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India – CCI Penalises The Chemists & Druggists Association, Ferozepur.

24 March, 2014

 


A complaint was filed by M/s Arora Medical Hall, through its partner Mr. Rajesh Arora (‘Informant’) against the Chemists & Druggists Association, Ferozepur (‘CDAF’) and its office bearers (collectively the ‘Opposite Parties’) for violation of Sections 3 and 4 of the Competition Act (the ‘Act’).


In the complaint, the Informant alleged that CDAF had imposed a condition that any chemist/druggist interested in availing the distributorship of medicines manufactured by any company in Ferozepur City, was required to obtain a no-objection certificate and letter of credit from CDAF by making a certain monetary payment. The Informant alleged that he was expelled from the primary membership of CDAF for raising an objection to this condition. Further, the Informant alleged that subsequent to his expulsion, CDAF also took a decision to boycott him.


On October 30, 2012, the Competition Commission of India (‘CCI’) directed the Director General (‘DG’) to cause an investigation and submit a report. Upon review of the findings of DG, CCI was of the view that DG had not investigated the role of individual office bearers of CDAF, and accordingly, DG was directed to further investigate this aspect.


CCI held that the above conduct limited/controlled the supply/provision of goods/services in contravention of Section 3(3)(b) read with Section 3(1) of the Act. Moreover, CCI held that the Opposite Parties had been unable to rebut the fact of the impugned agreement. Accordingly, the agreement was presumed to have an appreciable adverse effect on competition (‘Adverse Effect’).


On the basis of its finding, CCI, by its order dated February 5, 2014, directed the Opposite Parties to cease and desist from indulging in anti-competitive practices, and imposed a penalty on the Opposite Parties at the rate of 10% of their respective average turnover.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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