€3.2£3{}§, the %C«:>mpet's':ion Act, 2{}{)2 was enfmced wide the siamgaetition éaniendmeniz) (}:'d'mar;ce 20:39 {Grciinance 5 of ZQQQ} which aiso repeaﬁed the MRTP Act, 1§59.'§"?1ereafter, iixég Cammisséon tank up the matter received by transfer fram the MRTKZ under secticm €35{6) 0? the {I<3mp&ti?_:§s:)n Act, 230:}: anci {zarried aux: an invesfagatian ::uim'matin.g 'an investigation r-war'; dated 1S.{}6.2{}i;{). CDAG in thig regard emphasized that §»:42':_ taken by the as white 8.2 gtsreparing the rep:::s:'i: reiatag to ihe pericd prior to 123"' jams: 2.909, as the 1"

Show Cause Matias was issued by the {2'xG§¥Z on 28" August 3099 under the Q"? the ¥\/ERTP Act,' 1969 and the present prcgceedings and pr §:wsa:;"tEga'tE0n were pursuant E0 the Saki Natica dated 261%' August 2309 oniy.

Gr: the aisuzwa basiza the CDAG hag argued that 'am entére §n\=eSt}g'.£s't§£:n and gsmceeciings inzziuding the investigatiisn reagswt are mmpéeteiv withczui §urisdir.:t'i<:m and uitra xréres :3? the severai gsmviaian :3'? Eaw and this Cemmissien as weii as the {)8 :3? the Cammissésn dc: ncri have jzsrisdiction 0:' any iaxmrﬁsi as..sth{3rii:;y in 'me matter' Thai CEEAG by {gusting the varmus gmaviaions contained in gecticsrz 56 0'? the Ccwnpei:§tiz;3n ;?\<:':, 2032 , sectirm 5 of the éiﬁeznerai Gauge Act, 1892? (1% :32' 139?) as, weii assecticen 2 £0}, s&2ct§on2(u§« anti seciian BSA 02' the Mcmomzsﬁivzas anei Restrictive Traﬁe Practice Act, 1§69 has contemﬁezti 'mat as conjeint reading of these provisimns makes it dear that after the repeaé sf EVERY? .A'\ct,19=§§ by the Competition Act, 252232 the autimriﬁes umﬁer the MR7? Act, 1963? vi:«:.:.the T MET? Cammisskm as weﬁ as the 'Rf; ceased is be in existerzce eagle?-g 66(3) 3:0 63(8) mt the \ and the reievant gamxfaséons {i()§"f gﬁnes g "Q 28 Camgetition Act, 2932 pravéde 'for tantimsarzce cf the investigaticsns and pmceedings pending under' the MRTP Act, 3.E§§=Bbefc::'e we commencement am' the C;am;}e*z.i~:,%or2 ,<°-xs:i:, 2302. As giérthe avarment on' {ZDAC5 the scheme envisaged for deaiirsgg with maﬁ:ez's gaming under the regaeaieci MRTP, Act is as foiéawsz E. Bastian €s6{3§2 nf tha Cempeiitian Act, 2832 gamvides that an the cases pertaining ta Exfkzsmgaciiéstic Trade Practices and Rﬁstrictive Trada Fractéécag pending be-afaraa '£315: §'\:'§R"§'E> Cm'nm§s3i-cm shaii ha transferred to the Agméiiata "i"r'§§::ura§ and ghaii he adéazdistated as per we pr«:>v§s'éa:;ms :33' the MET? Act, 1969 as if it had met been repeaieci ii. Likewise, sectian 66(4) 0'? the Cumpetition Act, 213302 prevides that a§§ the cases pertaﬁning to the §_3m"air Tracie Practices pending hefsre the MRT? C<::mm§5Sian be "transferred :9 the Naticmai Cammissian unﬁer 'the Censumer Pmwcticsn Act, 198%} and shaﬁi be ad§u<:%§{:at:E~d as pea' the §C3f'{)\f§S3(}§"s5 of the MET? i-\~a.::t., 1989 as if $13: hati mt been rsepeaéea. Eéi. Furﬁmermcire, section Esﬁiﬁ 4-"

'f""'¥§e\\£Zempetit'icsn Ant, ESQZ €331?

provﬁdeg that ail §nw.§§.'§:ga Y r grékeeﬁings, other than a '\ ' 8.3 'f\J LC:

tfzczse reiating ta unfair trade practices, pending: befere the i3irectm" Generai af imsestigatien and Registratian on or befcre the cmmvzencement Cr? the Qampetéticn Act, 2.302 Act .-shaii stand transferred to the Competitécm Cammission an' mdia. 'w. Seciticm §5{'}''} :32' the Ccnapetétioai Act, 2882 pmvizies that an investigatians er gnmceestiings reiating ta Linfair Tracie Practices pending 'aefme 'me mrectczr Gsenerai of imrestigation and Regégtration am as' before the Cammencement cf the Cmmgseiition .s«"=n:*é:, §:{)=3.?; shaii atansi transferreﬂ is the Nationaé Cammégsisn cm:sﬁm':e::§ under the Cansumer Prﬁzstecztéan Act, 'SLQS6 and the Nationéi Cummissicn may mnduct m arcﬁer far canziuct sf such investigaticm ax" preceedings in the manner as 3*: deems fit.

Uterefcere, as per CDAG, this Camzmssion can exercige gmisdictian aniy in Envestigaticms arr gromedings in mattem othéer than those reéated 1:0 Unfair Trade Pra<:'i:i£:es which were pending E3 we the DG{§&R}_, MRTPEZ under the V 1 \ t.,»,_-- ' _ a.a%§z\n cw praceedangg reiated ta \ ~ I '- ' E .3 3': h 1' E W 30 the Unfair Trade I-ﬁractices are ta be Ysandied cmiy by the Natéanai Cernznéssion under {ha Ccsnsumm {4'r-::t£-zmican Act, 1935. As per the ccntentitm aﬁvanceci by CEM-X6, sectém 2E0} (sf the ME??? Act, E69 33 cktved hereézxabcmze deﬁnes "Res.':r%::tive Trade Practices and the necessary 'mgred':em: fer "Restr§c%E\.m '1."r:~3d€e Practices" is that there shmuécé be an impzzsitian er? unﬁustifieﬁ coat gr :"e5i:ric*%:§<;m an czszansumers by m%arz§g3mai:§c>n as set Gut 'm 'ma Said Sectisn. Fasrther, sectien Zia} sf the MET? Act, RSS5' dsfines Trade Ekaatices ané ﬁnaiigr sectiem BSA 95' the M PS1'? Act, 'E59 cieﬁnes Unfair 'E-§'¥:':'.{-Ea PVraVctices. it has hear: gzsssinteai mat that ths: aiiegatinns against {SEAS as set wt 3;': the zzwngtziaini :31" MKS Xfarca Bruggists anti ﬂhemists and others {Cm wh's::h the entire saga has commemzed} are severed name: Setting: 35.643} cw? "€.§"5& MRTP Act, il.£%§§¢ Thus, as per CBAE3 the aﬁegations against it are, at the mmstﬁn the nature 9? ijnfair Trade Practices and theauefare as ;:t'(3\«'ideci unéer Section 580') of the Comgaetitian Act, 2382 cnhg the Natimai Cgmmiasiatm under the Cmsumer Protection 'Act, 159% has the power :-sncﬁ aut'§$§'§?L§§ stigate ints the same. /,1 I ,, ,vt1rv:,~".h' 8.5 {B0

-.1 En ﬁght of the above suﬁbmigsions, the s:".DA{3 has cantaanded that this Cammissiegx has exceeded its jurisdictien and has taken up a matter which it is; mm entitéed mm' empmmaraci 'cc entertain Therefore; as per CEEAG, the t.sm'&r cf this Cnmmissécm directﬁng the Eirectur Generai is investigate the matter under secﬁczm 26(1) of the Iﬂampetitian Act, 2392 is iiﬁegai, uniawfué and uitra vires.

it has been aiso argued that withmn': pregudice ta whai:ews.=r has; 'seen s%:ai:=;~2d hareinaizaeave, under Sectinn §€-}{1.&.\} arm Sectian Evﬁilﬂ} of the Qomgzeiétéan Act, 2302 as weéi as under' Seaman 6 :33' the Qeneraﬁ Ciauseg Acts. 189?, the repeai aim' the MRTP Act, 196% dues mt affeci its preview apéeratisz-n at anything duiy done or suffared 'zherexsrzder car any right, priviiege, abiigaticsn GE" Biabiéity assrued, as::a:;u'sres:i cw incurred under the M935"? Act, 19f:39.As per thejsubmissimz made by CSAG it is expresgiy garavmzéd 'an these movisians that any 3:3ro<,:eedings :32' remedy can be i:n5tit2.sted, camcinued :32" enfmced as if the MRTP Act, 1969 had net been repeaied.

it been submitteti that, the}; 3331 act ccammitteﬁ during the ri_ Rec? in question under the 8.8 3 2 Com§etitis;»:1 Act, 2602. ¥m"i:hemm:'e, it is expreassiy prmfztied that the gsroviséons am' the NERTP Act, 3.969 wm aicme be appiicaitzie ta praceedings whim have 'seen énsmcuteci under the MRTP Act, 1£3€:3§ "BE;:~C'}RE" the mmnzencemexxt 0f the Competitian Act, 2802. Thus, even if it is assumed' even fat' the sake of argument that 'ma garesent proceedings and investigation are §ega§Ey maimainabie, the rW;w?sEf.=ras of the ﬁampetitimn F' Act, 2063?; cannat be .appi':ed under any circunwsiances and any prissecution _ C33" praceadings car: Ezse unéertaken mix; in ac:<::osrc§am:s3.-- wim the prmriséms af the'-2 i\.f§R'¥§* ;?\::'{, 3_E§i;":§ as the entire matter is haseai an a wmgtsiaim. clatészi tiE$,{}%E3.B€3{}'3 viz. befmre the wmmancemen': (sf the i:orng3e*§i%:§£::": Act, EEK); ﬁns per the: suhmissisn maﬁa by CDAG, there is as pratxvésion in the Competition Act, 2882 swherebgs the saici Act has been grantseci retrsaspective effect. 'Therefare Lander sectican S (3} of the Generaé Ciauses Act, the Cmmzzetiticm Act can mﬁy be enforced and inmiementecé after 14" Dctabes' EGOB and net mm' to that date. hug, CQAG contenﬁed that the cmmciaint dated 16.05.2393 rerzzeived frtam M/5 Varzza E}mggis': and Chemist shaié have to be treateri and ciéspsosed ceff cmiy under the §3§'QVE$§£:m$ of the MRTP Act, 8.9 8.1{} U3 U4 The onﬁy provisions air? the Com;3.<3=.t§t'mn Act, 2062 whéch may be ern;;1cn;e.>.d in the preseni; mater are Secticms 66 {ii-\} and 65 {"3} :3? the Competition Act since they pr:3v:3:':§€~3 fer <::::»m:':n%uity {sf the gzraeeedings ,1 irwestigaticms in View 0'? the Emmeldiate disizandmant 3? 'me MRTP Commission and the mm, MRTPC. Therefore, any persai przwiségms car vi{:a§at§on3, if any, shaii be soieiy and exciusiveiy 2-zubjéct to the prmzisians {sf the §\g'1?%.'ﬁ? M': and net the Competition !--\€:'£; 2302.

31: has aim been subznitteré by CDAG that tizas entire evidence reacursiegi and V COW:-3=:1;£-'sci by the £36 whiia garepz-sting regacmfc {iateé 15.38.2319 was ﬁfm' the gaeréoci prisr $23 3.6"' June 2383 when the Competitém Act, 2.982; was 2'20:

eanforceé anzi the pr-caper iaw at me time of the pgrpmied mmmissiiran :3'? the aiieged offences was the MRT? mi, 196?. The%refme, CQAG cannot n-aw be sub}er;'%;ed ta praceeﬁings or gssenasized under the Cmmpetiticm Act? 2302 an evidemte which pertains 3:0 period prior tsrs.» the enfarcement cf the said }'3sC'(.

{DAG has a¥s0 contended that th {EQ £335 szzbrmtted repart dated ..-' \.\ '_m%é§nt m' 'tiha pmvisions of 8.13'.

8.12 34 Comgiéetifgian Act, 2302 whereas in 'fact, he Qught ':0 have rastrécted himself «:m§y ':23 the provisions 0:' the MR"i"F Act, 195% in terms of Sectéan 6€2{1A),.

s3':':(Ti.{3} 0f the Campetiticm Acts 2362 and Section £1 0?' the General Ciauses Act, 1897. Cm the basis 0*? abave submissions the CDAG has argued that the investﬁgaticm regzort sf DE, therefare, is. xriaﬁative of mm uitra vires; 0%"

,e;«<pr"ess gzamviﬁacmg {if ﬂaw and is. met sustainabie. Mareavar, as per CDAG, sincea aiéeged was were dang ;:2urg::m'ted§\; in v':o§atéc3n :33' the §°~e'§R"§"£3" Act, 15359, mza action can be taken under the Campetétimn Act, RSS2 $13: the very same aciz. On this gmund aim we present proceedﬁngs deserve its be ci§sm%s5ed, CDAG has 333:) subsnitted that wéthmst megazdice in the abmze submissions, it can be seen "that the {X3 has 'fai§sad ':0 take mm csnsideramm provisitms of Section 19(3) {mi} and {e} tn" thaé Csmgzsetitien Act, 21362 which mandats that whéie determining whether an agreemen§_h§'§ an ap;:2:'e+;:iah%e adverse effect "-.

, x-.

an campetitian {AAECE giue reggfﬁ :§3=%.3§§;;$?§{:g factarg GUEE1'; to he g§\re:'::« 8.1.3 35 {Ci} f5siZ{2a"3.§a3 Qf benefits is ::::«nsumers. (3) Empmvemersts in graduation {Jr distributéan m' gaods 0:' girevésimn emf servE«.:e:~:, CEZMG has: smihzmtted that the 36 faiieci 1:0 mnsiées' the fact that on acztmmt sf the actémns ca' CEEAG, uéﬁmateiy the ccmsumers have baan i3en_:=,>.'E§m2::i; and thatv the distribution and saﬁe :3? drugs ms bases': effe€.>:§ve¥y' reg:.zEa*ted by iiilmﬁ in §arger pubiic interests' '¥'?2erefcs4:e, CBAQ has mmmitted rm Enfriszgemmt sf any Eaw much 3835 the Campetéimn Act, 2Q{}Z§..

CDAG has aiso gzshmiizteé tha": the mmg::Ea§nan't W3 Varca Druggisi: and Chemist §s a ziisgruntiecﬁ and misch§evm,as eésament and ':3 mm: {C} £1";-érass and trauma CEEAG. Mr. Hemant Angie, the Proprieter 0'? thé gaid Varca Bruggis':

anti Chemist was §1§rr§seif*?;§'3e V':+;e--Prasider§t :3? the Execuﬁve Committee of CDAG for the perimﬁ from 2i){}E$--2U€38 and reiinqmshed his office when he inst the eiectmrxs. Furtémrmore, Mr. Angie $5 himseif ﬂefendant Ne. 12 in T - Speciai C&.\.ai§ Suit Ne. 325 sf '£G{}E§w%xe:ein CDAE is M50 :2 {Z0--'Qve'fen.:ia,nt. The nu.-

zincmments reiaated to that Civii Case azaqzggyced as Exhibi§~2'm Voiume :3 cf ' '\ . '\R 8.15

5.»

-iii saiiing in the same heat as CSAG, he is not eniitiiaci ':9 make such serious, baseiess, 'faise anti friwimis aiiegaticins againsi: C{).='1\€Si. it has been fuﬁher ave:':'issd tiiai Mr. Angie is miszusing the pmcess (if this Commissicm in orcier ta giressurize and browbea': the demcscraticaiigi eiecteé ai'iii:e~beares's of CDAG 'mm abdiiciatirig their reswnsibiiities '50 that Siiri Angie can wresci ccmitmi it.' CDM3 has siiiimiizteé that ii is a nan ;ii"s;nT-it~cirieii':&<:i Assmtiatim and is interesitexi in tiie weiiare mi tiis traiie and the i;{.'§i'iSL3i'i"EéF'.;¥'S at iaige anti is.

"taking an active mie in this trade and is wmking with the \f3¥'§€.'ii§S gciariies in ercieir is bring ahaui; same sense :3'? resgamsibiiity and 'E3€3C€i'U¥'§iE3iiii3i'{'3f in iiie trade within the State. {ISAG has prayed i§"iBii it simuid he emtourageii in its beneveient efforts rather than be caiied inia aiueation far its acticins which are in "the iargei interests :3? the puhiic. inviting the ' attention of igiie Ci::«mmissi0n to' the manisiate sat mzt ii': the Pieambie at' the Act, the CEBAG has aiso submitted that that the Cxmmpetiiian Act, BBQ: has been szinacied in ' E§i£§*E§FY{1i',§'§€§i'i€:iE3ii';«' ;:=i'otei:t the iiiterestaui the C0i"i$iJm&i'S. As psi £'.D.i\(-3,.i'ivis. ., striving hard ti: girtiteci the irii:ei'ests..a~i~' '€m\SiimE¥'S and ti1er'efi:iri=3 time \ {if its actiizms can be said its be viggial n€i?§r§'-{ta the priiivisicms cxf the' LL) '--.5 Act. Cm the c:»::>ntrary, the smears :3? the? Act as weii as thase of CQAILS are in csnsananzce with each other.

On {}2.12.2{}'.%;{1, the report 0*? the US ﬁated 16.85.2819 akzng with enfwe materiai inciuding the submissians maﬁa by the CBM3 wag gﬂaceci far czsnséderatiorz .3? fzhsrs Cammissicm. A"fte:' gaing thmugh the entire matariai, T_ -- the C-ammissiasi opined that 7m erder ta enabﬁe it is same is a ::£m::ius'§=:m, 3 further imrgtﬁry mm certain aspects ﬁg requireci. The {".@mm%5sim':, t%*:er£.-:'§0re,. ea§§a'ec'tas:s:i ma 3:8 is csiiect su§::;:s§e%menta:"y Znfsrmaticm 1' evidenm can téxa foﬁcswﬁnggg igsues:

{E} Da%;e:'mi%nat§c:n af prise 3:33; cartai : Since 96 has mnsédered cgeratimsz Q? CDAG as 3 <:artei, prohibited under seztican 3 Q? 'aha Act, it is necessary to estabiigh the faiﬁewing through reéiatﬁe evidence cm the rezszcsré;

(3') Materiai regarding ihe agreement, gznractisze riecisian ammzgst ~"€h§% "members :3? the aii é§'h::z~ ﬁx prices, {ii} {:53} 38 {E3} Materiai its mew that the aéieged cartei has actuaiiy determined the saie prices as' drugs as required ufs ?>(3)(a} {if the Act, with recguéshte data.

Limits er controﬁs ;;rc:ci{uc't§cm em : Though {MS has cancﬁutzied vioiatian of .'Ss:*.~:~~2"§.r.7.a:: 3€3}{h} of the Act, it is necesssargr ta get the 'faiﬁmwing evideace fer estahiéshéng ihis finding in terms of the sﬁecific provisions of Séctiasi 363} {b}:

(3) if CHAS has éénmed or corstmﬁieé market fer mugs aim} Pharmaceuticais - infarmation neecied ':9 Show that they are actuaﬁy in a pmsiﬁcm ta (its 'this.

{b} if CBAG, hag iimited G3" cmztroﬁed supgaiy ax" ﬁrugs «« there has ta be data in eataiaéish at Eeast the actuai existence :3'? such §§mitat's:m on su gzpiy, if not the extent.

in adﬁitémn tat} the above, the {E was 3330 :'es:;uére::§ ta: fuﬁy Esweatigate anﬁ rem-:'t an the entire smsszture :3?' the ::.;§rte§ am ths active \ members. As CEEAG is _\_f' ' ii}.

13., Dmggésts WGCE), which 3339 csgcsemted thmugh various state units engaged in activities siméiar m that 0:" CBAG, {)6 was required his cleariy {bring am: the nexus between AEC}CD';and CDAG. {)6 was aisa required "ice give specific evidanm about the members; sf CBAG, who have pas"é:ic§pated actéveiy in the csperation :32' the stated carteé. in addition, 05 had is fuii ﬁnanciai informaiim necessary in determine appmgzriate gsenaﬁtﬁes 'Far Ai€Z}C{2s, {BAG anal the active inﬁiviﬁuaé members 3'? CEAG, in case the Camméssiesz u§t.émat£~:§y comes ta a ﬁnciing of 3 vicziatimn of pr:.w%s§::ms Q'? the Act. m accerdance with the eziiractéons cf 'me ﬁammassian a fm"i:h=er Enxiestigatian was ccsnciucteﬁ by the Diﬁarzd a sumsiementary %nv_estigaAt§cm repzzsrt dateszi 1.8,G3.2i313'. was submitteci 'ms the Cammismm. Eiindéngs sf simpéemeratarvg Bﬁ remri:

The abservations and ﬁt'2d§ng5 g%x:g3§:{{3::':{f ~¥L}:§§};§en1enia:'\,* 0:3 regtzert are summarized a2; uncier :

11.1 3-K} Reiationshisa and Nexus batw:-'zen A3{)CD and Chemis': and Czruggist _.I§,_g§_Qcizat§a33_,_ G33 11.1.3.

11.1.2 it has been mated by the {K3 that A¥€I){ZE3 {Mi éndia Qrganisatéaa Cr?

Chemigts and Eifzmggistsﬁ ﬁg an apex bady cf w§m§eSaiers anti retaééers 2:»? pharmaceuticaéa at MS Enﬁia Levei and beiow AEQCD, there are asscsciaticms Qf wh0§esa¥E§'§ éiiéi retaéiers at the state Eevei in the States. These state aascsciafmns are afﬁéiated ts: A§Q£D. VFs.:rther, there are as50c's3tians at the ﬁéstréct ée:-W-2% aise, which are affiééatad to state Eevei azgczciations. DE: has fur*t§'2e:' muted that CBAE was regigtered under the Sacieties Regﬁstratien Act, 185%} in the year 196'?' and is a state is-vei asseciation 9%' £2395. it is u3'tima'§:e%y affiiiated tee NOCD, This fact was ctzmfirmeci in we statememt {sf Herman? P;-3% Angie, mem§:>er of Chemést 8: Dmggist Associatian, {Essa recorded an

28.G2.2G11 and aisa €.".{3§'!'{3§:3{)i"atE{i by 'the Enfarmant Mr. Maria V32, :3?' Xcei Heaithsare, Bamciez, Sea, in his statement separatehr remrciesi Cm 28.82.2311.

Fmm the web--site of ASBCD, it has; been gathered by 0&3 that AEDCD has been aperating aé. €x¥a€;éz::ma.§....1,geve§, whiie them are assmziafuans further down at stats: 'as; gwtgxhicfz are uitimateiy affiiiaied .5 to AEGCEZ3.

11.1.3 3.1.151 1151.5 1'51 The Cemmissicm whiie seeking suppEems«ntary report hard aim caiied for ﬁnanciaé detaiés sf CDAG, AEOCE3 and active members :3'? CDAG. T'ne D63 has ehserved that ammugh in the instant cage .*1\!{)§.D was mat §'%£%I"ﬁ£':'d ag re.-s;.:s<:mdent§n the infm'mat§cn and the énfarmaticn was ﬂied against C)§3;1x(.-3, hmvever, {ﬁe ﬁnanciaﬁ infarmamzn in resgaect of 2*-\§QCi:=~ wag mbtained for the year ensﬁfmg 31.03.2836 and 3i.{33.2+€:t{3?.'T?:e 'ﬁnamziais details sf executivefmain mmmittaee members cf cam who are xas::éu:""i;v§th the functmmng cs'? CQAS were caéiad faﬁzut were mt guﬁmétted during the %nvest';ga*i:.'a<3n. .53. com: 9'? Anrsuaiﬁepori: sf CBAG shawmg its mmgaaratéves finzmcéaé detaiés far 2{3{}8~€Z}9 amj 2G{}§~1i} aimng with z:0g3i&$ of aczmuavrg 0? ASGCD has aisa been erzciased as Exhiim: to me supphmemgaw mves?;§ga";i::m regaczrt by the {BE}.

in ::«:3u:'s& of investﬁgaimn, it has been gathered by the DE ﬁhat AEDQD has entared mm Man with Grganigatisn af ?harmaceut§ca§ Pmciucers sf imﬁia (QPPAE and mziian Drug ¥\:'ianufamzres':s Aggaciaiien {%iB{'v'iA} in 1382, prescfibing aermin guédaiénea ami zmrrns :'egar::§'mg merging at 'the: iavei sf whmiasaiers and retaiﬁers. Amzmg others, guideiines and nmms far Vagpaéntxnerzi 0'? HEW and aciditicmaﬁ s't0ci<,'ssts have aiscs been prescribed. Ne pharma drug mmpany tan coratiuct buainess with whoiegaiers and rgtaﬁers, Lmiess it foihavas the gu':deE'mes and mrwms r;s'f.q='~%;i" N~\\"'\"4T7:v$%'%'1'°zaa:.§a have heart furmzﬂated by the members of AEDCB 3 a 1 TI, 3 Ii' '.21 \ . .

F 3;

11.1% 11.1.7 42 The guideifines and :'mrms Show the ﬁoiiective intent of the members of AZQCEB. The gzzédeiinesj raarms of Niou are §EV§SE§€§ fram ﬁme to ' ﬁme.

The suggpiemémtary D13 afeport '::roug§3'i: nu': as in haw the guideéines of NQCD, whim are being foiimwecﬁ by Statfefﬁiatrict Leve§ Vasscsciatimu; iiksz Chemists and ﬂmggsts xlsscciatiasi em" (Sea {Cf3AG), Eirﬁit and mrztam i>S{.¥§'_3§13§§<I-ES cf drugs and number cgf whaiesaiersfstockésts in tine market and ﬁx margms f0rAwho%e3a¥e:'s and E'E:'CEs§§E3i'S svhiah s.:i?{§:*:"».=ai.s:e§\_,~ has me effect {if determ'ma?:'scm :3? 3358 price sf érgsgg in the market. AEQCD is in g3z:s§t'u:m in mntmﬁ the affairs sf Sta::e,!§)i::i:s'%ct Levei ﬁxssociatians and these assmtmimns. cannet davmte fmm the gu§::iei§nes;'nm"ms of .MOCD° Ef gaharma mmpanies-: aria hat faiiow the nmmsfguideiiszes of assaciatkms, weir m1rma§ bugineas, ogaxzaratiens get hampered. is": case members of assaciations at Nationai, State as" Eiistritt Leveé, dc: mat foiiww the guiﬁeiinas and rmrms, they are baycetteci am even genaiized. The D63 has US$89} that mmmon Qatar :3? aii these Associaﬁarzs, as is evident fmm the statementg cf @E£"S0nS §'€COF(i&Ci, is that aii :32'? these are foﬁhtswing narmsfguideiénes Vwmch are restrictive and anti- s:0m;3et§'tive~ in nature. "fhis has came cam: in the statefnarri sf Shri Hemant Pa? Angle, me:r:he.r\~a;§*'ii'i32&{§\A:-gnti statement is saiméiar effect 43 11398 As per 38, if any whoiasﬁer gr retaéier wants to iransact businezss with 'tbs: members av? CDAG, ii: hag ti} commjisariiy fuimw the nmms and guide;-ﬁnes :3?" assaciation. §--'ur'ihe:', pharma cempames are aisa obiéged ta faiﬁaw the nerms :3? ass{:.acia.ti0n3, ethemrige irhey wcmid aim face probkszms in seiimg their prsdtscts in 3 particuiar territﬁry. 3.1.2 issue of ﬁmit er mntmi Q'? augmiy 11.2.1. As. per S6,, CD35 being a stata §eve§ aasasciatém and affiﬁated is AE€3{ZE3 ?'cs§§0ws the gizigﬁeﬁinesfmrms Qrestribeai by AEOCD. These guicieiineas are fmmd m be res'i:2"m.iv:s and ;mt§~c<3mpési:§t§\:e 3:': na'mre since '§Z§'}€:?;'3f uitigﬁateéy have: the effeatt ::«§" ::::sntr*c2§iingTan£'z iiméting sugsgw of drugs in the n13r§<ei:. The riezﬁzrictizm is imgmsﬂi aim tum cmmts; me, me phafma cesngsany can §§'§'{§'§)C§u€3€=§ 3 pharma drug in a territory, sgniesg. it pays certain amount ta thee associatksn in name of PES (Pwrmiuct infermafmn Sg=3.mic:e} purgtmrtediy fer the gurpeses 0*? advartiaemeni: and secgnﬁ, before appsointment :3'? any new stmckist as' aéditianai steckést, {E39 assaciatizm grants :'ae«c3.%::jes:'§:ic::'2 ﬁn name of i'\§{}{;1.«'Lt;)£i {Letter sf Caeperatggsg). if the assazziatian does nm grant NBC, me new :3? a \ mean be appainteci. Fcsiiswing .~' .5 .

«=34 excerpts fmna csmpiiaticm 9'? 23% the Memeramjum of Understanding {Maui and Agreeznetzt executes? ézsetween AK')-CD»iCsMA ~C%PPi from 15328;': mi date {{§ir<:uEate::i an §.ZKGS.?;C:G9reveai ms msitisnz Ma

3.. Smckést Poiicyx {E} Apgzmntment :3? Stockist:

The mnnpamr wiii appoint stockist sank: in :;<>r13uit.atEcn mréth Stai:e;'¥3istrTi<:': assmziation 3516 as was the gu§de§Evr~;~;s mid dawn by State Asgocéatima. Such aggoénted gmazzkigt wiiﬁ wurk for the area far whéctz they are agspzaintad. Whergver there 'is; amy (me steam: cs'? the 2:1:-mpawg 52*: the ciistrict, the seccmé siimzidst can be agzpstiinteé 'ma. mnsuitatéan with 5ta5;eidi:;tr's::t assaciation, ézswsaver the second stackigt sémuid be a bcmaﬁ:"3§ member {sf the association. ilompany wiéi mm'; appoint any additienai stockist {am am; new dévisicn fa-=m':e~a:i or created, it wiﬁ be given is thez any exiating steckist tn' the company.

{ii} E)is::e:mtim:at'mn cf stackistt 33 a rexguiar dfefauﬁter in payment ix} deaiing in spuriaug medicines :2} net keeping atiequate stack 3:' '25 mt serving tine market ;m"=:.:u;3e~z'§\,: or not submitting reguiar stack and Sam statement in such circaimstarzces mmpany wiii appmach Sitata,r"D§str§ct asﬁaciatimn wiﬁ": prr.:x;3er €i£)s5%;:m~emfgat%:>n and wﬁttené appiicatéan.

. 'J ' '\._ request of the mmpamg, 11.2.2.

{E3} i§.1,2.3.

then iaaking into the facts sf the appiication wéii try is resaive the issue. 3'? they wish ta consiéer the request 0*" the mmpany men St.:.=zte,?DEstrE'ct can aiiow aﬁtiitianai or rssep§acement cf the smckisiz to thee cznmgnany as per the set narma Cr? Siaie/District as.%sm:iation." Furthear, as regards aﬁd§+tim-"sai smckigt aiso, guiée-zimes have been ;3res«::'§i3ed is the effect that aciciitéonai stacédst can be appsmted szsniy with the canstazrrence of assacéatiens, ,<%.{ic§§t§::na§ Ststkésts Appointment {§:3»3yons;§ two} :

Afiditﬁonai Staciaézzts may ha appointeﬁ, szshgect ':0 State Asgo::':a*c's::m_'s cmncurrarsze, ;<m:n:ic§eﬁ there 33 suhstantiai increase in saiesg w§*:'ss:'n the exigting stockistg are unabie is z:operw§th. There wiiﬁ be mi:

L{.'3(Z,/Li)? 'fee far 5w.:§": aziditicmai s;me:§<;ist's appeintments. Yhe Evtate Assutiatian wiii decide wéthin 38 days {mm the :3:-.:'r.%.=. mi' ngfw stackists requeai is the Assaciatim, imaemaﬁ urfafmsﬁ gijitif-3§§§u=::$ wiﬁi be fnrmuiated E33; A%{){ZE) fa: Stata Agsaciatioras ta fscﬁiitate expeditious dispaasad Q? $t0ckést"s aQ§33"scati<ms."' As per US, withcwt getting NQC {mm the assmtﬁatien, stockists zzammt get sugsgﬁées fmm gﬁxarnzacemgicaﬁ mmgzaanies in mder ta seﬁ their praducts in the m%ari<s-31;. E? the ciictateg of the assetiaticm are net faiiawedj than caﬁ <32' heytq g§;x{en by the assacéation and the Stockists nu': fa%i§<::»wing'. v:Qii§'*\the aavsmcéatian are aiso as penaiézed. mang with gram: of NGC far appainiment (:2? stmziiistsfaciciétéanai s':::«c§<ési:s, the asscsciatizsén has aisa adapted the practice of approving isitrmﬁgction cf drugs in a particuﬁar temtory in name of Produ<:.2: information Service (P35) and taking m-{mew for the same. This gsractice is; aéso fmmcé it) be anti---com;3eﬁt§ve and rer=>"r'is:*=r7:a-*e. The modus aperandé fzsiirawed in resgsect of P55 is tha? .3. . {irug campangr has it» get drugs amareveii fer their ﬁaur-2:3': 'm a gsartiwiar tersit-zzry by the assc:s::ia*:§:::tn5. The agsociafzcm {<2E}!-W-.5} charge Rs. 589 pa: €ira3g% iaafare it can ﬁe Eaunchad in a partimiar territary; Meremiar! amaumt £3?" Rs. SSE) és net sniy charged gar siwg, but aEss:>,. gm: gzatesgmy of that t§rug.T For sxampﬁe if a drug come: under ﬁifferent ca=:egs:;>ries* say, 1 gm, 5:} gm, 588 gm pack , far each Suﬁ': categcsry :3'? that drug, the drug ma%nufa::9mr§ng mmaanies w%3§ have to giasg Rs.5QG."i"hus, the association {CBAG} mist cmiy restrécts nugnbwer sf piayers, but 335:: restricts intrarﬁuctiazi (3? naw Cirugs in the ma:'¥<e'{. The reéevant gamma :3?' Moi} sf A3Ci%{Zi':I» 9:': P33 is as under: "Ii. Praduct infm"mat§s::=n Servicg {P33} {3} if new HS Buiietm was pubiisheé car circzsiated reguiayw, my 9&8 chavges wcmid be payafgjg Sjﬁuiietin %nfm*ma'<:icm wiii cover {8} I 33»?

P35 t:ha:rges wcauid be gaayaizie crniy on Statawwise basis, exceprt in fxaaharashtra, where the §I3.F§S€§E'§"€ Bés.tric'i:~wise system wouki csntinme umtii March ::£2£}e$.Thea"«aafter, Maharashtra wcsuid aim impiement NS gystem on State-wise basis.

Far the purpsse 9? £363 charges, States wczsuid be ciassifiad i,iE'i€§E5€" A 8: 8 categmﬁas as yer ScVhe::1u§e"A' atiachad harem. Sumac: is abcwe, with effact fmm 13:: Qcmber 2833, PES wauid ' bé§';:a',>ab§e as fsiéawst 'A' Categctsw States -»- Rs.28GSf~ gaer entry M 9:53 Buéietin.» "8' Caiegsw States «~ Rs.5i§G,f» per entry in MS Euéietirz. Nate: Entry' means §:3r0duv::.t brandfﬁosaga §r::m;'si:rength fer which PES charges wiii Ems: paid.

N0 Pas charges aye gaagra-sbﬁe fer acieéiticmai pack shes, aciiiitienai fiavaurs andim' pI'§i:€:' revisions. As such, entries wiii be ;;s_z§3i':shed frea in PS Bu§§=3t'ms.

ms registered SS2 units with iheir awn marketing $et~u;3 and having armuai tus"ne:3ve-s' of ups ta 3343.23 trams {s:a§s:z.;§a'ta:§ at ﬂcmgzzznw Prices} 35 rzeritiﬁeszi by §Dfv§A;'{Z}PPi on baiance sheet basig, wiii be eiigime far 86% tasxcessicmaé P35 charges." 11.2.21. The EEG has quatearﬁ the guiﬁeiines fmmuiateﬁ by CB!-\{:i far ap;30§m;ment!term§naﬁan of stockist .whTu;h were faumté tabs -

restrictive in namre. The Di} has cited the ciauges mi? Memssraniium in case guideéinesfﬁvmu are \ 48 mm: foﬁowed, members wouici be bcaycotted and penaéties wcuid be imgmsed an the defauiting ﬁrms.

, ' "L The '06 after" examinﬁng the minutes zzrf {meeting =2»? CQGA and has

13..,2.'S. came out with the etanciusian that the Assaciatien is iimitirag anti cantreﬂing the_,su§__<:g3Ey cf drugs. Accsrzjing to {JG the minutes 0'? the meertirzg sf agsaciatécm bring taut the "?a::t that the Cﬂﬁia cantroés the S£§;)§3§',i of drugs 3%; 'N335 of NS simte.-'3 i,§f'!§€tS5 :53 MS gtsaiezé, aimgs sauna? ize Entrazﬁuzeé in Gaza. Eiurthear, we iszsua {sf a;3;3c:mtma2s"s*; 0*? stmzkist is 355:3 decided by the assczciaticzn.

The {K3 has mteci thaw: according ti? Memmandum 0%' Underisxtancﬁng {MGU} between Retaiksrs éi: Whiﬁegaiers ziatad 15f3,»'.?.(){}23~, rm whaiesaier is aiiczwed ta directéy seii the pmciucts to the customers and any whoﬁesaier fmsnd visiating the abiwe miss wiﬁi. be iiabie in strict actém: taken by the Asseciation an the racemmenriatian of the {)is{:i§3§§:1ary {Zqmmittee apgminied for the §>m'pose, As ;::e:' the ciauses stE;:}u§a"£ed therein a ﬁne sf Rs.2S{}Q,'~ ME: be impcssed far first viaiation besides wa' £19 whaiesaier. Further, far seczxzmd viczia-man a ﬁne ma' Rs'SD{3€3;'~ ﬁg stipuiated is be impasad and adeﬁitionaiéy executive ctmnmitizee wiﬁ mt issue: any LCM: to such a w§miesa¥er for a §Jer§i3s'§ of 1 year fog"

being appczinietﬁ as Emcmest cf am; cc::m;3any. 11.23. The DG has gtateﬁ t%;z.ai:..*t%rae ietters written by CBAG in $119 §3*§1a:*:*na«;:au%;§ca§ Cissnpanies confirmed that the guidseiines Esau-ed by ERAS weszre actuaiiy ezzforceﬁ. The 08 has refsavreé ietter daiezzi 1G.«fr:L2€3{}9 auidreased ".3.'C3 {W3 Erig ﬁfe: Scie:;tces Pvt. §_i:ﬁ., Ahmaziabad ta shc,w_\e' Eng': without NSC of tfzsa agaaciatim, ::»:;mg:aar:'%es cannot apgtzaini st:::sc§<§s?,. in ths said vietter the assucéafmn {C8516} hag intimated the compéaw that as per guideiines it was. mamﬁatory fur a new campany ta appmint twa smckistg. Since the campanx; had mm:

fuiiuwead the guideﬁineg, the NBC was withdrawn. Simiiariy th.<3 ietter ciateci 8.9.283? to SW5 Emcme §3*has"ma::s:utica§ Ltsi, Fame reveaéed that the NSC from the assaciatian QCDAGB is requirecﬁ for apgmintmént <2'? azécjitianai 1'1.}2.8.

1'.1.2A.§.

ESQ As per US remart the letter dame? 8.§'2G£f38 acidressed to M,f5 Micm Labmamries ijmited 335:3 reveaied ihe fact that z:::rmpan'ses can ::a:;3;3i5*,.= mm; through swckiest appointed by the assaciatiagz (CE>;'3\G} as per gz,s§de§§nes. The {:36 has come: my the s::{3s1C¥1:s§£m that the evidence gatheereci during investgaticsn &:".taE3§ish that the assm:.':at§<3ns~ NGCD, and Chemist anti D:'uggEs*: Assmtiatizgn of Ema {CHAS} arsé engageci in the practéce (sf;

2-3} ¥55u'éng Mai £35' :a;3;33?:n*::mez"a':: of a new :22' an aciditicmai stockist 'an a Qarticuézw t+s::*r§':::2r»,s wh'i<:_h eve2n'::ua§£y re:5t:"2::is the numhey 0? piayers in the market and 'an tum aﬁse iirnits 9:' canirais ssmgiy ea'? drugs; 33} insisting for PR5 apgsrovai .*'E<;:r intrezﬁuctian =31' cérugs 'm a ;:>ar*i:'sz::.s¥ar 'tez'r§i:s;mg and taking mcsrzey far that which eventuaiﬁy restrictg *:ih£«2 5u;::g:1¥y and ava':§abi§*:w :2'? drugs;

6) imposirg penakies in case the farms :29 mt fmiiaw the narms preserémd by the asscciaticsns.

{)6 has grated that if the garacme af NSC is dame away math, there wamci be more sumzzéy :1»? drugs in the market and cc>nsVe::;uer3t§y more avaiﬁahiiﬁy :3? the drug fgr ti} ""5§§%§.9i§'n-»man.

13.,2.1{3. T'nu5, EEG $135 mnciucled ma: C§3;'~'uS %:¥:m:.:gh guideiines and actuai conciuc':{§s awe in iimit su;3p§y 0'? drugs and numE::e;r af mayers in mar¥<et,V since: wé':':hout NSC: :3? the Assmziation, no gersmnfenterprise can he apgaaénteﬁ as whuiesaier anti s'i:<:sz:.%<'§est at {$53. Further, if prmﬁuct NSC in farm of P35 apgsrmsai is net given, cempanies wiii mt be in a ;)c:>sé*_r..im:a_..§::1 suppiy émgﬁ. The gum:-3.Einas . and practice of issuing, NOE far a%;3;:win'm":ent Q'? a nssw 93' an additiccsnai sateckist in a par%:éa:;s%ar temtmy eventnuaiw :"e5'tz'i::ts the mzmtver six? piayers in the market and in Vturn a§3:.'2 ﬁmits er szentwi suppbg :3? drugs, The system cf MSW a:3;3mva§ far Entroductiwn cf ﬁmgs in a particuiar territan; and taking mmey fez' that éésca restricts the szspmy ands a\ra§¥a§3'siit*-g cs'? drugs. Thege feﬁiawed by imgmsétian caf penaities an firms which ﬁn amt foﬁczw the dictates sf assac'iat§=:m estabiish that the ;::ras:tEc.es emf conduct of CDAS are rastrictive and am:i--c0mpetit°we.

12. issue at' cietermirzatézyn sf price 12.1 A5 per the report :33' BS, besides <--2:=<sser:,' ' 12.2 52 ':m.n:3§ve£.§ in the issue 0%' ﬁxatien 0'? margins and uitimsteiy cieterminatéera cf saie price :3? drugs as far as ncm~c:3ntrui%Eed drugs are comzec-zrnesﬁ. 'me {)6 has noted that there are breadiy tum categczrém of cirugs under mug Price Cmztmi Orders £§)§3'C{)} for the purpase czf mice %°a:<atisn%/'rex:is'a::m anﬁ mmnimring. These are scheriuied cirugs {drugs uncier mice ccsntrai} anti nan» scheduieci thugs wifzch are wt 3%' prica ccnrmai. at has been stated by US the': in the categczrsg gf ﬁ€)i'3*E2'Ch8§LE§E(§ drugs the trade assaciations are determining the marginta -w§1is:h genezeraiisg is -%;i£Is[%é*€:2t' reiaiiers and 18% 'Ear w%mEesa§es's. The reperi: has fzsrther a'e€ic-;=.~:i an the statement 572333 by 3hr':

Hemani Pai X-'mgﬁe, mambar :3? Chesmist 8: Eﬁrazggist .5'aS$ﬁ§:§%3'{.§Oi°£ C303 §'E€€3§'t:§Ed during; tha murse :31' invesi:igati:cm whszrein he has expiaineci we mechanism cs'? determining the trade margéras €23? nan schgciuﬁersi drugs 354 per the nczrms ﬁxeﬁ in the guiéeiines 0*? the Assuciaizisn. As an evicierace that tracie margins are decided by the assaciatimnis} at the time cf giving P23 approvai, Maris V32, the §r2f«;'3s'mai:ic3r1 garavicier subméﬁed befare the {BE cogées sf apprmrais Q'? Pmduct infmrmatinn Service {P65} given by ilhemist 8: Druggiszt Associatien (péaceﬁ as; Exhibibiiﬁ sf suppiemsentary rep:3rt'3.TE:a 0% has stated that the circazéar of {ZDA{3da'%:ed 2S.{}5,Z{){}9 aiso estabiisixed that trade margins are ﬁxeci as 'per guicieiines <3? A+ss<>c'aai:%on. The {)8 has conciuded that ncsrms inf margin ﬁxed by the assaciatima uitimateiy have th' f' Eﬁerminaticxn of sakes mice of {frag far the and wngumer. ~ \ . V \ \.

\ _ \ \ \, 3.2.5 it has been natsad by $35 that at the time when P13 agagamxrai 'is given by the CQAG far Eaunch cf drugs in a particuiar area, margins for whaiesaiers and zezetaners am ﬁxed The 36 has memﬁoneﬁ the irzstances where margins Hf some mirzsgs 'us stockigts anti retaiéers were determined and agmrcsveci under the system an' Precinct %nf:mnatEan Sewing:

The {)8 has aim mi:-2-;>d that apart {mm ﬁxéng margins can drugs, the CD516 aisa <ie+t=sermines the amcsum: Cr? ﬁisszouni: ta be e2c%;e::'c§€~:a3 by whaiesaiers anci rataiiem that has tha é:':1g:=act of u§t%ma'te ﬁeterminatéan ac? gmce ef drugs. En . this regar{>2,, ztircuiars {sf CQAG dated 16,=i}8.2§{3*'£s and 3.'3,.a6¢2E}€}9have been- szited by {R3, Ercam the evidence furnﬁsmaci in ccsurse m?' prmzeedings in farm :3'? P13 :-3;3g3rs::xv%a§s and staiemAent:s 9? persons recordecé in csursa er? ;3m<;eedi_ngs, the EEG has azimeziuéeai that the nmms and gu%de§§r:es mi" the Assaciatian whhth prescribe the margins fur whuiesaiers. anti retaiéers, net czniy has the ef"r"ect ax' ﬁxing margins, but 335.13 has 'me effect of cietermining the saies

- price as? rimgs. The margins sf drugs for whaieaaiers and retaﬁers are ciemrsnined by 'she assm:§at§anA{s} at the time «:3? givmg 9&3 agzspmvaéi for 'mt.1'-imuction of drugs in a partﬁcuiar territew, The {MS has siateé that MBU ané guideiines of CDAS grmsted on their website aisa reveaé that margins are determined by 'the Assoc':at§9n_ Umier the system af PS3 appravais, the CDAG takes an ammmt :3? drug gaer gategory fmm drug Sr'-1 naarmfactxsréng mmpanies for Entraduction/markieting Ce'? drugs in a particuiar tarritcury.

13. Whether practices of CDAG ére regtrictive ans} ant3»»::=:;=mpeti€;ive 22.3.1 On the basis 0'? evideznce ggatherad ﬁuring investigation the EMS has came m the <:omt:§usé::>n that the practices of CDAG are anti~c0n-zpetétéve and restrictive in nature since they mt snéy tend in cm"m'c:§ and iimit the 'sugwiées =33' drugs in the market, but aéscz, fix the Vmaaréins for the whmesaierg and retaiéers, nitimateéy determﬁning the sz-ﬁe price at' drugs in the" markeiz. at '$1323 335:: bean abserved hy the DE that if the practice of NSC is dame away with, there maid be mam suppiy sf drugs En the market and censecguerziéy mare axxaéiabiiity sf tise drugs for the commas man. Tiae ES has aiscs noted the': as gar guideﬁnea, a ziiscigzeimary mmmittee has baen cisnstituﬁci is cii5e:ipEi:':e the members, This Show that the a$$£::»<::Eat§0n exercises c:::sm=;::iet.e ctsntmi over $23 memberg and in case of am: v'a':;:§a**:';z:3n cf guédeiines, the memizrars are aim punishecﬁ' 13,2 The SS has conduciexd that the practices m' {DAG are anti casnpetitive 3:0 the a2>:tent that margins are fixeﬁ for whsiesaiers anti retaﬁers, prices are iieterminad, and thea sugapiies are rests'icte::§ in the market.

14. Riﬂe amﬁ §nva%vement of members an' CDAQ $3.1 As regarcis the question as in wha are the members ca' {DAG reggxmnsibée far » >\ E conciuded that it is the U1 LIT exeszutéxse/main mmmittee of asgeciaticzn wE1':ch takes decisions cm behaif of associaticm. Such members are w e'4k§§3s::«rt {ﬁe S3, Mahesh Nam, Akhtar Shah, Sarrmsh Fcmtiekar, 'Je-n¥<atesh frabﬁmu Qesaé, BM Praéamz Desai, Daria Ram M. Mapkar, Lyman E)' Siiva, Ami: Kamt, Sudesh Maéio, Rajesh Coﬁvaikar, Livia Vaz, Rajaram Gawas. Further, Mr. E-ﬁemant Pai Angie and §VE2~?:f3() V32: in their" statementg have 3335: named gvaessans, w?zr.::» aazcmding ta 'them, are acﬁveiy imroévezi in the am:i--::<3m§.:»etit§ve gzaracticeg. 1<iL3..1. The {M3 has aiso quoteé the faiiawing staiement <3'? Hemant ?ai Angie in this regartﬁz "' Q. Wm are the mambers 5f the C.3";erm's€ and 3rz.:g;g:".:;*f: Assacfgzﬁarz, C-Sag: who are active g:»a:*i£:§;3c:ent3 in the aﬁairs 0f the Assacfatiarr and ail their ether gtzffeged c::3t§%{:9ns;3s€§five practices ? Ans. 11. The main perscm is Aibert ﬁe Si? wfm £5 President sf CD.-M3 arm' is partner of C55 Em:er;3:'§ses. A3? execastivg camrﬁfttee members win} are whciessaiers Eike - Raj Esziemrises (Prep. Rajesh (1'c:}fv:1§§<:c:r}, KM Enterprises (Pmga. Mafznesh Naik) Ema? Pharma Pius {Qf which Ssznfresh Fandekar}, Saba Wmrma (Pimp. Sam: Mep£<::r},. GAR /isgenciesf {F*a.rvrner~ Ymfin Mafia}, E3'5E§w: and' D'S;'3va {Pz:::'tne:'~ iyndan £3' Sifva) are ﬁﬁfiife pa:'tici;;ants Er: the a5sa5:.°'c:fE0n. in addition', Pmkush Shankmxaikar, Partner af Eﬁmggzria ﬁnanm, csizhmzgéz net part ef the \\ :3ssac;"mfiQr: is {rise ac ' §§f'"'}s:.\af C£3Ae:3'."

" " \ / ;/«/4/.'1.""'/ / 58 141.13., in the murse Q'? investigatian, a ietter fmm one, Shri ixiadi-9, jauhri cs'? Naashik was received £33: tha BE in whim Shn jagshré pointeé mat towariig antbcamgsetitive aractices :3? asssciatiang stating that they are angageci in givmg page agapmvais and fixing margins cf trade. He aim requested that his ietter aimzg w':?;h gaperg emsizised may he made gnarl: {sf 'énvezstigatian report.

15. §C~m1::§us'mjn35_§n t§3g§:_3_§ regari 15.1 Cm ma £33523 9? the evidence miiacteci 'm caurse «sf praceeﬁéags and stai:em&nt.s :3'? persons remrdedthe Eﬁhag c:;mc2ueie:§*:§aai: the assssciamns, amt rnniy Emit and cantrmi suppk; Q"? dmgg 'm the markset 'ihreazgh a systénz :32' ms apprmsais, bu? aise ﬁmit ami ccmtmi the member piayem by Erzsésting Van need «sf NSC 0'? a$$0€:§ati::m3 far ag3§3a:§m:snem: mf' smcicésis in their areas :2? apa=::'at':on:s. it has a§s<.:3 been s:0nc§;:de»::i that the assaciatiasxs thmugh their guiiisaiénes and ncrms ﬁx margins far the wfmiegaiers and re'i:a'eier's, which has the effect of desterminatiun at" we ;}¥'i£2€55 3%' drugs we the market. AS per the fmstiingg an? {E6 these praciices and conduct sf CEEAG are viaiatixre 1?.

After examining the {entire matermi and suppienzentary report of {M3, the Qammissian in its maeting held rm 2E3.{3£%.2{}l1 decided izhat a ccjgw :3? the D13 ;'s:.>.;m:'t be sent is we §nfar'man_ts and the Cﬁké ta Envite their comments ,/ srgﬁzxjerztians. 'The Comrmssiszm aim directed the partieg to amaear for ma% hearing, if they 53 desire, on 19.83.2011.

The €:Z'.0mmissi::m further szunsiziered the matter Fm its. maetings heéﬁ <::':r -- i9.C35.2{}13., i3'3;£}§3.2aC'1'§.,A 3€}.€}6.2€33.1 and 2'.L€3'?.'.1.';{}i§.:3.. The: 3;'sfe:>rman:ts ﬂied their written suinmisskzns e':i3*:eﬁ '.§ﬁ3.{35,.?.£31.1 &£'}€:.{}?.2C%11 1;LG?.28i%.1 wherein they reiterated the aéiggatésns snaéie in the cmmaiaint arm befme DE: which grimariiy rr:-aiate ':0 the anti-- comgsetitéve and rnmnopmistis warking of the (132333-'G thmugéx the draconian' gzzideiines for appeirxtrnem sf st::»::§<E52':s and rwagarding Em requiraxmsnt 1221'' NGC for a§}'§)O§ﬁ'E:ﬁ'§Ei'i't {zf stackists. "¥'heT Enfcarmams have aiso submitted that the ccsntentimn of CBAG that the suppiementary iswestigatian is in fundamentai viciatiang Q'? the {ismpetiﬁzran Act is a pism; 1:0 mislead the Cammissicm and to deiay the pmceedings... 'me infarmantgs aisc submitted \.

that the mentian sf thé§3&'a\§e *§_':§:§~%\b&fore Horfiaie High Ccmrt of 2%}.

E8 Karsiataka wherein the Commizsian is aisa a party is amther picx; :2'? C{J.éx(3'3 deiaying tactics.

'Em: CEEAG ﬂied its resgsonse is §3G's suppiementary mvestigatiorz regsort vide its repiies dated 2!«'£.{}ﬁ.2:ﬁi1i. and {}9.ﬁ?.?283.1ﬁ in the meating 0%' the Casmmsséon heici cm 21.€3?..?.{.')1$, Shri Yusuf mhai Yusuf, Acivecata agspeared on behaif 0'? the CSAG arm made maé su§3mi5s's::mse Thé gigs': 02° '§':?v=;e ahmve 33.:-3':§ rewies 3%' {:§}§'3.{i 'm the suppiementaw ir:x:es':§gation rgigart :3?' {RE is :23 under:

A: 'Preéiminarv ﬁbésmizng Sn hehaif sf CDAQ it has been ggcntentieti that the praceeiﬁngs inétiateci by the Cammissicm cm the basis 3? the QG"s Suppiemeniiary §:westigaiii<:.~n repart dated 18.83.2311 are net sustainabie in iaw as fzmcéamentaﬁ xrimatians sf the SiaiU=i"{)£"\f provisions of the Carnpetitien Act, 2352 have been {7_§'§€§_€Z3:'3, it ha?» been suiirmifseezi that the centinuation ax' these-~« proceedinga are requéred to he r%ev';e:=wed by the Cczmmissicn, in the light ii.

59 F: has been argueé that since véeiiaticm :3? the praviséans ef the Act was remnmaemied in the DG investigation :'epor's; dated 3.6.96.2G10, the Cammissézm was abiigeci ta cemzfuct an inquiry wider section 26 (8) of the Act, after consicﬁeréng the Qbjectiens is the {JG repcm: fﬁeti by the parties.

The CDA8 has COi'3'ié§\{it";?C§ {that gfter otmsztiusim its'? the hearéng fmm bath sides, ciumzg 'times saizi inzmiry heid an :§,2.3.ﬁ..'3;818 under 5e+:t§:;>:':

26(8) tn? the Act, the Cammissimi aiosed the case for arders am: rm indicatéan of any ::¥ir'e:::'?c%s;*m ta me 36 far' any further 3' suppismerztary investigation was given ta the partéaa éurirag the gait} hearing an 12.10.2818.

Based cm abmse it hag been argues? that the orﬁer of the Comm§ssim*3 directing the BS in amazing: further 1' supmementary investigaticm into the same .ma~t'z.esr,..afte:' the matter had been incguired into by the Camsmasian under section 2&8} ef the act and the case aimed far arciers in the preseence 02' '7.a:%;-3 gkwas mini ab Enitio in the \ \ ._"'//)3;

esa absence :33' any psrovigéon is this affect under sectécsn 26 cf the Act. Conseqwsnﬂy, the guppiementang inxiestigatiarz canﬁucted by the DG a*nd his suppiementary report data-3:::§ 1E.G3.2G11a:"e mm est and wéthaut any iegm basis.

The: CDAG: has further ccemerasieei that wﬁhout prejudice in tbs agsgsaraerzt Eiiagaiitgr at' the under (2? the H::m'b%e Cummissian Véirecting sugmementary investigaticrm anti :::::»mia.s<:1':§s"eg fur-ﬁxer §rs%s:e»:~3di:3gs based can the szspgﬁementary investigatims regart it is atsea ta be noted that whereas. a notice dated 1633392811 was 'gamed by the :36 tab the CEBAG tailing upan far gasgcmiemsmary Enfarmatmn arm' fbzing the {ﬂats far hearing on 2.3.§3.2{}13. and suﬁsequentéy hearing the matter on {3"i.D«¢.2{}:'a3'. anti written submissians were a§s::1» tendered by the counsei for CBAG an 08.§:1.2{:=t11, the CGAG was :~;ur§3:'§s.€:.«:i ts Emsw through the ncetéce sf Canwnissien ztﬁatc-:-d 28.G$;2{311 that the supgaiementary irzveatigaticsn repart was aiready submitteﬂ by the D3 in the Cﬁjmmhsitm cm'. K V33.

61 it has been arguecﬁ that it is agmarentiy dear amzi evident that the entére exercise of issuing ncitice by tha 3&3 is the resgondent CDAG and caiiing upon it to ;::rese%:':': Etsgeif for hearing cm 23.{13..2Bi3., when the suppiemernary {apart haci akeady been submitted an :i.8,i}3.2011 éﬁseif was cf gm meaning am this aspect s§mu§d have béen taken into acccmm'. by the Icammissécm.

it has been fursther mntendeci that an gmuncig mi' simﬁsr v':<;:ia%;§::n :3»? the s*ca>tumr3€ §:}E'(}V§5§0ﬁS 9%" {ha Act in a gimiéar case: 'Em §<arw::ta'iia Chernésts and §':2z'ugg§,sts {T§<'CD) has fﬁesi Writ Petiticm in the He::ars"b§s-3 High Cesurt sf Karnataka at the Principai Bench 3*: Bangaime vicie W'.P. No. 19S'?§!2G11, Since tha same hagai issues haw aim been raised in W33 1$3579g'2{}11 befbre the Karnataka High Ceuri and the mattes' is sub judice the Cammissimn shauéd keeg the present prcscaeciirigs in abeyance mi the matter ﬁs cﬁecicied in the Eiarnataém High ﬁaurt at Bangaisare.

E: hag be»:-an furthezr cV::mten<ieg_§ K35' abundantéy dear fmm twee {-32 Q3' c%i%re=*.:t'mg the Suppienzentary investigation was afmne in mcier to bring the matter whthin the purvﬁew 01? the C:3mpe's:it%on Act, 2='C:{)'3.' at esggeciaiw since the CDAG had vehsameniciy statazi in its written submissions dated 13.09.2B1{} that the affence, if any, was mmmitted under thee Mamgméies and Restrictive Trade Practices Act. Therefmaa by virtue sf speciﬁc direzctéons ism dawn in sectisn 55 mix'; :3'? the {:C}§'§'§§3€ﬁi§(3§'i Kant, 2{}(32 as waﬁ as sectian E Q»? the Gerzerat Ciausas Act, the Lﬁrecmr Generai who was ccmsiucting the":

invegsﬁigatéan un=::§ea* iéae C:3mpei:'a':*:{;n Act, 2382 muici have at the very miss: fmzniﬁ €;::mts'a\:en*Z§:::n W§'i§"1 the gammisns 92° the MRTP Act which was in existenszte at the time when the mmpiaint was receiveﬁ. The pmvisimns :3"? the a'fm*esai<:§ sectians are very dear, iuszid and can harcéixs his cii5;3uted. This Cammésaéan can aiirect an isivestigaticszz in mat':e:'5 which it receixéeg an transfer {mm the MRT? £:c3mm'ass'son sasbject ':0 the c:anﬁitir;ms Eaié dawn in the subasecmzns (3% section 66 of the Competitian A6332. it has been submitted that tbs: iaw is very ﬂeas' that if any viaiatian E5 fauné in such matters, the same can aniy 1? A be: that of the MET? Act and maxi; nth:-2 iZc>n':;::e't§'t§t>n Act, 2032. Thus, even if the Birecmr Genga'%:a "*~_;:;Ies'ztian, he can 'find such viii.

ER miitraventéon Qniy sf the MRTP mt and mint ma Comgsetition Act, 2:302 since the Comgsetitimw Act was ma": in existance cm the date whm the comrgxiaint was remivedw A530, the Ewmgsetvﬁon Act was mtst in force on the dage when the giiegeci infractions are purported ts have taeess cismmittech ét baa been submittoecsi that in the detaiéed investigation regmzzsri 0'? 2316, the Direcwr went hayond the scape of the iaw am found ccmvaventicn -;3f the Cgmpetitien Act, 'Z0132.

it hag been suhrriittad ':%1a%. 3!? the repcsrts 9%' the £3%re{:tor Generaé am in the cantexfit :3? t.%1e €Z«:>m;3Et§'i:im'2 Act, .2592 and he has not fmmd any »::Qntraventis:3n :3? the gr»:w§sE::ans ct? 'ma Mm'? Am: {which was 'an farce am the date Bf thee aﬁegeni Qffences 3:5 mmpiaineci). Tharefare, the present p:'o<:ee~d'mgs deserve ta be ezirappeci and quashedi in adciétisn tn the meiiminary £'.'e§§E'C*i§{}E'!S, it has been submitteﬁ that the {X3 has faéieii ta Carry nut an§!econx$:r1ic anaiysis in fesgyact 03' {ha agreement in bath the fviain . \G reievant market gr any antE»com;3g;t.itive it. No evidence shcawmg 54 Vthe existssricaé of any "agn:~:ement" between the members :31' the :'espancis~rnt SEAS has been submitteci with bath the said Reports ':9 shew the vioiaticm of secti<>s;3(3} :3'? the Act. it has been further contencied mat the CBAE3 is an asscaciatéen of Chemists and iimsggists and is tmreressé under the deﬁiwitian of an ''enterprise'' umier secticm M1} (3? the Act may {try viftue 3% the service 01' imrsducing the new praducis ﬁauncizeé by the Limg manufacturing mmggzmies 'thrermgh its 7tm§ie§:én.~3 and ::'narg§ng the 'A'predu»::<; 'snfarmatizan service {Fifi} fag" the 5356 service, The r:s:§e\:aw*:

prmdasct market far the CQAG has, tharefore, in be reiateai is this "se:'v§ce" tandem-d {iv the resgxcmciemt agsmciation aﬁd it cam sertainiy not be the "mar§~:e*t far pha-:*ma<:eut§ca§s in the state e:::f Gaza" as' that 91' "'u'rugs said £331 the gtackists arzé restaiierzx is the a:::msume:'s", as cietermined by the BS in Para 12,2 of the férgt repair. The CBAG has, thus, cantandad thai in the abgencaa sf an a;3§3:'{);:§r'§a'te gt )7.' xii.

xiii.

Section 3(3){b} drawn by the £36 in the kwestigation !"€;3::i£"'t, canmtst be sustaineezi undsr t%':e eyes :3'? 'iihﬁ Saw, it has been aim mntertded that the D6 hag faiieci to coiiect any materiai evidence even in szsppmt :3'? his generai and vague crmciusian except the statement :3'? the ccsmpéainants whécﬁ are fu§§ Q3' ieading questians anti suggestive answers wimoast having be+:~:n subjected ':9 mass exammatian §3'y' the CDAG ami. thes"efere, t":w-g' are inadrnissibésa En avidanm. The BS has shawn mamas:-st c§§srerg,am:i the: estabiished Eegai princigies 0'? examirzatéon cs? wiicnessses an math En exercise cf his pi:-war "under secticm 41 {2} of the slat and hence We tiaz:um~=3ntas'y evidences attacheﬁ smith both the reports are net admissibie in evkience, The CEJAQ hag aka raised the cententimn that the Q13 Ems based his ccmciusian entireiy cm the baais 3? mai aﬁegations made by the ccsmgﬁainants wéﬁzout an»; carmbmative independent E\1§C§E3¥'éC€ and fihe aiiegations being made E33»; irfzerested witnesses cannot be .2' \.';.v\' reiéesed upsn. The ia:ves3;=§g>af:" eéin conduct:-3d in a meat casual €56 manner and no effsrts were made ':0 coiitect wzmsite evidence by discreet inspection is vssrify the varacity cf the aiiegatians maé-3 in vb {:€:m"'::;3iaint.

8: §bia § The CEEAG has. 8359 suizsmitteé that 136 has faiied ta examine the Stezzkistg and dea§ers 3:": Gas wha are nut memiaers m' the resgassnaéewt CiZ".t.=?xc3, and W330 WEFE spaciﬁcaﬁy memzéaneﬁ in ms regrsbg siatesﬁ ;:5.:33..Q2ms ﬁiaci by the mm.

it hasﬁeen further suhrnitteﬂ that the fact that €Z§1:>:em§s;x';3 amzi Bruggists whavare not members of the resgaanriant CDM3 are r.:+;;era1:ingAbm':h ass s't%::¥~.<:§<ési:s anﬁ retaiiers Er: Gaa games to shew that ihés requére%meni: af abtaining a £10 mjecticsn certiﬁcate {ram the: CHAS does am: restrict the eniw 0f naw g3iayers in the market. M§§T§'s§ to Study and unazierﬁand :.'\.\ %haVV5~mi§sceuticaE senor' mciia.

The CQAG has submitted thEE*€ 6?

it is submitted that there is a Nationai Fharnwaceuticai Pricing ;\;2t%1arity {NPPM w%1§<:h reguiates thaa prices 0*? buik drugs smiai in %:'2:;ﬁia awcé 'C§'!8f{~3 exists a {Rug Paiicy, 1935 aniiauncati in September 199:1. We NPW. reguiates the ﬁxatien and revisicim :3'? priceg of mm drugs anti formufatiens anzi aim maniiors the prices .23'? both c{)nt:'{:a3§s3<* ciecantmiieci drugs $2": the mummy through the provisians cu" 'mg Drugs {Price Catmtrci} Grcier, 1993 {£3§P€IC}). it has been gaéimted {mt that iii? Sate rm <r:{)m§;)§a§n€ has tseen made tsefare the NPPA :"»:.:s' any xréaéatéasa G3' 4:323 i'-*PC{} by am: member 0? the respizmdient CSAQ. Thna MS, has faiieci to examine this e:::sem'ia§ asgéeci (sf the cage in %':i5 Eegzaorts.

Accceming in me su§3miss§c:ms made by CETIAG, the margins aiiowed to wmiesaierés and retaiéers am fixed at 3.5% far ::::mtm%"Eer§ drugs and trade margins of the ::3emrr'cre:3§ied formtsiatéens have beeh znentioneai as 2.{)':."E» for retaibers anti 19% far WhD§¥3S':3§E!'S as per the mrms cs'? ~DPCO. it has been painted mat that "tmz game traiie n":a?rg'm-SA V have beers memticmsaci in ti} V :3 betwean the »*\%€Z%CD and HSMA and 01393 prQda:ce<§h p§a:;§}a\§':;::t and reiiecé upcm by the {'33 £36 in his rszpcrts ta <:on£:§u.ci&= the 5:3 szaﬁied "fixat§sn" cf trade margins by the CDAG.

it has been further mnteneied that the DEC} has aim faiied to remgnize the histury behinsﬁ the maciicee (sf znmaixxing, "via c:b§&cti0n certiﬁcate" §%:ar'macea.2tEca¥ comganies from the ﬁtate Assmﬁatiun rm' Chemists and ﬂruggésts. 3%: has been gubmitted that this garactice was evoived ms the recammemiatians m' the Masheikar Canamétiee agsgzxeinted by the Lﬁszicsn Heaith Ministry of the Government :3? india. The regmrt cf tha iviashs-23§<ar Cemmittee reccrmmended that the Chemist anti pharmacists thrceugh t5j3s=3ir asmciatéon shmsid act as "'w{m::h :€<:»g"' ta prewzmr entry of sgsurfous X dcmbtfu! quciiity drugs of mass purchase from unm.ethar.?zed smsrces and had speciﬁrcaﬁy reéte:'atec£ that mi} indie: organization 5:3' memists and amaggists {ASQCG} shouéd may an active role in educate their members and is cosperate with reguﬁamry aw:h0:*itie5 is eéirnfmrm 5:339 'Vo}°~As-mrzicxus £}f?d gash 5i°z::.m::§g;2;' caammfntee had noted the hggrﬁgcy éndustry, 'trade and their memizsers. 'fhe said vi.

vii.

59 other pr:3'a'ssss§0na§ aszaeciations inciuding the ASOCE3 'm preventing the mempoiistic activities 0'? §arg;e ;:ha:'maceut%caEs mmganies. That the MQU. was gzigned §3E*?i\I\I&"~.'E§t't the AEGCB and £BM.»'3a and (39% in the abmre context and bases: an the recommendations :32' the Masheﬁkar Eammitta-we s,atZ-**;Lere%3\,: the trade :1}? saie {if géiarmateaxticaﬁ ;m::du::.ts *E:?3:'e:3ugh chemists was Qrganizeaﬁ in acc:0rV:iance.wi1:h 'Ens EEPCQ and the practiae :3? abtain'sng "rm---0b§ect'a02?s a".'.{ﬁ3"f§§§{'.a"iE.T'" {mm the State ievei ass::=c'éat'sons sf Cheméstg szmi Efgruggisis was-.2 evaivezd ta curb the praéiferation of Sarge number 0? staacieistss. arzﬂ w%m§s$a§e2's at the cos': 5% smaﬁer retaiéers. Thse £36 in his remrts §'iES zzczmgzieteigx cve:'§{:20¥<ed the grawih <3fca3m;:aet%1;i{m in the psﬁxarmacy trade and has faiied to retzagnize the effnrts made by the Apex arganisatécn L3,. the NOCQ in mrganizing a baﬁanced reiatianship bzetuveen 'ihtif Earge pharmacﬁutiztak mmpanies and the smaii reiaiiera. it has; afsa been mntserztiesi that the 33 has aim j§ai¥ed'to examine 'T' aghe aﬁegz-ztiens made by the:

2.1.

3'8 ccamgaminents regarding the atiéegeé mie ef the respomient in restricting the entry or? new eteckésts.

The Commissian again censidered the matter ﬁn its meeting heid en , 21.10.2811 ant} deemed rte {erect the 313.5533 in fiie its ﬁnancéai statements fix' me feet three years anti eise §e"f'§'i?e ihe ﬂamers 0'? its office bearerg year- wise since June 2889 Lee. the eeﬁeci when ccamgyﬁaim; was ﬂied by the mf::>rmz5mt. in respense m the direct§::s:*:s ef the Cemmigsicm, as regﬁy' r.z'a*:.e::3 Q-'3.

gm-Ix 1.2811 was suhmitteaé by the ceunseé ef me Qepesite §3*arfr.y zxrhécéa was; ceesidereci by the Cemniisaion in its meeeng heid en 15.11.2011. in the azeiej regzsiy, the dkectims given :0 the party wide Eetter r.:Ee*;eoE»{31.3.1.2€)'i3 by the Cemmissiam havee been termed as Eﬁegai. uniawfui and unsL2.sta'mei';»§e. The gxarty has further caﬁeé epzm the €:ems'n§ss&e§*: tea Ehew any eroviséon Q?"

iaw which permits caiiing ef sucﬁz infermafaen. K-Xfrer censédering the shame seéezi ietter sf CDAS, the Eemmissim: passed an Greer en 13.12.2311" to the effect 'the: whenever, the Eienwmiiisien ﬁniis that an enterprise was in breach of See~.%i~ee».;'i er 4 of the Cemeetirtion Act, the Cemmiiszéen, apari fmm ease ens has gmwers under Sec 3-' §\'

23. "31.

2'2' 0? Comgaetittien Act to impose peneity upto net more than 109% at the average tumtwer fer the test 3 precetﬁing ﬁnanciai years. in case 0'?' carteis, the €Iemm.és5Em*s hes: {sewer te impese peneﬁtxg ttpto 3 times of the proﬁt fat each year at the eeetinuence at gush agreement whithever is higher. in view at the above emviséen mnteineti isgﬁectien 2? at the tlempetitﬁen Act, Ccsmmissien tzeﬁei that it is 'uneetetive that the party ﬁnvsiveﬂ in 3 case befere the Cemmesion shetziszti supptg the requisitet intermeticzn {meet its fineneiei states, §m:Eed':ng the tureever $1 ereﬁts fer test three years. The Cemmissien fer the §2urpese at dtigchatging its functmne can even etherwﬁee salt epcm the cencerneri pertiee ta we each and every reeuireti istfermatien. Non fiiing at the requisite infetmetéen is kzzekeszi upcm serioesiy by the Eegésiature arse Sectien 43 of the Cenmetitiee etzt etovicéeg that it any gcaerstm (wttich inciucies an esseciatien er an enterprise) faiia tn tempt; with the dirtectimts ef the emissien at with the directions of the D6, seeking 'mfcurmetiert than gush perstms is iiabie to be punished with fine, which may extertdtsgate Rs. fi.,ﬁQ,$3{){}/n fer each day , during .such ccmtinuence sf refusai :~3ub;'e{:':: to a maximum of Rs.1,QD,G€3,Q{}§3;'«»., Theretere, iew being very dear 4\"

can the aspect, it wee heid "on that n:;m»submi5s.§en at i'«J z'e«:§uisite in§0{ma'tien% by CBAG withcut reasonabie cause wiii hamper further pmceedisigs in the matter. The Commission, tfzerefcsre, decéderé ta §n§*:§a:s: proceedings againgt CEHXG under Secticm :13 Q'? the Act. The Commissian 'fu:*the@' decided in accard apportunity t0 the Asgaciation :3'? being heard in perssn EH' thrcsazgh their autmrizeeﬁ s'e;s:'esentat'we an

13.Zi,2.2{)11, if 'at 5:3 cieskeci.

The Cnmmissicn thereafter Eigted the maﬁa: €95 13.12.2811 ta amsfusier the égsue sf E:°;"zp0s§t§0n 0% p£-mam; an C338 fer m3n~g3ra:>vEc§?mg :3? infarmatizzn as reqzséreﬁ by the Co+mmi5s;isr:m. As am we mat appearance on behaéf Q'? CDM3, the gmanaﬁty gsrocaetﬁings were taken up £'3€*;*I}{Z!3'.'£'. Tm Commissicm mated that {ZDAG has deiiher;-steiy and pu:*;3:::sa%"uii:,: refused is gar': with the inf0:'ma1:"_i:m am} has rat§'ser*qu%estioms:d the autharity 0% the C0m:':'zEss§<m is ask far the informaﬁzam. in View of this. conduct, the Ctmmissian 'smgzmsed a penaﬁty of Rs. 25_,G£)(3!~ gxer day an CVDAS fer mm furnishmg the requisite infsrmatiun w.:r:e.f. 13.12.2811 fer a peristzeci <3'? 3&3 days. in case, the ';nf0r'mat§0n is not furnished within the 36 days, it was ﬁecieried that the penaity shaii he Rs. SQ,{}{3i3;'-- per ﬁ§;{..§ar~t%;e ;Q§xt 30 days and Rs. :i,£iO,ﬁ{)£',?,='m per day thereafter, tiii the pen§i'§. 3 u«§§:\x'gatas to Rs.1,(3{},{}G,€}{3£Z},»'».

".73 ESSUES The maﬁer was the§'eaf1':eAr considered by the Cemmissécsn in its meeting ﬁeid an {}5.{}1.2§12 and i)'Iv'.{31.2ﬂ13. The Cummissicm hag ::a:'efu!§y <:t:m57:r:£ered the essentiai issues raised by the infornwants in the instant case. the submissicins maﬁa by the CBAG before the W" the exaiéence gatherecé by the {)6 in his first investigation repart anti the su;::;:~,sEe%me:':tary 'i,m:estigai:Ee:a report as weiﬁ as th& repiies ﬂied by the {CW3 and tha E:':fQrn2ants in !'€$§.3:3§'§5§€.': in the natice :31' mag Camrdszsion. ﬁr§"car thomugh ;2emsa¥ cs? the aforesaﬁd dcsmsmems, the foﬁiawirxg issues a:'§s=e£ far <:ons;Eci$ra;t§o.n arid determinaﬁmz 9f the Csmmissicm in the c:«:se:~ iﬁwheizher the ;sre+s%en't Enformatﬁen can be .e:><amE:*sed under the provisiens sf the Competitﬁmn Act, 2062?

(ms? "me ansswa-2r tn the ﬁyst issgse is En a'Efirmat'we~,, whether the canduct and ps'ac§;":t:e5 mi' CD!-KG are ant§--c0m§aet§tive and in vicsiation sf 5es:'€&on 3 ca'? the %_&ct?

{H§}\."\fh€3*ihE3§' the members :3'? Ex;ez;4;;= \~§;_«;;;mm':%;tee <3-f CDAG are 335:} ﬁahie Q") .

3...;

"I4 Seterminatﬁgm an? issue Na. 1 CEIAG has contended that Eris dear {mm a reaaéirzg the provisicms Q? the Céslmgxetitéan Act, 3802, MRTP Act, 1%? and Sanerai Ciauses 33.22%, 139"? that after the repesﬂ :33' MRTP Att,1§%ﬁ§ by the Competition Act, 2962 the aL:$;hm"z':§es unciar tha MET? Act, 136% viz" the MRTP Commissicssj as wail as . V the BER cjeased to be in existenne and the reﬁsavant ;:r0v§sia::=n$ :32' the Casngxetitéon fact, HES: g<;?w3m the pm<:e&cEmg$ am investégaﬁcn uvﬁaich were perzding unéer the f'vﬁ;R"¥'P Act, '3;%§ befme the ccemmencement sf the Comgetitimn Act, ZGQZ. Since: the autharitias undar the MET? ﬂack, 1*3'E39 ceaseﬁ to be in existence an We commencement :3? the Canzpatétian Act, '2ee2_. sec-am saga; :3 55(3) 0%' the Cmmpatiticzsn Mt, ZQQZ prcwidev for ccmtimsance of the investigations arm gmceedmgs under the MRT? Act, 1959 iasfere the mmmemrement (If the Compe'ti':i<3n Act, ZQ02. it has been cantenaied that, hmwever, it has been saeciﬁcaiiy pmvkied that such mending matterﬁ shauid be deaﬁt with tamer the gwaxsisions 0*? the MRT? \.

25.2 263 26.4 42*" "

Section: ﬁﬁiﬁ} :33' the Comgrsetition Act, 213432 pmvides mat aii irzvestigations or p:'0ce»saci%s*:g5, ether than thosaa misting sic: un'?ai:' trarjss: practices» gsesuﬁng i1§§;V%aTL.&i;'€sc<:€;r Genésrai :3'? Snvegtigatirzsn and Registration an GE" before the z:::::':'::'nem:&::'ne:z't of the Competitian Act, 2082 Act shaii stand *:ran%$"ferre{3 to i:?:&*: Competéﬁsn Cmnmisséon sf maﬁa. Therefore: ag gar EIDAG, this; CGE"s"§§"ﬁ§SSis:§§'£ can exercise iurisééctien QR33! in Envegtigatimas us' prcnteeaﬁéngs in matters mthe: than them raﬁated is Unfaﬁr Trade Fracticsas which vmres gpamiiing before the {Wetter Genera? :3'? investigatéasa and R&g':s~::r;=2"§:'zen zmcier the MET? éct, 1962?. On the atﬁer hand, §rwest§ga':im's at praceeeciinga reiati-ad the Unfair Trade Practices are 13:; be hamziiezi cmiy by the Nations? Cammigsmn under the Ccxnsumer Pratectiaxz Act, 12386.

As per CBAG, the ingredients for "Re5tri<:'t§ve Tratié Practices" as ﬁeﬁrsedirz :~2é2ct§0n 2 {9} 035 the MRTP Act, 1969 is that there shozséﬁ be an impasitian 9*? u:1jusﬁfied cast €32" restréctian am cansumers by manimsiatican asset am: in. the said sectima. Secﬁczsn Rim) :3? the_'§g§R1E,g§ct_. 1969 c§ef*mas Trade Wactices ' , '$69 deﬁnes Unfair 'Trade 2&5 marmm'.w»hats.Gever'.

'35 Practices. $3.3 per Cﬂﬂﬁg the aiiegatiens against it 35 in 'me cempiaint fmm M/s Varca aruggiats and Chemists and athers {on which the entire saga has £0s'z§.m<2=nced) we --4:«:3v=:~.sr£-id u--nci--e3.r .s.e.ct§cm SENS} 0? the MET? Act, 1.369. Thus, CDQG s2§Lim'.€f't€3§S that the a§iegat§:3n:s against {ZDﬁ'x€L-3 are at the mast in the nature 3'? Lmfair Trade Practéceeg and tﬁaerefore as prmsédsﬁ under SE*C't§€2¥f'i --.*5~'.'}{".3}--8'5 the tampetitian Act, 2882 arm; the Natienai {:<;an$s.;s*a:m ~ {Zommissien has the gaawer and aut;hz:»rE%:y tic; inueatigate Erma the same uncisx the Cansumer Protection Act, T9536.

m Eight :3'? the :ab:;we subméssicms, EQAG has emphasized that this Cmmmissicn haﬁ exceeﬁeii its; jtifiﬁdiﬁiiﬂﬂ anﬁ hag takan :49 a matter which it is not entitﬁed mar ermsawereé 22:2 and a::cmd§ng§y the order :33' this Cammissian directing 'me Directm (':3em';>.r'aS ta investigate: the matte;-r uniﬁes"

Sectmn 26(1) 0f the Corngzetitian Act, M302 is iﬁiegaé, uniawfui anti uétra wires. Thus, 'sthaa been argueci by CDXAG that the irwesiigation Regsart pursuant to $U€:}'§ mder is. of am iaféa ' at 0:" conaequence in any . .. \_ 25.5 7?'?

Further' {IDAG has cmztenciedi that under sectian €€at3§1A} and Sactécan 6t'3(1E3} _ of the Canwpatitien Act, 20:32 35 weii as under sec'-zian 6 :3? the Generai 5 Qéauses Acts 1397; the re;)E2a3 9f the MET? Act, 869 dues mt affect its previous Qperatian mm' anything duh: ﬂame :32' Suffered thereunder neg' any right! pr%vi¥e%ga, abiigaticm cs: iiabiiity accrued, acquired er incurred uncisrsr the MRTE3 .5\C ?f_,;. 3959- arasci any gsrmzeeciingg er remeciy can be §§'%Sti'€L§'iE€5, continued or enfmced as if the MET? Act, 19%? hazi nut been regeaieér Tharefare, CD4-Mi centemsied that any ac: mmmiitteﬁ ﬂaring the currency sf the MRT? 53:63:, 1969 azammt he caﬁed in qmaestican unmet the Camgseﬁiiian Mt, 2302. Furthernmre, it £5 expressiy gﬁzwided 'mat the ;3rovi:~;'s0n5 of the MRTP Ant, H69 wiﬁ cméy be agzygiicabm ta pmceedings whim iwave been instituted under 'aha MET? Act, 19% "EEFQRE" the cemmencement ef the Camgsetition Act, 2082. "£"hu5,, as per CEEAG, the pravisimng of tha Corragetitioﬁ Act, 2832 cannot be agspiied under any circumstances in the mess-ant case ami any pmsecutian 02* pmceeciings are it: be in strict at:::m"c§an:e'ef 'the MET? Act, 1§ﬁ§% a::m'ixg as "she entire matter is based-{ah 2% "

E' V"

mmpmint dated 3:%;":.{}5.2GQ$} Cen*1;;eti'ticm Act, 2382.

26.8 178 Therefcure as per CEWZS there Es my gzsrmxiséen in the Competition Act, 288?. whereby the said Act has been granted retmsgaecﬁxxa effect. Therefore, uraaier sectéan S {3} of the Geizerai Cﬁauses Act, the Campetitécm Act can aim; be s.=:nforced and Emgiemented afteév 14"' Gctaber 2969 and not prim therets. Thus, the :.::.::'2;:-.Ea3r:t dates)? 1ﬁ'{)ES.2,Q{3§ ree:eived fmm M15 varsa iiiruggist anﬁ Chemist shaﬁﬁ have to be treateﬁ and disgzaseti gaff eniy. un<3erT '.1 E982 uni:-Ear any civcumstanaes. The eniy pmvisiens of the Cmm33et§'t§%::m Act, 3982 which nxasg be emgxkzyeci in the prezsent mater are $e{:t'ir:ms 5%} {iii} anti E35 {FF} :3? the Carnpeiitierz Act since: {they provécie for ctsntinuity of the pmceedings 1' %m:e5t.§ga':is3n5 in View 0'? the émmeciiata dﬁsbandment cf the MET? ﬂammission and the BGER. However, any persai prtxvisiezms or viaiatims, if any, shaié be scﬁeiy and ex::§us'sva2y subject is the pmvisicms of the MRTP Act and mat the Campetitiun Act, mm.

in view of th'e"-C:::mnz's-gsian, the preiiminary abjectéms taken by the CD!-'>.G -' A are tantrary tn the scheme of the Act and the §ega¥ pﬁﬁitiﬁﬁ can this aspect ggixffiat H::m'bAie High Cmzrt. cf ileihi me previsémus {pf the §'vi$§'§"P Act, :i.%Q and am': under the Campetitﬁon Am- 79 in W33. {C} 5305 J 2038, intergiobe Aviation Ltii. Vs Csmgetitien Commission :3»? india 8: Drs. decided an {}§.3.€3.:«':C1i{} has heici 2:5': gimﬁar 'assua ma': V».-'?':-*;=.;'e;=a the investigatian by the QGER, MRTPC remained Encomptete and iihe matter did mt :::'ys:ta§£'s;ae min a 'case:-' befora the MRTPC, it was neat incumbent on the BEER, MRTPC ta tranzafer the case to the Co+m;3etitian Agipeﬁiatse Trsbunai am siéammission. This V§E3'W was reiterated by the Hc3n"bE»<.=: High Court :3'? Eéeihi in W.P. {C} ??56;' 2918, Eujrat Quarﬁian Ltd. VS Campetiticm {:G¥E'3§"f'§§SS§sZ§i'e cf Emiéa ELUW. decided on 23.11.2316. in this sage the ;3et%iticmer azivancezi me argumem: that as the matter was pendirzg before DEER, MRTPC the cage might 'as have been transferred in Cesrspeziitzian iixppeiiatez Tribuﬁai arm net is the Commissicm. it was aiso cantenzied that the Cammhissims had me pawea' is $3335 Gffiﬁf uncigr 5eci'z:m Zﬁil) in such matter and that the Cammissicm had in gamceed unﬁer tha gztwisians 0'? the MET? A::'z. Th:-2 Eeihi High Court reﬁected thes arguments raised by the petitiener and heiﬁ that "Z:'"his Cauri: finds that since the invesrfigatiarv was inwmpiete the matter was righfiy irrzznsferrerf $9 the CC}. (in further consideratien 43;' fire zncmariai an record the 2:753' farmeai as primzz facfze opinion In preceezi under %S:3.e;«i:§v ~£:ﬁ§:i} :23' the CA. Thia was 'mat ::on+mt::"y to Secricm e*':35{5} --i'%-:1 ﬁpssfbie in the zraurse of xii-

215.10 SB investigatsbn that the D6, Cf! forms :3 prima facie apinim is gzzraceea' under the prowTs:'z:;»ns mg' the (IA, 26332 iisgif. Were 55 mt: ifiegafity per se in such 8 .-::e:*£f:"s:'3 :33? DC-?, ¢;Z"{T.i."' The Commissicm mates that the g:rresem: matter was mm bafcsre the BEER, MRTPC an 16.£)6.2{)€39 and se::.*.?._i.r:.+e*«--j;~?.%-- and «ti 9f the ﬁompetitimx Act, ZGGZ aieaﬁng with anti~cumpetit'zvEe aanciuct were bmught into: force on 23.05.2899. Fm'thsrm{:s:"«3_, an ﬁémg :2»? the comgﬁainzt the BER, MRTFK :.mﬁea'tm3¥< the g3re2E§minaa"3; imesiigatien vmicéz was gm: pending when the §v'§R'§'P Act, 136% was regeaieﬁ xside arﬁinance oéaﬁzeci 1»3~.1C!.2£){)§, As the imrestégation haci not cuiménated irs't<:: 52 Ease" the: matter wag rightﬁy transferred iii} the Campetman C0mm':s3%+::m by the DEER, MRTPC irwaéqing the garcsvisiems sf section 66%} :2? iha Act as the aiiagatians §nvo§ve::i in the <:c2m;:Ea'mt were reiateci is resstrisztéve traﬁe gzractices cf CQAG. Even a piasin reading 3%' sectian 66%) of tha Act cieariy demonstrates that on receiving ths-3 mattﬁrs where invastégatﬁon wag pending, {ha iommﬁgsion may order far czmduct of the inwa:-:si§gat§m /inwthe mamzer as it :.:§eems,.ﬁt. ﬁf we Cezxmmisséon were in mder izwgﬁ ' A?i%'~sgch matters, the ceniy section 0'? the Act which empowers tife gm;

SD is sectimn 223 by treating S}.

the ccmpiaént as infcrmatimn unﬁer the iiemjpetitian Act. Further! an res.:e':v§ng the matter the orcier far' investigation under section 2&1} nan be passaed aaniy 5:" in the View of the Cummisséan there existed a prima facie Case of viaiation cm' the §;3:'m'i5§{3ns 0%' Campetitian Aii. As the mmpiaint fised befcsre the DEER, MRTPC wag stééi at the stage Of meiiminary investigation rm r':ghi:, iiabiiity, ;'.)fi\!§§€.%g€-2' r2p,e§3§égatien can be Sam ta have been accrued to any party and, 'the:'ei'::3:'e_. 'the mmrisianﬁ of Eectian sssm} er 6§{'3,{3},referred Kay CDAS are net wpéécabﬁe in the present siv:u:_-st§::m. Fur%:h::'srmc:re, the Commiasian has ms": been carrferreci 'any gmwer ta aaﬁgnzdisate am: matter invmzing the provigimns 0%' repeaﬁed i\£iR}"F, Act. This; premése becomes sﬁear when tide p:"::w§si(3ri3 av? se::<:is:m% 653(6) are c<:mtras1ﬁe-ad with the prtwisions stzf sectéan E':§E{E.%} cf the Act Whereas {he Campetitian Appeiiate Tribunai has been specéﬁcaiiy mnfened newer tat} adgudicate caseg pertaining to mosmgsoﬁistic and restrictive trade practéces pemtiing befare MET? Comm'ass%m's in accordance with the §:>mviS§£ms ef regeaieci MET? Act tmdes §a{:t'mn 6513} of the 33.12:, am such mwer has been given its the Cgmméssksn under set:t':m":_,€.~5T(6§ <3?-tiae Act. in the backmog :3? the proxsésiczms cf the M': as anaiyaed abave th§'Cmnmi§sicm ﬁndg that there is e' «\--i mz iéiegaéity in entertaisﬁng asg' g "ﬁe present case under the':

26.3.1 82 Cempetiiirm Act, 2.Q€:.?i in which the investigaiésn was pending before *i:,h::

SEER, MRTPC befora the MRTP Act was rtegasaaieé. Furizher, even in cases where the aﬁeged an'::§~mmpe=:§t§ve z:z:m<:Euc't was siarteﬁ befsm teaming mm f::m:e 9"? sectém 3 and 4», the Commissiam has the ;'u:'éséi<:t'ion 'to ism»: mm such canduct »'si:.~:*.:;:s§':t%Mr*:ués even after ting enfcarizesmesmt cf reievant gsrovismsts 3f the Act. This pasitiorx hats'. men séi:"z.§ed by the H<3n'%:':§e High cam mi' Emmbay in Kzvﬁ. No. 1?8S---I ZEEG, étzingfiamsr Airiénes %.':€§. Vs Campemﬁnn ilommission cs'? Smiia 84 Cm. i2§€§£§d§;*»'.'3 can 31.93.2919, an the saicﬁ case, §'t_%°:as been heid by the Hxzwfbie Eambay Hégh Cmzrt that tixougﬁ the Act is net retrcspectixxe, it w:3uiri cover aii agreements covereé by the Act tmugh entered mic gtarior in the cemmencemanfa cf the ﬂeet but sought to be acteii upon rmw, i.e., if the effect :3'? the agreement mntinues even after 2£'3.S.2GQ9. in the present case, we matztiesres of Cms aﬁieged is be anti - {:{)¥'§'B§Ei§i".§\:'E have been fauna by {:16 to be stﬁi cimtimsmg am? there is nczthing on re-3:::::::'d 'ac; cantraciict the same. Thes"e¥ore,m View cfdche cuntinuance cf enforcernent en' the g.I,ui<ie%ine§ sf C§Z1A{3 and un:i~E'f7§'% "iii mg ,5 agreement amcmgsi: the \..

members em' CDAG which have i_§eg§ ts§3§§;a*»}%ga ant§~competitEve ssﬁect, 25,112 1213 U»?

tha pregent case is sqzzareiy covered by the iaw prapmmded by the judgmerxt 0%' the Hon'b§e High Czzmrt cf aambay in tine a*fm'z-zsaiazii case. The C«::«mmiss-.§e:m t.hszrefm'e E5 05*' the cansiderad \:Ee~.r~.r that in the Eight <31? legai pcssition as discussed abcve there is abso§u's:e§y no iiiegaiity in the prmzeedings in the gsrasent case and the arguments and the mntentéonss 0% the CDM3 an this aspect have na farm.

As ?'E%§E3£'i§vS» the cmtfsntien Q?' the CBAS mm the Cammissicm has :10 grower ts diratt. tings Eiifs ta sf.Em";f ms': sugmiementary iziva-;m*.§g;stE::n, this Commissim ié sf the cos'as2c§are<::£ véaw that we pﬁea tai-zen by the: CHAS is demiei C)?' any merit and is iiaiﬁe ta 'ea mjecteti. The Act has mt ysiaszed any fetter' an the power 0? the Csmméssicm tat: ctmciuct further investigation er further"

inquiry. The Cammissﬁen xfsde order ciatsd a2.12.2s3m, white ct.:msic¥er's~rzg the EEG investigatﬁan repmrt, hati natetﬁ that in order in enabﬁe it is came it) a primer cecmxzmsiers, at fzsrthm incguéw 'unit; certain asgzzact ':5 essemciai anzi accordmgiy had directezi the DG in conciuc: fzsrthes' %:wesi:§gat§0ns in reagaect 0'? csrtain issues speepiﬁed in the tiirecticsamwith a v's2ew~ 'm do cemgalete gustice in the. mattesz it is aim painted wt that ¥~':egL:3ati:3n 28 {6} 9*?' The \.

Compvatitian Ccrmmissicm csf EA "

gguiations, ZQBSE speciﬁcaéiy 353- emgzwwers the Cctmmissimn ':0 direct the D5 to conduct further Erwestigatésn even after the 136 has submititéed his report. I?

Z£i.13 The fiommzaséasz aﬁso "finds that as prazscedurai irreguiarity was cammitted £33,:

the DE whiie ccmciucting suppiementary Envestigaiésrm. in this mgarsi, 21 pemsai the nets 0f the DE fmwardéng the representatian dated $8.333-..:2Q11 fﬁed by the advmzate of the CBAG raveais that ietters. were written is the membzers cf the CDM3 try 'me {)6 far s:sbm'si'f;:§ng their p;*m*§'st Eaiasg accs::mn*?asA énd haiance sheeets. The adxescate csf Cmsﬁ hag'; ﬂied the aferesaéd segsresentatian ,r' abiecﬁcrn ta the sugagiementary Enxsessﬁgaticm ahaiiengmg the iegaiity 22%' the proceedmgs and at the same time amoging ta ignare the recguetst of the BE in furnish the requisite Ezifsrmatimn. The 38 haﬁ stated iii the sugzgjiementaw repsrt that informatimi regardéng finesmjai deztaiia were ataiieﬁ far from the CDAG» am the same WEE: be submitiad as and when it is suhmitteci. As the f;)€§ had aimacéy ﬂied the suppiementary remri 'there was m3 accasmn fear him is give hearing or daaﬁ with the ahgecticms raised in the reprasentatirm m any ':{2E3SE we C2bjEC'ii§OﬁS taken izxthe ?"8;)fE3SE§_'itE§t§i3§'§ were a§5o- Saiseci by the: CDAG an its repiy tea the sugmﬁeswaeaatarxgg and they have airearjy been deaf: with in the preceding paras {sf Ems artist and am this ccmm: rm prejudice has been caused in the CEEAG.

25.14 As regarcis the cententiém sf C§);9.i'.T» that we margins aiiowed in whoie seiiers and retaéiers are fixed at 169% fm: cantrczziied mugs arm at 3.8% fm retaiiers and fgsj whmée geiiers far the decmtroiied furmuiaticyns a5 pm; !3:'=,..=g., E-'rice Ezmtmi C1*rc§es' {DPCO}, it is acted that vxrhereas the trade masgins far the schaduied drugs is; ﬁstmi at 15% far 3 reitafiier as my ';§}»':"£§'&i 3.3 0*? me §f$¥3C£'3, ;'i§§3S, in =:.a:~:.e cf n{3n-s.s:§*;edu§ed drugs {non gmzze contrzaiiessi dings} the trade margins have been determineci for the 'w§m§e2sa§~a:'§; ram nat:a§Ears csgaratirsg m the pharmaceuti<:a§ market thmu_g%": an agweemen": iasetweesm tmz traofe assaciatians and the ;3harm%aceu'§:§:a¥ §nd+ustw¢ Thus, the E'»*"i€.)i3 between A§{)CS, 639?; and EDMA, wh§cE'a has teem': rssefermci in {>13 reperi:, has in fact ieai 20 the determinatéan $3'? the trade margim on 3336 cf the man §i.".'§"3{'3i.'§i§§eC§ drugs. The ::aAs has fuﬁiowed the guédeiines mm dawn by mam in this respect. EVER.

Hemant Pa": .&mg§e, member cf CDAG has cenﬁnned -mm in his statement _ _ T€E{2§3f:_€3_;E3§2i before the": D53. Gr: the basis sf aimve facts, the Cc.smmEs5i_:.'m finds " 'that the tracié margins are \.

25?.

P»:

'3**' gm:

212.

2'33, £§u+b:_sse:ti::Ln (3}__c>f $ec:téz:m iv? ﬁat I Beterm§:*'aat§an sf issue me. 2 Having decided the issue ma. 1 in affirmative, the Cammissicm naw gnmceeais ta aietermine issue {It}. 2. Le. whether the acts and gsractéces :33' CSEAE-3_Aarg_%eg_::?;§ ~-- €.'.:Z§E'!"i§3~Ei§t§\!& in nature. {:23 has tﬂmﬂ ta the sscmzziusécsn that éecigion in f:::s'm cf guideﬁines, actiang and practices of ESSA are antE~c€3m;:setEtive~ $5 tarmg ef pmvﬁsisna Q? sszcticm 3(3) {3} anti 3{3} {b} :3"? the Csmpetitism A::'t,.v ?.€JD2.The informants have agreed with the conziusiang drawn by the SE; and an the other hami the {:95-X63 has éenéed Enduiging imtstze am: ant§~ cmmpetitixve activities.

Since the {M3 has fmmei that the CD!-'x6 has vioiated the pravisians 0?' sectiun 3{3}(a) and 3{3}{§::} cf the ilampetitiun Act, RG32 the reievant §.y ha §c:<3ke+ci»int0<.whi:cE'2 reaﬁs as under:

(:2) {b} (C) {cf} 2?.!-';.

provisions reiatisxg ta an*:i--cr:2m;3e:iti%ve agreements, it Ea usefui ts t:c:sn»si§re:"' the--syarimus eiements 0:' sectism 3 cf the Act in some'éetaé=i.'-:~-- = Sectian 3(1) of the Act pwh§;i'3' s and gem-§::2n 3453;} makes veﬁd 355 agreements by Vassaciatiq' 8?' "Any agreement entered ism between £=ni'er;:.sr:'s§5 cu' asszzcfatians of ente:';:>rfses 3:' ;;:»er.::ons car associationg of persazsns x as' between my persan rmci erzierprige or practice: mrried an, or decisim tejken by, any a55c>£::'{3t§on sf eni'erpr:'se5 0:' c:s5c.rc;'czIion cf pemzns, incmcifng mrteis, engaged in ;':2'emtF<::::f or smwffar trade er mszzigian af serviceg, which -

c2°irectIy 0:" inciirectiy zﬁetemzines purchage or mfe prices; 5:' :3ev:?§<:,=;smem irmasémenf ar provfzion of5.<zrw'a:e5; 3325:?! £38 presumed 25:3 have an app:'eciab§e adverse effect" an {.'E3fﬁ;)€fi.f'TE&7€3i?.' PM the sgmrguose sf §3I'D§}Ei' agmesiation sf appiicaiaﬁity Q2' reievant 5 \'~ § \ x \ \._, _.

umiis as' mmfmis wacfuczien, Sappiy, mcmicets,' f:e:-3c§*2ru'c:::f as praductéon, supgﬁgg distributian, storage, acquhitian rm mntmi of geads ear mavisimss of sez'vi::.es which gauge gr iéksaiy is cause appre<:'iahis.=: 6

<m.mm§:;xEa.tion witmn india.

3'}'.S, Therefore, if any agmemem: resmct.s gr is iikaiy ta :'es.3:r§z:*: the mmpeitition themr'; :»,:ii§--'$"'a§§ fmzi cf sectéan 3 of the Act. 2"f.6. §u;'t§':erV,, secticm E'>{3} 0%' the Act agmﬁées-as net zzmiy it: an agreement entered Enrica betwiees': szsztergsrises as' ass»-:s::§:;2ti<3ns; £3'? entermiseg er perscms cu" associaticxrz :3'? pemmzs C3? betwezsen any g::~e:'s<m and .en'tsarpr§s~::s 'crust aim with equaé farce $10 the prcmtieeé carried an ear éecision taken by any assacéatfm sf erztewriges Gr sr5s{>ciaz?ic:n of pa-£'5c3r.?:; inciuﬁing ::arteis, engaged in identicm car siméiar trade 3*? gaada ansd grovisicsn of serviws whiésh hag the purpose af ﬁiresttﬁy 02* indﬁrectiy fixing prices, limiting autput £33" sakes; for sharing markets £132; custcrmers. Cmce Existence 01' §:mi::hib'§tEs'§ agreement, garactice «:3: decision enumerate'c§'-'unciéer sectien 38) E5 ES'§iE§b§3Sh{'¥:=Z§ there is mt: fur*i:her new' w ta» Show an effect on mmgetiiésn hecause than 3 ra§::uttabEe 2?'f}".

2'33.

effect of competition and is therefcsre ant§~mm;:set§t§ve. m ;=.m:h a situatmsx burden of press? ghéfts an the Qppaséte parties tn Show that S izf:'s§;T:;g«;23e{:§.--Tc<m::Eus::t doas mt muse appreciabie adverse effect an competitiun.

The next cguesticm aréarsﬁ-1-:£§'§~et§1er the CQAG, being an assacéatien :3? che:'éi5i:s arm druggiats in the state «:3? {sea is £€}\.*'E3§'%(§ uniifer the ztategcxry :33' entities emsmerated in sectian E;§3) sf the Act' m this respect the éefiniiicm 07? "L~nter;:;r'i:ze"' a3 previdegﬁ §n gectian Zih} assumes Significance and which runs as '¥z:)§§Qw3:~ "£=r:ter;3:'i3e" means as perscm £31?' 3 z:§ep::rfment 53' we {§:3ver'r:ment, whey or which £5, £3: hag haw}, engaged in any aatiarfty reiatmg in the grrvésicfion, sm:"ag§_. sumaiy, iiistribution, cscquigition D3' c::»ni'ro%i sf articies or gwdg, or the ;;rm:§5:'::>n csf services c>fr;:r1=y kins? .............. .. but dams not-'in£!a:m'e? any activity {sf tire: Eiiavernnieni" .»*E~§ata§!e in the sovweign functians «sf the i3£3iféZ'.*"f?€'s"¥€5':'2i' fmtiudfng mi 2329.

.11}.

BO €.':30vernm§.>nt deaifng with ammic en:-;»'.r'gy, currency, ciefenae and mate.

it L9 mated by the Commissicm that CBAE is an assaciaticm of wh<:3§E=.s%a%Eers and retaiiers at' Goa regican ans: is; affiéiated ta AEGCB. Pram the receards it is aim gathere.c!:-.t%1¢:£::-Eizwas registered unﬁasr the Secietéssss Reg'§s»'tra'i:°mn Act, 1363 in the year 336?. Eta; mnstituem: memb»:«.>:'s c;em;:¢:'ise at}? retaiéefs and wﬁeiesaiers sf {Baa A éist :32' me§"ném:"3 ha:

been emzi-::ss<3d E33: the S6 with tfza Enveatégaticm repgnri. The EEG has 'aiscs pﬁacezi an i'€i'C€3§'d Mm} of Ehemists anci Druggisi: As:s0ciaf.i::en,A {;'~:c=a, cwpies 2;»? Ruiz}; am Regulations and guideiinas ta be fcxiiewecé '§e:::*' agsgseinizmenti tes'm7:natic;m sir? sztmtkﬁst by aii pharmaceuiicais mmpaniesv incﬁuding awrvedic campanias seiiing thrmzgh chemisis. There is ncs ﬁigpute as its the fact that congtétuent members :3? CD.&G are staﬁkists and retaﬁers 2:31? g:2ha:'ma£eut§::a§ mmganies whee are engaged in ihe s«u;:»p§y cf pharma §3E'.s'Z}€3i3€:'E:S $0 the ccsnsumers. T§1erefc:re, they faﬁ scguareiy within the definétimra Bf 'sntemrisa' pwevideczi in the Act. 275.11.

91

agreementg entered intcs betwﬁen enterparéses or asscsciatisns of entermisess but aiso tha practice carried an ar decisAéon taken by any aaaacéatim of EI'I"£§:':T§3i'iS€E5 erzgadged in iﬁemﬁtai or s,§mE3ar trade 53%' goods rm pravision of services. There is am ztienying the faatt that CDAG is an assmziatmn af enﬁerprises whose szanstituent members are engaged in iaientﬁcaé er -siméiar trade :3? goods.

Tm-:~ ¥v3::sU, riﬂes , reguiatéons am guitieéines are refiectéve :3? t§*:e'c.::si§es:tiv& inizmt af '§'.§'3§Z* z:a:3r:::ti2';s.:e:*2t merrsbesrs haaeci ugcmn whéch ﬁe CQAG itakes e:ies:is§:::ms and me:r::§:>ers; in mm géve effect to the r.ia--':cis'ions by acﬁng ugcsam them? We CDAG £3 s:r;:-mmzzsecﬁ cf smc'k§st5 and retaéﬁers with ctztmmqan interests in traﬁe, which ;'--:;>§::': tageiher tn further iheir cammerciai objectives.

. The Cammisséon, therefore, hmﬁds that since CSAG is taking ciacisions reaming is distributéan and S%.3§3;3§gF :3? gharma prcducts on behaéf :31' the membera wha are engaged in simiﬁar m identicai traiie mf gmgiﬁ, the practices. carried an, or deciésﬁona iaken by {SAG as assczciatien <3'? 92 2".?.'13, St is noted by the Ccssmmssiaun that the Envestigatian i:ng'D{3 has feumi many aszfs and .:::;>m.iuct are part of CQACS as anti~::£>mpe3titEveA Therefare, §t is nscessary to e:<amine such infringements by CFJAEB. as aﬂeged in the Snfmrmation and féund substarafiatecé by the ES «in mcier is arrive at 3 conclusiorg.

Limiting the sugspﬁy :3? grshzswnaa proﬁucia 272.14. at ':5 ebserveﬁ by $;§"a:«:< C:::m<:n§ssi:m that in tﬁe caasrge :3? §rwas.tigat§::>n_. has has f»-:nm.ci that 'u'3?'§GL$S céausésa :33' Mew and guideiines ﬂamed by CDGA as weﬁﬁ as {ha gractice carriesszi sitm by E': restrict and cszmtrm the suppﬁy 0"? drugs. in {N5 regard the gui«.:§e§§nes Va'? C2363-X {maced as Ex%':§hit--<$ af sugapéememgarsg regmrt} EFE reprmimzsazi heiew:

"GU§C=EL§NES TO BE FGLLGWEE3 FE}? i5k§>¥'{)§E\§'§"E\fEE¥\3'§' f TERMi§\iAT!{)N C3? STGCKETS BY ALE. FHARMACEUTSCALS CQM?A§\E3E5 ENCLUDENG % em»:-Er\:z:$"?'s :ci\~f-5'.~""

§3 Deﬁnition: Stockiest means Trade and instétutiersai Stackiest. There shaﬁ be F33 tiéfferentiatéan between Trade and insfsizutémai Smckiest as a S'i'.'<G-:k§a=33t wiiﬁ deai with bath wings. 3! Appcsmtment ,.*' Termination an' new stockiegt shaii onﬁy be cicme with the permissian cf the Asaaciation, Since fieoa is a smaii state it shaii he cansiéereﬁ district éivideti éntm two ikéczrth €353' énﬁ Smith Qaam A new {:ompamy can Tmitiaiiy appaint away we sS:oc§<§es"t we in €sir.>r'£:h Sea and End in Scmth 630a Frefsrabiy. 'E"§°aes.s:: stockiest may :1»: 23133,! net have ﬁrssnchss. Aii siaakéest cmerating mar 22:: law: September, 1%? w'a§§ mz':t.imse in ha the stsckiest 3? thair respectixxé-2 ztainfvgzasizias, i:"re3pe:::tive of the n:.zmbes' mi' stockiasi in Gaszraa.

ASE furthar appaintments shaii he: made as gear the ﬁsﬁimwing formaﬁa:

when the average secxrsndary trade saie cmsseg 2 33:3, per nmnth, 3 third stockiesst can be appaimteﬁ. ﬁwerage means 6 mcmths trade saﬁes prim' to date of amziécaticn.

when the average semndary 'Era ' '- \ ii iaxzs, par mgmth, a fourth stockész-st can be appointéd = 94 when the axwage semndary trade saﬁeg are abave 5 iacs per month, a fifth amckiesi can he ammmteé.

There can be no rncre than 5 stnckiesi except in case :3'? me:-rrgers amti accguisitians.

Regoiacement of stmzkéesi is aﬁoweﬁ cm mndétiun the Asssciaiian is ,[..:;:st§sfied the need {sf repiacemerrt. taking inta ccmside-r;stE=-;s:: the e:0m;3am,«"s interest. The Asscciaﬁsian mam: have the cansent of "thé retiring .st:;:z:§<:ies: in writing in aiiaw saméacement. Hawe saver, Sé.3:":§"§ rrapéacement sémuid he esffetteé within six mrumths :3? 'th£=.~ East i:ws:>'e::a raised by the sugzsgﬂier an the retiying smckiest. Hawsever, £1? the current 3:-ﬁes are not within the abcsve guiﬁﬁiimzs mo .r«:«.;:s§a«;:ament shaéi be given {:1-.g. if tixem are 3 existing stackiest and if one ratires and if the saées are beiew P. iats me repiacement. wiié be grarﬁged. The ccmpany w§£§ hava ta manage with the 2. existing stackéest. N0 mutua§ 'transfer at)? stmckiest ship is permissibie, even with the consent Of the e;x§%sting steckiegt. Appaintmesit cf additimai stackiest even with the conse:*:i_.g2*E.K existing stoakiest is' no': Taiiawed. We decision of the Assaciatign is ﬁnai ci §g7g:}'§§§:*'sg; cm a§§ members. Any {}'f 3 retiréng member 'm'~:-§1:2s.:' fm" me wear.

imembaz' who wants to cietzse riavm his gaizarma business) wiii be aiicsweci in take ever the existing stmckiest ship of the reiiring 1% member, with a hatter fmm the reﬁring memiser to that effect. Na ether transfer :3? smckiest ship is perméssééaﬁe. Cmce a cempany agzupaints 3 stmckiest, no: further agapméntments can if any whalesaier takes stockies': ship cf 3 ~iZQi"i"i{3E3¥'3§f wkhaut the permisgéan :3"? 'me Asseciatécm, than '£1513 stcsckéegt wiii be terminateati and ha wiii Eyes; ﬁned {minimum 'Rs, Sf2éi)S[--} anﬁ ®§§§ nut be granteri pernzissian is take any new ste;:>cEv;¥es'£: ship fat' 3 iaerimﬁf of same year. 9R{3£EAE3URE Thmsa cs:m;3ar;ias whiz» are eiigib-Ea as» mar abczve guidemaes far adciitiaswﬁ atcsck paint shmxid give an suffer I amyeintment. ietter in miginai is the Assaciation ear is the whaﬁesaﬁer whom they wish is apgaaint. Such affer j appnintment: Eettar shnuki be signeﬁ by the Manager as' a sugzericr officer nr issued direcztéy {mm the wmgsanxg c3fﬁc'e can the company's Eetteﬁmaad. The campam; shouici expiaisz in abexre gtsérjelénes.

Tim W§"3Q§§EE=33E33" in '?CL3i'i"'i sheuiiri ihferm the CDAS eziciczssing the aheve offer! a§3§)CI§i'i"i'ifn"ie§'i'1Z ietier and submit the nacessary prcaf on which eiigibiiihg is based. ° The steering cammittee which is chnstituteci far this piirgimae shaii scriitihize gush aiczpiiitatien aria} issue i:;ieai'asice if the itomziiticns 35 per stz:~r_;i--:°:e::.:i :.~:hi;,) guideiines given shave are satisﬁeé. A§)§{)§§Ca'iliC}§'iS shrimid £33 disposed eff within 38 days hem the hate hf receipti Withirs ihis ;;ies'i0d iche cciiiimittee shmiéci ccshfirm that there ' are iii") imig handing issue heiween the cismgaahy and the existing smciiiest.

Retiiitihe ciaim ccinizaming expirs; ,1 hrezikage etc. iess than 5 ihohiths shoiiiei mt he heatesi as pending ismies.

Na stmzkiest shaii giaite drdhr is the campany hefare E"8{1§2§\r'iiig itiearance ciertiﬁcate within the Si§§3{3§E%i"£%3€§ gzieriod of 38 eaiaysi The fihai cieaianize shaii be given by the hresideht / Secriataw. in case {if any disputes in the impiementatiah of the shave §'i{'.>f§"{i§ the first » apiaeai: suihcarity shaii he the steerihg cemmittee, and th& fiha-§ i agzsiziaai iizrum shaii he the Stat »:hiriimee. \ S}?

An'; w§1::1§esa¥er viciating these gu§(§e§§nes:';.:s'acedu:'e shaii be aVs§':£eci is ieave tha particuiaf stackiast shigs arm? hé wiﬁ be debarred fmm taiimg :19 any further fines fer cane year and wiiﬁ have in may a fine (maximum Rs. S_.€3€3{3;'~}.

Am: iamgany which has vioiateci the g:.:ic¥e3mess wiii have to pas; a ﬁna {?\:§§n§mum~*E§5':' m.€3{3Uf~} ané abide mg mg fine: ziacéaizjn oi' the fksscciaticm.

Tina Zompamg shaii be seieéy reagszzswsiésie fan' the excazss stacks Vwith the existing smckiest. it 'as ths=: Lint»; 2:? 'ma xzanmasw to take tsacéz the excsasa stacks er transfer the s.»t.o:§<.s, is the new smckiesic. Tim eaxcegs stock prahéasn ghmuké ha ﬁrgt se'$;*a:§~=.3d iexefave ms: *C;a3:"r:§:san3r ﬁiggatchas $_'££s<:i< is the new smc%;§e:s=t;.

A Eampamy can appiy far NSC far a new stackiest far each divisien separateﬁy pmvided that the new %stm:§<%e5t in be appainted is a smckiest as'? any (Ether dévisiam (2% the ﬁiamgaarwz A ~=:::smpEe'tei§; new sitockiest wiii be eiﬁgibie aniy' when the existing staciziest are deaiing with ai§"?t§'fe£ t1':v';s§¢:ms, anti if the appiicatian ':s;\.w':th'm the guideiinea. 32' ~ oniy {me divisign appiiaes fa; NQC3;.h ""f§§$-\vn%gw stssckéesrt' wiéi have its dazed QNLY far that division agsi r§;e.:\°""-\.\;<;sr seii geods of tha as ether dévisions. The Cmmpany wiiﬁ have to agzepﬁy fregh for the ether dévisicms Er; gush cases.

if a Comparw poiicy is that a ﬁtockiest shouid ﬂea? with a§§ its divisianx than the ccwmpany sheuid apgsiy accordingiy, provicﬁeci aﬁi existing stackiesi are Lieaﬁing with aéi eiiviséongp éx s.t::.«a:§<ies's Gpera:Er.;_.;-- - Gea wfzh muitégie branches, WEES be Cansidered as a aingie» smckiast Qf tha ctemgzzany even if the Casvmany ra2se:~: :;«::~:ga:'a't;~e éswaice far iheir ciifferent bmzxches. We §\%O§Z given to a C»:>m;:ang; 1:0 appuﬁnt 3 new 5tz><".§<§eezt Es: uaﬁicé far .5 rsv;a:'2ths aniy, ,éd'tca~r 5 swanihs the NEE Es imsaiiii and tha Cqsmgsanw' ' Stmakiest wiii have :0 submit a fresh agmiicatéwn, QEENERAE.

Nomréthstandﬁng anything in they-2 norms a: campam; can repiace ea smckiest when:

C:::mp;emies are germineigs aggrieved and are éming saies due ta thé nan perfarvnanca :3? 3 gtaciiéest.

A stcsckiest r=e§§m;uTishes hi5 smckiest Ship. Nate: Créteria fat man perfermasjace--w§'§§>T~.%s~e% gs foiiows: ~\.

$953; the cemgany.

§ mg BS} ﬁnes net aperate schssme maaant far the retaiimﬁs. Does neat maintain adequate stacks as per ':m:~:ar°:i:0ry smrms. {Sa§es>c2 ~--~ C§as'mg stack -~ Steak in transzit : {}:'der :3? next mszmth}. Sees net comperats with the mmgaany in §3%'0\.5iﬂ'mg agreed infcsrmaticm, 'when {ha campasw is aggrieveci Esased cm 'the atzmze criteria am wighas to re§;%aa;;e s;*'£e:)s:1<':es'£: it wiii have ta submit the: nacesgary evidemza ':9 me Assaaziaiian anal the Assaciatien in mm after discussiyag time matter zvith the =:.:m<::eme<i stockiest wéii YES decﬁsitm.

The mmpany car: 013%'; apgzeoinis as ST£?C§{§ELSF§" a whoiesaéer whee is :":':emi3e2:r :3? our ASS(}C§. "€'§iZ}§\§.

if :3 campam; has mt raised am; Envaice an 3 whcsiesaﬁar / s':oc2<§e:~:.'§; fa: ccxntinumss 12 mamths it siiaﬁ he ﬁeemeci that the smckiest. shigz has been tgminated anti in no way can be reaiarted withmst the: pem'1issi<:m cf the msaciatisn, provided there is as mrrespmndenca betwesn the stackiest anti the mrngaazw an stepping su;:ap§'ae$ am the ﬁ%.s.s0ciat's<:m is infermeé abmst thﬁs corresgmndence. Ni? wmpasw can make direct suppiies ta dactatms', nursing hmmas, ,r$i3.gh authorized steckiszest ZICIU CENLY. {Zmmpanies may quote d3rec'f;§y 'm ficwemment instituiians Eike €3J'v'E.C¢, €"3.H.S, M.P.T. but {:ar;na?; dea§ with priwate Emspétaig, Nursing Hames etc. except thrcmgh their autixerizeﬁ steckiest. if a company has stopped speratims in G023 for mam than 2 years arzci if it wants :3 restagrs: agaeyatiang it wiiié ﬁe considered as 3 new campam; and Wm have ta am:s§y 'fm:,§t:.¢fsr P.§.S. and far apgmintmerzt :3? stackiest, prmziﬁeti a§§ prevéeus cﬁaimg an' 059% s>:£;%<::%:¥eAst ;' retaiéem have beaen asettied, ﬁrefeere S63 is zzské staackiesai shzmid be ccmsécierezi Seéiing :3'? prodmzts ;' brands fmm (ms: ezonmany ta azmther wiéi be ccmgidered 35 3 new ;;§'{:--s'§uC'z'..

if a campaséy has ciaseﬁ cicmzzz ﬁts ogaeratian than the stackéest are: resggonsibie for takﬁng back urzsciﬁ anci expérx; s'tc:3{:§~:$ fmm the retaiéers. The Whaiesaier is yesgmnsibie fm exgiry af gcmtis mic: {by him even if tampang; 55 mt gazing Cradit Nam for the same. it E5 the iﬁuty Bf the smckiest to infarm reta§§es's I Association abmzt the stogzapage G'? a;3e:"at§Qn§ by the company. EMPORTANTI Na whaiesaier shauid sugapiy gaodg is 351;: new Rataiiers, even on CASH, ﬁniesg +Et"'§-egg-.:\became' as member' csf the Associatimn. The remiier 3:1-35,, t':'§§Ei3iT fa<:§i'at'zes for a 151 ;3er':::3d% £33' 8 months after xavhéah the whaiesaier may extend Credit faciiity ta the ;3am; at his d§sc:'etim."

""?QLEC¥ T3 MAKE SXEPPHES Tﬂ NEW' RETML Q§§Ti.E"§'$ Faficmrfng csnditfons appfy to new Retaiiers zmﬁeisﬁzir cw gczerfad cf mininmm one YEQF.

:3} SUFPLY: Na. guppiy is be made is any Remffee' by my wémﬁesaﬁer i§:"3§£'.'§§ sac}; Retai§er ﬁacamm mem&e:° sf C$A(§,°" ;3?.'i5. 'Tm axaminatﬁim ef the cﬁaugas m' the guiciefmes ca:m::§L:sive§\; E$Si:"i&b3i$§":E3S that no person err entity is aﬁawed is $3 buséness :2? ;3harrr:aceu'ﬁica% »:'imgs as whaiesaker and retaiﬁer uniess it hemmes member 9% Asseciatim. it is. a¥s<:) evident Vthat without obtaining NSC fmm CQAG neither any new madam can he intrsduceci by any gcyharmaceuticaé cempany mar any new stackist car: be appointed. These 'facts wen? 335:3 cnnﬁrmed by Hemant Pai Angie, Prczprietor mf Varca Dmggist and Chemiat in his statement recorded befsre DEE \h!hEi"='?:§iT's it has been stat:-zsﬁ ﬁzrgrhim that in order in became 'st_;'wh0§e5a%«:~3r hag ta» take NOC fmm CDAG.

2?',:£§. The fact that the £1'-.SS{)CEE§f:Qz'a nm: cniy cormcais intmciuctian sf cimgs hut 23150 the: appczintrrzent of stackists has aim been conﬁrmed by Mr. Mario V32, g3ropr§a*£:0r cf Xcei Heaithcare in his srtatemem: made §3e'?m'e B8, .;%.¢.-fﬁze faiiawing excerpts from Memarandum of Un§erstan.<'§I=.:*.-g szrf SEAS ﬁave bsaén reprmziuced ﬁzzy the as is Shaw that in case gu§de§?mes;'Mm.3 am mt faimwazi, membars wmaié be b0\gc0tted and pena§t§es weak} be isnpaseci an ma tﬁe§au§i:"mg ﬁrms:

'""Ps,:rs:§m§s& payment"

Amy wémfegaiézr fmsné viamiiiisg the wave ruiés {as is 5' iﬁsied in M95}; wiﬂ be iiaﬁie '$133 sirist astian taken by Cﬁﬁﬁ an the recammenﬂwtian 93' me disciminary camm.§1'tee* appaﬁnted far the purgasse. Fm" first v§a§a't§nn 0 ﬁne Rs. ﬁ5§Qf~ wﬁf ﬁe Smpaseﬁ beside warning fetter wfﬂ ﬁg written is the Whaiesaier.

- Far-Tgecartd' w'm§at§an €'§_..fine sf Rg. ﬁﬁﬁﬂg'--- wéff he imgaseé mm' aiﬁn executfve wmmiirtee wﬁii na$is$;era~:_m1;_. M95 in sad: 3 wixaﬁemfer' G?' 9 .. y\\ .'I\ \ -ix 4_T'%§;k§e5t any campany.

.H;¢¢~,a:+;mf§=E::*§e§ far the gﬁurgwe.

gun D Lt) Reifiziiers 5}}D£JI£é' mt resort in any 11J§}f'):'£Q§ff'?}»' mmpszmiorz by giving discount is weir cusfomers and ghouf-if ncsn' apsrais any beneﬁciary ssfvemeg fa af:':'€'2(:f the custmners.

Any ﬁsiafiws fmsnﬁ' wiamtfng the absznre 51.5395 wifi ha fiawe ta gtrict wzfian i*an§re:fs £33! SDAG' an the reanmmmdatim Q? the ﬁiscshiinary Comnaiitee Far ﬂrsi w'+:2a'::f:fm': as ﬂag £25. .2§€?§,x'~ w§i£ be Emgzmseaf §3E§§d€ warning letter waif M wrétten iv the z:anm~g*°::e::' §%em§§er.

Fm" gemnzi v?a3§:3ti{;n'::}*}'n%e <5?" R5. 5w"a'JPi'}G;'~ w:'§.*' be :'m;:~:;>sea' and :25? Whaéasaier wii! bayccit such remfierfm' :3 gaerﬁad Q3' 3 mcsmrfss. Remiiers sfmufd make pagsmenz af cream ,aurc:fn:ses :m'i'§7§n 21 daya ffifiiﬁg whim'? the wimfesaier wifi charge 28% interest fmm £539 3%'? day. Whaiegaferg sfzouia' repari" we nmne af remiiers many with detaiis :33' isiiig af retaiiers deiayfng the payment beycssm' 50 a'ays° wms: W51! be farwarded to the £}isz::';::siim:s:'}.I Committee Fczffmving m::2f':'cm wiii be rakes against {fag :'ei':::u'f£:"3 ijffmszm guiify. v:'ssu':.=:~af»warni;7g iettgr is) the ifafizuiiing reztaiier anai sisrder him 'ta: gyay the \a.

dues to the :"€3;3E£21'ive w;hcf_ V were on.

104 $5': case the Q'£f£§'§£§i'§!'.3Q retaifey §t;'ié' fmfig is make the payment ft: me w§m§e$a§er aii whey whaiesaier wfiﬁ he direstea' is 5mg: sugpiies in such remifen .2?.18.lT%':e fact that the Assmziatian is ﬁmiting ané mntméﬁng tha suppiy cf drugss is fuvii:a:r~:=:s;ui3stantiates:i frczm the examination emf the foﬁeqywing rr2ina;%:£-:s-s:s'f-T- maating of {ZQGA qumtecﬁ in B6 regcsrtz 2'?.18.1. ¥'~f§§m.stes {sf the Whaiesaiers meeting hem at Keservei Garden Re:-=t:'eat ﬁmftaiim an 25.38.2985 "Same wmieaaierg said that the £om,=aany's xéxere samng gmads :1'§r«ss:»::tEy1;.z:> {meters by gaagaﬁng both the whoEe5a§e:'s am: retaéiers. The names of Camgﬁanies were Cipia, G§ea'amar§<, VHS, Srgarzmz, and Thﬁvém Pharmatzeutiaaisé (Ether wh::~iesaier$fratai§&rs wha were aware of ziirect suppiim fmm Campany[C&?~' ta Docmrs were ta repmt the same is the mgmciaticén. £1 was cietzézietf that a 1&5 2118.2. §\:'iinutes. of the EC meeting: heizi at the afﬁca ;<>r==3m'2ses;, Panaii, on 14.11.2008 "Regarding Miercz Labs it was decided that as they are aiready having S smckists in 6:33, a new smcziszéest canrmt bi-2 appointed as per mar guideﬁines,"

2118.3. Minutes Q?' the EC meeiing heﬁci on 2.{3.0?,Z€}é3? 'Mr. %%~=1urta:'§<ar said ﬂea: he ésaﬁ gmi befmae the w?2:3§esaE2ers' rneeting that szarma wheéeaaiers were maiqing ;3;'-cw;§u:«.::ts Ié§'*.'3§3-.-":§b§sE§ and sLzVp;:ﬁy§ng ta reta§iers witheut gmying FEE and he haci therezfore ;::«rc>;3«:3sed that for a gsrnduct macie axzaiiabie by a whciesaier without gauging 9&3 charges the whsiesaier wauid have is pay R5.1€)G0 éngtead af 85.839/--".

.?.'}'.'}.8.ﬁ,. Armuai Regmrt for the year 20{}"?~€38 "The Ema? caﬁerction an Pmduct infarmatian Service timing the £35': year has bees': around 12 i.a§<%2T.:;a:r»§i'*s%a::¥*z means 2438 new? - pmciucts have beén §.:-a:.;".za'°'§%{ae_; A;;3'"f§T;;~;§h& East year. Retaéiers 1536 shouid ;3ur::%1ase ;3r::>.::§:.sz:ts cm§y which are registerezﬁ with the assm:iat§on."' 2';*,13,§_ min utes 0? Executive {Iammitiea fxiieeeting heéd an 3i.G'?.§3Q{}8 ls' .............................. ...Preséc§en's: askeci the wfmiesaiers chairman that a W§'}{}§£§SE§f3;?$ wmmittee sheuid be farmed ~whE<:h wouici be respcrengibie fear' deciding on the issue sf appsintmenzt :3'? stac§<.§e5t'."

27.13.23. Minutés of Exemstive cammiraee fsiiaeting hszéd on 19.992868 'Com;;::¥a§m':. from Desa§ 321:} CC}. a-mﬁ Bmgaria Manages and $33.

"TE 'serge wan a C€:3¥'§'i;':3§ai:'i'§: from Qesai am £30., abaut Mafzaveer ﬁigemzy, sasper stsckist {sf Mitre Labsramries and Ram Saies Cargzmrations.

3. Micm La_¥;s<>ra%:c3.ri&3 dc: mt take PES for the new psotiucts.

4. Raju Saiea Carpmrat;§m'; has s{:a"%"f f.&? agent is the retaiﬁ chemists.

.mm,,.

/r/'~ Ir /1" ,

7. 1:)?

it was demied is write in §x«'3a%33vesr Agency sham? the campiaimts amzﬁ instruci the ﬁrm ta adhere its the ruies and reguiaticms cf the AssociatEcm."

"Reg:arding Mediwings Bioscienﬁa Pvt. Ltd, Mr. Aibart ezozzpiaineﬁ the reasczm far denying the third stezsckiestship fa: the c:::sm;3any.E{Z dzacided to fina the mzzmpasw but Mr. Aibert infa:"med that the ccssngsany and the existing st::;cE<§est are 5ett§irz-g Em: 62312:: amicabiy. it was agreed u;3:.:>n"

'2,T.?'.1S.".?. Rsiinzztes cf E>:e::ut%im§ tZimmn'i:€:ee Meeicinig heiazi can 2§.Q§.§.G83 "Mr, ﬁxshésh exwainecé ihaa Msﬁaveer iﬁharmaceutécaﬁs issue. it was :>§e<:'sz:£e:£ ta wimz "ta mam Labsratmias axgﬁaéning the viaéatﬁezm :3? the Cbﬁaﬁ guéﬁeéﬁnes by their auger' ssm-«:§<§«es:: with 3 cc:

:5 Sviahavees' 'z?.%:a:'maceuiéca¥s."

.?:?'.18.§3. Minutes cf the meafmg heid an 1i3,.{}2.%2G€39 at office f:)§'€-3§'¥'ii$£i'5 "(En the i'"{-3C€°§§3*£ aide, Mr. Lyndwn Said that PES Q? tatai 18538 new gssmciuezts. was taﬁcen am tiﬁi mm 3%' {R-3c:ember." 2118.9. Minutes of the EC maetin ..2i}{}§ at office gmseméses 108 'Mr. Rajesh suggested that EC. simuié make an effer is the comgsanies. The company can ava§§ a waiver an MS fees for an year if it sponsors a mimmum 0*? Rs' 1 53%."

2'?.:L8.1€3. minus? Remit T2{3£38~£3Q 2:319.

"ﬁéuring the year we «$8 new members :9 the Assaciatian and eazjneé 85.1.2 Lakh by way sf New m£3m§:)€:'$hEp fees. The Esta? c:z¥§<;-'sctEc§rz cm the -;Pm:§am ¥:1fe::erma*=;ic:::'a Servéeze has baen R3.3.;2,53,'5i)€3.'"' Thus, pemsai an? the mimriceza m'E1-':§":<=.=:» meeting 9'? aﬁaaciatian cimriy brings gut the fact that the CSGA contmﬁs the suppiy of drugs by way :3'? 955 smce uniess the MS is mid, drugs cammt he intmtziuced irz 603. when the minutes are reaﬁ in the ccmtexi: 0? guideiirzas and Moi} sf CDAG, it aka estabiishes beyend am; dispute that the agzgzointment mi' smckist is aiso csmtmiﬁed by the Assaciat.§cm.

. Furthszsr, accsarding :0 Memoranﬁu{:1,m:::f Unéerstantiing {Mow} beftweerz "' £3 whuiesaier $5 aﬁowecﬁ ta 3.03 Eiirectixg 3933 the moazﬁucts to the «wsmmers and any whoiesaier fauna'; vicsiating we abave miss wﬁi be ﬁaéaﬁe E0 strict actiun taken by the Association an the reconzmendaticm cf the E3isc:ipEina:'y Cammittee apgminted for the purgasse. As per the? sziseuses stipuéataci therein a ﬁne czf R5.2§{3E3f~ WEE be inzgacésed far ﬁrm. \'§£}§3'§i§€}fT3 amides warning ietter to be issued is the caricerned w§1aiesai_e;:;g..[~2?;;:.g%.{-fer secmmﬁ vioiatian a fine 0? Rs.5GGGf-- is 5*ci;m§ater:3 in be imposed and a;d:i§ti0naiETg: executive mmméizfzesz xﬁii mt issue any LDC its such a whaiesaiew far 3 gzsaswﬁ 9%? me year far' b»e§ng agzgainteci as :~s'£s<:k§est {ref any company.

3.?..21. Tim Cemrmasiosé is in agreement W§'ii§'§ tim ﬁndings; :3? US that the Setters written by CSAG to the Pharmaceutiszai Canmanires casnfirmeci that the gL:ide§§n«:;~5 issued by CB.-'KG were actuaiiy enfmrted. Further, the iettszr dated 3.0.Gi1.2§99 addressed ':9 M53 Eris Léfe Sciences Wt. i-td., Aémzadabad gees an tea shew that withcaut NBC 03' the Associatian, campanieg canncn: apptzmt Stacécist. in the said Setter' the CDAS inﬁmaiedé the ccsmparzy that as per guidgiénes it was mandatong for an new campany tn appoim: two» ataikists and s§nc& the :::om;:}any had mt fs::¥§g_sg«.s.e.ﬁ.,f;ha guisieiines, the NBC was ti) M/5 Emcure F'harma::eut§.e:3i Ltd, Puma reveai that the NOE -fmrn the Cimiﬁ is reqsmed 5-1:3; appaintmeni: an' gciditécnai amcixzist.

323.22. "ms; ﬁnding 335:3 ﬂaws fmm examinatiesi of the miter dated 3.9.2608 add:'es.sed to M/*5 Micro Laboratories Limited whim rewaais that ccmmanies can gupgaiy mm; thmuigh smciziegt a.p;3oEn'§.ie£:E, U3-AG as per gisideiirxes. . .-*-'x'£"'s:»";>r censidering the cumuiative effeci: ;3f'1;he eviéarzce as a?§3<:u55«::.§ 2-shaves the {.".<3mm§ss§on agreas WM: the wnc:§:.:si§m ﬁfawra has the mi that use eviziiemte gatheraci during im*est§ga*:E::m céeawg estabﬁzhez that iihemgst an-aﬁ iémggést giasczciaiiczm of Gaza {CBAG} is engageé in the practice af;

"(ii msuing NGC fm appeésxtment sf 3 new car an a§dd'sti(ma§ sicckist in 3 particutar temmry which evantuaiiy regizricis 'the number of piayera in the market and 3:1 mm 355:) iisnitz m' corztmi suppiy cf drugs;

{Ki} yianciating $335 appmvai far §:':tr'(:edu::tEan csf drugs in a +parti+czs§.;-ag territory and taking mcmey fer 12%-=2-=afs mlifaich evenmaiiy ra=:str'iz:ts the supgtziy and avai§a§3iEity cf €53'-L 2'}*124.. T0 erzforce the guideiines the CDAG has 335:2.» 331;': in gsiace the mechanism of T _Q .2125.

23126.

3.7.273.

impﬁsing penaities in case the smckists or retaiiers (3:23 mm: fczeiiaw the norms preacribed by the C£}Ai3.

The centemtmn af C13AG't:hat it is not re§tric't§;r4:g .§é§3'her the number m' stecészists or :'e'taEies"s faiis 3°53": in the fight 0*? cii:*sc§':§:':.g eviaﬁence as arzaﬁysed in the preceding gvvarasz.

The neceswry mmiéary whiizh ﬂaws fmm abmve ﬁmrﬁingg $5 mat if the practice 5%' NOE is «time a:way with, tharea weuid be mare supmy :1"? drugs Tm the market and cansaqzzentiy mere avaiiabﬁity 33' the drugs is the :t<3nsu'mers.

Thus, Cammissicm cm':(:§m:E£-35 that CBAG thmugh guizieﬁines and actuai canduct is ébie ta iimit suppﬁy 13%' drugs and number of ;3Ea*>,-'erg in market, since x.v§'ch<::ut of the f3xssr:2c§at§a£':;, ram perscm can be appointed as whoiesaier or s,'m::S<':a-33*: ﬁt Baa. Further. if NGC in fmm :39?' W53' apprsvai is net Q: be in a pesition ta suppiy ;..r.

)...'.

?'>J drugs. The guicieiines and mactim cf issuing NSC far appointment :3? a new car an additionai siockisi in as particuiar terrémry aventuaiiy regtricts the numbger :::f piayars in the market and in turn aiso iimrcs C3?' Cont.m»¥3 sumﬁy sf cﬁrugs. The system cf comgmiscry PES appmvai f«::>r" introduction 0? ﬁrugs in a ;:>art§»::uEar 'scer:'i'iary anti taking mama; far that aim» restfsctg the supgzwéwg and .. Aavailabiiity €33' cirugs. Had there been ma wmpuisigm an rha.;mEfmrn3ace;stiCa% 212.8.

companies to» seek Fiﬁ am3r0va§ before §n'troduc§ng 'E§"§§':' drugs in any territory and they ware aﬁnweazé in am: far rnechanisnw :3?" M3 for 'snf<>rmat§:>n désseminatéan \:*s:,~§unta:"iiy it may mt have gzvcsaiims given rise iii:

any antiazzomgsetitive gractiare. am. in the gresent matter the afmasaid cenduct of CEBGA fsiimweci by Empmsitian :32' perxaities can ﬁrms wﬁich {is not foiiow the ciictates of assaciatism estabiishes that the gzractices anti conﬁuct :3? CEBAG are iimiting anti s::::m:r(1§¥ing the supgéy nf cimgs in the state 0'? Sea 32*: xrissiaticsn of provisizms af szecticsn 3{3} {b} ef the Act. The CDAG has aim taken me ;3§ea.':hat the gzcmciusien sf {)6 are nut based

- an any emneméc anaéysig and the reievam market has been i§'1{:C}f'i"€3e:'E§\,f defined by the {M3 lhzwciusican of vimﬁatéazn sztaf s;&<:'cT:a:m 2129.

3(3}{b} drawn by the D6 in time Suppﬁementary Report, ::.arm::>>:. he.5us'::a%ne£:§ under the eyeg 0f the ﬁaw.

At the very outset, in {Z0mmi5s§t;m's view, the arguments raised by the {IE3};-\i;;'3 are flawed and szantrary in the scheme and pmvisiasng cf the Act. For ¥"'E.m§&~r1g cantraventéon under sectimn 3, the deE'in£~:a'i:§on 01"" E'e§i'£~:'JE12'si:E'a7:3E"§{EiEi is net rezguired in be done; ¥ug'thermore, 23$ diacasssgd 3:': gzreceding paras;-, amaze the eiements ::0nsi:ii:ut§:jag t§'s& s:':<:z§a'i:§»;>:'a <3"? se::'i;=»'..m 3{3} sf ﬁche Act have been estabiéshezzé, the m'esumpt'im"a regardmg QAEQ $3 tr§gg,areti and me' onus si**.§'r"<;s on the infringing e:s't§ty is rveﬁmt that pres'-<,:mpti<:;n referring ms the factors enumerated in sectisn 19{Esi} an' the Ami. in 'the gregerat maﬁa: mt: effort has been made by the {SEAS ta repeé the presun'a;:s'ft§Csrs. . A5" pcsinteii out abave that tfmugih the Cammissien £3 rm: requixé:-d is munch intej an enquirxg in cages reiaied is secténn 3{3fs ta ﬁnd cm: the existence cf NXEC, however, the D6 has anaiyzeti the arctiann 2:22' CBAG vis-a--vis 'Eac'mrS = me~n':§:';med in Sectétm 1§(3}'::*s §a£§ow§ng terms: 3' {1} Creaticn sf barriers in new entrants in the market: As per the guide%i:1eAs an' the assmciav "'\"§a§h@§esa§er can be appointed .un§»;=3ss.ti':e giiarma €Gi"¥'§p83"1§E'§ give ncs~cib}ei:ti:>n .ceriiiica.i.ss: in this affect. Tize piiarma wmpanies can a;3}3€3§i't'5£ new smcinzist Cmiy as per the guicieiines 0'? CDAG whicii are restrictive in namre. Fiiriizeig. ciiiiv tiisse retaiiers arevdeiigihie ":0 get suppiies from the wimiesaiers wim are the members {if the asseciatiizm. with iiieir coiiective market power, the associaticsii of Chemists and ciruggists has triéd ta: erasure that as new piayer gets entry in {ha market witiidut 'i;.heii" rie~ab§e::tie;;n. The ""'éS.§bEiatiain has made its members ané giiiarma cempanies c:3§'npi§}'with their 'terms and Cﬂﬁdiiieﬁs. {Timing merger <3'? Sarébhai and Nicimias, 3 gms..ig3 cu' smitkiat piexiaiied ever CBAS to ensure that m.ii'}'i§I§;'3§' :3? st£>:i<i:st re-zmaains. i'estricifi.=sci and thereafter Secretary 9? €;§:3AiI;'7; wiete ta: §'~§.§€Z§"i*33a$ L §3§§"B§'a"EB§ irizriia i.§§'§'i§'§i8§I§ me: its ssiiarige in the ciistriiauiicsii peiicy' \e&'§ﬁi€3L§'E 'f:ai<ing i.QC {mm the §.EiSSiZ§C§&i§€.'PE'L {it iséuaiiti {ﬁat iligia, a maiziiiacitirei oi' issthma ariruggs, tried in bypaaas the: SLi§'.3§Z§§§»' chain by ;:3§"£3\.'§§§3¥ig §"s{}§'§"§é Sé3'i"V§€3% for its psmiiuitts. Eipiia faced strizmg ragisiéince i'm:'ii {me of the traders iobbyu {sf same tithe: Etatei, which strippers? stacking Ci;3ia's gareﬁuici. Uitima:tieiy,' Cipia haé ta withdréw ihe schemef. when a mmpaiw iaimciies 3 new pmzriuat {either hrianded 33%' generic}, tit: make that: precinct avaiiaitsie in the pharmacy, tiia civimpamg has tit: pay certain amount in form (if Praiiuct infzirmatién System {PS3} is the association. Thus, entry iiciarriars have been created by the assdciation in terms (if new piayers ané intr0cii:c:ti::m emf new gimmazzigs. Even in case of gmremment tenders, as per the dictate sf assaciatiian, oniy autheiiaeé smckist can make suiapiies as is; evident irsziiii tine ietter addressed its ';i:>uti;srs, Aim Pcirmrim, Gcia {Hi} 11% {ExhibEt~4)~ :33' the {)6 repsrsrt §n'§m*ming,them that saﬁe by Lmamthorized stockést tantamisunt its vieiatizrsn <3'? Ruies and Reguﬁatmns 0'? CEDAG and Vinivites ciiacipiinary acfson and aise ésking them ta shew cause a5 is why action s¥1s:3u§d rm he initiated against them.

Brivma existing cammetéims ms: a'§t§'§& market: The agreements cf the iike entereﬁ by the whoﬁesaierswetaiie-rs tiwough EDAES is agreement ammg camfqzeiifars at the same ievei of waive chairs. Thmugh their acticms, "the w§w5esa%ea*s~retaiEers have attempteé ta ensure that if the w%'zs3k=::'3a%ar;;--«:'etaiEésrs {ii} mt abéde me' the détisﬁms 0? the as3«*.'.:ci;«':a*'r;§:::s::, ' tin'-sy wiﬁ be gyunéghesi am they wééi ram: get stezecézist shig 9% gaharma ezsmparziesv Fz3mc§(;«su:*'e 9'? ximngsetitiesn giw hindeyﬁﬁg entrv mm the mgrkeiz Thsze ' ' act :31' wh::«§esa§<srs--reiaE§ers certaimy attempted ta hincier the entry :1? i:h:;>se whoéesaéers and re':ai§?er5 Mm are am'. we members Q? the agasciatian iﬁiﬁ the mamet. Mmeaver', the pharma carnpanies wmsid 355:) not get sentry in the nzarket of ;aharma::eutir:a§s_. :.m3e.==3s the assstéatﬁnn pmvicies a no~obje::ti0n certificate ta them Thus, the ccnmpetitiori has been restrécted by their canduct. Asjcrua§ :3'? beneﬁts ta cmnsumars: As has been hmughi gut abave, the assaciatisn are certainhg mat \ .

§1e.,..cE,gn5umers. Cm the Camtrary, {V} 512525 and reguiaﬁens cm' the .assm:§ai'::;m whizrh si:i;:su§a.te that retaiiesrs canrmt pass cm any beneficiary schemas or discount its the consumers certaigwg is antbconsmnar in nature.

at Emgmuemants in gmdugtian ar ﬁisirihuﬁazm cf gm3ﬁ$ €}§' mrmvisien 9%' services: The acts, guideiines, ruies and reguiatians cf tha association BEG dc; not ¥:2"i'r3§ about any mzpmvememt in productﬁm cu" distriizmtﬁen af gcmda 03' prcw':si«::m: :3? services :a§m:e the rjmmber <32' the wiwiegaiers» retaiiesrs gets iimiied anti rastricteré because of the aiauses memﬁomed in we guidaiines.

Pmmoﬁan sf tachn§ca§,.T ssciamiﬁc gyaﬁ eceenamia daavaiceggsrnerzt Qy means :3? gggmduatiaai :2: ti§$i;rE3§3s.sﬁ_g;:°a (sf gsaés es' §_:_;:w§s§mf§ Q? servécuggg Further, there is net: juséziﬁcirstien :3: case maﬁa nut by the asscsiziatkarz :3'? its memharsz ta garcxve that their actican resuéted Er: pramstiora ax' technicaé, sciehtéfic and {'.*.C.0§"§{}n'§iC deveﬁopment by means (if gzzrmductim: or distributim 0?' gimﬁs or pms.:isi::m 3? 5er\.«i<:es. There wag :20 positive outcome achieved «ajther in terms 0%' improvemahts in pmciucfscrs G!' distribasiian sf gmsis Oi" pmvigicn mf séssrvkzes or in terms of prcemotisn of t{~s<:hm<:a§, scienthiéfic am eczmamic deveE<>;3m«emc by meanss 0*? prcedmztion or ciistribution of goods GE' §3¥'C3\:'§S§€)E'§ sf sewiceg as at resuﬁt 0? the action cs"? the assaciaﬁ ';?£s\.(nembers., ya} H mi 27_3,:'L. Thus, on the basis 93* 2ma§ys.i5 of the factors enumeratesii in Bastien 3.§3{3} 'of r the Act as brought nut by the BS, it can ha men that aﬁ g:'0«c::3m;:aet%ti\«'e:-3 §ar:':--ms:. are ai:>s;e.v:'t anti af game time aii factcsrs énsiécating anti-czzympetitive effect are preset}: in this case. The anaiysis dame by the EEG further strengthens the finding 9? the Cammissmn that the Chemists and Elmaggisis Assaciatian, 633 E3 engraggf-3.{%.--En among and pﬁacizéces whim are sntig cormsetitéve and vicsiative of prcvisions of sectém 3{3}€%3=}of the Act. ﬁatarmitéing the saﬁe pxiceg $1" émgrs . in the gzresent case, the E36 hm aiscz returned the fintiirag thai we ctmziuczt - and pract§::es cs? CQAG are aim ia'1d§rect§y determining the 5355 prices af nan cssntmiieci érugs in viciation of section 37{3}{a} cf the Act" an the other harm 'the CDAG has denied this charga.

. it has been brcsught mat m 536 remrt that there are br{>ac§§y twa catagisriess of drugs; the scheduéeﬁ ﬁrugs {drugs under price c0nt2*3_§ of {)¥>C(3} and mm» scheduiad drugs which are ms: 31: is in the categwry of mm 113' .sc hedLs5ec§. cirugs that traée assoaiatéms decide aspnn Ems: margins mwhich genera§¥\g is 28% for retaiiers and 1C%€'/:3 far wh0§esa§es':-3. ll ;2'?.3;4. As regards thé éssue of determinaﬁon of margﬁns anﬂ saie mites sf drugs by the association, in his; statement {H-3f<3re E365}, Shri Hemant Pai Angie, Member sf Chemist 13: {ismggiszit ..»'4\s;.>.::2cia2t§s;'::': Sea, has suﬁmitted as undey : "'i.Zi. Cm': you <f£Jf!?iS}7yi§:3€} yes: hmre ewtferxcea regrm§s'ng ms agreezﬁant, practises ar any rjecfsécén amzmgsi the m§:.m£':«er$ ef the siiiiésemisi mg i3ru;ggists .«'~§5sQ3::'a2E§:::n, {Sm ta cmntrai mines, if cmy? $.35. CEAG is czfﬁiissiued ts: .39.£CTi€.?£3 and fsffaws {#29 gssiﬁeifneg etsj' A§'z")s:'.£L in the gufdefiﬁés, the margins have bean f:'xa=d fess" {3':'ug_3$ fssar mm whaiesaiers and remiferg. The merging are ﬁxed at the f:'n:re £25,' Qiviiig P35 £?{.3;3rc3w3!5. The 5335 $5 caiiégteai in the name of adverifsamervts pubiished in "the magazzhe-5 iikga "Ewe?:in+-e:a:m~P?S". For W3, ﬁ'3..'§4f3£'} per prcsduct per §t:'engthy}'armu§ai:'an is cfwargawd. :' zzrn g::'w'r3g mu 53,3595 5}' apprnvais giver} try AEOCEP pwiished' in "'8s.:£1stin~c:§m--PfS""

whim woaxid show that Prmfuci Snfarmastion Service is charged by assaciafians, Q. Can my furnfszh/D0 youﬁ 2:8 : :}3{2a' a'cm'.= to sfmwv that the 119 amzrities of members {pf the assscfzytimn have 595:' $0; e::fs3fermfr;affan of five safe ,or:1::e Qf £z'r:.:g5 ?

.»<2ns.Tmde margins'ﬁ';<§3d by A3€Z?£'£} fcsﬁsxwed by CDAS and P55 charged by them fT}:f1}»'_ have impact an prices sf drugs. Cfrcuiar dated 04.05.3016 cf €DAG (2535: brings out that the aséaciation wr:'tes% re the cammnies far efjfeciing variafian in prices."

2133. W%::=2s'z asked by the D6 haw the margénsjdisceuzvts are decided by the azsociaiﬁrm at z-=a:>i0.:.s:'.r gtzzges cm' samgaéyf distrébutizkn cﬁsain, Mr. E-éemant Pa:

Angie, £2:-as sifateci as under:

"Q, What are ihé mazzrgins sharged at va:'i;:;m$ stageg' af fhé s:::;zg3:'y,fa'fséribut§an cimin? P§:-mge garnish .ev§d¥en.:te§,. in war pagsegsion, Efmy?

Ans.The:-.= PS5 apprmrcxis {$5 handed aver :0 Wu given far :;f:ffere::t mmpanfes wouice' Ixweixi irhzzet margins are ffxeci. Q. What are' the ﬁisceurzts given with raference to the nmrgins iaia' dawn in the guideéfnes?

Ans. £3'iscmm€ poiicies is given in->Ms§Li_;:2f CSACE which Stateg that \ wh»:2Ie3:::Ie.r'§ ma gags snly as'; 4;§iMgnt in remfiersx Furihea 1213' CEAG aim restricts i-he rei'm'1s2r5 from Vpasging or) discoesnrs ta cusmmsrs which affectg the comme:'m mszm. if reiaifers give disccrmnf $0 c:usm:ne:'s,/°Cz3mrnc3n nwn, penczitfes am imgsosed. Thus, 55:19 ;:3f§CE «sf cirugs m'& i.m;3mtted in 9: way because the rerai;'ers:even if they wouid .*-'.F!-:9 is pagg cm diismumrs its common mzm_. mane: dc: so. i am given iwce pieces of evia'en:;':s§ --- cirmfm" dated .'és':§.£38,2{3{3.:S and

11.Gé§.A2€3Q§ is support thfs e:cmfe:7%ti<::n. "' 2135. Eurtéaer, in Qftief to shew mat ézrade margins are éaszidéd by the Assaciaticm at the time 3'? giving HS agsgsmvaé, Marita V:-2:, the infmszzatian §Z§i'£'3\f§d€§',. submitteai armies cf agzkgtsrfsvaig af Praduct i%:":§£srn1atiora 3£.';§'\r'§C~3 {P33} given by Céwermst & £3r:.:ggi;*s't 5'3.$S§3€3Ef~.'.§'£3r3 6&3 befsm tma SS. The fact that margins are ﬁxed far the wheiesaiar ansi {ataxia at the time :35 E-'°§S apprmaiy is arise heme ma': fmm the faiieawéng stateniem 0? Mr. Maﬁa Va: 0% Xceﬁ Hea§th{:a%re V32:

"62. {Tar} yes; _fLsrnishf€}a 3:02.: haw evidenceg and data (":3 gfmw that the activities 93' the membem sf 3-329 associcstizan maze A96 to determinatfcm of tin? mfg p'r:'ce' afdrugg?

AH5. Trcsde margin fixed £3} ffiiiowed by {TIIAMS Ems? W5 charged by them may ' ti' 'mice sf cfmgg.

.- Q. 5} 121 Q. 3.»W3z:.:' are the margins cfmrgea' at varimzs stages cafrhe 5:.sppiy;'disir'fbufi0~n chain? Piease furnisfw evidencsg, in yaur gsogsegsmn', if any?

Arrg. P5 apprcwafs 4:35 i'PG!'h1}'€'s':1' over ta yam givéir fer d{!j'e:"ent campanies wcmid rwec?! fhat mr:::'g:'n§ for wu'u:>ie5a!ers am' :"em;'!er§ £3Ii'€€' fixed. There srcmnot be gfeviaffcxn fmm the margins whicf? are laid dawn in the g=.:i:3'€{ir'::~5'.5L Q. , M/hét cm: the dismunts g§ve:': wéth reference is the margins faid dawrz ii: the gufdeiineg?

Artsg. Discéunt paficy is given in Maw sf CDAG which sfates thesrt whoiesaiers am 95:55 Gniy 2%' as cassh c§§scmmf is remfierg. Further, iT{L*.e$1{~§ aim r£°.s?€:'§a:i's the? re1'{:§!e.r'.<; fmm passing am discozmfs m cuafamgrs W§'?.5C?? affect the ::::m/mmn man. 5' retzziiéers giver: <;¥i.s5a*:<2uni* ts: c:;si'a::n1er1:j?c:3::r1::1::r: man, pemzsiiéés are impaged. "ﬁlms, saig price Sf drugs are imgactad in :3 way becmsse the refafiew, Even if they wsmfd iike to pass an ::5:'.se::3unt5 3:0 mmmcm mam, carnnat do 59."

2'?.3T?. A {:ir{:uiTas* ciated 2S.{}'S.,20G'9 sf CQA5 whmh éiavaiéabie on reco:*::€ aism estaiﬂisheg that izrarie margins are fixed as per the norms set by the guicieﬁrses 01? :3.:~;:sc><:';a':?§cms. The trade 'aligigjgs fixesﬁ by the assoaiatisn u§timat'.§E\,: have the effect of ir;r3§§ \ of saies mice sf (érug for the end mnsumezr. _{ 235.38.

2'}'.§:39..

it has aim came in evidence that at the time when P15 agzsgzzmzai is given by the ass0c':at§cm for launch in' drugs in as particular area, margins. for whaiesaiers ané %re':a3Iers are fixed. The BS has mentioned margins sf same drugs is stockista and retai§ers marmfaatured by drug ccsmganieg as atiatermineci and appmveci under the systam of E"-'~r*=~~=

- .., ,,;§.~:g.g, ﬁnfmrmatien 3E':¥'ViC~§~3.

ﬁxgsart ﬁcm fizasmg margms an dmgs, thé Aaamziatéan aisst; s'§etz=:r'm%.nes athe am«::>unt sf ﬁiscmmt in be extendezi by wimiesaiers amt? :"e>:a§£e%rs that has the impact of uitimate dete:'m'ma'{§on 0'? garice of drugs. m thisz regam, fcsiiﬂwing circasiar cf C'D£x{3 dated 1ﬁ,Q8_Z{36§:3 assumes s§g;;':§'§%cance;

"' ca --- Wm': ir:r3méa'Em'e effecfwhafegaiers ce:3:,::'a' extend :3: maximum 9}' 2% Cash $E5s:{3:m2i° _fa:' fmmecifate case': pa3:rm:°ni' 52:' gssgymemf with current datezf {3f7{?Q'£.a'E'§ ii') refaﬁers. Wﬁoiesaiers are requegzfed net is afar mare than 3% {If}. and in case- crf cheque payment the Chegji} 53" be: degzmsitecs' in the bank immedfateiy.

123 Refaifsr3_;3§ease dis mp: demand rmmss than 2.95 CD. and dc net give ,r:osf.'~dc':€9d magmas car da ask whaiemiers to gresent zrhecgues late to ma bcm!<~."

i?.'}'.£.i0,' m this regard anomef t:'m:u§ar C§a'tE.'.€§ 13..{3E».2€}{I3§ ax' the cams has aim been fumésfned which aim restricts; the {Z£3¥'{'£§)E't§'E3Q¥§ between r'E~:t3§§es's by "" c:é'r"::::ur:c§n'g the practisze cf extending disscmsntsg "We have ézeen rm:£+Ev§ng :3 50: 0f ca::m;::fm'.nt5% that mam: :"em:'ie:'.§ am:

cz"§§::0z.:m2§ mrhich run ever} time; 1:95-25. Psessss 32$ aware that am" Aﬁgmciatisn and 5:5 grsmant bady »- We .£1.h';"}{?{32§:Har'ft.re Eumzi $3 Excsrgizir: She mmgganfgs and mczimain 2°.e~:.:sc$é=.= ' marg:'ns an r>':=m'£c§r2es;.'T:%e5e myde merging are just encrugh {zzmi srsme ac:::c2:;:'en$ nan: essmsgh} 23:9 5usm:'r: msrseivsis & %'::m=:% cs respgctabie Iiw"ng:.

Pieavse 333:) be aware tfraf :3 big pharmaszy remix? cfzaifn En the .S:.:=u'them India which was brashiy advertising and gfwhg discaunts in cusmmers, is tcsday in ban§<ru,s::ic;;_. with fasses ammxmiing ta craves sf rupees.

Giving ciigccunts rm czsniy g§'_§qr§:s the ather re2:a;':'er5 in the Egébcgcxrris, but 5: N30 feazfs to 12¢?

Lmeffnimf practices and is actuaziiy §mmperi.ng }?£3LH'TOWf3 ,o:"ofits in the fang run. You giving; discaasrwtg is net aniy destraying me neigfybsuring remiiem, but Wm' aisc: eventual}? desire}: yaw facu Pfeage mzfe, 5t'r:'c:t action wiii be taken against any reitzrifgrg fcsund given a?£scmmi:5. We therefore appea! tea yam fr: 550;: giving s;2'é'sz:m:n~:s. Heip Q5 to keep the trcsda heaithyﬁ mivsé' "

2.?§41. Thus, it Es evidﬁni that the CEBAG Es am: deierm"ming the amount 6'? discsunt that may be extended £33; t'm:°; stackistg its: ﬁne retaiéers and aiso the extent rm' :'s3::<:<::unt which can ha given ':0 me atmisumers hy the retaiiars. 2?'.»=';2, when thé E\fi€?3€EfE'§i'2E avaiﬁaizsiss cm re::s:zrs:} in farm :3? MS agagsscsvms and statements cf paersczrss recmtzieﬁ tn; the DE in course {if érwsrstigatittm, is taken inm azzccmm; ccmaintéy it becomes ciear that the nmms anﬁ guiciaimes of the sfxssaciatéon which gsrescrébe the margéras far whaiesaéers and retaiiersy are not aniy ﬁxing margins, but aim have the effect La? iniiirectiy dete:'minirag the saie price of drugs. The margms of ﬂrugs; first whoﬁesaiers am retaiiers are det€r£R~§§'in<3d*'§3\3§j.§'%€% ..=1\sso:::Eat§{:»n at the time of é\§;art%::u§ar terrémry. The BS 123 has made PES »approva§s_ Ennsorm of the cases as part :3'? his I'E}3{')¥'i,. whéch aieariy shew that margins for whoiesaiers and mrtaiéars are dew';e:'mined by !'«$:as:%§;i:§<'ti~«:3§1. The M013 and guicieiines mF'C£)A€3 pasted on their websita aisa =cr;m*a;}§::::>ra'c«e3 tins findmg that margins are deterrﬁined by the Assmzﬁatian. Under the gystem an' MS appmvais, the CBAQ "takes an amcsunt of Rséﬁaﬁ 3'35'? §'§m,g gum' categmy {mm drug manufacturing wmpaaies ﬁn: .» §§T€.i"{3f§£iC'§§€)i'},/f'§'§a1"§<8i§§f'eg of cirugg ﬁn a g::art';£::,:§a;' terr§.t<'.>:"y¢ . ('after camfui exa:'sfmat§un :3»? aii' the facts amt': evitiente as aiiscﬁoseﬁ is'; {IE6 repart amﬁ referred in the "fez*ege'mg gzzaras 'Ema iZ<>mm§ssé»;:m has came in the mrmcziusion that CSAG ha'Ed§ sway we: the sugsgm; 92' drugs 3:2 22% '£E*.I"§'i?i{)?",f of Goa. F'urt§1erms3re, the sumuiative effect :2? the'ev§d.e:'ace caﬁecteiﬁ by the DE durmg Ezwastigatian Efiij anaiysed in the Eight 0? cantentioris advanced by the BS ieads is inevitabﬁe cezmdusion 'that the csnduct and pracﬁces af CDAGL emanating fmm the guEdé§ine%s and Mm: cw? the Asss0e::':at§0n cieﬁniteiy amaunt in indérectiy 'fixing the saie ;3i'§£:E:S sf pharmaceumai drugs in €33 vicxiafsan in' the grevisims m?se::1:ic:3n3 raised by the CBAG that their é3§.- ' 335% m ﬁns: iieterrnérfmg the

(a) inf the Act, The s.t:::a:rs::+:ni:ic>:'a ~ 136 price sf drugs canmt be accepted in View of.unmntr::zvertad :.'°3\i3§'j{?.*.'§"§{I§:3 avaiiahie an recarci.

.T%ze Cammaésasissz": :"'a'::::§s 2*'"mf::e in the ﬁndings 3:' the D8 that in such a simatien, xvmen effarts are. being made ts ensure suppﬁy af cirugg to the ccamnmn man aye .r%xs=s3per rate, the restriétive guitieiines caf Chemists and D:'ugg§sts Assaciatssn work as stumbiing b%0a:i< Emmi {in net a§.:s§:3ea;' to be in' Sine with the gmxemmem: 52:33:15 'E0 §§E'{}\é'§E3E meﬁicines is summer: man at an affsrdabie rate. in View an' the afosmaizi, the Csrrmxéssﬁwz is sf the v§e\.,r<..' thai:

C£f2A<3 not anﬁy iimét émci ccmtroi suppiy 0'? drugs in the market i;§"smz.sgh 3 ---;._:. aystem as"? $333 apgsrovais and iimit and contmi the number' 02' géayssrs. by H énaésfang cm need of its NSC far appointment of Siﬁckiﬁt hat a§:"~.a thraugh its guideéines fixes trade margﬁns '$91' the wha§esa§ers am retaiisrs which, in 'i;m'n, résuitg into cieterminatian (if gaie prices of drugs;_ in the market, Theref0r~e,'i:ha Cammﬁssinn hams that {DAG has vioiated the pmvi:~2'sans of Sectitm 3(3) {3} and 3(3) {5} of t.h~a"'W ,,,,,.,,,,,,, ,/ /' .

7.,

23. 23.1.

12?

Beterminaticn an? issgge na. .3 After having decideﬁ that the mnduct and practices foiﬁeweei by CSAG are anti~c0mpetit§»{e and m viciatien sf prowsiosas 0%' secﬁon 3(3) {3} and 38} {E3} m' the Act. tha Cerramissksn pracaeés ta decide the issue no. 3 Le. wheihes' the memberyzﬁ' 1&2' executive bmﬁy of {DAG are also iiaﬁaie far an't§-camg:e~ti%t§ve mmtiuct viuéative af' previsions of section 3%} {3} arm M3} {E3} crnftfms Umréeg' 'aha scheme sf the Act in case <3? 3SSOC§E?C§s3:§'i :3?' gnterprisasg <:a.3i»:-m' ; traaie as:s:;2cis'§:§c2ns in ccmmzm ;;3a:'3ar2{:e,Tmmpr§s§ng :3? members whim 3-fa themseﬁves erztergmses, §'ia%:>§Ei'1i=g for ar2ti~mmpeti%t§ve conduct may ar§:se Ewe foid. Ari assacéatim cs? enterpriseg may be Eiabié far breach 0%" section 3 of the Act embcwﬁed in a decésécm taken by that assoeciatésn, whéie additicznaiiy the cmsiituent enterprAises Q'? associatima may be hem Eiahie far ::0nt:'avent%c:m sf section' 3 .0? me Act arising from an agreement er concerted practice between them. Further, the an?:§~z::srr;pte.-titive «siecision 0:' ;:raci:§ce of the a3s:><:§ati:3:*': can be a'%;i":'»Ebu:t{-sci is 'the memherg Mm were gssociatisn and activehg 28.3.

128 ,;)articips3'ced'in giving effect ta the anti~r:0mpe'm§ve decjsﬁon 0:' ma-::i:§::«;-2 9f 'the associatien. in case the centraventéan of any of the garcrvisicmz sf thés Act is made by 3 campany, section 48 «:1»? 'thé zixct sgzzeciﬁcaiiy pravides far the individuai iiabiiity :3?" the perscng, in addition in the iiabéiity :31' the camgaany, whiz were in charge Bi' and were resgzsansibﬁss fer the conduct :3'? the businesa rzsf' {ﬁg mmpany We-:«:.'time when the ﬁcntraventian was cemmittezi The Expianaticm 3:0 semen 48 further pr'«::nvi_d<.:>.s that for the psmsages «sf this £«.&<:'?;i€3;-'3, aerwrsgsarzgz iszciuées a firm 3:' othgr asseciatéan of irxdividuais. '§'%u~:ra=3§ore, 'me: members sf thé Exeaut§=§re Cammittee» caf CELQG who were res;::»z:m.~3§%_>ie fez" anii--compsstitive mnduci: 3? {Sam} are aﬁse Eiabée, Tm adéitéon m C{.>,='5,€35 far coniraveﬁtisn Qt? sectécm 3 {3} {3} and 3(3) {hfg o%':'t§':e Act.

The {)5 has itﬁentified members G"? the execzstixza zzenamittee sf CEEAG whiz ware responsﬁgie fa? iha 23r:'ci~::»s3:_':':pe'£:i"?c§w53 tiecésions takesx and enforced by the CQAG. Such mambers are - Aébert De Sta, &'v'§a§':es§': Naék, Akhtér Shah, Sanwsh ?ond&E<ar, Vénkatesh Prabhu Deaai, BM Frabhu Besai, Baits Ram Ni. Mogakar, Lyndon B' Séiva Ami: iiamt, Sudeah §v'§:3i§:::z, Rajesh '~-Jvir. Heman': Pai Angie and '\ \ 13¢?

Maria» Va: in their statemeznts hawk aim named permzsns, Wm} accarding in:

them, are activeiy invmvee-3% in the anﬂ-campetitive practéceaa The reéevant gsart in' the statement of Msiﬁemant Pai Angie remrr:ied by D6 ':5 :'e;:':m<§uced beﬁcwz 'Q11. Wm are the members 3? the Chemist and Bmggist Asgmciatécm, Goa wha are active ;;aartét:ipan"E:s in the ;-'.ai'i':s.ir4s:\r:~?E-['::3*§e Assacziation and 3%} "their other aﬂeged antiucompetitive practéces?

Ans. 11' The main persan is. .!>._ibez"t £352 33 wins: 55 '§'i*resie:ie«nt mi' CDM3 and is partner sf CS Entsrgarises. ME executive' :;z3mm':'i:teeT members whee are w§*mEe.s:-eziers iike ~-- Rag' %Er:'£e:'§3rE:;es {Pm;2. Rzzjﬁsh Cainsaikar}, iiifvi Evn~:er§:«z'E3£es (Pmga. E'».«'ia%*:e~2s;§€ Naik} and Pharmaﬂass $22?' which Saar-ﬁ:ess%1 Forsdekar}, Bah:

Pharma (Pimp. 8;.-mu fxricpiiar}, G¢N..Agenci&s {§>ar€:m<.2rn 'fatin Naik}, Efﬁiiva arid i'}'Si§va {Partm=:r~ Lyndcm £3' Siﬁva} are active gamtitépants in {$29 associaticm. in adcéitiun, '§1'ra§<;as§': ':3han§:xa:aB§<.'ar, Partner :3"? Dregaria Anar*sta, aithmsgh not part of the aaseciatiecm is aisc; actéve in the affairs :2? EMS' 28,51. The Ccs=mmissie%n V3133 his ercier dated 13°12'.2{311ci§rectec§ the CEAG ta submit its finantiw statement 'far the East 3 years and aisa» to furnish the names 0'? the affice.=.- bearers, hgg ti §'iCs't fiie the reezguisite

29. 13523 izjformatmn. Therefszr-re, the Commisgian has decided to deai with the issue 9? passing orders under settﬁcm 2'? of tha Act againét the §nd":vi::§ua§ wem~ber'5 sseparateéy----when the reﬁuisite Enfarmatizm ':5 furnished by the Cifhﬂasfi.

Qrder under sectiarz' E'? m' the A52 As the Cczmmissioﬁ has {sand that the C:F:~.!3..!3 vicziated the Vpraxzisséaxnsé of aecﬁcm 3{3}{a} amﬂ 3(3}(b} of the Am: the Commissizzsn mew pmceezds to pass . . smtabie arders zxrsder ﬁectécm 2}' cm' the Act against Em': slim-\C~3 3-«;ta:.:':m;*§§z'"s;g gaerzjaiixg.

#25 gm' the Staizutczry Audit "Remark an Auditaﬂ Acacmntg for Fir:am:§a§ Year .'$:Q£3:9--2€31G dataé fxksvember 11,2818 ,Ef'§€'}t'33(€£i with the su;3p§emers'targ; 'anvestigaticm repsrt Q?' BG,£D:'-':6 (antﬁty against %w¥1i::h the aiiegatizms have been med) had the foﬁowing receipts dmﬁng 2€3€)S--G§ arad 23$?-:0:

Hﬁnaritiai Years Receiptsiin Rs.) 2393--3&3 2:.,38,9é's5.e@ 2809-10

31.

33.

' Gregg Raxsarsue Receépts during the year EEQS-$3 : 131

Thus, Comrnissicm after mnsideringé the facts and circumstances sf the instant case $3 cs'? tine Qpinion that it is apgaropriate ta Emgmse penaity @ 18% 0f the average am' the receipts for financiai y£.=.ar\268S~()§3 and 2070946 {me respect of wh§c%: the 'figures are avaiéabia with the Cammizsian} an CDAG. Therefme, ﬁr: exercise cf pmwers under Secticm 2?' {E3} :3? the Act, the Vtomrmssisn imimsas peszaity an CBAE3 can1pute:¥.~a;s,fe%Eaws:

Rs'. 21, 353, §§§.a.s§:3 Grass Ramnue Reaeigig ﬁzzring the year Eﬁﬁﬁﬁﬁ 2. Rs. 3.3, ?2,{3§}?.{}€;% Avemge sf "me Rewesfaua RsE}a':e§p'E$ R3. my 333% 3% ma Average G"? #5113 Revenue Eiamipts R3. 2, §$,$&3.E§i3;§;; Mnaﬁty {Rmmded 3?? tea tha nearest msmbar) Rs, 2, Eﬁ,§sﬁi3.${3' * Accarzﬁinghi. the C«;::mn*z§s$i<:3n passes the foiiowing Grders, under "Section 2'? of the Act against the afaresaid cmntravening enﬁtieg: {i} The CD5-'~.'£3 and its members are directed ta seam and desist from '7"E;:%2 haw: keen fiimmcé \ gm) 132 antit:{3m;3et§t§ve in véeiatian cs? $e::.t3o~n 3 of the Act in the preceding paras am' this csrcier.

The CEBAG E5 further ciirecfted to fiie an undartaking that » Gu§deEénes ans} Moi.) with respect in man appaintment cs? 3 stscﬁaégt m wémiesaier frem amcmgst the n<3n-mem§:3ers mf QVDAG, requiremem: of Na Qbjecticzm Certiﬁcate *%.'.s*<:=:=s':, the QQAG fer appméntmant of smckégt er wmiessaier' anti iimit an number :2?' stmkisi :3'? ;3%~.ar:'*na::eui§m¥ mrgzpanées as weﬁ .35 the siauaes mandating csmgmigong P35' a;);3r<:>va§ from {BAG fess" i:2tr:;st§ut;'s'im§ 0?" drugs in the ?:era°it::ery :3'? £393 anci mquiring rgsuting cu' bids 5;}:

sug2;::E:y° czaf drasgs is time Gavemmer.st am Hospitais thmugh authorisesti stockists sniy have been dame away withén Ed} zfays « fmm the ﬂake <3'? receipt 0'? the emier.

The CSAG Es aim tiirectad ':0 rerrmve the ciames in the C§z'<:uiars;, MQU anaﬁ Sasideiines which my dawn the marging far whcﬁegaiers and retaiiers in the categstmg 0% new schecziuieﬁ cirugs, 'prescribing a cap an the amount af disc a whc>iesa§e:' can géve is 'me rldh} giving any discounts {C3 :»"x' a 3:3».

133 the consumers and fiie an unéerta£<§ng ta this effect within 50 days fmm the date cf receipt af this arcier.

{W} A penaity of R5,; 2;G€3,£)€3{)f-T is aim inmezsseﬂ on CDM3. The penaﬁty shaii he paid by Cams within sixty days fram the date of rer:e'§pt of the cam: of this Qrc§er.

Secretary igiciwezzted tax sand 3 ~::;:py 0%' this zzmder is the mncemssd gartéeg far »::'mm§;1§'aar:c'e §a*z'ss":':::s§%z-:"':;;:=,=~§A\,,:. ﬁupta Amsmg am: M. 1.. "$33,432 iiwesmberﬁ {ix-*'iem¥:;ses'} {§\«'3E-3§"ﬁ'r:}€3r') w Mimi: Shawia {CE'sairperssn) '__,.,.».

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