Chemists & Druggists Association & Ors. v. Competition Commission of India & Ors.

The Cyber Blog IndiaCase Summary

Chemists & Druggists Association

Chemists & Druggists Association & Ors. Vs. Competition Commission of India & Ors.
In the Competition Appellate Tribunal
Appeal 21-28/2014 and I.A. 31-46/2014
Before Mr G.S. Singhvi and Mr Rajeev Kher
Decided on October 30, 2015

Relevancy of the case: Fraudulent billing by manipulation of computer software

Statutes and Provisions Involved

  • The Indian Penal Code, 1860 (Section 420, 429, 499, 500)
  • The Competition Act, 2002 (Section 3(1), 3(3)(b))
  • The Information Technology Act, 2000 (Section 66(1))

Relevant Facts of the Case

  • In 2005, the Association initiated disciplinary action against Respondent No. 2 because the retailers repeatedly complained that he was not deducting the price of expired medicines from the total bills and was overcharging them. After some time, his membership was suspended and then revoked when an apology was received.
  • In 2010, several retailers complained that he was indulged in fraudulent billing by manipulating computer software.
  • After the informant continued abusing its dominant position by refusing to refund the amount to the retailers, the members urged CDAF to boycott him.
  • His membership was terminated on not receiving a response on the notice issued by the Association. The decision became final since it was not challenged in the court of law or any other competent adjudicatory body.
  • Respondent No. 2 challenged the aforementioned resolution and circular by filing civil and criminal cases. Their firm claimed that they had suffered a great loss to their business and reputation and prayed for an award of damages.
  • On the petition being dismissed, the appellants preferred an appeal to the Supreme Court since the appellants had neither been heard by the State Government before making the order nor were the order supported by any reasons.

Prominent Arguments by the Advocates

  • The petitioner’s counsel argued that the defendants had made false imputations against the business dealings of the plaintiff and lowered the morale and character of the plaintiff firm. Hence, the plaintiff firm is entitled to claim damages from the defendants.
  • The respondent’s counsel claimed that Respondent No. 2 continued to abuse its dominant position and was not deducting the price of expired medicines from the total bills and was overcharging them. Further, the plaintiff failed to bring the account books of his firm from 2008 till date to show the total sale of medicines, even when he was directed to produce the original account books for the relevant period.

Opinion of the Bench

  • The bench believed that the Commission should not have finally pronounced upon the guilt of the Association along with the other appellants. They should have waited for the final verdict of the civil and criminal cases that were filed by the petitioners.
  • They heard the learned counsel for the parties and perused the record including the objections, the replies filed and the updated affidavit presented by the plaintiff.

Final Decision

  • Appeals allowed.
  • Impugned order set aside.
  • All interlocutory applications were disposed of.

This case summary has been prepared by Ria Verma, an undergraduate student at Symbiosis Law School, Noida, during her internship with The Cyber Blog India in January/February 2021.