Delhi High Court - Orders
Swapan Dey vs Competition Commission Of India on 10 January, 2023
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 17468/2022 and CM APPL. 55743/2022
SWAPAN DEY ..... Petitioner
Through: Mr. Rohit Arora & Mr. Saunak S.,
Advocates.
versus
COMPETITION COMMISSION OF INDIA ..... Respondent
Through: Appearance not given.
CORAM:
JUSTICE PRATHIBA M. SINGH
ORDER
% 10.01.2023
1. This hearing has been done through hybrid mode.
2. The Petitioner challenges the order dated 25th October, 2022, passed by the Competition Commission of India (hereinafter 'the Commission') under Section 26(2) of the Competition Act, 2002 (hereinafter 'the Act'). In the said order the Commission has rejected the complaint filed by the Petitioner- Swapan Dey against M/s Vifor International AG a Swiss company. The conclusion of the CCI is that there is no violation under Sections 3 or 4 of the Act which prohibits anti-competitive agreements and abuse of dominant position respectively. The operative portion of the order of the CCI reads as under:
"75. In the view of the Commission, prima facie the clauses of the agreement do not appear to be one sided or to be couched in such terms which can be said to be not reasonable in relation to protection of right of a patent holder qua its licensees, when seen from the perspective of Section 3(4) of the Act. There is nothing on record to prima facie indicate that Lupin and Emcure are said to be distribution channel partners Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:11.01.2023 15:56:26 with such pervasive presence in the market that allows them to exclude competition from other pharma companies operating in the Indian market dealing with diverse product, both generic and non-generic. Further, prima facie there is nothing to suggest that construct of the market is such that impedes the free entry of other manufacturer of soluble iron injectables, should they like to operate in the market either independently or through Indian pharma companies, save the interse restrictions between Vifor and its two licensees as discussed above.
76. Further, Vifor has submitted that it has no control over prices of soluble FCM Iron injectables sold in the market through these companies and has not restricted its licensees to inter se compete through any unilateral anti-competitive policies. According to the Commission what is also noteworthy is that, these license agreements entered into by Vifor are not of a long-term nature but entered into for a limited period of three years with provision for extension upon expiry. There is also no restriction that Vifor cannot enter into more licensing arrangements should it want. Also, the termination clause contained in such agreements do not appear to be prima facie erroneous on the two licensees so as to place them at any disadvantageous position in the bargain. Another significant aspect that has weighed with the Commission is that the patent granted to Vifor in respect of its soluble FCM iron injectables is said to expire in the year 2023 and it is expected that the patented FCM should then be available for free exploitation by interested parties.
77. As regards the price discrimination alleged by the Informant, the Commission observes that all price differentiations may not be discriminatory, more so when the same is based on reasonable classification of consumers to which they are offered. Prices offered in government procurement may not be comparable with the products being sold in open market on quantity Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:11.01.2023 15:56:26 criteria (bulk vs. individual buying) as well as purpose (public purpose or distribution free of cost vs private consumption). As regards pricing of FCM injectable in another country i.e. Bangladesh, the Commission does not find this to be a correct parameter to adjudge the reasonability of pricing in India. Different countries may have different tax and import duty regimes besides other conditions not being homogenous.
78. Another aspect that has been highlighted is the freedom available to Vifor to choose its trading partner, as has been recognised by the Commission in Case No. 18 of 2021 (In re:Hiveloop and Britannia). The Commission in this regard would like to reiterate that this legal position as has been claimed by Vifor is not absolute in nature, but within the confines of the legal principle as has been enunciated in the decision of the Commission in such case. However, the Commission is mindful of the fact that not every company has a right to seek access to the patent of Vifor, unless it demonstrates that there is indeed a need for such access, basing on the existing supply conditions of an essential product/facility as against its demand by the consumers, so as to affect the market adversely by non-dealing on the part of the entity with significant market power. Vifor has submitted that it did not receive any satisfactory request for grant of license of its patent from any entity and that it has responded to two requests it has received recently. Any company requesting for grant of access should also demonstrate its ability to the patent holder, to satisfy the requirements specified for receipt of the grant of license.
79. In the backdrop of the discussion as above, the Commission does not prima facie find any contravention on the part of Vifor either under Section 4 or Section 3(4) of the Act and the Information merits to be closed under Section 26(2) of the Act."Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:11.01.2023 15:56:26
3. It is observed that the impugned order is an appealable order under Section 53A of the Competition Act, 2002. Ld. Counsel for the Petitioner, however, submits that the Commission has failed to determine the `relevant market' while dismissing the complaint under Section 26(2) of the Act and hence there is a jurisdictional error which is assailable in a writ petition.
4. Section 26(2) of the Act reads as under:
"(2) Where on receipt of a reference from the Central Government or a State Government or a statutory authority or information received under section 19, the Commission is of the opinion that there exists no prima facie case, it shall close the matter forthwith and pass such orders as it deems fit and send a copy of its order to the Central Government or the State Government or the statutory authority or the parties concerned, as the case may be."
5. Section 53A of the Act reads as under:
"53A. Appellate Tribunal.--The National Company Law Appellate Tribunal constituted under section 410 of the Companies Act, 2013 ( 18 of 2013) shall, on and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017 (7 of 2017), be the Appellate Tribunal for the purposes of this Act and the said Appellate Tribunal shall--
(a) hear and dispose of appeals against any direction issued or decision made or order passed by the Commission under sub-sections (2) and (6) of Section 26, section 27, section 28, section 31, section 32, section 33, section 38, section 39, section 43, section 43A, section 44, section 45 or section 46 of this Act; and
(b) adjudicate on claim for compensation that may arise from the findings of the Commission or the orders of the Appellate Tribunal in an appeal against any finding of the Commission or under section 42A or Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:11.01.2023 15:56:26 under sub-section (2) of section 53Q of this Act, and pass orders for the recovery of compensation under section 53N of this Act."
6. The above provision clearly stipulates that orders passed under Section 26(2) are appealable before the National Company Law Appellate Tribunal (NCLAT). Thus, the NCLAT would be the appropriate forum for the Petitioner to raise the grievances against the order of the Commission including the grievance on the alleged non-determination of the `relevant market' while rejecting the complaint of the Petitioner.
7. The petition is dismissed with liberty being given to the Petitioner to approach the NCLAT by way of an appeal under Section 53A and 53B of the Competition Act, 2002. If the Petitioner is so advised, the Petitioner may seek condonation of delay for the period during which the writ petition was pending before this Court, which shall be considered and decided in accordance with law.
8. With these observations, the present petition, along with all pending applications, is disposed of.
PRATHIBA M. SINGH, J.
JANUARY 10, 2023 dj/aman Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:11.01.2023 15:56:26