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TMI Blog2018 (11) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... 40%. Application disposed off. - Case Nos. 65, 71, 72 of 2014 and 68 of 2015 - - - Dated:- 30-8-2018 - MR U.C. NAHTA, MEMBER AND G.P. MITTAL, MEMBER ORDER UNDER SECTION 27 OF THE COMPETITION ACT, 2002 1. Vide order dated 12.07.2018 (hereinafter, the 'Main Order'), passed under Section 27 of the Competition Act, 2002 (hereinafter, 'the Act'), the Commission has found contravention of the provisions of the Act by certain chemists and druggists associations and pharmaceutical companies in the State of Gujarat. 2. The erring associations, namely Federation of Gujarat State Chemists Druggists Associations, along with its district units i.e. Amdavad Chemists Association, Surat Chemists Association and Chemists and Druggists Association at Baroda, have been found to be indulging in the anti-competitive practice of mandating a No-Objection Certificate (hereinafter, 'the NOC') prior to the appointment of stockists in the State of Gujarat. Such practice has been found to be resulting in limiting and controlling the supply of drugs in the market and hence, held to be an anti-competitive practice, being in contravention of the provisions of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.08.2018, decided to drop Section 43 proceedings against them. 6. However, in view of the Main Order dated 12.07.2018, wherein the Commission has found the above named individuals to be liable under Section 48 of the Act and decided to impose penalty in due course, penalties are being imposed hereunder, through this order passed under Section 27 read with Section 48 of the Act, for their deemed and/or active involvement in the contravention by their respective companies. 7. The Commission notes that the liability of these four individuals has already been established in detail in the Main Order under Section 48(1) and/or 48(2) of the Act. The relevant paras of that order in this regard are reproduced herein below, for the sake of convenience: Shri Glenn M. Saldanha, Managing Director, Glenmark 172. Shri Glenn M. Saldanha was the Managing Director of Glenmark at the relevant time period when the anti-competitive conduct by Glenmark took place. The contravention against Glenmark is found to be based on the documents placed on record which included data for appointment of new stockist at Ahmedabad prepared by Distribution Department of the Company during 2104-15, sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took place without his knowledge or that he took adequate measures to avoid its occurrence. Therefore, based on the key position of Managing Director held by Shri M. Srinivas Reddy, it is inferred that he was in-charge of and responsible for the conduct of Hetero Healthcare at the relevant time, making him liable under Section 48(1) of the Act. Shri Rakesh Shah, Director, Divine Savior 179. Shri Rakesh Shah was the Director of Divine Saviour at the relevant time period when Divine Saviour indulged in the anti-competitive conduct and thus, held a position of responsibility in the said company. Shri Rakesh Shah has not been able to demonstrate that the contravention by Divine Saviour was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such contravention, in order to be absolved of liability under Section 48(1) of the Act. Rather, the email dated 24th April, 2015, recovered from the email dump of the President, SCDA, establishes that Shri Rakesh Shah sought permission of SCDA in relation to appointment of a new stockist by Divine Savior. This evidence shows his active involvement in addition to the key position held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alculate penalties on the four individuals named supra, at the rate of 1% of their respective incomes based on their income tax returns (ITRs) for three years as mentioned herein below: Income of Officials of Pharmaceutical Companies Year Shri Srinivasa Reddy, Managing Director, Hetero Healthcare Ltd. Shri Bharat Pandya, Regional Manager, Hetero Healthcare Ltd. Shri Glenn M. Saldanha, Chairman and Managing Director, Glenmark Pharmaceutical Ltd. Shri Rakesh Shah, Director, Divine Savior Pvt. Ltd. 2013-14 13,29,00,095 5,48,919 7,35,77,769 8,98,090 2014-15 2,42,42,287 6,24,955 8,47,01,320 9,00,534 2015-16 4,01,61,159 7,12,295 10,83,67,494 9,02,482 Total 19,73,03,541 18,86,169 26,66,46,583 27,01,106 Average 6,57,67,847 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid individuals are directed to deposit the amount of penalty, within 60 days of the receipt of this order. 15. Before parting with the order, the Commission notes that there were certain pharmaceutical companies, whose names were arraigned as Opposite Parties in Case No. 68 of 2015; however, the Investigation Report of the DG contained no specific finding against them. They are the following Opposite Parties: (a) Abbott India Ltd. (b) Abbott Healthcare Pvt. Ltd. (c) Novartis India Ltd. (d) Dr. Reddy's Laboratories Ltd. (e) USV Pvt. Ltd. (f) M/s SUA Agency (g) Allergan India Pvt. Ltd. (h) M/s Aars AARS Agencies (i) Astrazeneca Pharma India Ltd. (j) M/s Chimanlal Pharma (k) Torrent Pharmaceuticals Ltd. (l) M/s Zeal Drugs Chemicals (m) Alcon Laboratories India Pvt. Ltd. (n) Parekh Integrated Services Pvt. Ltd. (o) Systopic Laboratories Pvt. Ltd. (p) M/s Medico Agencies (q) Meyer Organics Pvt. Ltd. (r) M/s F. Dinyar Pharma 16. Many of the aforesaid pharmaceutical companies also requested for deletion of their respective names, in response to the Investigation Report forwarded to them. Further, the Informants also co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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